The square-peg fraud is a kind of case that until very recently enjoyed the widespread support of prosecutors, jurists, and the general public. Rather than punishing a scheme that rids a victim of her money or property, the square-peg prosecution has long focused on deprivations of intangible property. For years, enforcement actors have employed this concept to pursue innumerable varieties of corruption.
Nowhere has the square peg been more essential than in the government’s prosecution of higher education scandals. From the Varsity Blues parents who wrongfully secured elite college slots for their children, to the business school dean who shaped certain facts to inflate his school’s U.S. News ranking, the government has relied on various intangible property “hooks” to shove highly specific fact patterns within fraud law’s boundaries.
The aim of this Essay is to explore this square-peg phenomenon and highlight one of the less-explored reasons for being wary of it, which is its expressive effect. Whatever its benefits, the square-peg prosecution conveys counterproductive signals about victimhood, which stymie the movement towards deeper, systemic reforms.
One of criminal law’s strongest justifications is that it conveys a moral lesson. In the higher education context, however, the square peg perverts that lesson. To show a loss of property in the Varsity Blues cases, prosecutors denominated universities and standardized testing companies as “victims,” notwithstanding their moral complicity in an admissions system that is only superficially meritocratic. To establish an actionable property loss in the rankings fraud case, the government’s case treated the U.S. News graduate school rankings as a reliable arbiter of value. Not only are these narratives questionable, but they also promote the very competitive, winner-take-all attitude that undergirds higher education’s corruption problem.
Recent decisions by the Supreme Court and First Circuit might well dampen the appetite for intangible property fraud prosecutions. But there will always be new theories and new square pegs. Accordingly, we would all do well to take note of the square peg’s drawbacks. Using higher education as its exemplar, this Essay sets us on that path.