On the Legality of Defrauding the Public

Marquette Law Review Marquette Law Review

Volume 107 Issue 4 Article 6

2024

On the Legality of Defrauding the Public On the Legality of Defrauding the Public

Wes Henricksen

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Wes Henricksen,

On the Legality of Defrauding the Public

, 107 Marq. L. Rev. 1043 (2023).

Available at: https://scholarship.law.marquette.edu/mulr/vol107/iss4/6

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ON THE LEGALITY OF DEFRAUDING THE

PUBLIC

WES HENRICKSEN

Speech used to intentionally mislead others to gain a tangible benefit while

causing harm to the one deceived or to others is generally labeled “fraud.”

This term is used in both legal and nonlegal contexts. Where speech used to

defraud satisfies the elements of a tort or a crime, it becomes “actionable

fraud.” Categories of actionable fraud include common law deceit, securities

fraud, and wire fraud. But taken together, these laws address harmful

dishonesty in an inconsistent manner. While they broadly prohibit deceiving

individual victims, they often allow deceiving the public at large. As a result, it

is often lawful to intentionally spread harmful, false, or misleading messages

to the public. Moreover, because such publicly disseminated false speech is

often not actionable fraud, it is protected speech under the First Amendment.

This gap in the law, whereby one is prohibited from defrauding one person but

permitted to defraud millions, gives a green light to those who stand to benefit

from the largest and most harmful schemes to deceive. These include, for

instance, the fossil fuel industry’s campaign of climate change denial and

former President Donald Trump’s stolen election lie. This Article builds on

prior scholarship by exploring why current law largely fails to address schemes

to defraud the public. It further explores the myriad ways fraud on the public

causes economic harm, harm to human health and life, and environmental

damage. The Article then argues that this gap in the law should be closed and

posits possible ways to do so consistent with the First Amendment. The Article

answers critics who claim that imposing such speech restrictions will allow

those in power to determine the “truth” and impose it on the public by noting

that those in power are already doing this precisely because the law allows it.

Those with the public megaphone frequently disseminate self-serving

falsehoods and manipulate the public into buying into falsehoods as “truth.”

Accordingly, the Article concludes it is urgent we find solutions to this problem

Associate Professor of Law, Barry University School of Law. Thank you to the participants

and discussants at the Stanford-Penn-Northwestern Junior Faculty Forum for Law and STEM at

Northwestern University School of Law. Thanks to Dean Leticia Diaz and Barry University School of

Law for their support for this Article. Thanks to James Knox Anderson and Martina Sapia for excellent

research assistance. Portions of this Article have been adapted, in substantially altered form, from my

forthcoming book, I

N FRAUD WE TRUST: HOW LEADERS IN POLITICS, BUSINESS, AND MEDIA PROFIT

FROM

LIES—AND HOW TO STOP THEM (Univ. Press of Kansas, forthcoming).

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1044 MARQUETTE LAW REVIEW [107:1043

that carefully balance free speech rights against the harm from intentional

falsehoods spread to the public.

THREE MISUNDERSTANDINGS ABOUT THE CONCEPT OF, AND

TERMINOLOGY USED TO DESCRIBE, HARMFUL DISHONESTY ......... 1045

A. Harmful Dishonesty is More Widespread and Deeply Ingrained into

Society than is Often Acknowledged ........................................ 1047

B. Although Fraud is Wrongful, Deceitful, and Harmful, it is Often

Legal .......................................................................................... 1054

C. The Misunderstood “Evasion” Component of Fraud ................... 1058

II. THE LAW’S EXCESSIVE FOCUS ON PERSONAL FRAUD, AND RESULTING

FAILURE TO ADDRESS FRAUD ON THE PUBLIC ................................. 1062

III. WHY FRAUD ON THE PUBLIC, WHICH THE LAW GENERALLY ALLOWS, IS

ARGUABLY AS HARMFUL AS ONE-ON-ONE FRAUD, WHICH THE LAW

GENERALLY PROHIBITS .................................................................... 1071

A. Brief Overview of the Prevalence and Purpose of Fraud on the

Public ......................................................................................... 1071

i. For Financial Gain .................................................................. 1077

ii. For Political Gain .................................................................. 1078

iii. To Inhibit Justice .................................................................. 1081

iv. To Falsify History ................................................................ 1083

B. Harms Caused by Fraud on the Public ......................................... 1085

IV. CONCLUSION .......................................................................................... 1093

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1045

I. THREE MISUNDERSTANDINGS ABOUT THE CONCEPT OF, AND

TERMINOLOGY USED TO DESCRIBE, HARMFUL DISHONESTY

Lying is generally legal.

This makes sense. To begin with, most lies are

harmless, and some are even socially beneficial.

Perhaps more importantly,

however, lies are ubiquitous; they are uttered by virtually everyone every day.

Indeed, people are frequently untruthful in ordinary interactions with friends,

family, colleagues, and strangers.

Lies are part of the normal way individuals

communicate with one another. Accordingly, courts are understandably

skeptical of suggestions that falsehoods are, or should be, unprotected under the

First Amendment.

This hostility toward regulating falsehoods arises, as well,

from the high likelihood that a state empowered to arbitrate truth will use that

power to silence opponents and disfavored views.

Accordingly, suggestions

that the state ban falsehoods, or any broad category of falsehoods, should be,

1. See Bryan H. Druzin & Jessica Li, The Criminalization of Lying: Under What Circumstances,

If Any, Should Lies Be Made Criminal?, 101 J. C

RIM. L. & CRIMINOLOGY 529, 530 (2011) (noting that

lying, even where it causes harm, is most often not a crime).

2. See United States v. Alvarez, 567 U.S. 709, 733–34 (2012) (Breyer, J., concurring) (noting

the ways “[f]alse factual statements can serve useful human objectives”); David S. Han, Categorizing

Lies, 89 U. C

OLO. L. REV. 613, 629 (2018) (stating that “lies can also produce significant social benefits

on a purely instrumental level”).

3. CBS Minnesota, Average American Tells 4 Lies Per Day, Survey Says, CBS N

EWS (Aug. 17,

2022, 8:45 AM), https://www.cbsnews.com/minnesota/news/average-american-tells-4-lies-per-day-

survey-says/ [https://perma.cc/AX7E-MUJA]; see also Bella M. DePaulo, Deborah A. Kashy, Melissa

M. Wyer, Susan E. Kirkendol & Jennifer A. Epstein, Lying in Everyday Life, 70 J.

PERSONALITY &

SOC. PSYCH. 979, 984 (1996) (studying the prevalence of lying in daily social interactions).

4. Chris Melore, ‘You Look Great!’ Average Person Tells 4 Lies Per Day, Survey Shows, S

TUDY

FINDS (Aug. 16, 2022), https://studyfinds.org/average-person-tells-four-lies-daily/

[https://perma.cc/3XUE-HKYZ].

5. See Alvarez, 567 U.S. at 722 (noting that false statements do not comprise a “general” category

of unprotected speech); United States v. Alvarez, 617 F.3d 1198, 1200 (9th Cir. 2010) (“While we

agree with the dissent that most knowingly false factual speech is unworthy of constitutional protection

and that, accordingly, many lies may be made the subject of a criminal law without creating a

constitutional problem, we cannot adopt a rule as broad as the government and dissent advocate without

trampling on the fundamental right to freedom of speech.”), aff’d, 567 U.S. 709 (2012); Jonathan D.

Varat, Deception and the First Amendment: A Central, Complex, and Somewhat Curious Relationship,

53 UCLA L.

REV. 1107, 1109 (2006) (“[A]ccepting unlimited government power to prohibit all

deception in all circumstances would invade our rights of free expression and belief to an intolerable

degree, including most notably—and however counterintuitively—our rights to personal and political

self-rule.”).

6. See Alvarez, 567 U.S. at 751–52 (Alito, J., dissenting) (“The point is not that there is no such

thing as truth or falsity in these areas or that the truth is always impossible to ascertain, but rather that

it is perilous to permit the state to be the arbiter of truth.”).

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1046 MARQUETTE LAW REVIEW [107:1043

and most often are, met with suspicion, if not contempt.

Such sweeping

censorship would be as unfeasible as it would be undesirable.

However, the same can be said for going to the other extreme. That is, on

the spectrum of the legality of lies, if the state were to go all the way in the other

direction, allowing individuals the freedom to utter any and every falsehood,

this would be likewise unfeasible and undesirable. Some lies are clearly too

harmful to allow. These include, for instance, speech that qualifies as perjury

or defamation, or that incites a crowd to engage in imminent violence.

Moreover, as Justice Oliver Wendell Holmes put it so aptly more than a century

ago, “[t]he most stringent protection of free speech would not protect a man in

falsely shouting fire in a theatre and causing a panic.”

This brings us to the necessary starting point for any discussion of

falsehoods under the First Amendment: the acknowledgement that some lies

simply must be allowed, and some simply must not. This is precisely how the

First Amendment’s free speech protections operate. Courts and legislatures

have drawn lines that delineate, under the First Amendment, which falsehoods

are protected, on one hand, and which may be proscribed, on the other.

Many

such lines have been drawn.

This Article focuses on one of those lines: the

line between permitted and proscribed fraudulent speech.

That such a line even exists is a matter of contention and confusion. Indeed,

the way we think about fraud as a concept is problematic in at least two ways.

First, people often assume that conduct described as fraudulent must be

necessarily either tortious or criminal. They conflate the word fraud with

unlawful activity. This, as discussed further below in Section I.B, is

inaccurate.

And second, the term “fraud” is very often misused in bad faith

7. See sources cited supra note 5.

8. See Alvarez, 567 U.S. at 722 (noting false statements are not a category of unprotected

speech); Holloway v. Am. Media, Inc., 947 F. Supp. 2d 1252, 1263 n.15 (N.D. Ala. 2013) (“[F]alsity

must be coupled with some other element of culpability, such as an intent to injure or defraud another

person.”).

9. Alvarez, 567 U.S. at 717–18.

10. Schenck v. United States, 249 U.S. 47, 52 (1919).

11. Alvarez, 567 U.S. at 722.

12. Id. at 748–49 (Alito, J., dissenting) (explaining that falsehoods held to be unprotected, and

therefore which can be restricted by law, include false statements under oath, false threats of violence,

false claims that incite a mob, false claims that cause severe emotional distress, and falsely

impersonating a Federal Bureau of Investigation’s officer).

13. See discussion infra Section I.B; see also, e.g., Andrea Miller, Food Fraud Secretly

Infiltrates Kitchens Across America–Here’s How to Avoid It, CNBC,

https://www.cnbc.com/2023/01/15/food-fraud-secretly-infiltrates-america-heres-how-you-can-avoid-

it-.html [https://perma.cc/4S9Q-L7UT] (Jan. 15, 2023, 1:13 PM) (alleging “food fraud” is widespread,

a concept that appears to include both lawful and unlawful deceitful activities).

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1047

accusations against persons or groups with whom the speaker disagrees or

whom the speaker dislikes.

In this way, the term shows up in the news, in

social media, and in other contexts where it is used, not to describe actual

wrongful conduct or speech, but rather to invent fictional wrongdoing that

never occurred, which the speaker intends to make people believe occurred.

In this context, the “fraud” label is applied, ironically, in a fraudulent manner.

I hope here to dispel some of the misconceptions people have about fraud, and

to clarify under what circumstances it indeed actually is tortious or criminal,

and under what circumstances it is legal and constitutionally protected.

A. Harmful Dishonesty is More Widespread and Deeply Ingrained into

Society than is Often Acknowledged

The term “fraud” has two commonly used, though somewhat inconsistent,

meanings. On one hand, it is a legal term of art used to refer to a broad category

of civil and criminal wrongs, each of which has similar, though not identical,

elements.

It could refer, for instance, to securities fraud, wire fraud, or

common law deceit.

On the other hand, the term “fraud” is used in nonlegal

terminology to refer to harmful dishonesty more generally.

Some of the

conduct that falls under this second definition would be actionable, and some

would not. This broader definition of the term would include, for instance,

many of the allegations of “fraud” frequently lobbed at public figures, news

channels, and political opponents alleging wrongdoing of one kind or another,

which, even if engaged in, may or may not actually run afoul of the law.

14. See, e.g., Trip Gabriel, Driven by Election Deniers, This County Recounted 2020 Votes Last

Week, N.Y.

TIMES (Jan. 15, 2023), https://www.nytimes.com/2023/01/15/us/politics/2020-recount-

lycoming-county.html [https://perma.cc/8NUN-DKKK] (discussing that a Pennsylvania county

conducted a hand recount of ballots based on allegations of “fraud,” but no fraud or irregularities were

detected).

15. See, e.g., id.

16. Fraud, L

EGAL INFO. INST., https://www.law.cornell.edu/supremecourt/text/384/436

[https://perma.cc/G46U-ASU4].

17. See, e.g., United States v. Ramsey, 565 F. Supp. 3d 641, 643 (E.D. Pa. 2021) (discussing

criminal securities fraud under a federal statute); 18 U.S.C. § 1343 (federal wire fraud statute); Greg

Beeche, Logistics, LLC v. Cross Country Constr., LLC, 178 N.Y.S.3d 231, 236 (2022) (discussing

common law fraud under New York state law).

18. See Fraud, M

ERRIAM-WEBSTER, https://www.merriam-webster.com/dictionary/fraud

[https://perma.cc/BZH2-FVTP].

19. See Jon Cohen, Almost Everything Tucker Carlson Said About Anthony Fauci This Week

Was Misleading or False, S

CI., (Aug. 25, 2022, 6:10 PM),

https://www.science.org/content/article/almost-everything-tucker-carlson-said-about-anthony-fauci-

week-was-misleading-or-false?et_rid=17778419&et_cid=4371647& [https://perma.cc/56DV-PVEQ]

(discussing media figure calling Dr. Anthony Fauci a “dangerous fraud” for alleged wrongdoing,

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1048 MARQUETTE LAW REVIEW [107:1043

In this Article, I will use the words “fraud” and “fraudulent” in this latter

sense: to denote harmful dishonesty in general. Therefore, fraud, as used herein,

is where A lies to B with the intent of making B believe the lie and, as a result,

A benefits and B suffers harm. To be fraud, the dishonesty must cause an

unacceptable level or distribution of harm.

It would not, therefore, cover white

lies or other deceits that cause harm society generally finds acceptable. The

unacceptability of the harm is the touchstone distinction between mere

falsehood, on one hand, and fraud, on the other.

In each fraud, the one who attempts to deceive or mislead another is the

“liar.” The one deceived is the “dupe.” Any time a liar deceives a dupe and, in

the process, causes an unacceptable level or distribution of harm, then it is

fraud.

While some may object to my use of the word “fraud” in this more general

sense, it is preferable for at least two reasons. First, it reflects the most widely

accepted definition of the term fraud, rather than artificially imposing on the

term one of a number of possible legal definitions. In fact, “fraud” is the word

most often used in English to refer to the harmful deceit, whether or not it runs

afoul of criminal or tort law.

And second, using the term “fraud” in this

broader sense helps bring clarity to the discussion and analysis in parts of the

Article where it is necessary to distinguish between fraudulent conduct that is

criminal or tortious, on one hand, and fraudulent conduct that is not, on the

other. For clarity, then, when I make reference to fraudulent conduct that is

though not necessarily law-breaking); Celeste Sepessy, Is Fraudulent News the ‘New Normal’?, ARIZ.

ST. UNIV. NEWS CO/LAB (Apr. 10, 2019), https://newscollab.org/2019/04/10/is-fraudulent-news-the-

new-normal/ [https://perma.cc/56L3-FLYK] (discussing what the author calls “fraudulent news,”

which appears to refer to misleading or false news stories, which likely are protected free speech);

Farnoush Amiri, Judge: Trump Knew Vote Fraud Claims in Legal Docs Were False, AP N

EWS (Oct.

19, 2022, 7:20 PM), https://apnews.com/article/capitol-siege-donald-trump-georgia-crime-congress-

e285497c6a96f82ed08a0d561316029c [https://perma.cc/MT6M-STY7] (discussing false voter-fraud

claims made following the 2020 presidential election); see also generally M

ARC MORANO, GREEN

FRAUD: WHY THE GREEN NEW DEAL IS EVEN WORSE THAN YOU THINK (2021) (making numerous

politically motivated allegations to purportedly show that the Green New Deal is fraudulent).

20. See Mark Tushnet, The Kids Are All Right: The Law of Free Expression and New Information

Technologies, 71 C

ATH. U. L. REV. 471, 479 (2022) (discussing, in the context of free expression, how

the law permits conduct up to the point where the harm, or the distribution of harm, reaches a level of

unacceptability in society, and conduct causing harm above this threshold can be, and often is,

prohibited and punished).

21. For instance, “fraud” is used to describe harmful dishonesty more than twice as frequently

as “deception,” three times as frequently as “scam,” and five times more frequently than “deceit.” See

Frequency Lists, W

ORD & PHRASE, https://www.wordandphrase.info/frequencyList.asp

[https://perma.cc/ML22-AKEK]

(search in search bar “fraud”; then search in search bar “deception”;

then search in search bar “scam”; then search in search bar “deceit”) (receiving 8,949 total results for

“fraud”; 2,256 total results for “deception”; 2,397 total results for “scam”; 669 total results for

“deceit”).

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1049

either tortious or criminal, I will refer to it as actionable fraud. This will

distinguish it from fraud more generally, which may be tortious or criminal, but

on the other hand may be perfectly legal, notwithstanding the fact it is wrongful

or objectionable.

Given the broad scope of the term fraud, encompassing all unacceptably

harmful deceits, it is clear that fraudulent conduct is prevalent in society.

Indeed, even actionable fraud is clearly widespread, as evidenced by the over

ten thousand actionable fraud cases published on Westlaw in 2022 alone.

These do not include more than perhaps a tiny fraction of many of the most

common frauds carried out today, via phishing email and text scams, robocalls,

and other digital deceit the public is regularly bombarded with, but rarely results

in a tort or criminal court case.

Indeed, there are over fifteen billion spam

emails every day, making phishing emails difficult to detect or block.

And in

2021, “roughly 214,345 unique phishing websites were identified, and the

number of recent phishing attacks ha[d] doubled since early 2020.”

Phishing

is just one subset of the many ways liars defraud using digital platforms and

communications.

And digital platforms and communications represent just

one kind of forum where harmful deceit takes place.

Many frauds are

accomplished or attempted in person, by mail, and over the phone.

Of course, fraud is not a new phenomenon. Historian Robert Leflar

remarked that “fraud and misrepresentation are as old as human

communication.”

While this is certainly true, it may be something of a gross

understatement. Tying fraud to “human communication” masks just how long

22. A Westlaw search of federal and state cases, in 2022, for “(fraud! Deceit! “fraudulent

misrepresentation” “intentional misrepresentation”) & DA(aft 12-31-2021)” yielded over 10,000

results for actionable fraud cases in 2022, the maximum number visible in Westlaw searches.

23. See Top 15 Phishing Attack Statistics (And They Might Scare You), C

YBERTALK (Mar. 30,

2022), https://www.cybertalk.org/2022/03/30/top-15-phishing-attack-statistics-and-they-might-scare-

you/ [https://perma.cc/4DPJ-HX2U].

