In the 1896 case of Edgington v. United States, the U.S. Supreme Court ruled that a defendant's intent to defraud can be inferred from their actions and circumstances surrounding those actions. The case involved William H. Edgington who was convicted for using mails with an intent to defraud his creditors by sending out false statements about his financial condition in order to obtain credit extensions or new loans while he was insolvent. He appealed on grounds that there wasn't sufficient evidence presented at trial proving he intended to deceive his creditors when mailing these letters, arguing it should have been explicitly proven rather than implied from circumstances. The Supreme Court upheld the conviction stating that fraudulent intent does not need explicit proof but can be deduced from all facts and circumstances disclosed by evidence; it is rarely susceptible of direct proof and must usually be inferred from conduct and circumstantial evidence generally.

In the dissenting opinion for Edgington v. United States, Justice Harlan argued that the court majority had erred in its interpretation of what constituted a "scheme to defraud" under federal law. He contended that the defendant's actions clearly fell within this definition and should be punishable by law. Harlan believed that any scheme which involved deceit or dishonesty with an intent to cause financial loss was fraudulent, regardless of whether it was carried out through false representations or not. In his view, the defendant’s act of sending deceptive letters through mail with an intention to deceive investors amounted to fraud as per existing laws at that time. Thus, he disagreed with the majority's decision to overturn Edgington’s conviction on grounds that there were no explicit false statements made in his letters.