Wire fraud is a criminal offense under federal law. It involves any scheme to defraud another person that uses electronic communications, either across state lines or internationally. It is closely related to the federal offense of mail fraud, which involves any fraud offense committed with the use of the U.S. mail or other interstate carriers. The federal wire fraud statute specifically mentions wire, radio, and television communications, but it also includes many fraud offenses involving computers and the internet.
Mail and Wire Fraud
Federal mail and wire fraud are essentially the same other than the method of communication used.
Congress enacted the first mail fraud statute in 1872 as part of a revision of federal postal laws. The Supreme Court held in McNally v. United States that it applied to any act “designed to defraud by representations as to the past or present, or suggestions and promises as to the future.” In 1952, Congress enacted the wire fraud statute in order to extend the prohibitions on mail fraud to newer communications technologies. Courts have generally held that wire fraud is identical to mail fraud under federal law, except for the means of communication used. SeeUnited States v. Frey, 42 F.3d 795 (3d Cir. 1994).
State criminal codes may address specific acts that could be considered wire fraud. The creation of electronic codes for use in fraudulently obtaining telephone service, for example, is a class D felony under New York law.
Elements of Wire Fraud
Different federal circuit courts have developed varying lists of elements that the prosecution must prove in order to obtain a conviction for wire fraud, but they are all substantially similar to each other. A prosecutor must prove all of the following beyond a reasonable doubt:
The defendant was part of a scheme to defraud another person, such as by obtaining money or something else of value through false pretenses;
The defendant acted knowingly or with intent to defraud;
The defendant made false representations that were material to the scheme to defraud; and
The defendant transmitted a material misrepresentation by wire, radio, or television communications in interstate or foreign commerce.
A person may be found guilty of wire fraud even if he or she never actually defrauded anyone, and even if he or she did not personally send a fraudulent wire, radio, or television transmission. The state must prove that the defendant intended to defraud someone, or acted with knowledge that wire communications were being used to transmit fraudulent representations. It is also sufficient for the state to prove that the defendant caused the use of a wire transmission in order to commit or further the fraudulent scheme, even if the defendant did not intend the specific transmission, if it was reasonably foreseeable “in the ordinary course of business.” Pereira v. United States, 347 U.S. 1, 8 (1954).
Examples of Wire Fraud
Since a key element in mail and wire fraud prosecutions is the means by which fraudulent statements are conveyed, wire fraud cases include almost any type of fraud-based offense, such as insurance fraud, bank fraud, or tax fraud. A list of fraud investigations for fiscal year 2013 from the Internal Revenue Service (IRS) shows a wide range of cases, involving matters like statements made to investors in an alleged Ponzi scheme, allegedly fraudulent claims on a warranty for business equipment, and electronic bank transfers allegedly intended to further a tax evasion scheme.
Federal Wire Fraud and Student Aid
In June 2021, a man was charged with federal conspiracy to commit wire fraud for his role in a scheme to fraudulently obtain federal student aid. The defendant allegedly recruited foreign nationals and at least one co-conspirator to create fraudulent school documents and submit coursework by using students’ usernames and passwords. The students’ identifying information was either allegedly stolen or given over to the defendant willingly. The scheme took in at least $6.7 million in federal student aid between 2005 and 2021.