{"id":27294,"date":"2024-04-17T14:37:21","date_gmt":"2024-04-17T22:37:21","guid":{"rendered":"https:\/\/www.spokeo.com\/compass\/?p=27294"},"modified":"2024-03-27T14:43:51","modified_gmt":"2024-03-27T22:43:51","slug":"what-is-wire-fraud","status":"publish","type":"post","link":"https:\/\/www.spokeo.com\/compass\/what-is-wire-fraud\/","title":{"rendered":"Wire Fraud: The Wires Are (Mostly) Gone, but It\u2019s Still Everywhere"},"content":{"rendered":"\n

If you watch classic films, especially comedies and gangster movies, you\u2019ll have seen a lot of vintage hucksters plying their trade.\u00a0 The scam might be a carnival sideshow, a crooked card game<\/a> (Bystander:\u00a0 \u201cIs this a game of chance, gentlemen?\u201d\u00a0 W.C. Fields:\u00a0 \u201cNot the way I play it, no\u2026\u201d) or a faked-up telegram designed to fool the \u201cmark.\u201d\u00a0<\/p>\n\n\n\n

The term wire fraud might conjure up those black-and-white images in your mind, with its old-fashioned sound.  While its roots do indeed go back to the days of the telegraph, the definition is a lot broader now and sadly, it\u2019s very much in its golden age. <\/p>\n\n\n\n

The Criteria for Wire Fraud<\/h2>\n\n\n\n

Federal legislation<\/a> lays out a few surprisingly simple criteria that must be met in order for a crime to be considered wire fraud.\u00a0 The first is that it uses a form of electrical or electronic communications as opposed to the mail (otherwise it\u2019s mail fraud, which is pretty old-school these days but it definitely still happens<\/a>).\u00a0 The second is that the communication takes place as part of a deliberate scheme to defraud someone of their money or other property.\u00a0 A third is that it involves materially deceiving the victim.\u00a0 The communication must also cross state lines<\/a> at some point.\u00a0<\/p>\n\n\n\n

That first point is the one that explains why wire fraud, despite its vintage sound, is still a very big deal in this century.  Although the law originally specified the use of \u201cwire\u201d as the medium used to conduct the fraud, its interpretation has been broadened to include any use of the telephone system or the internet.  In other words, even when the communication takes place over modern fiber-optic lines or wirelessly through the cellular network, it\u2019s still considered \u201cwire\u201d fraud for legal purposes. <\/p>\n\n\n\n

Not only is wire fraud still a thing, then, it\u2019s a bigger and broader category than it has been at any point in history.  You can scam a lot more people, a lot more quickly, if you do it remotely. <\/p>\n\n\n\n

What Is and Is Not Wire Fraud<\/h2>\n\n\n\n

Let\u2019s look at a specific example.  Suppose friends of yours fall for one of the many (many!<\/em>) Bitcoin scams that are currently making the rounds.  Your friends were approached via a phishing email (the first criterion), an organized crime ring is running the bogus investment (which meets the \u201cdeliberate scheme\u201d criterion), and finally the scam has been misrepresented as a legitimate arbitrage opportunity or something equally plausible (a material deception).  If the scammers are caught, they can be prosecuted for wire fraud. <\/p>\n\n\n\n

But suppose your friends are really enthused about this investment and talk you into getting on board as well.  Because your friends were duped by the real criminals and legitimately believed the investment to be valid at the time, they\u2019re not liable for wire fraud.  It might put a serious dent in your relationship, but they won\u2019t be prosecuted. <\/p>\n\n\n\n

Similarly, if a legitimate business opportunity goes badly and you lose your investment, it\u2019s a life lesson as opposed to wire fraud.  As long as the failed company was in compliance with prevailing law, and intended to turn a profit, it\u2019s not a deliberate scheme to defraud investors. <\/p>\n\n\n\n

