In the case of David B. Pasquantino, Carl J. Pasquantino, and Arthur Hilts v. United States (2004), the defendants were charged with wire fraud under U.S law for a scheme involving smuggling large quantities of liquor from Maryland to Canada without paying Canadian taxes or duties. The defendants argued that their actions did not constitute wire fraud as they had no legal obligation to pay these taxes themselves; rather it was the responsibility of those who purchased the alcohol in Canada. However, the Supreme Court ruled 5-4 against them stating that defrauding a foreign government out of tax revenue can be prosecuted under American wire fraud statute which prohibits fraudulent schemes for obtaining money or property by means of false pretenses transmitted over phone lines or other forms of electronic communication.

In the dissenting opinion for Pasquantino v. United States, Justice Ginsburg argued that the majority's interpretation of wire fraud statute was overly broad and could potentially lead to an international jurisdictional conflict. She pointed out that Canada had not sought extradition or prosecution of the defendants for their evasion of Canadian alcohol taxes, suggesting a lack of interest in enforcing its tax laws abroad. Furthermore, she noted that U.S courts generally do not enforce foreign tax judgments due to concerns about sovereignty and comity among nations. By allowing U.S prosecutors to pursue charges against individuals who defraud foreign governments by evading taxes, she warned it might encourage other countries to prosecute Americans under similar circumstances - something which could strain diplomatic relations between nations.