24. Id.

25. Id.

26. See, e.g., Shane Goldmacher, How Trump Steered Supporters Into Unwitting Donations,

N.Y. T

IMES (Aug. 7, 2021), https://www.nytimes.com/2021/04/03/us/politics/trump-donations.html

[https://perma.cc/NLE2-9QZ2]; Jessica A. Wentz & Benjamin Franta, Liability for Public Deception:

Linking Fossil Fuel Disinformation to Climate Damages, 52 E

NV’T L. REP. 10995, 10995 (2022); Sara

Dillon, The Propaganda Conundrum: How to Control This Scourge on Democracy, 23 O

R. REV. INT’L

L. 123, 132 (2022).

27. See What Are Some Common Types of Scams?, C

ONSUMER FIN. PROT. BUREAU (Mar. 13,

2024), https://www.consumerfinance.gov/ask-cfpb/what-are-some-common-types-of-scams-en-2092/

[https://perma.cc/7VXR-U4KQ].

28. See id.

29. Robert A. Leflar, Economic Problems of Fraud Law, 13 C

LEV.-MARSHALL L. REV. 203, 203

(1964) (emphasis omitted).

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1050 MARQUETTE LAW REVIEW [107:1043

we and our ancestors have engaged in, and fallen for, fraud, and just how deeply

ingrained fraud is into our society, if not our genetic endowment.

To begin with, other primates deceive one another, and people, to get things

they want the very same way people deceive.

They use vocal sounds, body

language, hand gestures, facial expressions, and eye diversion to deceive for

gain.

This has been observed, and scientifically documented, for decades, and

not only with regard to gorillas, chimpanzees, and other great apes in

captivity.

In other words, it is not just primates.

Dogs have long been observed deceiving each other, as well as their

owners. But until recently, such anecdotal observations had not been studied

under controlled conditions. Dr. Marianne Heberlein, of the University of

Zürich, tested canine deception in a controlled experiment to determine if dogs

actually do consciously deceive to get what they want, or if humans simply

project their own traits onto dogs.

The study, which is discussed more fully in

the footnote to this sentence, demonstrated conclusively that a significant

proportion of the twenty-seven dogs in that study clearly did deceive to obtain

something they wanted—a sausage.

30. Casey Kirkpatrick, Tactical Deception and the Great Apes: Insight into the Question of

Theory of Mind, 15 T

OTEM 31, 31 (2007).

31. Id. at 32.

32. See id. at 33; H.S. Terrace, L. A. Petitto, R.J. Sanders & T.G. Bever, Can an Ape Create a

Sentence?, 206 S

CI. 891, 981–902 (1979); STEVEN ROGER FISCHER, A HISTORY OF LANGUAGE 26–

(1999); Deborah Netburn, Q&A: What It’s Like to Be Interviewed for a Job by Koko the Gorilla:

‘She Had a Lot to Say’, L.A.

TIMES (June 22, 2018, 3:00 AM),

https://www.latimes.com/science/sciencenow/la-sci-sn-koko-gorilla-reflection-20180622-story.html

[https://perma.cc/6YVJ-73N8]; see also generally P

ROJECT NIM (BBC2 Mar. 23, 2013); Franzo Law

II, Tristan Mahr, Alissa Schneeberg & Jan Edwards, Vocabulary Size and Auditory Word Recognition

in Preschool Children, 38 A

PPLIED PSYCHOLINGUISTICS 89 (2017); DECEPTION: PERSPECTIVES ON

HUMAN AND NONHUMAN DECEIT 249 (Robert W. Mitchell & Nicholas S. Thompson eds., 1986);

ILLIAM A. HAVILAND, HARALD E.L. PRINS, DANA WALRATH & BUNNY MCBRIDE, THE ESSENCE

ANTHROPOLOGY 178 (3rd ed., Cengage Learning 2012).

33. R.W. Byrne & A. Whiten, Tactical Deception of Familiar Individuals in Baboons (Papio

Ursinus), 33 ANIMAL BEHAVIOUR 660, 669 (1985).

34. Marianne T.E. Heberlein, Marta B. Manser & Dennis C. Turner, Deceptive-Like Behaviour

in Dogs (Canis Familiaris), 20 A

NIMAL COGNITION 511, 511–20 (2017).

35. In the experiment, Heberlein and her researchers tested twenty-seven dogs to see whether

they would deceive to obtain a sausage. Id. at 513. She and her researchers put two boxes on one side

of a room. Id. at 514. One contained a sausage. Id. The other was empty. Id. All dogs were trained to

follow a simple verbal command. Id. When any trainer said, “Show me the food,” the dog was to lead

the trainer to the box with the sausage in it. Id. The dogs all learned this simple task. Id. Each dog was

paired with two human partners. Id. at 516. One was generous and one was selfish. Id. at 511. When

the generous partner told the dog, “Show me the food,” and the dog showed her the box with the

sausage in it, as the dog was trained to do, the generous partner took out the sausage and gave it to the

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1051

Given what has been discovered and studied about conscious deceit among

other mammals, such as primates like chimpanzees and apes,

as well as

dogs,

it is almost certain that conscious deception predates human

communication. It appears, instead, to be a trait, or more likely, a collection of

traits that we have inherited from our ancestors dating back millions of years.

Scientists have observed attributes we share with other species and drawn

conclusions about those attributes based on how long ago we shared a common

ancestor with those species. The last common ancestor (LCA) we share with

these other species informs us how long we have possessed traits we share with

them.

This includes, for example, gender identity and gender differences in

bonobos

(LCA 8 million years ago),

personality traits in mammalian farm

dog. Id. at 514. But when the selfish partner said, “Show me the food,” and the dog led the selfish

partner to the box with sausage in it, the selfish partner took the sausage out and put it in her pocket,

withholding it from the dog. Id. If, however, the dog led either partner, generous or selfish, to the empty

box—that is, the wrong box—the partner would show the dog that the box was empty and leave the

sausage-containing box untouched. Id. at 515. Then, in the final step of the experiment, the dog would

be returned to their owner, and the owner would go and look in both boxes. Id. If the sausage was still

in its box, the owner would take it out and give it to the dog. Id. Heberlein put each dog through the

whole scenario with the generous partner and the selfish partner numerous times. Id. It always began

with the command, “Show me the food.” Id. at 514. At first, the dogs led both partners, generous and

selfish, to the correct sausage-containing box. Id. at 515. The generous partner each time gave the dog

the sausage. Id. The selfish partner always withheld it. Id. Then, the dogs began changing their

behavior. Id. During the two days, one dog after another began deceiving the selfish partner by leading

her to the empty box, knowing they would later get the sausage from their owner. Id. at 518. These

same dogs, however, continued being truthful with the generous partner. Id. Every dog knew what the

command, “Show me the food,” meant. Id. They knew what they were supposed to do: that they were

supposed to always lead the human to the box with the sausage. Id. at 518. Throughout the experiment,

more and more dogs misled the selfish partner because the selfish partner was never going to give them

the sausage. Id. at 516.

36. Kirkpatrick, supra note 30, at 33; Terrace, Petitto, Sanders & Bever, supra note 32, at 981–

902; P

ROJECT NIM, supra note 32; DECEPTION: PERSPECTIVES ON HUMAN AND NONHUMAN DECEIT,

supra note 32, at 249; Byrne & Whiten, supra note 33, at 669.

37. Heberlein, Manser & Turner, supra note 34,

at 511–20.

38. See Robert Lamb, What Is the Last Common Ancestor, H

OWSTUFFWORKS,

https://web.archive.org/web/20201125090832/https://science.howstuffworks.com/life/evolution/last-

common-ancestor.htm [https://perma.cc/67PA-TPKH] (providing an archive URL as this article is no

longer available through science.howstuffworks.com).

39. See generally F

RANS DE WAAL, DIFFERENT: GENDER THROUGH THE EYES OF A

PRIMATOLOGIST (2022).

40. Rui Diogo, Julia L. Molnar & Bernard Wood, Bonobo Anatomy Reveals Stasis and

Mosaicism in Chimpanzee Evolution, and Supports Bonobos as the Most Appropriate Extant Model

for the Common Ancestor of Chimpanzees and Humans, S

CI. REPS., Apr. 4, 2017, at 1.

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1052 MARQUETTE LAW REVIEW [107:1043

animals (LCA varies),

personality traits in squirrels

(LCA 88 million years

ago),

and even hierarchical societal structures in lobsters (LCA 350 million

years ago).

We have learned much about our own cognitive abilities,

biological traits, and societal structures from studying these traits in other

animals, and most particularly other mammals.

Accordingly, evidence

strongly suggests we and our ancestors have lived with, and fallen for,

consciously deceptive behavior for at least 92 million years, which is when the

LCA we share with dogs lived.

If, however, we discard canines and accept

only great ape deception similarities, this would still put the age of our

conscious deception trait at between 8 and 20 years.

In any case, the problem

is millions of years old. In all that time, we and our ancestors have been

manipulating one another by actions and words to wrongfully get things we

want in ways that deprive others of things rightfully theirs. Given what is now

known about deception in our mammalian relatives, including canines, we must

reckon with the likely fact we have lived with conscious deceit since long

before we developed language (200,000 years ago

), or first stood upright and

walked on two legs (6 million years ago

), or lost our tail (25 million years

41. Marie-Antonine Finkemeier, Jan Langbein & Birger Puppe, Personality Research in

Mammalian Farm Animals: Concepts, Measures, and Relationship to Welfare, F

RONTIERS

VETERINARY SCI., June 28, 2018, at 1.

42. See generally Jaclyn R. Aliperti,

Brittany E. Davis, Nann A. Fangue, Anne E. Todgham &

Dirk H. Van Vuren, Bridging Animal Personality with Space Use and Resource Use in a Free-Ranging

Population of an Asocial Ground Squirrel, 180 A

NIMAL BEHAVIOUR 291 (2021).

43. Jan E. Janecka, Webb Miller, Thomas H. Pringle, Frank Wiens, Annette Zitzmann, Kristofer

M. Helgen, Mark S. Springer & William J. Murphy, Molecular and Genomic Data Identify the Closest

Living Relative of Primates,

318 SCI. 792, 794 (2007).

44. See J

ORDAN B. PETERSON, 12 RULES FOR LIFE: AN ANTIDOTE TO CHAOS 1–22 (2018);

Leonor Gonçalves, Psychologist Jordan Peterson Says Lobsters Help to Explain Why Human

Hierarchies Exist–Do They?,

CONVERSATION (Jan. 24, 2018, 9:33 AM),

https://theconversation.com/psychologist-jordan-peterson-says-lobsters-help-to-explain-why-human-

hierarchies-exist-do-they-90489 [https://perma.cc/3FX7-5XDT].

45. See sources cited supra notes 38–44; Cecilia Heyes, New Thinking: The Evolution of Human

Cognition, 367

PHIL. TRANSACTIONS ROYAL SOC’Y 2091, 2092 (2012).

46. George E. Liu, Lakshmi K. Matukumalli, Tad S. Sonstegard, Larry L. Shade & Curtis P. Van

Tassell, Genomic Divergences Among Cattle, Dog and Human Estimated from Large-Scale

Alignments of Genomic Sequences, BMC

GENOMICS, June 7, 2006, at 2.

47. Robert Thomas, Intentional Deception, C

TR. FOR ACAD. RSCH. & TRAINING

ANTHROPOGENY, https://carta.anthropogeny.org/moca/topics/intentional-deception

[https://perma.cc/M2VY-SLPY ].

48. Mark Pagel, Q&A: What Is Human Language, When Did It Evolve and Why Should We

Care?, 15 BMC B

IOLOGY, no. 64, 2017, at 1.

49. Walking Upright, S

MITHSONIAN NAT’L MUSEUM OF NAT. HIST.,

https://humanorigins.si.edu/human-characteristics/walking-upright [https://perma.cc/CEF4-PJDM]

(Jan. 3, 2024).

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1053

ago

). It is a problem millions of years old. This should inform us how

seriously we should take it, and what measures we should implement to protect

ourselves against it.

Moreover, given how long fraud has been part of our society and the way

people interact with, and manipulate, one another, one might expect that

humans might have developed some sort of defense mechanism to protect

themselves from it. But the opposite is actually true. One of the principal

reasons fraud is such an incredibly difficult problem to address is that, as recent

studies show, people are hardwired to fall for it.

In the words of Timothy

Levine, one of the leading experts on deception detection, “[gullibility] is a

near-universal human tendency. We all are perceptually blind to deception. We

are hardwired to be duped.”

People have no reliable way to know if they are

being lied to, whether the lie is spoken, written, or shown.

Indeed, in decades

of deception detection research, it has been well established that people, at best,

have a 54% success rate at telling when someone is lying.

This, of course, is

barely better than flipping a coin. There are a number of competing theories on

why we are such poor lie detectors.

But regardless of why it is the case, the

fact remains we are poor at detecting deception. This does not stop people from

believing they can detect lies, which only makes us even more vulnerable to

them.

The combination of our inability and overconfidence in the area of

deception detection makes fraudulent conduct extremely effective, and

therefore profitable, wherever people are able to get away with it.

The results

are as you might predict, given the foregoing to be true. Where people are to

deceive to gain a thing they desire—be it money, a job, political office, or an

intimate partner—many will use deceit to get it, even if they cause harm in the

process.

50. Michael Le Page, How Our Ape Ancestors Suddenly Lost Their Tails 25 Million Years Ago,

EW SCIENTIST (Sept. 24, 2021), https://www.newscientist.com/article/2291130-how-our-ape-

ancestors-suddenly-lost-their-tails-25-million-years-ago/ [https://perma.cc/D67E-LBEA].

51. T

IMOTHY R. LEVINE, DUPED: TRUTH-DEFAULT THEORY AND THE SOCIAL SCIENCE OF

LYING AND DECEPTION ix–xii, 3–14 (2020).

52. Id. at ix.

53. Id. at 10.

54. Id. at 10–11.

55. See id. at 5.

56. See id. at 17–26 (discussing the unreliable deception cues people commonly rely on to tell if

someone is lying).

57. See discussion infra Section III.A.

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1054 MARQUETTE LAW REVIEW [107:1043

B. Although Fraud is Wrongful, Deceitful, and Harmful, it is Often Legal

In recent years, many political campaigns have used manipulative tactics in

their online donation platforms to extract more money from donors. One such

scheme was detailed in a New York Times report by Shane Goldmacher.

According to the report, the Trump presidential campaign added checkboxes to

a screen on its donation site where donors had to click through to complete their

donation.

The checkboxes were auto-checked.

One auto-checked box made

the donation recurring, meaning the donor “opted,” often without knowing they

had done so, to donate monthly or weekly, or in some cases multiple times per

week.

Another auto-checked box doubled the donation amount for recurring

donations.

Each checkbox had lengthy instructions next to it.

It required

extensive careful reading to understand what the checkboxes were for, and

whether unchecking them meant “opt in” or “opt out” for each item.

On the

checkbox page, the website warned, “If you UNCHECK this box, we will have

to tell Trump you’re a DEFECTOR.”

Using deceptive tactics like this,

Trump’s campaign specifically targeted retirees, veterans, and chronically ill

individuals who are more vulnerable to such tactics.

The result? Trump’s

campaign collected millions of dollars that donors never intended to donate.

In one case, a sixty-three-year-old man named Stacy Blatt, who was battling

cancer and living in hospice care in Kansas City on less than $1,000 per month,

made his first ever donation to the Trump campaign.

He had heard on the

Rush Limbaugh radio show that Trump badly needed campaign cash.

So,

Blatt made a one-time donation of $500—or so he thought.

Unbeknownst to

Blatt, “another $500 was withdrawn the next day, then $500 the next week and

every week through mid-October, without his knowledge—until Mr. Blatt’s

bank account had been depleted and frozen. When his utility and rent payments

58. Goldmacher, supra note 26.

59. Id.

60. Id.

61. Id.

62. Id.

63. Id.

64. Id.

65. Shane Goldmacher, G.O.P. Group Warns of ‘Defector’ List If Donors Uncheck Recurring

Box, N.Y.

TIMES (Apr. 17, 2021), https://www.nytimes.com/2021/04/07/us/politics/republicans-

donations-trump-defector.html [https://perma.cc/356S-8H46].

66. Goldmacher, supra note 26.

67. Id.

68. Id.

69. Id.

70. Id.

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1055

bounced, he called his brother, Russell, for help.”

“What the Blatts soon

discovered was $3,000 in withdrawals by the Trump campaign in less than 30

days. They called their bank and said they thought they were victims of fraud.”

Blatt was one of thousands duped by the scam.

In fact, it was estimated

that about 3% of all credit card fraud claims in the U.S. in 2020 came from

automatic donations made to Trump.

Victor Amelino, a seventy-eight-year-old in California, made a one-time

$990 online donation to Trump.

But because he failed to uncheck a box, the

payment recurred seven more times, adding up to almost $8,000.

“I’m

retired,” Amelino said.

“I can’t afford to pay all that damn money.”

Blatts, Amelino felt betrayed. The ones running the website, he said, were

“bandits.”

Ron Wilson, another Trump donor, called the donation website

“predatory.”

Wilson, an eighty-seven-year-old retiree in Illinois, made a series

of small contributions totaling about $200.

Within a couple months, however,

the Trump donor platform “had withdrawn more than seventy separate

donations from Mr. Wilson worth roughly $2,300.”

Goldmacher, who authored the New York Times report, was interviewed on

MSNBC.

At one point in the interview, after he listed some of the tactics still

being used on Trump’s political contribution website, the interviewer,

Stephanie Ruhle, shook her head and remarked, “It may be immoral, but it

appears to be legal.”

This phrase captures the essence of the problem. Fraud is always

unacceptably harmful, or in the words of Ruhle, “immoral,” but it is

nevertheless often legal.

71. Id.

72. Id.

73. Id.

74. Id.

75. Id.

76. Id.

77. Id.

78. Id.

79. Id.

80. Id.

81. Id.

82. Id.

83. See Stephanie Ruhle Reports (MSNBC television broadcast Apr. 5, 2021),

https://archive.org/details/MSNBCW_20210405_130000_Stephanie_Ruhle_Reports/start/3360/end/3

420 [https://perma.cc/E6GM-P3FU].

84. Id.

85. See id.

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1056 MARQUETTE LAW REVIEW [107:1043

The Trump campaign’s deceptive tactics amounted to fraud by the

dictionary definition of the term, but not in the legal sense of the term.

That

is, it was likely not actionable fraud. This happens often.

One reason for it is

obvious: the ways people defraud one another are far too numerous and varied

to fit into any particular prohibited category. Fraudulent conduct, unlike the

law, can be crafted in every imaginable way, on the spur of the moment, as the

need or desire arises. The law, on the other hand, can only prohibit specific

categories of conduct, none of which can be overbroad or vague.

The law,

unlike the schemes themselves, develops slowly and must comply with certain

standards. A new scheme to manipulate or deceive can be thought up instantly.

A new law to address it, on the other hand, can be enacted only after going

through a lengthy political or judicial process.

Accordingly, the frauds that run afoul of the law will always comprise only

a subset of the full spectrum of possible (and actual) fraudulent schemes

devised and carried out. The following diagram, though not necessarily to

precise scale, roughly illustrates this principle.

