Mail and Wire Fraud

Article excerpt

I. INTRODUCTION

To federal prosecutors of white collar crime, the mail fraud statute is our

Stradivarius, our Colt 45, our Louisville Slugger, our Cuisinart--our true

love. We may flirt with RICO, show off with 10b-5, and call the conspiracy

law `darling' but we always come home to the virtues of 18 U.S.C. [sections]

1341, with its simplicity, adaptability, and comfortable familiarity. It

understands us and, like many a foolish spouse, we like to think we

understand it....(1)

As the above statement by a former federal prosecutor indicates, the mail(2) and wire(3) fraud statutes have always been used as a powerful prosecutorial tool. The purpose of these two statutes is to prevent the use of the mails or wires(4) in the furtherance of fraudulent activity. While the two statutes were separately codified, a majority of the case law dealing with the statutes has concerned the meaning of a "scheme to defraud" and the courts have generally considered the two statutes in conjunction with one another.

The two statutes have been widely used to "cover not only the fun range of consumer frauds, stock frauds, land frauds, bank frauds, insurance frauds. and commodity frauds, but [also] ... such areas as blackmail, counterfeiting, election fraud and bribery."(5) Prosecutors have also used these statutes to prosecute money laundering and Racketeer Influenced and Corrupt Organizations Act ("RICO") violations.(6) A violation of [sections] 1341 or [sections] 1343 can provide the unlawful act necessary to establish a RICO(7) or money laundering violation.(8) Once a mail fraud or wire fraud offense has been proven, then both the RICO and the money laundering statutes allow for more severe penalties.(9)

When legislatures have been slow to act to combat certain types of crimes, the mail and wire fraud statutes have often served as a "first line of defense"--serving as a "stop-gap device which would permit the prosecution of newly-conceived frauds until such time that Congress enacted particularized legislation to cope with new frauds."(10) The mail and wire fraud statutes have, therefore, been referred to as "at least one secret weapon"(11) possessed by federal prosecutors.

In 1994, responding to the ever-increasing threat of new innovations such as telemarketing fraud, the federal mail fraud statute was amended to cover not only the United States Postal Service (USPS), but private interstate commercial carriers as well (e.g., United Parcel Service, FedEx, DHL).(12) Because many of these telemarketing ploys were directed at the elderly, Congress promulgated the Senior Citizens Against Marketing Scams Act ("SCAMS"), which specifically criminalized telemarketing fraud.(13) The SCAMS Act of 1994 enhanced the penalties for mail and wire fraud convictions when targeted at individuals aged 55 and over.(14)

This Article concentrates on the mail fraud statute because it has been utilized more frequently than its wire fraud counterpart. However, with the rapid advance of technology, the wire fraud statute may soon overshadow its more popular counterpart.(15) While jurisdictional differences exist between the statutes, they are sufficiently similar in their wording that court decisions addressing the character and scope of one statute are generally applicable to the other.(16)

Section II of this Article outlines the elements of a mail fraud offense while Section III examines the available defenses. Next, Section IV reviews venue considerations; finally, Section V addresses sentencing issues.

II. ELEMENTS OF THE OFFENSE

On its face, [sections] 1341 applies to any instances where the mails are used in furtherance of a scheme to defraud.(17) Given the common law definition of fraud, however, courts have traditionally read into the statute a third element: the defendant must have had an intent to defraud. …

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.