Mail and Wire Fraud Law.
Mail and Wire Fraud are federal crimes. These laws make it a felony to con or scam people out of money, property, or both. Notably, the con or scam becomes a federal offense if the person uses the mail, radio, television, or other wire to promote the fraud.
Mail and Wire Fraud Examples.
Examples include:
- File a false auto claim;
- Sell used cars with rolled-back odometers;
- Run a “Ponzi” scheme;
- Submit a false mortgage application;
- Conduct fraudulent real-estate transactions;
- Engage in money-laundering activities;
- Using social media to con or scam another person out of money;
- Using a computer to scam victims into giving you their credit card or banking account numbers;
- Commit a Racketeering (RICO) violation; or
- Engage in traditional bribery or kickback schemes.
In short, these are just some of the many ways to commit these crimes.
Mail Fraud Definition.
18 USC § 1341 makes it a crime for anyone to use the mails, or any private or commercial interstate carrier, in carrying out a scheme to defraud. Of major interest, mail fraud has 4 key elements. They are knowledge, specific intent, a plan to con or scam another person, and using the mail to run the con or scam.
How to prove an 18 USC § 1341 crime.
The table below is the definition judges give to juries in criminal cases. Jurors then use this definition to see if the person is guilty or innocent of this crime. To amplify, if prosecutors can prove each of these facts to a jury, then the person is guilty of an 18 USC § 1341 crime.
Federal Mail Fraud Definition
| No. | Federal Mail Fraud Elements |
|---|---|
| 1. | The defendant knowingly devised or intended to devise a scheme to defraud; |
| 2. | The scheme to defraud employed false material representations, false pretenses, or false material promises; |
| 3. | The defendant mailed something, caused something to be sent or delivered through the United States Postal Service (or private commercial interstate carrier) for the purpose of executing such scheme or attempting so to do; and |
| 4. | The defendant acted with specific intent to defraud. |
In summary, the essence of mail fraud is the con or scam. And any mailing that is linked to a key part of the scam will make it a federal crime. This is true even if the information mailed is not false. Finally, each separate use of the mails (or wires) to push the con is a separate crime.
Wire Fraud Definition.
Wire fraud is similar to mail fraud. 18 USC § 1343 makes it a crime to con or scam people using the radio, television, or wire. Similar to mail fraud, wire fraud has four key elements. They are knowledge, specific intent, a con or scam, and using a wire to promote the scam.
How to prove an 18 USC § 1343 crime.
The table below lists the facts that show or prove wire fraud. Prosecutors must prove each of these facts beyond a reasonable doubt.
Federal Wire Fraud Statute
| No. | Elements of the Federal Wire Fraud Statute. |
|---|---|
| 1. | The defendant knowingly devised or intended to devise any scheme to defraud; |
| 2. | The scheme to defraud employed false misrepresentations, false material pretenses, or false material promises; |
| 3. | The defendant transmitted or caused to be transmitted by way of wire (including radio, television, or foreign wire) communications in interstate (or foreign) commerce, any writings (including signs, pictures, or sound) for the purpose of executing such scheme; and |
| 4. | The defendant acted with specific intent to defraud. |
Mail Fraud vs. Wire Fraud.
The elements of these crimes are similar and courts apply the same analysis to both crimes. Further, mail and wire fraud are both specific intent crimes. In other words, the government must prove that a person knew the scheme involved false representations.
However, these crimes differ in both obvious and subtle ways. One obvious difference is how a person breaks these laws. Mail fraud requires the use of the mail. This can be the postal service or a private carrier like UPS or FedEx. On the other hand, wire fraud requires the use of a wire to commit the offense.
Another major difference is the government must prove an interstate connection in a wire fraud case. In contrast, mail fraud does not require proof of an interstate connection. This is because Congress passed these laws using different constitutional powers.
Congress passed the wire fraud statute using its Commerce Clause powers. And it passed the mail fraud statute using its authority under Article I, Section 8, Clause 7 of the United States Constitution. See Matthew Angelo, Justin Loscalzo & Ryan Turner, Mail and Wire Fraud, 57 Am. Crim. L. Rev. 1023, 2015 (2020) (discussing similarities and differences between the mail and wire fraud.)
Honest-Services Fraud Definition.
