Wire Fraud Under 18 U.S.C. 1343: Building a Defense.

Defenses to federal wire fraud allegations and charges range from factual and legal challenges to arguments about the prosecution’s lack of grounds for pursuing criminal charges. The particular facts that are at issue in each case will dictate the most effective approach to defense. Some examples of defense strategies include:

• Lack of Intent (Good Faith), Section 1343 prosecutions require proof of “specific intent.” The government must prove the defendant acted “for the purpose of obtaining money or property by means of false or fraudulent pretenses.” Good faith defenses are often powerful, especially when bolstered by evidence of the defendant’s prior conduct.
• No Use of Interstate Wires, The government must also connect a use of interstate or international wires to the alleged scheme or artifice. The particular wires involved can be a weak point in the government’s case, and challenges to the government’s evidence can be used to argue that wire fraud is not an appropriate charge.
• No Intent or Willingness to Interfere with Someone’s Rights, Federal wire fraud charges can target a range of misconduct, including schemes and artifices intended to interfere with a target’s right to property or other assets. This also extends to attempts to take or obtain property that is not held by another person.

What are the consequences of a federal wire fraud conviction?

A basic Section 1343 conviction carries a maximum of 20 years in prison, and additional penalties can apply in various circumstances. Prosecutors can enhance defendants’ sentencing exposure by:

• Attaching additional counts for each transmission over wires
• Including or alleging use of an interstate wire to further a separate offense (e.g. unlawful financial transactions)
• Alleging use of interstate or international wires to pursue fraud that impacts another federal program or government benefit
• Alleging a scheme or artifice designed to defraud a financial institution or the federal government itself

What must prosecutors prove beyond dishonest conduct?

What Else Must Prosecutors Prove to Establish Wire Fraud?

Along with dishonest conduct (i.e., fraud), prosecutors must prove all of the following elements to obtain a federal wire fraud conviction:

1. Intent to Defraud

Intent is a critical element of a federal fraud offense. In order to convince a jury of the defendant’s intent to defraud, the government must prove intent to defraud beyond a reasonable doubt. While circumstances such as false statements or misrepresentations may be used against defendants, they do not automatically establish fraudulent intent. At Spodek Law Group, federal wire fraud defense lawyers have successfully defended against fraud charges using a variety of defense strategies, and some of those strategies have included (but have not been limited to):

• Good faith Reliance, If a defendant relies in good faith on advice from professionals (e.g., accountants, auditors, and consultants), then the defendant’s conduct was likely not done with intent to defraud.
• Contemporaneous Record Evidence, Contemporaneous records such as emails, notes, and documents showing a defendant’s intent can also be a powerful defense tool. For example, a targeted and targeted-date email demonstrating a defendant’s focus on transparency or compliance can cast doubt on the government’s theory of the defendant’s intent at that time.

2. Use of Wires for Interstate or International Business

While the use of telephones, internet, and other electronic transmission methods for communication is common practice, the government must prove “use” for the purpose of carrying out the fraudulent scheme. In recent federal court cases, the use of a single interstate wire was enough to sustain a wire fraud charge. It is a good idea to have this in mind when considering whether or not to negotiate a plea.

• Kousisis v. United States, 605 U.S. 114 (2025), At the U.S. Supreme Court, Kousisis held that while economic harm is not a necessary element of wire fraud under 18 U.S.C. 1343, “fraudulent inducement” claims must involve the “scheme to obtain a victim’s money or property.”
• Ciminelli (2023), Also at the U.S. Supreme Court, Ciminelli held that “ fraudulent-inducement” schemes must involve an attempt to obtain “traditional property,” not the alleged “right to know the truth” in order to obtain a government contract.
• Kelly v. United States, 590 U.S. 391 (2020), Here, the U.S. Supreme Court held that federal fraud statutes like 18 U.S.C. 1343 and 18 U.S.C. 1346 are limited to those schemes intended to defraud others “of money or property.”

3. Materiality (True and/or False Statement)

Prosecutors must prove that the defendant engaged in a material fraud, meaning he or she provided a “misstatement that had a natural tendency to influence or was capable of influencing” a reasonable decision-maker.

• Materiality of Silence, Materiality of silence or omission, as opposed to affirmative lies, requires a duty to disclose. Defendants that assert a duty to disclose must be able to make a well-supported claim that the other party was unaware of the omitted truth or they were under the assumption it was not relevant to their decision to proceed.
• Materiality of a Misleading Half-Truth, Misleading half-truths can be a challenging defense as well. When a party provides half the truth or omits the truth to deceive, it can, in some situations, be viewed as fraudulent conduct.

