USC 1341 and 1343 provide the framework for the federal crimes of wire fraud and mail fraud. These statutes are the most common ones used by state and federal prosecutors in Massachusetts because they are simple and expansive. These federal statutes make it illegal to use mail and wire (telephone, cell phone, Internet, email and fax) to further any type of fraudulent and/or illegal scheme.
A person can be convicted of wire fraud even if the underlying crime was not completed. It is common for both wire and mail fraud to be charged with RICO and conspiracy charges at the state and federal levels. Federal prosecutors also may use wire and mail fraud statutes to deal with conduct that has yet to be criminalized. These statutes are often used as a catch all by federal prosecutors if they are having difficulty getting convictions to stick for other federal charges.
Wire fraud and mail fraud charges can arise in a variety of schemes. They most often are involved in crimes where public funds are diverted for personal use, illegal loan schemes and illegal donations and charities.
Some federal prosecutors have used the wire and mail fraud statutes to prosecute cases in federal court where the wire communication involved has a nearly non-existent relationship to the crime. The good news for defense attorneys and their clients is this leaves substantial room for strong defense arguments.
Massachusetts Laws and Penalties
Essential elements of wire fraud that must be proven by the prosecution are:
- You were part of a scheme involving wire that was intended to defraud
- You used interstate wire communications to further the scheme
Note that a conviction for wire fraud does not require that the victim lost money. The federal statute makes illegal to engage in a scheme with the intention of defrauding someone. So you can be convicted even if there is no financial loss. Also, a wire fraud conviction can be obtained when the person is engaging in a scheme to defraud other people of what are known as ‘honest services.’
For example, if a public official has a duty to give an honest or ethical service to other people, the person can engage in wire fraud when utilizing an interstate communications tool or system to violate their office duties. A common case is where a government official participates in a bribery or kickback scheme and also commits wire fraud because they have deprived the public of honest services.
Wire fraud can be punished by a prison sentence of up to 20 years and a steep fine. If the fraud is related to any type of state or federal financial institution, the crime can be punished by up to a 30 year prison sentence. The Sarbanes-Oxley Act of 2002 enhanced the statutory maximum prison term for wire and mail fraud violations by four times. This is a major penalty enhancement that has raised the stakes for all criminal defendants in wire fraud cases.
Note that every act of wire fraud is a separate offense. For instance, if you engage in a scheme to defraud and make 10 cell phone calls as part of the scheme, this is 10 acts of wire fraud.
Massachusetts Wire Fraud Defenses
Experienced Massachusetts criminal defense attorneys can use various defenses against a federal wire fraud charge. One of the most common is regarding proof of a scheme to defraud. This is a highly nuanced element that has been the focus of a great deal of judicial commentary and clarification in recent years. An experienced attorney might argue that the communication was not related to any underlying scheme.
Another potential defense for wire fraud is lack of knowledge or intent. It also may be possible to challenge subject matter jurisdiction and argue that the case should not be in federal court at all.
Another good defense in some cases is ‘puffery.’ This is where a person uses exaggerations, flattery, or strong opinions to sell a potential buyer on something. This is puffing or puffery and can be a potent defense. For example, if a salesperson states on the phone that an electronic device is the best ever made, this is probably not wire fraud. But if the person says the product is made from gold and is only colored in gold, this could be wire fraud.
Massachusetts Statute of Limitations
According to 18 USC 3282, the statute of limitations for mail and wire fraud is five years. The only exception is a case where a financial institution was affected; in this case, the limit is 10 years.
Massachusetts Wire Fraud Cases
- MA Woman Pleads Guilty for Stealing Russian Icons — A woman from Worcester MA pleaded guilty last week to embezzling hundreds of thousands of dollars from the Russian history museum for which she worked. Federal prosecutors said Jennifer D. McNamara pleaded guilty to wire fraud related to her theft from the Museum of Russian Icons in Clinton MA. She embezzled money by failing to deposit the cash received by the museum bank account. The woman had worked for the museum since 2010 and was promoted to full time business manager. Her sentencing has been scheduled for Aug. 2, 2018.
- Disbarred Attorney Convicted to 57 Months for Fraud — A man from Massachusetts who was convicted for defrauding four people out of hundreds of thousands of dollars was sentenced last month to nearly five years in federal prison. John Silvia from Somerset MA was a former attorney who was convicted of securities, mail and wire fraud. Among his many victims was a nurse that took care of his wife while she had terminal cancer. Two victims of the fraud gave powerful victim impact statements in federal court.
- Convicted Former DA Takes Case to Appeals Court — An attorney for former North Shore DA Walter Reed asked a federal appeals court on May 1 to throw out Reed’s conviction for wire fraud and corruption charges from 2016, arguing that the federal government overreached in the case.