MAIL FRAUD AND WIRE FRAUD
Prosecution Policy Relating to Mail Fraud and Wire Fraud
Prosecutions of fraud ordinarily should not be undertaken if the scheme employed consists of some isolated transactions between individuals, involving minor loss to the victims, in which case the parties should be left to settle their differences by civil or criminal litigation in the state courts. Serious consideration, however, should be given to the prosecution of any scheme which in its nature is directed to defrauding a class of persons, or the general public, with a substantial pattern of conduct.
See also USAM 9-85.210 (requires prior consultation with the Public Integrity Section to use the mail or wire fraud statutes in the prosecution of election fraud cases).
Further guidance and legal analysis of issues surrounding the investigation and prosecution of frauds involving use of the mail or wire, in violation of Title 18, United States Code, Sections 1341 and 1343 can be found in the Criminal Resource Manual:
Investigative Authority
Primary investigative jurisdiction of possible violations of the mail and wire fraud statutes is vested in the Federal Bureau of Investigation. In some cases, complaints involving securities may be investigated by the Securities and Exchange Commission. In addition, the Postal Inspection Service of the United States Postal Service may initiate mail or wire fraud investigations. In both situations, the investigations are usually continued by the agency initiating the investigation. Reports of investigation are disseminated directly to the appropriate United States Attorney.
18 U.S.C. Section 1341—Elements of Mail Fraud
"There are two elements in mail fraud: (1) having devised or intending to devise a scheme to defraud (or to perform specified fraudulent acts), and (2) use of the mail for the purpose of executing, or attempting to execute, the scheme (or specified fraudulent acts)." Schmuck v. United States, 489 U.S. 705, 721 n. 10 (1989); see also Pereira v. United States, 347 U.S. 1, 8 (1954) ("The elements of the offense of mail fraud under . . . § 1341 are (1) a scheme to defraud, and (2) the mailing of a letter, etc., for the purpose of executing the scheme."); Laura A. Eilers & Harvey B. Silikovitz, Mail and Wire Fraud, 31 Am. Crim. L. Rev. 703, 704 (1994) (cases cited).
The Scheme and Artifice to Defraud
The wire fraud statute was patterned after the mail fraud statutes. United States v. Lemon, 941 F.2d 309, 316 (5th Cir. 1991); United States v. Castillo, 829 F.2d 1194, 1198 (1st Cir. 1987). Thus, the same principles apply in defining "scheme to defraud" for mail and wire fraud prosecutions. See Carpenter v. United States, 484 U.S. 19, 25 n. 6 (1987) ("The mail and wire fraud statutes share the same language in relevant part, and accordingly we apply the same analysis to both sets of offenses here."); United States v. Lemire, 720 F.2d 1327, 1334-35 n. 6 (D.C. Cir. 1983) ("The requisite elements of 'scheme to defraud' under the wire fraud statute [§ 1343] and the mail fraud statute [§ 1341], are identical. Thus, cases construing mail fraud apply to the wire fraud statute as well."), cert. denied, 467 U.S. 1226 (1984).
The mail fraud and wire fraud statutes do not define the terms "scheme" or "artifice" and the courts have traditionally been reluctant to offer definitions of either term except in the broadest and most general terms. Lemire, 720 F.2d at 1335 ("Congress did not define 'scheme or artifice to defraud' when it first coined that phrase, nor has it since. Instead that expression has taken on its present meaning from 111 years of case law.").
The fraudulent aspect of the scheme to defraud is to be measured by nontechnical standards and is not restricted by any common-law definition of false pretenses. "[T]he words 'to defraud' in the mail fraud statute have the 'common understanding' of '"wrongdoing one in his property rights by dishonest methods or schemes," and "usually signify the deprivation of something of value by trick, chicane, or overreaching."'" Carpenter, 484 U.S. at 27 (quoting McNally v. United States, 483 U.S. 350, 358 (1987) (quoting Hammerschmidt v. United States, 265 U.S. 182, 188 (1924))). "The concept of 'fraud' includes the act of embezzlement, which is '"the fraudulent appropriation to one's own use of the money or goods entrusted to one's own care by another."'" Id. (quoting Grin v. Shine, 187 U.S. 181, 189 (1902)).
