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What is Wire Fraud?
Understanding Wire Fraud: A Comprehensive Breakdown
Nothing less than a serious federal crime, wire fraud involves deceiving and cheating individuals of their hard-earned money or property, typically using electronic communication methods. This article will delve into the details behind wire fraud, including its legal elements and penalties, to help you better understand this significant and complex issue.
A Brief Overview of Wire Fraud
Wire fraud is defined by the Title 18 United States Code §1343 as a scheme that intends to defraud individuals of money or property using false or fraudulent pretenses, representations, or promises, utilizing wire, radio, or television communication in interstate or foreign commerce. It has a striking similarity to mail fraud (18 U.S.C. §1341), and interpretations of one statute often apply to the other. The term “scheme or artifice to defraud” includes scenarios that aim to deprive others of their intangible right to honest services, thereby extending the scope beyond mere protection of property rights.
Identifying the Key Elements of Wire Fraud
Different District Courts across the United States have outlined two, three, or four elements of wire fraud, which the Government must prove beyond a reasonable doubt.
The Two-Element Approach
In jurisdictions that adopt a two-element approach, the required elements are:
1. A scheme or artifice to defraud
2. Use of interstate wire communication to facilitate that scheme to get money or property.
The Four-Element Approach
In federal jurisdictions that apply a four-element approach, the elements are:
1. The defendant voluntarily and intentionally devised or participated in a scheme to defraud another out of money
2. The defendant did so with the intent to defraud
3. It was reasonably foreseeable that interstate wire communications would be used
4. Interstate wire communications were, in fact, used.
The Three-Element Approach
New York, as part of the Second Circuit, follows a three-element approach:
1. A scheme to defraud
2. Money or property as the object of the scheme
3. Use of wires to further the scheme.
While not a statutory element, the materiality of a falsehood in the scheme to defraud is considered a common-law element of wire fraud.
Dissecting the Elements of Wire Fraud
(1) Scheme to Defraud Involving a Material Misrepresentation or Disclosure
A scheme to defraud can be broadly understood as any action that significantly deviates from fundamental honesty and ethical behavior. It typically includes conduct that is reasonably calculated to deceive, whether through non-disclosure or affirmative misrepresentation. Courts have held that even material non-disclosures alone can sustain a wire fraud conviction, regardless of the presence of a fiduciary duty.
The government need not prove that the actual scheme was successful only that a scheme existed. To qualify as a material misrepresentation, the false statement must have a natural tendency to influence or be capable of influencing the decision of the targeted party.
(2) Intent to Defraud Another of Money, Property, or Honest Services
The specific intent to defraud refers to the deliberate intention to deceive or cheat to gain financial benefit for oneself or cause financial loss to others. A statement made in good faith that later turns out to be false would not satisfy this requirement. As long as some harm or injury was contemplated by the scheme, the prosecution does not need to show direct, tangible economic loss to the intended victims.
(3) Interstate Wire Communications Were Used in Furtherance of the Scheme
A person can be held accountable for causing a wire transmission if they act, knowing that the use of wires or electronic communication will follow in the ordinary course of business or if such use is reasonably foreseeable. In wire fraud cases, the government must prove that the wire transmission was for the purpose of executing the scheme not necessarily that it was an essential element.
Sentencing and Penalties for Wire Fraud
Wire fraud is a grave federal crime punishable by up to 20 years of imprisonment and/or a fine of up to $250,000. If the violation is in connection with a disaster or emergency declared by a president or affects a financial institution, the penalties increase to imprisonment of up to 30 years and/or a fine of up to $1,000,000.
Contact Top-Rated Wire Fraud Attorneys
Facing wire fraud charges is a profoundly distressing experience that demands the expertise of top-rated federal attorneys. If you are under arrest or have been charged with federal wire fraud, do not hesitate to contact experienced and highly-regarded legal professionals at 212-729-9494 to schedule your initial consultation. The sooner you seek professional advice, the better your chances of resolving your case successfully.
What is Wire Fraud?
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