Kousisis v. United States

605 U.S. 114 (2025) Supreme Court of the United States 2025-05-22

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)

Facts

  1. 1 Scheme or artifice to defraud satisfied proved
    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.
  2. 1 Scheme or artifice to defraud satisfied proved
    In short, Markias was no more than a paper pusher, funneling checks and invoices to and from Alpha's actual suppliers.
  3. 1 Scheme or artifice to defraud satisfied proved
    As the proj- ects progressed, he falsely reported qualifying payments to Markias.
  4. 1 Scheme or artifice to defraud satisfied proved
    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.
  5. 1 Scheme or artifice to defraud satisfied proved
    A conviction premised on a fraudulent inducement thus com- ports with § 1343.
  6. 1 Scheme or artifice to defraud satisfied proved
    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.
  7. 2 Traditional money or property as an object satisfied proved
    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.
  8. 2 Traditional money or property as an object satisfied proved
    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.
  9. 2 Traditional money or property as an object satisfied proved
    Obtaining the victim's money or property must have been the “aim,” not an “incidental byproduct,” of the defendant's fraud.
  10. 2 Traditional money or property as an object satisfied proved
    Their goal? To “obtai[n] money” (tens of millions of dollars) from Penn- DOT.
  11. 2 Traditional money or property as an object satisfied proved
    In short, the wire fraud statute is agnostic about economic loss. The statute does not so much as mention loss, let alone require it.
  12. 2 Traditional money or property as an object satisfied proved
    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.
  13. 2 Traditional money or property as an object satisfied proved
    Nothing suggests that they concocted their scheme with the goal of thwarting Penn- DOT's disadvantaged-business initiative.
  14. 3 Material deception satisfied conceded
    Failing to comply with this requirement would consti- tute “a material breach” and could “result in [contract] termi- nation.”
  15. 3 Material deception satisfied conceded
    We need not settle the debate here, however, because Alpha and Kousisis have not contested that their misrepresentations were material.
  16. 3 Material deception satisfied conceded
    For now, it is enough to reiterate “that materiality of falsehood is an element of ”— and thus a limit on—the federal fraud statutes.