Kousisis v. United States

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Supreme Court of the United States
Kousisis v. United States
Term: 2024
Important Dates
Argued: December 9, 2024
Decided: May 22, 2025
Outcome
affirmed
Vote
9-0
Majority
Amy Coney Barrett • Chief Justice John Roberts • Samuel Alito • Elena Kagan • Brett Kavanaugh • Ketanji Brown Jackson
Concurring
Clarence Thomas • Neil Gorsuch (in part) • Sonia Sotomayor (in judgement)

Kousisis v. United States is a case that was decided by the Supreme Court of the United States on May 22, 2025, during the court's October 2024-2025 term. The case was argued on December 9, 2024.

The Court affirmed the decision of the United States Court of Appeals for the Third Circuit in a 9-0 ruling, holding the fraudulent inducement theory was valid in convicting a party of mail or wire fraud. Justice Amy Coney Barrett delivered the majority opinion of the court.[1] Click here for more information about the ruling.

HIGHLIGHTS
  • The issue: The case concerned the fraudulent inducement theory of mail and wire fraud. Click here to learn more about the case's background.
  • The questions presented: "1) Whether deception to induce a commercial exchange can constitute mail or wire fraud, even if inflicting economic harm on the alleged victim was not the object of the scheme. 2) Whether a sovereign's statutory, regulatory, or policy interest is a property interest when compliance is a material term of payment for goods or services. 3) Whether all contract rights are 'property.'"[2]
  • The outcome: The Court affirmed the United States Court of Appeals for the Third Circuit's decision that the fraudulent inducement theory was valid in convicting a party of mail or wire fraud.


    • The case came on a writ of certiorari to the United States Court of Appeals for the Third Circuit. To review the lower court's opinion, click here.

    Background

    Case summary

    On April 3, 2018, industrial painting company Alpha Painting and Construction Co., Inc. and Alpha project manager Stamatios Kousisis were indicted on wire fraud charges. Alpha won two federally funded bridge contracts with the Pennsylvania Department of Transportation (PennDOT); the U.S. government claims that Alpha "evaded regulatory and contractual Disadvantaged Business Enterprise (DBE) participation goals to lower their costs, saving PennDOT money on work it needed while depriving it of the worthy purpose of the DBE program."[3][4]

    The government sued Alpha and Kousisis in the United States District Court for the Eastern District of Pennsylvania; a jury convicted Kousisis and Alpha of wire fraud conspiracy, three counts of substantive wire fraud, and false statements, and acquitted them on two counts of substantive wire fraud. According to Kousisis' petition to the U.S. Supreme Court, "Sentencing brought to the fore that the completed scheme inflicted no economic harm on PennDOT. Restitution was zero."[4] Kousisis was sentenced to 70 months’ imprisonment, and Alpha was ordered to pay a $500,000 fine, along with forfeiting all of its profits from the PennDOT projects at issue in the case.[3][4]

    On appeal, a three-judge panel of the United States Court of Appeals for the Third Circuit vacated the U.S. District Court for the Eastern District of Pennsylvania's loss calculation and remanded the case for further proceedings consistent with its opinion, holding:[3]

    “ On August 30, 2018, a jury convicted Stamatios Kousisis and Alpha Painting & Construction Co., Inc. ("Alpha") of, among other things, one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and three counts of wire fraud, in violation of 18 U.S.C. § 1343. Kousisis and Alpha appeal the District Court's (1) denial of their motion for judgment of acquittal, (2) jury instructions, and (3) loss calculations at sentencing. We will affirm the convictions. Given the complex nature of the fraud in this case, we commend the District Court for its attempt to determine the amount of loss for sentencing purposes. However, we must vacate the loss calculation and remand for further proceedings consistent with this opinion.[5] ”

    On February 20, 2024, Stamatios Kousisis and Alpha Painting and Construction Co., Inc. appealed to the U.S. Supreme Court, citing a 6-5 circuit split regarding "the validity of the fraudulent inducement theory of mail and wire fraud," they claim the government employed in the case.[4] On June 17, 2024, SCOTUS accepted the case to its merits docket for October term 2024-2025.

