Michael Jay Stewart v. United States

There is widespread conflict regarding the meaning of the federal criminal fraud statutes. While the confusion existed long before Neder v. United States, 527 U.S. 1 (1999), it has persisted as courts have struggled to interpret footnote five of that opinion, which cited the definition of materiality set forth in the Restatement (Second) of Torts. Some lower courts declare that the materiality standard is objective and mail fraud is determined by a reasonably prudent victim, while others insist that the criminal fraud statutes were designed to protect the naive and careless. The first question presented is: Whether, when the government relies on an omissions theory of criminal mail fraud, a jury may also be instructed that “it is immaterial” that “only the most gullible or negligent would have been deceived by the defendant’s scheme” because the “mail fraud statute is designed to protect the naive and careless as well as the experienced and careful.”

In Kokesh v. S.E.C., 137 S. Ct. 1635 (2017), this Court recently held that disgorgement is a “penalty” that cannot be imposed for fraud losses beyond the statute of limitations. The second question presented is: Whether conduct outside the statute of limitations can increase a fraud defendant’s loss calculation under the United States Sentencing Guidelines.