Summary
Annual white collar crime survey
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Extract
Mail and wire fraud.
I. INTRODUCTION
To federal prosecutors of white collar crime, the mail fraud statute is our Stradivarius, our Colt 45, our Louisville Slugger, our Cuisinart--and our true love. We may flirt with RICO, show off with 10b-5, and call the conspiracy law `darling,' but we always come home to the virtues of 18 U.S.C. [sections] 1341, with its simplicity, adaptability, and comfortable familiarity. It understands us and, like many a foolish spouse, we like to think we understand it.(1) As the above statement by a former federal prosecutor indicates, the mail(2) and wire(3) fraud statutes provide powerful prosecutorial tools. The purpose of these two statutes is to prevent the use of the mails or wires(4) in the furtherance of fraudulent activity. Despite sparse legislative history, courts initially assumed that the statute intended to secure the integrity of the Post Office.(5) Over time, however, courts have found a wide range of activities punishable under the mail and wire fraud statutes.(6) Some commentators suggest that in practice the statutes have been extended beyond their original role to provide federal jurisdiction over a broad array of frauds.(7) Used together, the statutes "cover not only the full range of consumer frauds, stock frauds, land frauds, bank frauds, insurance frauds, and commodity frauds, but [also] ... such areas as blackmail, counterfeiting, election fraud, and bribery."(8) Prosecutors also use these statutes to prosecute money laundering and Racketeer Influenced and Corrupt Organizations Act ("RICO") violations.(9) A violation of [sections] 1341 or [sections] 1343 can provide the unlawful act necessary to establish a RICO(10) or money laundering violation.(11) Once a mail fraud or wire fraud offense has been proven, both the RICO and the money laundering statutes allow for more severe penalties.(12) When legislatures have been slow to combat certain types of crimes, the mail and wire fraud statutes have often served as a "first line of defense," that is, a "`stopgap' device which would permit the prosecution of newly-conceived frauds until such time that Congress enacted particularized legislation to cope with new frauds."(13) The mail and wire fraud statutes have, therefore, been referred to as "at least one secret weapon"(14) possessed by federal prosecutors. In 1994, to combat telemarketing ploys directed at the elderly, Congress promulgated the Senior Citizens Against Marketing Scams Act ("SCAMS Act"). The Act responded to the ever-increasing threat of new schemes and the increasing use of private carriers in such schemes, by amending the federal mail fraud statute to cover not only the United States Postal Service (USPS) but private interstate commercial carriers as well (e.g., United Parcel Service, FedEx, DHL).(15) The Act also specifically criminalized telemarketing fraud.(16) The SCAMS Act enhanced the penalties for mail and wire fraud convictions when targeted at individuals aged 55 and over.(17) This Article concentrates on the mail fraud statute because it has been utilized more frequently than its wire fraud counterpart. However, the wire fraud statute has been applied to an increasing variety of means of communication such as facsimile, telex, modem and internet transmissions.(18) As technology advances, the wire fraud statute may overshadow its more popular companion statute. Although there are differences between the statutes, particularly their distinct jurisdictional requirements, they are sufficiently similar in wording that court decisions addressing the character and scope of one statute generally apply to the other.(19) Section II of this Article outlines the elements of a mail or wire fraud offense while Section III examines the available defenses. Section IV reviews venue considerations, and lastly, Section V addresses sentencing issues. II. ELEMENTS OF THE OFFENSE On its face, [sections] 1341 applies to any instance where the mails are used in furtherance of a scheme to defraud.(20) In light of the common law definition of fraud, however, courts have traditionally read into the statute a third element: the defendant must have an intent to defraud.(21) Therefore, to convict a defendant for violating [sections] 1341, the government must prove beyond a reasonable doubt that the defendant perpetrated (1) a scheme to defraud, (2) with the ...See the full content of this document
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