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The crime of fraud has been underdescribed and undertheorized, both as a wrong and as a legal prohibition. These deficits contribute to contention and uncertainty over the practice of punishing white-collar crime. This Article provides a fuller account of criminal fraud, describing fraud law’s open-textured, common law, and adaptive qualities and explaining how fraud law develops along its leading edge while limiting violence to the legality principle. The legal system has a surprising, often overlooked methodology for resolving whether to treat novel commercial behaviors as frauds: Courts and enforcers often conduct an ex post examination of whether an actor’s mental state included “consciousness of wrongdoing.” The Article summarizes this methodology’s history and contemporary applications before moving to the question of its justification. Among possible normative justifications for this unusual fault methodology, one fits best and involves the fewest complications: An actor’s pursuit of a novel course of conduct (that involves, as with all fraud, some deception causing or threatening harm), in the face of actual knowledge that prevailing norms reject that behavior, renders the actor equivalently blameworthy to an actor who intentionally pursues a course of conduct that the law has previously described as fraud. The Article concludes that ex post decisionmakers should continue to apply this methodology, despite its imperfections; that importing the methodology into fraud’s conduct rules would be possible but also perilous; and that the methodology identifies the subset of frauds for which criminal sanctions are justified if one purpose of sanctioning fraud is to assess blame.

Overbreadth in criminal liability rules, especially in federal law, is abundant and much lamented. Overbreadth is avoidable if it results from normative mistakes about how much conduct to criminalize or from insufficient care to limit open texture in statutes. Social planners cannot so easily avoid overbreadth if they cannot reach behaviors for which criminalization is well justified without also reaching behaviors for which it is not. This mismatch problem is acute if persons engaging in properly criminalized behaviors deliberately alter their conduct to avoid punishment and have resources to devote to avoidance efforts. In response to such efforts, legal actors are apt to expand liability rules further, feeding a cycle of evasion and overbreadth that characterizes important areas of contemporary criminal law. Lawmakers cannot purge the resulting overbreadth from liability rules without producing underbreadth, at significant cost to regulatory objectives. I conclude that, in some areas of expanding substantive criminal law, answers to “overcriminalization” therefore lie not in reducing the scope of conduct rules but in greater reliance on mens rea doctrines, redesign of enforcement institutions, and modification of sentencing practices.