86. Compare Goldmacher, supra note 26, with Fraud, supra note 18.

87. Lee E. Berlik, Fraud: What It Is, and What It Is Not, B

ERLIKLAW (Nov. 24, 2009),

https://www.virginiabusinesslitigationlawyer.com/fraud-what-it-is-and-what-it-i/

[https://perma.cc/MN4T-MXYV].

88. Stuart Buck & Mark L. Rienzi, Federal Courts, Overbreadth, and Vagueness: Guiding

Principles for Constitutional Challenges to Uninterpreted State Statutes, 2002 U

TAH L. REV. 381,

385–86.

89. W

ES HENRICKSEN, IN FRAUD WE TRUST (forthcoming 2024) (manuscript at 88) (on file with

author) (“Whereas a new fraud scheme can be thought up in the moment, and can be molded and

shaped as it is carried out, putting a law in place to prohibit that scheme is a slow and cumbersome

reaction, which can be accomplished only through a lengthy political process.”).

90. Id. (manuscript at 89).

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1057

Every deceptive scheme whereby one seeks to deceive another for their

own advantage, and in so doing causes harm—that is, every fraud—fits within

the larger circle in this Venn diagram.

These include all frauds, then, whether

or not they might satisfy the elements of any particular tort or crime. Fraud

schemes that do satisfy the elements of a tort or crime, actionable fraud, are

represented by the smaller circle at the bottom.

Actionable fraud is only a

small subcategory of the far larger category of fraud.

It is almost certainly the

case, although empirical data on this would be difficult to establish, that most

frauds are not actionable. That is, most instances where one deceives people

with falsehoods for their own advantage, and cause some harm in so doing, are

neither a tort nor a crime.

The line delineating what constitutes actionable fraud is drawn by those

who make and interpret the law. This is done largely by legislators and courts.

It is, therefore, an artificial line that can, and has, moved over time.

Indeed, it

is always in flux to some degree, adjusting with each new fraud case decided

by courts. The central problem I seek to highlight in this Article, and which I

91. Id.

92. Id.

93. Id.

94. See Paula J. Dalley, The Law of Deceit, 1790-1860: Continuity Amidst Change, 39 A

M. J.

LEGAL HIST. 405, 406 (1995).

Fraud

all unacceptably harmful deceits

Actionable

Fraud

fraud prohibited by

law

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1058 MARQUETTE LAW REVIEW [107:1043

will discuss in greater detail below, is that there is a category of fraudulent

conduct that should, by any fair measure, fit inside the small circle of actionable

fraud but is today treated by the law as outside it. This includes many fraudulent

schemes aimed at the public rather than at individual victims. One reason fraud

aimed at the public is not, today, adequately addressed by law is that most fail

to see it as “fraud” because they do not understand how fraud works and how

serious of a problem it really is, particularly when it is carried out on a large

scale.

C. The Misunderstood “Evasion” Component of Fraud

Perhaps the single greatest misconception when it comes to understanding

and dealing with fraud arises from people’s misplaced belief that fraud is

centered on deception, and that therefore the focus when crafting laws to

address fraudulent schemes should likewise focus on its deception

component.

It is true, of course, that deceit is key to fraud. Fraud always

involves a liar deceiving one or more dupes.

But seeing fraud through this

lens misses a critical point. Every fraud is centered, first and foremost, not on

deception but on evasion.

In every scheme to defraud, regardless of the size of the scheme or the aim

of those carrying it out, the last thing most consider when analyzing and

addressing it—but the first thing considered by the liar who aims to carry it

out—is that, to succeed, the liar must profit from it.

To do so, they must get

away with it.

And “getting away with it” is what is meant by evasion. This

element, though never listed in any fraud definition, is in fact required for every

successful fraud.

A liar can accomplish evasion in either of two ways. The scheme they carry

out must either (1) go undetected, or (2) if it is detected, then the liar must avoid

punishment. If either (1) or (2) is achieved, then evasion is accomplished.

The first option is always preferable to the second. There is, of course, no

need to worry about punishment if you are not caught in the first place. But if a

liar is caught defrauding another, then the liar is left only with the second

option, avoiding punishment. To achieve this, the liar must establish that their

95. See Fraud 101: What Is Fraud?, ASS’N CERTIFIED FRAUD EXAM’RS,

https://www.acfe.com/fraud-resources/fraud-101-what-is-fraud [https://perma.cc/U2D5-7SBB].

96. Wes Henricksen, Deceive, Profit, Repeat: Public Deception Schemes to Conceal Product

Dangers, 42 C

ARDOZO L. REV. 2395, 2424 (2021).

97. Id.

98. Id.

99. Id.

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1059

conduct, although fraud, was not actionable fraud.

100

If the liar’s fraud does not

satisfy the elements of a tort, then it is not tortious, and if it does not satisfy the

elements of any crime, then it is not criminal. If the conduct runs afoul of no

law, then no punishment can be imposed nor damages awarded.

101

This allows

the liar to avoid paying any penalty for the fraud, thereby allowing them to

achieve the advantage or profit they sought by their fraud in the first place. The

liar succeeds in this task by winning in court, or by making clear they would

win if taken to court.

Failure to accomplish evasion by either manner—avoiding detection or

punishment—renders the fraud unprofitable. If unprofitable, it removes the

incentive to carry out the fraud in the first place.

102

Without evasion, fraud is

futile.

This point may seem obvious when it comes to actionable one-on-one

frauds, which are now largely, though not totally, prohibited by law.

103

But

evasion is frequently—indeed, almost universally—overlooked and ignored

when it comes to frauds aimed at deceiving millions of people, such as those

carried out by politicians, media, and corporations.

104

These kinds of largescale

frauds, which I call “fraud on the public,”

105

are most often legal, meaning they

do not fit into any existing prohibited fraud category, such as common law

fraud, securities fraud, or false advertising, nor do they fit into any other false

speech prohibited category, such as defamation or incitement.

106

In short, the

conduct involved in most frauds on the public falls outside existing legal

100. Take, for instance, the campaign donation scam, see supra notes 58–85 and accompanying

text, where the scheme may have been “immoral,” but “appear[ed] to be legal.” Stephanie Ruhle

Reports, supra note 83.

101. See Damages, L

EGAL INFO. INST.,

https://www.law.cornell.edu/wex/damages#:~:text=Damages%20are%20imposed%20if%20the,inten

ded%20to%20punish%20the%20wrongdoer [https://perma.cc/C3CC-S8XS].

102. Henricksen, supra note 96, at 2444–45.

103. Of course, not every instance where one deceives another to gain something in a manner

that causes harm is, or even should be, prohibited. For example, if someone wanted to cut into a long

line at a coffee shop, and they lied to someone in the line to allow them to cut in, this would be a fraud,

albeit a relatively benign one, and it would almost certainly not be actionable. One-on-one frauds are

actionable only under very limited circumstances, most often involving a financial profit motive. See

Eugene Volokh, When Are Lies Constitutionally Protected?, K

NIGHT FIRST AMEND. INST. (Oct. 19,

2022), https://knightcolumbia.org/content/when-are-lies-constitutionally-protected

[https://perma.cc/6R2J-4TNA] (listing as one category of falsehoods the First Amendment does not

protect as “fraudulent attempts to get money”).

104. Wes Henricksen, Disinformation and the First Amendment: Fraud on the Public, 96 S

JOHN’S L. REV. 543, 552–53 (2022).

105. See id. at 559.

106. United States v. Alvarez, 567 U.S. 709, 717–18 (2012) (listing categories of prohibited false

speech).

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1060 MARQUETTE LAW REVIEW [107:1043

prohibitions. This gives those who carry them out a free pass to defraud with

impunity.

This happens out in the open. It is not hidden. Anyone who observes the

news, regardless of which source one consumes it from, will, if looking for

them, frequently find falsehoods reported alongside truthful information.

107

Falsehoods are thus spread far and wide, not just in the news, but on social

media, other online platforms, and by word of mouth.

108

Of course, a falsehood

alone never amounts to fraud. To be fraud, it must involve someone

purposefully spreading something they know to be false for the purpose of

deceiving others for their own benefit.

109

And while not all falsehoods one finds

in the media or online are fraudulent, some are.

110

Politicians purposefully

spread falsehoods to help swing public opinion, and votes, in their favor.

111

Media outlets purposefully spread falsehoods to gain viewers and, therefore,

more revenue.

112

Corporations purposefully spread falsehoods to increase

profits and shareholder value.

113

Many of the falsehoods that ultimately reach

us through our screens or by word of mouth were cooked up by politicians,

media, and corporations, and others, who benefit from manipulating people into

believing the falsehoods to be true.

114

The law treats fraud schemes aimed at millions of people different from a

fraud scheme aimed at one person.

115

As pointed out by Professor Howard

Wasserman, “paradoxically, speech is easier to sanction when it is said to a

smaller group than a larger one.”

116

But why is this the case? Certainly, there

107. See discussion infra Section III.A.

108. See Lyle Moran, Fighting Disinformation, A.B.A.

J., Oct.-Nov. 2020, at 20, 22 (quoting

Chief Justice John Roberts, who stated that “[i]n our age . . . social media can instantly spread rumor

and false information on a grand scale”).

109. Wes Henricksen & Broderick Betz, The Stolen Election Lie and the Freedom of Speech,

127 P

ENN ST. L. REV. PENN STATIM 111, 117–18 (2023).

110. Two recent examples are climate change denial and the stolen election lie. See generally

Wentz & Franta, supra note 26; Henricksen & Betz, supra note 109.

111. See Victory Through Deceit: The Constitutional Collision Between Free Speech and

Political Lies, 50 S

UFFOLK UNIV. L. REV. 717, 717 (2017); Annie C. Hundley, Fake News and the

First Amendment: How False Political Speech Kills the Marketplace of Ideas, 92 T

UL. L. REV. 497,

498 (2017).

112. See Daniela C. Manzi, Managing the Misinformation Marketplace: The First Amendment

and the Fight Against Fake News, 87 F

ORDHAM L. REV. 2623, 2628 (2019).

113. See Wes Henricksen, Intended Injury: Transferred Intent and Reliance in Climate Change

Fraud, 72 A

RK. L. REV. 713, 743–44 (2020).

114. See sources cited supra notes 111–13.

115. Henricksen, supra note 104, at 556–57.

116. Howard Wasserman, George Santos, Lies, and Jewishness, P

RAWFSBLAWG (Dec. 29,

2022, 11:52 AM), https://prawfsblawg.blogs.com/prawfsblawg/2022/12/george-santos-lies-and-

jewishness.html [https://perma.cc/EW3U-V5UU].

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1061

must be a number of factors at work, including the simple fact that the nature

of policing publicly made statements, which may fall on millions of ears, is

more dangerous and more risky than policing statements made one-on-one.

117

But I do not believe that this justification is the full story. For example, it

appears likely that one reason fraud on the public is largely allowed is the fact

that those who possess the wealth and power to spread profitable falsehoods,

unlike those who seek to defraud one-on-one, have massive resources, which

allow them not only to devise and carry out sophisticated and carefully-tailored

schemes that straddle the line of illegality but also to influence, if not outright

dictate, where the line of illegality is, or should be, drawn.

118

The ways this may

be accomplished, which are well documented elsewhere, are not the focus of

this Article.

119

However, it may involve the same techniques used to influence

public opinion and political power in general, such as campaign contributions,

lobbying, public relations campaigns, marketing, and advertising, all of which

may influence not only elections but also judicial and other political

appointments.

120

Another significant factor that helps explain why the law ignores massive

fraud schemes and focuses, instead, almost exclusively on smaller frauds,

involves how and when fraud law first emerged, and the way the law developed

over the past couple of centuries. Although there have been laws against some

harmful deceptions for centuries, going all the way back to the Code of

Hammurabi,

121

modern fraud law, as it exists today and is applied in the U.S.

and other common law jurisdictions around the world, was invented with the

stroke of a judge’s pen in London in 1789 and has, for the most part, evolved

as a tool by which tort plaintiffs and prosecutors seek most often to hold liable,

or to punish, only those who target particular victims with their schemes rather

than aiming the schemes at the public.

122

117. See Henricksen, supra note 104, at 555–56.

118. See K. Sabeel Rahman, Producing Democratic Vibrancy, 25 J.L.

& POL’Y 273, 274 (2016)

(“[E]conomic wealth generates disparities in political power and influence, and that we need a variety

of legal protections and structures to secure the political freedoms that make democracy possible.”).

119. See, e.g., Elizabeth Garrett, The William J. Brennan Lecture in Constitutional Law: The

Future of Campaign Finance Reform Laws in the Courts and in Congress, 27 O

KLA. CITY UNIV. L.

REV. 665, 672–73 (2002).

120. See id.

121. See, e.g., Code of Hammurabi, W

RIGHT ST. UNIV.,

http://www.wright.edu/~christopher.oldstone-moore/Hamm.htm [https://perma.cc/5JUK-WEVL]

(quoting C

ODE OF HAMMURABI (1700 B.C.E.)) (“If a man bears false witness concerning grain or

money, he shall himself bear the penalty imposed in the case.”).

122. Brent A. Olson, History of the Tort of Fraud, in 20A3 M

INN. PRAC., BUS. L. DESKBOOK

§ 34:3, Westlaw (database updated Dec. 2023).

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1062 MARQUETTE LAW REVIEW [107:1043

II. THE LAW’S EXCESSIVE FOCUS ON PERSONAL FRAUD, AND RESULTING

FAILURE TO ADDRESS FRAUD ON THE PUBLIC

Actionable fraud is prohibited for the same reason other harmful human

impulses are prohibited: from a tort perspective, to protect victims;

123

and from

a criminal perspective, to protect society.

124

If left to their own devices, people

very often deceive others to get things they want.

125

But while most refrain from

deceiving in a way that causes significant harm to others, some will carry out

such fraudulent schemes if allowed to do so by law, or if they can get away with

it undetected. This, in short, is why there are laws against fraud, and why there

have been for as long as laws have been written down.

126

The network of laws

aimed at stopping deceit, which can be broadly labeled “fraud law,” succeeds

to some extent by curtailing some of the unacceptably harmful ways people

deceive one another.

127

In this way, fraud law is not unique. People possess a number of destructive

impulses the law steps in to prohibit. These include, for instance, robbery,

trespassing, property destruction, assault, murder, rape, and incest. As societies

progress, so do restrictions on these harmful behaviors.

128

The law, of course,

rarely lines up perfectly with morality; there are moral actions deemed illegal

and immoral actions deemed legal.

129

In some cases, the law overcorrects. For

instance, until recently, American law prohibited one from marrying a person

of a different race, and until just a couple of years ago, it prohibited marrying a

person of the same sex.

130

The law also, for most of U.S. history, made it a

123. Henricksen & Betz, supra note 109, at 124.

124. See, e.g., Dov Greenbaum, Research Fraud: Methods for Dealing with an Issue That

Negatively Impacts Society’s View of Science, 10 C

OLUM. SCI. & TECH. L. REV. 61, 117 (2009).

125. See generally L

EVINE, supra note 51.

126. See, e.g., Code of Hammurabi, supra note 121.

127. See Robert E. Hoyt, David B. Mustard & Lawrence S. Powell, The Effectiveness of State

Legislation in Mitigating Moral Hazard: Evidence from Automobile Insurance, 49 J.L.

& ECON. 427,

427 (2006) (carrying out an empirical study on the effectiveness of laws aimed at curtailing insurance

fraud and finding that some laws appeared to have an effect while others “ha[d] no statistically

significant effect on fraud”).

128. Sungyong Kang, In Defense of the “Duty to Report” Crimes, 86 UMKC L. R

EV. 361, 374

n.73 (2017) (“Law influences and reflects a society’s morals.”); Daryl J. Olszewski, Statutory Rape in

Wisconsin: History, Rationale, and the Need for Reform, 89 M

ARQ. L. REV. 693, 694–95 (2006).

129. See, e.g., Hal Fliegelman, A Bear of a Problem, NAELA Q., Spring 1999, at 18 (“[A]n act

may be legal and immoral, legal and moral, illegal and immoral, or illegal and moral.”); Kang, supra

note 128, at 383 (“Of course, there are moral acts that are illegal and immoral acts that are legal.”).

130. See Ronald Turner, Same-Sex Marriage and Loving v. Virginia: Analogy or Disanalogy?,

71 W

ASH. & LEE L. REV. ONLINE 264, 266–67 (2015) (discussing bans on same-sex marriage and

interracial marriage).

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1063

crime to engage in homosexual activity.

131

Although these laws, too, prohibited

certain human impulses, most today agree these restrictions did not help make

society safer, happier, or better.

132

They did not protect victims.

133

Instead, they

were, as is obvious through historical hindsight, oppressive and

counterproductive.

134

One can think of numerous laws, past and present, that

overreach like these. Clearly, not all laws put in place to suppress hardwired

impulses necessarily help society. But many such laws do. We are certainly

better off suppressing the impulses to rob, to assault, or to murder.

Like robbery, assault, and murder, fraud appears to be a human impulse

hardwired into some people, whereby one seeking personal advantage, profit,

or satisfaction is willing to harm others for their own private gain.

135

robbery, assault, and murder, fraud encompasses a broad spectrum of wrongful

activity, which varies from highly harmful to minimally harmful. Take robbery

for example. There is a vast difference between stealing someone’s car and

stealing an air freshener out of their car. Should one who commits either of

these acts be put on trial and imprisoned? Perhaps they should for the former,

but should they for the latter? As for assault, there is a huge difference between

accidentally bumping into someone on the sidewalk and purposefully punching

them. Murder, too, has degrees. Is it murder to use a contraceptive while

engaging in sexual intercourse? According to some, yes.

136

But this point is

certainly debatable.

Fraud, like other harmful impulses, has degrees. The law distinguishes

between lies that are harmful but legal, on one hand (nonactionable fraud), and

those too harmful to allow, on the other (actionable fraud).

137

But how this

distinction is made has, to date, not been adequately studied or appreciated. A

survey of fraud law over the past two and a half centuries reveals a troubling

131. See Lawrence v. Texas, 539 U.S. 558, 578 (2003) (holding that Texas’s anti-sodomy law,

which criminalized homosexual behavior, violated the Due Process Clause of the Fourteenth

Amendment).

132. See, e.g., Windsor v. United States, 699 F.3d 169, 182 (2d Cir. 2012) (holding that

“homosexuality has no relation to aptitude or ability to contribute to society”), aff’d, 570 U.S. 744

(2013).

133. Id. at 187–88.

134. See supra notes 130–33; see also William N. Eskridge, Jr., A History of Same-Sex

Marriage, 79 V

A. L. REV. 1419, 1490 (1993).

135. See L

EVINE, supra note 51, at ix, 96 (noting people “are hardwired to be duped,” and that

while “most people lie infrequently” and “are honest most of [the] time,” “[t]here are a few

people . . . who lie often,” and that “[m]ost lies are told by a few prolific liars”).

136. See, e.g., Elizabeth Sepper, Gendering Corporate Conscience, 38 H

ARV. J.L. & GENDER

193, 211 (2015) (“By categorizing emergency contraception and IUDs as abortion and then

condemning it as murder, some . . . denounce women who use such forms of contraception as

murderers.”).

