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Wire Fraud Laws, Charges & Statute of Limitations

June 23, 2020 Federal Criminal Attorneys

Fraud can have many definitions and take on many different forms depending on how the crime was committed. Wire fraud is considered a federal crime and will attract the attention of the FBI who will investigate the case. Each state has laws in place as well to protect consumers and residents from different types of scams. These crimes can take the guise of phishing where emails are sent out to look like official correspondence from a financial institution. It may also include bank fraud, tax fraud, or insurance fraud.

Wire Fraud Laws

When it comes to defining wire fraud, we use a broad brush. Think of anything that uses wires like the internet, your landline phone, or a radio. All of these devices when used to commit fraud can constitute wire fraud. Once a criminal has broken state laws regarding committing fraud, a wire fraud charge will make sure they also face federal charges to increase the likelihood of a conviction.

The Parts of Wire Fraud

To determine if wire fraud was committed, courts will look at several aspects of the case. It can be seen in the “U.S. Department of Justice Criminal Resource Manual” section 941.18 U.S.C. 1343. If a man approaches you in person to invest in a business and then defrauds you later by taking your initial investment, this would not necessarily be wire fraud. The judicial system will look for the following aspects:

-Wired communications were done with the defendant over the phone, internet, television, faxes or radio.
-The victim had their money or property taken through fraud.
-Interstate communications were used to gain the trust of the victim.

With all of these elements together, the criminal will be facing federal charges which come with harsher penalties in general.

Wire Fraud Charges

Many crimes will fall under the umbrella of wire fraud since much of our communication now is no longer just done in person. This can include the following:

Insurance Fraud. An effort to deceive an insurance company through false claims. The criminal may say that damages to their belongings or property are more severe than they really are. At times, the insured party may also damage or destroy their own property to receive money from the insurance company. At the same time, an insurance company can also be charged with not paying out the correct amount for a claim or trying to deny a claim that should have gone through.

Bank Fraud. This can be any activity that deceives a financial institution or the customers for a financial institution. The scam can involve a person posing as a bank employee or a representative of the bank. Some hackers have been known to replace wire instructions for mortgage banks with their own wiring instructions to trick borrowers and have funds from a closing sent to them.

Tax Fraud. Intentionally lying on tax returns to lower your obligation to the government. This can involve taking deductions for expenses that were not related to your business or forging receipts to make it seem like you spent more than you did.

Ponzi Scheme. A Ponzi Scheme is used like a pyramid with people at the bottom funding investors at the top. Many extensive Ponzi Schemes have come to light which seemed like valid investments for years. Eventually, this type of scheme will fall as the amount of people entering at the bottom of the pyramid can no longer support paying out funds to the people at the top that expect above average returns.

Penalties for Wire Fraud

The federal crime of wire fraud can sentence an individual to prison for no more than 20 years and fines that total $250,000. If an organization was involved in the fraud, the limit on fines is then increased to $500,000. Wire fraud done in association with a state of emergency can increase prison time to 30 years and fines are capped at a million dollars.

The Statute of Limitations

Wire fraud charges must be initiated in a five year time span. If a bank or financial institution was involved, this time span is increased to 10 years. The victim does not need to be successfully defrauded for charges to be brought against the criminal or group involved. If a court can prove the intent was to defraud and wired communications were used, then this would still fall under wire fraud.

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