Скачать или смотреть ORAL ARGUMENT: KOUSISIS V. UNITED STATES

ORAL ARGUMENT: KOUSISIS V. UNITED STATES

Supreme Court Reviews Scope of Federal Fraud Statutes in Kousisis v. United States

Washington, D.C. — December 9, 2024 — The U.S. Supreme Court engaged in oral arguments for Kousisis v. United States (Docket No. 23-909), a case that examines the boundaries of federal fraud statutes, particularly concerning deceptive practices that may not directly result in economic harm to the victim.

Case Background

Stamatios Kousisis and Alpha Painting & Construction Co., Inc. secured two bridge-repair contracts from the Pennsylvania Department of Transportation (PennDOT). They represented that a significant portion of the work would be subcontracted to a Disadvantaged Business Enterprise (DBE), as mandated by federal guidelines to support minority-owned businesses. However, it was alleged that the DBE involvement was nominal, with Kousisis and Alpha performing the majority of the work themselves. This led to convictions for wire fraud and conspiracy, despite no direct economic loss to PennDOT.

Legal Questions

The Supreme Court is considering:

Whether deception to induce a commercial exchange constitutes mail or wire fraud, even if causing economic harm to the victim was not the scheme's objective.

Whether a government's regulatory or policy interest qualifies as "property" when compliance is a material term of payment for goods or services.

Whether all contract rights are considered "property" under federal fraud statutes.

Oral Arguments

Jeffrey L. Fisher represented Kousisis, arguing that the fraud statutes should not apply when the victim receives the bargained-for goods or services without economic harm. He cautioned that an expansive interpretation could criminalize commonplace business misrepresentations.

Deputy Solicitor General Eric J. Feigin, representing the United States, contended that the deception undermined the integrity of the DBE program, constituting fraud regardless of direct economic loss. He emphasized that the misrepresentation deprived PennDOT of its right to allocate funds according to its policy objectives.

Justices' Inquiries

The Justices probed both sides with hypotheticals to explore the limits of fraud statutes. Justice Ketanji Brown Jackson questioned why the case didn't represent a "classic fraudulent scheme to obtain property under false pretenses," highlighting the misrepresentation's impact on PennDOT's contractual decisions.

Justice Neil Gorsuch expressed concerns about overcriminalization, suggesting that accepting the government's broad interpretation could render trivial business misrepresentations as federal crimes.

Implications

The Court's decision will clarify the reach of federal fraud statutes, particularly whether deceptive practices that do not cause direct economic harm can still constitute criminal fraud. A ruling favoring the government could strengthen enforcement against fraud schemes targeting regulatory programs, while a decision for Kousisis might limit federal fraud prosecutions to cases involving clear economic injury to victims.

The decision is anticipated by June 2025.

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