137. Henricksen, supra note 104.

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1064 MARQUETTE LAW REVIEW [107:1043

inconsistency.

138

The law generally prohibits one person defrauding another in

an unacceptably harmful way.

139

But the more victims one defrauds, the less

likely it is for the scheme to be actionable fraud under the law.

140

This presents

a paradox. The more victims a fraudster targets, the less likely it is the fraud

they carry out will fit into the actionable fraud category. Therefore, the bigger

a fraud is, the less likely it will be prohibited. Part of the explanation for why

this is the case can be found in the history of how fraud law was established in

the first place, and how it has evolved in the years since.

141

* * *

Modern fraud law, which today encompasses all actionable fraud, grew

primarily out of a single court decision in 1789.

142

Up to then, in the United

Kingdom’s common-law system, which all common-law jurisdictions inherited

from the United Kingdom, there was no law against defrauding another person

unless you had entered into a contract with that person.

143

No contract, no fraud.

One judge in the 1789 case of Pasley v. Freeman,

144

decided in the King’s

Bench Court, changed that. The facts of Pasley are simple. A store owner sold

goods to a customer on credit.

145

The customer needed to provide a personal

reference to vouch for his creditworthiness.

146

For this purpose, the customer

brought in a man named Joseph Freeman, who assured the store owner the

customer could, and would, pay.

147

But the customer did not pay.

148

He disappeared and was never seen

again.

149

The store owner, who was owed the equivalent of over $500,000 in

today’s U.S. currency,

150

could not sue the customer because the customer

138. HENRICKSEN, supra note 89 (manuscript at 89).

139. Henricksen, supra note 104, at 553 (noting how defrauding another in a harmful way may

constitute an actionable crime and tort).

140. Id.; H

ENRICKSEN, supra note 89 (manuscript at 89).

141. There are other factors, of course. For example, First Amendment analysis gives stronger

protections for speech to the public than to one-on-one speech. This makes the bar higher for restricting

speech to the public than for one-on-one speech. See Wasserman, supra note 116.

142. See Olson, supra note 122.

143. See Dalley, supra note 94, at 413–14.

144. Pasley v. Freeman, (1789) 100 Eng. Rep. 450 (K.B.).

145. Id. at 450.

146. Id.

147. Id.

148. Id. at 450–51.

149. Id. at 451.

150. Id.; Eric W. Nye, Pounds Sterling to Dollars: Historical Conversion of Currency, U

NIV.

WYO., https://www.uwyo.edunumimage/currency.htm [https://perma.cc/EX9D-QUFN].

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1065

could not be found.

151

Instead, the store owner sued Freeman, who had vouched

for the nonpaying customer.

152

Freeman, in fact, had lied.

153

He had known the

customer was untrustworthy, and that he would likely not pay.

154

Freeman’s lies

about the customer’s integrity and creditworthiness caused the store owner to

lose thousands of dollars.

155

But such deceit was not illegal at the time. Fraud was then only actionable

if carried out between parties to a contract.

156

The store owner and Freeman had

no contract.

157

So, the store owner had no legal basis for a claim against

Freeman.

158

The case was appealed to the King’s Bench Court.

159

There, Chief Justice

Lord Kenyon conceded the obvious: there being no contract between the men,

the law provided no avenue for the store owner to seek damages against

Freeman.

160

However, Justice Grose, whose opinion in the case is appended to

Lord Kenyon’s, insisted that although there is no law, there is a “principle” that

holds “that wherever deceit or falsehood is practised to the detriment of another,

the law will give redress.”

161

Lord Kenyon agreed.

162

Using this principle as the

basis of his ruling, the Chief Justice invented a new law under which Freeman

could be, and was, held liable to pay the store owner’s damages.

163

The law

Lord Kenyon created was:

A false affirmation, made by the defendant with intent to

defraud the plaintiff, whereby the plaintiff receives damage, is

the ground of an action upon the case in the nature of deceit. In

such an action, it is not necessary that the defendant should be

benefited by the deceit, or that he should collude with the

person who is.

164

This was an astonishing change to the law. From one moment to the next,

victims of fraud who had no contractual relationship with the one who deceived

151. Pasley, 100 Eng. Rep. at 451.

152. Id.

153. Id.

154. Id.

155. Id.

156. Id.

157. Id.

158. Id.

159. Id.

160. See id. at 456–58.

161. Id. at 451.

162. See id. at 457 (“[A]n action upon the case for a deceit lies when a man does any deceit to

the damage of another.”).

163. Id. at 450.

164. Id.

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1066 MARQUETTE LAW REVIEW [107:1043

them went from having no rights to being able to take the fraudster to court and

sue for damages.

165

Under the ruling in Pasley, it did not even matter if the one

deceiving stood to gain anything from the fraud.

166

Freeman appeared to gain

nothing from deceiving the store owner.

167

It was enough that Freeman

defrauded the store owner, and that the store owner suffered damages as a

result.

168

Today, two and a half centuries later, these general parameters of the

law still hold true in common-law jurisdictions like the U.S.

169

Thousands of actionable fraud cases were decided in American courts

during the century following Pasley.

170

Most of these cases arose out of one-

on-one transactions involving the sale of goods, such as horses or other

livestock, intellectual property, or land. Some, like Pasley, involved credit

references. When a case was decided in favor of the plaintiff (i.e., the dupe),

the defendant (i.e., the liar) was ordered to pay damages. In addition to these

tort cases, criminal laws were passed to make actionable fraud a crime.

171

This

meant that one who harms another through fraud can be sent to prison or

ordered to pay fines, in addition to being required to pay damages to the one

defrauded.

172

In the 1700s, it made sense to focus legal remedies for harmful frauds on

the kinds of frauds most often carried out in that era, which were one on one.

To be clear, it is not as if fraud on the public was totally nonexistent; the idea

of spreading a fraudulent claim to masses of people certainly existed at the

time.

173

But the available avenues for disseminating falsehoods to masses of

people were extremely limited when compared with the opportunities available

165. Dalley, supra note 94, at 413–14.

166. Pasley, 100 Eng. Rep. at 450.

167. Id. at 451.

168. Id. at 450.

169. Klein v. Receivable Mgmt. Grp., Inc., 595 F. Supp. 3d 1183, 1191 (M.D. Fla. 2022)

(quoting Pasley for the proposition there must be damage for a fraud claim to be actionable).

170. I make this observation, and the ones to follow, drawing from the knowledge I have

acquired by conducting, in collaboration with research assistants, numerous reviews, studies, surveys,

and analyses concerning fraud cases in the U.S. These reviews, studies, surveys, and analyses are on

file with the author.

171. See S

TEVEN W. FELDMAN, GOVERNMENT CONTRACT GUIDEBOOK § 12:14 (4th ed. 2023)

(“There are a number of criminal statutes under which the government prosecutes procurement

fraud.”); Utah v. Kent, 945 P.2d 145, 147 (Utah Ct. App. 1997) (discussing “statutes criminalizing

forgery, insurance fraud, and communications fraud”).

172. See F

ELDMAN, supra note 171; Kent, 945 P.2d at 147.

173. See, e.g., Samantha Barbas, From Privacy to Publicity: The Tort of Appropriation in the

Age of Mass Consumption, 61 B

UFF. L. REV. 1119, 1140 (2013) (discussing patent medicines, which

were “‘cure-all’ elixirs that were typically fraudulent if not toxic” and “were the most commonly

advertised product of the 1800s”).

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1067

in later centuries.

174

At the time, to send a message to one person out of earshot

took a significant amount of time. With no telephones or electronic

communications, except in later decades the telegraph, and without

automobiles or airplanes, messages traveled slowly. Thus, one-on-one fraud

posed the most immediate and clear threat. Accordingly, it made sense for fraud

law to, in its early stages, focus almost entirely on one-on-one fraud schemes.

But a new kind of fraud scheme grew more prevalent during the 1800s.

175

This category of fraud did not quite fit the model for which fraud law had been

made. This new fraud scheme involved the marketing, selling, and purchasing

of securities, such as stocks and bonds.

176

These frauds were different because

they were not carried out the way fraud schemes had previously, where one

person made false representations to another so that the other would rely on

them and thereby suffered harm.

177

As the Supreme Court has noted, “the

typical fact situation in which the classic tort of misrepresentation and deceit

evolved was light years away from the world of commercial transactions to

which Rule 10b-5 is applicable.”

178

In a securities fraud scheme, “privity of

dealing or even personal contact between potential defendant and potential

plaintiff is the exception and not the rule.”

179

The liar in a securities fraud scheme disseminates a profitable falsehood,

not to any particular individual, as is the case in the sale of horses or land, but

rather to potential investors, an undefined but substantial portion of “the public

at large.”

180

That is, the one hoping to profit from deceiving others disseminates

the lie to the public via, for instance, a prospectus or news release, to spread the

falsehood to everyone who might have occasion to hear or read it and who

might either sell or buy shares themselves, or might communicate the

information to someone else who would.

181

The liar’s hope was for someone,

though the liar did not know or care who, would believe the falsehood to be

174. See Mehmet Konar-Steenberg, The Needle and the Damage Done: The Pervasive Presence

of Obsolete Mass Media Audience Models in First Amendment Doctrine, 8 V

AND. J. ENT. & TECH. L.

45, 60 (2005) (discussing the rise of mass communications emerging in 1920s and 1930s).

175. See supra note 170.

176. See General Rules and Regulations, Securities Exchange Act of 1934, 17 C.F.R. § 240.10b-

5 (2014) (prohibiting fraud in the purchase or sale of securities); Dalley, supra note 94, at 440–41.

177. See supra note 170; Dalley, supra note 94, at 435, 439–41.

178. Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 744–45 (1975).

179. Id. at 745.

180. See What’s New?, S.C.

LAW., Sept./Oct. 1996, at 48, 55–56 (describing a securities fraud

scheme where falsehoods were “all disseminated to public at large”).

181. See, e.g., In re Ulta Salon, Cosms. & Fragrance, Inc. Sec. Litig., 604 F. Supp. 2d 1188, 1196

(N.D. Ill. 2009) (holding that the safe harbor rule for forward-looking statements did not protect

corporations and officers from securities fraud liability for alleged failure to disclose material but

pending negative quarterly financial data in prospectus).

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1068 MARQUETTE LAW REVIEW [107:1043

true and, based on that belief, either buy a particular stock or other security, or

that they sell it.

182

This purchase or sale would ultimately enrich the liar. That

is, it worked the very same way as any other fraud scheme, but with one

variation. The lie was targeted not at an individual victim but at the public,

which was a class of thousands or millions of potential victims.

183

This difference in the way securities fraud is carried out posed a novel

problem. It was clear that such deceptions, which were aimed at thousands or

millions of people, rather than at one individual, posed a threat to people just

like one-on-one fraud schemes, but the law, as it had up-to-then developed, was

ill-equipped to handle securities fraud claims.

184

The law had been created in a

different era when the fraud threat came almost entirely in the form of one-on-

one frauds.

185

As a result, fraud law turned out to be a poor check on the harmful impulses

to defraud when it came to stopping securities fraud.

186

The law, in fact, was so

deficient on this front and so lopsided in favor of those who carried out

securities fraud that, in the early twentieth century, every state in the U.S.

passed securities fraud laws to address it.

187

But “state-by-state regulation

proved ineffective.”

188

Accordingly, in 1934, Congress passed legislation

182. See id.; supra note 170.

183. See What’s New, supra note 180; James Chen, What Is Securities Fraud? Definition, Main

Elements, and Examples, I

NVESTOPEDIA, https://www.investopedia.com/terms/s/securities-fraud.asp

[https://perma.cc/4DGF-6H55] (June 9, 2022) (“Securities fraud . . . is a type of serious white-collar

crime that can be committed in a variety of forms but primarily involves misrepresenting information

investors use to make decisions.”).

184. See Paul N. Edwards, Compelled Termination and Corporate Governance: The Big Picture,

10 J. C

ORP. L. 373, 427 (1985) (“Section 10(b) was enacted largely due to the inadequacy of the

common law of fraud in impersonal securities transactions.”).

185. See Wes Henricksen, Fraud Law and Misinfodemics, 2021 U

TAH L. REV. 1229, 1249–50

(discussing the growth of securities fraud cases brought under common law doctrine at the end of the

1800s and beginning of the 1900s).

186. Edwards, supra note 184, at 427; see also Joseph Goldberg & Walter F. Kelly, Jr.,

Comment, Accountants’ Liabilities to Third Parties Under Common Law and Federal Securities Law,

9 B.C.

INDUS. & COM. L. REV. 137, 154 (1967) (“It is clear that Congress intended, in passing [the

Securities Act of 1933 and the Securities Exchange Act of 1934], to provide the public with more

protection and better remedies than were available at common law.”).

187. Christine Lazaro & Benjamin P. Edwards, The Fragmented Regulation of Investment

Advice: A Call for Harmonization, 4 M

ICH. BUS. & ENTREPRENEURIAL L. REV. 47, 52–53 (2014)

(“Securities regulation within the United States began at the state level. State laws creating liability for

securities fraud, known as blue sky laws, first appeared in the 1910s . . . .”); Paul G. Mahoney, The

Origins of the Blue-Sky Laws: A Test of Competing Hypotheses, 46 J.L.

& ECON. 229, 229 (2003)

(“Between 1911 and 1931, 47 of the 48 states adopted statutes that regulated the sale of securities.”);

Jonathan R. Macey & Geoffrey P. Miller, Origin of the Blue Sky Laws, 70 T

EX. L. REV. 347, 348–49

(1991).

188. Lazaro & Edwards, supra note 187, at 52–53.

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1069

targeting securities fraud and created an entire government agency, the

Securities and Exchange Commission (SEC) to investigate and prosecute

securities fraud cases.

189

An independent executive agency was created, in large part, to stop this

kind of fraud on the public, which under the law at the time was falling through

the cracks.

190

This gave victims a way to sue to recover damages against those

who defrauded them by spreading false and misleading claims to the public.

191

It also made securities fraud a crime, which allowed the state to prosecute

securities fraud under criminal fraud law statutes.

192

This did not entirely stop

securities fraud, but it almost certainly at least made a dent in it.

193

The manner in which securities fraud is carried out, however, was not as

anomalous as might appear at first. But the way the law was amended to address

it was anomalous.

Securities fraud is not the only kind of fraud carried out on the public.

Beginning in the 1910s and 1920s, with establishment of mass media through

radio and television, avenues for spreading messages, both true and false, have

expanded the opportunities for those seeking to profit through fraud.

194

At the

very beginning of this new era, the idea of shaping public opinion through

propaganda was viewed largely as a positive development and integral to

managing a democratic population.

195

During World War I, President Woodrow

Wilson established the Committee on Public Information for the express

purpose of generating support for the war effort among the American public.

196

189. Jacob Antrim, Note, Securities Fraud and Reliance: Indiana’s Securities Fraud Standard,

54 I

ND. L. REV. 421 (2021).

190. Michael A. Bednarz, Let’s Be Frank: The Future Direction of Controlling Person Liability

Remains Uncertain, 46 SUFFOLK U. L. REV. 551, 553 (2013).

191. See Allegaert v. Perot, 466 F. Supp. 516, 519 (S.D.N.Y. 1978) (“The trustee’s

characterization of 10B-5 claims as intentional torts is of course correct.”).

192. Gregory Klass, Meaning, Purpose, and Cause in the Law of Deception, 100 G

EO. L.J. 449,

454 (2012) (making reference to both the “civil and criminal securities fraud laws”).

193. Lori Richards, Dir., Off. Compliance Inspections & Examinations, Sec. & Exch. Comm’n.,

Why Does Fraud Occur and What Can Deter or Prevent It?

(Sept. 9, 2008),

https://www.sec.gov/news/speech/2008/spch090908lar.htm [https://perma.cc/2CGW-ND42]

(explaining that “vigorous civil and criminal prosecution can deter” many frauds).

194. Buckley v. Valeo, 424 U.S. 1, 21 (1976) (“The electorate’s increasing dependence on

television, radio, and other mass media for news and information has made these expensive modes of

communication indispensable instruments of effective political speech.”).

195. See Mark Barenberg, The Political Economy of the Wagner Act: Power, Symbol, and

Workplace Cooperation, 106 H

ARV. L. REV. 1379, 1438 (1993) (leading intellectuals “saw positive,

democratic possibilities in the social construction of human desires and interests” through propaganda).

196. See Robert A. Emery, The Official Bulletin, 1917–1919: A Proto-Federal Register, 102

AW LIBR. J. 441, 442 (2010) (discussing President Wilson’s creation of the Committee on Public

Information).

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1070 MARQUETTE LAW REVIEW [107:1043

In the wake of the war, the public relations (PR) industry was established, and

many large businesses and corporate interest groups engaged PR firms to shape

public opinion in their favor.

197

Some of these messages, no doubt, were akin

to truthful advertising, perhaps containing puffery, but not containing outright

lies.

198

Some, however, used this access to manipulate public opinion, to spread

outright falsehoods calculated to hide dangers posed by their products, and to

deceive the public about what they were selling.

199

This included, for instance,

the leaded gas, tobacco, fossil fuel, asbestos, and sugar industries.

200

There

were, and are, many others.

201

In each of these particular cases, the industry did not merely tinker with

language or express a valid, albeit convenient, opinion.

202

Each of these

industries knew its products posed enormous threats to human health and life,

and nevertheless lied to the public so the public would remain ignorant for as

long as possible about the actual threat posed.

203

Private industry is not alone in taking advantage of this opportunity to

defraud millions. Politicians and media organizations, who likewise stand to

gain from spreading profitable falsehoods, do so as well.

204

Like securities

fraud, in nearly every case where a fraudulent scheme is based on a lie told to

the public, rather than a lie told to an individual, fraud law, as first established

in Pasley, proves inadequate and ill-suited for the job.

205

So, while one particular kind of fraud on the public, securities fraud, has

been reasonably well addressed, the vast majority of other methods of

defrauding the public have, so far, continued to be protected by law, rather than

punished by it. Accordingly, the law focuses far too narrowly on one-on-one

fraud. It ignores most fraud on the public. By doing so, it gives free rein to those

seeking to profit through fraudulent conduct and messages.

197. Allen W. Palmer & Edward L. Carter, The Smith-Mundt Act’s Ban on Domestic

Propaganda: An Analysis of the Cold War Statute Limiting Access to Public Diplomacy, 11 C

OMM. L.

& POL’Y 1, 5–6 (2006).

198. See, e.g., Henricksen, supra note 96, at 2420.

199. See id. at 2414–23 (discussing disinformation campaigns by the leaded gas, tobacco, and

other industries).

200. See id.

201. See id. at 2420, 2424–25.

202. See, e.g., Wentz & Franta, supra note 26, at 10995–98 (discussing fossil fuel industry

campaign of climate change doubt and the industry’s knowledge of the falsity of its public campaign);

see also generally N

AOMI ORESKES & ERIK M. CONWAY, MERCHANTS OF DOUBT: HOW A HANDFUL

SCIENTISTS OBSCURED THE TRUTH ON ISSUES FROM TOBACCO SMOKE TO GLOBAL WARMING

(2010) (discussing the fossil fuel and tobacco industries’ disinformation campaigns for profit).

