Whether deceit that merely influences a victim's spending decision, without contemplating tangible economic injury, constitutes property fraud under the mail and wire fraud statutes

No question identified. : On September 21, 2023 the Circuit granted in part and denied in part Applicants’ timely petition for rehearing. Exhibit “A,” Order. It declined to reconsider its affirmance of the convictions, but granting rehearing to address Alpha Painting’s statutory challenges to the forfeiture order entered against it. The Circuit also vacated its April 21, 2023 opinion and judgment. The Circuit issued a new precedential opinion on September 22, 2023, which modified aspects of its discussion of the basis for affirming the convictions. Exhibit “B,” Opinion post-rehearing. The Circuit addressed Alpha Painting’s forfeiture issues in a separate, not-precedential, opinion issued September 27, 2023, and issued judgment in both matters on that date. Because the contemplated petition for certiorari would address the Circuit’s basis for affirming the fraud convictions, a topic on which the Circuit modified its opinion but denied rehearing, Applicants interpret this Court’s Rules 13.1 and 13.3 to impose a deadline of December 20, 2023. This application is being filed at least ten days before that date. Rule 30.2. This Court has jurisdiction under 28 U.S.C. §1254(1). 2. Opinions Below. After granting rehearing in part and denying it in part (see Exhibit “A”) the Third Circuit issued a precedential opinion (per McKee, J., with Greenaway, Jr. and Restrepo, JJ.) published at United States v. Kousisis, 82 F.4th 230 (3d Cir. 2023) (Exhibit “B”), superseding the previous opinion published at 66 F.4th 406. The Circuit also issued a not-precedential opinion addressing forfeiture, available at 2023 WL 6294144 (8d Cir. Sept. 27, 2023). 3. Reasons for Granting the Extension. a. This case presents a substantial and important question on which the circuits are divided: whether deceit aimed at influencing a victim’s spending decision, without contemplating economic injury, is property fraud under the mail and wire fraud statutes, 18 U.S.C. §§1341, 13438, 1349. 1. Here, Alpha Painting (for which Kousisis worked) and affiliated entities were the lowest bidders by millions on two federal transportation contracts, and the government acknowledged that they did high-quality work. The government accused them of winning the contracts by misrepresenting their compliance with regulatory and contractual requirements for Disadvantaged Business Enterprise participation—but also argued that non-compliance allowed them to charge less than a compliant bidder would have for the “same work.” i. The Third Circuit held that these facts prove a property fraud scheme because the defendants “obtained” the victim’s money by fraud—though the scheme contemplated giving the contracting agency the benefit of the quality bridge repairs it bargained for, for less than it would have paid absent the scheme. F.g., Kousisis, 82 F.4th at 240. The Circuit held that fraudulently inducing a victim to spend money with someone it would have avoided had it known the truth, without more, deprives the victim of the money spent. E.g., Kousisis, 82 F.4th at 240, 242-43. The same holding underlies United States v. Porat, 76 F.4th 213, 219 (8d Cir. 2023), decided after the initial Kousisis opinion and while the Kousisis rehearing petition was pending. See Porat, 76 F.4th at 219 (students “deprived” of tuition money spent on expected education because inflated rankings data influenced enrollment decisions).! ili. This holding contravenes this Court’s longstanding recognition that the mail and wire fraud statutes criminalize schemes to injure a victim’s traditionally recognized property interests, which are economic interests. Deceit that affects the victim’s spending decision is not enough. E.g., McNally v. United States, 483 U.S. 350, 360 (1987). Accordingly, Kousisis (and Porat) opened a circuit split. Other circuits recognize that even when deceit induces a transaction the victim otherwise would have avoided, the scheme is not “property fraud” simply because it affects how the vi