Can wire fraud apply to telephone communications?

Can Wire Fraud Apply to Telephone Communications?

Wire fraud is a type of fraud that involves the use of telecommunications or the internet to execute fraudulent schemes. But can it apply to old-fashioned telephone calls? The short answer is yes, wire fraud can absolutely apply to telephone communications.

The legal definition of wire fraud is actually quite broad. It applies to any interstate or foreign communication by wire, radio, or television used to further a fraudulent scheme. This includes phone calls, text messages, emails, faxes, and online communications. As long as the phone or internet is used to transmit information or communicate across state or national borders, wire fraud can apply.

Wire fraud laws have been around for decades, since well before the internet. The first federal wire fraud law was passed in 1952. Back then, it was mainly aimed at fraudulent telegraph communications. But the law has evolved over time to encompass new technologies as they emerged, like the telephone, fax machine, and eventually the internet.

So wire fraud has always covered phone calls, even if that wasn’t the main focus early on. The legal definition and scope of wire fraud hasn’t really changed. Prosecutors just apply the same statutes to new tech. The laws were meant to be broad and flexible enough to adapt as technology advanced.

In fact, some of the earliest wire fraud cases in the 1950s and 60s dealt with telephone communications. There are records of people being convicted for using the telephone to execute fraudulent investment schemes, for example. The phone was considered a wire communication even in the early days of the wire fraud laws.

These days, wire fraud charges often focus more on email, online messaging, and other internet communications. But phone calls can still provide the basis for wire fraud prosecutions. If someone uses a telephone call to lie, misrepresent, or deceive as part of a fraudulent plan, that can potentially constitute wire fraud under federal law.

Elements of Wire Fraud

For any communication to qualify as wire fraud, prosecutors generally have to prove these basic elements:

• There was a scheme to defraud or obtain money or property through false pretenses
• The defendant knowingly and willfully participated in the scheme with intent to defraud
• The scheme involved an interstate wire communication, like a phone call or online message
• The wire communication was used to execute or further the scheme to defraud

As long as these elements are met, the specific communication medium used doesn’t matter. It could be a telephone call, email, fax, or other electronic transmission. Anything that crosses state lines qualifies as an interstate wire communication.

For example, if a fraudster makes misleading statements over the phone to convince someone to invest in a phony business or transfer funds, that could potentially be charged as wire fraud. The phone call facilitated the fraud scheme by communicating false information.

Real World Examples

There are plenty of real cases where phone calls formed the basis of wire fraud charges:

• In 2020, a stockbroker was convicted of wire fraud for making false statements to clients over the phone to get them to invest money in high-risk securities. He misled them about the risks and exaggerated the potential returns.[1]
• In 2019, a man pleaded guilty to wire fraud after using telephone calls to pitch fraudulent investment opportunities to doctors and dentists. He convinced them to invest over $2 million but never actually invested their money as promised.[2]
• In 2015, the CEO of a renewable fuel company was charged with wire fraud for allegedly making false claims about the company’s technology and production capabilities when talking to investors on the phone. This induced them to invest or remain invested.[3]

As you can see, phone calls were central to the fraud in each of these cases. The defendants lied or made misleading claims over the telephone to deceive victims and obtain money from them. Even though newer technologies were available, plain old telephone calls were sufficient to bring wire fraud charges.

Defenses Against Wire Fraud

If you’ve been accused of wire fraud involving phone calls or other communications, there are legal defenses that may apply in your case:

• No intent to defraud – If there’s evidence you acted in good faith without intent to deceive, this could rebut charges that you “knowingly” engaged in a scheme to defraud.
• No actual fraud – If the communications didn’t factually contain false or fraudulent statements, there’s no underlying fraud to base charges on.
• Free speech – The First Amendment protects free speech. If your telephone communications contained only truthful information, opinions, or non-fraudulent sales puffery, your constitutional rights may provide a defense.
• No reliance – If alleged victims didn’t actually rely on your phone communications to make decisions, it may defeat the charges.

An experienced criminal defense lawyer can evaluate the specifics of your case and determine if any of these defenses might apply. It’s important to get advice from a lawyer when facing wire fraud allegations, even if they involve something as simple as a phone call.

Avoiding Wire Fraud Charges

To avoid getting ensnared in a wire fraud case, follow these best practices:

• Be truthful in all communications, including phone calls, emails, texts, online chats, etc. Never make false statements or misrepresent facts.
• Don’t use any communication channels to pressure or deceive people into sending money, investing, or buying something.
• Maintain clear and accurate records of all communications with clients and customers.
• Consult a lawyer if you have any concerns that your communications could be misconstrued.

Wire fraud laws are broad and carry harsh penalties – up to 20 years in prison. So never take risks when communicating electronically or over the phone. Get legal guidance to ensure you stay firmly on the right side of the law.

In summary, wire fraud absolutely applies to phone calls in addition to online communications. The telephone has always been considered a “wire” under the federal wire fraud statutes. While the internet opened more avenues for fraud, plain old telephone calls can still provide the basis for wire fraud charges today. Maintaining open and honest communications is the best way to avoid allegations of wire fraud.

References

[1] https://www.justice.gov/usao-sdny/pr/stockbroker-sentenced-manhattan-federal-court-wire-fraud-connection-multimillion-dollar

[2] https://www.justice.gov/usao-ednc/pr/raleigh-man-pleads-guilty-investment-fraud-scheme

[3] https://www.justice.gov/opa/pr/former-ceo-and-executive-vice-president-indiana-based-biofuels-company-indicted-fraud