I learned this today. Wire fraud and mail fraud are federal crimes in the United States that concern transferring something connected to fraud by mail, email, phone, radio, or television.
To be guilty of wire fraud, somebody must have “voluntarily and intentionally devised or participated in a scheme to defraud another out of money” and “have done so with the intent to defraud” and “that interstate wire communications were used”.
Wire fraud is a class C felony. That means it carries a sentence of less than 25 years but more than 10 years. It also carries a fine of up to $250,000. The US has 5 classes of felony, from A to E, depending on the severity of the crime. A has a maximum prison term of life or death. This would be for first-degree murder, rape, kidnapping, terrorism, amongst others. B has 25 years or more. This would be for manslaughter and first-degree reckless homicide, amongst others. C has less than 25 years but more than 10. This would be for wire fraud, stalking, carjacking, amongst others. D has between 5 and 10 years. This would be for drunk driving, vehicular manslaughter, amongst others. E has between 1 and 5 years. This would be for criminal contempt, larceny, amongst others.
Wire fraud is a federal crime because most wire or mail communication services are federal. Wire fraud is also a useful charge for a prosecutor because it is easier to prove than other crimes. There also doesn’t have to be a victim. All they have to do is prove intent to defraud.
The law came into being in 1872. It was initially brought into law to prevent misuse of the post office and not to stop fraud. After the Civil War, Congress started to revise the postal laws to make the post office more trustworthy. In 1865, they started by banning people from using the post office to send obscene or inappropriate material. Then they made it illegal for people to use the post office to promote lotteries. Each law was created to deal with a specific problem that was happening at that time. In 1872, they enacted the mail fraud law. The problem it was enacted to deal with was the sale of counterfeit currency through the United States mail. And the statute was more about the degree of misuse of the mail than the degree of the fraud. That is why the emphasis was on showing that the defendant intended to use the mail to commit the fraud.
Interestingly, the sale of counterfeit money is the exact same reason that the US Secret Service was created. In 1862, America started using a single currency and by 1877, currency was issued by the Bureau of Engraving and Printing. The Secret Service was a department of the treasury set up to combat the increasing amount of counterfeit money being produced. The Mail Fraud law was sometimes used to prosecute these people.
In 1889, Congress altered the mail fraud statute to cover other types of counterfeiting and swindling schemes. This is the point where law became more concerned with the fraud than it was with the misuse of the post office. In 1909, the law was rewritten again, further unlinking the law from the post office. The gist of the rewritten law was the “intent to defraud” and the placing of a letter in the post office”. The post office wording was merely kept in to keep the law as a federal crime because the post office was a federal institution.
Over the next 70 years, the law became broader and vaguer. It was a very useful law for prosecutors because it carried a serious sentence, and it covered a huge amount of crimes. Wire and mail fraud have been very useful for prosecuting the mafia and companies that are engaging in nefarious business.
In 1952, the Wire Fraud statute was added with the Communications Act Amendments. The increasing popularity of the television made this a necessary revision. And, as it covers all forms of communication, the Internet is also covered by this. Recently, this law has been used to try and stop people engaged in the “Nigerian Prince” scam.
So, the mail fraud law started out as a way to increase trust in the United States Post Office and to stop people selling counterfeit money. After the Civil War, when the American currency was being formed, people were making counterfeit currency and selling it through the post office. The law was a way to prosecute these people. Over the years, the number of crimes that were contained inside mail fraud increased and the crime became less about using the post office and more about attempting fraud. The mail fraud and wire fraud laws are federal crimes because any carrier you use will be a federal carrier. It is easier to prove than other crimes and carries a weighty sentence, so it is a common crime that prosecutors prosecute. And this is what I learned today.
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Sources
https://digitalcommons.law.ou.edu/cgi/viewcontent.cgi?article=1058&context=olr
https://www.richardhornsby.com/federal/crimes/wire-fraud.html
https://www.everycrsreport.com/reports/R41930.html
https://www.criminaldefenselawyer.com/resources/wire-fraud.htm
https://www.investopedia.com/terms/w/wirefraud.asp
https://en.wikipedia.org/wiki/Mail_and_wire_fraud
https://en.wikipedia.org/wiki/Classes_of_offenses_under_United_States_federal_law
https://www.mccabecoleman.com/blog/2019/april/the-difference-between-a-felony-and-a-misdemeano/
https://www.encyclopedia.com/law/legal-and-political-magazines/mail-federal-mail-fraud-act
http://numismatics.org/the-beginnings-of-the-secret-service/