Supreme Court Reins in Broad Reading of Fraud Statutes with 'Bridgegate' Case Ruling

As we have observed over the years, when federal prosecutors focus their attention on high profile misconduct that is not an obvious violation of federal criminal law, they often cannot resist the attractions of broadly worded "catch-all" fraud statutes like the one prohibiting wire fraud. From time to time, however, the U.S. Supreme Court has pushed back on efforts to further expand the boundaries of these statutes, leading to reversals of some well-publicized criminal convictions. The most recent example is the Supreme Court's reversal of the "Bridgegate"-related convictions of Bill Baroni, the former Deputy Executive Director of the Port Authority, and Bridget Anne Kelly, the former Deputy Chief of Staff to former New Jersey Governor Chris Christie. The unanimous "Bridgegate" decision's rationale, however, was relatively narrow. The court, for example, did not expressly weigh in on the controversial "right to control" theory, which provides that a defendant deprives a victim of "property" as required under the federal fraud statutes if he or she denies the victim the right to control how its assets are used. The extent to which the principles articulated in that decision will have an impact on future federal fraud prosecutions is currently being tested in another high-profile case currently on appeal before the Second Circuit where the "right to control" theory is at issue — United States v. Gatto, otherwise known as the NCAA "hoops" case.