Ciminelli v. United States
The Supreme Court unanimously threw out a New York construction executive's wire fraud conviction, ruling that the Second Circuit's decades-old 'right-to-control' theory — which made it a federal crime to withhold business-decision information from victims — goes beyond what the wire fraud statute actually covers.
The decision significantly narrows how federal prosecutors can charge fraud, limiting the statute to schemes that take traditional property and leaving many deceptive-but-information-only schemes to state courts.
How it got here: A federal trial court in New York convicted Ciminelli; the Second Circuit affirmed relying on its own right-to-control precedents; Ciminelli asked the Supreme Court to step in and the Court agreed to hear the case.
The Case in Depth
What happened
Louis Ciminelli owned a construction company that paid a lobbyist to rig the bid process for Governor Andrew Cuomo's "Buffalo Billion" initiative — a $1 billion New York development program. Through the scheme, Ciminelli's company was quietly steered to "preferred developer" status and secured a $750 million construction contract. The federal government charged him with wire fraud, but rested its entire case on the theory that he deprived the nonprofit running the program of valuable economic information it needed to make fair business decisions — not that he stole money or contracts outright.
The question before the Court
Does the federal wire fraud law allow prosecutors to convict someone for scheming to deprive a victim of valuable economic information needed to make business decisions, even when no traditional property was taken?
The Court's answer
No — the federal wire fraud statute does not allow convictions based solely on a scheme to withhold economically valuable information from a decision-maker. The statute protects only traditional property interests, and the right to receive information needed to make business decisions has never been recognized as one. The Second Circuit had used this "right-to-control" theory for decades, but the Court found it was never grounded in the statute's text or the common-law understanding of property at the time the statute was enacted. Even the government, by the time the case reached the Supreme Court, conceded the theory was wrong.
The Court also refused the government's fallback request to uphold the conviction under a different fraud theory — one never presented to the jury at trial. Doing so would have required the Court to step into the roles of both a trial court (deciding the legal theory for the first time) and a jury (applying facts to that new theory). That is not the Supreme Court's job, so the conviction was reversed and the case sent back to lower courts.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Federal prosecutors in New York and other states have relied on the right-to-control theory to charge corruption and business-fraud cases for decades. The ruling eliminates that tool: future wire fraud cases must show a traditional property interest was at stake. Some schemes that were previously federal crimes may now be handled only by state prosecutors — or not charged at all.
What changes now
The case is sent back to lower courts for further proceedings. On remand, questions remain open — including whether the government may retry Ciminelli on the theory that he fraudulently obtained actual contracts (a traditional form of property), whether the original indictment was legally sufficient, and how harmless-error rules might apply to certain aspects of the trial. Justice Alito's concurrence flags these unresolved issues explicitly. This is a final merits decision on the right-to-control question itself.
What this does not decide
The ruling does not decide whether Ciminelli can still challenge his indictment on remand, whether the indictment was legally sufficient, how harmless-error analysis applies to the flawed jury instructions, or whether the government may retry him on a theory that he obtained valuable construction contracts through fraud — a traditional property interest. Justice Alito's concurrence expressly reserves all four questions.
Concurrences and dissents
Concurrence — Justice Alito
Justice Alito joined the majority opinion in full but wrote separately to make clear that the Court's holding is narrow. He identified four specific issues the ruling does not address: Ciminelli's ability to challenge the indictment at this stage, the legal sufficiency of the indictment itself, whether harmless-error review might save some aspects of the trial, and whether the government could retry Ciminelli on the theory that he conspired to obtain — and did obtain — valuable construction contracts, which are a traditional form of property.
How the Court got there
The legal reasoning, step by step
- The wire fraud statute (18 U.S.C. § 1343) criminalizes schemes to defraud or to obtain money or property through false pretenses. The Court has long read the word 'property' as a real limit on what counts as fraud — meaning deception alone is not enough. Both the statute's text and the common-law meaning of 'to defraud' at the time of enactment required that someone's property rights be at stake.
- The Second Circuit's right-to-control theory treated a victim's right to receive information needed to make informed business decisions as the protected 'property' interest. Under this approach, almost any deception that withheld useful information from a decision-maker could be charged as federal wire fraud — regardless of whether any money, contracts, or recognized property actually changed hands fraudulently.
- The Court applied its established rule that the fraud statutes protect only interests that were long recognized as property when the statutes were enacted. The right to receive economically valuable information was never such an interest. When the Second Circuit first adopted the theory in 1991, it could cite no authority establishing that kind of informational right as traditional property — and it never attempted to do so in the decades that followed.
- The Court also looked at Congress's response to its 1987 decision in McNally v. United States, which had reined in courts that were expanding fraud statutes to cover all kinds of intangible rights. Congress stepped in and restored just one of those intangible rights — the right to 'honest services' (18 U.S.C. § 1346). Its silence about every other intangible interest, including the right to control one's assets, meant courts had no authority to revive those theories on their own.
- Finally, the right-to-control theory created a nearly unlimited expansion of federal criminal law: treating information as the protected interest meant almost any deceptive act could be a federal crime. The Court has repeatedly warned against reading the fraud statutes to federalize a vast range of conduct traditionally handled by state contract and tort law, and the right-to-control theory did exactly that.
- Because the government built its entire case — from the grand jury through trial and appeal — exclusively on the right-to-control theory, and never asked the jury to find that a traditional property interest was taken, the Court declined to affirm the conviction on a different theory raised for the first time at the Supreme Court. Appellate courts cannot simply pick a new theory and apply facts a jury never evaluated under that theory.
Doctrinal impact
Cases affected by this decision
Reaffirms McNally v. United States (483 U.S. 350)
Still-good law limiting federal fraud statutes to the protection of individual property rights, not intangible interests.
Reaffirms Cleveland v. United States (531 U.S. 12)
Still-good law holding that the fraud statutes protect only traditional property rights and do not federalize broad swaths of state conduct.