
Editor’s Note: PCCE has been following the Supreme Court’s recent decision in Kousisis v. United States, which, unlike recent cases narrowing the scope of white collar crimes, appears to have expanded the reach of the federal mail and wire fraud statutes. In this post, PCCE invited leading white collar practitioners to discuss the implications of the Court’s decision.

Left to right: Robertston Park, Alexandra Marinzel, Helen Cantwell, Winston Paes, and Mark Krotoski (photos courtesy of the authors)
by Robertston Park and Alexandra Marinzel
Prior to Kousisis, recent Supreme Court decisions had limited the reach of fraud statutes, leading many commentators to speculate that the Court’s limiting trend would continue here. However, in a rare unanimous decision, the Court went in the other direction and held that a conviction under the federal wire fraud statute does not require a showing of economic loss. While at surface level, Kousisis appears to buck the Court’s recent trend, a careful reading of the majority opinion and the separate concurring opinions authored by Justices Thomas and Gorsuch indicate that the Court’s holding could well have been different if not limited to the narrow issue of pecuniary loss. Indeed, the concurring opinions read more like dissents than concurrences.
As noted in Judge Barrett’s majority opinion, the parties did not dispute the materiality of the defendants’ false representations about contracting with a disadvantaged business enterprise (“DBE”), and therefore, the Court did not analyze materiality further than to say “that materiality of falsehood is an element of – and thus a limit on – the federal fraud statutes.” In his concurrence, Justice Thomas expressed significant doubt that the defendants’ false representations were material, and even questioned the constitutionality of the statute creating the DBE requirement in US Department of Transportation contracts. Clearly, he would have ruled differently had materiality been at issue. Justice Gorsuch noted that the question presented was a narrow one, and took serious issue with footnote 5 in the majority opinion, suggesting that it improperly threatened to upend the common law injury requirement necessary to sustain a fraud conviction. Justice Gorsuch also raised strongly worded concerns about the potential over-criminalization of harmless lies and the creation of so-called morality police.
So while the justices agreed on the issue of economic loss, their agreement appears to stop there. Accordingly, it seems unlikely that Kousisis represents a reversal in the Court’s efforts to narrow the scope and reach of fraud statutes, and rather reflects only a narrow holding on a narrow question.
Robertston Park is a Partner and Alexandra Marinzel is Of Counsel at Davis Wright Tremaine LLP.
by Helen Cantwell and Winston Paes
The Supreme Court’s decision in Kousisis comes on the heels of DOJ’s announcement establishing a new Civil Rights Fraud Initiative. The Initiative, announced by Deputy Attorney General Todd Blanche, aims to enforce the False Claims Act (“FCA”) against federal contractors and recipients of federal funds alleged to have knowingly violated civil rights laws, if DOJ determines that these recipients’ certifications are inconsistent with their approaches to antisemitism, gender identity issues, and diversity, equity, and inclusion (“DEI”) programs. It remains to be seen whether DOJ will use the Kousisis decision to bolster the Initiative by claiming that misrepresentations in certifications by federal funds recipients and federal contractors also violate the criminal wire fraud statute, a statute that has in recent years been significantly circumscribed by the courts.
To bring charges under either the criminal wire fraud statute or the civil FCA, any alleged misrepresentation or false certification needs to be material. Because the defendants did not contest the materiality of their misrepresentations, the Kousisis majority did not directly address this requirement or whether it differs for wire fraud charges and FCA claims. But, in separate concurrences, Justice Thomas and Justice Sotomayor outlined two different views of materiality that suggest different potential implications for DOJ. According to Justice Thomas, even though the contracts at issue in Kousisis explicitly required subcontracting a certain percentage of the total contract to a “disadvantaged business,” misrepresentations about compliance with this requirement were not material because they did not go to the “essence of the bargain”—the materiality standard for FCA claims—since the contracts “were for bridge repairs, not minority hiring.” Although Justice Thomas did not express a “definitive view” about whether the materiality standard is identical for wire fraud and the FCA, he indicated that courts should be particularly reluctant to presume the materiality of provisions in government contracts. This is because the government may include in its contracts political or regulatory requirements that are “unrelated to the contracts’ core purpose” to “achieve policy goals by leveraging its unmatched bargaining position.” By contrast, in her concurrence, Justice Sotomayor found the same misrepresentations material under the “essence of the bargain” test. In Justice Sotomayor’s view, the defendants had promised to provide repair services that complied with the Disadvantaged Business Enterprise (“DBE”) program and then delivered something materially different by providing repair services that did not comply with that program. This was because DBE compliance “featured prominently” in the contracts and bidding process, and because failure to comply with the DBE program could yield “serious legal consequences[,]” including an enforcement action or the suspension or termination of federal funds.
