In the 1942 case Wells v. United States, the Supreme Court ruled on a matter of criminal law involving conspiracy to defraud the U.S. government and its agencies. The defendants were charged with conspiring to defraud by obtaining approval for fraudulent applications for loans from Home Owners' Loan Corporation (HOLC). They argued that since HOLC was not a department or agency of the U.S., they could not be convicted under federal statutes prohibiting such frauds against government departments or agencies. However, in an unanimous decision, Justice Hugo Black writing for the court held that HOLC was indeed an agency of the U.S., as it had been created by Congress and performed important governmental functions; thus making it fall within scope of relevant statute. Therefore, their conviction stood.

In the dissenting opinion for Wells v. United States, Justice Murphy argued that the majority's decision was a misinterpretation of the Federal Kidnapping Act. He contended that Congress intended to criminalize interstate transportation of kidnapped individuals only when it is done with an intent to extract ransom or commit extortion. In this case, where Wells had transported his victim across state lines after killing her and without any intention of demanding ransom or committing extortion, Justice Murphy believed he should not be convicted under this act. Instead, he suggested such cases should fall under local jurisdiction as they involve murder rather than kidnapping in its traditional sense. The justice expressed concern over federal encroachment on states' rights and warned against expanding federal law enforcement into areas traditionally reserved for state control.