Wire fraud charges (18 U.S.C. Section 1343) are federal crimes that involve allegations that a person has made false promises or representations to defraud someone by using wire communications (telephone, tv/radio broadcasts, or over the internet.) Mail fraud charges (18 U.S.C. Section 1341) are similar to wire fraud charges, but mail fraud involves the use of a mail or postal service (U.S. Mail, Federal Express, etc.).
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I’ve been representing people in federal criminal cases for well over 20 years now, and many of those cases have involved mail or wire fraud charges. So if you or someone you know is going through a case like that, you may find it helpful to learn a little bit more about the basics. What is a mail or wire fraud prosecution, and what are some possible defenses? So let’s start with the basics.
What does the government have to prove to convict someone of mail or wire fraud? Well, the first element the government has to prove is that the person made false promises or representations. They have to prove that the person lied. Now the lie needs to be an important lie, a material lie. Not some trivial matter, but something that the person who’s saying the lie or saying the false statement intends for the other person to rely on. It has to make a difference.
Let’s use an example of a telemarketer trying to pitch an investment opportunity. If that telemarketer gets on the phone and makes false statements about the company, about the investment opportunity, say, you know, the returns have averaged over a 1,000% every year for the past 10 years. And if that’s a false statement, obviously it’s a material statement. The person is saying that statement to get the other guy to send the money for this particular investment. So it’s material, and it’s false, and it qualifies as a false promise or representation.
And that’s true even if the statement is crazy and almost unbelievable. So let’s say the same telemarketer gets on the phone, calls someone else, and says, “This is such a great investment that if you send me $10 you’re going to have a million dollars by the end of the year.” Now, most people wouldn’t believe that I hope. But that can still be the basis for a mail or wire fraud case because it’s false, and the government can probably prove it’s false.
The next thing the government would have to show is that there’s an intent to defraud someone. Not just are you lying to the person, but you’re lying to them for a reason. And usually, that reason is to get them to send you some money. So the intent to defraud is the basis, it’s really the heart of this type of case. The government is not going to prosecute every lie. They’re only going to focus on lies that are intended to get someone to send them something, usually money.
The next element is that, makes sense, in a wire or a mail fraud prosecution that the case must involve the mail or wire communication. And the mail can include not just dropping letters at the post office, but also FedEx, or any other private, overnight carrier. And wire communication can, of course, be the telephone, radio, television, and these days mostly email, websites, and even chats. And the reason there’s an element like this in this statute is because it gives the federal government jurisdiction.
If it was just one person talking to another person, face-to-face, and the person was committing a fraud, the federal government would have no jurisdiction over that because it was local. It had nothing to do with interstate commerce. So the federal government included this element so that they would have jurisdiction over this type of fraud offense.
Now the scheme doesn’t have to work. I mean, let’s say the telemarketer is making this false statement about the investment opportunity. And the person on the other end of the line decides I’m not going to send any money in. I’m not going to fall for it. They can still be prosecuted for mail or wire fraud because it’s that intent to deceive someone. It’s that intent to cheat someone that’s the focus of this type of case.
Now if someone is convicted for this offense the penalties can be pretty steep, up to 20 years. Unless it involves disaster relief money or financial institution, and then it can be up to 30 years in prison. The exact sentence will usually depend mostly on the amount of money involved in the case. And you would want to start calculating the potential sentence for a case like this under the Federal Sentencing Guidelines. And I do have a separate video on the Federal Sentencing Guidelines that you can probably find on this page. There should be a link to it.
Now, what are some defenses to a mail or wire fraud charge? Well, the most obvious one is there’s no false statement, what the telemarketer said on the phone was true, or was simply an exaggeration. I mean, let’s say the telemarketer’s talking about this investment. They don’t give specific numbers about their profits or returns. But they say, “This is one of the best companies I’ve ever seen in this particular industry. It’s a no-lose type of investment. It’s a once in a lifetime opportunity.” All of those statements may technically be false, but they’re really more exaggerations, more opinion. And for the most part, the government does not prosecute that type of false statement under the mail or wire fraud statute. The statement can also be a mistake. Let’s say the telemarketer’s on the phone. They give them this information about these annual returns. The information is false. It’s not true, but the telemarketer got that information from what he or she believed was a reliable source, either their employer or some other company, and the relied on that information in telling some else about it. They made a mistake. The information’s not true, but they didn’t know that. They weren’t intending to get on the phone and lie to someone. And of course, you can’t have a mail or wire fraud prosecution if there’s no scheme to defraud. If the purpose of the lie is not to try to take money or something of value from someone else.
