Yes, the federal government does have jurisdiction over wire fraud offenses based on the interstate element of electronic communications. In fact, wire fraud is the most widely prosecuted white collar crime in federal court. Part of the basis for this is that federal prosecutors use the broad application of wire fraud to prosecute cases that are not covered by more specific federal fraud crimes do not apply, such as bank fraud, mail fraud or healthcare fraud. This point is supported by statistics from the United States Sentencing Commission, which determined in 2018 that the three most common white collar offenses are Fraud, theft, and embezzlement offenses. The broad range of allegations covered by wire fraud results in it being the most common of these three types of offenses prosecuted.
See the US Sentencing Commission’s 2018 Sourcebook here and the specific chart here.
Primer on Wire Fraud Offenses and Penalties
The federal wire fraud crimes are defined in Title 18 U.S.C. § 1343. The definition of federal wire fraud is found in the statute as well. In order for someone to be convicted of wire fraud charges, the government must prove the person intentionally used an electronic communication, such as the internet, social media, cellphone, or email, for the purpose of committing fraud.
What is Wire Fraud?
In addition to the definition of wire fraud being found in 18 U.S.C. § 1343 of the federal code, the same statute also lists the legal elements that federal prosecutors must prove beyond a reasonable doubt in order for someone to be convicted of wire fraud. The elements of federal wire fraud are as follows:
- Scheme or Artifice to Defraud. This initial element of wire fraud requires the prosecution to prove a scheme or plan to cheat someone, the government, or a business out of money or something of value.
- Scheme involving Material False Representation: wire fraud also requires a false statement, half-truth, or false information; however, the representation must be “material” i.e. capable of influencing another person to act based on the false representation.
- Intent to Defraud. It is not enough to make a false representation to obtain a conviction for wire fraud. Federal prosecutors must prove the statement or representation was made with the purpose/intent to deceive, not for some other purpose.
- Wire Transmission in Interstate or Foreign Commerce. Federal prosecutors are limited to prosecuting federal crimes, which more often than not is based on the Interstate Commerce Clause. Prosecutors must establish an interstate or international element in order to prosecute a wire fraud offense in federal court. Prosecutors often use the media device in order to meet this element, i.e. the Wire Fraud involved the internet, radio, television, or a telephone communication.
A few important details regarding Wire Fraud include the fact that every communication that meets the elements of Wire Fraud above can be prosecuted as separate offenses. As a result, it is not uncommon for wire fraud indictments to include 10, 20, or even 50 or more counts of wire fraud. Additionally, federal prosecutors do not have to prove the wire communication itself was fraudulent or intended to deceive. Prosecutors only have to prove the electronic communication was part of the fraud. In the 21st Century with the overwhelming use of cellphones, social media, and the internet, it is difficult to find a circumstance where a communication was not used as part of carrying out the alleged wire fraud.
Failure is unfortunately an option in wire fraud cases. Federal prosecutors do not have to prove the scheme or plan was successful in order to prosecute for wire fraud. Federal wire fraud prosecution does not require actual financial loss either.
Don’t lose hope, if you are facing a federal wire fraud investigation or indictment. Defenses do exist for allegations of wire fraud. Read below for more information or CALL NOW for a free confidential case strategy session to get your questions answered (405) 657-2323.
Who Investigates Wire Fraud?
As a federal offense, wire fraud is investigated by a variety of federal investigative agencies, including the FBI, DEA, Homeland Security, and the IRS. In many cases wire fraud investigations involve a task force or combination of agencies investigating a particular issue or aspect of the economy. The FBI may be in charge of an investigation related to fraud and the IRS may investigate related tax crimes in the IRS Investigative Division.
Although no federal investigation is exactly the same, most wire fraud investigations include some or all of the following investigation techniques: witness interviews, social media searches, wiretaps, search warrants, cellphone dumps (download of all content on a cellphone), subpoenas, grand jury testimonies, and interrogation.
