In Depth Look: Federal Mail Fraud Law

Posted by & filed under Crimes Defined, Federal Crimes.

 

What is Federal Mail Fraud?

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The mail and wire fraud statutes are essentially the same, except for the method associated with the offense – the mail in the case of mail fraud and wire communication in the case of wire fraud. As a consequence, the interpretation of one is ordinarily considered to apply to the other. The two terms have been used interchangeably in this article.

 

The federal statute for mail fraud is found at 18 USC § 1342. The two elements of Mail Fraud are (1) having devised or intending to devise a scheme to defraud (or to perform specified fraudulent acts), and (2) use of the mail for the purpose of executing, or attempting to execute, the scheme (or specified fraudulent acts).

The statute explains mail fraud by fictitious name or address as:

Conducting, promoting, or carrying on by means of the United States Postal Service, any scheme, fraud, artifice or any other unlawful business, uses or assumes, or requests to be addressed by, any fictitious, false, or assumed title, name, or address or name other than his own proper name, or takes or receives from any post office or authorized depository of mail matter, any letter, postal card, package, or other mail matter addressed to any such fictitious, false, or assumed title, name, or address, or name other than his own proper name.

 

Scheme to Defraud

The mail fraud and wire fraud statutes do not define the terms “scheme” or “artifice” and the courts have traditionally been reluctant to offer definitions of either term except in the broadest and most general, nontechnical terms. The words ‘to defraud’ in the mail fraud statute have the common understanding of doing wrong to another’s property rights by dishonest methods or schemes and usually signify the deprivation of something of value by trick or deception.

 

No Victim is Required

It is the scheme or intent to defraud and not actual fraud that is required. No victim or actual loss is required. The Success of the scheme and loss by a defrauded person are not essential elements of the crime.

“To hold that actual loss to victim is required “would lead to the illogical result that the legality of a defendant’s conduct would depend on his fortuitous choice of a gullible victim.” quoted in Maxwell, 920 F.2d at 1036.

 

Proof of a Scheme

To sustain a conviction the government must prove the existence of a scheme; it is not required, however, to prove all details or all instances of the alleged illicit conduct. The government need only prove that the scheme to defraud existed. It is, however, required to prove beyond a reasonable doubt that the defendant willfully and knowingly participated in a scheme or artifice to defraud. The defendant need not have performed every key act of the scheme herself.

 

Includes Tangible and Intangible Property Rights

Mail fraud may include a scheme or artifice to deprive another of intangible property rights, such as honest services, as well as tangible property rights. To determine whether a particular interest is considered a property right for purposes of fraud statutes, we must look at whether the law traditionally has recognized and enforced it as a property right.

 

Use of Mailings and Wires

The offense of mail fraud demands proof of a scheme to defraud which, at some point, is intentionally furthered by the use of the mails. It is not necessary that the scheme contemplate the use of the mails as an essential element. It is sufficient for the mailing to be incident to an essential part of the scheme..or just a step in the scheme. Moreover, it is not necessary to show that the defendant directly participated in the transmission or actually mailed something himself, proof that the defendant caused something to be mailed is sufficient. This may be proven by circumstantial evidence.

The gist of the offense of mail fraud is the use of mailings by someone to carry out some essential element of the fraudulent scheme or artifice. Accordingly, each use of the mails (in the case of mail fraud) and each separate wire communication (in the case of wire fraud) constitutes a separate offense, i.e., each mailing and/or wire transmission can constitute a separate count in the indictment.

 

Private and Commercial Carriers

To combat telemarketing fraud, Congress amended the mail fraud statute to broaden its application to include private or commercial interstate carriers in addition to the United States Postal Service. The large delivery service companies, such as Federal Express and United Parcel Service, are clearly interstate carriers, but small entities, such as local messenger services, are not as easily categorized.

 

Interstate or Foreign Commerce

The statute requires a transmission in interstate or foreign commerce, so an intrastate transmission of a mailing or electronic communication is not mail fraud.

 

Noteworthy:

The mail fraud and wire fraud statutes are becoming important tools in the prosecutions of a) RICO violations, b) money laundering, c) financial institution fraud, and d) telemarketing fraud. Mail and wire fraud violations that support prosecutions in these areas can result in more severe sanctions and can form the basis for civil or criminal forfeiture.

 

What is the penalty for Federal Mail Fraud?

If the fraud involves a fictitious name or address, pay a fine or imprisoned not more than 5 years, or both.

A fine or imprisonment of not more than 20 years, or both.

If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency, or affects a financial institution.

Fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

 

Legal Assistance

If you or a loved one has been indicted for mail fraud or any other federal white collar crime, contact our law firm for a consultation. Let us start helping you today!

 

 

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