Mail and Wire Fraud Cases

As mentioned elsewhere, the past few years have seen an explosion of federal criminal prosecutions for fraud and other types of economic crimes. Federal prosecutors have brought lots of cases involving allegations of accounting fraud, bank fraud, false or fraudulent statements in connection with a bankruptcy proceeding, fraudulent acts while using a computer, credit card fraud, forgery, defrauding a government agency, health care fraud, Medicare fraud, mortgage fraud, public corruption (or honest services fraud), securities fraud, and tax fraud. In many of these cases, the main charge is an allegation that the Defendant committed “mail fraud”, in violation of title 18 United States Code, Section 1341, or “wire fraud”, in violation of title 18 United States Code, Section 1343. These are the workhorses of federal fraud statutes, and we see these in just about every federal criminal case we do that involves economic issues.

The mail fraud and wire fraud laws are basically identical, with one crucial difference. Use of the mails is needed for the first type, while for the second kind there must be some kind of “wire”, or electronic transfer of information. An easy way to remember the difference is that when someone mails a letter in furtherance of a fraud scheme, that could be mail fraud, while when that same person induces the victim to make an electronic bank transfer, that likely is wire fraud. Other than this difference, the discussion below applies equally to both mail and wire fraud cases.

The mail and wire fraud laws make it a federal crime to devise a scheme to defraud another out of property, when mail (or wire) communications are used in furtherance of the scheme. One of the key words in these statutes is “property”. Federal prosecutors are very creative, and often argue that things with little economic value fall within the meaning of the word “property.” In 1988, the United States Congress expanded the meaning of “property” so that a mail or wire fraud prosecution can include schemes to defraud another out of honest services. Again, creative lawyering by prosecutors and skilled federal criminal defense lawyers led to a case before the United States Supreme Court which in 2010 ruled that the “honest services” part of the word “property” only applies when the scheme involves a bribery or a kick back.

In order to convict a federal criminal Defendant facing a mail or wire fraud prosecution, the government must prove five basic factors beyond a reasonable doubt. First they must prove that the Defendant used the mail (or wires). Second the use of the mail (or wires) had to further a scheme to defraud. Next, there must be proof that part of such a scheme involved a ”material” deception or falsehood or omission. Fourth, the prosecutor needs to show that the Defendant acted with intent. And, lastly, there must be evidence that the Defendant’s intent was to deprive another person out of “property” or “honest services”

Mail and wire fraud are serious offenses. Defendants convicted of these crimes face the prospect of imprisonment for not more than 20 years, a fine of not more than $250,000 (not more than $500,000 for organizations), an order to pay victim restitution, and the confiscation of any property realized from the offense.

Mail and wire fraud also are interrelated to other federal criminal laws. The same conduct that potentially violates the mail or wire fraud laws could also constitute a violation of one or more of these other federal crimes. For example, if there is proof that a Defendant engaged in mail or wire communications that were part of a bribe or kickback, federal prosecutors can bring separate charges if the recipient of the bribe or kickback was a public official, if the recipient was involved in a federal program, if the Defendant acted “under color of official right”, or if the case involved one of the federal medical benefit programs such as Medicare or Medicaid. Additionally, federal prosecutors sometimes argue that mail or wire fraud is what we call a “predicate offense” under the money laundering or racketeering statutes, which means they can pile these additional crimes on top of the mail or wire fraud allegations to make the case even more challenging to defend.

As mentioned above, one factor that a prosecutor needs to prove in any mail or wire fraud case is a material deception, falsehood or omission. In other words, not just any false statement turns into a federal mail or wire fraud crime. The falsity must be “material”, which basically means it was important to the person or entity to whom it was directed.

In just about every federal mail or wire fraud case we handle, the question of the Defendant’s “intent” is crucial. A Defendant who intends to do something, but who does not intend to defraud is not guilty. One of the hardest pieces of advice we give to clients facing mail and wire fraud prosecutions is whether they should testify in their own defense, in order to have them directly tell the jury that he or she did not intend to defraud anyone. There is no rule for when the Defendant should or should not testify, because every case is different.

This review of the federal mail and wire fraud law makes clear that such cases should be handled by specialists; attorneys who regularly handle federal criminal cases. At Kish & Lietz, we have focused on federal criminal defense for our entire legal careers. We have the experience, the talent, and the know-how to handle these challenging matters. If you or a loved one is investigated for or accused of mail or wire fraud offenses, we would be glad to speak with you. Feel free to call (404) 588-3991, or contact us online.