203. Henricksen, supra note 96, at 2420–24.

204. See Henricksen & Betz, supra note 109, at 113 (discussing the stolen election lie).

205. See Edwards, supra note 184, at 427; Goldberg & Kelly, Jr., supra note 186, at 154.

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1071

III. WHY FRAUD ON THE PUBLIC, WHICH THE LAW GENERALLY ALLOWS, IS

ARGUABLY AS HARMFUL AS ONE-ON-ONE FRAUD, WHICH THE LAW

GENERALLY PROHIBITS

A. Brief Overview of the Prevalence and Purpose of Fraud on the Public

Most would agree that politicians, the media, and corporations frequently

deceive millions by spreading falsehoods, half-truths, and exaggerations for

their own benefit and, in the process, cause harm to others.

206

That is where the

agreement on this issue ends, however. There is vast disagreement on numerous

dimensions of this issue, such as how much harm is caused by the spread of

harmful falsehoods, how serious the threat of fraud on the public actually is,

and what we should, or even could, do about it.

207

Perhaps the chief impediment to finding common ground on the issue of

fraud on the public lies not in the lack of representative examples but in an

overabundance of them.

208

Fraud on the public is so ubiquitous it appears not

only completely normal but perhaps inevitable, necessary, or even preferable.

We are bombarded with disinformation aimed to mislead so frequently that

many, understandably, conclude it must be unavoidable in a free society.

209

appears, by its sheer omnipresence, to be the natural order of things. People

who subscribe to this line of thinking tend to believe the best course of action,

when it comes to fraud on the public, is no action.

210

The impulse to take a

laissez-faire approach to fraud on the public is understandable, given how

206. See, e.g., Dillon, supra note 26, at 179 (“It may be considered something of a truism that

‘all politicians lie.’”).

207. Compare, e.g., id. at 179–80 (arguing that the U.S. “must enact laws making the

propagation of lies, deliberate untruths of a significant nature, by elected or other officials, immediately

disqualifying”), with Nadine Strossen, The Paradox of Free Speech in the Digital World: First

Amendment Friendly Proposals for Promoting User Agency, 61 W

ASHBURN L.J. 1, 10–11 (2021)

(noting that “[a]lmost without exception, controversial political speech,” such as “‘hate speech’ or

‘disinformation’ [are] constitutionally protected from government censorship”).

208. See infra notes 211–236.

209. See James Sample, Democracy at the Corner of First and Fourteenth: Judicial Campaign

Spending and Equality, 66 N.Y.U.

ANN. SURV. AM. L. 727, 765 (2011) (noting that absent some heavy-

handed content-based regulation, “misinformation is inevitable”).

210. Tim Wu, Disinformation in the Marketplace of Ideas, 51 S

ETON HALL L. REV. 169, 171

(2020) (explaining the hesitation by some to regulate disinformation as stemming from the belief that

“the cure is worse than the disease,” and that because “disinformation and propaganda are inherently

subjective categories and forms of speech,” “there is nothing to be done”). However, as noted by

Professors Terri Day and Danielle Weatherby, “the marketplace of ideas theory has many critics.” Terri

R. Day & Danielle Weatherby, Shackled Speech: How President Trump’s Treatment of the Press and

the Citizen-Critic Undermines the Central Meaning of the First Amendment, 23 L

EWIS & CLARK L.

REV. 311, 322 (2019).

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1072 MARQUETTE LAW REVIEW [107:1043

saturated the information environment is with falsehoods aimed at deceiving

the public for the benefit of those who invented and spread the lies.

One morning in May 2022, while working on the book In Fraud We Trust,

from which portions of this Article were adapted, I opened the Washington Post

(online) to look for representative examples of articles addressing or containing

harmful falsehoods. That day’s Washington Post offered a diverse range of

stories that pertained, directly or indirectly, to purposeful efforts to mislead the

public. One of the top stories in the Washington Post that day was by Meryl

Kornfield, entitled “U.S. surpasses record 100,000 overdose deaths in 2021.”

211

That article covered the then-current status of the opioid epidemic, considered

by some the “worst public health crisis in American history.”

212

The opioid

crisis, which is virtually unique to the U.S.,

213

was effectively manufactured by

the opioid industry through an aggressive, long-term disinformation campaign

to downplay and hide the addictiveness and dangers posed by opioid

painkillers.

214

This “marketing” push resulted in massive over-prescription.

215

Those responsible, including the Sackler family, made billions.

216

That was the first relevant headline I noticed in that day’s Washington Post.

There were plenty of others:

“Earth given 50-50 chance of hitting key warming mark by 2026,” by Seth

211. Meryl Kornfield, U.S. Surpasses Record 100,000 Overdose Deaths in 2021, WASH. POST

(May 11, 2022, 6:45 PM), https://www.washingtonpost.com/health/2022/05/11/drug-overdose-deaths-

cdc-numbers/ [https://perma.cc/C95D-SKSU].

212. Neil Howe, America’s Opioid Crisis: A Nation Hooked, F

ORBES (Nov. 30, 2017, 1:42 PM),

https://www.forbes.com/sites/neilhowe/2017/11/30/americas-opioid-crisis-a-nation-

hooked/?sh=1713e43f6a57 [https://perma.cc/6AVH-9HM8].

213. Thomas J. Salerno & Clarissa C. Brady, In Defense of Third-Party Releases in Chapter 11

Cases: Part I: Let’s Define the Battlefield!, A

M. BANKR. INST. J., Mar. 2022, at 32 n.6 (noting the

opioid crisis has been called a “uniquely American problem”).

214. See Keith Ongeri, A New Prescription: The Case for Enterprise Liability Reform in Light

of the Opioid Epidemic, 35 N

OTRE DAME J.L. ETHICS & PUB. POL’Y ONLINE 865, 889 (2021) (“Purdue

Pharma and other opioid pharmaceuticals engaged in an active disinformation campaign that

downplayed the adverse side effects of the drug, leading doctors and patients to believe the drug they

were taking was not nearly as dangerous or addictive as it was.”).

215. See Taleed El-Sabawi, The Role of Pressure Groups and Problem Definition in Crafting

Legislative Solutions to the Opioid Crisis, 11 N

E. U. L. REV. 372, 385–86 (2019) (discussing the role

over-prescription played in the opioid crisis).

216. See Brian Mann & Martha Bebinger, Purdue Pharma, Sacklers Reach $6 Billion Deal with

State Attorneys General, NPR (Mar. 3, 2022, 1:43 PM),

https://www.npr.org/2022/03/03/1084163626/purdue-sacklers-oxycontin-settlement

[https://perma.cc/8QJM-TR62] (“Court filings show the family took in $10 billion in profits from

OxyContin . . . .”).

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1073

Borenstein.

217

This article discussed the ways powerful countries chose,

through their leaders’ decision, not to act on climate change.

218

This failure to

act resulted in large part, if not as a direct result of, the fossil fuel industry’s

campaign to raise climate change doubt.

219

“Nearly half of Republicans agree with ‘great replacement theory,’” by

Philip Bump.

220

This story covered how nearly one in three Americans now

buys into a baseless conspiracy theory being spread in rightwing media and,

more recently, by Republican leaders, whereby Democrats are allegedly

funneling immigrants into the U.S. to “replace” other Americans with “more

obedient voters from the Third World.”

221

“Inside the Republican campaign to take down Madison Cawthorn,” by

Isaac Arnsdorf.

222

Cawthorn was, at the time, a freshman congressman who had

spread provably false claims about himself, his opponents, and numerous public

policy issues.

223

Shortly before that article appeared, he had falsely claimed to

have witnessed other members of Congress snorting cocaine and taking other

hard drugs, and claimed to have been invited by other members of Congress to

an orgy.

224

“The Supreme Court: Unreachable, inaccessible and frightening,” by Robin

Givhan.

225

Givhan’s piece discussed the Court’s politicization and the recently-

leaked opinion purporting to overturn Roe v. Wade; the fact both events were

ultimately the result of a scheme to mislead the public by Senator Mitch

McConnell and other Republicans, whereby that party blocked President

217. See Seth Borenstein, Earth Given 50-50 Chance of Hitting Key Warming Mark by 2026,

NEWS (May 9, 2022, 6:01 PM), https://apnews.com/article/climate-science-environment-

8bc309e4610879e029b2d26d1ffb45e8 [https://perma.cc/2SHE-3HBB].

218. See id.

219. See id.

220. Philip Bump, Nearly Half of Republicans Agree with “Great Replacement Theory,” W

ASH.

POST (May 9, 2022, 4:28 PM), https://www.washingtonpost.com/politics/2022/05/09/nearly-half-

republicans-agree-with-great-replacement-theory/ [https://perma.cc/JPW4-K6LY].

221. Id.

222. Isaac Arnsdorf, Inside the Republican Campaign to Take Down Madison Cawthorn, W

ASH.

POST (May 10, 2022, 3:36 PM), https://www.washingtonpost.com/nation/2022/05/10/thom-tillis-

madison-cawthorn-primary/ [https://perma.cc/KEE7-PCC4].

223. Id.

224. Felicia Sonmez, McCarthy: Cawthorn Did Not Tell the Truth About Orgy, Drug Claims,

ASH. POST (Mar. 31, 2022, 1:29 PM), https://www.washingtonpost.com/politics/2022/03/30/house-

republican-leaders-meet-with-rep-madison-cawthorn-after-comments-about-orgy-invitation-drug-

use/ [https://perma.cc/7BDK-ECUY]; Dave Goldiner, Rep. Madison Cawthorn Admits Lying About

Cocaine and Orgies After Tongue-Lashing from GOP Leaders, S

EATTLE TIMES (Mar. 30, 2022, 6:59

PM), https://www.seattletimes.com/nation-world/nation-politics/rep-madison-cawthorn-admits-lying-

about-cocaine-and-orgies-after-tongue-lashing-from-gop-leaders/ [https://perma.cc/8FM2-MUTU].

225. Robin Givhan, The Supreme Court: Unreachable, Inaccessible and Frightening,

WASH.

POST (May 10, 2022, 6:54 PM), https://www.washingtonpost.com/nation/2022/05/10/supreme-court-

unreachable-inaccessible-frightening/ [https://perma.cc/5D2X-J5QW].

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1074 MARQUETTE LAW REVIEW [107:1043

Barack Obama from filling a vacant seat on the Court by lying about the

propriety and precedent of Presidents filling such vacancies during election

years, was not mentioned in the piece.

226

Scrolling just a couple inches down on the Washington Post homepage,

readers that day encountered an entire panel dedicated to COVID-19

vaccination rates and the current status of infections state by state.

227

There were

numerous articles, charts, and opinion pieces included, as well. Like the New

York Times, CNN, Fox News, and numerous other leading news media, the

Washington Post had included a dedicated section for COVID-19 since shortly

after the pandemic began in 2020. Although there has been a great deal of

disinformation purposefully disseminated to mislead the public with regard to

the pandemic, just two examples should suffice. First, there were falsehoods

spread by the right. Specifically, rightwing media, former President Donald

Trump, and Republican leaders spread false claims about the pandemic being a

hoax perpetrated by Democrats, about vaccines being a plot by Bill Gates to

install microchips into people’s bodies, and about horse worm medicine and

other homeopathic remedies being more effective against the virus than the

vaccine.

228

Second, there was hypocrisy from some on the left. California

Governor Gavin Newsom, like many Democrats, imposed harsh restrictions

during the COVID pandemic, including mask mandates, social distancing

guidelines, and orders to avoid nonessential social contact.

229

During one

COVID-19 surge, however, Newsom was photographed eating out at one of the

three-Michelin star restaurants, The French Laundry, in Napa Valley, sitting at

a table with at least a half dozen other patrons, all unmasked.

230

The last article from that day’s Washington Post that I will mention here is

an opinion piece by Max Boot entitled, “We’re in danger of losing our

226. Id.

227. See, e.g., Coronavirus, W

ASH. POST,

https://www.washingtonpost.com/coronavirus/?itid=hp_top_nav_coronavirus

[https://perma.cc/5EQ7-Q7CE].

228. Aaron Blake, A Pollster Tested 8 Pieces of Covid Misinformation. On 6 of 8, More

Republicans Said They Were True Than False, W

ASH. POST (Nov. 8, 2021, 1:30 PM),

https://www.washingtonpost.com/politics/2021/11/08/sobering-poll-gops-embrace-coronavirus-

misinformation/ [https://perma.cc/U2YL-2GVV].

229. Eric Ting, As COVID-19 Explodes, Was California Too Strict for Its Own Good?, SFG

ATE

(Dec. 21, 2020), https://www.sfgate.com/bayarea/article/California-COVID-lockdown-cases-deaths-

businesses-15819841.php [https://perma.cc/8MPG-YFWG].

230. Jeremy B. White, Newsom Faces Backlash After Attending French Laundry Dinner Party,

OLITICO (Nov. 13, 2020, 3:21 PM),

https://www.politico.com/states/california/story/2020/11/13/newsom-faces-backlash-after-attending-

french-laundry-dinner-party-1336419 [https://perma.cc/26TY-G79K].

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1075

democracy, but most Americans are in denial.”

231

In it, Boot outlined the risk

posed by Republicans continuing to embrace the falsehood the that 2020

election was “stolen” by Joe Biden through massive fraud perpetrated by the

Democrats, a falsehood now commonly referred to by many pejoratives, such

as the Stolen Election Myth and the Big Lie.

232

Not only has Trump never

conceded the election, but “[f]ealty to the ‘big lie’ has become a litmus test for

GOP candidates because it has become gospel for Republican voters.”

233

As a

result, “most Republicans have tacitly accepted that inciting an insurrection is

no big deal.”

234

This would have been unthinkable a few years ago before the

Trump era of politics. But this is what an overabundance of disinformation

produces: a view of reality so warped the unthinkable becomes the new normal.

* * *

Although disinformation is not a new phenomenon, there appears to be an

emerging consensus among scholars that the speed with which disinformation

proliferates today presents a danger of a different magnitude than it did in the

past.

235

A great deal of disinformation, of course, is almost certainly protected

231. Max Boot, We’re in Danger of Losing Our Democracy. Most Americans Are in Denial,

ASH. POST (May 11, 2022, 6:00 AM),

https://www.washingtonpost.com/opinions/2022/05/11/americans-in-denial-trump-threat-jan6-

elections/ [https://perma.cc/MY89-LQCE].

232. Doug Bock Clark, Alexandra Berzon & Kirsten Berg, Building the “Big Lie”: Inside the

Creation of Trump’s Stolen Election Myth, P

ROPUBLICA (Apr. 26, 2022, 5:00 AM),

https://www.propublica.org/article/big-lie-trump-stolen-election-inside-creation

[https://perma.cc/Q5ZJ-GR66].

233. Boot, supra note 231.

234. Id. It is worth noting most of the Washington Post stories highlighted here focus on

disinformation spread by the political right. This partisan bias might reflect the newspaper’s political

leaning, or perhaps the stories I encountered simply happened to be the biggest news stories of the day.

But neither side of the political aisle has a monopoly on manipulating public opinion. In recent years,

Trump and other Republicans’ outrageous and frequent lies have dominated public discourse.

However, it was President Wilson, a Democrat, who established the first government propaganda

agency, the Committee on Public Information. David F. Forte, Righting A Wrong: Woodrow Wilson,

Warren G. Harding, and the Espionage Act Prosecutions, 68 C

ASE W. RSRV. L. REV. 1097, 1118–19

(2018).

235. See Wayne Unger, How the Poor Data Privacy Regime Contributes to Misinformation

Spread and Democratic Erosion, 22 C

OLUM. SCI. & TECH. L. REV. 308, 308 (2021) (“While

disinformation and misinformation are not new, their rapid and widespread dissemination has only

recently been made possible by technological developments that enable never-before-seen levels of

mass communication and persuasion.”); Anna Yamaoka-Enkerlin, Comment, Disrupting

Disinformation: Deepfakes and the Law, 22 N.Y.U. J. LEGIS. & PUB. POL’Y 725, 741 (2020) (“Though

disinformation, misinformation, and malinformation have always been a problem, our cyber

connectivity is such that information can travel through vast networks quicker than ever before. In this

medium, falsehoods have a clear advantage—studies have shown that misinformation reaches more

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1076 MARQUETTE LAW REVIEW [107:1043

speech and, therefore, could not be regulated as fraud or as any other category

of unprotected speech.

236

However, some of the ways that some political,

media, and business leaders purposefully spread profitable falsehoods might

qualify as fraud on the public, which I argue should be treated like any other

kind of fraud.

Unlike other kinds of fraud, however, fraud on the public is carried out by

only those who have access to so vast an audience that they can manipulate

public opinion. This exclusive group includes, among others, three major

categories of people: (1) those involved in the political process, whether as an

officeholder, a candidate, a campaign official, or a political party; (2) those who

work in the media, such as TV news pundits, newspaper editors, and journalists;

and (3) large corporations, big banks, and those who work on their behalf, such

as officers and directors, trade groups, lobbyists, and paid experts.

237

The purpose of schemes to defraud the public is, in many ways,

indistinguishable from schemes to defraud individuals. Perhaps the most

common and obvious goal of those who defraud the public is money. The fraud

is aimed at profiting the liar. Other major motivating factors for defrauding the

public are political power and elected office. But while these cover perhaps the

vast majority of the reasons for fraud on the public, there are others. These

include attempts to inhibit or evade justice, and to falsify history.

Naturally, asking why someone says or does something is always tricky, but

it is particularly so here. Not only does addressing this question risk taking

focus off what is most important—the fact those with power manipulate and

mislead regular people constantly, and in the process, reap enormous profit

while causing enormous harm—but discussing the motivations held by large

groups of people, such as the groups who defraud the public (politicians,

corporate officers and directors, etc.), is something that can be done with

precision only with extensive study and analysis, which, to the author’s

knowledge, has not been undertaken. Nevertheless, courts routinely determine

fraudulent intent (motivation) in deciding whether to impose liability for

fraudulent conduct on individuals.

238

That is to say, the law does not treat

people and spreads faster than the truth.”); Richard K. Sherwin, Anti-Speech Acts and the First

Amendment, 16 H

ARV. L. & POL’Y REV. 353, 355–56 (2022) (“Strategies of deception designed to

disrupt public discourse in the electoral context” presents a problem that “is particularly acute in a

digital communication ecosystem where proprietary algorithms funnel and shape political discourse to

advance not truth, but profit derived from maximized attention share online”).

236. Henricksen & Betz, supra note 109, at 118–19.

237. H

ENRICKSEN, supra note 89 (manuscript at 110).

238. See Stewart v. Scheinert, 392 N.E.2d 563, 563 (1979) (holding that liability under a statute

imposing sanctions for public officials who commit “illegal acts” “arises only if the illegal acts were

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1077

fraudulent intent as something unknowable. It can be proven with evidence.

Moreover, an understanding of the reasons those in politics, media, and

business defraud the public is necessary to gain a clear picture of how and why

fraud on the public happens, and the grave dangers it poses.

