In Kousisis v. United States, 605 U.S. ___, No. 23-909 (2025), the Court affirmed the defendant's convictions for wire fraud based on a fraudulent-inducement theory. Here are some key parts of the majority opinion.
Stamatios Kousisis and the industrial-painting company he helped manage, Alpha Painting and Construction Co., secured two government contracts for painting projects in Philadelphia. Both contracts required the participation of a disadvantaged business—and in its bids for the projects, Alpha represented to the Pennsylvania Department of Transportation (PennDOT) that it would obtain its materials from a qualifying supplier. See 49 CFR §§26.21(a), 26.5 (2024). This promise turned out to be an empty one: In addition to using the supplier solely as a pass-through entity, Alpha and Kousisis submitted multiple false certifications to cover up their scheme. So although Alpha’s paint work met expectations, its adherence to the disadvantaged business requirement did not.The Government charged Alpha and Kousisis with wire fraud, asserting that they had fraudulently induced PennDOT to award them the painting contracts. See 18 U. S. C. §1343. Under the fraudulent-inducement theory, a defendant commits federal fraud whenever he uses a material misstatement to trick a victim into a contract that requires handing over her money or property—regardless of whether the fraudster, who often provides something in return, seeks to cause the victim net pecuniary loss. We must decide whether this theory is consistent with §1343, which reaches only those schemes that target traditional money or property interests. It is, so we affirm.To convict Alpha and Kousisis, the Government needed to prove that they used the wires to execute a “scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.” 18 U. S. C. §1343. Despite the use of the disjunctive “or,” we have declined to interpret §1343 as establishing alternative pathways to a conviction. Instead, reading the two clauses together, we have held that “the moneyor-property requirement of the latter phrase” operates as a limitation on the former. A defendant commits federal wire fraud, in other words, only if he both “‘engaged in deception’” and had “‘money or property’” as “‘an object’” of his fraud.The fraudulent-inducement theory is consistent with both the text of the wire fraud statute and our precedent interpreting it. We therefore reject petitioners’ proposed economic-loss requirement.In short, the wire fraud statute is agnostic about economic loss. The statute does not so much as mention loss, let alone require it. Instead, a defendant violates §1343 by scheming to “obtain” the victim’s “money or property,” regardless of whether he seeks to leave the victim economically worse off. A conviction premised on a fraudulent inducement thus comports with §1343.To summarize, [] common-law courts did not uniformly condition an action sounding in fraud on the plaintiff ’s ability to prove economic loss. More specifically, if the action was one for rescission or a prosecution for false pretenses, the plaintiff ’s required “injury” ordinarily need not be financial. That sounds the death knell for Alpha and Kousisis’s reliance on the common law. The old-soil principle does not apply in the absence of a well-settled rule. Kemp, 596 U. S., at 539. In Pasquantino v. United States, for example, we refused to read “the wire fraud statute to except frauds directed at evading foreign taxes” because the relevant common-law rule did not “clearly ba[r] such a prosecution.” So too here: The common law did not establish a generally applicable rule that all fraud plaintiffs must plead and prove economic loss, so we will not read such a requirement into the wire fraud statute.[T]he common law has long embraced a different standard—namely, materiality—as the principled basis for distinguishing everyday misstatements from actionable fraud. Whether in tort or contract law, “materiality look[s] to the effect on the likely or actual behavior of the recipient of the alleged misrepresentation.” Resembling a but-for standard, materiality asks whether the misrepresentation “constitut[ed] an inducement or motive” to enter into a transaction. Or, as we explained in Universal Health Services, a misrepresentation is material if a reasonable person would attach importance to it in deciding how to proceed, or if the defendant knew (or should have known) that the recipient would likely deem it important.For now, it is enough to reiterate “that materiality of falsehood is an element of ”—and thus a limit on—the federal fraud statutes. A conviction premised on the fraudulent-inducement theory cannot be sustained without it.The “demanding” materiality requirement substantially narrows the universe of actionable misrepresentations. And the boundaries of the fraudulent-inducement theory are not so imprecise as to risk encroachment on States’ authority or to “create traps” for the “unwary.” Snyder v. United States, 603 U. S. 1, 15 (2024). Rather, the theory criminalizes a particular species of fraud: intentionally lying to induce a victim into a transaction that will cost her money or property. As Judge Learned Hand put it, “[a] man is none the less cheated out of his property, when he is induced to part with it by fraud, because he gets a quid pro quo of equal value.”
