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Federal wire fraud charges (18 USC 1343 and 1349)

The criminal defense attorneys at Galluzzo & Arnone LLP have successfully represented many people charged with wire fraud in federal court. This serious accusation can result in very significant penalties, including huge fines and lengthy prison sentences. However, these charges are also frequently quite defensible, too. As such, if you or a loved one have been accused by federal prosecutors of money laundering, you should strongly consider contacting Galluzzo & Arnone’s team of former prosecutors.

The crime of wire fraud occurs when someone voluntarily and intentionally uses an interstate communications device (such as a telephone) as a part of any scheme to defraud another of property, or anything else of value.

The main criminal statutes that apply to wire fraud are 18 U.S.C. §§ 1343 and 1349. Those statues refer to fraud by wire, radio, or television.

Section 1343 defines as guilty of wire fraud: “Whoever, having devised 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, shall be fined under this title or imprisoned 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.”

Therefore, to be criminally culpable under 18 U.S.C. § 1343, a defendant must have intentionally and voluntarily used a communication device that sends information over state lines as part of a scheme to defraud another out of money or other valuables. It can involve the use of a landline telephone, cell phone, computer, tablet, or another electronic device.

U.S.C. 1349 applies to attempts to commit wire fraud. Indeed, “[a]ny person who attempts or conspires to commit any offense under this chapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy.”

A person could be charged with wire fraud if the following four elements of the crime are established: (i) the person voluntarily or intentionally participated in or devised a scheme to defraud someone of money or other valuables; (ii) the person did so with the intent to defraud the person. Moreover (iii) It was reasonably foreseeable that interstate wire communications would be used, (iv) in the scheme.

The wire fraud statute does not make an explicit reference to materiality. Yet materiality is an element of the offense, because at the time of the statutes’ enactment, the word “defraud” was understood to “require a misrepresentation or concealment of [a] material fact.” Thus, other than in an honest services context, a “scheme to defraud” for mail or wire fraud purposes must involve a material misrepresentation of some kind. material if it is capable of influencing the intended victim.”

Wire fraud can involve many different schemes to defraud a person using electronic communications such as emails, webpages, and social media. The federal wire fraud statute specifically mentions wire, radio, and television communications, but it also includes many fraud offenses involving computers and the internet. The information transmitted can be any writes, signs, signals, pictures or sounds used in the scheme to defraud. In order for wire fraud to take place, the person must voluntarily and knowingly make misrepresentations of facts with the intent to defraud someone of money or property.

Fraudsters use various methods to get personal credentials and passwords including:

  • Malware: Malware (short for “malicious software”) is designed to gain access, damage or disrupt a computer without the knowledge of the owner.
  • Phishing: Phishing is a scam typically carried out through unsolicited email and/or websites that pose as legitimate sites and lure unsuspecting victims to provide personal and financial information.
  • Vishing and Smishing: Thieves contact bank or credit union customers via live or automated phone calls (known as vishing attacks) or via text messages sent to cell phones (smishing attacks) that may warn of a security breach so as to obtain account information, PIN numbers and other account information they need to gain access to the account.
  • Accessing Email Accounts: Hackers gain illicit access to an email account or email correspondence through spam, computer virus, and phishing.

For example, creating a webpage to ask for donations for a charity or a personal tragedy that is fraudulent could be prosecuted as a wire fraud. Moreover, stealing bank and other financial information to transfer money out of a person’s bank and other financial accounts, to make charges on his credit cards, or to take out credit cards in his name, or sending a mass email to a person’s email contacts with a tragic story as to why the person needs money immediately are other examples of wire fraud.

Wire fraud is a federal crime. Since November 1, 1987, federal judges have used the Federal Sentencing Guidelines to determine the sentence of a guilty defendant. A judge will look at the “base offense level” and then adjust the sentence based on the specific characteristics of the crime. With all fraud offenses, the base offense level is six. However, other factors will then influence that number, including, for example, the dollar amount stolen, how much planning went into the crime and the victims that were targeted.

Thus, for example, a wire fraud scheme that involved the theft of $300,000 through an intricate scheme to take advantage of the elderly will score higher than a wire fraud scheme that an individual planned in order to cheat their employer out of $1,000.

Other factors that will influence the final sentencing “score” include the defendant’s criminal history, whether or not the defendant tried to impede the investigation, and whether the defendant willingly helped investigators catch other people involved in the crime.

Usually, a person convicted of wire fraud faces significant potential penalties. A single act of wire fraud can result in fines and up to 20 years in prison. However, if the wire fraud scheme affects a financial institution or is connected to a presidentially declared disaster or emergency, the potential penalties are fines of up to $1,000,000 and up to 30 years in prison.

If you or a loved one have been accused of a federal wire fraud charge, you should strongly consider contacting the experienced federal criminal defense attorneys at Galluzzo & Arnone LLP.

(Blog by Matthew Galluzzo and Julie Bolo-Jolly)