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In May of 2025, the Supreme Court issued its decision in Kousisis v. United States (No. 23-909). A number of federal fraud statutes prohibit devising or intending to devise schemes or artifices to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises by various means including the use of the postal system, email, or the internet. In Kousisis, when a state department of transportation awarded a $20 million contract to an individual and a construction company, the contract was subject to a regulation requiring the contractors to use a disadvantaged business as a subcontractor. When it was later discovered that the contractors had lied about using such a subcontractor, the government charged them with wire fraud and conspiracy to commit wire fraud. After a jury returned guilty verdicts, the contractors moved for acquittal based on the argument that notwithstanding their scheme to deceive concerning the use of a disadvantaged subcontractor, no harm was done because the state had received the benefit of its bargain because the contractors had neither intended, nor caused, any economic loss.

In a 9-0 decision, the Court rejected the contractors’ argument that precedent foreclosed the inducement approach to criminal fraud liability (i.e., that federal fraud convictions must depend on economic loss). In Carpenter v. United States, 484 U.S. 19, 23 (1987), and in Shaw v. United States, 580 U.S. 63, 67 (2016), the Court had previously upheld fraud convictions without any monetary loss where, in Carpenter, a newspaper had been deprived only of the right to the exclusive use of its proprietary information (as a result of repeated leaks) and, in Shaw, a bank fraud conviction had been upheld notwithstanding the fact that no bank involved in the scheme had suffered any monetary loss.

As to the argument that the fraudulent inducement approach to prosecutions under the fraud statutes would bring within their scope every single intentional misrepresentation designed to induce a business transaction, the Court noted had two responses. First, the Court noted that the requirement that the misrepresentation be material operates to substantially narrow the universe of actionable misrepresentations. Second, the court noted that the phrasing of the wire fraud statute is broad. Indeed, because the wire fraud statute prohibits schemes to obtain money or property by means of false or fraudulent pretenses, representations, or promises – the statute, through its remarkably phrasing, unmistakably endorses the inducement approach to criminal fraud liability without regard to any economic loss. Thus, it was unsurprising that the Court’s decision was unanimous. Of course, in the wake of the decision, a number of issues pertaining to the scope and parameters of “[t]he ‘demanding’ materiality requirement [that] substantially narrows the universe of actionable misrepresentations” remain open to interpretation.