Kousisis v. United States (605 U.S. ___, 2025)
The Supreme Court validates the “fraudulent-inducement” theory and rejects any freestanding economic-loss requirement under the Federal Wire-Fraud Statute, 18 U.S.C. §1343

1. Introduction

Kousisis v. United States presented the Supreme Court with a sharpened, recurring question: may the Government secure a wire-fraud conviction when the defendant lied to obtain a contract but ultimately delivered work of equal monetary value, leaving the contracting agency with no net pecuniary loss? Petitioners Stamatios Kousisis and Alpha Painting & Construction Co. had procured two Pennsylvania Department of Transportation (PennDOT) contracts by falsely promising to employ a qualified Disadvantaged Business Enterprise (DBE). The deception satisfied DBE participation goals attached to substantial federal funding, yet in reality the “DBE” acted only as a pass-through entity. After a jury conviction for wire fraud and conspiracy, Petitioners argued on appeal that PennDOT suffered no property harm because the bridges were painted and the agency received the economic benefit of its bargain.

The Court—speaking through Justice Barrett—affirmed the Third Circuit and held that economic loss to the victim is not an element of federal mail or wire fraud. It endorsed the “fraudulent-inducement” theory: if a defendant obtains money or property by means of materially false representations, the crime is complete even when the victim receives goods or services of equal value.

2. Summary of the Judgment

• Holding. A defendant who induces a victim to transfer money or property under materially false pretenses may be convicted under §1343 irrespective of whether the scheme was calculated to inflict—or in fact produced—net pecuniary loss.
• Vote. 7–2 on the key reasoning (Barrett, Roberts, Thomas, Alito, Kagan, Kavanaugh, Jackson); Gorsuch and Sotomayor concurred in the judgment, each writing separately.
• Key disposition. The Third Circuit’s judgment upholding convictions of Alpha Painting and Stamatios Kousisis is affirmed.

3. Detailed Analysis

3.1 Precedents Cited & Their Influence

1. Ciminelli v. United States, 598 U.S. 306 (2023) – Rejected the “right-to-control” theory and re-emphasised that fraud statutes protect “traditional property interests.” Kousisis leverages Ciminelli to clarify that while information alone is insufficient, money or property obtained through deceit remains protected.
2. Kelly v. United States, 590 U.S. 391 (2020) – Held that schemes to alter regulatory decisions without seeking property fail §1343. Kousisis distinguishes Kelly: here the object was money, not merely regulatory power.
3. Carpenter v. United States, 484 U.S. 19 (1987) & Shaw v. United States, 580 U.S. 63 (2016) – Both refused to require ultimate economic loss; these decisions laid doctrinal groundwork that “injury” can be satisfied by deprivation of exclusive use or possessory rights.
4. McNally v. United States, 483 U.S. 350 (1987) – Located the “money or property” limitation; Kousisis harmonises fraudulent-inducement theory with McNally by stressing that the victim parted with money.
5. Key Common-Law Sources – 19th- and early 20th-century cases on false pretences and rescission (e.g., State v. Mills, Williams v. Kerr) show that economic loss was not an invariant element where property was obtained by deceit. The majority relies on these to rebut Petitioners’ “loss” argument.

3.2 The Court’s Legal Reasoning

1. Textual approach. The words “obtain money or property by means of false or fraudulent pretences” contain no loss language. The ordinary meaning of “obtain” is merely “to gain possession,” whether or not consideration of equal value is furnished.
2. Common-law ‘old soil’ analysis. Although fraud historically demanded an “injury,” the relevant injury was the deception-induced transfer itself, not an actuarial loss. The Court canvassed rescission, false-pretence crimes, and deceit torts, concluding that only deceit actions sounding in damages required pecuniary loss.
3. Materiality as limiting principle. A misrepresentation must still be “material.” While the majority declines to pick between the Government’s “essence of the bargain” test and Petitioners’ “traditional” test, it reiterates that Neder makes materiality an element and thus cabins liability.
4. Rejection of contrary theories. Fraudulent inducement does not (i) criminalise mere interference with regulatory power (Kelly), (ii) overlap completely with false-statement statutes (§1001) or conspiracy-to-defraud (§371), or (iii) resurrect the forbidden “right-to-control” theory (Ciminelli).

3.3 Concurring Opinions & Points of Divergence

• Thomas, J. (concurring) – Agrees that economic loss is unnecessary but questions whether PennDOT’s DBE representations were “material” under an “essence-of-the-bargain” standard. Suggests future scrutiny of race-based DBE programmes.
• Gorsuch, J. (concurring in part) – Expresses concern that the majority’s dicta erodes the historic “benefit-of-the-bargain” injury rule; warns that trivial lies (e.g., a babysitter’s résumé fib) could become federal felonies.
• Sotomayor, J. (concurring in judgment) – Would decide only the economic-loss question and criticises the majority for venturing into hypothetical fact patterns; insists Petitioners’ misstatements are plainly material on any test.

3.4 Practical & Doctrinal Impact

1. Wider prosecutorial reach. U.S. Attorneys can proceed under §1343 where contractors or vendors procure deals through lies—even if governmental or private purchasers receive services of equal economic value.
2. Government contracting & compliance programmes. Compliance representations (DBE, Buy-America, environmental, cybersecurity, etc.) become high-stakes: falsity may invite fraud charges regardless of project performance.
3. Split resolved; circuits realigned. The decision overrules positions previously adopted in the Second, Sixth, Ninth, Eleventh, and D.C. Circuits that had required loss or its intent.
4. Materiality litigation incoming. Because materiality is now the principal limiting principle, future cases will test its contours—especially for soft representations (e.g., diversity intentions, CSR statements) that do not affect price or product quality.
5. Intersection with civil remedies. False Claims Act (FCA) litigation will likely cite Kousisis to argue that actual monetary loss is not required, provided the Government’s payment decision was induced by material falsehood.
6. Policy debates over scope of federal criminal law. Justice Gorsuch’s and Justice Thomas’s writings foreshadow renewed academic and legislative dialogue about over-criminalisation and federalism constraints.

4. Complex Concepts Simplified

Wire Fraud (§1343)

Using interstate wires (telephone, email, internet, banking) to execute or further any scheme to obtain money or property through deceit.

Fraudulent-Inducement Theory

Liability arises where the defendant lies to secure the victim’s consent to transfer money/property, even if the defendant later provides goods/services of equal value.

Materiality

A false statement is material if it would influence a reasonable person’s decision—or if the speaker knows it is likely to influence this particular victim.

Money-or-Property Requirement

Since McNally, fraud statutes protect only tangible or traditional property interests, not abstract regulatory powers or purely intangible “rights.”

Right-to-Control Theory (rejected in Ciminelli)

The idea that depriving a victim of economically valuable information itself equals property loss; the Court rejected this expansive notion in 2023.

5. Conclusion

Kousisis v. United States anchors a significant clarification in federal fraud jurisprudence: a deceptive scheme that succeeds in extracting money or property is criminal even without a balance-sheet loss to the victim. By ratifying the fraudulent-inducement theory the Court widens prosecutorial tools but simultaneously leaves “materiality” as the crucial guardrail—provoking vivid debate in the concurrences about future boundaries. Contractors, corporate officers, and transactional counsel must now treat any compliance representation as a potential wire-fraud trip-wire, and litigators should expect intensified battles over what counts as material. Whether Congress chooses to recalibrate §1343’s breadth, or whether future cases further refine materiality’s edges, Kousisis will serve as the modern starting point for analysing property fraud in federal courts.