No Loss or Gullible Victims
"It is the scheme to defraud and not actual fraud that is required." United States v. Reid, 533 F.2d 1255, 1264 (D.C. Cir. 1976).
"No particular type of victim is required . . . nor need the scheme have succeeded." United States v. Coachman, 727 F.2d 1293, 1302-03 n. 43 (D.C. Cir. 1984).
No actual loss to the victims is required. See United States v. Pollack, 534 F.2d 964, 971 (D.C. Cir.)
"The fraud statutes speak alternatively of devising or intending to devise a scheme to defraud and do not require that the deception bear fruit for the wrongdoer or cause injury to the intended victim as a prerequisite to successful prosecution. [S]uccess of the scheme and loss by a defrauded person are not essential elements of the crime under 18 U.S.C. §§ 1341, 1343 . . . .", cert. denied, 429 U.S. 924 (1976); see also United States v. Jordan, 626 F.2d 928, 931 (D.C. Cir. 1980)
"The amount of money realized as a result of the scheme is not an essential element of mail fraud. It was not even necessary to prove that the scheme succeeded."
For a discussion of fraud loss computation in sentencing see Guidelines Sentencing (Federal Judicial Center, 1997), Section II.D.2. Offense Involving Fraud and Deceit.
"[I]t makes no difference whether the persons the scheme is intended to defraud are gullible or skeptical, dull or bright . . . . " United States v. Maxwell, 920 F.2d 1028, 1036 (D.C. Cir. 1990) (quoting United States v. Brien, 617 F.2d 299, 311 (1st Cir.), cert. denied, 446 U.S. 919 (1980)).
"[T]he monumental credulity of the victim is no shield for the accused . . ." Id. (quoting Deaver v. United States, 155 F.2d 740, 744-45 (D.C. Cir.), cert. denied, 329 U.S. 766 (1946)); cf. Pollack, 534 F.2d at 971 (To hold that actual loss to victim is required "would lead to the illogical result that the legality of a defendant's conduct would depend on his fortuitous choice of a gullible victim.") (quoted in Maxwell, 920 F.2d at 1036).
Proof of Scheme and Artifice to Defraud
To sustain a conviction the government must prove the existence of a scheme; it is not required, however, to prove all details or all instances of allegedly illicit conduct. See, e.g., United States v. Stull, 743 F.2d 439, 442 n. 2 (6th Cir. 1984) ("It is well established that proof of every allegation is not required in order to convict; the government need only prove that the scheme to defraud existed."), cert. denied, 470 U.S. 1062 (1985); United States v. Halbert, 640 F.2d 1000, 1008 (9th Cir. 1981) ("[T]he Government need not prove every misrepresentation charged conjunctively in the indictment."); United States v. Jordan, 626 F.2d 928, 930 (D.C. Cir. 1980) ("The Government is not required to prove the details of a scheme; it is, however, required to prove beyond a reasonable doubt . . . that the defendant . . . willfully and knowingly devised a scheme or artifice to defraud . . . .") (quoting with approval the trial court's instruction on § 1341); United States v. Amrep Corp., 560 F.2d 539, 546 (2d Cir. 1977)
("A scheme to defraud may consist of numerous elements, no particular one of which need be proved if there is sufficient overall proof that the scheme exists."), cert. denied, 434 U.S. 1015 (1978); Anderson v. United States, 369 F.2d 11, 15 (8th Cir. 1966) (all instances of illicit conduct need not be proved to sustain a conviction), cert. denied, 386 U.S. 976 (1967).
"All that is required is that [the defendant has] knowingly and willingly participated in the scheme; she need not have performed every key act herself." United States v. Maxwell, 920 F.2d 1028, 1036 (D.C. Cir. 1990). The "evidence need only show that defendant was a 'knowing and active participant' in scheme to defraud and that scheme involved interstate wire communications." Id. (quoting United States v. Wiehoff, 748 F.2d 1158, 1161 (7th Cir. 1984)).
