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KELLY v. UNITED STATES 

Syllabus 

program fraud statute bars “obtain[ing] by fraud” the “property” (in-
cluding money) of a federally funded program or entity.  §666(a)(1)(A). 
These  statutes  are  “limited  in  scope  to  the  protection  of  property 
rights,” and do not authorize federal prosecutors to “set[ ] standards of
disclosure and good government for local and state officials.”  McNally 
v.  United  States,  483  U. S.  350,  360.    So  under  either  provision,  the 
Government had to show not only that Baroni and Kelly engaged in 
deception,  but  that  an  object  of  their  fraud  was  money  or  property. 
Cleveland v. United States, 531 U. S. 12, 26. 

The Government argues that the scheme had the object of obtaining 
the Port Authority’s money or property in two ways.  First, the Gov-
ernment claims that Baroni and Kelly sought to commandeer part of 
the  Bridge  itself  by  taking  control of  its  physical  lanes.  Second,  the 
Government asserts that the defendants aimed to deprive the Port Au-
thority of the costs of compensating the traffic engineers and back-up
toll collectors.  For different reasons, neither of these theories can sus-
tain the verdicts. 

Baroni’s and Kelly’s realignment of the access lanes was an exercise 
of  regulatory  power—a  reallocation  of  the  lanes  between  different 
groups of drivers.  This Court has already held that a scheme to alter
such a regulatory choice is not one to take the government’s property. 
Id., at 23.  And while a government’s right to its employees’ time and
labor is a property interest, the prosecution must also show that it is 
an “object of the fraud.”  Pasquantino v. United States, 544 U. S. 349, 
355.  Here, the time and labor of the Port Authority employees were
just the implementation costs of the defendants’ scheme to reallocate 
the Bridge’s lanes—an incidental (even if foreseen) byproduct of their 
regulatory object.  Neither defendant sought to obtain the services that
the employees provided.  Pp. 6–13. 

909 F. 3d 550, reversed and remanded. 

KAGAN, J., delivered the opinion for a unanimous Court.