Mail and wire fraud
Mail fraud and wire fraud are terms used in the United States to describe the use of a physical (e.g., the U.S. Postal Service) or electronic (e.g., a phone, a telegram, a fax, or the Internet) mail system to defraud another, and are U.S. federal crimes. Jurisdiction is claimed by the federal government if the illegal activity crosses interstate or international borders.[1][2]
Case law[edit]
In McNally v. United States (1987), the Supreme Court held that 18 U.S.C. §§ 1341 and 1343 did not reach honest services fraud.[10] Congress responded by passing 18 U.S.C. § 1346. In Skilling v. United States (2010), the Court construed § 1346 to apply only to bribes and kickbacks.[11]
United States v. Regent Office Supply Co. (1970) involves Regent which was a company that sold orders over a telephone. Regent representatives would exaggerate their office products over the phone. The United States government charged the company with wire fraud.[12] The company's salesmen were accused of making "false pretenses" over the phone.[13] The United States Court of Appeals for the Second Circuit ruled that the "repugnant" conduct of the company did not amount to criminality.
Lustiger v. United States, 386 F.2d 132 (9th Cir., 1967), involved a real estate advertisement mail fraud. The defendant stated that as a salesman he had engaged in puffery.
In United States v. Takhalov (2016), female nightclub employees would pose as tourists, engage with potential customers, and lure them into nightclubs owned by Takhalov. The employees would express romantic interest in the customers and not reveal that they were club employees.[14] The 11th Circuit ruled that Takhalov deceived their customers, but this deception didn't amount to defrauding the customers under the Wire Fraud statute.
Mail fraud schemes[edit]
There are many types of mail fraud schemes, including employment fraud, financial fraud, fraud against older Americans, sweepstakes and lottery fraud, and telemarketing fraud. Additional information about these various types of mail fraud schemes can be found on the United States Postal Inspection Service website.[15]
In the 1960s and 1970s, Chief Postal Inspector Martin McGee, also known as "The Top Sleuth" or "Mr. Mail Fraud", led his department in exposing and prosecuting numerous mail fraud swindles such as land sales, phony advertising practices, insurance rip-offs, and fraudulent charitable organizations that used the mail to facilitate their illegal activities.[16]
Scope[edit]
The scope of 18 U.S.C. §1341 and 18 U.S.C. §1343 is broad. These statutes have been held by the Supreme Court to encompass "everything designed to defraud by representations as to the past or present, or suggestions and promises as to the future."[17] Lower courts have progressively expanded this ruling, finding that the law "puts its imprimatur on the accepted moral standards and condemns conduct which fails to match the 'reflection of moral uprightness, of fundamental honesty, fair play and right dealing in the general and business life of members of society'".[18] As interpreted, these requirements are not difficult to meet; the Justice Department claims to defer federal prosecution for petty local fraud.
In 1987, the Supreme Court of the United States ruled in McNally v. United States to narrow the scope of the mail and wire fraud statutes, ruling that the statute pertained only to schemes to defraud victims of tangible property, including money. In 1988, Congress enacted a new law that specifically criminalized schemes to defraud victims of "the intangible right of honest services" (honest services fraud).