Ciminelli v. United States
The Supreme Court unanimously struck down a legal theory that New York federal prosecutors had relied on for decades, ruling that wire fraud requires targeting real property — not merely a victim's ability to make informed financial decisions.
The decision overturns the convictions of a construction executive tied to a corruption scheme in then-Governor Andrew Cuomo's Buffalo Billion program, and it closes off a major tool New York prosecutors used to pursue public corruption cases.
How it got here: A federal jury convicted Ciminelli; the Second Circuit affirmed using its longstanding right-to-control theory; Ciminelli asked the Supreme Court to review whether that theory was valid.
The Case in Depth
What happened
Louis Ciminelli ran a Buffalo construction company that paid a lobbyist to rig the bidding process for New York state development projects linked to then-Governor Andrew Cuomo's "Buffalo Billion" initiative. He and associates manipulated bid requirements so that only his company would qualify as a "preferred developer," landing it a $750 million contract. Federal prosecutors charged him with wire fraud, arguing that the scheme deprived the state agency of economic information it needed to make sound decisions.
The question before the Court
Did federal prosecutors in New York validly convict a construction executive for wire fraud by showing he withheld economic information from a government agency — or does federal fraud law require targeting actual property, like money or contracts?
The Court's answer
No — the "right-to-control" theory of wire fraud, which the Second Circuit (the federal appeals court covering New York) had used for decades, is not a valid basis for a wire fraud conviction. Under that theory, prosecutors could win by showing a defendant deprived a victim of "potentially valuable economic information" needed to make financial decisions — effectively treating a right to information as a form of property. The Court held that this so-called right has never been recognized as a traditional property interest, and the federal wire fraud law covers only schemes that target traditional property. The government's concession that the theory was wrong settled the matter.
The Court also refused the government's fallback request to search the trial record and affirm the conviction under a different, traditional fraud theory. Doing so would require the Court to act as both a first-level trial court and a jury — roles that belong to lower courts. The case goes back to the lower courts for further proceedings.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Federal prosecutors in New York and other states that followed the same approach can no longer charge wire fraud simply by showing a defendant withheld important economic information from a victim. They must now tie fraud charges to tangible property — money, contracts, or similar traditional interests — which may make certain public corruption and bid-rigging schemes harder to prosecute under federal law.
What changes now
The case returns to lower courts for further proceedings. Federal prosecutors may attempt to retry Ciminelli on a traditional property fraud theory — arguing the scheme deprived the state agency of actual contracts or money, not merely economic information. Justice Alito's concurrence flags several open questions on remand, including whether the original grand jury indictment was sufficient, whether harmless error principles apply to parts of the trial, and whether a retrial under a traditional fraud theory is available.
What this does not decide
The ruling does not decide whether Ciminelli can be retried on a theory that his scheme defrauded the agency of actual contracts or money. It also does not resolve whether the original indictment was sufficient to support that different theory, or whether harmless-error rules could save any part of the original conviction.
Concurrences and dissents
Concurrence — Justice Alito
Justice Alito joined the majority opinion in full but wrote separately to flag what he saw as open questions the Court's opinion does not answer. He identified four issues that could matter on remand: whether Ciminelli can still challenge the indictment at this stage, whether the indictment was sufficient to support a different fraud theory, whether harmless-error rules could apply to parts of the trial, and whether prosecutors can retry Ciminelli on a traditional property-fraud theory. He joined the majority on the understanding that none of those questions were decided.
How the Court got there
The legal reasoning, step by step
- The federal wire fraud statute punishes schemes 'to defraud, or for obtaining money or property' through false pretenses. Even though the statute uses 'or,' the Court has long read the word 'property' to limit what counts as fraud — because when the statute was written, 'to defraud' meant wronging someone in their property rights, not deceiving them in any way.
- The Second Circuit's right-to-control theory, developed in 1991, treated a victim's 'right to control its assets' as a kind of property — meaning a defendant committed wire fraud if he withheld economic information the victim needed to make sound financial decisions, even if no money or tangible property changed hands improperly. The Court found this theory had no roots in traditional property law: when the Second Circuit first announced it, the court could cite no authority recognizing economic information as a property interest.
- In 1987, the Supreme Court's decision in McNally v. United States reined in lower courts that had been expanding fraud statutes to cover a wide variety of intangible interests — including the right to honest government services and the right to honest elections. McNally confined fraud liability to the protection of individual property rights. Congress then responded by enacting a new statute (18 U.S.C. § 1346) to restore only one of those eliminated theories — honest services fraud — while staying silent on all others.
- That congressional silence was decisive. Because Congress specifically revived only honest-services fraud after McNally, and said nothing about a right to economic information, the Court ruled that judges cannot fill the gap by expanding the fraud statute to cover the right to control. Allowing courts to do so would contradict Congress's deliberate, limited response.
- The right-to-control theory also posed a structural problem: by treating any deceptive withholding of information as potential federal fraud, it would turn an almost unlimited range of ordinary deceptive conduct — normally handled by state contract and tort law — into federal crimes. The Court has repeatedly warned that federal fraud statutes should not become a general ethics code governing state and local officials.
- Finally, the Court declined to affirm the conviction on a different, traditional property-fraud theory. Doing so would require selecting facts from a trial record built around the now-discredited theory and applying them to a different legal standard — a task for trial courts and juries, not an appellate court deciding a case for the first time.
Doctrinal impact
Cases affected by this decision
Reaffirms McNally v. United States (483 U. S. 350)
The Court reaffirmed that federal fraud statutes cover only traditional property rights, not intangible interests.
Reaffirms Cleveland v. United States (531 U. S. 12)
Reaffirmed that the fraud statutes protect property rights only and courts must not expand their reach.