What Is Wire Fraud?

What Are the Elements of Wire Fraud? What Are the Potential Defenses to Allegations of Fraud? What Are the Possible Penalties?

Fraudsters can come up with some highly creative ways to take your money. They may send you a fake bill that appears to be legitimate, along with a threat of collection efforts if you don’t pay immediately. Then, if you call about it, they’ll tell you it’s time sensitive, and you need to wire funds to avoid dire circumstances. Another scheme might trick you into making an online payment to purchase bogus anti-viral software. Any time a person uses interstate communication networks (e.g., telephone or online) to wrongfully take something from you, they commit wire fraud.

How Does the Law Define Fraud?

The term “fraud” refers to a legal wrong and can apply to both criminal and civil acts, but wire fraud involves criminal charges. Certain types of fraud are governed by state law and others fall under federal law, but wire fraud generally is a federal offense. While the precise language varies from state to state and from statute to statute, the common elements of criminal fraud generally include:

• Misrepresentation of a material fact—The misrepresentation may be a false or misleading assertion, or it can involve the omission of an essential or material fact.
• Intent to deceive—Criminal fraud requires knowledge and purpose. You cannot be criminally prosecuted for carelessly making a false statement.
• Losses caused—The misrepresentation actually led, or could have led, to losses by the person to whom it was made.

With a charge of criminal fraud, the evidence must establish guilt beyond a reasonable doubt. Conviction of criminal fraud can lead to incarceration, fines, or an order of restitution.

What Is Wire Fraud?

Wire fraud is distinguished from other types of fraud in that it requires use of some form of electronic communication to perpetrate the fraud. Wire fraud is a federal criminal offense governed by Title 18 of the U.S. Code, Section 1343 and includes fraud committed using interstate electronic communication networks, including phones and online internet services. All wire fraud criminal charges are handled by the U.S. Department of Justice.

Common examples of wire fraud include:

• Extortion
• Phishing attempts on the internet
• Identity theft
• Online investment scams
• Personal data breaches
• Online telemarketing fraud

What Are Potential Defenses to Criminal Charges of Wire Fraud?

A person charged with criminal fraud might raise a number of defenses:

• Lack of intent—The evidence may show that the defendant did not know the statement was false, or there may be evidence that the statement was made in jest.
• Mistaken identity—There may be evidence that the person who made the statement unknowingly made it to the wrong person.
• Belief that the statement was true—A good faith belief in the truth of the statement being made, even if the statement was actually false, can serve as a defense to wire fraud.
• Entrapment—Law enforcement officials may have crossed the line between legitimately obtaining a fraudulent statement and putting words in the defendant’s mouth.
• Statute of limitations—An expired statute of limitations can result in dismissal of charges.

What Are the Potential Penalties for Wire Fraud?

Conviction on charges of federal wire fraud can have potentially serious consequences, with the possibility of up to 20 years in a federal correctional facility. In addition, a person may face fines of up to $250,000. It’s important to understand, as well, that a single scam that affects a number of people can be charged as multiple crimes.