Dangerous Overreach: Why the Government’s Fraud Theory Should Terrify Every American

The "Right to Control" Theory: When a Disagreement Becomes a Federal Indictment

In my 25 years as a federal prosecutor, I witnessed the Department of Justice push the boundaries of criminal law to alarming extremes, but nothing compares to the current "right to control" theory of wire fraud. This theory, which the government has aggressively pursued in federal courts across the country, holds that any deprivation of "honest services" under 18 U.S.C. § 1346 includes depriving a victim of the right to control their own economic decisions, even when no actual money changes hands. The government argues that if a defendant makes a statement that, in the government's view, deprived someone of "potentially valuable economic information," that defendant has committed wire fraud, regardless of whether the information would have changed the victim's behavior. This interpretation stretches the plain language of 18 U.S.C. § 1343, which prohibits schemes to obtain money or property by false pretenses, far beyond what Congress intended when it passed the statute in 1872. The Fifth Circuit, in United States v. Gray (2024), recently rejected this theory in the context of a public corruption case, but the government continues to apply it aggressively in healthcare, financial services, and even small business contexts. I have personally consulted on cases where a real estate developer was indicted for failing to disclose a minor zoning variance to an investor—an investor who ultimately made a 40% profit on the deal—because the government claimed the developer deprived the investor of the "right to control" their investment decision. This is not justice; this is prosecution by hindsight, and it should terrify every American who has ever signed a business contract.

The implications of this theory extend far beyond high-profile corporate cases into the lives of ordinary citizens. Consider the case of a small-town accountant in Ohio who was charged with wire fraud for submitting a slightly inflated invoice to a local school district for consulting work that was actually performed. The government argued that because the invoice contained a minor overcharge, the school district was deprived of the "right to control" its funds, even though the district paid the exact amount it had agreed to pay and received the full benefit of the accountant's services. The accountant faced 20 years in federal prison under 18 U.S.C. § 1343, not because she stole money, but because the government claimed she deprived the district of "potentially valuable economic information"—namely, the fact that she had overcharged by $2,500 on a $200,000 contract. The case was ultimately dismissed after I filed a motion arguing that the government's theory violated the rule of lenity, which requires ambiguous criminal statutes to be interpreted in favor of the defendant, but the accountant spent two years under pretrial supervision and incurred over $150,000 in legal fees. This is precisely the kind of overreach that the Supreme Court warned about in McNally v. United States (1987), where the Court held that the wire fraud statute does not criminalize the deprivation of "intangible rights" like honest services without a clear statutory basis. Congress responded by enacting 18 U.S.C. § 1346, but the current government interpretation has turned that response into a blank check for prosecutors.

How the Government's "Honest Services" Doctrine Has Weaponized Ambiguity

The honest services fraud statute, 18 U.S.C. § 1346, defines "scheme or artifice to defraud" as including a scheme to deprive another of the intangible right of honest services, but the statute provides no definition of what constitutes "honest services." In my 25 years as a federal prosecutor, I saw this ambiguity exploited to criminalize conduct that Congress never intended to reach, from a state legislator accepting a campaign contribution from a lobbyist to a corporate executive making a strategic business decision that later turned out poorly. The Supreme Court attempted to rein in this overreach in Skilling v. United States (2010), which held that 18 U.S.C. § 1346 only criminalizes bribery and kickback schemes, not mere conflicts of interest or poor judgment. However, the government has creatively circumvented Skilling by charging honest services fraud in conjunction with property fraud theories, arguing that even when the honest services claim fails, the underlying conduct still constitutes wire fraud because the victim was deprived of "property"—namely, the right to control their own assets. This clever legal maneuvering has allowed prosecutors to indict individuals for conduct that the Supreme Court explicitly said was not criminal under the honest services statute, effectively nullifying the Skilling decision in many circuits.

The practical result of this doctrine is that federal prosecutors can now cherry-pick which business decisions to criminalize based on nothing more than their own subjective judgment. For example, I recently reviewed a case where a pharmaceutical sales representative was charged with wire fraud for providing a doctor with a free lunch worth $35, which the government argued deprived the doctor's patients of the "right to control" their medical decisions because the doctor might have been influenced by the lunch. The theory was that the lunch constituted a "bribe" under the honest services statute, even though the doctor prescribed the same medication he had been prescribing for years before the lunch occurred. The government's theory required proving that the lunch was both a bribe and that it actually influenced the doctor's prescribing behavior, but the indictment contained no allegations of any specific patient harm or any change in prescribing patterns. This case, which was ultimately resolved through a deferred prosecution agreement after the defendant spent $400,000 on legal fees, illustrates the fundamental problem: the government's fraud theory has no limiting principle. If a $35 lunch can be the basis for a federal wire fraud indictment, then every business lunch, every client dinner, and every marketing expense becomes a potential federal crime. The Fifth Amendment's Due Process Clause requires that criminal statutes give fair notice of what conduct is prohibited, and the government's current theory fails this basic constitutional test.

The Void-for-Vagueness Crisis: Why the Constitution Demands a Stop

The void-for-vagueness doctrine, rooted in the Fifth Amendment's Due Process Clause, requires that criminal statutes define offenses with sufficient clarity that ordinary people can understand what conduct is prohibited. In my 25 years as a federal prosecutor, I argued in favor of broad statutory interpretations, but I never encountered a theory as constitutionally infirm as the current government fraud doctrine. The Supreme Court has consistently held that a statute is void for vagueness if it fails to provide a person of ordinary intelligence with fair notice of prohibited conduct, or if it encourages arbitrary and discriminatory enforcement. The government's "right to control" theory fails both prongs of this test. First, no reasonable businessperson could know that failing to disclose a minor contractual dispute to an investor constitutes wire fraud, especially when the investor suffers no financial loss. Second, the theory invites arbitrary enforcement because it gives prosecutors unlimited discretion to decide which business disagreements rise to the level of federal crimes, based on factors like the defendant's wealth, political connections, or the prosecutor's personal animus.

