Mail fraud and wire fraud are terms used in the United States to describe the use of a physical (e.g., the

U.S. Postal Service The United States Postal Service (USPS), also known as the Post Office, U.S. Mail, or simply the Postal Service, is an independent agencies of the United States government, independent agency of the executive branch of the federal governmen ...

) or electronic (e.g., a phone, a telegram, a fax, or the

Internet The Internet (or internet) is the Global network, global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a internetworking, network of networks ...

) mail system to

defraud In law, fraud is intent (law), intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrato ...

another, and are U.S. federal crimes. Jurisdiction is claimed by the federal government if the illegal activity crosses interstate or international borders.

Mail fraud

Mail fraud was first defined in the United States in 1872. provides:

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, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any
counterfeit A counterfeit is a fake or unauthorized replica of a genuine product, such as money, documents, designer items, or other valuable goods. Counterfeiting generally involves creating an imitation of a genuine item that closely resembles the original ...
or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing to be sent or delivered by the
Postal Service The mail or post is a system for physically transporting postcards, letters, and parcels. A postal service can be private or public, though many governments place restrictions on private systems. Since the mid-19th century, national postal sy ...
, or deposits or causes to be deposited any matter or thing to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, 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 Presidential declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

Thus, anyone trying to defraud another individual or group through items of value, e.g., money, through the US mail system or a private mail delivery service and those knowingly participating in that fraud will be punished with a fine and/or prison sentence that cannot be longer than 20 years. However, for such acts during a Presidential declared major disaster or emergency, the prison sentence can be as long as 30 years and the fine as great as $1,000,000. In mail fraud, US federal jurisdiction is based on the enumerated power to create a post office under Article I, Section 8 of the US Constitution. International reply coupons mailed by participants of

Charles Ponzi Charles Ponzi (; ; born Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi; March 3, 1882 – January 18, 1949) was an Italians, Italian charlatan and Scam, con artist who operated in the United States and Canada. His Pseudonym, aliases included ''C ...

's scheme are a 20th-century example of mail fraud. Ponzi was charged with the U.S. federal crime of mail fraud.

Wire fraud

Wire fraud was first defined in the United States in 1952. provides:

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 (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5122 )), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both..

Briefly, anyone trying to defraud other people or groups through any form of telecommunication, or through writing, signs, pictures or sounds can be punished with a maximum prison sentence of 20 years. If the fraud involves a financial institution, the maximum fine is raised to 1 million US dollars and prison sentence not more than 30 years, or both.

Honest services

provides:

For the purposes of this chapter, the term "scheme or artifice to defraud" includes a scheme or artifice to deprive another of the intangible right of honest services.

Elements

There are three elements to mail and wire fraud: # A mail or wire communication # a scheme and intent to defraud someone # a

material A material is a matter, substance or mixture of substances that constitutes an Physical object, object. Materials can be pure or impure, living or non-living matter. Materials can be classified on the basis of their physical property, physical ...

deception Mail fraud applies only to United States domestic mailings and use of interstate carriers ( UPS,

FedEx FedEx Corporation, originally known as Federal Express Corporation, is an American Multinational corporation, multinational Conglomerate (company), conglomerate holding company specializing in Package delivery, transportation, e-commerce, and ...

) which must originate in one state, and successfully terminate pursuant to the address label inside another state, a transportation that is termed "interstate" (over which

Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...

has power to regulate) and does require that the mailing cross at least one state line into another state; wire fraud has been expanded by Congress to include foreign wire communication or interstate connections via (e.g.) an e-mail server or telephone switch or radio communication.

Case law

In '' McNally v. United States'' (1987), the Supreme Court held that 18 U.S.C. §§ 1341 and 1343 did not reach honest services fraud. Congress responded by passing 18 U.S.C. § 1346. In '' Skilling v. United States'' (2010), the Court construed § 1346 to apply only to bribes and kickbacks. ''United States v. Regent Office Supply Co.'' (1970) involves Regent which was a company that sold orders over a telephone. Regent representatives would exaggerate their office products over the phone. The United States government charged the company with wire fraud. The company's salesmen were accused of making "false pretenses" over the phone. The

United States Court of Appeals for the Second Circuit The United States Court of Appeals for the Second Circuit (in case citations, 2d Cir.) is one of the thirteen United States Courts of Appeals. Its territory covers the states of Connecticut, New York (state), New York, and Vermont, and it has ap ...

ruled that the "repugnant" conduct of the company did not amount to criminality. ''Lustiger v. United States'', 386 F.2d 132 ( 9th Cir., 1967), involved a real estate advertisement mail fraud. The defendant stated that as a salesman he had engaged in

puffery Puffery is undue or exaggerated praise. Puffery serves to "puff up" what is being described. In law, puffery is usually invoked as a defense argument: it identifies general praising speech, typically produced by a seller, which is not expected ...

. In ''United States v. Takhalov'' (2016), female nightclub employees would pose as tourists, engage with potential customers, and lure them into nightclubs owned by Takhalov. The employees would express romantic interest in the customers and not reveal that they were club employees. The 11th Circuit ruled that Takhalov deceived their customers, but this deception didn't amount to defrauding the customers under the Wire Fraud statute.

Mail fraud schemes

There are many types of mail fraud schemes, including employment fraud, financial fraud, fraud against older Americans, sweepstakes and lottery fraud, and telemarketing fraud. Additional information about these various types of mail fraud schemes can be found on the

United States Postal Inspection Service The United States Postal Inspection Service (USPIS), or the Postal Inspectors, is the Federal law enforcement in the United States, federal law enforcement arm of the United States Postal Service. It supports and protects the U.S. Postal Servic ...

website. In the 1960s and 1970s, Chief

Postal Inspector Postal inspector may refer to: * The United States Postal Inspection Service (or USPIS), the law enforcement arm of the United States Postal Service * '' Postal Inspector'', a 1936 American film directed by Otto Brower See also * The Inspectors ...

Martin McGee, also known as "The Top Sleuth" or "Mr. Mail Fraud", led his department in exposing and prosecuting numerous mail fraud swindles such as land sales, phony advertising practices, insurance rip-offs, and fraudulent charitable organizations that used the mail to facilitate their illegal activities.

Scope

The scope of 18 U.S.C. §1341 and 18 U.S.C. §1343 is broad. These statutes have been held by the

Supreme Court In most legal jurisdictions, a supreme court, also known as a court of last resort, apex court, high (or final) court of appeal, and court of final appeal, is the highest court within the hierarchy of courts. Broadly speaking, the decisions of ...

to encompass "everything designed to defraud by representations as to the past or present, or suggestions and promises as to the future." Lower courts have progressively expanded this ruling, finding that the law "puts its imprimatur on the accepted moral standards and condemns conduct which fails to match the 'reflection of moral uprightness, of fundamental honesty, fair play and right dealing in the general and business life of members of society. As interpreted, these requirements are not difficult to meet; the Justice Department claims to defer federal prosecution for petty local fraud. In 1987, the Supreme Court of the United States ruled in '' McNally v. United States'' to narrow the scope of the mail and wire fraud statutes, ruling that the statute pertained only to schemes to defraud victims of tangible property, including money. In 1988, Congress enacted a new law that specifically criminalized schemes to defraud victims of "the intangible right of honest services" (honest services fraud).

Notes

References

* Jed S. Rakoff, The Federal Mail Fraud Statute (Part I), 18 771 (1980).

External links

* {{US federal public corruption law United States federal public corruption crime Organized crime activity