McNally and Intangible Rights
In McNally v. United States, 483 U.S. 350 (1987), the Supreme Court held that the mail fraud statute does not reach "schemes to defraud citizens of their intangible rights to honest and impartial government" . . . and that the statute is "limited in scope to the protection of property rights." See Carpenter v. United States, 484 U.S. 19, 25 (1987) (quoting McNally and extending it to wire fraud statute); see also Evans v. United States, 504 U.S. 255, 292 (1992) ("[I]n McNally . . . we rejected the Government's contention that the federal mail fraud statute . . . protected the citizenry's 'intangible right' to good government . . . . ") (Thomas, J., dissenting).
In response to McNally, Congress passed Section 1346 of Title 18, United States Code, which provides that "For the purposes of this Chapter, the term 'scheme or artifice to defraud' includes a scheme or artifice to deprive another of the intangible right of honest services."
Section 1346, which became effective November 18, 1988, seemed to resolve the intangible rights issue. See Madeoy, 912 F.2d 1486, 1492 (D.C. Cir. 1990) ("McNally has been overruled by legislation."), cert. denied, 498 U.S. 1105 and 498 U.S. 1110 (1991); cf. United States v. Bush, 888 F.2d 1145, 1145-46 (7th Cir. 1989) (ex post facto concerns bar the application of section 1346 to pre-1988 conduct). In United States v. Brumley, 79 F.3d 1430, 1440 (5th Cir. 1996), petition for rehearing en banc pending, however, the court concluded that the wording of § 1346, "simply does not effect a change in the portion of the McNally opinion which held that the mail fraud statute does not reach 'schemes to defraud citizens of their intangible rights to honest and impartial government.'"
Tangible Versus Intangible Property Rights
In Carpenter, 484 U.S. 19, 25 (1987), the Court confirmed that "McNally did not limit the scope of § 1341 to tangible as distinguished from intangible property rights." The Court held that the intangible nature of "confidential business information" does not make it any less "property" protected by the mail and wire fraud statutes. Id. Carpenter accordingly distinguished intangible property rights, which were still protected by the mail and wire fraud statutes, and intangible non-property rights, which were not protected. Cf. United States v. Lemire, 720 F.2d 1327, 1336 (D.C. Cir. 1983) ("[A]lthough the scheme to defraud must threaten some cognizable harm to its target, that harm need not be a deprivation of tangible property or money; criminal fraud encompasses schemes to defraud persons of significant intangibles as well."), cert. denied, 467 U.S. 1226 (1984).
QUERY: Whether interests such as contract rights, licenses, permits, trade secrets, franchises, government grants, goodwill, market share, etc., are intangible or tangible property rights that can be the subject of a mail or wire fraud violation. See, e.g., Carpenter, 484 U.S. at 25 (suggesting that contractual right to honest and faithful services is too ethereal in itself to fall within the protection of the mail fraud statute); United States v. DeFries, 43 F.3d 707, 709-11 (D.C. Cir. 1995) (union ballots are tangible property); United States v. Henry, 29 F.3d 112, 114-15 (3d Cir. 1994) (fair bidding opportunity is not a property right); United States v. F.J. Vollmer & Co., 1 F.3d 1511, 1521 (7th Cir. 1993) ("It is well established that the government's regulatory interests are not protected by the mail fraud statute.") (citing cases concerning licenses and permits), cert. denied, 114 S.Ct. 688 (1994); United States v. Loney, 959 F.2d 1332, 1336 (5th Cir. 1992) (flight award coupons are property); United States v. Madeoy, 912 F.2d 1486, 1492 (D.C. Cir. 1990) (a FHA insurance commitment, by which the Government promises to pay the lender if the borrower defaults on the loan, is a "property interest," not an "intangible right" because it involves the Government's "control over how its money [is] spent."), cert. denied, 498 U.S. 1105 and 498 U.S. 1110 (1991). The United States Court of Appeals for the District of Columbia's decision in DeFries provides a brief survey of cases finding property interests in permits, city liquor licenses, medical licenses and other items. See generally, 43 F.3d at 709-10 and n. 2; see also Laura A. Eilers & Harvey B. Silikovitz, Mail and Wire Fraud, 31 Am. Crim. L. Rev. 703, 706-11 (1994) (discussing "traditional frauds" and "frauds involving intangible rights").
