Mail and Wire Fraud Charges
The United States government investigates and punishes fraud at many levels, including the means used to commit fraud, the kind of party the defendant attempted to defraud, and more. On of the broadest ways the federal government targets fraud cases is by going after fraudulent information exchange that happens over “wire”, which is called wire fraud, or by interstate mail carriers. Wire fraud essentially covers using a phone, computer, the internet, or any electronic device that can send information across state lines – for the purpose of defrauding someone, while mail fraud covers all mail.
Both mail and wire fraud are quite broad and can encompass a lot of behavior and it is usually linked to other federal crimes. As with most federal crimes, the penalties can be steep including potential for high fines and long terms of imprisonment. Federal crimes can also be more challenging to defend and the federal prosecutors can put a lot more time and resources into investigating crimes than most state prosecutors. Additionally, while these crimes are most often handled by the federal government as they can take place across states, the state of North Carolina has similar laws that you can be charged with at the same time. If you are facing wire fraud or mail fraud investigation or charges, it is necessary that you contact an experienced federal white-collar defense attorney immediately.
Elements of Mail and Wire Fraud Charges
While you may hear of mail and wire fraud charges against large-scale scams and fraudulent business schemes, there are many complicated technical aspects to this crime that can lead to unsuspecting individuals being implicated in a crime. There are some key elements to wire fraud cases to be aware of:
Intention to Deceive
A person commits fraud when they willfully and intentionally deceive others, typically for personal gain. Federal prosecutors have the burden of proof to show that the defendant acted with the intent to defraud somebody of something of value. The thing of value could be their money, property, personal information, surrendering of their rights, and more.
Since nobody can know another person’s intent with absolute certainty, the federal government relies on evidence that reasonably suggests the defendant was knowingly engaging in fraudulent activity. This generally means a scheme was involved, such that prosecution has evidence of a plan linked to fraudulent information, or the information exchanged can be reasonably assumed to be deceptive for the purpose to defraud somebody.
For example, telemarketing fraud is a common form of wire fraud, where scammers call people and lure them with the possibility of a prize in exchange for sensitive information, like a social security number.
Interstate Communication Devices and Mail Carriers
For wire fraud, an “interstate communications device” may be a confusing term, but it essentially means any electronic communications device that can send, receive, or otherwise transmit messages across state lines. This includes phones, fax machines, e-mails, radio, television, or any form of internet communication. It does not cover fraud sent by interstate mail, which falls under the separate but similar crime of mail fraud.
Mail fraud may be a bit simpler in scope, as it refers to only fraudulent mail transfer. It is important to note that the crime is not limited to using the U.S Postal Service (USPS) to commit fraud. If you commit fraud by sending mail using a private interstate carrier, you can be charged with mail fraud.
Conspiracy and Attempt are Treated the Same as Committing Fraud
As with many other federal crimes, a conviction of mail or wire fraud does not require a victim. If the federal government has enough evidence that the defendant intended to devise a fraud scheme (conspiracy) or did devise a scheme but had successfully executed it (attempt), they can push for a conviction with the same degree of penalties.
Essentially, these charges cannot be defended by simply arguing that nobody got hurt if the defendant planned to act or acted in a way that would have caused harm to others.
Penalties for Mail and Wire Fraud
For mail fraud, the penalties are outline in the mail fraud statute, U.S.C § 1341. A conviction is punished by a fine and imprisonment of up to 20 years. In the case where the crime involves defrauding benefits connected to a presidentially declared major disaster or emergency, or affects a financial institution, the penalties increase to include fines up to $1 million and imprisonment of up to 30 years.
Wire fraud has a similar penalty structure, found under the statute, U.S.C § 1343. Most convictions of wire fraud include a fine up to $250,000 for individuals or up to $500,000 for organizations and an imprisonment of up to 20 years. Like with mail fraud, if it is related to a presidentially declared disaster or emergency, or if it involves a financial institution, the penalties increase to a fine up to $1 million and imprisonment up to 30 years.
As stated earlier, each act of wire fraud is a separate count, meaning that you can be charged for every email or phone call separately. For example, three fraudulent phone calls can net a maximum fine of $750,000 and up to 60 years in prison.
Related and Additional Federal Crimes
Mail and wire fraud are treated as catch-all crimes, meaning that they are intentionally broad. They are useful to federal prosecutors who may strongly believe a defendant has committed other fraud crimes but may have difficulty proving many separate underlying crimes. For example, a federal prosecutor may be investigating somebody for securities or bank fraud but could not trace the evidence flawlessly enough to secure a conviction, so they charged the defendant with mail or wire fraud as well.
