5 Critical Steps to Take Today If the Supreme Court’s Fraud Ruling Affects Your Federal Investigation

1. Immediately Assess the Government’s Theory of Property Under 18 U.S.C. § 1346 and § 1343

In my 25 years as a federal prosecutor, I saw countless indictments that relied on the “intangible right of honest services” or a “right to control” economic information as the property interest at stake. The Supreme Court’s recent decision in Ciminelli v. United States (2023) and its companion cases have dramatically narrowed the scope of what constitutes “property” for wire fraud under 18 U.S.C. § 1343 and honest-services fraud under 18 U.S.C. § 1346. The Court held that the “right to control” a decision, without a corresponding tangible economic loss, does not satisfy the property element of the fraud statutes. If your investigation involves allegations that you deprived a public entity or private employer of “honest services” or “confidential information” without a concrete financial harm, the entire legal foundation of the case may now be unsound. You must ask your attorney to immediately review the indictment or target letter to identify whether the government has alleged a traditional property interest—such as money, real estate, or specific trade secrets—or merely a regulatory or informational interest. If the latter, we have a powerful basis for a motion to dismiss under Federal Rule of Criminal Procedure 12(b)(3)(B)(v).

2. File a Timely Motion to Dismiss Under Federal Rule of Criminal Procedure 12(b)(3)(B)(v)

Federal Rule of Criminal Procedure 12(b)(3)(B)(v) requires that any motion alleging a defect in the indictment—including a lack of jurisdiction or failure to state an offense—must be filed before trial, typically within 21 days of arraignment. This deadline is jurisdictional and cannot be extended by stipulation or oral agreement. If you fail to raise a challenge to the government’s fraud theory at this stage, you will waive the argument forever, even if the Supreme Court’s ruling directly invalidates the charging document. I have seen experienced defense attorneys lose this critical issue because they assumed they could raise it later in a motion for judgment of acquittal under Rule 29. Do not make that mistake. Your motion should cite the Supreme Court’s holding that “property” under § 1343 must be a specific, identifiable asset, not an amorphous right to make an informed decision. Attach the grand jury transcript if you can obtain it, and argue that the government presented no evidence of a tangible property loss.

3. Secure All Grand Jury Materials and Discovery to Pinpoint the Government’s Theory of “Property”

Under the Jencks Act, 18 U.S.C. § 3500, and Federal Rule of Criminal Procedure 16(a)(1)(E), the government must disclose any grand jury testimony of witnesses it intends to call at trial, as well as any documents that are material to the defense. You need to immediately file a motion for early production of these materials, specifically targeting any evidence that purports to show a “property interest” in information, data, or regulatory compliance. In my experience, prosecutors often build fraud cases around the theory that an employer’s “right to control” its internal data or a government’s “right to honest services” is itself a property interest. The Supreme Court has now rejected that expansive view. If the discovery reveals that the government’s entire theory rests on a “right to control” or “intangible benefit” without a corresponding financial loss, you can move for a bill of particulars under Federal Rule of Criminal Procedure 7(f) to force the government to specify the exact property interest it claims was taken. This procedural move often exposes the weakness of the government’s case and may lead to a dismissal or a favorable plea offer.

4. Review All Proffer Agreements and Cooperation Strategies in Light of the New Mens Rea Standard

The Supreme Court’s ruling also impacts the mens rea element of fraud, specifically the requirement that the defendant “knowingly” participated in a scheme to deprive another of property. In Percoco v. United States (2023), the Court clarified that a private citizen does not owe a fiduciary duty to the public unless they have “agreed to perform” a government function—a much narrower standard than the government previously argued. If you have already signed a proffer agreement under 18 U.S.C. § 6002 or a cooperation letter, you must revisit that agreement with counsel immediately. Statements you made during a proffer that were based on the government’s now-defunct legal theory may be inadmissible or may require a limiting instruction. Additionally, if you are considering a cooperation strategy, the new legal landscape means that the government’s leverage over you may be significantly reduced. In my practice, I have already seen two federal prosecutors in the Southern District of New York decline to indict cases that were pending under the old “right to control” theory. Do not make any admissions or waive any rights until your attorney has fully analyzed how the Supreme Court’s ruling affects the specific factual allegations against you.

5. Preserve All Privileged Communications and Work Product Under the Attorney-Client Privilege

When the legal landscape shifts as dramatically as it has with these fraud rulings, the government may attempt to use your own internal communications against you by arguing that you “knew” the scheme was illegal. You must immediately issue a written directive to all employees, agents, and affiliates to preserve all documents and communications that are subject to the attorney-client privilege under Federal Rule of Evidence 502. This includes emails, meeting notes, and internal compliance reports that discuss the nature of the information or data at issue. The government may argue that the Supreme Court’s ruling retroactively clarifies that your conduct was always illegal, and they will scrutinize your pre-indictment statements for evidence of criminal intent. To protect yourself, you should also consider hiring an independent forensic examiner to create a privileged “taint team” review of your electronic communications. In my 25 years of practice, I have learned that the government’s greatest advantage is often the defendant’s own words, taken out of context. A properly preserved privilege log and a clear chain of custody for privileged materials can prevent the government from using your internal discussions as evidence of guilty knowledge.

If you or your organization is under federal investigation and the Supreme Court’s recent fraud rulings may affect your case, you need experienced counsel who understands the nuances of 18 U.S.C. §§ 1341, 1343, and 1346. In my 25 years as a federal prosecutor and now as a defense attorney, I have successfully moved to dismiss indictments that rested on the now-rejected “right to control” theory. Time is critical—motions under Rule 12 have strict deadlines, and the government will not wait. Contact my office today for a confidential, privileged consultation to assess your exposure and develop a strategy to protect your rights, your reputation, and your freedom.