Overview
(May 15, 2023, Washington DC) – Culminating eight years of hard-fought advocacy by Steptoe on behalf of its client, Dr. Alain Kaloyeros, the United States Supreme Court has unanimously struck down the “right to control” theory of wire fraud on which the conviction of Dr. Kaloyeros and his co-defendants rested and vacated the judgments against them.
Dr. Kaloyeros was convicted in 2018 in federal court on charges of wire fraud and wire fraud conspiracy arising from the “Buffalo Billion” initiative in New York State. Dr. Kaloyeros and his co-defendants were alleged to have misled the board of directors of an economic development entity called Fort Schuyler in connection with the selection of contractors to be involved in the initiative. The Government never contended that the State or Fort Schuyler was deceived out of any funding or otherwise suffered any economic harm, or that Dr. Kaloyeros received any bribe or economic benefit in connection with the initiative. Instead, the Government contended that a wire fraud can occur solely because the board was deprived of information and therefore was deprived of its “right to control” its assets.
In a unanimous opinion which echoed many of Steptoe’s arguments, the Court rejected that expansive reading of the wire fraud statute, holding that the federal fraud statutes are limited to the protection of money and property, and that intangible-rights theories such as the “right to control” theory “stray from traditional concepts of property,” and thus fall outside the mail and wire fraud statutes. The Court further noted that accepting the right-to-control theory would “vastly expand federal jurisdiction without statutory authorization,” “criminaliz[ing] traditionally civil matters and federaliz[ing] traditionally state matters.”
On behalf of the Steptoe team representing Dr. Kaloyeros, Reid Weingarten and Michael C. Miller said: “As we have said from day one, Dr. Alain Kaloyeros committed no crimes in connection with his efforts to jump start the economies of Buffalo and Syracuse. He has devoted his entire life to advancing the public interest through science. We very much look forward to watching as Dr. Kaloyeros returns to his tireless work as a talented and innovative scientist.”
Steptoe attorneys Michael C. Miller, Reid Weingarten, Bruce C. Bishop, and Michael G. Scavelli have fought for Dr. Kaloyeros since the moment charges were brought and represented him at trial, before the Second Circuit Court of Appeals, and before the Supreme Court. The decision is available here, and the briefs in support of Dr. Kaloyeros's certiorari petition and at the merits stage, authored by the Steptoe team, are available here, here, here, and here.
About Steptoe
In more than 100 years of practice, Steptoe has earned an international reputation for vigorous representation of clients before governmental agencies, successful advocacy in litigation and arbitration, and creative and practical advice in structuring business transactions. Steptoe has more than 500 lawyers and other professional staff across offices in Beijing, Brussels, Chicago, Hong Kong, London, Los Angeles, New York, San Francisco, and Washington. For more information, visit www.steptoe.com.
