decided May 22, 2025
Under 18 U.S.C. §1343, efforts to commit fraud over federally regulated transmission lines or by other means of electronic communications are felonies (i.e., “wire” frauds) punishable by up to twenty years in prison. In this case, the Court ruled that a fraudulent effort to merely induce another party to sign (or to enter) an otherwise valid and executed commercial contract can still be “wire fraud” punishable by a years’ long imprisonment. The Court explained, via a 6-3 majority opinion, that the statute criminalized fraudulent attempts to obtain valuable commercial contracts via “wire,” when the targeted party would not have made the contract if he or she knew the truth underneath the fraudulent communication. Justices Gorsuch, Sotomayor, and Thomas specially concurred at least with the result of the majority opinion, which left Mr. Kousisis under a six-year federal prison sentence for “wire fraud,” despite his otherwise satisfactory completion of the contract he had fraudulently obtained.
Comment: The underlying, objectively discernible intent of Congress behind 18 U.S.C. §1343, as currently amended, was to severely criminalize all forms of fraud, and even attempted frauds, via electronic transmission, without concern over any alleged “materiality” or “immateriality” of the allegedly false statement concerning the sought-after contract. Yet the Court, in interpreting prior versions of the statute without all of the current amendments had ruled that “materiality” was an essential element of a wire fraud prosecution. The majority opinion worked around that precedent while still maintaining its validity as the “law,” leading to the technical, and difficult-to-understand doubts about the “law” expressed in the three concurring opinions. A better ruling would have affirmed Mr. Kousisis’ criminal sentence, for deliberately making a false statement of fact in contract negotiations with the intent of winning the job at stake, without worrying over its “materiality” to that job, because the wording of the statute has changed since the “materiality” element was inserted by the Court into the prosecution’s burden-of-proof.
Dan D. Rhea
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