Kenneth R. Spirito v. United States

This Court made plain in Kelly v. United States that Congress intended the federal program fraud laws to apply only to a narrow field of official misconduct, specifically “fraudulent schemes for obtaining property.” 140 S. Ct. 1565, 1568 (2020). In a case with no evidence of personal gain, no evidence of action outside of exercising regulatory authority, no evidence funds were used in any way other than pursuant to the vote of a public authority, and no evidence funds were used for an illegitimate purpose, the Fourth Circuit created an exception to Kelly’s rule. The Fourth Circuit held in a published opinion that prosecutions for violations of 18 U.S.C. § 666(a)(1)(A) under a theory of intentional misapplication “do[] not require the defendant to ‘obtain’ the property or ‘deprive’ the owner of the property.” Petitioner’s Appendix (“App.”) at A17. In so holding, the Fourth Circuit generated a split in the circuits regarding the elements of the offense of federal program fraud under a theory of misapplication. See United States v. Thompson, 484 F.3d 877 (7th Cir. 2007); United States v. Jimenez, 705 F.3d 1305 (11th Cir. 2013). The question presented is: Whether the elements of the offense of federal program fraud under 18 U.S.C. § 666(a)(1)(A) differ under a theory of intentional misapplication and stand as an exception to Kelly’s rule that the government must prove the defendant fraudulently intended to obtain property or deprive the owner of property.