Mail and Wire Fraud

• Author: Todd Kowalski
• Pages: 1051-1070

MAIL AND WIRE FRAUD

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1051

II. ELEMENTS OF THE OFFENSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1052

A. Scheme to Defraud by Means of a Material Deception . . . . . . 1053

B. Intent to Defraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1055

C. Use of the Mails, Wires, or Both in Furtherance of a Scheme to

Defraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1058

D. Loss of Money, Property, or Deprivation of Honest Services . . 1060

1. Loss of Money or Tangible Property . . . . . . . . . . . . . . . . 1061

2. Loss of Intangible Property .. . . . . . . . . . . . . . . . . . . . . . 1061

3. Deprivation of Honest Services . . . . . . . . . . . . . . . . . . . . 1062

III. DEFENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1065

A. Good Faith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1066

B. Statute of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1067

IV. SENTENCING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1067

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. § 1341,

with its simplicity, adaptability, and comfortable familiarity.

1

The federal mail

2

and wire

3

fraud statutes are powerful tools for prosecutors that

apply to a wide range of conduct.

4

While some have lauded the statutes,

5

others

have expressed concern about their sweep, maintaining that the “mail and wire

fraud statutes have ‘been invoked to impose criminal penalties upon a staggeringly

broad swath of behavior,’ creating uncertainty in business negotiations and chal-

lenges to due process and federalism.”

6

In practice, the statutes have often been

1. Jed Rakoff, The Federal Mail Fraud Statute (Part I), 18 DUQ. L. REV. 771, 771 (1980).

2. 18 U.S.C. § 1341.

3. Id. § 1343.

4. See Geraldine Szott Moohr, The Balance Among Corporate Criminal Liability, Private Civil Suits, and

Regulatory Enforcement, 46 AM. CRIM. L. REV. 1459, 1467–68 (2009) (highlighting “the diminished import of the

mens rea element”); Ralph K. Winter, Paying Lawyers, Empowering Prosecutors and Protecting Managers: Raising

the Cost of Capital in America, 42 DUKE L.J. 945, 954 (1993) (noting the “wide range of conduct involve[es]

conflicts of interest, alleged misrepresentations, or the failure of agents to inform alleged principals of certain facts”).

5. E.g., Rakoff, supra note 1, at 771.

6. United States v. Weimert, 819 F.3d 351, 356 (7th Cir. 2016) (quoting Sorich v. United States, 555 U.S.

1204, 1205 (2009) (Scalia, J., dissenting from denial of certiorari)).

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used as a stopgap to enable prosecution of new forms of fraud until Congress

enacts more particularized legislation.

7

Although Congress originally enacted the mail fraud statute to secure the integ-

rity of the United States Postal Service (“USPS”),

8

the mail and wire fraud statutes

are now applied to several modes of communication.

9

The statutes also provide

federal courts with jurisdiction over a broad array of frauds.

10

See Sawyer, 85 F.3d at 723 n.5 (referring to mailing element as “hook” to secure federal jurisdiction);

Geraldine Szott Moohr, Mail Fraud Meets Criminal Theory, 67 U. CIN. L. REV. 1, 7 & nn.25–29 (1998)

(discussing jurisdictional effect of mailing element); see also United States v. Swenson, 25 F.4th 309, 313–14

(5th Cir. 2022) (afrming mail fraud conviction for defendant who defrauded prospective adoptive parents

through her adoption agency); United States v. Gatto, 968 F.3d 104, 109–10 (2d Cir. 2021) (afrming wire fraud

convictions for Adidas executives who defrauded universities by paying college basketball players to attend the

universities in violation of NCAA rules); United States v. Hird, 913 F.3d 332, 338–40 (3rd Cir. 2019) (afrming

convictions for mail and wire fraud for trafc court judge who ran ticket-xing scheme); Lauren del Valle &

Kara Scannell, Michael Avenatti convicted of wire fraud and aggravated identity theft for stealing form Stormy

Daniels, CNN (Feb. 4, 2022, 3:37 PM), https://www.cnn.com/2022/02/04/politics/michael-avenatti/index.html

(reporting on attorney who stole proceeds of book deal).

Further, mail and

wire fraud are predicate felonies under the Racketeer Influenced and Corrupt

Organizations Act (“RICO”) and are specified as unlawful activity for purposes of

the federal money laundering statutes.

11

This Article provides an overview of the prosecution of offenses under the fed-

eral mail and wire fraud statutes. Section II of this Article lists and analyzes the

elements of a mail or wire fraud offense. Section III examines the available

defenses. Finally, Section IV addresses sentencing issues that relate to convictions

under the mail and wire fraud statutes.

II. ELEMENTS OF THE OFFENSE

For a mail or wire fraud offense, the government must prove beyond a reasona-

ble doubt that the defendant perpetrated (A) a scheme to defraud by means of a ma-

terial deception; (B) with the specific intent to defraud; (C) while using the mails,

private commercial carriers, and/or wires in furtherance of that scheme; (D) that

did result or would have resulted in the loss of money or property or the

7. See United States v. Maze, 414 U.S. 395, 405–06 (1974) (Burger, C.J., dissenting) (“When a ‘new’ fraud

develops—as constantly happens—the mail fraud statute becomes a stopgap device to deal on a temporary basis

with the new phenomenon . . . .”), superseded by statute, 18 U.S.C. § 1344; United States v. Sawyer, 85 F.3d 713,

723 n.5 (1st Cir. 1996) (noting the increased use of the mail and wire fraud statues and that “[their] use . . . is

merely a ‘jurisdictional hook’”).

8. See, e.g., Parr v. United States, 363 U.S. 370, 389 (1960) (stating the statute was designed to prevent the use

of the post office for fraudulent schemes).

9. See infra Section II.C. (discussing application of the wire fraud statute to new modes of communication).

10.

11. 18 U.S.C. §§ 1956(c)(7)(A), 1957(f)(3), 1961(1); see also United States v. Simon, 12 F.4th 1, 33–34 (1st

Cir. 2021) (affirming RICO conviction based on mail fraud), cert. denied sub nom. Lee v. United States, 142 S.

Ct. 2812 (2022); United States v. Fattah, 914 F.3d 112, 166 (3d Cir. 2019) (affirming RICO conviction based on

wire fraud); United States v. Jenkins, 633 F.3d 788, 804 (9th Cir. 2011) (affirming defendant’s conviction for

wire fraud based on money laundering scheme). For a discussion of liability under the RICO or money

laundering statutes, see the Racketeer Influenced and Corrupt Organizations and Money Laundering Articles in

this Issue.

1052 AMERICAN CRIMINAL LAW REVIEW [Vol. 60:1051