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Page Number: 12

10 

KELLY v. UNITED STATES 

Opinion of the Court 

drivers from Fort Lee should get two fewer lanes while driv-
ers from nearby highways should get two more.  They did
so, according to all the Government’s evidence, for bad rea-
sons; and they did so  by resorting to lies.  But still,  what 
they  did  was  alter  a  regulatory  decision  about  the  toll 
plaza’s use—in effect, about which drivers had a “license” 
to use which lanes.  And under Cleveland, that run-of-the-
mine exercise of regulatory power cannot count as the tak-
ing of property.

A government’s right to its employees’ time and labor, by 
contrast, can undergird a property fraud prosecution.  Sup-
pose that a mayor uses deception to get “on-the-clock city 
workers”  to  renovate  his  daughter’s  new  home.  United 
States v. Pabey, 664 F. 3d 1084, 1089 (CA7 2011).  Or imag-
ine that a city parks commissioner induces his employees 
into  doing  gardening  work  for  political  contributors.    See 
United States v. Delano, 55 F. 3d 720, 723 (CA2 1995).  As 
both defendants agree, the cost of those employees’ services 
would  qualify  as  an  economic  loss  to  a  city,  sufficient  to 
meet the federal fraud statutes’ property requirement.  See 
Brief for Respondent Baroni 27; Tr. of Oral Arg. 16.  No less 
than if the official took cash out of the city’s bank account 
would he have deprived the city of a “valuable entitlement.” 
Pasquantino, 544 U. S., at 357. 

But that property must play more than some bit part in
a scheme: It must be an “object of the fraud.”  Id., at 355; 
see Brief for United States 44; supra, at 6–7.  Or put differ-
ently,  a  property  fraud  conviction  cannot  stand  when  the 
loss  to  the  victim  is  only  an  incidental  byproduct  of  the 
scheme.2    In  the  home-and-garden  examples  cited  above, 

—————— 

2 Without that rule, as Judge Easterbrook has elaborated, even a prac-
tical  joke  could  be  a  federal  felony.    See  United  States  v.  Walters,  997 
F. 2d 1219, 1224 (CA7 1993).  His example goes: “A [e-mails] B an invi-
tation to a surprise party for their mutual friend C.  B drives his car to 
the place named in the invitation,” thus expending the cost of gasoline. 
Ibid.  “But there is no party; the address is a vacant lot; B is the butt of