Fraud is a broad topic that can take many different forms. The most common charges involving fraud brought in indictments against someone in the federal system are wire fraud, bank fraud, credit card fraud, mail fraud, health care fraud, and identity theft cases. Each of those usually includes a component of either conspiracy charges or money-laundering charges, as well.
What Exactly Is Wire Fraud?
Wire fraud basically involves any kind of scam or scheme where you use false information or present things in a false light to induce someone to send you money. You’re probably familiar with the type of scam calls where you pick up your phone from a number you don’t know and hear: “This is the Social Security Administration, and your Social Security number has been cancelled because you are part of a criminal investigation. If you want to fix this right now, you have to send $400 to this account via Western Union.” That’s a perfect example of a wire fraud using electronic means to deliver funds. It employs false information (your social security number has been cancelled) and induces you to send money through electronic means to prevent something bad from happening. We see this scam using Western Union, direct wires from one bank to another, or even apps like Cash App, Venmo, or PayPal.
Any kind of electronic means of sending money will turn a fraud case into a wire fraud case. Additionally, if money crosses state or country borders, that also becomes a wire fraud case because it now involves the federal government. An example of a wire fraud case that used lies to induce payment and crossed international lines was the Nigerian Prince scam from the early 2000s. The emails would say, “I’m a deposed Nigerian Prince, and I’ve got a billion dollars. I’m willing to give you a couple million, but I just need your help to move it around from some bank.” The scam wouldn’t ask you for money at first, but then, if you continued going along with the process, there would be bank fees and requests to send money. This is textbook wire fraud.
What Elements Must the Prosecution Prove in a Wire Fraud Case?
There are four main elements of a wire fraud case that the prosecution must prove: one, the defendant created or participated in a scheme to defraud another out of money or property; two, the defendant did this with the intent to defraud; three, it was reasonably foreseeable that the defendant would use wire communication; and finally, the defendant did, in fact, use interstate wire communications. See 18 U.S. Code § 1343 (you can link to either one or both of these sites 18 U.S. Code § 1343.Fraud by wire, radio, or television or 941. 18 U.S.C. 1343—ELEMENTS OF WIRE FRAUD
Let’s look at the first element: the defendant created or participated in a scheme. This can happen with just one person, but most of the time, these schemes involve multiple people organizing a plan to defraud someone, from pretending to be an FBI agent on the phone to sending an email to get someone’s money.
The second element, acting with the intent to defraud, is one of the most important because it requires the government to show that you intended to defraud someone, meaning you knew that what you were doing was fraudulent and illegal. I routinely have people call me when they think they’ve been duped into being part of a scheme. For example, I have one client who was looking for a part-time job online and found a post on Indeed.com for an area manager for a furniture company. The company told the client to open up another company and a bank account so that he could act as the middleman: clients would send him money for furniture, and he would forward that money to the company in China or India, in exchange for a three percent commission fee. Many times, clients such as this one, who are not savvy about financial transactions, miss the red flags and end up participating in the scheme for a couple of weeks to a month before the bank catches on or someone reports stollen money. The client’s first indication that something is wrong might not come until the bank has frozen their account and an investigator is calling them with questions.
If this were to happen to you and you stopped transferring money and got an attorney involved once you realized something was wrong, you would probably be safe. Why? Because you didn’t have the intent to defraud anybody. You thought you were doing a legitimate job. However, if you continued to work after your account has been frozen and you’ve been contacted by an investigator, then you might be seen as knowingly participating in something illegal and could have a big problem.
When we’re defending a fraud case, intent is the most important element. It’s hard to prove that someone knew what they were doing was illegal because they could have been duped. The final two elements, on the other hand, are easier for the government to prove; if you used a cellphone, email, bank transfer, etc., it would be easy for them to show you met the third and fourth elements by involving wire communication. Very few people defraud others face to face with only cash payments. Therefore, we defend these fraud cases mostly by exploring your involvement in the creation of the scheme and your intent.
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