4. Specific Intent to Defraud

The government must prove a scheme to defraud. Defendants that are targeted in fraud cases can use their records, statements, and other communications to cast doubt about this and, in some cases, rebut intent. For example, if the defendant acted in reliance on advice received from consultants or third party experts, or if the defendant made no effort to conceal their actions, these facts can potentially be used to cast doubt on the government’s case and to assert a good faith defense.

When Does a Communication “Execute” a Scheme to Defraud?

A federal wire fraud prosecution requires the government to prove that a defendant’s communications were sent in furtherment of the alleged scheme. To be considered “furtherment,” a transmission or communication must use interstate or foreign wires, including telephones, internet, radio, or television. While this is often the case, federal wire fraud prosecutors must establish that the transmission was sent in furtherment of the defendant’s alleged fraudulent behavior or scheme.

• Preliminary Communications, Often, preliminary communications can be used to execute a scheme, provided they are incident to the execution of one of the scheme’s essential parts.
• Lulling Communications, Communications that a defendant transmits to victims or otherwise as a means of concealing the alleged fraudulent scheme will be considered “ lulling communications.” These communications are deemed to further the scheme because they have the tendency to induce the victim to delay discovery and to delay filing a complaint.
• Wires and Subsequent Conduct, Wires transmitted after the alleged execution of a scheme generally cannot, however, further the scheme. For example, an investor who deposits money into a brokerage account and then wires the money to a broker may be able to challenge federal wire fraud charges if the alleged scheme had been executed prior to the wire transmission.

Who Is Subject to Liability if a Wire Was Sent Outside of the Defendant’s Immediate Control?

In some cases, the government will claim that another party acted as a conduit for executing a scheme to defraud. The defendant’s liability attaches where the use of another’s wire “ordinarily follows” the defendant’s conduct.

• U.S. Courts have held that defendant needs not knowingly use wires that traverse state or national borders. In fact, in many cases defendants need not know that a transmission sent within the U.S. from one state to another is considered “interstate business” under federal wire fraud laws.
• While Section 1343 specifically calls out wire transmissions, it applies to radio and television transmissions as well.
• Modern-day means of transmissions that fall under Section 1343 include (but are not limited to):

- Text messages and emails

- Wire transfers (e.g. ACH, SWIFT, Zelle, and wire transfers)

- Phone calls

- Use of the internet

- Social media posts

- Use of the public postal system for federal offenses

How Can Good Faith Negate Proof of Fraudulent Intent in Federal Wire Fraud Case?

Because fraudulent intent is an essential element of Section 1343 wire fraud, the federal government must prove that the defendant acted with “intent to defraud.” This is an affirmative intent that has to be proven beyond a reasonable doubt in a jury trial. This means that a good faith defense can negate evidence of intent, and, when good faith is asserted, the government retains the burden of proving the defendant’s fraudulent intent.

This provides two avenues for defense:

• Demonstrating a good faith defense to rebut the government’s evidence of intent.
• Challenging the government’s evidence by arguing that the government has failed to prove the defendant’s intent beyond a reasonable doubt.

Can the Government Defeat a Good Faith Defense by Establishing Willful Blindness?

The government is permitted to prove the defendant’s intent to defraud indirectly. While the government cannot prove the defendant’s intent through gross negligence, recklessness, or even indifference, it can prove a defendant’s intent through “willful blindness.” This is a legal fiction that means that a defendant deliberately avoided knowledge of the fraud. In other words, if a defendant suspected fraud and decided to ignore it to avoid knowledge, then this constitutes “willful blindness” and will be treated as a sign of intent.

Can a Defendant Rely on Advice Received from Accountants to Assert a Good Faith Defense?

Defendants who received advice from accountants can assert a good faith defense if they have also disclosed all the relevant facts to their accountants.

• Defendants who testify in order to assert a good faith defense are subject to being cross-examined and impeached. This can expose the defendant’s conduct and intent and expose the defendant to other charges. If a defendant is under investigation, his or her good faith defense will likely be scrutinized and could raise new issues that may jeopardize the defendant’s ability to maintain a good-faith defense.
• Advice-of-counsel is an approach to asserting a good faith defense that is frequently used. An advice-of-counsel defense is supported by (i) the defendant’s reliance on the advice received from legal counsel, (ii) that the defendant had full disclosure of all material facts to the lawyer, and, (iii) the defendant actually relied on the lawyer’s advice.

