In the 2002 case of Illinois ex rel. Lisa Madigan, Attorney General of Illinois v. Telemarketing Associates, Inc., et al., the U.S Supreme Court ruled in favor of the state's right to sue a professional fundraiser for fraud under its charitable solicitation law. The court held that fundraisers who make false or misleading representations are subject to prosecution for fraud even if they do not pocket all proceeds from their solicitations and pass on some portion to charity as promised. In this case, Telemarketing Associates had retained 85% of gross receipts it collected on behalf of VietNow National Headquarters (a veterans' group), which was deemed fraudulent because donors were led to believe that a significant amount would go directly towards aiding veterans when only 15% did so.

In the dissenting opinion for Illinois ex rel. Lisa Madigan, Attorney General of Illinois v. Telemarketing Associates, Inc., et al., Justice Ruth Bader Ginsburg disagreed with the majority's ruling that a state cannot bring fraud charges against a fundraiser based solely on high fundraising costs. She argued that while fundraisers have a First Amendment right to solicit charitable contributions, they do not have an absolute immunity from fraud liability when their fees are excessive and deceptive practices are used in solicitation efforts. According to her interpretation of previous rulings by the Court, fraudulent misrepresentation is not protected speech under any circumstances - including charitable solicitation cases like this one where 85% of donations were kept as "fundraising expenses". Therefore, she believed states should be able to regulate such activities through anti-fraud laws without infringing upon First Amendment rights.