I will briefly discuss the two primary aims of fraud on the public: financial

gain and political gain. I will also discuss two other motivations underlying

fraud on the public. Although not as widespread and common, they are

nevertheless important. These are the avoidance of justice and the falsification

of history.

i. For Financial Gain

Many schemes to defraud the public are aimed at making money, including,

for instance, the public deception schemes to conceal product dangers (PDCPD

Schemes) like those carried out by the fossil fuel, opioid, and sugar

industries,

239

as well as corporate welfare schemes whereby massive

government subsidies are paid to giant corporations even though the purported

purpose of them is to assist middle-class or working-class families.

240

In short,

in the past century, many corporations have taken advantage of their public

platform to spread false and misleading messages to defraud the public for

profit, and they have done so in diverse ways.

241

Media corporations are no

exception. There are plenty of examples of media organizations, as well as

individuals in the media, who engage in fraud on the public for financial gain

in much the same way as other kinds of corporations. They have done this, for

instance, by spreading falsehoods for the purpose of gaining or retaining

viewers, or increasing online engagement, both of which ultimately further the

media platform’s bottom line.

242

For example, radio host Rush Limbaugh

claimed Hurricane Irma was a hoax and told listeners not to heed official

warnings just hours before he, himself, fled his Florida home to escape its

collusive, fraudulent, or motivated by personal gain”); In re Alpha-Omega Commc’ns, Inc., 52 B.R.

846, 849–50 (Bankr. E.D. Pa. 1985) (holding that liability there rested on whether defendant was

“motivated by fraud or selfish considerations” or “motivated by fraud and self-dealing”).

239. Henricksen, supra note 96, at 2401–02.

240. David Autor, David Cho, Leland D. Crane, Mita Goldar, Byron Lutz, Joshua K. Montes,

William B. Peterman, David D. Ratner, Daniel Villar Vallenas & Ahu Yildirmaz, The $800 Billion

Paycheck Protection Program: Where Did the Money Go and Why Did It Go There? 2 (Nat’l Bureau

of Econ. Rsch., Working Paper No. 29669, 2022); Rick Newman, All That COVID Aid Included $366

Billion for the Wealthy, Y

AHOO! FIN. (Feb. 2, 2022), https://news.yahoo.com/covid-aid-included-366-

billion-for-the-wealthy-203956538.html [https://perma.cc/RA7P-9749].

241. Henricksen, supra note 96, at 2424–25.

242. Tatyana Hopkins, Social Media Companies Profiting from Misinformation, GW

TODAY

(June 19, 2020), https://gwtoday.gwu.edu/social-media-companies-profiting-misinformation

[https://perma.cc/X766-6D9V].

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1078 MARQUETTE LAW REVIEW [107:1043

path.

243

Breitbart News falsely claimed Hillary Clinton’s presidential campaign

was funded by Saudi Arabia.

244

CNN falsely reported that Trump aide Anthony

Scaramucci was involved in a Russian hedge fund under Senate

investigation.

245

Slate falsely reported Trump created a secret internet server to

covertly communicate with a Russian bank.

246

Radio host Hal Turner falsely

claimed that people with the COVID-19 vaccine are being “tracked in real time

via 5G cellular, and all that data can be hacked into to track you.”

247

Examples

of provably false claims in the media are so commonplace, in fact, that listing

them risks making them appear less common than they actually are. Any

scheme whereby one aims to mislead the public to turn a profit would, if all

other elements were met, likewise fit into the category of fraud on the public

for financial gain.

ii. For Political Gain

Not all frauds on the public are aimed at financial gain. Many are aimed,

instead, at political ends. In fact, when one thinks of people lying to large

numbers of people for their own benefit, it perhaps most often brings to mind

243. Angie Drobnic Holan, In Context: What Rush Limbaugh Said About Hurricane Irma Before

Evacuation, P

OLITIFACT (Sept. 10, 2017), https://www.politifact.com/article/2017/sep/10/context-

what-rush-limbaugh-said-about-hurricane-ir/ [https://perma.cc/YPN6-UKHA]. Shortly after telling his

listeners not to heed the warnings, Limbaugh fled from his home and radio studio in Palm Beach to

escape from the storm. See Mike Snider, Rush Limbaugh, Ann Coulter Facing Blowback on Hurricane

Irma Comments, USA TODAY (Sept. 13, 2017, 9:21 AM),

https://www.usatoday.com/story/money/2017/09/12/rush-limbaugh-ann-coulter-facing-blowback-

hurricane-irma-comments/654353001/ [https://perma.cc/S2G6-A5MQ].

244. Yochai Benkler, Robert Faris, Hal Roberts & Ethan Zuckerman, Study: Breitbart-Led

Right-Wing Media Ecosystem Altered Broader Media Agenda, C

OLUM. JOURNALISM REV. (Mar. 3,

2017), https://www.cjr.org/analysis/breitbart-media-trump-harvard-study.php

[https://perma.cc/TFW2-VQXR]; Tiffany Hsu, Conservative News Sites Fuel Voter Fraud

Misinformation, N.Y.

TIMES (Oct. 25, 2020, 5:00 AM),

https://www.nytimes.com/2020/10/25/business/media/voter-fraud-misinformation.html

[https://perma.cc/FJ9G-KDM7].

245. Paul Farhi, The Story Behind a Retracted CNN Report on the Trump Campaign and Russia,

ASH. POST (Aug. 17, 2017, 3:50 PM), https://www.washingtonpost.com/lifestyle/style/the-story-

behind-a-retracted-cnn-report-on-the-trump-campaign-and-russia/2017/08/17/af03cd60-82d6-11e7-

ab27-1a21a8e006ab_story.html [https://perma.cc/2JRB-GELP].

246. Rowan Scarborough, Hillary Clinton Operatives Pushed Now-Debunked Trump-Alfa

Server Conspiracy, Testimony Reveals, W

ASH. TIMES (Jan. 23, 2019),

https://www.washingtontimes.com/news/2019/jan/23/hillary-clinton-operatives-pushed-now-

debunked-tru/ [https://perma.cc/224Y-C4VA].

247. Andy Nguyen, No, a Video Doesn’t Prove the COVID-19 Vaccines Allow People to Be

Tracked Through a 5G Network, P

OLITIFACT (May 28, 2021),

https://www.politifact.com/factchecks/2021/may/28/hal-turner-radio-show/no-video-doesnt-prove-

covid-19-vaccines-allow-peop/ [https://perma.cc/K7Q2-D8MF].

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the government and politicians. There is good reason for this. Politicians lie

frequently.

248

If such a lie causes unacceptable harm, it would be, under my

definition, fraud on the public for political gain.

249

The political gain could be

winning an election, generating support for a particular policy or agenda item,

or increasing support for a political party, platform, or candidate more broadly.

Examples include: the Republican chair for Bexar County, Texas, telling an

audience and TV viewers that the COVID-19 pandemic was a Democratic hoax

and imploring everyone to take their protective masks off;

250

Senator Marco

Rubio claiming President Barack Obama wants to “take away our guns”;

251

President George W. Bush and his administration claiming Iraq possessed

248. See, e.g., Bruce Fraser, The Neutral as Lie Detector, DISP. RESOL. MAG., Winter 2001, at

12 (“[M]ost of the time we don’t expect people to lie to us (except in the case of politicians).”).

249. Critics of the idea of regulating political speech raise two major objections. The first is that

it would violate the political question doctrine. See Elizabeth Earle Beske, Political Question

Disconnects, 67 A

M. U. L. REV. F. 35, 36–39 (2018) (explaining the origin and parameters of the

doctrine). Notably, the very existence of the political question doctrine is in question. See, e.g., id. at

39 (“[T]he vacillating fortunes of the political question doctrine have led some commentators to declare

the doctrine dead.”); Jesse H. Choper, The Political Question Doctrine: Suggested Criteria, 54 D

UKE

L.J. 1457, 1459 (2005) (observing that numerous scholars have concluded that the political question

doctrine is “in serious decline, if not fully expired”). Even if the doctrine exists, however, it does not

necessarily limit regulating political speech in any way inconsistent with my definition of fraud on the

public. The second objection is the idea that prohibiting false and misleading political speech, where

such speech satisfies the elements of fraud on the public, might effectively include a substantial portion

of all political speech. See Jack Shafer, In Defense of Political Lying, R

EUTERS (Apr. 28, 2014, 5:15

PM), https://www.reuters.com/article/idUK193102541220140423 [https://perma.cc/5YRK-C8FN].

But if lies really are the foundation of most political speech, then it would mean truthfulness cannot

have any place in political speech. Accordingly, unless the aim is to elevate dishonesty, this objection

appears to be an argument for regulating fraud on the public, not against it.

250. Sanford Nowlin, At Rally, Bexar County Republican Chair Cynthia Brehm Claims

Coronavirus Is a Democratic Hoax, S

AN ANTONIO CURRENT (May 23, 2020, 7:55 AM),

https://www.sacurrent.com/news/at-rally-bexar-county-republican-chair-cynthia-brehm-claims-

coronavirus-is-democratic-hoax-23690141 [https://perma.cc/E6PP-HPJ5]; see also Timothy Burke

(@bubbaprog), T

WITTER (May 22, 2020, 4:00 PM),

https://twitter.com/bubbaprog/status/1263937751872868353 [https://perma.cc/M3Q9-WUHU]

(“Absolutely bizarre. The Bexar County GOP chair concludes this rally by stating that the coronavirus

is a hoax perpetuated by Democrats, tells people to take off their masks, and then everyone hugs each

other.”). The video embedded in the tweet shows the chairperson saying, “Why is all this happening?

I’ll tell you why. All of this has been propagated by the Democrats to undo all the good that President

Trump has done for our country. And they are worried. So, take off your mask. Exercise your

constitutional rights. Stand up, speak up, and vote Republican.” Id.

251. Michelle Ye Hee Lee, Analysis- Marco Rubio’s Claim that Obama Wants to ‘Take Away

Our Guns,’ W

ASH. POST (Jan. 7, 3:00 AM), https://www.washingtonpost.com/news/fact-

checker/wp/2016/01/07/marco-rubios-claim-that-obama-wants-to-take-away-our-guns/

[https://perma.cc/H4SH-F2DX].

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1080 MARQUETTE LAW REVIEW [107:1043

weapons of mass destruction as a pretext for the American invasion of Iraq;

252

campaign workers for Democrat Doug Jones creating a Facebook group called

“Dry Alabama,” which purported to be an alliance between teetotalers and

Jones’s Republican opponent, Roy Moore, but which was actually an effort by

Jones to get moderate conservatives to vote Democrat;

253

and Joe Biden

claiming in September 2020, “If [President Trump] had done his job, had done

his job from the beginning, all the people would still be alive. All the people.

I’m not making this up. Just look at the data.”

254

Fraud on the public for political

gain is carried out using a diverse range of techniques, including demonizing

marginalized groups, such as immigrants, racial and ethnic minorities, and the

LGBTQ+ community; making baseless and bad faith accusations against

political opponents and opposition parties; manufacturing outrage with regard

to irrelevant or nonexistent issues; and utilizing rhetorical weaponry in bad

faith, such as making false equivalencies or whataboutisms.

255

These politically

motivated deceptions have caused myriad horrors, from genocides

256

to military

invasions.

257

The fact that the end goal is not pecuniary does not make these

frauds any less dangerous. Nevertheless, whether any such scheme should be

subject to speech restrictions depends on a careful examination of the speech

involved, the harm or potential harm it poses, and a First Amendment analysis

of any law, rule, or regulation restricting such speech.

258

252. Dylan Matthews, No, Really, George W. Bush Lied About WMDs, VOX (July 9, 2016, 10:00

AM), https://www.vox.com/2016/7/9/12123022/george-w-bush-lies-iraq-war

[https://perma.cc/6K3Q-C98Z].

253. Scott Shane & Alan Blinder, Democrats Faked Online Push to Outlaw Alcohol in Alabama

Race, N.Y.

TIMES (Jan. 7, 2019), https://www.nytimes.com/2019/01/07/us/politics/alabama-senate-

facebook-roy-moore.html [https://perma.cc/7MFV-JQLR].

254. Bill McCarthy, Joe Biden Wrongly Claims Trump Could’ve Prevented Every COVID-19

Death, P

OLITIFACT (Sept. 18, 2020), https://www.politifact.com/factchecks/2020/sep/18/joe-

biden/joe-biden-wrongly-claims-trump-couldve-prevented-e/ [https://perma.cc/7SH7-VM65].

255. See, e.g., Marty Schladen, No, Undocumented Immigrants Don’t Commit More Crime.

Research Shows They Commit a Lot Less, NC

NEWSLINE (Aug. 3, 2021, 12:02 PM),

https://ncpolicywatch.com/2021/08/03/no-undocumented-immigrants-dont-commit-more-crime-

research-shows-they-commit-a-lot-less/ [https://perma.cc/U8W9-VSLE] (debunking false claims that

immigrants, or illegal immigrants, cause more crime, when in fact legal and illegal immigrants cause

less crime, per capita, than natural born citizens).

256. See T

IMOTHY SNYDER, BLOODLANDS: EUROPE BETWEEN HITLER AND STALIN 201 (2012)

(discussing the ways that Germany deceived German, Eastern European, and Soviet Jews to make

themselves available to be massacred and noting “[d]isinformation was the key to the entire

operation”).

257. See Julian E. Barnes, U.S. Exposes What It Says Is Russian Effort to Fabricate Pretext for

Invasion, N.Y.

TIMES (Feb. 3, 2022), https://www.nytimes.com/2022/02/03/us/politics/russia-ukraine-

invasion-pretext.html [https://perma.cc/C3EK-GVPY] (exposing a plot by Russian President Vladimir

Putin to create a fake video of Ukraine attacking Russian soldiers to justify an invasion of Ukraine).

258. Varat, supra note 5, at 1141.

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iii. To Inhibit Justice

Another form of fraud on the public consists of spreading disinformation to

wrongfully influence the outcome of possible criminal charges or civil claims

against an individual or organization the liars hope to protect. This is fraud on

the public to inhibit justice. In recent years, there have been a handful of well-

publicized cases of police departments carrying out these kinds of frauds on the

public. They do this by disseminating false or misleading information about

actions by police officers who injured or killed civilians, most often during the

act of arresting or transporting suspects.

259

In the case of George Floyd, a man

arrested on suspicion of having used a counterfeit $20 bill at a food mart, the

Minneapolis Police Department released an official statement claiming Floyd

had “physically resisted officers” and that he had died in a “medical

emergency.”

260

Several videos of the incident later emerged that clearly showed

Floyd had cooperated with police and that he had been murdered by Police

Officer Derek Chauvin when Chauvin pressed his knee heavily onto Floyd’s

neck for nine minutes and twenty-nine seconds.

261

Had the videos not emerged,

the public would almost certainly have had little choice but to buy into the

falsehoods in the police department statement.

Incidents like this one occur with frightening frequency. Indeed, while

writing this Article, news emerged of yet another incident where police

brutality against a citizen was fraudulently covered up by an official police

department public statement that blamed the victim and concealed criminal

violence by police.

262

This time, the victim was Tyre Nichols, who died from a

savage beating he received from a group of police officers.

263

According to the

New York Times, “[a] police report written hours after officers beat Tyre

Nichols was starkly at odds with what videos have since revealed, making no

mention of the powerful kicks and punches unleashed on Mr. Nichols and

instead claiming that he was violent.”

264

“The police report painted Mr. Nichols,

259. Bill McCarthy, What the First Police Statement About George Floyd Got Wrong,

OLITIFACT (Apr. 22, 2021), https://www.politifact.com/article/2021/apr/22/what-first-police-

statement-about-george-floyd-got/ [https://perma.cc/CMJ4-T42W].

260. Id.; Cody Fenwick, The 1st Police Statement on George Floyd’s Death Resurfaces After

Guilty Verdict–and It’s Deeply Revealing, A

LTERNET (Apr. 21, 2021),

https://www.alternet.org/2021/04/the-1st-police-statement-on-george-floyds-resurfaces-after-guilty-

verdict-and-its-deeply-revealing [https://perma.cc/TPS8-4QA7].

261. McCarthy, supra note 259.

262. Jessica Jaglois, Nicholas Bogel-Burroughs & Mitch Smith, Initial Police Report on Tyre

Nichols Arrest Is Contradicted by Videos, N.Y.

TIMES (Jan. 30, 2023),

https://www.nytimes.com/2023/01/30/us/tyre-nichols-arrest-videos.html [https://perma.cc/UEA4-

3ZAY].

263. Id.

264. Id.

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1082 MARQUETTE LAW REVIEW [107:1043

29, who died three days after the January 7 beating, as an irate suspect who had

‘started to fight’ with Memphis police officers, even reaching for one of their

guns. The videos, which were released last week, showed nothing of the

sort.”

265

Time and again, police department public relations offices have been

caught misleading the public about harms caused by police conduct. There are

myriad examples.

266

I will give just one more here, as another case in point. A

few months ago, another man, this one named Manuel Ellis, died while being

arrested in Tacoma, Washington.

267

The Tacoma Police Department released

an official account of how it had happened.

268

It said Ellis had attacked police

officers and that no officer placed a knee on his head or neck.

269

These

statements directly contradict three witnesses who saw the encounter.

270

In fact,

in the case of Mr. Ellis, it later came to light that overwhelming evidence

showed a police officer did put a knee on Ellis’s neck, and that as a result of the

knee on his neck, Ellis died of asphyxiation.

271

In fact, Ellis’s last words were

“I can’t breathe, sir!”

272

Political leaders also sometimes make false claims to the public to interfere

with justice. Trump, for instance, while running for and serving as President,

(1) praised former Navy SEAL, Eddie Gallagher, while Gallagher was on trial

for heinous war crimes; (2) pressured military courts to take legal action against

Lt. Col. Alexander Vindman, who had criticized Trump; and (3) bullied a U.S.

district judge who issued a ruling unfavorable to Trump by claiming the judge

was biased, calling him “Mexican,” and suggesting the judge should be

265. Id.

266. See, e.g., Maya Lau, Police PR Machine Under Scrutiny for Inaccurate Reporting; Alleged

Pro-Cop Bias, L.A. T

IMES (Aug. 30, 2020, 6:00 AM), https://www.latimes.com/california/story/2020-

08-30/police-public-

relations#:~:text=In%20many%20cases%2C%20problematic%20actions,the%20lawman%20with%2

0a%20Taser [https://perma.cc/6KN3-88FL]; Jill Castellano & Gustavo Solis, These Officers

Committed Misconduct. But What Were the Consequences, KPBS (Mar. 7, 2023, 9:30 AM),

https://www.kpbs.org/news/public-safety/2023/03/08/public-know-details-san-diego-police-

misconduct-files-not-always-discipline [https://perma.cc/26D6-F5GQ].

267. The Associated Press, Tacoma Police Charged with Murder in Case Where Black Man Said

He Couldn’t Breathe, NPR (May 27, 2021, 3:11 PM),

https://www.npr.org/2021/05/27/1000968917/tacoma-police-murder-manuel-ellis

[https://perma.cc/KF3R-3Y9N].

268. Id.

269. Id.

270. Id.

271. Id.

272. Id.

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investigated.

273

Although such statements are also clearly “for political gain,”

“for profit,” or both, the fact they involve meddling in the justice system means

their aim was also “to inhibit justice.”

iv. To Falsify History

For most of the twentieth century, public school children in the American

South were taught the Civil War had little, or nothing, to do with slavery.

