The Ultimate Guide to the Federal Wire Fraud Statute

When prosecuting defendants for white-collar crimes, the U.S. Department of Justice (DOJ) will often file charges under the federal wire fraud statute. This statute is one of the DOJ’s most potent weapons, as it is both extremely broad and imposes substantial penalties.

How substantial? In a typical case, a defendant prosecuted under the federal wire fraud statute can face up to a $250,000 fine and 20 years behind bars. In cases involving fraud affecting financial institutions or fraud perpetrated under a presidentially declared major disaster or emergency, the maximum penalties increase to a $1 million fine and 30 years of federal imprisonment.

As a result, if you are facing (or if your client is facing) prosecution under the federal wire fraud statute, you need to be prepared to execute a strategic defense. This starts with gaining a clear understanding of the statute itself.

Put our highly experienced team on your side

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester

Former U.S. Attorney

Hon. Kevin McCarthy

55th Speaker, U.S. House of Representatives (ret.)

Government Consultant

Mike Pompeo

Of Counsel

Former U.S. Secretary of State

John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara

Federal Appeals Attorney

Nicholas B. Johnson

Former Prosecutor

Roger Bach

Former Special Agent (DOJ)

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen

Former Supervisory Special Agent (FBI)

The Federal Wire Fraud Statute (18 U.S.C. Section 1343): An Overview

The federal wire fraud statute (18 U.S.C. Section 1343) prohibits using any means of wire, radio, or television communication in connection with the commission (or attempted commission) of a substantive federal fraud crime. This includes using the Internet in any manner—from sending text messages and emails to posting content on a website or on social media.

The statute’s operative language states:

“Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. . . .”

While the federal wire fraud statute may be short, it packs a major punch. There is a lot to unpack from the statutory language—and unpacking the language reveals just how powerful of a prosecutorial tool 18 U.S.C. Section 1343 is for the DOJ. Breaking down the federal wire fraud statute, we can identify four key clauses:

1. “Having devised or intending to devise any scheme or artifice to defraud”

The federal wire fraud statute can potentially be implicated in any federal prosecution targeting a “scheme or artifice to defraud.” This has been interpreted broadly, and is generally understood to cover any plan to commit a substantive federal fraud crime (i.e., government contract fraud, healthcare fraud, insurance fraud, or securities fraud).

Crucially, the federal wire fraud statute applies not only when a target has “devised” a scheme or artifice to defraud, but also when a target engages in a wire communication “intending to devise” a scheme or artifice. Thus, proof that a target committed a substantive fraud offense is not necessary for the DOJ to pursue charges under 18 U.S.C. Section 1343, and federal wire fraud charges can be justified even when a target’s actions do not justify prosecution for conspiracy or attempt.

2. “[T]ransmits or causes to be transmitted by means of wire, radio, or television communication”

Even though Congress enacted the federal wire fraud statute in 1952, its language is broad enough that it remains an extremely powerful tool in the DOJ’s law enforcement arsenal today. This is largely due to the statute’s use of the language, “by means of wire, radio, or television communication.”

This language, and the term “wire” specifically, has been interpreted to allow prosecution based on the use of the Internet in connection with the commission of a substantive federal fraud crime. This is true even though the Internet didn’t exist when the statute was enacted. Since 18 U.S.C. Section 1343 covers Internet communications, virtually any fraud (or attempted fraud) in the modern era will implicate the statute’s prohibitions.

In fact, when describing the federal crime of wire fraud, the DOJ now omits reference to “radio” or “television.” The DOJ’s Criminal Resource Manual states that, “[t]he elements of wire fraud under Section 1343 directly parallel those of the mail fraud statute, but require the use of an interstate telephone call or electronic communication made in furtherance of the scheme.”

3. “[A]ny writings, signs, signals, pictures, or sounds”

By covering “any writings, signs, signals, pictures, or sounds,” the federal wire fraud statute allows the DOJ to prosecute in cases involving all types of Internet communications. This includes direct one-on-one communications (i.e., text messages, direct messages, emails, and VOIP calls), as well as communications that involve publishing information more broadly. If an individual uses the Internet in any capacityin connection with efforts to devise a scheme or artifice to defraud, the individual will be at risk for facing prosecution under 18 U.S.C. Section 1343.

