Docket 23-909
Kousisis v. United States
DecidedMay 22, 2025
9-0decision
Source: CourtListener.
Court upholds wire fraud conviction even though victim got services of equal value
Impact4/10
What it does
The ruling holds that a person can be convicted of federal wire fraud for lying to get someone to enter into a deal, even if the victim received something of equal economic value in return and suffered no net financial loss. It confirms that the 'fraudulent-inducement' theory of prosecution is valid under the wire fraud statute, so long as the lie was material (important enough to affect the victim's decision) and the defendant sought to obtain money or property through it.
Who benefits
Federal prosecutors pursuing fraud cases where a defendant lied about compliance with contract terms (like disadvantaged-business requirements) but still delivered acceptable work or goods; government agencies and contracting parties who rely on truthful representations in awarding contracts.
Who is affected
Contractors, businesses, and individuals who make false statements to induce a deal--even if they ultimately deliver something of equal value--now face continued exposure to wire fraud prosecution and its penalties, including up to 20 years in prison per count.
Practical impact
Prosecutors can continue bringing wire fraud charges based on a fraudulent-inducement theory without needing to show the defendant intended to leave the victim financially worse off, provided the lie was material. Contractors and businesses that misrepresent compliance with contract terms--even while performing satisfactory work--remain criminally exposed under federal fraud law. The ruling leaves open, for future cases, exactly what materiality standard governs (the traditional common-law test versus the government's stricter 'essence of the bargain' test).
Majority reasoning
Justice Barrett, writing for the Court, reasoned that the text of the wire fraud statute never mentions economic loss and is satisfied whenever a defendant schemes to 'obtain' money or property through false statements, regardless of what is given in return. The Court reviewed common-law fraud doctrines and found no consistent historical rule requiring economic loss--rescission actions and false-pretenses prosecutions typically did not require it, only the tort of deceit did. The majority held that materiality, not economic loss, is the proper limiting principle separating everyday misstatements from criminal fraud, and here the defendants did not contest that their misrepresentations about using a disadvantaged business were material. The Court also found this fraudulent-inducement theory consistent with precedent (Carpenter and Shaw), distinct from the right-to-control theory rejected in Ciminelli, and not an intrusion into regulatory or intangible interests foreclosed by Cleveland and McNally.
Constitutional question
Does the federal wire fraud statute require prosecutors to prove the defendant intended to cause the victim a net financial loss, or is it enough that the defendant lied to induce the victim to hand over money or property?