Source: cases/18usc1343/us-605-114-kousisis-v-us.case
Case source: https://www.neochart.com/catalog/cases/clus/volume_605/114/index.html
Obtaining the victim's money or property must have been the “aim,” not an “incidental byproduct,” of the defendant's fraud.
In short, the wire fraud statute is agnostic about economic loss. The statute does not so much as mention loss, let alone require it.
But if, as here, the fraudster seeks to induce the Gov- ernment into a transfer of its money or property, that loss is suffcient to sustain a fraud conviction.
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.
Rather, the theory criminalizes a particular species of fraud: intention- ally lying to induce a victim into a transaction that will cost her money or property.
By using Markias as a pass-through entity, petitioners “devised” a “scheme” to ob- tain contracts through feigned compliance with PennDOT's disadvantaged-business requirement.
A conviction premised on a fraudulent inducement thus com- ports with § 1343.
For now, it is enough to reiterate “that materiality of falsehood is an element of ”— and thus a limit on—the federal fraud statutes.
We need not settle the debate here, however, because Alpha and Kousisis have not contested that their misrepresentations were material.
casedsl 1
case /us/605/114
name Kousisis v. United States
cite 605 U.S. 114 (2025)
# IR court field says: scotus
court Supreme Court of the United States
date 2025-05-22
url catalog/cases/clus/volume_605/114/index.html
source ir/caselaw/clus_605.jsonl sha1=860fc77cb777643d15f6fb05358309e5dc329d10 chars=60000
law 18usc1343
role applied
posture criminal; jury convictions on three wire fraud counts and a 1349 conspiracy (disadvantaged-business pass-through on two PennDOT painting contracts); judgment of acquittal denied, affirmed by CA3; certiorari on whether fraudulent inducement without intended net economic loss is wire fraud
result claimant-won
element property : satisfied [proved]
theory fraudulent inducement: contract payments obtained although the victim received work of full economic value
variant money-as-object/public-contract-payments-for-fully-performed-work
fact @15400..15574 [supports] | PennDOT, satisfed with Alpha's paint and repair work, paid it accordingly. By the time the last coat of paint had dried, Alpha had turned a gross proft of over $20 mil- lion.
fact @22652..22729 [supports] | Their goal? To “obtai[n] money” (tens of millions of dollars) from Penn- DOT.
fact @15918..16098 [cuts-against] | Alpha and Kousisis moved for a judgment of acquittal, arguing that because their paintwork met PennDOT's expectations, PennDOT had received the full economic beneft of its bargain.
fact @44636..44759 [supports absent] | Nothing suggests that they concocted their scheme with the goal of thwarting Penn- DOT's disadvantaged-business initiative.
rule @20152..20275 | Obtaining the victim's money or property must have been the “aim,” not an “incidental byproduct,” of the defendant's fraud.
rule @23857..23990 | In short, the wire fraud statute is agnostic about economic loss. The statute does not so much as mention loss, let alone require it.
held @44015..44174 | But if, as here, the fraudster seeks to induce the Gov- ernment into a transfer of its money or property, that loss is suffcient to sustain a fraud conviction.
gloss Money paid under the contracts was the object of the scheme even though the painting was done to the agency's satisfaction; frustrating the disadvantaged-business rule was only a downstream byproduct, so the Kelly/Cleveland regulatory-power limit and the rejected right-to-control theory (Ciminelli) are not engaged. The no-net-economic-loss rule the Court applies here is recorded in the next `property` block.
element property : not-reached
role rule-announced
theory rejected requirement: net economic loss to the victim (or a purpose to cause it)
variant money-or-property-object/no-net-economic-loss-required
rule @23991..24160 | 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.
gloss The rule of the case, stated as a construction of the money-or-property requirement: when money or property is the object of the scheme, the statute does not require that the victim suffer, or that the defendant seek, a net economic loss. It is a rule about `property`, not a separate mens rea ruling. Kept as its own not-reached / rule-announced block only so that the variant can name the rule; its application to these facts is the satisfied `property` block above.