Honest-services fraud is the bribery and kickback law. Prosecutors use this law to go after shady politicians and corporations. Specifically, the definition of “scheme or artifice to defraud” used in both mail and wire fraud cases includes depriving another person of “the intangible right to honest services.” 18 USC § 1346.
Example of honest-services fraud.
The Supreme Court provided a useful example of honest-services fraud:
[I]f a city mayor (the offender) accepted a bribe from a third party in exchange for awarding that party a city contract, yet the contract terms were the same as any that could have been negotiated at arm’s length, the city (the betrayed party) would suffer no tangible loss. (Citations omitted.) Even if the scheme occasioned a money or property gain for the betrayed party, courts reasoned, actionable harm lay in the denial of that party’s right to the offender’s honest services.”
Skilling, 561 U.S. at 400.
In short, these laws allow the government to prosecute defendants and politicians for bribery and kickback schemes. This is true even if the scam benefited the victims.
Federal Mail and Wire Fraud Penalties.
Both crimes share identical penalties:
| Statute | Punishment Range | Fine Range | Possible Asset Forfeiture | Statute of Limitations |
|---|---|---|---|---|
| Mail Fraud Penalty | 0-20 years or 0-30 years- If fraud affects a financial institution. | 0-$250,000.00 or 0-$1,000,000.00- If fraud affects a financial institution. | Yes. | 5 years or 10 years- If fraud affects a financial institution. |
| Wire Fraud Penalty | 0-20 years or 0-30 years- If fraud affects a financial institution. | 0-$250,000.00 or 0-$1,000,000.00- If fraud affects a financial institution. | Yes. | 5 years or 10 years- If fraud affects a financial institution. |
Defenses.
A. Puffing and Good-Faith Defenses.
There are two common ways to defend against these types of white-collar crimes. First, challenge one or more of the elements of the crime. Notably, “good faith” is a classic defense that works for both crimes:
In mail fraud cases often the only available defense is that of good faith. In the typical case, the accused is not in the position usually to refute that the representations made were false. The accused can then only defend on the ground that the representations were made in good faith without the intent to defraud. Courts have come to recognize that in our high pressure economy, puffing of merchandise and services to the legal limit is commonplace. Consequently, a person accused of fraudulent representations to prospective customers must not be unduly restricted in asserting what may be his sole defense, good faith. Intent to defraud is a jury question and a liberal policy as to the admission of evidence tending to prove good or bad faith should be followed.
United States v. Diamond, 430 F.2d 688, 692 (5th Cir. 1970) (Emphasis added.).
B. Example of the puffing defense.
Here’s a good example of the puffing defense. Let’s say you are selling a smartphone. You can say the phone has the best camera on the market. It runs the latest apps. And for the price you are selling this smartphone, the buyer is getting a steal. In other words, this is a hard sell. That is, whether your statements are true, is at least debatable.
However, if you know the phone does not have a camera. Or that it does not have the memory to run any apps, then you are no longer puffing. You are making statements you know are false. And if you use the mail or wire during the scam, then you maybe in trouble.
C. No link between the scam and the use of the mail or wire.
Additionally, a person can challenge the link between the scam and the use of mails (or wires) in furtherance of that scam. If there is no link between the two, then a person should not be convicted of either crime. In effect, you are saying the con or scam had nothing to do with using the mail or a wire.
D. Statute of Limitations Defense.
Finally, a person accused of either of these crimes should also raise a statute-of-limitations defense if the indictment is filed five years after the crime was committed. Similarly, raise a statute-of-limitations defense if the indictment was filed 10 years after the crime was committed and the scam involved a bank.
Further, this defense does not say you are innocent. It only says that prosecutors waited too long to bring a case. If you can show that more than five years passed since the scam was completed, then this can stop the government for going after you for mail or wire fraud.
San Antonio Criminal Defense.
The mail and wire fraud laws are almost the same crime. To illustrate, they both ban the same types of cons and scams. In addition, these laws carry similar penalties. Likewise, the case law creates similar defenses for both types of crimes. For this reason, anyone charged with these crimes should carefully review the case law to see what defenses they can raise at trial.
White-Collar Criminal Defense. 210-733-7575.
Genaro Cortez is a white-collar criminal defense attorney in San Antonio, Texas. He’s represented clients charged with white collar crimes in South Texas since 2003. Call today for a free case evaluation. 210-733-7575.