When Can the Use of Advice-of-Counsel Evidence Lead to a Waiver of the Attorney-Client Privilege?

In order to defend against a charge that the defendant intended to defraud, defendants may need to put their attorneys’ advice at issue. A client who does so effectively waives their attorney-client privilege in order to assert an advice-of-counsel defense. Thus, an advice-of-counsel defense will require a careful and comprehensive assessment of what will be at issue and what additional evidence and information may be revealed in the process.

Todd Spodek and the attorneys at Spodek Law Group handle federal cases of this kind from New York, Brooklyn, Queens and Los Angeles.

Which Motions Can Limit or Dismiss Federal Wire Fraud Charges?

Before proceeding to trial, Spodek Law Group’s defense attorneys will evaluate whether the following motions are appropriate:

• Suppression Motion. Spodek Law Group’s defense attorneys can file a suppression motion in order to challenge the admissibility of evidence obtained illegally by the government. For example, if the government improperly obtained the electronic evidence, then a suppression motion can be used to exclude the evidence from trial.
• Rule 12(b)(3). Under Rule 12(b)(3) of the Federal Rules of Criminal Procedure, the defendant must raise certain defenses and objections before trial, including motions alleging a defect in instituting the prosecution, motions alleging a defect in the indictment or information, motions to suppress evidence, motions to sever charges or defendants under Rule 14, and motions for discovery under Rule 16. The time for making an affirmative defense is limited and defendants will be required to raise their defenses before the end of the pretrial period.
• Rule 29 Motion for Acquittal. Under Rule 29 of the Federal Rules of Criminal Procedure, a defendant may move for a judgment of acquittal on the ground that the evidence is insufficient to sustain a conviction, either after the government closes its evidence, after the close of all the evidence, or within 14 days after a guilty verdict. A jury verdict of acquittal is final and cannot be appealed by the government, but where the court grants a Rule 29 judgment of acquittal after a guilty verdict has been returned, the government may appeal that ruling.
• Motion for Bill of Particulars, Motions for more detailed descriptions of the government’s charges can be filed in wire fraud cases. Often, defendants accused of fraudulent conduct will have a difficulty preparing a defense strategy if they do not have a detailed description of the fraudulent conduct alleged by the government.
• Motion for Bill of Particulars, If the government pursues the charges of fraud and other offenses that are related, these charges could be the subject of a motion for bill of particulars. This allows a defendant to more easily determine which defense he or she should rely on for each offense.
• Motion to Dismiss Based on Duplicity and Multiplicity, Duplicity occurs when the government charges more than one offense in a single count. Multiplicity occurs when the government charges the same offense in multiple counts. In some cases, these are grounds for a motion to dismiss.
• Motion to Quash Warrant, In some cases, the warrants used to obtain the evidence to be used against the defendant will not have particularity. This can be grounds for a motion to quash, leading to the evidence being suppressed.
• Motion to Dismiss Based on Constructive Amendment, A constructive amendment occurs when the government’s trial evidence will be fundamentally different from the government’s indictment. Defendants can seek to avoid a conviction by arguing that the government tried to amend its charges by a “constructive amendment.”
• Motion to Dismiss for a Statute of Limitations Violation. In wire fraud cases, the federal statute of limitations period is five years. The statute of limitations period begins to run upon the commission of the offense, subject to certain tolling provisions. If the statute of limitations has expired, then the case must be dismissed.

Can prosecutors blame one participant for another’s conduct?

Can Federal Prosecutors Hold One Defendant Liable for Co-Defendant’s Alleged Wrongdoings?

Along with wire fraud charges, federal prosecutors can pursue charges under various other theories of criminal liability. This includes conspiracy, aiding and abetting, and Pinkerton liability. While the government may pursue these charges, each requires proof of specific elements. Defenses for each of these theories are:

Fraud Conspiracy (18 U.S.C. 1349)

A fraud conspiracy requires proof of an agreement between the defendant and at least one other person to violate federal law. While the government may point to the defendant’s association with wrongdoers, that alone is not proof of an agreement to commit fraud. Section 1349 does not require a conspirator to have committed an overt act in furtherance of the conspiracy to be liable. If the government pursues an overt act, the evidence is typically circumstantial and must be challenged by asserting an alternative explanation or demonstrating that the communication in question was not in furtherance of a conspiracy.

