18 USC 1029 Credit Card Fraud.

What does 18 U.S.C. § 1029 make illegal beyond counterfeit cards?

While 18 U.S.C. § 1029 is often referred to as the federal credit card fraud statute, its scope extends far beyond the common image of counterfeit credit cards. Section 1029(a)(1) prohibits knowingly producing, using, or trafficking in counterfeit access devices with fraudulent intent. Similarly, Section 1029(a)(10) imposes criminal penalties for, without the authorization of the credit card system member or its agent, causing or arranging for another person to present transaction records made by an access device for payment.

These examples from Section 1029 are just the tip of the iceberg. All of the offenses in subsection (a) of the credit card fraud statute share three common elements: (i) knowing conduct, (ii) fraudulent intent, and (iii) a connection to interstate or foreign commerce. Because Section 1029 is a federal criminal statute, a connection to interstate or foreign commerce is required for the federal government to have jurisdiction. With respect to credit card fraud, this means that the underlying conduct must involve financial institutions or businesses, the use of electronic devices, materials or individuals that cross state or national boundaries, and various other activities.

Section 1029(e)(1) further explains that the statutory term “access device” includes more than just credit cards. The statutory definition specifically includes:

• Cards;
• Plates;
• Codes;
• Account numbers;
• Electronic serial numbers;
• Mobile identification numbers;
• Personal identification numbers;
• Telecommunications-service, equipment, or instrument identifiers; and
• Other means of account access.

As specified in subsection (a), producing or using counterfeit devices containing any of this information with intent to defraud is illegal under Section 1029. Whether obtaining or accessing an access device without authorization violates Section 1029 depends on the specific conduct and subsection charged. All of these elements must be proven beyond a reasonable doubt in order to sustain a federal credit card fraud conviction.

Which § 1029 subsections match the conduct charged?

When facing allegations under Section 1029(a) of 18 U.S.C., determining the specific subsection charged is critical because the legal requirements vary. Federal prosecutors can choose from any subsection that they believe aligns with the facts of the case. For example:

• Section 1029(a)(2) involves trafficking in or using one or more unauthorized access devices. It requires a total value of at least $1,000 received during any one-year period.
• Section 1029(a)(3) focuses on possessing fifteen or more counterfeit or unauthorized access devices. Unlike subsection (a)(2), this provision does not require a specific monetary threshold to be reached but relies on the sheer quantity of devices involved.
• Section 1029(a)(4) prohibits knowingly possessing, controlling, producing, or trafficking in device-making equipment. This includes equipment, mechanism, or impression designed or primarily used for making an access device or a counterfeit access device.
• Section 1029(a)(5) is similar to subsection (a)(2) in that it targets fraud involving other people’s access devices. It requires the accused to effect transactions with one or more access devices issued to another person or persons, totaling at least $1,000 during a one-year period.
• Section 1029(a)(6) criminalizes soliciting a person for the purpose of offering an access device or selling information regarding or an application to obtain an access device. This subsection is often used to prosecute attempts to commit fraud prior to the actual use of any fraudulent device.

Each of these offenses under Section 1029(a) is a federal crime. The federal government will use these various subsections to target a wide range of fraudulent conduct, and prosecutors may choose the one that best fits the facts of the case. This is why it is critical to work with a criminal defense attorney who can assess the specific allegations and devise a defense strategy that takes into account the particular subsection charged.

Spodek Law Group is a second generation New York firm. Todd Spodek practices out of the firm his father opened in 1976.

How Can Prosecutors Prove the “Device”, “Intent”, and “Commerce” Elements of Section 1029?

At trial, prosecutors must present evidence proving that the defendant committed each element of the offense. Generally, this involves linking the defendant to the access device, the conduct of the transaction, knowledge, and fraudulent intent. In federal criminal cases, the government must establish this beyond a reasonable doubt.

Crucially, some factors that appear to make a case “federal” on their face do not necessarily establish federal jurisdiction. For example, evidence of Internet use, losses exceeding $1 million, involvement of multiple states, or allegations of operating a criminal enterprise or organized crime do not by themselves satisfy the government’s burden. In these cases, the government must still establish proof of all other elements of the relevant subsection(s) under Section 1029.

Similarly, proving that the total amount involved in a defendant’s alleged fraudulent activities meets or exceeds $1,000 does not establish an effect on interstate or foreign commerce. These are separate statutory requirements that prosecutors must independently prove.

If the government presents evidence of the defendant possessing fewer than fifteen counterfeit or unauthorized access devices, this generally precludes a charge under Section 1029(a)(3). However, such evidence may still support a charge under other relevant subsections of Section 1029. Our attorneys have significant experience defending individuals and businesses against all potential charges that can stem from the unauthorized or counterfeit use of an access device or devices.