Defenses to Wire Fraud
Many defenses are available to federal wire fraud allegations. Each wire fraud case is fact intensive; however, the elements of wire fraud above illustrate aspects of the government’s wire fraud cases, which can be defended against. One of the most powerful defenses is lack of intent. Wire fraud requires the “intent to defraud” element. Federal prosecutors cannot obtain a conviction, if you made a statement believing it to be truthful and later found out that it was false. You cannot be guilty of wire fraud, if you believed a statement to be true at the time you made it. The Good Faith defense is very effective in defending wire fraud cases, even evidence exists to support a good faith belief.
The second powerful defense to wire fraud allegations is showing the fraudulent statement was “not material” or did not substantially impact the transaction or another party. It is important to work with an experienced white collar defense attorney to evaluate the specific facts of your case and help you identify the most effective defense to your wire fraud case and how to effectively present your defense in court.
Although federal prosecutors have jurisdiction over interstate and international wires, they cannot pursue an indictment in any federal court. Rather, federal prosecutors must select the appropriate venue, i.e. a location with a substantial connection between the wire transmission and the federal fraud the prosecutor is looking to prosecute.
An experienced federal white collar defense attorney can review the specific facts of your case and identify the best available defenses to wire fraud for your specific case.
Federal Wire Fraud Charges
Wire fraud charges often come as a result of the federal government investigating other offenses, such as mail fraud, social security fraud, bank fraud, bribery, healthcare fraud, and related embezzlement allegations.
Another popular offense filed by federal prosecutors related to wire fraud is conspiracy. Anytime more than one individual is involved in an alleged scheme or plan to defraud, the government will likely file a conspiracy allegation.
In addition to facing federal charges for conspiracy and/or wire fraud, state prosecutors can bring separate charges as well. State prosecutors or District Attorney’s may file a related fraud or embezzlement case, if they believe you committed fraud that is covered under state law. In some instances federal prosecutors will receive additional information from investigators and may file a Superseding Indictment during your case. The Superseding Indictment will include different or additional charges.
In instances of cooperation with federal prosecutors, you may be offered the opportunity to proceed on a less serious allegation by agreeing to prosecution by information or complaint. It is important to work with an experienced white collar defense attorney to ensure you understand exactly what charges you are facing and whether or not the government has evidence to support their prosecution of you for wire fraud and related offenses.
As stated above, most wire fraud prosecutions include multiple counts or allegations of multiple federal crimes, including the following most commonly:
- Conspiracy
- Money Laundering
- Embezzlement
- Credit Card Fraud
- Internet Crimes
- Healthcare Fraud
- Mail Fraud
- Tax Fraud
- Securities Fraud
- Internet crimes
- Embezzlement
- Email crimes, such as phishing or hacking
- Immigration Fraud
- False Statements in a Bank Record
What is a Wire Fraud Conspiracy?
Conspiracy is the offense most commonly charged when two or more individuals agreed to commit a crime and they worked together to commit a crime. Conspiracy is often an additional charge to wire fraud. The federal statutes that prosecutors use to allege conspiracy are 18 U.S.C. § 371 and 18 U.S.C. §1349.
We have discussed federal conspiracy charges in general at a greater level in other articles. Conspiracy will be discussed as it relates to wire fraud charges only in this article. Federal prosecutors exercise an incredible amount of discretion and power in federal criminal courts across the country. They will typically file a conspiracy charge in any case with evidence to support that allegation for a number of reasons.
Conspiracy charges in federal court are incredibly powerful for prosecutors, as it makes every party to the conspiracy responsible for all “reasonably foreseeable” acts of each individual involved in the conspiracy. Stated another way, in for a penny, in for a pound. This joint or collective responsibility aspect of federal Conspiracy charges creates a great risk in going to jury trial in federal court, as each individual can be held responsible for the actions of each member of the conspiracy, which may result in greater punishment.
Prosecutors can present evidence under relaxed rules of evidence in conspiracy trials. Prosecutors are allowed to use statements of any alleged “co-conspirator” without consideration of the rules of hearsay, which are designed to protect a defendant through the rights afforded under the Confrontation Clause. These relaxed rules of admission of evidence even permit some types of evidence that would otherwise not be admissible. Additionally, federal prosecutors may use the alleged acts of co-conspirators.