QUERY: How to determine whether an interest is property? See, e.g., United States v. D'Amato, 39 F.3d 1249, 1258 (2d Cir. 1994) (shareholder's property rights to information are defined by state law and the law of fraud); cf. Henry, 29 F.3d at 115 ("[T]o determine whether a particular interest is property for purposes of the fraud statutes, we look to whether the law traditionally has recognized and enforced it as a property right."); see also Eilers & Silikovitz, 31 Am. Crim. L. Rev. at 706 n. 19 (case cited).
Fiduciary Duty
QUERY: Whether a fiduciary duty or relationship is a necessary ingredient to frauds relating to intangible property rights. See generally Laura A. Eilers & Harvey B. Silikovitz, Mail and Wire Fraud, 31 Am. Crim. L. Rev. 703, 706 n. 19 (1994) ("Unlike traditional frauds which may arise regardless of the relationship between the defendant and the victim, frauds related to intangible rights stem from a fiduciary relationship between the defendant and the defrauded party or entity."). "At the core of the judicially defined 'scheme to defraud' is the notion of a trust owed to another and a subsequent breach of that trust." United States v. Lemire, 720 F.2d 1327, 1335 (D.C. Cir. 1983) ("But '[n]ot every breach of a fiduciary duty works a criminal fraud.'") (quoting United States v. George, 477 F.2d 508 (7th Cir.), cert. denied, 414 U.S. 827 (1973)), cert. denied, 467 U.S. 1226 (1984). But cf. United States v. Sawyer, 878 F. Supp. 279, 288-90 (D. Mass. 1995) (mail fraud statutes do not require that a public fiduciary be a participant in the scheme). It may follow that to defraud one of the "right to honest services" would generally require a fiduciary relationship that creates the right to provide or protect honest services. It does not necessarily follow, however, that the existence or protection of an intangible property right must depend upon the existence of a fiduciary relationship or duty. Nonfiduciaries can steal, embezzle and defraud others of property interests, regardless of whether the property interest is tangible or intangible. Cf. United States v. Allen, 554 F.2d 398, 410 (10th Cir.) ("While the existence of a fiduciary duty is relevant and an ingredient in some mail fraud prosecutions, . . . it is not an essential in all such cases.") (citations omitted), cert. denied, 434 U.S. 836 (1977); Eilers & Silikovitz, 31 Am. Crim. L. Rev. at 711 ("There is some debate in the Circuit Courts about whether intangible rights can be violated if they are not premised upon fiduciary duty.").
Courts have held nonfiduciaries criminally liable for frauds related to intangible rights when a co-schemer or co-conspirator was a fiduciary. See United States v. Alexander, 741 F.2d 962, 964 (7th Cir. 1984) (an intangible rights scheme is cognizable when at least one of the schemers has a fiduciary relationship with the defrauded person or entity), overruled on other grounds by, United States v. Ginsburg, 773 F.2d 798 (7th Cir. 1985), cert. denied, 475 U.S. 1011 (1986); see also Sawyer, 878 F. Supp. at 289 (describing situation of nonfiduciary) (citing United States v. Margiotta, 688 F.2d 108, 121-23 (2d Cir. 1982), cert. denied, 461 U.S. 913 (1983), and Alexander, 741 F.2d at 964).
Intent to Defraud
The government must prove that the defendant had the specific intent to defraud. See United States v. Diggs, 613 F.2d 988, 997 (D.C. Cir. 1979) ("Because only 'a scheme to defraud' and not actual fraud is required, proof of fraudulent intent is critical."), cert. denied, 446 U.S. 982 (1980); see also United States v. Costanzo, 4 F.3d 658, 664 (8th Cir. 1993) (intent is an essential element, inquiry is whether defendants intended to defraud); United States v. Porcelli, 865 F.2d 1352, 1358 (2d Cir.) (specific intent requires intent to defraud, not intent to violate the statute), cert. denied, 493 U.S. 810 (1989); cf. United States v. Reid, 533 F.2d 1255, 1264 n. 34 (D.C. Cir. 1976) ("Proof that someone was actually defrauded is unnecessary simply because the critical element in a 'scheme to defraud' is 'fraudulent intent,' Durland v. United States, 161 U.S. 306 . . . (1896), and therefore the accused need not have succeeded in his scheme to be guilty of the crime."); United States v. Bailey, 859 F.2d 1265, 1273 (7th Cir. 1988) (court held that there must be sufficient evidence that the defendant acted with intent to defraud, that is, "willful participation in [the] scheme with knowledge of its fraudulent nature and with intent that these illicit objectives be achieved." (quoting United States v. Price, 623 F.2d 587, 591 (9th Cir. 1980), cert. denied, 449 U.S. 1016 (1980), overruled on other grounds by, United States v. DeBright, 730 F.2d 1255 (9th Cir. 1984)), cert denied, 488 U.S. 1010 (1989).
