By Ashley Adams

In Kousisis v. United States, 605 U.S. —- 145 S.Ct. 1382, (decided May 22, 2025), the U.S. Supreme Court held that defendants may be criminally liable under the federal wire fraud statute even if they did not intend to cause — and did not in fact cause — economic harm to the victim. Writing for the majority, Justice Amy Coney Barrett confirmed that under a fraudulent inducement theory, liability attaches when a defendant uses a material misrepresentation to obtain money or property, regardless of whether the victim received equal value in return.

This decision resolves a significant circuit split and reaffirms the breadth of 18 U.S.C. § 1343, offering prosecutors wider latitude in fraud cases while raising new compliance and litigation risks for government contractors and corporate defendants. Notably, Kousisis stands somewhat in contrast to recent Supreme Court rulings that narrowed the scope of federal fraud and corruption statutes, such as Ciminelli v. United States and Snyder v. United States.

Background and Procedural Posture

The petitioners — Stamatios Kousisis and his employer, Alpha Painting and Construction Co. — were convicted of wire fraud and conspiracy to commit wire fraud for misrepresenting their use of a disadvantaged business subcontractor in bids for federally funded painting projects in Philadelphia. While Alpha performed the work, it falsely claimed compliance with federal disadvantaged business enterprise (DBE) requirements by using a pass-through entity that did not perform a commercially useful function.

Although the government suffered no measurable financial loss — and was satisfied with the completed projects — the Department of Justice pursued the case on a theory of fraudulent inducement, arguing that Alpha obtained contract payments through materially false statements. The Third Circuit affirmed the convictions, and the Supreme Court granted certiorari to resolve whether § 1343 requires intent to cause economic loss to the victim.

The Supreme Court’s Opinion

Justice Barrett’s opinion for the majority firmly rejected the notion that pecuniary loss or intent to harm is required for wire fraud liability. Key points include:

1. Statutory Text Controls.

The Court emphasized the plain language of § 1343, which prohibits schemes to “obtain money or property by means of false or fraudulent pretenses.” Nowhere, the Court observed, does the statute require proof of economic harm. The focus is on the means of obtaining money or property — not the net effect on the victim.

“A thing is no less ‘obtained’ simply because something else is simultaneously given in return.” — Justice Barrett

2. Common Law Does Not Supply a Loss Requirement.

Petitioners argued that fraud, as used in the statute, incorporates a common law understanding that includes economic harm. But, the Court found no uniform historical rule that fraud required pecuniary loss. Accordingly, it declined to “import a loss requirement where Congress did not include one.”

3. Fraudulent Inducement Is a Recognized Theory.

The Court confirmed that a defendant commits wire fraud if he uses a material misrepresentation to induce a transaction involving money or property — even if the victim receives something of equivalent value. In this case, PennDOT disbursed funds based on materially false representations about the defendants’ DBE participation.

4. Key Limiting Principles Remain.

Although the Court embraced a broad reading of the statute, it pointed to two guardrails: 1) Materiality remains an essential element — not all misstatements suffice; and 2) The decision applies only to a specific category of fraud involving the deceitful procurement of property, not to intangible harms or regulatory objectives.

Comparative Perspective: A Shift from Recent Restraints?

Kousisis marks a notable departure from the Court’s recent trend of narrowing federal fraud and corruption statutes:

• In Ciminelli v. United States, 598 U.S. 306 (2023), the Court invalidated the “right-to-control” theory, holding that deprivation of “economically valuable information” is not a property interest under § 1343.
• In Snyder v. United States, 603 U.S. 1 (2024), the Court restricted the reach of the federal bribery statute by interpreting “gratuities” as outside its scope absent an explicit quid pro quo.

By contrast, Kousisis affirms the government’s ability to prosecute fraud even where the economic loss is speculative or nonexistent. Yet, the Court’s reliance on statutory text — rather than a policy-driven expansion — suggests that Kousisis is a return to doctrinal first principles, not a reversal of its general skepticism toward aggressive federal theories of liability.

Implications for Compliance and Enforcement

This ruling has far-reaching implications for companies, particularly federal contractors and grant recipients:

• Compliance Programs: Companies must treat any material misrepresentation — even in seemingly technical areas like DBE participation — as a potential source of criminal liability.
• Contractual Accuracy: Full transparency in certifications, bids, and disclosures is critical. Providing equivalent value does not immunize a company from prosecution if the means of obtaining funds is deceptive.
• Enforcement Strategy: Prosecutors may increasingly use Kousisis to pursue fraud charges even in the absence of financial loss, especially where regulatory compliance is a condition of payment.

Conclusion

Kousisis v. United States reinforces the principle that fraud is defined not by the harm caused, but by the deceptive means used to obtain money or property. While this expands the prosecutorial toolkit under the wire fraud statute, it also clarifies the doctrinal foundation of fraud: material deception in pursuit of gain remains at the statute’s core, regardless of the outcome for the victim.

For companies operating in federally regulated or funded environments, Kousisis signals a need for heightened diligence in all aspects of compliance — especially in representations made to government entities, where even harmless inaccuracies can carry criminal consequences.