Many conspiracy cases in federal court involve far greater evidence against one “conspirator” than another. In conspiracy cases, the government is allowed to use all the damaging evidence against the more culpable party to try and prove a case against the less culpable party. It is crucial to work with an experienced federal criminal defense attorney when facing conspiracy charges as not only the law, but the procedure and rules of evidence are unique and require a great amount of experience to fight and defend.
Wire Fraud Penalties and Sentencing Guidelines
Unfortunately, having little or no criminal history has less impact in federal wire fraud and other financial crimes than many federal cases. Some individuals facing federal wire fraud charges may serve long prison sentences, even without any criminal history. Both wire fraud and some other financial crimes carry a penalty up to 20 years in prison.
Our goal is dismissal for every client; however, when we are unable to accomplish our goal we help our clients decide between fighting their case and seeking a resolution with a less serious consequence. Fortunately, it is possible to seek reduced charges and fight for a shorter sentence through the complex process of federal sentencing. Federal wire fraud sentencing is determined by a in-depth analysis of the parties, the facts of the case, and the background and criminal history of the defendant before the court at sentencing.
The federal sentencing guidelines are considered by federal judges at every sentencing hearing; however, they are advisory only. The guidelines and sentencing factors play an important role in federal judges marking decisions in regarding to sentencing, but your defense attorney’s advocacy plays an important role as well. All that to say, sentencing in federal wire fraud cases is complex and this short overview is intended to give some insights into the issues and points to consider federal sentencing in white collar cases. Your wire fraud case or any federal criminal case for that matter should be evaluated by an experienced federal criminal defense attorney.
Federal sentencing is determined by the federal district judge over each case; however, they must first determine the advisory guideline range for the particular offender. The criminal history and offense characteristics are combined to create an advisory range for the federal judge to begin analyzing the appropriate sentencing.
Every federal offense falls under one federal sentencing guideline for a starting point in calculating the “advisory guideline range” on a particular case. In most wire fraud cases the applicable sentencing guideline is § 2B1.1. Many of the individual sentencing guidelines have offense characteristics or factors, which can increase the “base offense level” for that individual crime. The most critical or impactful factor in most white collar offenses, including wire fraud, is the amount of financial loss in the case. The following chart is from the guidelines and describes how great an increase in offense level comes from the amount of loss:
The above loss table is from the sentencing guidelines, USSG 2B1.1
The full guideline related to wire fraud is available at the following link:
See the full Wire Fraud sentencing guideline here.
In wire fraud cases, “loss” will typically mean monetary impact to a victim. In other cases, there is no “victim” or party with a direct loss. Therefore, the prosecution will seek to prove the gain by the defendant and argue these as “intended loss.” The most important factor, loss, is often also the most contested and it is crucial your federal white collar defense attorney is prepared to argue the lowest appropriate loss calculation in your individual case, as seen in the impact the loss can have in sentencing above.
Some of the most common offense characteristics, which may also increase the advisory guideline range considered by the federal judge at sentencing include the following:
- Multiple victims impacted by wire fraud
- Role in the offense, can result in enhancement or reduction, if defendant abused a position of trust or special skill
- Offense level may reduced if the defendant is identified as a minor or minimal participant
- The offense caused “substantial financial hardship”;
- An offense involving “misrepresentation that the defendant was acting on behalf of a charity, educational, religious, or political organization, or government agency”;
- Fraud during the course of a bankruptcy proceeding
- Substantial portion of the offense occurred outside the United States
- The offense included “sophisticated means and the defendant intentionally engaged in or caused the conduct constituting sophisticated means.”
- 3B1.1 through 3B1.5 identify a number of potentially applicable enhancements and reductions in white-collar offenses and wire fraud cases
It is the sentencing judge’s discretion in your case whether or not any or many of these sentencing enhancements or reductions will apply. It is crucial to work with the best federal white collar criminal defense attorney possible to present a compelling argument that these enhancements should not apply to your case and to negotiate a reduction in the seriousness of the charges you will be sentenced on, if you elect to not fight your case in jury trial.
