Editor’s Note: The NYU Law Program on Corporate Compliance and Enforcement (PCCE) is following the recent U.S. Supreme Court decisions in Percoco v. United States and Ciminelli v. United States, which narrow the scope of honest services fraud and eliminate the so-called “Right to Control” theory in federal fraud cases, respectively. Together, these two cases continue a trend of circumscribing the federal government’s ability to prosecute domestic public corruption in the United States.
by Helen V. Cantwell, Andrew J. Ceresney, Courtney M. Dankworth, John Gleeson, David A. O’Neil, Winston M. Paes, Bruce E. Yannett, Douglas S. Zolkind, and Scott M. Caravello
From top left to right: Helen V. Cantwell, Andrew J. Ceresney, Courtney M. Dankworth, John Gleeson, and David A. O’Neil. From bottom left to right: Winston M. Paes, Bruce E. Yannett, Douglas S. Zolkind, and Scott M. Caravello.
(Photos courtesy of Debevoise & Plimpton LLP)
On May 11, 2023, the United States Supreme Court issued its latest opinion in a series of decisions narrowing the scope of the federal fraud statutes. In that case, Ciminelli v. United States, the Court foreclosed prosecutors’ ability to pursue fraud charges for misrepresentations that did not result in financial harm, but instead deprived victims of information that may have been useful in deciding how to use assets. In repudiating this theory, known as “right-to-control,” a unanimous Court held that the federal fraud statutes touch only schemes aimed at traditional property interests, like money, and not “mere information.” To have held otherwise would have meant that “almost any deceptive act could be a crime.”
Going forward, the Department of Justice will not be able to prosecute a defendant for engaging in mere deceptive or unethical conduct, but must additionally prove that the defendant’s objective was to deprive the victim of money or property.