And of course finally and this is the most successful defense that we’ve used because it’s the most common. The person being charged with the particular crime didn’t know about the scheme. I mean, let’s say the salesperson is on the phone, and they’re given a script by their employer, and they’re reading it and they have no reason to believe that the information they’re providing is false. Now you have to be careful because the courts do say that if, you know, turned a blind eye to it, or you make no investigation at all, that you had a reckless disregard for the truth you can still be prosecuted. But if you had no reason to believe the information was false, even if you gave it to someone else, and even if it wasn’t true, and even if they sent you money in exchange, you’re not guilty of mail or wire fraud.
So I hope this has been helpful. We went over the basics of this type of an offense, the possible defenses. But if you have any additional questions about this type of case, feel free to give us a call. We’ve been down this road many times, and we’ll do our best to help.
Wire fraud charges usually involve allegations that someone lied to cheat someone else out of money. The legal elements to a wire fraud offense are simple – a person makes false representations or promises, with a clear intent to defraud someone, by using wire communications. “Wire communications” include telephone, radio or TV broadcasts and, most commonly now, email or the internet.
Sometimes, wire fraud cases can be straightforward, such as a person who makes misrepresentations on the phone with someone in order to defraud them. Other times, however, wire communications are not used to complete the fraudulent offense, but rather to conceal the fraud or fool the alleged victim. As long as the use of wire communications is related to a fraudulent scheme, the government can bring wire fraud charges.
The government can even convict someone of wire fraud even if no one falls for the fraudulent scheme. What’s critical in these cases is the intent to defraud. The issue is not whether money was actually taken, but whether someone tried to take someone else’s money by making false promises or statements.
The penalties for wire fraud include a prison sentence of up to 20 years (30 years if the case involves federal disaster relief funds or a financial institution), restitution to any victims and a fine set by the judge.
Like wire fraud, a federal mail fraud case has the same basic elements – a person makes false representations or promises, with a clear intent to defraud someone – but they use the mail instead of the internet or some other type of wire communication. To convict a person charged with mail fraud, the government must prove that the person made materially false promises or representations with the clear intent to defraud another and that they used the mail to accomplish the fraud.
A person can be convicted of mail fraud even if they used the mail after their fraud is completed, as long as their use of the mail was related to their fraud. Using the mail to conceal the fraud or lull the victim into a false sense of security, for example, constitutes mail fraud. A person who sells a person a house based on fraudulent misrepresentations can be prosecuted for mail fraud if he later has the court send the buyer the deed in the mail.
A conviction for mail fraud can result in a 20 year sentence, restitution to any victims, and fine determined by the judge. If the fraud involves federal disaster relief funds or a financial institution, a conviction can result in up to 30 years in prison.
There are several valid defenses for those charged with mail or wire fraud. Some of the more common defenses include:
Of course, we have also been very effective in reducing the sentence our clients face in these cases by focusing on the calculation of the “loss amount” under the Federal Sentencing Guidelines. Sentencing in a fraud case is primarily determined by these Guidelines, and these Guidelines are complex and frequently being amended by Congress and the Sentencing Commission. We have saved our clients many years of prison time by creatively arguing for a favorable application of the Guidelines, and by presenting judges with positive character evidence that shows our client is more than just what crime he or she may have been charged with in their case.
Mail and wire fraud prosecutions are usually complex and involve a lot of financial information and other documents that require expert review and analysis. If you have been charged with mail or wire fraud, you need an experienced criminal attorney who will defend your legal rights.
Many wire and mail fraud cases also involve conspiracy charges. A wire fraud conspiracy charge, or a mail fraud conspiracy charge, requires the government to prove beyond a reasonable doubt that two or more people agreed to defraud someone by using the mail or by using some form of wire communication. The key issues in wire and mail fraud conspiracy cases are usually the existence of a common scheme or plan, and proof that the person being charged actually knew about the plan and agreed to join in it.
There does not have to be an agreement to specifically use the mail or wire communications as part of the fraudulent scheme. As long as it was foreseeable that one of the conspirators would use the mail or wire communications to further the group’s fraud, all of the co-conspirators can be prosecuted for the conspiracy.
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