UNDERSTANDING MAIL FRAUD AND WIRE FRAUD CHARGES

Federal mail fraud and wire fraud charges are similar but distinct charges that a person can face in North Carolina. Federal mail fraud and wire fraud charges are not mutually exclusive, so depending on the circumstances of the case, you could end up facing both mail fraud and wire fraud charges.  Although some people assume that mail fraud and wire fraud are white-collar crimes that do not carry penalties as steep as other offenses, both are felony offenses that can result in lengthy prison sentences and other consequences.

Mail fraud and wire fraud can take many different forms, and our experienced federal criminal defense lawyers want to provide you with the information you need to understand the distinctions between these similar offenses, as well as the associated penalties and potential defense strategies.

Elements of Federal Mail and Wire Fraud

Mail fraud is a federal crime, and according to the U.S. Department of Justice, it has two elements:

• “Having devised or intending to devise a scheme to defraud (or perform specific fraudulent acts)”; and
• “Use of the mail for the purpose of executing, or attempting to execute, the scheme (or specific fraudulent acts.”

Two key federal cases that define these required elements of mail fraud include Schmuck v. the United States (1989) and Pereira v. the United States (1954).  The elements of federal wire fraud are similar to the elements of federal mail fraud charges, which can include the following:

• “A scheme or artifice to defraud”; and
• “Use of interstate wire communication to facilitate that scheme.”

According to the U.S. Department of Justice, the “elements of wire fraud under Section 1343 directly parallel those of the mail fraud statute but require the use of an interstate telephone call or electronic communication made in furtherance of the scheme.”  There are a series of U.S. cases in federal circuit courts that have defined and refined the elements of federal wire fraud charges, including but not limited to the United States v. Briscoe (1995), United States v. Frey (1994), United States v. Hanson (1994), United States v. Cassiere (1993), and the United States v. Maxwell (1990).

Requirement of Intent

Both federal mail fraud and wire fraud charges require an intent to defraud.  You cannot be charged with federal wire fraud or mail fraud if you did not have an intent to defraud.  To be clear, a person’s actions do not have to actually defraud or succeed in defrauding another person or entity, but the intent to defraud must be present or else neither criminal offense can be charged.

What Makes Mail Fraud and Wire Fraud Different?

The key difference between mail fraud and wire fraud is the way in which the actions intended to defraud occur.

With mail fraud charges, a person uses the mail in an attempt to defraud or to accomplish fraud. You should know that a person can face mail fraud charges even if their use of the mail related to the scheme occurs after a successful defrauding of another person.  For example, if a person succeeds in defrauding another person—regardless of whether the mail is used—and then that person who succeeded in the defrauding uses the mail in an attempt to hide the fraud or provide false information to the defrauded person about the scheme, then mail fraud charges can still be brought.  In short, a person facing mail fraud charges must use the mail-in in some capacity related to the defrauding scheme.  To be clear, the term “mail” refers to the U.S. Postal Service.

With wire fraud charges, a person uses a wire, television, radio, or any other type of interstate communication device to send or receive material related to the defrauding scheme.  Wire fraud charges can include but are not limited to a telephone, email, text messaging, advertising on television, advertising on the radio, or even use of a fax machine (although fax usage is becoming less and less common in the 21st century).

When a person uses both the mail and a type of interstate communications device to transmit information in a defrauding scheme, that person can face both mail fraud and wire fraud charges. In such situations, a person can be charged with mail fraud and wire fraud because the charges are not mutually exclusive.

When Wire Fraud or Mail Fraud Involves Other Types of Fraud

While wire fraud and mail fraud are very similar to one another (and only really differ in the form of the communication or sharing of material designed to defraud), these charges can also be brought in conjunction with other types of federal fraud charges.

In particular, wire fraud often occurs in acts of tax fraud, insurance fraud, and bank fraud.  For example, a person might transmit fraudulent bank statements to potential investors or may transmit a fraudulent warranty to an insurance company or fraudulent income information in tax returns.  These acts of fraud often occur through email communication, and they can also occur over the telephone or through the use of a fax machine.  At the same time, these types of fraud may also occur through the mail.  For instance, to send fraudulent bank statements to investors or to send a fraudulent warranty to an insurance company or materials related to taxation, a person might send hard copies of these materials through the U.S. mail.

In some cases, a person might be accused of engaging in tax fraud, insurance fraud, or bank fraud through wire fraud and mail fraud.  In such circumstances, a person may face multiple types of federal fraud charges.

Conspiracy to Commit Mail Fraud or Wire Fraud

In addition to federal mail fraud and wire fraud charges that we have discussed above, you should know that you can also face charges for conspiracy to violate the mail fraud or wire fraud statute.  According to the DOJ, “where a scheme and artifice to defraud is shared by two or more, it becomes a conspiracy to defraud.”  The essential elements of conspiracy to commit mail fraud or conspiracy to commit wire fraud include the following:

• “An agreement between two or more persons”;
• Those two or more persons agree “to commit mail fraud or wire fraud”; and
• There is “an overt act committed by one of the conspirators in furtherance of the conspiracy.”