Use of Wire Fraud Charges by Prosecutors<\/h2>\n\n\n\n

The laws around wire fraud give prosecutors a powerful and versatile tool to work with.  Often an existing fraud prosecution under other statutes can have wire fraud charges tacked on.  Similarly, prosecutions under the RICO Act, bribery or kickback scams and even money laundering can often be broadened to include wire fraud charges. <\/p>\n\n\n\n

Prosecutors may also fall back on wire fraud charges to secure a conviction if they\u2019re uncertain of successfully making their case on other charges.\u00a0 As this article was written, for example, Elizabeth Holmes \u2014 the CEO of failed medical-tech startup Theranos \u2014 was on trial for nine counts of wire fraud<\/a> and two counts of conspiracy to commit wire fraud.\u00a0 Prosecutors assert (but haven\u2019t yet proven in court, at the time of writing) that Holmes and her co-defendant knew their device didn\u2019t work but lied about it to investors.\u00a0<\/p>\n\n\n\n

The other virtue of wire fraud charges, from the prosecutor\u2019s perspective, is that each offense results in a separate charge.  If the scammer has defrauded (or attempted to defraud) 100 victims, or 1,000, that means 100 or 1,000 counts of wire fraud.  Since each count carries a potential fine and\/or jail time, they add up quickly.  That creates enough leverage to seek a long sentence for high-volume scammers or to coerce them into cutting their losses with a guilty plea. <\/p>\n\n\n\n

What To Do When You Encounter Potential Wire Fraud<\/h2>\n\n\n\n

We write about a lot of criminally fraudulent activity here on this blog, from romance scams<\/a> and buy-and-sell scams<\/a> to phishing emails<\/a> and bogus social security calls<\/a>.\u00a0 One thing these scams \u2014 and most others \u2014 have in common is that they almost invariably meet the criteria for prosecution under the wire fraud statute.\u00a0<\/p>\n\n\n\n

This means that if you\u2019re approached by a scammer through email, text or a phone call, it\u2019s worth taking a few moments to report the incident whether it was successful or not (a failed fraud is still fraud, just as a failed burglary is still burglary).  Not only does every report give investigators more information and an opportunity to crack the case, it gives prosecutors another potential charge to lay. <\/p>\n\n\n\n

At a minimum, you should report any potential fraud to the FTC\u2019s fraud reporting page<\/a> (or, if your identity has been stolen, IdentityTheft.gov<\/a>) and the FBI\u2019s Internet Crime Complaint Center<\/a>.\u00a0 Reporting the incident to your local law enforcement agency is never a bad idea, either.\u00a0<\/p>\n\n\n\n

Finally, reaching out to public-facing venues like the AARP\u2019s Scams & Fraud<\/a> page, the BBB\u2019s Scam Tracker<\/a> or your local news outlets can help warn others about the potential for being scammed.\u00a0 It might not lead directly to an arrest or prosecution, but you could help someone else avoid being victimized.\u00a0<\/p>\n\n\n\n

References:<\/p>\n\n\n\n

IMDB – My Little Chickadee (1940):\u00a0 Quotes<\/a><\/p>\n\n\n\n

Congressional Research Service – Mail and Wire Fraud:\u00a0 An Abbreviated Overview of Federal Criminal Law<\/a><\/p>\n\n\n\n

U.S. Department of Justice Office of Justice Programs – Mail and Wire Fraud<\/a><\/p>\n\n\n\n

United States District Attorney\u2019s Office, Northern District of California – U.S. v. Elizabeth Holmes, et al.<\/a><\/p>\n\n\n\n

U.S. Federal Trade Commission – Report To Help Fight Fraud!<\/a><\/p>\n\n\n\n

U.S. Federal Trade Commission – Report Identity Fraud and Get a Recovery Plan<\/a><\/p>\n\n\n\n

U.S. Federal Bureau of Investigation – Internet Crime Complaint Center (IC3)<\/a><\/p>\n\n\n\n

AARP\u00a0 – Scams & Fraud<\/a><\/p>\n\n\n\n

Better Business Bureau – BBB Scam Tracker<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

It may sound old-fashioned, but wire fraud is very much a modern and growing problem. 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