Federal Wire Fraud Internet Crimes: Online Fraud Defense.

Federal Online Fraud Questions and Answers

Q1: What is the Punishment for Federal Online Fraud?

• Discuss penalties including fines, imprisonment, or both, depending on the statute and sentencing guidelines.

Q2: What Causes a Federal Criminal Inquiry?

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Q3: Are You Willing to Help in Criminal Cases?

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Q4: Are You a Federal Defense Lawyer?

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Q5: How Can I Contact You?

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How Does the Government Connect a Failed Online Transaction to Wire Fraud?

The federal wire fraud statute, 18 U.S.C. § 1343, covers “transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce”. Online fraud cases typically involve electronic communications that trigger federal wire fraud charges.

1. Elements of Proof Regarding Communication

To support its allegations under the wire fraud statute, the government must satisfy two key elements of proof involving the use of the transmission medium. Specifically, federal prosecutors must prove the following:

• It was transmitted by means of wire, radio, or television communication in interstate or foreign commerce; and,
• The transmission was used to further the execution of a fraudulent scheme.

In other words, the transmission medium itself must connect the fraudulent act to the jurisdictional authority of the federal government. Then, based on the federal government’s jurisdiction, federal prosecutors must prove the essential elements of a wire fraud offense. These three key elements include:

2. Elements of Proof Regarding the Fraudulent Scheme

• Proof of the existence of a scheme or attempt designed to defraud;
• Proof of the defendant’s intent to defraud; and,
• Proof that the defendant knowingly and willfully participated in the alleged fraudulent scheme or attempt.

3. Application to Failed Online Transactions

If federal authorities have evidence of a fraudulent scheme (even a failed one), they will use that evidence to target those who allegedly participated in the scheme. Even though the attempted transaction may not have been successful, federal law enforcement will seek to establish that a fraudulent attempt was made. This allows them to connect an individual to a specific criminal act that is eligible for prosecution under federal law.

As a result, individuals who allegedly engaged in fraudulent online transactions may face serious allegations, regardless of the outcome of the alleged fraud. In order to secure a conviction, federal prosecutors must establish both a fraudulent intent and the transmission of information through any of the communication channels specified in Section 1343.

Which Digital Records Can Prove or Undermine the Elements of an Online Fraud Case?

When investigating allegations of online fraud, federal investigators have extensive digital investigative tools at their disposal. Digital forensic teams will use subpoenas and warrants to seek records and information that can be used to support, or potentially undermine, allegations of federal online fraud and other related criminal charges.

The following are just a few examples of the digital evidence that the government can seek during a federal online fraud investigation:

1. Email, Server, and Internet-Service-Provider Records

Records of electronic messages, emails, and other information that can be retrieved from email providers, servers, and internet-service providers can support federal investigators’ allegations of interstate or foreign commerce, the use of communication channels in furtherance of a fraudulent scheme, and the existence of a fraudulent scheme itself. These are also very important for CFAA, identity theft, and other online-fraud investigations.

2. Computers, Smartphones, and Other Electronic Devices

When necessary, federal agents will use search warrants to seek to obtain access to computers, smartphones, and other electronic devices. Files, passwords, cryptocurrency-wallet information, search history, deleted messages, and applications found on these devices can all be used to attempt to establish a defendant’s participation in the alleged fraud or the defendant’s intent to commit online fraud.

3. IP-Address Records, Cryptocurrency-Wallets, and Other Digital Forensic Data

IP-address records, cryptocurrency-wallet records, and the results of other forms of digital forensic analysis can be used to support allegations of access-device fraud, identity theft, and unauthorized use of computers and the internet. These digital records can provide evidence of fraud perpetrated through the internet or by targeting protected computers and other online information systems.

4. Banks, Payment Processors, and Other Third-Party Entities

In addition to digital records, investigators may also seek information and witness testimony from banks, payment processors, and other third-party entities. They may use these sources to gather additional evidence in support of charges including wire fraud, CFAA violations, and identity theft, while attempting to build evidence regarding the amount of financial loss and/or a defendant’s specific role in an alleged fraud.

5. Alleged Victims of Online Fraud

Finally, federal investigators may also conduct interviews with alleged victims of online fraud. These interviews can serve to support wire-fraud and CFAA charges and provide leads to other potential witnesses and electronic evidence.