Teachers taught students that slavery barely existed in the South; that slavery

was really not that bad; that under slavery, Blacks “were the happiest set of

people on the face of the globe,—free from care or thought of food, clothes,

home, or religious privileges”; and that whites were the superior race.

274

many schools, the whole curriculum covering American history was sanitized

to glorify Southern white culture and slaveholding, and conflated white

indentured servitude with the African slave trade.

275

These demonstrably false assertions grew out of a decades-long effort to

rewrite history following the Civil War. This is often referred to as the “Lost

Cause.”

276

It “had its roots in the Southern search for justification and the need

to find a substitute for victory in the Civil War.”

277

As one author observed:

273. George Petras, Timeline: How Trump Intervened in the Navy SEAL Eddie Gallagher’s War

Crimes Case, USA

TODAY (Dec. 15, 2019, 8:52 PM), https://www.usatoday.com/in-

depth/news/politics/2019/11/27/timeline-gallahers-war-crimes-trump-intervention/4305986002/

[https://perma.cc/MLD8-7GX2]; Leo Shane III, Trump Suggests Army Should Punish Officer Who

Testified in Impeachment Inquiry, M

IL. TIMES (Feb. 11, 2020),

https://www.militarytimes.com/news/pentagon-congress/2020/02/11/trump-suggests-army-should-

punish-officer-who-testified-in-impeachment-inquiry/ [https://perma.cc/PT6V-B6TV]; Kyle Cheney,

Impeachment Witnesses Ousted Amid Fears of Trump Revenge Campaign, P

OLITICO (Feb. 7, 2020),

https://www.politico.com/news/2020/02/07/donald-trump-pressure-impeachment-witness-alexander-

vindman-111997 [https://perma.cc/FF94-XJS5]; Scott Lemieux, Donald Trump’s Judge-Bashing

Crosses a Line, G

UARDIAN (June 2, 2016, 2:04 PM),

https://www.theguardian.com/commentisfree/2016/jun/02/donald-trump-bully-race-bait-judge-

gonzalo-curiel-trump-university [https://perma.cc/4DHG-PQ8Y].

274. Mildred Rutherford, Historian General, Utd. Daughters of the Confederacy, “The Wrongs

of History Righted,” at 14–16, Savannah, Georgia, (Nov. 13, 1914), in Mildred Rutherford Defends

Slavery in Address to the United Daughters of the Confederacy, C

ONFEDERATE TRUTHS,

http://www.confederateneoconfederatereader.com/detail/the-nadir-of-race-relations/mildred-

rutherford-defends-slavery-in-address-to-the-united-daughters/ [https://perma.cc/Q4AR-NSL9].

275. Greg Huffman, Twisted Sources: How Confederate Propaganda Ended Up in the South’s

Schoolbooks, F

ACING S. (Apr. 10, 2019), https://www.facingsouth.org/2019/04/twisted-sources-how-

confederate-propaganda-ended-souths-schoolbooks [https://perma.cc/4MMV-9EBL].

276. Mitch Landrieu, How I Learned About the “Cult of the Lost Cause,” S

MITHSONIAN MAG.

(Mar. 12, 2018), https://www.smithsonianmag.com/history/how-i-learned-about-cult-lost-cause-

180968426 [https://perma.cc/3TVW-572Z].

277. Id.

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1084 MARQUETTE LAW REVIEW [107:1043

In attempting to deal with defeat, Southerners created an image

of the war as a great heroic epic. A major theme of the Cult of

the Lost Cause was the clash of two civilizations, one inferior

to the other. The North, “invigorated by constant struggle with

nature, had become materialistic, grasping for wealth and

power.” The South had a “more generous climate” which had

led to a finer society based upon “veracity and honor in man,

chastity and fidelity in women.” Like tragic heroes,

Southerners had waged a noble but doomed struggle to

preserve their superior civilization. There was an element of

chivalry in the way the South had fought, achieving

noteworthy victories against staggering odds. This was the

“Lost Cause” as the late nineteenth century saw it, and a whole

generation of Southerners set about glorifying and celebrating

it.

278

Although the Lost Cause was glorified in a number of ways, including by

erecting statues and other monuments to Confederate heroes, one of the most

pernicious ways this was accomplished was by enshrining false narratives in

textbooks used throughout the American South until the late twentieth

century.

279

These were called Lost Cause textbooks.

280

It is difficult to know the extent of the harm caused by spreading this

falsified version of history. It is clear, however, that it has had a radical effect

on Americans’ failure to adequately understand race and history.

281

In a Pew

Research poll taken in 2011, for instance, it was found that 48% of Americans

thought the Civil War was mainly about states’ rights—including 60% of those

under age thirty—while only 38% thought it was primarily about slavery.

282

These opinions do not square with reality. The Confederate leaders’ own words

show slavery was the central issue of contention between the Southern and

278. Id.; see also Jessica Owley, Jess Phelps & Sean W. Hughes, Private Confederate

Monuments, 25 L

EWIS & CLARK L. REV. 253, 259 (2021).

279. Huffman, supra note 275.

280. See id.

281. Rex Springston, Fighting Myths, Misconceptions and Misunderstandings About Race,

Slavery and the Civil War, V

A. MERCURY (May 23, 2019, 7:55 PM),

https://www.virginiamercury.com/2019/05/23/fighting-myths-misconceptions-and-

misunderstandings-about-race-slavery-and-the-civil-war/ [https://perma.cc/C9FH-TWZE] (debunking

misunderstandings some Americans have bought into as a result of the Lost Cause myth).

282. Russell Heimlich, What Caused the Civil War?, P

EW RSCH. CTR. (May 18, 2011),

https://www.pewresearch.org/fact-tank/2011/05/18/what-caused-the-civil-war/

[https://perma.cc/JGT2-GJQW].

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Northern states, and that it was the motivating cause for secession and war.

283

The poll results reflect the fact that students in the South, as well as many

outside the South, were fed Lost Cause propaganda for generations.

This was one of many instances where those motivated to erase or rewrite

history have purposefully spread lies about the past to benefit themselves by

spreading an ideology or solidifying their own place at the top of the societal

hierarchy. Falsifying history, of course, overlaps with other kinds of fraud on

the public, such as “for profit” and “for political gain.” For instance, if an oil

company attempted to mislead the public into believing that scientists were

“divided” on the global warming question in the 1990s, which oil companies

have actually done,

284

this would be both an attempt to defraud the public “for

profit” and “to falsify history.” If a politician spread the same climate science

doubt as part of a political campaign, which has also been done, then it would

be both an attempt to defraud the public “for political gain” and “to falsify

history.”

B. Harms Caused by Fraud on the Public

This Article’s principal argument, that fraud on the public should be

regulated in a manner similar to fraud on the individual, rests largely on the

claim that failing to regulate fraud on the public results in unacceptable harm.

Whether a particular harm is unacceptable is, by necessity, a subjective

determination. But to make that determination, one must first gather the facts.

In this case, that involves a review of the harms caused by fraud on the public.

These include harm to human health and life; environmental destruction;

harm to knowledge, autonomy, and the search for truth; undermining of

democracy and democratic institutions; the proliferation of gun violence,

including injuries and deaths resulting from it; and an increase in intolerance,

inequality, and an increased threat of tyranny. These are by no means an

exhaustive list. The exercise of cataloguing the harms caused by fraud on the

public would fill a book and will be addressed more fully in scholarly work

elsewhere.

285

This Article will only briefly discuss each major category of harm

283. Ta-Nehisi Coates, What This Cruel War Was Over, THE ATL. (June 22, 2015),

https://www.theatlantic.com/politics/archive/2015/06/what-this-cruel-war-was-over/396482/

[https://perma.cc/Y59K-3475] (quoting the words of Confederate leaders and Confederate states’

declaration of secession).

284. See William C. Tucker, Deceitful Tongues: Is Climate Change Denial a Crime?, 39

COLOGY L.Q. 831, 844 (2012) (“[B]y the early 1990s a clear consensus was emerging among climate

scientists that human-caused global warming was underway and posed a threat to humankind.”).

285. See HENRICKSEN, supra note 89 (manuscript at 149) (discussing laundry list of harms

caused by fraud on the public).

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1086 MARQUETTE LAW REVIEW [107:1043

to give readers a rough analytical framework for understanding the scope of the

threat.

With regard to harms to human health and life, numerous schemes to

defraud the public result in this kind of damage. One notable recent example

was the falsehoods spread for political purpose regarding the safety,

effectiveness, and advisability of taking the COVID-19 vaccine.

286

As a result

of massive and widespread disinformation spread through rightwing media

networks and channels, a gap between vaccination rates of liberals and

conservatives emerged, even though prior to the disinformation no such gap

had existed.

287

Studies now show this diminished vaccine rate killed hundreds

of thousands of people.

288

But politically motivated vaccine disinformation is just one of the ways

fraud on the public causes harm to human health and life. Another is profit

motivated disinformation spread by corporations aimed to mislead the public

about dangers posed by the products they make and sell. These PDCPD

Schemes have been carried out by numerous industries. The opioid industry

misled doctors, the public, lawmakers, and courts about the dangers and

addictiveness of opioid painkillers and caused “the worst public health crisis in

American history.”

289

The sugar industry carried out a similar scheme.

Beginning in the 1960s, it launched a decades-long campaign to hide the health

dangers of high-fructose corn syrup and other harmful sugars by paying

286. Marlon I. Diaz, John J. Hanna, Amy E. Hughes, Christoph U. Lehmann & Richard J.

Medford, The Politicization of Ivermectin Tweets During the COVID-19 Pandemic, O

PEN F.

INFECTIOUS DISEASES, June 6, 2022, at 2, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9290534/

[https://perma.cc/8M5V-6DCD].

287. Jennifer Kates, Jennifer Tolbert & Kendal Orgera, The Red/Blue Divide in COVID-19

Vaccination Rates, KFF (Sept. 14, 2021), https://www.kff.org/policy-watch/the-red-blue-divide-in-

covid-19-vaccination-rates/ [https://perma.cc/7NLU-C65A].

288. A. Martínez & Allison Aubrey, How Vaccine Misinformation Made the COVID-19 Death

Toll Worse, NPR (May 16, 2022, 5:07 AM), https://www.npr.org/2022/05/16/1099070400/how-

vaccine-misinformation-made-the-covid-19-death-toll-worse [https://perma.cc/2K3L-8TA6]; Taylor

Allen, Nearly Half of Pennsylvania’s COVID Deaths Were Preventable, Per Analysis, A

XIOS (May

19, 2022), https://www.axios.com/local/philadelphia/2022/05/19/pennsylvania-preventable-covid-

deaths [https://perma.cc/35G7-VDNL]; Vaccine Preventable Deaths Analysis: Date from January

2021–April 2022, G

LOB. EPIDEMICS, https://globalepidemics.org/vaccinations/

[https://perma.cc/58ZG-J7D7].

289. Howe, supra note 212; see also Jessica Bruder, The Worst Drug Crisis in American History,

N.Y.

TIMES (July 31, 2018), https://www.nytimes.com/2018/07/31/books/review/beth-macy-

dopesick.html [https://perma.cc/XYN5-NSLB]; Press Release, Ctrs. for Disease Control & Prevention,

Nat’l Ctr. for Health Stats., Drug Overdose Deaths in the U.S. Top 100,000 Annually (Nov. 17, 2021),

https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2021/20211117.htm

[https://perma.cc/93QF-W7PV]; Art Van Zee, The Promotion and Marketing of OxyContin:

Commercial Triumph, Public Health Tragedy, 99 A

M. J. PUB. HEALTH 221, 221 (2009).

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scientists, academics, and public relations firms to produce messages that

downplayed the dangers of sugar and redirected the public’s attention to fat.

290

As a result, diabetes, hypertension, cardiovascular disease, and other sugar-

caused health maladies spiked in the U.S.

291

The U.S. leads the world in added

sugar consumption.

292

Another large PDCPD Scheme was carried out by the fossil fuel industry

between up about 1990 and up through the 2010s.

293

Like the sugar industry,

the fossil fuel industry spent millions of dollars to convince the public that the

dangers posed by its product were not scientifically certain and that there was

doubt about the cause–effect relationship between fossil fuel and climate

change.

294

In addition to the displacement of millions of people and all of the

other climactic effects, climate change has also had a catastrophic effect on

human health; according to one study, global warming now kills 9 million

people per year.

295

Most of these deaths occur as a result of small particle

290. Anahad O’Connor, How the Sugar Industry Shifted Blame to Fat, N.Y. TIMES (Sept. 12,

2016), https://www.nytimes.com/2016/09/13/well/eat/how-the-sugar-industry-shifted-blame-to-

fat.html?module=inline [https://perma.cc/9AGF-BFY2]; Anahad O’Connor, Sugar Industry Long

Downplayed Potential Harms, N.Y.

TIMES (Nov. 21, 2017),

https://www.nytimes.com/2017/11/21/well/eat/sugar-industry-long-downplayed-potential-harms-of-

sugar.html [https://perma.cc/X83A-HTYF].

291. Cristin E. Kearns, Laura A. Schmidt, Dorie Apollonio & Stanton A. Glantz, The Sugar

Industry’s Influence on Policy, 360 S

CI. 501, 501 (2018); Cristin E. Kearns, Stanton A. Glantz & Laura

A. Schmidt, Sugar Industry Influence on the Scientific Agenda of the National Institute of Dental

Research’s 1971 National Caries Program: A Historical Analysis of Internal Documents, 12 PLOS

MED., Mar. 10, 2015, at 1,

https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1001798

[https://perma.cc/NB4S-HBMX].

292. Robert H. Lustig, Laura A. Schmidt & Claire D. Brandis, The Toxic Truth About Sugar,

482 N

ATURE 27, 28–29 (2012).

293. Neela Banerjee, Lisa Song & David Hasemyer, Exxon’s Own Research Confirmed Fossil

Fuels’ Role in Global Warming Decades Ago, I

NSIDE CLIMATE NEWS (Sept. 16, 2015),

https://insideclimatenews.org/news/16092015/exxons-own-research-confirmed-fossil-fuels-role-in-

global-warming [https://perma.cc/LV65-28HD]; Sara Jerving, Katie Jennings, Masako Melissa Hirsch

& Susanne Rust, What Exxon Knew About the Earth’s Melting Arctic, L.A.

TIMES (Oct. 9, 2015),

https://graphics.latimes.com/exxon-arctic [https://perma.cc/6TRW-GGSH]; Susanne Rust, Report

Details How ExxonMobil and Fossil Fuel Firms Sowed Seeds of Doubt on Climate Change, L.A.

TIMES (Oct. 21, 2019, 4:00 AM), https://www.latimes.com/environment/story/2019-10-21/oil-

companies-exxon-climate-change-denial-report [https://perma.cc/Y2XG-7DBN].

294. Suzanne Goldenberg, Work of Prominent Climate Change Denier Was Funded by Energy

Industry, G

UARDIAN (Feb. 21, 2015, 4:32 PM), https://www.theguardian.com/environment/2015/feb/

21/climate-change-denier-willie-soon-funded-energy-industry [https://perma.cc/BU4P-M2XU].

295. Karn Vohra, Alina Vodonos, Joel Schwartz, Eloise A. Marais, Melissa P. Sulprizio &

Loretta J. Mickley, Global Mortality from Outdoor Fine Particle Pollution Generated by Fossil Fuel

Combustion: Results from GEOS-Chem, 195 E

NV’T RSCH., Apr. 2021, at 6.

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1088 MARQUETTE LAW REVIEW [107:1043

respiratory infections and related respiratory illnesses.

296

This has amounted to

one in every five deaths worldwide.

297

“Without fossil fuel emissions, the

average life expectancy of the world’s population would increase by more than

a year, while global economic and health costs would fall by about $2.9

[trillion].”

298

Numerous other industries have carried out PDCPD Schemes to deceive the

public about dangers posed by the products they make and sell. These include,

for instance, the tobacco,

299

leaded gas,

300

lead-based paint,

301

cosmetic,

302

and

baby powder

303

industries. Similar schemes to mislead the public have been

296. Id.

297. Oliver Milman, ‘Invisible Killer’: Fossil Fuels Caused 8.7M Deaths Globally in 2018,

Research Finds, GUARDIAN (Feb. 9, 2021, 2:50 PM),

https://www.theguardian.com/environment/2021/feb/09/fossil-fuels-pollution-deaths-research

[https://perma.cc/QML5-E8AL].

298. Id.

299. See generally Off. of the Surgeon Gen., Health Consequences of Smoking, Surgeon General

Fact Sheet, U.S.

DEP’T HEALTH & HUM. SERVS. (Jan. 16, 2014),

https://www.hhs.gov/surgeongeneral/reports-and-publications/tobacco/consequences-smoking-

factsheet/index.html [https://perma.cc/8SRC-FWAK] (noting that more than 20 million Americans

have died because of smoking since 1964, including approximately 2.5 million deaths due to exposure

to secondhand smoke). As Stanford professor Robert Proctor points out, “[i]t’s still the leading cause

of death. It still kills over 400,000 Americans per year. It’s still two jumbo jets crashing every day.”

Michael Mechanic, “Golden Holocaust” Is the Book Big Tobacco Doesn’t Want You to Read, M

OTHER

JONES, https://www.motherjones.com/politics/2012/05/tobacco-book-golden-holocaust-robert-

proctor [https://perma.cc/698F-GA48]. Worldwide, the number is even more grim; it is estimated 100

million people were killed by tobacco in the twentieth century, and that as many as 1 billion are

expected to die from tobacco in this century. See Michael V. Ciresi, Roberta B. Walbum & Tara D.

Sutton, Decades of Deceit: Document Discovery in the Minnesota Tobacco Litigation, 25 WM.

MITCHELL L. REV. 477, 482 (1999) (tracing the beginnings of tobacco litigation back to the 1950s).

300. See, e.g., Jamie Lincoln Kitman, The Secret History of Lead, N

ATION (Mar. 2, 2000),

https://www.thenation.com/article/archive/secret-history-lead [https://perma.cc/3HE7-MZX8]; Paul

Brown, Firms ‘Knew of Leaded Petrol Dangers in 20s’,

GUARDIAN (July 12, 2000, 8:40 PM),

https://www.theguardian.com/environment/2000/jul/13/uknews [https://perma.cc/M5XF-5RDS].

301. See Cnty. of Santa Clara v. Atl. Richfield Co., 137 Cal. Rptr. 3d 313, 319 (Ct. App. 2006).

There, the appeals court held that the plaintiffs had sufficiently alleged a fraud claim against the

defendant lead paint manufacturers based on the allegations that defendants had made false

misrepresentations and concealments to the public in an effort to deceive the public as to the dangers

of low-level exposure to lead paint. Id.

302. See Maryse Rodriguez, Dying to Be Beautiful: An Assessment of How a Self-Regulating

Cosmetic Industry and Biotechnology Are Impacting Public Health, 20 H

OUS. J. HEALTH L. & POL’Y

457, 487 (2021) (describing how the failure of the government to adequately regulate the cosmetics

industry results in myriad health dangers posed by beauty products).

