Kelly v. United States

A person commits wire fraud or fraud on a government entity only when they commit actual fraud and the fraud “obtain[s] property or money." 18 U.S.C. §§ 343, 666(a)(1)(A). Even if a scheme of fraud "obtains property," the second element requires that the "obtaining property or money" be the principal object of the fraud; this means that the scheme does not "obtain[] property or money" inadvertently. See Pasquantino v. United States, 544 U.S. 349, 364 (2005).

Petitioners caused traffic congestion, using Port Authority employees to restrict toll lanes, to punish a city mayor for not endorsing the Governor’s reelection.  At trial, Petitioners were convicted of wire fraud and fraud on a government entity. See 18 U.S.C. §§ 1343, 666(a)(1)(A).  On appeal, Petitioners argued that evidence was inadequate for a conviction.  Here, again, Petitioners argued that no evidence showed that they “obtain[ed] property or money.” 18 U.S.C. § 1343.  Respondent countered that Petitioners' fraud “commandeered” toll lanes and dispossessed the Port Authority of its employees' labor.  The United States Supreme Court found that 18 U.S.C. §§ 1343 and 666(a)(1)(A) are violated only when “obtaining property or money” is the object of a fraud scheme, not incidental to the scheme. See Pasquantino v. United States, 544 U. S. 349, 364-65 (2005).  Actions within state officials' regulatory power do not qualify as "obtaining property." See Cleveland v. United States, 531 U.S. 12, 26 (2000).  The Court held that Petitioners’ scheme did not have the object of "obtaining property." Restricting toll lanes was within Petitioners’ regulatory power.  However, since the Port Authority was entitled to use its employees’ labor, Petitioners indeed took property where they redirected that labor.  This taking, however, was incidental because the labor was only the means of Petitioners’ regulatory action.  REVERSED.