element scheme : satisfied [proved]
variant fraudulent-inducement/false-subcontractor-compliance-promise-to-win-public-contract
fact @13848..14046 [supports] | Accordingly, as part of the bidding process, Kousisis represented that Alpha would acquire ap- proximately $6.4 million in painting supplies from Markias, Inc., a prequalifed disadvantaged business.
fact @14672..14790 [supports] | In short, Markias was no more than a paper pusher, funneling checks and invoices to and from Alpha's actual suppliers.
fact @15318..15399 [supports] | As the proj- ects progressed, he falsely reported qualifying payments to Markias.
rule @48756..48916 | Rather, the theory criminalizes a particular species of fraud: intention- ally lying to induce a victim into a transaction that will cost her money or property.
held @22470..22645 | By using Markias as a pass-through entity, petitioners “devised” a “scheme” to ob- tain contracts through feigned compliance with PennDOT's disadvantaged-business requirement.
held @24161..24238 | A conviction premised on a fraudulent inducement thus com- ports with § 1343.
gloss A false promise in the bid plus later false certifications of performance; giving equal value in return does not take the plan outside "scheme to defraud / to obtain money by false pretenses".
element materiality : satisfied [conceded]
variant uncontested/contract-condition-labelled-material-breach
fact @13706..13832 [supports] | Failing to comply with this requirement would consti- tute “a material breach” and could “result in [contract] termi- nation.”
rule @42072..42205 | For now, it is enough to reiterate “that materiality of falsehood is an element of ”— and thus a limit on—the federal fraud statutes.
held @41936..42071 | We need not settle the debate here, however, because Alpha and Kousisis have not contested that their misrepresentations were material.
gloss CAVEAT: uncontested point; the Court made no determination of materiality on these facts and left the governing standard open.
gloss Materiality of these misrepresentations was not contested, so the element is met only by concession. The governing standard (traditional reasonable-person/known-importance test vs. the Government's essence-of-the-bargain test) is expressly left open; the Court stresses that materiality, not economic loss or "uniqueness", is what limits the fraudulent-inducement theory.
element intent : not-reached
gloss No ruling on the intent element: whether these defendants acted with intent to defraud was not separately contested, and the Court's no-net-economic-loss rule is a construction of the money-or-property requirement (see the rule-announced `property` block), not a holding about mens rea.
misfit The core holding is the REJECTION of a proposed requirement (intended net economic loss); v1 can only show it as a satisfied `property` block plus rule quotes and a second, rule-announced `property` block whose variant names the rejected requirement. Known gap (rule-announced has no content type; "X is not an element").
misfit The rejected requirement could be phrased under three declared elements (scheme, property, intent); the Court treats it under money-or-property, so it is recorded only under `property` and `intent` is left bare not-reached. Splitting scheme from property is the annotator's choice: the same passage ("Take the facts of this very case") decides scheme and property together.
misfit materiality carries two things with different status: a concession on the facts (satisfied [conceded]) and a reserved question of law (which materiality test). One basis per block; known gap.
misfit The IR text is a single 60000-char paragraph of a preliminary print: quotes contain line-break hyphenation ("Penn- DOT", "mil- lion"), dropped ligatures ("proft", "satisfed") and must dodge running heads ("Page Proof Pending Publication") that fall mid-sentence; several otherwise better sentences were unusable for that reason. The first ~8000 chars are the reporter's syllabus, not the opinion; no quote is taken from it.
misfit Three separate opinions (Thomas concurring, doubting materiality on these facts; Gorsuch concurring in part, proposing an injury requirement; Sotomayor concurring in the judgment) are not recorded: v1 has no scope for a concurrence, and the text is capped at 60000 chars inside Thomas's concurrence, so Gorsuch and Sotomayor are not in the IR text at all.
misfit Count 4 (18 U.S.C. 1349 conspiracy) is affirmed on the same reasoning; another statute, not recorded. wire / interstate / furtherance were not in issue and get no block.