In recent years, the U.S. Supreme Court has repeatedly narrowed the scope of federal criminal laws targeting corruption and fraud. It seems poised to do so again in the case of a wire fraud prosecution that began here in Philadelphia.

The defendants in Kousisis v. United States are government contractors who bid for local construction contracts. The contracts included a provision designed to promote diversity, which required a certain portion of the contract proceeds on subcontractors that qualified as “disadvantaged business enterprises” (DBE). Although the defendants reported payments to such a subcontractor, the subcontractor was actually a fictitious shell corporation. Defendants were convicted of wire fraud and related offenses on a theory that they had fraudulently induced the government to enter the contract. The question now before the Supreme Court is whether fraudulent inducement to enter a contract qualifies as wire fraud.