Considering the aims of the Initiative and DOJ’s stated intention to use it to incentivize universities and corporations to adhere to the Trump administration’s policy priorities, these two concurrences may prove politically counterintuitive. Specifically, under Justice Thomas’s approach, the materiality requirement would serve as a more robust limit on the government’s ability to bring charges against federal funding recipients who certify compliance with federal civil rights laws but maintain DEI programs or other disfavored policies. Conversely, Justice Sotomayor’s approach lowers the bar on materiality, providing DOJ with more leeway to bring such cases. Given that the Kousisis majority did not reach the question of materiality, it is not yet clear whether DOJ will adopt Justice Sotomayor’s lower standard of materiality for misrepresentations in certifications for federal funding as it embarks on enforcing the goals of the Initiative, and whether the courts, in an effort to curb any overreach by DOJ, will embrace Justice Thomas’s higher materiality standard.
Helen Cantwell and Winston Paes are partners at Debevoise & Plimpton LLP. Sofia Squatriti Muno and Raquel Leslie, associates at the firm, contributed to this note.
A central question continues to focus on the limits to federal criminal prosecution under the wire and mail fraud statues particularly where civil remedies may apply. The Supreme Court noted a prior concern about a prosecution that “criminalizes traditionally civil matters and federalizes traditionally state matters.”[1] Over recent years, the Supreme Court has narrowed the scope of the federal fraud statutes and what many refer to as the overcriminalization of the mail and wire fraud statutes.[2] When the Supreme Court granted certiorari review in Kousisis v. United States, No. 23-909, one question was whether the narrowing trend would continue.[3]
On May 22, 2025, the Supreme Court issued its opinion.[4] The holding is a narrow one, limited to construing the money-or-property requirement under the wire fraud statute which was “at the heart of this dispute.”[5] In resolving a circuit split, the Court focused on “a particular species of fraud: intentionally lying to induce a victim into a transaction that will cost her money or property.”[6] The Court held, “The fraudulent-inducement theory is consistent with both the text of the wire fraud statute and our precedent interpreting it.”[7] However, as Justice Sonia Sotomayor clarified in her concurring opinion, the limited holding did not address other types of fraud cases: “The Court therefore has no reason to opine on a class of fraudulent-inducement cases distinct from this one: those in which a defendant provides exactly the goods or services that they promised to deliver, but lies in other ways to induce the transaction.”[8]
When Chief Justice John G. Roberts, Jr. asked the Deputy Solicitor General during oral argument, what are the limits to the theory of prosecution advanced by the government under the fraud statute, the response was the “materiality” requirement.[9] However, the materiality element was not contested in the Kousisis case.[10] As the opinion explained, under this standard “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.”[11] The Supreme Court noted that the distinct role and function of the materiality requirement was a “demanding” one which “substantially narrows the universe of actionable misrepresentations,”[12] and provides “the principled basis for distinguishing everyday misstatements from actionable fraud.”[13] In Kousisis, the government specifically asked the Supreme Court to apply “an essence-of-the-bargain test, under which a misrepresentation is material only if it goes to the very essence of the parties’ bargain.”[14] This particular standard “is rigorous and context specific.”[15]
While the Kousisis opinion resolved a circuit split on a narrow issue, it highlights a broader issue that the scope of the wire and mail fraud statutes will largely turn on the application of the materiality element including the guidance given to juries in deciding this central issue. The focus on the scope or overcriminalization of the federal fraud statutes now shifts to the materiality requirement.
Mark Krotoski is a Litigation Partner at Pillsbury Winthrop Shaw Pittman LLP.
[1] Ciminelli v. United States, 598 U.S. 306, 143 S.Ct. 1121, 1128 (2023).
[2] See, e.g., Mark Krotoski & Anne Voigts, High Court Could Clarify Scope of Oft-Used Wire, Mail Fraud Laws, Bloomberg Law (Dec. 4, 2024) (summarizing trend of Supreme Court cases), https://news.bloomberglaw.com/crypto/high-court-could-clarify-scope-of-oft-used-wire-mail-fraud-laws.
[3] Id.
[4] Kousisis v. United States, No. 23-909, 2025 WL 1459593 (May 22, 2025).
[5] Kousisis, 2025 WL 1459593, *5.
[6] Id. at *11.
[7] Id. at *5.
[8] See id., at *22 (Sotomayor, J., concurring).
[9] Kousisis v. United States, No. 23-909, Oral Argument Transcript, at 61:1-22 (Dec. 9, 2024).
[10] See 2025 WL 1459593, *9 (noting materiality was not contested).
[11] Id. (citations omitted).
[12] Id., at *11 (citations omitted; emphasis added).
[13] Id., at *9 (emphasis added); see also id. at *16 (Thomas, J., concurring) (same).
[14] Id., at *9 (citing Brief for United States 43–45; cleaned up).
[15] Id., at *16 (Thomas, J., concurring).
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