Beyond Sentencing Guideline Calculations in White-Collar and Wire Fraud Crimes
In every federal sentencing hearing the federal judge will evaluate the arguments of the parties and the pre sentencing report or PSR completed by the U.S. Probation in determining what the appropriate enhancements and reductions are in a given white-collar case or wire fraud case. Additionally, the court will determine the criminal history level of the defendant. This information will enable the court to determine the appropriate “guideline sentencing range” for a given white-collar defendant or wire fraud defendant. However, this is just the beginning of sentencing in white-collar and wire fraud cases.
During federal sentencing hearings the judge will consider all relevant information presented by both parties, including potentially aggravating factors by the prosecution and mitigating or extenuating circumstances presented by your wire fraud defense attorney. The majority of information presented for consideration by your federal criminal defense attorney will fall under the federal sentencing factors found at 18 U.S.C. § 3553. The specific language from the statute is below:
18 U.S. Code § 3553 – Imposition of a sentence
The court shall impose a sentence sufficient, but not greater than necessary, to comply with the purposes set forth in paragraph (2) of this subsection. The court, in determining the particular sentence to be imposed, shall consider—
(a) Factors To Be Considered in Imposing a Sentence.—The court shall impose a sentence sufficient, but not greater than necessary, to comply with the purposes set forth in paragraph (2) of this subsection. The court, in determining the particular sentence to be imposed, shall consider:
- The nature and circumstances of the offense and the history and characteristics of the defendant;
- The need for the sentence imposed—
- To reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense;
- To afford adequate deterrence to criminal conduct;
- To protect the public from further crimes of the defendant; and
- To provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner;
(3) The kinds of sentences available;
(4) The kinds of sentence and the sentencing range established for—
- The applicable category of offense committed by the applicable category of defendant as set forth in the guidelines—
(i)issued by the Sentencing Commission pursuant to section 994(a)(1) of title 28, United States Code, subject to any amendments made to such guidelines by act of Congress (regardless of whether such amendments have yet to be incorporated by the Sentencing Commission into amendments issued under section 994(p) of title 28); and
(ii)that, except as provided in section 3742(g), are in effect on the date the defendant is sentenced; or
- In the case of a violation of probation or supervised release, the applicable guidelines or policy statements issued by the Sentencing Commission pursuant to section 994(a)(3) of title 28, United States Code, taking into account any amendments made to such guidelines or policy statements by act of Congress (regardless of whether such amendments have yet to be incorporated by the Sentencing Commission into amendments issued under section 994(p) of title 28);
(5) Any pertinent policy statement—
- Issued by the Sentencing Commission pursuant to section 994(a)(2) of title 28, United States Code, subject to any amendments made to such policy statement by act of Congress (regardless of whether such amendments have yet to be incorporated by the Sentencing Commission into amendments issued under section 994(p) of title 28); and
- That, except as provided in section 3742(g), is in effect on the date the defendant is sentenced.[1]
(6) The need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct; and
(7) The need to provide restitution to any victims of the offense.
Application of 3553(a) Sentencing Factors in White Collar and Wire Fraud Cases
Both parties have wide latitude to present arguments under the 3553(a) sentencing factors. Additionally, your wire fraud defense attorney will have the opportunities to argue for a “Downward Variance” or a sentence below what the advisory guideline range calls for based on participate facts of the case, your life, and your history. For an in-depth Analysis of the Federal Sentencing Process, read our article on that topic here.
Fortunately for defendants facing white-collar offenses or wire fraud offenses in federal court, the sentencing guidelines are no longer mandatory; rather they are advisory. Therefore, the advocacy of your federal wire fraud defense attorney and the information you are able to present to the sentencing judge in your case may have a substantial impact on your outcome.
Federal judges are often willing to grant the request for a downward variance or sentencing below the advisory guideline range based upon the 3553(a) factors and how well you and your federal white-collar defense attorney are able to present your story and your case at sentencing.
Get Answers from an Experienced Fraud Attorney
You should never speak to an investigator or the government without counsel. You are entitled under the Constitution to have your federal fraud attorney present during any and all questioning. You should exercise this right and hire the best white collar defense attorney for your case, prior to facing the government. You should not meet or speak with anyone, until you have spoken with an experienced federal white collar crime attorney.
We welcome the opportunity to meet you for a free confidential case strategy session. Please CALL NOW at (405) 657-2323 or complete the Contact Form on this page and get answers to your questions today.