Stamatios Kousisis and Alpha Painting and Construction Co., Inc., Petitioners v. United States

The Supreme Court ruled 9-0 that a person can be convicted of wire fraud for using material lies to get a contract, even if they did not intend to cause the victim financial loss. The Court found that the defendants committed fraud by falsely claiming they would use a disadvantaged business enterprise (DBE) to win government contracts. The ruling clarifies that the government only needs to prove that a defendant used deception to obtain money or property, not that the victim ended up poorer.

This decision makes it easier for the government to prosecute contractors who lie to win bids, even if they perform the work well. It specifically impacts companies that use 'pass-through' businesses to bypass diversity requirements in government projects. Contractors now face higher risks of federal prison time for any material misrepresentation used to secure a deal.

For years, lower courts were split on whether fraud requires a 'loss' to the victim or just a 'gain' by the liar. This case settles that debate by focusing on the act of 'obtaining' property through lies rather than the final bank balance of the victim. It reinforces the idea that the government has a right to know who it is actually doing business with.

Justice Amy Coney Barrett wrote the unanimous 9-0 opinion affirming the conviction. Justice Thomas and Justice Gorsuch each wrote separate opinions agreeing with the result but expressing different views on how 'material' the lies were and how broad the fraud law should be.

“The statute’s language criminalizes schemes to 'obtain' money or property by means of material lies. 'Obtain' means to gain possession of something and does not require that the victim end up worse off financially.”

Lying to get a government contract is wire fraud even if you do the job and the government doesn't lose money.

Lower courts will now use this standard to evaluate other types of commercial fraud where the financial harm is unclear. Federal agencies may increase oversight of disadvantaged business requirements to ensure contractors are not using deceptive pass-through schemes. The defendants' convictions remain in place following this high court affirmation.

The dispute was whether defendants could be guilty of wire fraud if they lied to get a contract but did not intend to cause financial harm. The defendants argued that because they performed the work, no real fraud occurred.

Contractors must be strictly honest about meeting diversity and participation goals. Even if the work is completed perfectly, lying about who is doing the work can lead to federal criminal charges.

The Court held that wire fraud occurs when a defendant uses material lies to induce a victim into a transaction. The government does not need to prove the victim suffered an actual economic loss.

The Supreme Court has affirmed the lower court's judgment, meaning the case is effectively over. Lower courts will now apply this ruling to other pending fraud cases across the country.

This ruling clarifies the 'money or property' requirement that the Court has narrowed in recent years. It confirms that while fraud must involve property, it does not strictly require a net financial loss.