With a unanimous decision issued by the Supreme Court last week in Kelly et al. v. United States, the Court is continuing its trend toward narrowing the scope of viable prosecution theories in fraud cases against public officials. In Kelly, the Supreme Court reversed the convictions of two of New Jersey Governor Chris Christie’s aides arising from their involvement in an incident commonly known as the “Bridgegate scandal.”
The Court found that because the scheme did not aim to obtain money or property, it could not have amounted to federal program fraud or wire fraud. Writing for the majority, Justice Elena Kagan broadly proclaimed that “not every corrupt act by state or local officials is a federal crime.” Citing an earlier decision from 1987 by the Court, McNally v. United States, the Court explained that the scheme did not violate either the wire fraud or the public program fraud statutes because both of those statutes are “limited in scope to the protection of property rights.” Since the object of the scheme the Christie aides participated in involved realignment of access lanes on the George Washington Bridge – a regulatory power, rather than to obtain money or property for themselves, their convictions had to be thrown out.
This decision is the latest by the Court evidencing clear movement toward limiting the breadth of the prosecution’s power to convict in fraud cases involving public officials, under current federal statutes. It remains to be seen whether Congress will attempt to make changes to various criminal fraud statutes to reverse this current trend in the coming years.