This makes mail and wire fraud more challenging to defend because they give prosecutors a broad crime to charge against people without having to make a compromise. Prosecution can still push charges for all the related crimes along with mail or wire fraud, with the aim that something will stick. Additionally, every act of wire or fail fraud is a separate offense. This means that if somebody made 5 telemarketing scam phone calls, they can be charged with 5 acts of wire fraud.
The types of federal crimes that could be tied to a mail or wire fraud case include, but are not limited to:
- Computer Hacking: “Hacking”, or using a computer to obtain unauthorized access to a network, computer system, computer device or digital information is a federal crime under 18 U.S.C. § 1030. If you are accused or hacking a computer network for the purpose of committing fraud, such as imitating a trusted agency, you can be guilty of wire fraud as well.
- Identity Theft: Using stolen or falsely produced identity documents, or otherwise misrepresenting your identity to defraud a United States institution, is a federal crime under 18 U.S.C. § 1028. Communication scams that are used to commit identity theft, such as phone calls or mail asking for social security numbers, can be hit with mail or wire fraud charges along with identity theft.
Related Crimes in North Carolina
While most mail and wire fraud related crimes are handled by the federal government as they typically take place across states or are involve interstate organizations, North Carolina does have state laws on fraud. In specific relation to wire fraud, North Carolina has its own statute on computer fraud, under N.C.G.S § 14-453. While most of this statute covers crimes involving unauthorized access to computers, one of its first sections on “Accessing computers” encompasses using any computer for a scheme to defraud others.
The penalty upon conviction is a class G felony if the scheme results in damages of more than $1,000, or the property or services obtained are worth more than $1,000. If the damages or fraudulently obtained value is less than $1,000, the crime is punished as a class 1 misdemeanor.
Defending Against Mail and Wire Fraud Charges
Like most fraud crimes, it is not enough for prosecution to show that you presented false information, they must show that you did so knowingly. While this may seem like an easy area of defense, you will need more than to simply testify that you did not mean to commit fraud, as prosecution will find and present any evidence that suggests you were aware of your actions. An experienced attorney will review the details of the case and identify evidence you can present that shows a lack of knowingly committing fraud. Every case is unique and needs thorough review to determine what defense strategy would be the most effective, but below are some ways these charges can be defended against:
Acting in Good Faith
As fraud is about intent to deceive others for one’s own gain, evidence that you acted in good faith will help in defending against these charges. A defense of good faith can be support by evidence that shows:
- You did not have any financial or personal motive to defraud others.
- You were acting within the requirements law to the best of your knowledge.
- If your behavior caused damages, you took steps to rectify the loss the victim’s suffered once you learned of the consequences.
- You sought or obtained legal advice before engaging in the activity, which did not warn you against it.
Engaged in Salesperson “Puffery”
Puffery refers to exaggeration, opinions or flattery used to persuade others. Often this strategy by salespeople can seem deceptive and may lead to accusations of fraud, but there is a legal difference. Generally, fraud needs to involve a claim that can be firmly proven to be false, has reasonable potential to deceive others, and the person making the claim knew the claim was false.
For example, statements such as “we are the best” are a matter of opinion and fall under puffery. The marketing slogan “Red Bull Gives You Wings” is not fraudulent false advertising, because it is not intended to convince you that the product can give you wings nor would a reasonable person believe the claim is true. An example of fraud would be advertising the sales of expensive name-brand goods at your store by mail or electronic communication, but the actual products are counterfeits with fake labels.
In cases where a business owner or salesperson is facing investigation for fraud, puffery is a possible defense if the case is more like the first two examples given and not the last.
Committed Fraud Under Duress
This defense is tricky because it entails admitting to committing fraud, but under unlawful pressure from another person or entity. If you firmly believe this was the reason you committed mail or wire fraud, you will need an experienced attorney who knows how to frame this kind of defense. Duress does not entail minor cases of pressure, such as a partner, family or friend asking you to help them with their fraud scheme. Cases where duress can be used as a defense typically involve violent threats and extreme coercion, such as a third party threatening the safety or life of you or family members unless you commit wire fraud on their behalf. If your lawyer determines that this defense is viable in your case, it does serve as an absolute defense that can clear you from any liability.
Request a Consultation with Tarlton | Polk Bank Fraud Attorneys
Our lawyers have successfully represented clients in fraud cases at state and federal levels and know how to carefully structure a defense based on the facts of the case. Most importantly, we are exceptionally skilled at taking these cases to trial, as we know the tactics used white collar criminal prosecution that often push the defendant into a plea-bargaining position before a trial begins. If you would like to learn more about how we an help, or request a consultation with us, then leave us a message or call us today.