Lying Is Protected by the First Amendment, but Fraud Isn’t. Here’s Why

The First Amendment protects freedom of speech in many forms, unless it falls into one of the few, narrowly defined categories of unprotected speech.

One category of unprotected speech is fraud — specifically, fraudulent statements.

When are false statements protected by the First Amendment — and when are they unprotected?

The First Amendment’s free speech protections sometimes extend to false statements to ensure the government doesn’t decide what is considered false or true in public debate.

However, the government can limit false statements in specific circumstances, such as when they cause harm. This includes defamation, which harms someone’s reputation, perjury, when someone lies under oath — and fraud.

What is fraud?

Fraud is the intentional use of false or misleading statements or misrepresentations to exploit someone, resulting in personal gain and/or causing material or financial harm to another. In short, fraud is not only lying; it is lying for ill-gotten gain.

Here is an example: To show off to your friend, you tell her your new purse is from a high-end luxury brand, when you know it’s a knockoff. This statement may be a lie, but it’s not fraud.

But telling your friend the knockoff is from a high-end luxury brand in the process of selling it to her so that she pays you more is fraud.

In addition to falling outside First Amendment protection, fraud can also be punished via civil lawsuit and criminal prosecution. In both instances, the person accused of fraud must be making an assertion of fact rather than expressing an opinion, and they must intend for the person they are defrauding to rely on that statement to make a decision, such as a purchase.

Usually, fraud, whether criminal or civil, means someone intentionally lied to deceive someone else. Some states allow civil fraud lawsuits for what’s called “negligent misrepresentation”: making a careless false statement that causes harm, even if the speaker didn’t intend to mislead anyone.

Common types of fraud

Larceny, forgery, insurance or banking fraud, mail fraud and wire fraud are crimes that can lead to prosecution. Victims, be they businesses or individuals, can often file civil lawsuits, too, to recover their losses.

Phishing schemes, job scams and identity theft are other common examples of fraud that may lead to both criminal charges and civil cases.

Election fraud is a federal crime and can be prosecuted under federal, state and local laws.

These types of fraud can all be punished under criminal or civil law. And while not all instances of fraud involve speech, those that do also lose First Amendment protection.

Where are the legal lines between fraud and First Amendment-protected free speech?

Courts set strict criteria when defining unprotected categories of speech, such as fraud, to ensure the government doesn’t limit more speech than necessary.

The following are some areas where courts have drawn lines between protected speech and unprotected fraudulent speech.

Unprotected: Speech integral to committing crimes like fraud

In Giboney v. Empire Storage & Ice Co. (1949), the U.S. Supreme Court ruled that the First Amendment does not protect “speech or writing used as an integral part of conduct in violation of a valid criminal statute.”

While the Giboney case didn’t concern fraud specifically, courts have applied the general principle — that speech used to commit a crime isn’t protected — to cases involving fraud.

Unprotected: Misleading donors about how donations will be used

In 2003, the Supreme Court ruled that the First Amendment doesn’t protect making false or misleading claims to deceive donors about how donations are used (Illinois ex rel. Madigan v. Telemarketing Associates Inc.).

A Vietnam veterans aid nonprofit had hired a telemarketing firm to solicit donations. In exchange, the firm received 85% of the donations. The callers told donors that “a significant amount of each dollar” would help veterans.

Illinois sued, alleging fraud. The Supreme Court agreed, finding that the callers didn’t just omit information; they actively misrepresented it. These misrepresentations, the court ruled, fall outside “the First Amendment’s cover.”

Protected: Sincerely held religious beliefs

In 1944, the Supreme Court ruled that courts cannot determine the truth or falsity of religious beliefs (U.S. v. Ballard).

Guy Ballard, who believed himself a divine healer, was charged with violating a mail fraud statute after he collected millions of dollars in donations using religious claims.

The court held that, when determining if the expression of religious beliefs is protected, courts may look only at whether those beliefs are sincere but not at whether they may be true or false.

(Usually) protected: Lying about military service

In 2012, the Supreme Court said lying about military service isn’t necessarily unprotected speech (United States v. Alvarez).

After California public official Xavier Alvarez falsely claimed he was a decorated military veteran, he was charged with violating the Stolen Valor Act of 2005. Alvarez sued, claiming the law violated his First Amendment free speech rights.

The Supreme Court agreed, finding the law limited too much speech.

In 2013, Congress revised the law to align with First Amendment standards. The update specifically criminalizes “fraudulent claims” made “with intent to obtain money, property, or other tangible benefit.” Under the revised law, in 2023, a Rhode Island woman was sentenced to 70 months in prison for identity theft and false use of military medals. She had collected $250,000 in benefits after falsely claiming she was a disabled veteran.

The bottom line on fraud: Scams aren't free speech

While false statements do not automatically lose First Amendment free speech protection, fraudulent statements specifically are not protected speech.

From internet scams and identity theft, to lying to receive benefits and making statements that mislead consumers or investors, courts have repeatedly ruled fraud is subject to prosecution under the law, with no First Amendment protection.

Karen Hansen is a staff writer at Freedom Forum. She can be reached at [email protected].