Wire Fraud · Federal Charges
Does Full Performance Defeat Wire Fraud?
Completed work does not automatically defeat a fraudulent-inducement charge. Materiality, intent, the property sought, and loss remain distinct questions.
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Short answer: No, not by itself. In Kousisis v. United States, the Supreme Court held that a defendant may be convicted of fraudulently inducing a transaction to obtain money or property even when the victim receives the full economic benefit of its bargain. Finished work still matters. It can bear on the alleged lie, materiality, intent, loss, and remedy.
What Kousisis decided
The defendants won Pennsylvania Department of Transportation contracts for painting work in Philadelphia. The contracts required part of the work to go to a disadvantaged business enterprise. Prosecutors said the company told the state a qualifying business would supply materials, then used that business only as a pass-through for invoices and payments. The painting was completed. The defense argued there was no fraud because the state got the work it paid for.
The Court rejected that argument. A material lie used to obtain a contract payment can support a federal fraud conviction. The government does not have to prove a net economic loss.
What the prosecution still has to prove
Kousisis did not remove any element of wire fraud under 18 U.S.C. § 1343. Use this table to sort the file by element:
| Element | What to look for in the file |
|---|---|
| A scheme to defraud | The specific statement, certification, or promise the indictment calls false. |
| Materiality | Whether the statement could influence the decision to pay. A trivial or unrelated falsehood does not qualify. |
| Intent to defraud | Emails, drafts, and meeting notes showing what the person knew when the statement was made. |
| Money or property as the object | The payment, contract award, or transfer the scheme allegedly sought. |
| A qualifying wire | The charged email, call, or electronic transfer, and the interstate or foreign route it traveled. |
A road contract example
Compare two false statements made on the same $400,000 county road job.
| Fact | False subcontractor certification | False coffee-brand claim |
|---|---|---|
| What was said | The pay request says a required disadvantaged-business subcontractor did $60,000 of hauling. It did not. | A site email names the wrong brand of coffee served at meetings. |
| Tied to the payment? | Yes. The county required the certification before paying. | No. The county’s payment did not depend on it. |
| Does the finished road end the case? | No. Under Kousisis, materiality and intent still decide it. | The lie is immaterial, so it does not support wire fraud. |
The Ciminelli limit still applies
Ciminelli v. United States rejected the "right to control" theory, which treated the loss of potentially valuable economic information as a property loss. Prosecutors must identify money or traditional property that the scheme sought. A lie that only kept a decision-maker from having complete information is not enough.
| Question about the indictment | Why it matters after Ciminelli |
|---|---|
| What payment, transfer, or property interest does it say the scheme targeted? | The government must identify money or traditional property. |
| Does it describe only a contract breach or missing information? | Lost information alone is not property. |
| Does the misstatement connect to that payment? | A lie about the background of the deal may not show a property objective. |
Conviction, loss, and restitution are separate questions
Proof of a fraud theory does not settle the dollar figures. Each measure has its own rules and evidence.
| Question | How full performance may matter |
|---|---|
| Was there a crime? | Delivered work can bear on materiality and intent, but it does not automatically defeat fraudulent inducement. |
| What is the sentencing loss? | The applicable guideline edition decides how loss is measured, including whether value delivered is credited. |
| What restitution is owed? | Restitution depends on the victim’s actual loss under the governing statute, which can differ from the amount paid. |
| Is forfeiture sought? | Forfeiture has its own statutory basis and needs a separate analysis. |
Records to gather
- The contract, bid documents, and every certification attached to a payment request.
- Proof of the work delivered, such as inspection reports, acceptance letters, change orders, and punch lists.
- Payment records showing when each request was submitted, approved, and paid.
- Emails and messages about each certification, including who drafted and approved it.
- Any refunds, credits, or warranty work after delivery.
Got a target letter, subpoena, or indictment about a finished job? Do not send explanations to the agency or investigators yourself. Bring these records to a lawyer, who can compare them with each charged count.
Sources
This article provides general information, not legal advice. The law and its application depend on the facts and the law in effect on the relevant date. Consult a lawyer about a specific matter.
Wire Fraud Defense · Texas and Federal Financial Crimes Defense
