Federal Law for Wire Fraud: Electronic Communications, Radio, or Television — 18 USC § 1343
The wire and mail 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 wire fraud reads as follows:
Devising or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice.
The four essential elements of the crime of wire fraud are: (1) that the defendant voluntarily and intentionally devised or participated in a scheme to defraud another out of money; (2) that the defendant did so with the intent to defraud; (3) that it was reasonably foreseeable that interstate wire communications would be used; and (4) that interstate wire communications were in fact used.
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 wire fraud demands proof of a scheme to defraud which, at some point, is intentionally furthered by the use of the electronic communications. It is not necessary that the scheme contemplate the use of the mails as an essential element. It is sufficient for the commnication 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 transmitted is sufficient. This may be proven by circumstantial evidence.
The gist of the offense of wire fraud is the use of electronic communications by someone to carry out some essential element of the fraudulent scheme or artifice. Accordingly, each use of the mailings (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.
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.
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.
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