While many criminal charges under Section 1029 are for transactions involving credit cards, other provisions target specialized activities. Section 1029(a)(7) covers fraudulent access and use of telecommunications devices and services, Section 1029(a)(8) prohibits knowingly and with intent to defraud using, producing, trafficking in, possessing, or controlling a scanning receiver. and Section 1029(a)(9) prohibits knowingly using, producing, trafficking in, possessing, or controlling hardware or software configured to insert or modify telecommunication identifying information so that a telecommunications instrument may obtain service without authorization.

In cases in which our lawyers represent defendants, making arguments regarding consent and interstate commerce can be crucial, but the viability of these arguments depends on the specific subsection(s) charged and the facts of each case.

How Many Years Can a § 1029 Conviction Impose? What About Attempts and Conspiracies?

For a non-repeat offense under 18 U.S.C. § 1029, how many years can a federal conviction impose? For federal prosecutions in which the defendant has not been convicted of a credit card fraud offense in the past, the maximum prison term under Section 1029(a) depends on which subsection(s) have been charged. For most offenses under subsections (a)(1), (2), (3), (6), (7), and (10), the maximum statutory sentence is ten years. However, a conviction under subsections (a)(4), (5), (8), or (9) can expose a defendant to fifteen years, or twenty years after a conviction for another offense under § 1029.

In cases in which the defendant is being prosecuted for a new § 1029 offense following a previous conviction for credit card fraud, the statutory maximum prison term under Section 1029(a) is twenty years.

What about attempting to commit a federal crime under Section 1029? In many criminal cases, it is important to distinguish between an attempt and an alleged commission of the crime; however, Section 1029 explicitly provides that individuals who “(b)(1) Whoever attempts to commit an offense under subsection (a) of this section shall be subject to the same penalties as those prescribed for the offense attempted. (b)(2) Whoever is a party to a conspiracy of two or more persons to commit an offense under subsection (a) of this section, if any of the parties engages in any conduct in furtherance of such offense, shall be fined an amount not greater than the amount provided as the maximum fine for such offense under subsection (c) of this section or imprisoned not longer than one-half the period provided as the maximum imprisonment for such offense under subsection (c) of this section, or both.” under subsection (a) are subject to “Whoever attempts to commit an offense under subsection (a) of this section shall be subject to the same penalties as those prescribed for the offense attempted.” Section 1029(b) separately addresses attempts and conspiracies, while aiding-and-abetting liability is governed by 18 U.S.C. § 2.

Finally, what about conspiracy to commit federal credit card fraud under 18 U.S.C. § 1029? To establish a conspiracy under 18 U.S.C. § 1029(b)(2), prosecutors must prove that two or more people agreed to commit an offense under Section 1029(a) and that at least one party engaged in conduct in furtherance of the offense. In addition to these requirements, prosecutors must establish that the charged agreement was to commit an offense under Section 1029(a). If these elements are proven beyond a reasonable doubt, defendants can face imprisonment no longer than one-half the period provided as the maximum imprisonment for the offense.

What Can a § 1029 Conviction Cost Beyond Imprisonment?

Offenses under Section 1029(a), as well as attempts, conspiracies, aiding, abetting, and assistance, carry substantial penalties. Beyond the risk of a federal prison sentence, defendants who are convicted can also face fines, supervised release, and the statutory forfeiture of assets.

Under federal law, judges may impose fines alongside (or in addition to) imprisonment. While the specific amount of a fine is determined by the circumstances of the individual offense and the defendant’s prior criminal record, individual defendants can face fines of $250,000 (or more) for any qualifying federal felony offense.

Section 1029(c) also provides for the forfeiture of assets in criminal cases. Specifically, Section 1029(c)(1)(C) provides for forfeiture to the United States of any personal property used or intended to be used to commit the offense.

Regarding the distribution of assets obtained through forfeiture, the statutory provision specifies that such forfeiture proceeds are to be governed by the procedures and provisions set forth in Section 413 of the Controlled Substances Act. With the single exception of the government’s ability to recover property from an innocent third party that was used in a § 1029 violation, this federal statute mandates that all assets obtained through forfeiture are to be processed and distributed in accordance with the provisions of the Controlled Substances Act.

Finally, statutory forfeiture and restitution are separate and independent remedies that may be sought in federal criminal cases. This means that prosecutors are authorized to pursue both penalties in a single case. As a result, defendants who fail to successfully avoid a conviction under Section 1029 could face the loss of their personal assets and the imposition of restitution payments in addition to prison time and fines.

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