303. Cheryl Wischhover, Johnson & Johnson Accused of Hiding the Asbestos in Its Baby Powder

for Decades, V

OX (Dec. 14, 2018, 5:50 PM), https://www.vox.com/the-

goods/2018/12/14/18141265/johnson-johnson-talc-asbestos-lawsuits-cover-up-stock-price

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1089

carried out by the asbestos,

304

pesticide,

305

soft drink,

306

artificial sweetener,

307

fast food, processed food,

308

and prenatal drug

309

industries. There are others.

These, together with politically motivated disinformation on vaccines and other

public health matters, represent just some of the ways fraud on the public harms

human health and life.

Fraud on the public also harms the environment. This arises from numerous

sources, including the fossil fuel industry’s campaign of disinformation, which

effectively stopped meaningful government action to restrict, cap, or ban fossil

fuels for at least three decades.

310

This fraudulent scheme resulted in trillions in

profit for the industry and has resulted in a cornucopia of environmental harms,

such as “[e]xtreme weather events, desertification, wild fires, heat waves, sea

level rise, ocean temperature increases, and glacial and polar ice melt.”

311

Other

[https://perma.cc/5CQR-2U8D]; Lisa Girion, Johnson & Johnson Knew for Decades that Asbestos

Lurked in Its Baby Powder, R

EUTERS (Dec. 14, 2018, 2:00 PM),

https://www.reuters.com/investigates/special-report/johnsonandjohnson-cancer

[https://perma.cc/25XW-FMUB].

304. P

AUL BRODEUR, OUTRAGEOUS MISCONDUCT: THE ASBESTOS INDUSTRY ON TRIAL 14–18

(1985); Lester Brickman, On the Theory Class’s Theories of Asbestos Litigation: The Disconnect

Between Scholarship and Reality, 31 P

EPP. L. REV. 33, 35, 41 (2003).

305. EPA Takes Action to Provide Accurate Risk Information to Consumers, Stop False Labeling

on Products, EPA (Aug. 8, 2019), https://www.epa.gov/newsreleases/epa-takes-action-provide-

accurate-risk-information-consumers-stop-false-labeling [https://perma.cc/54YH-QKTW].

306. Anahad O’Connor, Studies Linked to Soda Industry Mask Health Risks, N.Y.

TIMES (Oct.

31, 2016), https://www.nytimes.com/2016/11/01/well/eat/studies-linked-to-soda-industry-mask-

health-risks.html [https://perma.cc/5AD9-HDWJ]; Chase Purdy, Coca-Cola Is Being Sued for

Misleading People Over the Healthfulness of Its Sodas, Q

UARTZ (Jan. 4, 2017),

https://qz.com/878091/coca-cola-is-subject-of-lawsuit-about-sugary-sodas-impact-on-health-and-

obesity [https://perma.cc/6CLY-47KH].

307. Holly Strawbridge, Artificial Sweeteners: Sugar-Free, But at What Cost?, H

ARV. HEALTH

PUBL’G (Jan. 29, 2020), https://www.health.harvard.edu/blog/artificial-sweeteners-sugar-free-but-at-

what-cost-201207165030 [https://perma.cc/8DYR-U8YS].

308. Joel Fuhrman, The Hidden Dangers of Fast and Processed Food, 12 A

M. J. LIFESTYLE

MED. 375, 377 (2018); Jennifer L. Harris & Samantha K. Graff, Protecting Young People from Junk

Food Advertising: Implications of Psychological Research for First Amendment Law, 102 A

M. J. PUB.

HEALTH 214, 214 (2012).

309. See Barbara L. Thompson, Pat Levitt & Gregg D. Stanwood, Prenatal Exposure to Drugs:

Effects on Brain Development and Implications for Policy and Education, 10 NATURE REVS.

NEUROSCIENCE 303, 308 (2009).

310. See Joseph Manning, Climate Torts: It’s a Conspiracy!, 62 B.C.

L. REV. 941, 944 (2021)

(“[T]he fossil fuel industry knew about the dangers of climate change but nevertheless chose to fund

disinformation campaigns designed to spread doubt and confusion regarding the existence, cause, and

risks of climate change.”).

311. David Foster, Changing the Climate for Prosperity, 27 N

OTRE DAME J.L. ETHICS & PUB.

POL’Y 187, 193 (2013).

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1090 MARQUETTE LAW REVIEW [107:1043

effects of global warming include increased food insecurity and more frequent

and severe droughts and floods.

312

It is not just the fossil fuel industry either. Other schemes to defraud the

public result in environmental harm, such as the harms caused by mineral

extraction, deforestation, and pesticide use, which often result, at least in part,

from false and misleading claims by those who profit from the products causing

the harm.

313

Apart from harm to health, life, and the environment, fraud on the public

also causes harm to knowledge, truth, and autonomy. Although this category of

harm may appear less definite and measurable than harms to health, life, and

the environment—and it certainly is—it is nevertheless arguably even more

immediately relevant and personal. After all, when we, ourselves, are

manipulated by falsehoods calculated to get us to think, speak, vote, or consume

in a manner favorable to the one spreading the falsehoods, the first harm caused

is the harm of us being manipulated in the first place. When we are deceived by

those seeking to profit off of our gullibility, it is hurtful, humiliating, and

disrupts our life. The intrusion into the autonomy of the dupe might not be

measurable, but it is certainly stressful, and this stress can cause trauma,

insomnia, or even physical illness.

314

That is why lies that deceive us are an

assault on the autonomy of those lied to.

315

This is even truer when the liar aims

312. Walter G. Johnson, Using Precision Public Health to Manage Climate Change:

Opportunities, Challenges, and Health Justice, 48 J.L.

MED. & ETHICS 681, 682 (2020).

313. See, e.g., Katherine Drabiak, Roundup Litigation: Using Discovery to Dissolve Doubt, 31

GEO. ENV’T. L. REV. 697, 715 (2019) (discussing claim against Monsanto, alleging it knew of

Roundup’s “dangerous propensities and carcinogenic characteristics” but “concealed, downplayed, or

otherwise suppressed, through aggressive marketing and promotion” information relating to the risks

and dangers of product exposure rather than warning consumers); Nadia Ahmad, Blood Biofuels, 27

DUKE ENV’T. L. & POL’Y F. 265, 290 (2017) (discussing claims by Honduran farmers who allege

“thousands of hectares of land used for subsistence farming were fraudulently and coercively

transferred to agribusinesses that grow African palms, which are lucratively exported to the west for

biofuel, and are traded in the carbon credit market”).

314. Kenneth J. Smith, Timothy D. Haight, David J. Emerson, Shawn Mauldin & Bob G. Wood,

Resilience as a Coping Strategy for Reducing Departure Intentions of Accounting Students, 29 A

CCT.

EDUC. 77, 98 (2020); Mayo Clinic Staff, Stress Symptoms: Effects on Your Body and Behavior, MAYO

CLINIC (Aug. 10, 2023), https://www.mayoclinic.org/healthy-lifestyle/stress-management/in-

depth/stress-symptoms/art-20050987 [https://perma.cc/DXZ4-63HT].

315. See, e.g., Christine M. Korsgaard, What’s Wrong with Lying,

in PHILOSOPHY INQUIRY:

CLASSES AND CONTEMPORARY READINGS 583–85 (Jonathan E. Adler & Catherine Z. Elgin eds.,

2007); see also C

ASS R. SUNSTEIN, LIARS: FALSEHOODS AND FREE SPEECH IN AN AGE OF DECEPTION

31 (2021); Paul Faulkner, What Is Wrong with Lying?, 75 P

HIL. & PHENOMENOLOGICAL RSCH. 535,

535 (2007); S

EANA VALENTINE SHIFFRIN, SPEECH MATTERS: ON LYING, MORALITY, AND THE LAW

5 (2014); CHRISTINE M. KORSGAARD, The Right to Lie: Kant on Dealing with Evil, Philosophy and

Public Affairs, in C

REATING THE KINGDOM OF ENDS 113, 113–58 (1996).

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2024] ON THE LEGALITY OF DEFRAUDING THE PUBLIC 1091

to manipulate the dupe to personally profit off of the liar’s naïveté, which is the

case in every fraud on the public.

Fraud on the public also undermines faith in democracy and weakens

democratic institutions. For example, Professor Helen Norton observed that

falsehoods spread by those in government “inflict democratic harm when they

deny the public the information necessary to hold the government accountable

for its misconduct, undermine citizens’ ability to make informed voting

choices, sabotage the policymaking process when participants cannot rely on

others’ assertions, and foster public cynicism about (and disengagement from)

democratic self-governance.”

316

Another leading First Amendment scholar,

Professor Caroline Mala Corbin, likewise pointed out that “the government’s

deliberate dissemination of false claims on matters of public interest” poses an

imminent threat to democratic functions and institutions.

317

Self-government

depends on a well-informed public able to understand what public officials are

doing, what they stand for, and who to vote for at the ballot box. Purposeful

manipulation of the electorate disrupts the electoral process, results in a less

democratic system, and weakens democratic institutions.

Other harms arguably caused by fraud on the public include the tens of

thousands of gun deaths in America each year.

318

Conservative former Chief

Justice of the Supreme Court, Warren Burger, wrote:

The very language of the Second Amendment refutes any

argument that it was intended to guarantee every citizen an

unfettered right to any kind of weapon he or she desires. In

referring to “a well regulated militia,” the Framers clearly

intended to secure the right to bear arms essentially for military

purposes.

319

In a 1991 interview, he asserted that the gun lobby’s interpretation of the

Second Amendment is “one of the greatest pieces of fraud, I repeat the word

fraud, on the American public by special interest groups that I have ever seen

316. Helen Norton, Government Falsehoods, Democratic Harm, and the Constitution, 82 OHIO

ST. L.J. ONLINE 1, 3 (2021).

317. Caroline Mala Corbin, The Unconstitutionality of Government Propaganda, 81 O

HIO ST.

L.J. 815, 815, 853–54, 857 (2020).

318. John Gramlich, What the Data Says About Gun Deaths in the U.S., P

EW RSCH. CTR. (Apr.

26, 2023), https://www.pewresearch.org/fact-tank/2022/02/03/what-the-data-says-about-gun-deaths-

in-the-u-s/ [https://perma.cc/3ACF-QC8S].

319. Warren E. Burger, 2nd Amendment Has Been Distorted, A

SSOCIATED PRESS, Dec. 11,

1991, at 13, https://www.newspapers.com/clip/102574603/record-searchlight/

[https://perma.cc/J2ML-P5C3].

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1092 MARQUETTE LAW REVIEW [107:1043

in my lifetime.”

320

Admittedly, whether this is a fraud or a legitimate result of

good-faith advocacy is debatable. What is not debatable is that, unique in the

developed world, America experiences frequent gun violence and mass

shootings, and that in 2021 alone more than 45,000 Americans were killed by

a gun.

321

Other harms caused by fraud on the public, though perhaps less measurable

or even identifiable, are nevertheless impactful on people’s lives. These

include, for example, intolerance of minority groups and views,

322

widening

economic inequality,

323

and the threat of tyrannical government.

324

A fruitful

discussion of these three harms—intolerance, inequality, and tyranny—could

themselves fill a book on how fraud on the public helps create and maintain

320. PBS NewsHour, WATCH: Former Chief Justice Would Have Dropped Second Amendment,

OUTUBE (Apr. 11, 2023), https://www.youtube.com/watch?v=LNn_AfSagSg

[https://perma.cc/P2RV-53ZT]; see also Joan Biskupic, Guns: A Second (Amendment) Look, W

ASH.

POST (May 10, 1995), https://www.washingtonpost.com/wp-

srv/national/longterm/supcourt/stories/courtguns051095.htm [https://perma.cc/Y2PS-YRF3]; Michael

Waldman, How the NRA Rewrote the Second Amendment, B

RENNAN CTR. FOR JUST. (May 20, 2014),

https://www.brennancenter.org/our-work/research-reports/how-nra-rewrote-second-amendment

[https://perma.cc/G4DU-QBT3]; Warren E. Burger, Second Amendment Does Not Guarantee the Right

to Own a Gun, in G

UN CONTROL 99–102 (Charles P. Cozic ed., 1992),

https://www.ojp.gov/ncjrs/virtual-library/abstracts/second-amendment-does-not-guarantee-right-

own-gun-gun-control-p-99 [https://perma.cc/DW7T-CCXE].

321. Gramlich, supra note 318.

322. See Whittney Barth, Comment, Taking “Great Care”: Defining Victims of Hate Speech

Targeting Religious Minorities, 19 C

HI. J. INT’L L. 68, 71 (2018) (discussing hate speech targeted at

Muslims as a racial minority or as a religious minority, which generate animosity toward the minority

group).

323. Patrick Crawford, Occupy Wall Street, Distributive Justice, and Tax Scholarship: An

Ideology Critique of the Consumption Tax Debate, 12 U.

N.H. L. REV. 137, 140–41, 142 n.7 (2014)

(quoting A

DAM SMITH, ROY HUTCHESON & ANDREW S. SKINNER, AN INQUIRY INTO THE NATURE

AND

CAUSES OF THE WEALTH OF NATIONS 267 (Clarendon Press 1976) (1776)) (discussing the theory

that the radical recent increase in economic inequality arose at least in part from the fact that those with

wealth “have generally an interest to deceive and even to oppress the public, and who accordingly

have, upon many occasions, both deceived and oppressed it”).

324. The connection between manipulation of public opinion through spreading falsehoods, on

one hand, and tyrannical rule, on the other, has been noted my several authors. See, e.g., Max Eastman,

Book Review of The Future of Liberty by George H. Soule (New York: Macmillan Company, 1936), 47

ALE L.J. 303, 304 (1937) (noting that, in Russia, “a more unscrupulous and more absolute tyrant has

deceived a more ignorant population into believing that tyranny is … the last word in democracy”);

NYDER, supra note 256, at 201 (noting that, with regard to the Nazi’s planning and perpetrating the

Holocaust, “[d]isinformation was the key to the entire operation”); Mary L. Gill, North Korea: The

Role of Propaganda in the Sustainability of the Kim Regime (Nov. 1, 2012) (M.A. Thesis, Georgetown

University), https://repository.library.georgetown.edu/handle/10822/557700 [https://perma.cc/4EJ3-

NT8E] (discussing how propaganda spreading falsehoods has propped up the Kim regime for decades

in North Korea).

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them. But these are simply three of the multitude of harms imposed on society

by those spreading profitable falsehoods.

The damage done by fraud on the public is significant and

underappreciated. Those who deceive millions of people for their own benefit,

whether it be economic, political, ideological, or some other aim, do enormous

harm to people, society, and the environment. This seeming paradox, whereby

it is unlawful to defraud one person, but it is perfectly legal to defraud millions,

causes myriad harms. Indeed, a strong argument could be made that these

harms, taken as a whole, pose as great a threat to people, society, and the

environment as the sum total of smaller one-on-one frauds. Yet, the law remains

largely silent when it comes to fraud on the public. The question is: Should it?

It is urgent we now revisit the approach (or lack thereof) the law takes vis-à-vis

fraud on the public. The most harmful intentional falsehoods should be

prohibited, and those who knowingly spread them should be held accountable.

IV.

CONCLUSION

The problem this Article sets out to shine a light on is that harmful

dishonesty is handled in an inconsistent manner under the law. Small schemes

aimed at defrauding individuals are, in many circumstances, both criminal and

tortious. But large schemes aimed at defrauding the public at large are almost

universally ignored by law. They are, accordingly, allowed and most often

legal. Certainly, there are reasons for treating intentional falsehoods aimed at

small groups differently from intentional falsehoods aimed at large groups. The

former raises fewer First Amendment concerns than the latter. Yet, the harm

now being caused by fraud on the public presents a compelling reason to now

revisit this paradox of the law.

Front and center in this debate is the First Amendment’s Free Speech

Clause, and that clause’s fraud exception. Speech involved in actionable fraud

is unprotected.

325

But fraudulent speech that is not actionable has not, to date,

been held to fall within this unprotected category. Because fraud on the public

is generally not actionable—with the exception of narrow categories like

securities fraud

326

and false advertising

327

—a large number of schemes to

325. United States v. Alvarez, 567 U.S. 709, 723 (2012) (“Where false claims are made to effect

a fraud or secure moneys or other valuable considerations, say, offers of employment, it is well

established that the Government may restrict speech without affronting the First Amendment.”); Va.

Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 771 (1976) (noting that

fraudulent speech generally falls outside the protections of the First Amendment).

326. See General Rules and Regulations, Securities Exchange Act of 1934, 17 C.F.R. § 240.10b-

5 (2014).

327. See 15 U.S.C. §§ 52–55 (prohibiting the dissemination of any advertising or labeling that

is false or misleading “in a material respect”).

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1094 MARQUETTE LAW REVIEW [107:1043

defraud the public are categorically protected speech.

328

This gives a free pass

to those who stand to profit from defrauding the public to do so without legal

risk.

This present state of affairs has resulted from two contributing factors. First,

those in charge of making and applying the laws have largely failed to grasp

how fraud works, why we fall for it, and how much of a danger it actually poses.

And second, the development of new technologies, first at the dawn of the

twentieth century (telecommunications, radio, TV) and the dawn of the twenty-

first century (internet, email, social media), have provided exponentially more

power to those who profit from disinformation, while providing no corollary

defensive mechanism, in law or otherwise, for the public against the rising tide

of false and misleading claims. A number of solutions to this problem have

been proposed. These include prohibiting “deliberately or recklessly

disseminat[ing] demonstrably false statements in pursuit of fraudulent electoral

or commercial gain,”

329

“government propaganda,”

330

health-related

misinformation and disinformation,

331

and “false statements made for material

gain or advantage in an election.”

332

More broadly, some have called for the

First Amendment to be de-weaponized by tailoring it to protect the people

against the powerful, rather than allowing it to be used by the powerful as a

weapon against the people.

333

However, the search for solutions continues.

Finding a solution to this problem will prove challenging. There are real

dangers inherent in speech restrictions applied to those who disseminate

messages to the masses. However, one of the gravest dangers of imposing such

restrictions is that it will allow those in power to determine what the “truth” is

and impose it on the rest of us. However, that is precisely what is happening

right now. Those with the public megaphone disseminate falsehoods dressed

up as “truth” and manipulate the minds of millions, spreading a self-serving and

categorically false “reality” on voters, followers, and consumers. Thus, the

danger of those in power imposing self-serving “truth” on the rest of us is

precisely why we must restrict fraud on the public. Whatever solution is

adopted must carefully balance fundamental free speech rights against the harm

from intentional falsehoods spread to the public. Finding such solutions will not

328. See Henricksen & Betz, supra note 109, at 119 (discussing the constitutionality of the stolen

election lie).

329. Sherwin, supra note 235, at 356.

330. Corbin, supra note 317, at 834–36.

331. Claudia E. Haupt & Wendy E. Parmet, Lethal Lies: Government Speech, Distorted Science,

and the First Amendment, 2022 U.

ILL. L. REV. 1809, 1842–43.

332. Win v. Cegavske, 570 F. Supp. 3d 936, 944 (D. Nev. 2021).

333. See generally Catharine A. MacKinnon, Weaponizing the First Amendment: An Equality

Reading, 106 V

A. L. REV. 1223 (2020).

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be easy. But it is urgent we explore the options at our disposal. The stakes are

too high to continue allowing unfettered fraud on the public by those who stand

to profit from it.

* * *