Wire fraud is one of the most common crimes federal authorities prosecute on a day-to-day basis. It involves a carefully woven scheme to defraud an unsuspecting victim of money or property.
A criminal will typically employ some means of deceit or deception to lure the victim through concealment, misrepresentation, or a series of false statements.
It is a serious crime under federal jurisdiction and carries with it stiff penalties that may include paying a hefty fine, serving a long jail term, or both. This article explores everything you need to know about wire fraud.
What Is Wire Fraud
The crime of fraud takes many forms. Any scam that takes place over interstate wires constitutes wire fraud. Phishing scams, telemarketing fraud, and spam-type schemes all fall within this realm.
The wire fraud definition is rather wide and includes any signals, signs, sounds, pictures, or writings transmitted via cable/wire, television, or radio in foreign or interstate commerce. For a scam to be classified as wire fraud, it needs to have the following elements:
- The defendant needs to have come up with or participated in a scheme designed to defraud the victim of money or property
- The defendant needs to have crafted or participated in the scheme with the specific intent to defraud the victim
- It can be proven that the defendant planned to use wire communications to perpetuate the scam
- The defendant used interstate wire communications to defraud the victim of money or property
The term “interstate wire communications” as used in wire fraud refers to internet communication, telephone calls, television/radio transmissions, or even faxes.
Wire Fraud Penalty
Individuals who are found guilty of this crime face the following penalties under federal law.
- A fine of up to $250,000 for an individual
- A fine of up to $500,000 for an organization
- Imprisonment of up to 20 years
It doesn’t end there, though. If the wire fraud targets a financial institution or is related to a presidentially declared disaster, the maximum fine goes up to $1 million and/or an imprisonment term of up to 30 years.
Keep in mind that these penalties apply to each count of the crime. This means that each electronic communication used to perpetrate the fraud is considered a separate count.
For instance, if an individual made three different phone calls concerning the scam, they would be charged with three counts of wire fraud. If each count of the crime could potentially be subject to the $250,000 maximum fine and/or the 20-year prison sentence, the individual in question could be looking at $750,000 worth of fines and/or a prison term of up to 60 years.
Wire Fraud Examples
Although most wire fraud schemes target businesses such as banks or insurance companies, and institutions like the IRS, it is not uncommon for fraudsters to target individuals. The latter may involve getting the victim to part with their personal financial information to gain access to their bank accounts or credit cards.
Some of the most common techniques fraudsters use to obtain this sensitive information include internet scams, telemarketing fraud, and phishing. Phishing may involve some elements of social engineering.
The infamous “Nigerian Prince Scam” is one such example of internet fraud perpetrated through phishing and social engineering. The criminal sends a high volume of unsolicited emails to numerous personal email accounts to increase the odds of recipients taking the bait.
In the email, the scammer identifies themselves as a Nigerian prince who, due to some unfortunate circumstances, is unable to access the money in their Nigerian bank account. The fraudster then appeals to the email recipient to allow them to transfer their money into the recipient’s bank account and hold it until they (the prince) can sort out their banking issues.
If the recipient takes the bait and agrees to “hold the money,” the fraudster uses the account information the victim provides to access their account and withdraw whatever available balance there is. This is a classic example of wire fraud.
Conspiracy to Commit Wire Fraud
A fraudster doesn’t have to successfully defraud their victim of money or property to be guilty of the crime. They can still be charged with taking part in a “conspiracy to commit wire fraud” or “attempted wire fraud.” It’s important to note, however, that federal law does not distinguish between “wire fraud” and the “conspiracy to commit wire fraud.” They both carry the same penalties.
This begs the question – Who investigates wire fraud? The answer to that would be the Federal Bureau of Investigation (FBI), although state charges may also apply.
Individuals can report wire fraud crimes to the Federal Trade Commission. The agency will then launch an investigation into the scam, trace the perpetrators, and prosecute them accordingly. The wire fraud statute of limitations is five years. However, if the scheme targets a financial institution, the statute becomes 10 years.
Wire fraud is related to several other underlying offenses. Federal authorities usually use it to prosecute these crimes. The common ones include:
Mail and wire fraud share several common characteristics. The main differentiator between them is the medium used to commit the crime. Wire fraud relies on electronic communication, whereas mail fraud does not. Nonetheless, they are both federal crimes and carry similar penalties.
This covers a wide range of fraudulent activities related to investment securities. If electronic communication was used in committing securities fraud, it might be charged alongside wire fraud. Keep in mind that it is both a state and federal crime, so the penalties can be steep if an individual is convicted of both offenses.
Internet fraud or “cybercrime” refers to scams carried out through email or any other channel over the internet. Hacking and phishing to illegally obtain confidential information are two common types of cybercrime. Internet fraud that is not prosecuted as wire fraud may fall under state jurisdiction.
Get Legal Help
Wire fraud is a serious crime and carries stiff penalties. If you’re facing these charges, you need to talk to a wire fraud lawyer as soon as possible before making any statements to federal investigators.
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