4. “[F]or the purpose of executing such scheme or artifice”

To secure a conviction under 18 U.S.C. Section 1343, the DOJ must be able to prove that a defendant sent a wire communication “for the purpose of executing” the scheme or artifice in question. In other words, the communication (or, as is more often the case, communications) at issue must pertain to the proposed, attempted, or successful commission of a federal white-collar crime. This means that prosecutors must be able to tie the communication(s) at issue to an underlying substantive offense. While this will be a relatively straightforward matter in some cases, in others, proving the purpose and intent of a communication can require evidence that isn’t available.

The Varying “Elements” of Wire Fraud Under 18 U.S.C. Section 1343

All federal crimes are comprised of multiple “elements;” and, when seeking a conviction in federal district court, the DOJ must prove each element beyond a reasonable doubt. Notably, however, different federal circuits have defined the crime of wire fraud in different ways.

For example, the U.S. Court of Appeals for the Eighth Circuit has established a four-part test for determining if a defendant is guilty of wire fraud. In the Eighth Circuit, the elements of wire fraud are: “(1) that the defendant voluntarily and intentionally devised or participated in a scheme to defraud another out of money; (2) that the defendant did so with the intent to defraud; (3) that it was reasonably foreseeable that interstate wire communications would be used; and (4) that interstate wire communications were in fact used.”

In contrast, the U.S Courts of Appeal for the Fifth and Tenth Circuits have established two-part tests. In the Fifth Circuit, the DOJ must prove: “(1) a scheme to defraud and (2) the use of, or causing the use of, interstate wire communications to execute the scheme.” In the Tenth Circuit, the DOJ must prove: “(1) a scheme or artifice to defraud; and (2) use of interstate wire communication to facilitate that scheme.”

With these differences in mind, when facing charges under 18 U.S.C. Section 1343, it is not enough to look at the statutory language itself. Instead, targets, defendants, and their defense counsel must also review the elements of the offense in the relevant circuit. Proving wire fraud in some circuits is more difficult than proving the crime in others, and this can have a significant impact during plea negotiations, in grand jury proceedings, and at trial.

Defending Against Criminal Charges Under the Federal Wire Fraud Statute

Regardless of the relevant circuit, there are several potential defenses to wire fraud charges under 18 U.S.C. Section 1343. While the defenses that are available depend on the facts of any particular case, the potential defenses to wire fraud generally include:

• Inadequate Evidence to Meet the DOJ’s Burden of Proof – The DOJ has the burden of proving a defendant’s guilt for wire fraud beyond a reasonable doubt. If the government is not able to obtain sufficient evidence of guilt during its investigation, then a conviction is unwarranted. This is true whether the government is unable to uncover evidence of a scheme or artifice to defraud, or any wire communications in the government’s possession do not clearly show a relation to the alleged fraudulent scheme or artifice.
• Inadmissibility of the Government’s Evidence Due to Constitutional Violations – Conducting unconstitutional searches of phones and other devices, seizing evidence in violation of suspects’ constitutional rights, and interrogating suspects in custody without reading their Miranda rights are three examples of issues that can render the government’s evidence inadmissible in court. If the government’s evidence of wire fraud is inadmissible, then prosecutors won’t be able to meet their burden of proof.
• Procedural Miscues and Constitutional Violations During a Wire Fraud Prosecution – Failing to turn over exculpatory evidence, unnecessarily delaying trial, and various other procedural miscues and constitutional violations during a wire fraud prosecution can provide defenses to prosecution as well. In some cases, these can serve as complete defenses to prosecution, while in others they can spur favorable plea deal negotiations.

Contact the Federal White-Collar Defense Lawyers at Oberheiden P.C.

Do you need to know more about defending against federal wire fraud charges under 18 U.S.C. Section 1343? If so, we encourage you to contact us promptly. To speak with a senior federal white-collar defense lawyer at Oberheiden P.C. in confidence, call 888-680-1745 or request a complimentary consultation online now.