Aiding and Abetting (18 U.S.C. § 2)

Under 18 U.S.C. § 2, “ whoever aids, abets, counsels, commands, induces, or procures any person to commit any offense pursuant to this title or will recklessly or intentionally aid, abet, counsel, command, induce or procure any person to commit any offense pursuant to this title shall be punished as principal.” To prove aiding and abetting liability, the government must prove the defendant provided intentional and substantial assistance toward the commission of a federal fraud offense.

Pinkerton Liability

A recent Supreme Court decision affirmed the doctrine of Pinkerton liability, a legal rule that allows a defendant to be held liable for other offenses committed by a coconspirator. Under the Pinkerton doctrine, defendants can be held liable for another offense if, (i) the substantive offense is within the scope of the conspiracy, (ii) the offense was committed in furtherance of the conspiracy, and, (iii) the substantive offense was a reasonably foreseeable consequence of the conspiracy.

Withdrawal from a Fraud Conspiracy

A defendant can avoid subsequent Pinkerton liability if they can demonstrate that they withdrew from the fraud conspiracy. Withdrawal requires “ affirmative conduct ” communicated to coconspirators disavowing the conspiracy or withdrawing from it. A defendant can also withdraw by cooperating with law enforcement agencies and facilitating the government’s prosecution of a fraud conspiracy. Once withdrawal from the fraud conspiracy is proven, the defendant cannot be held liable for the subsequent offenses committed by a coconspirator.

How Can the Defense Reduce Sentencing Exposure?

Along with challenging the government’s evidence of guilt, it is imperative to have a clear understanding of sentencing and any other criminal penalties that may apply. When defendants face sentencing, they need to be prepared to make informed and educated decisions. The following are examples of circumstances and defense arguments that can limit defendants’ exposure to fines, forfeiture, restitution, and incarceration:

Forfeiture

Forfeiture is often a consequence of a federal wire fraud conviction. It includes forfeiture of all proceeds of the fraudulent scheme and all property “traceable to such proceeds.”

A forfeiture of real or personal property depends on whether the property is traceable to the proceeds of a fraud. For example, if a fraud defendant used the proceeds of a fraud to purchase a vehicle, then the vehicle can be forfeited.

Actual and Intended Loss

Loss calculation is another critical aspect of sentencing. If the prosecution pursues charges, then the defense will have to argue for a loss calculation that avoids excessive incarceration. For example, if a fraud defendant tried to execute a multi-million dollar fraud, but only succeeded in taking a few thousand dollars, then the alleged “intended loss” will be substantially greater than the “actual loss.” The loss used for sentencing should generally be based on the actual loss calculation.

Defendants can also object to the amount of loss calculations. For example, if a defendant returned the funds he obtained prior to being caught, then the defendant may be able to get credit for those funds under a specific Sentencing Guideline rule.

Joint Liability for Loss

Under U.S.S.G. 1B1.3, joint liability applies if: (i) the defendant acted “in concert” with another person, (ii) the defendant’s role contributed to the fraudulent scheme, (iii) the crime was committed in furtherance of the conspiracy, and, (iv) the crime was a reasonably foreseeable consequence of the conspiracy.

If any of these conditions do not apply, then the defendant should not be held jointly liable. This is an important issue when targeting co-defendants.

Gain-Based Sentencing

Along with actual and intended loss, the Sentencing Guidelines also allow prosecutors to seek an “amount of gain” as the measure of the offense. A gain-based sentence can be used as a substitute for a loss-based sentence if the loss is not reasonably determinable. If loss can be reasonably determined, then a gain-based sentencing enhancement is not allowed.

Restitution Obligations

Restitution is an out-of-pocket obligation. It is meant to compensate the victim of a crime for the loss incurred due to the defendant’s crime. Under 18 U.S.C. 3663A, prosecutors must prove that the defendant’s conduct “directly and proximately” caused the loss of the property or other assets.

Guidelines Manual and Ex Post Facto

The relevant Sentencing Guidelines manual determines the loss table in § 2B1.1 of the Guidelines. If the relevant loss table is found in the Sentencing Guidelines that were published before the crime was committed, but there is a more severe table in the Sentencing Guidelines published after the crime was committed, then an Ex Post Facto argument will be used to bar the latter table.

Contact a Federal Criminal Defense Attorney

Nothing here is legal advice, and the details of your case matter. Todd Spodek and Spodek Law Group take federal criminal and white collar cases nationwide, from offices in New York, Brooklyn, Queens and Los Angeles. You can reach the firm at 212-300-5196.