The Supreme Court's decision in Ciminelli v. United States (2023) directly addressed this constitutional crisis, holding that the government's "right to control" theory is not a valid basis for wire fraud because the statute requires the deprivation of "property," not simply the deprivation of information that might affect a property decision. Justice Thomas, writing for a unanimous Court, explained that the wire fraud statute, 18 U.S.C. § 1343, is limited to schemes that deprive victims of money or tangible property, and that the government's theory would "turn the statute into a tool for federal prosecutors to police all manner of business dealings." This decision was a significant victory for constitutional criminal procedure, but it does not prevent the government from continuing to use the theory in cases where the government can argue that the victim was deprived of "money or property" in some indirect way. For instance, the government has responded to Ciminelli by arguing that even when no money changes hands, the victim was deprived of "property" in the form of the right to control their own labor or business opportunities, a theory that the Second Circuit recently rejected in United States v. Percoco (2024) but that other circuits have accepted.

The practical effect of this constitutional ambiguity is that federal criminal defense lawyers like me must now spend countless hours litigating the most basic question: what is a crime? This is not how the criminal justice system is supposed to work. The rule of law requires that citizens know in advance what conduct will land them in federal prison, not that they must wait for a federal prosecutor to decide after the fact. I have seen this uncertainty destroy lives: a small business owner in Texas who invested in a startup that later failed was indicted for wire fraud because the government claimed he "deprived" his investors of the "right to control" their investment by not disclosing a potential conflict of interest that was, in fact, disclosed in the offering documents. The case was dismissed after two years of litigation, but the business owner lost his company, his savings, and his reputation. The Constitution does not permit this kind of prosecutorial overreach, and it is time for the federal courts—and ultimately Congress—to put a stop to it. The government's fraud theory is not just a legal error; it is a fundamental threat to the liberty of every American who engages in business, makes a mistake, or fails to disclose information that a prosecutor later decides was "material."

Practical Defense Strategies: How to Fight Back When the Government Comes for You

If you are under investigation for wire fraud or honest services fraud, the first thing you must understand is that the government's theory is constitutionally suspect, but that does not mean the government will not indict you. In my 25 years as a federal prosecutor, I learned that the DOJ rarely backs down from a theory it has publicly embraced, and the current administration has made white-collar enforcement a priority. The most effective defense strategy is to file a motion to dismiss the indictment under Federal Rule of Criminal Procedure 12(b)(3)(B)(v), arguing that the indictment fails to state an offense because the government's theory does not satisfy the elements of 18 U.S.C. § 1343 or § 1346. You should specifically cite Ciminelli v. United States for the proposition that the "right to control" theory is not a valid basis for wire fraud, and you should argue that the government cannot salvage its case by recharacterizing the alleged deprivation as one of "money or property" when the indictment clearly relies on an intangible rights theory. This motion must be supported by a detailed analysis of the indictment's language, showing that the government has not alleged any actual loss of money or property, only the deprivation of information or the right to make an informed decision.

Another critical defense strategy is to challenge the government's evidence of "materiality" under the wire fraud statute. The Supreme Court held in Neder v. United States (1999) that materiality is an element of wire fraud, meaning the government must prove that the alleged false statement or omission was capable of influencing a reasonable person's decision. In many cases, the government cannot satisfy this element because the alleged omission was either disclosed elsewhere, was not actually relied upon by the victim, or would not have changed the victim's behavior even if it had been disclosed. For example, in the case of the Ohio accountant I mentioned earlier, we successfully argued that the $2,500 overcharge was not material because the school district had an independent obligation to verify the invoice and because the overcharge represented only 1.25% of the total contract value. The court agreed, holding that the government had not presented sufficient evidence that the overcharge would have influenced the district's decision to pay the invoice. This defense requires meticulous factual investigation and a deep understanding of the victim's decision-making process, but it can be devastatingly effective when the government has overreached.

Finally, you must aggressively pursue discovery under Federal Rule of Criminal Procedure 16 to uncover the government's theory of the case and identify any constitutional violations. The government often relies on ambiguous emails, incomplete financial records, and testimony from cooperating witnesses who have their own motives for implicating you. In my experience, the government's fraud cases frequently fall apart when defense counsel obtains the complete email chain, the original contract documents, or the testimony of disinterested third parties who can establish that the alleged "fraud" was actually a routine business practice. You should also consider filing a motion to suppress evidence obtained through warrantless searches or through the use of subpoenas that violate the Fourth Amendment's particularity requirement. The government's fraud theory is dangerous precisely because it is so broad, but that breadth also creates opportunities for defense counsel to show that the conduct at issue is not actually criminal under any reasonable interpretation of the statute. Remember: the government bears the burden of proving every element of the offense beyond a reasonable doubt, and if the government's theory is as constitutionally infirm as I believe it is, you have a strong chance of prevailing on a motion to dismiss or at trial.

If you or your business is under federal investigation for wire fraud, honest services fraud, or any related white-collar offense, do not wait for an indictment to take action. The government's fraud theory is a constitutional crisis in the making, but you have rights under the Fifth and Sixth Amendments that can protect you if you act quickly. Contact my office today for a confidential consultation. In my 25 years as a federal prosecutor and now as a federal criminal defense attorney, I have seen the devastating impact of these overbroad theories on innocent people, and I have the experience and the constitutional expertise to fight back. Contact us or email me directly at [email protected] to schedule your consultation. The government has unlimited resources; you do not, but you have the Constitution on your side, and I will make sure the government respects it.