One of the most common federal criminal charges is wire fraud. The "wire" is any form of telecommunication. Forms of telecommunication include phone, fax, and text messages. They also include radio, television, and internet messages. They may also include social media messages, emails, or any other form of airwave. It's possible they can even include cable communication. "Fraud" involves the use of intentional deception for monetary or personal gain.
Like mail, telecommunications is an instrument of interstate commerce. That means the crime of wire fraud can be charged at the federal level. It is typically investigated by the Federal Bureau of Investigation (FBI). It is also usually investigated by the Federal Trade Commission (FTC). But state laws can also result in criminal charges.
This article explains the crime of wire fraud and provides examples of this state and federal crime. Different from mail fraud, wire fraud is covered in this article as a legal concept. These differ in very basic ways. Mail fraud, for example, involves a similar kind of fraud but only by use of the United States postal service. In this article, we cover examples of wire fraud.
Wire fraud can involve bank fraud insofar as wire fraud involves the misuse or illegal use of a financial institution. Fraud offenses can entail severe penalties. So, if you're facing charges or accusations for such offenses (even a federal offense), it's a good idea to contact a criminal defense lawyer. Continue reading to learn more.
Definition of Wire Fraud
The definition of wire fraud is broad and includes any writings, signs, signals, pictures, or sounds that are transmitted.
The U.S. Department of Justice wire fraud statute (18 U.S.C. 1343) cites these four elements of wire fraud:
- The defendant created or participated in a scheme to defraud another out of money or property;
- The defendant did so with the intent to defraud;
- It was reasonably foreseeable that the defendant would use wire communications; and
- The defendant did, in fact, use interstate wire communications
On the part of the fraudster, the offense can involve the following:
- False pretenses
- False statements
- Material misrepresentation
- Tax fraud, if the offense concurrently involves tax systems or misrepresentation of tax forms
- Securities fraud, if the systems used involve stocks, bonds, or other financial instruments that are publicly traded
- Health care fraud, if the systems used involve a hospital, doctor, or medical insurance company
Federal wire fraud charges are used to prosecute perpetrators of both white-collar crimes and organized crime. Scams that take place over interstate wires include (among other things):
If the fraud involves crossing state lines or spans beyond one state in any way, wire fraud or comparable offenses are treated as federal offenses. But wire fraud almost always involves this kind of interstate offense, by its very nature. As previously discussed, if the wire fraud is a federal offense, the federal government is likely to become involved. This includes the FBI as the primary law enforcement agency to investigate the offense. Wire fraud can involve foreign commerce.
Penalties for Wire Fraud
Persons found guilty of wire fraud under federal law face the following penalties:
- Fines up to $250,000 for individuals
- Fines up to $500,000 for organizations
- Imprisonment of not more than 20 years
There are additional penalties of 30 years imprisonment and a million-dollar fine. This would be the case if the wire fraud is related to a presidentially declared major disaster or involves a financial institution.
These penalties are per count, which means that each phone call, email, or other electronic communication can be considered a separate count. For instance, if an individual makes three phone calls regarding the fraud, there may be three counts of wire fraud. Each count would potentially be subject to the maximum $250,000 fine and a 20-year prison sentence for a total of $750,000 in fines and 60 years in prison.
Wire Fraud Schemes
Below are a few examples of wire fraud schemes.
The Nigerian Prince Scam
One of the early and infamous examples of email fraud is the story of the Nigerian prince. In that scam, the sender claims that he is a Nigerian prince who has been exiled and needs to transfer millions of dollars out of the country. He asks the reader for help in doing so, for which they will be lavishly rewarded. The reader only needs to provide the Nigerian prince with his bank account details so the money can be transferred. The scammer then uses that information to access the reader's money.
The newest version of this scam, as reported by the Better Business Bureau, involves scammers creating fake bank websites to add credibility to their stories. The victim can then access the fake bank account to see the millions of dollars "available" to them. They enter their own bank routing information, and the scammers have what they need.
People who commit wire fraud are frequently looking for their victims' personal information. This information includes credit card information, passwords, and financial information. "Financial information" usually means things like bank account numbers. "Phishing" is the practice by which a scammer will send out an email that looks official but is not. The email requests personal information from the reader.
In 2018, two Nigerian nationals, Olayinka Olaniyi and Damilola Solomon Ibiwoye, were convicted in federal court of conspiracy to commit wire fraud. They were also convicted of computer fraud and aggravated identity theft. They led a phishing scheme that tricked employees at several American universities into sharing their computer log-in and password.
Once they had that information, they used it to deposit payroll checks into bank accounts they controlled. They also gained access to W2 forms. They used those forms to file fraudulent tax returns.
These fraudsters used yet another fraudulent scheme to complete the theft—a romance scam. They used dating sites and apps to lure in trusting love interests. At some point, they would ask the new partner if they could wire transfer money into their bank account for safekeeping. They would then transfer the money from the universities into these American accounts before forwarding it to their own accounts in Malaysia and other countries.
Another common example of wire fraud cases, this one using the phone, is telemarketing fraud. In 2020, Sahil Narang was one of six conspirators convicted of a telemarketing scheme that originated in India. Their targets? Mostly elderly Americans who owned computers but were hardly tech-savvy.
Narang pled guilty to conspiracy to commit wire fraud and ten counts of wire fraud. The scheme was called "Tech Fraud," and it involved routing some 20,000 phone calls regarding computer tech problems to call centers in India. More than 7,000 callers stayed on the line, allowing the scammers to remotely access their computer for "repairs." That misrepresentation allowed computer criminals in India to download their banking information.
Worse yet, a follow-up "Refund" scheme involved calling the victims of the first scam to tell them they were eligible for a refund. Of course, they needed to provide their banking information so the money could be forwarded to them. Eager to be refunded, the victims handed over their account information and were defrauded a second time.
Charged With Wire Fraud? Get Legal Help
If you have been charged with mail and wire fraud or any other offense, talk to a criminal defense attorney near you who handles federal criminal charges. An experienced defense lawyer can advise you on the best course of action for your defense.