Just as in federal mail fraud or wire fraud charges, intent must be present.  There cannot be a conspiracy to commit mail fraud or wire fraud if there is no intent.  You should also know that, similar to other types of conspiracy charges, the DOJ underscores that “it is sufficient that the defendant knowingly joined the conspiracy in which wire fraud or mail fraud was a foreseeable act in furtherance of the conspiracy” in order for that defendant to face charges.  What this means is that a defendant does not have to perform one of the fraudulent acts himself or herself in order to face charges for conspiracy to commit mail fraud or wire fraud.

Penalties for Mail Fraud and Wire Fraud

If you are convicted of mail fraud, you can receive a sentence of up to 20 years of imprisonment in addition to monetary fines.  If you are convicted of wire fraud, the penalties are the same, meaning you can receive a sentence of up to 20 years of imprisonment and monetary fines.

When mail fraud or wire fraud affects either a financial institution (such as a bank) or involves a federally declared disaster, the penalties are much steeper.  In these cases, a conviction can result in a monetary fine of $1,000,000 and 30 years in prison.

Examples of financial institutions include but are not limited to commercial banks, credit unions, internet banks, savings and loan companies, investment companies, mortgage companies, insurance companies, and brokerage firms.  Any time an act of mail fraud or wire fraud affects one of these financial institutions, additional penalties may apply.  When it comes to mail fraud or wire fraud in connection with a federally declared disaster, examples of the types of acts that may involve additional penalties include but are not limited to submitting a false application for federal emergency assistance money, submitting fraudulent reports of damage in order to receive an insurance payout, or taking a federal disaster check from a person’s mailbox.  Federally declared disasters can include, for instance, areas affected by hurricanes, forest and wildfires, flash flooding, and tornadoes.

Penalties for conspiracy convictions are similar to the penalties outlined above, and you should know that the penalties apply to each separate charge.  As such, you could end up receiving a sentence in which the separate terms of imprisonment do not run concurrently but rather are back-to-back, resulting in the effect of a life sentence in some cases.

Common Examples of Mail Fraud and Wire Fraud

We noted some examples of mail fraud or wire fraud cases above, but we want to provide you with more information about the wide range of acts that ultimately can result in federal mail fraud or wire fraud charges.  Examples of mail fraud charges might include but certainly are not limited to materials sent through the mail that do the following:

• Seek donations for a fraudulent charity;
• Ask for investors in a Ponzi scheme;
• Inform a person that they owe taxes and seek the alleged tax payment even when the person does not owe taxes;
• Tells a person that they have inherited a sum of money and provides steps for allegedly claiming the money that involves a transfer of funds; or
• Offering a job for pay to a person is not an actual job offer but is designed to obtain free services fraudulently.

Mail fraud involves materials sent through the U.S. Postal Service, while wire fraud involves communication through electronic or wire-based means, but otherwise, the offenses are extremely similar.  Accordingly, all of the examples listed above may also be examples of wire fraud if they occur through email communication, telephone calls, text messages, or similar means.  In addition to those examples listed above, additional examples of wire fraud may include but are not limited to:

• Sending mass emails asking for money to be deposited into an account based on a fraudulent personal or familial loss, including fraudulent personal narratives about the need for asylum based on family or national tragedy;
• Taking out and using a credit card in another person’s name; or
• Making a fraudulent charity website and seeking donations.

Are the Defenses to Federal Mail Fraud and Wire Fraud Charges Similar?

Defenses to mail fraud and wire fraud can be similar or the same based on the specific case and the facts surrounding a person’s charges.  Examples of potential defenses to mail fraud or wire fraud may include but are not limited to:

• There was no intent to defraud;
• You did not know that you were getting involved in a fraud scheme;
• Mailings, emails, or other forms of communication that have been cited in the charges did not actually aid in the fraud scheme; or
• The federal government obtained the evidence against you through a Fourth Amendment violation or by another unlawful method.

Contact an Experienced Fraud Crimes Defense Attorney in North Carolina

Anytime you are facing federal fraud charges, it is critical to have an experienced mail fraud defense lawyer or wire fraud defense attorney in North Carolina on your side.  To be clear, you can face federal charges in North Carolina even if you never left the state, and in fact, most mail fraud and wire fraud charges involve allegations in which the defendant did not actually leave the state but used the U.S. mail or engaged in interstate commerce through some form of electronic communication.

Do not hesitate to get in touch with our federal fraud defense attorneys for more information about developing a defense strategy that is tailored to the facts of your case. Contact The Marcilliat & Mills PLLC today for more information about the service we provide.