In the United States v. Oberlin M. Carter case of 1909, former U.S Army Captain Oberlin M. Carter was accused and found guilty of conspiracy to defraud the government during his tenure as a supervising engineer in Savannah, Georgia between 1890-1896. The fraud involved overcharging for harbor improvements by approximately $2 million (equivalent to about $60 million today). After being convicted in a military court, he served five years in prison but continued to fight against the judgement regarding financial penalties post-release. The Supreme Court upheld that Carter had to repay all funds obtained through fraudulent means despite his argument that some work had been legitimately completed under contracts associated with the fraud scheme. The ruling set an important precedent: when public officials are involved in fraudulent schemes causing loss or damage, they can be held responsible for returning all monies linked directly or indirectly with their misconduct regardless of any legitimate services rendered within those operations.

In the dissenting opinion for United States v. Oberlin M. Carter, Justice Holmes disagreed with the majority's decision to hold Carter liable for conspiracy to defraud the government in a harbor improvement project. He argued that there was insufficient evidence of an agreement between Carter and his co-defendants to commit fraud, which is necessary to prove conspiracy under law. Furthermore, he contended that even if such an agreement existed, it would not necessarily constitute fraud unless its purpose was illegal or harmful - something he believed had not been sufficiently demonstrated in this case. Holmes also criticized the court's interpretation of "fraud," stating that it should be defined more narrowly as intentional deception resulting in injury or loss rather than broadly encompassing any dishonest act or breach of trust.