Supreme Court Upholds Wire Fraud Conviction of Pennsylvania Contractor

The U.S. Supreme Court unanimously upheld the wire fraud conviction of Stamatios Kousisis and Alpha Painting & Construction for falsely claiming to use a disadvantaged business enterprise (DBE) on federally funded transportation projects, ruling that economic loss is not required to prove wire fraud. The Court emphasized that the fraudulent inducement of a contract through deception, regardless of whether the victim received equal value, qualifies as criminal fraud because it deprives the victim of money or property. The case involved contracts awarded by the Pennsylvania Department of Transportation for significant projects, wherein the certified DBE acted merely as a pass-through without performing the required work, violating the “commercially useful function” requirement. This decision resolves a split among appellate courts and broadens the government's ability to prosecute fraud in public contracting and beyond. The ruling marks a rare win for federal prosecutors amid recent Supreme Court skepticism toward expansive interpretations of federal fraud laws. It also reverses a recent trend of the Court limiting the scope of white-collar prosecutions, underscoring the importance of truthful representations in government contracts promoting diversity.