In February of 2015, former N.Y. Assembly Speaker Sheldon Silver was indicted on charges of fraud and extortion. According to the Wall Street Journal, the charges arose from two schemes in which he allegedly used his political power to elicit kickbacks. The U.S. Attorney brought charges for extortion as well as for mail and wire fraud.
Silver is one of many defendants who faces mail and wire fraud charges in addition to allegations of other fraud offenses. A former Arkansas Senator also Reportedly pled guilty this March to a federal mail fraud charge. This crime was not related to extortion, but was instead related to the misuse of federal campaign funds. Another criminal defendant is facing mail fraud charges in connection with a phony contract in which he claimed to own half of Facebook, according to Bloomberg.
Mail and Wire Fraud Charges a Common Federal Charge
These three cases are just a few of many examples of the wide range of situations under which a person can be charged with a mail or wire fraud offense. Mail and wire fraud charges can be brought by federal authorities virtually any time the mail, wire communications, television communications, or radio communications are used as any part of a scheme or artifice including in cases involving:
- Securities fraud
- Franchise fraud
- Insurance fraud
- Health care fraud
- False claims
- Bribery and kickbacks
- Bank fraud
- Computer fraud
- Credit card fraud
- Insider trading
- Money laundering
Mail and wire fraud statutes have incredible breadth. The federal mail fraud statute found in 18 U.S. Code Section 1341 defines the offense of mail fraud to include “any scheme or artifice to defraud,” as well as any attempt to “obtain money or property by means of false or fraudulent pretenses, representations, or promises.” 18 U.S. Code Section 1346 expands that definition to include any “scheme or artifice to deprive another of the intangible right of honest services.”
Since almost all communication and almost all monetary transfers involve wires, mail, radio, or television, almost any type of allegedly fraudulent behavior could result in charges of a federal crime that carries a penalty of as long as 20 years incarceration (or 30 years if the fraud is against a financial institution).
Limits on Mail and Wire Fraud Charges
Although mail and wire fraud offenses are defined broadly, there are some limits imposed upon the definition of “scheme” that can lead to a mail fraud offense.
In United States v. Henderson, a New York district court opinion made clear that: “The use of the mail fraud provision has been generally confined to schemes of a type designed to defraud members of the community at large, in the sale of commodities and services, rather than schemes to defraud the government.” The court thus ruled that using the mail to submit allegedly fraudulent income tax returns should not be considered a form of mail fraud. Other courts have affirmed that tax fraud should be prosecuted as a mail fraud offense only in “exceptional circumstances.”
The definition of “scheme or artifice to defraud” also does not include mailings that are intended for the purpose of threatening murder or bodily harm in order to extort money. In Fasulo v. United States, the U.S. Supreme Court held that while threats to injure or kill someone may be more reprehensible than a scheme based on false pretenses, they do not constitute mail fraud.