    Timeline

    The following timeline details key events in this case:

    Questions presented

    The petitioner presented the following questions to the court:[2]

    Questions presented:
    “ 1) Whether deception to induce a commercial exchange can constitute mail or wire fraud, even if inflicting economic harm on the alleged victim was not the object of the scheme. 2) Whether a sovereign's statutory, regulatory, or policy interest is a property interest when compliance is a material term of payment for goods or services. 3) Whether all contract rights are 'property.'[5] ”

    Oral argument

    Audio

    Audio of oral argument:[6]



    Transcript

    Transcript of oral argument:[7]

    Outcome

    On May 22, 2025, the Court affirmed the decision of the United States Court of Appeals for the Third Circuit in a 9-0 vote, holding the fraudulent inducement theory was valid in convicting a party of mail or wire fraud. Justice Amy Coney Barrett wrote the opinion of the court.

    Opinion

    In the majority opinion, Justice Barrett wrote:[8]

    “ The Government charged Alpha and Kousisis with wire fraud, asserting that they had fraudulently induced PennDOT to award them the painting contracts. See 18 U. S. C. §1343. Under the fraudulent-inducement theory, a defendant commits federal fraud whenever he uses a material misstatement to trick a victim into a contract that requires handing over her money or property—regardless of whether the fraudster, who often provides something in return, seeks to cause the victim net pecuniary loss. We must decide whether this theory is consistent with §1343, which reaches only those schemes that target traditional money or property interests. See Ciminelli v. United States... It is, so we affirm.[5] ”

    Concurring (Thomas)

    In a concurring opinion, Justice Clarence Thomas wrote:[8]

    “ In persuading the Court to reject petitioners’ economicloss arguments today, the Government has assured us that “the ‘essence of the bargain’ standard for materiality” will ensure that federal wire-fraud prosecutions cannot be used to target benign, everyday misstatements... Because a demanding approach to materiality is all that prevents an “extraordinarily expansive view of liability” from rendering the federal wire-fraud statute nearly limitless in scope... lower courts should hold the Government to its word.[5] ”

    Concurring (Gorsuch)

    In a concurring opinion, Justice Neil Gorsuch concurred in part and in the judgement, writing:[8]

    “ Over centuries of experience, common-law courts developed a variety of tools to sort venial lies from criminal frauds. In a brief and unfortunate diversion in an otherwise sound opinion, the Court casts doubt on whether one of those tools still applies under the federal wire-fraud statute. In the process, the Court needlessly risks turning the federal wire-fraud statute into a weapon for punishing victimless crimes. I can only trust that future courts will recognize that aside for what it is—unsound dicta.[5] ”

    Concurring (Sotomayor)

    In a concurring opinion, Justice Sonia Sotomayor concurred in part and in the judgement, writing:[8]

    “ At bottom, this case presents a classic scheme to defraud: Petitioners tricked PennDOT into paying for one thing, and then delivered something materially different. The Court today rightly holds that a defendant in that position may not escape federal fraud liability by asserting the victim nevertheless suffered no net economic loss. On that basis, I agree with the majority’s bottom-line decision to affirm the Third Circuit’s judgment.[5] ”

    Text of the opinion

    Read the full opinion here.

    October term 2024-2025

    See also: Supreme Court cases, October term 2024-2025

    The Supreme Court began hearing cases for the term on October 7, 2024. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June.[9]


    See also

    External links

    Footnotes

    1. ↑ Supreme Court of the United States, "STAMATIOS KOUSISIS, ET AL., PETITIONERS v. UNITED STATES," May 23, 2025
    2. ↑ 2.0 2.1 U.S. Supreme Court, "23-909 KOUSISIS V. UNITED STATES," June 17, 2024
    3. ↑ 3.0 3.1 3.2 3.3 United States Court of Appeals for the Third Circuit, United States v. Kousisis, decided September 22, 2023
    4. ↑ 4.0 4.1 4.2 4.3 U.S. Supreme Court, "Kousisis v. United States PETITION FOR A WRIT OF CERTIORARI," filed February 20, 2024
    5. ↑ 5.0 5.1 5.2 5.3 5.4 5.5 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    6. ↑ Supreme Court of the United States, "Oral Argument - Audio," argued December 9, 2024
    7. ↑ Supreme Court of the United States, "Oral Argument - Transcript," argued December 9, 2024
    8. ↑ 8.0 8.1 8.2 8.3 Cite error: Invalid <ref> tag; no text was provided for refs named op
    9. ↑ SupremeCourt.gov, "The Supreme Court at Work: The Term and Caseload," accessed January 24, 2022
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