In this case, the court considered this issue: Can deception to induce a commercial exchange constitute mail or wire fraud, even if inflicting economic harm on the alleged victim was not the object of the scheme?
The case was decided on May 22, 2025.
The Supreme Court held that the fraudulent-inducement theory is consistent with the federal wire fraud statute, 18 U-S-C §1343, and does not require proof of economic loss to the victim. The Court affirmed the convictions of Stamatios Kousisis and Alpha Painting and Construction Co. for wire fraud, finding that their scheme to use a disadvantaged business as a pass-through entity to secure government contracts involved material misrepresentations to obtain money, satisfying the statute's requirements. The Court rejected the petitioners' argument that a fraud conviction requires intent to cause economic loss, clarifying that §1343 focuses on schemes to obtain money or property through deception, not on the victim's net financial harm. The ruling resolved a circuit split, affirming that fraudulent inducement is a valid basis for wire fraud convictions when it targets traditional property interests.
The opinion is presented here in its entirety, but with citations omitted. If you appreciate this episode, please subscribe. Thank you.
