In 2023, all nine justices of the Supreme Court agreed on something, which almost never happens. In Ciminelli v. United States, the Court unanimously held that the "right to control" theory of wire fraud is not a valid basis for federal prosecution. Depriving someone of economically valuable information, the Court said, is not the same as depriving them of money or property.
The Nevin Shetty case tests whether that ruling actually means anything in practice. As CEO Official Magazine has reported, the prosecution's theory in United States v. Shetty relied on essentially the same reasoning that Ciminelli was supposed to eliminate. The NACDL brief filed in the case warned that accepting the government's approach would effectively resurrect a legal theory the Supreme Court had buried.
What Right to Control Means
The right-to-control theory holds that someone commits fraud by depriving another person of the right to control how their assets are used, even if no money is actually stolen. Under this theory, failing to disclose information that might have influenced a business decision is enough to constitute fraud, regardless of whether the decision itself was intended to benefit the victim.
The theory was popular with prosecutors because it lowered the bar for fraud convictions. You did not need to prove that money was taken. You only needed to prove that information was withheld. Ciminelli rejected this approach, holding that wire fraud requires an intent to deprive someone of tangible money or property.
How the Theory Appeared in the Shetty Case
The prosecution charged Shetty with wire fraud based on allegations that he invested company funds without fully disclosing the nature of the investment and his connection to the entity managing it. The defense argued in its motion to dismiss (Motion To Dismiss) that this was textbook right-to-control reasoning: the charge was built on nondisclosure rather than theft.
The corporate law supplemental filing (Corporate Law Supplemental) elaborated on why this kind of dispute belongs in civil court, not criminal court. Corporate governance has well-established mechanisms for addressing conflicts of interest and disclosure failures: shareholder lawsuits, SEC enforcement, board investigations. Criminal prosecution was never intended for these situations, and stretching wire fraud to cover them gives prosecutors a power that Congress did not grant.
The Stakes for Corporate Executives
If the government's theory is sustained on appeal, the implications extend far beyond one case. Every CFO who makes a treasury decision without documenting full disclosure to every interested party could face criminal exposure if the investment loses money. Every executive who exercises discretion over company resources could be second-guessed by a prosecutor with the benefit of hindsight.
The defense filed a trial brief (Trial Brief) and motions for reconsideration (Motion To Dismiss Reconsideration) pressing these arguments throughout the proceedings. The appeal will test whether the lower courts are willing to follow the trajectory the Supreme Court has set, or whether prosecutors will continue to operate under theories the highest court has rejected.