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How Does a Federal Online-Fraud Case Move from Investigation to Plea or Trial?

While the timeline for a federal online fraud case can vary depending on the circumstances, most federal criminal cases follow a general progression from investigation to arraignment, with the potential for plea negotiations and pre-trial motions preceding a final resolution.

1. Pre-Indictment Investigation

At this point, federal law enforcement may already have evidence of suspected fraudulent conduct, but the case is not yet at the indictment stage. Investigations may last for several months or years before charges are filed.

When a federal criminal case is at the pre-indictment stage, the case is still continuing, and investigators will continue to use subpoenas and other means to gather additional evidence. This can include executing search warrants to seize computers and smartphones.

Regardless of how the case is progressing, it is critical to speak with a federal defense lawyer as soon as possible.

2. The Indictment

Once prosecutors gather sufficient evidence, they will present their findings to a federal grand jury in hopes that this body will return a criminal indictment for a specific offense (or offenses). After an indictment, the court may issue an arrest warrant or summons.

3. Arrest or Summons / Arraignment

Following a grand jury’s return of an indictment, federal authorities will either execute an arrest warrant or send a summons to the defendant to appear in federal court for an arraignment.

4. Plea Negotiations / Discovery / Pre-Trial Motions / Trial

After an indictment, the case begins moving toward a potential trial. However, most federal fraud cases do not go to trial. Many federal cases end in a plea agreement.

If a plea agreement is not forthcoming, the defense will typically review the government’s evidence in a process known as “discovery.” The defense team may then file pre-trial motions to suppress or exclude unfavorable evidence. Ultimately, if no plea agreement is reached, the case goes to trial.

How do Loss, Guidelines, and History Change the Cost of a Wire-Fraud Case?

In connection with wire fraud allegations under 18 U.S.C. § 1343, there are two main “costs” that defendants in these federal cases should be aware of: prison time and attorney fees. Along with restitution, these costs can vary significantly based on a variety of factors.

1. Prison Time

Statutory Maximum

Under 18 U.S.C. § 1343, the maximum federal prison sentence for wire fraud is twenty years. However, if a defendant’s fraudulent scheme has an impact on a financial institution, the statute provides a thirty-year prison sentence maximum. When analyzing a defendant’s potential exposure under the federal wire fraud statute, it is important to consider these maximum penalties, as well as any potential impact that a defendant’s online conduct may have on the outcome of a federal case.

Actual Sentences

However, while statutory maximums are important to consider, they do not establish the actual sentence that a defendant will receive if convicted. The actual sentence a defendant will receive will be determined based on a complex set of factors, including the calculations of loss amount and the defendant’s criminal history (if any), that are used to calculate the defendant’s federal sentencing guideline range.

2. Attorney Fees

There is no single reliable standard for a federal defense lawyer’s fee, and there is no single number that can be presented as the average fee for an online fraud defense case. While attorney fees in federal fraud cases can be expensive, this is due to the fact that federal cases are extremely complex and can take many months or years to resolve. The actual cost of a federal online fraud defense depends on the complexity of the case, the number of charges, the type of digital evidence involved, the stage of the proceedings, and other factors. When you call to discuss your case with an attorney at Spodek Law Group, he will be able to give you an informed estimate of how much it will cost to defend your case based on the specific circumstances and facts.

3. Restitution

Restitution is yet another form of potential penalty in a federal fraud case. According to 18 U.S.C. § 3663A, restitution will be paid in qualifying cases in which an identifiable victim suffered pecuniary loss. This is not automatic in every federal fraud conviction, and it must be specifically awarded by a judge. If a judge decides to award restitution, this could involve ordering the defendant to repay the victim’s financial losses, repay any stolen or fraudulently-obtained funds, and/or pay the greater of the property's value on the date of the damage, loss, or destruction or its value on the date of sentencing, less the value of any part of the property that is returned

Speak With Counsel Before You Answer Anything

If agents have contacted you, the order matters: counsel first, answers second. Spodek Law Group has been practicing since 1976 and defends federal matters nationwide, coast to coast, from offices in New York, Brooklyn, Queens and Los Angeles. Call 888 348 8028.