Proof of Fraudulent Intent
"The requisite intent under the federal mail and wire fraud statutes may be inferred from the totality of the circumstances and need not be proven by direct evidence." United States v. Alston, 609 F.2d 531, 538 (D.C. Cir. 1979), cert. denied, 445 U.S. 918 (1980). Thus, intent can be inferred from statements and conduct. United States v. Cusino, 694 F.2d 185, 187 (9th Cir. 1982) (citing United States v. Beecroft, 608 F.2d 753, 757 (9th Cir. 1979)), cert. denied, 461 U.S. 932 (1983). Impression testimony, that is, testimony of victims as to how they had been misled by defendants, is admissible to show an intent to defraud. See Phillips v. United States, 356 F.2d 297, 307 (9th Cir. 1965), cert. denied, 384 U.S. 952 (1966). Also consider complaint letters received by defendants as relevant to the issue of intent to defraud. The inference might be drawn that, since the defendant knew victims were being misled by solicitation literature and other representations, the continued operation of the business despite this knowledge showed the existence of a scheme to defraud.
Fraudulent intent is shown if a representation is made with reckless indifference to its truth or falsity. Cusino, 694 F.2d at 187. In addition, "[f]raudulent intent may be inferred from the modus operandi of the scheme." United States v. Reid, 533 F.2d 1255, 1264 n. 34 (D.C. Cir. 1976) ("[T]he purpose of the scheme 'must be to injure, which doubtless may be inferred when the scheme has such effect as a necessary result of carrying it out.") (quoting United States v. Regent Office Supply Co., 421 F.2d 1174, 1180-81 (2d Cir. 1970) (quoting Horman v. United States, 116 F. 350, 352 (6th Cir.), cert. denied, 187 U.S. 641 (1902))). "Of course proof that someone was actually victimized by the fraud is good evidence of the schemer's intent." Id. (quoting Regent Office Supply Co., 421 F.2d at 1180-81). In United States v. D'Amato, the court explained the government's burden of proving fraudulent intent as follows:
The scheme to defraud need not have been successful or complete. Therefore, the victims of the scheme need not have been injured. However, the government must show "that some actual harm or injury was contemplated by the schemer." Because the defendant must intend to harm the fraud's victims, "[m]isrepresentations amounting only to a deceit are insufficient to maintain a mail or wire fraud prosecution." "Instead, the deceit must be coupled with a contemplated harm to the victim." In many cases, this requirement poses no additional obstacle for the government. When the "necessary result" of the actor's scheme is to injure others, fraudulent intent may be inferred from the scheme itself. Where the scheme does not cause injury to the alleged victim as its necessary result, the government must produce evidence independent of the alleged scheme to show the defendant's fraudulent intent.
39 F.3d 1249, 1257 (2d Cir. 1994) (citations and footnote omitted) (holding that the government failed to produce legally sufficient evidence of criminal intent).
Use of Mailings and Wires in Furtherance of the Execution of the Scheme
"The federal mail fraud statute does not purport to reach all frauds, but only those limited instances in which the use of the mails is a part of the execution of the fraud, leaving all other cases to be dealt with by appropriate state law." United States v. Schmuck, 489 U.S. 705, 710 (1989) (quoting Kann v. United States, 323 U.S. 88, 95 (1944)); accord United States v. Coachman, 727 F.2d 1293, 1302 n. 43 (D.C. Cir. 1984) ("The offense of mail fraud demands proof of a scheme to defraud which, at some point, is intentionally furthered by use of the mails.").
"It is not necessary that the scheme contemplate the use of the mails as an essential element." Pereira v. United States, 347 U.S. 1, 8 (1954); Durland v. United States, 161 U.S. 306, 313 (1896) (proof of specific intent to use the mails on the part of defendants need not be proven). "It is sufficient for the mailing to be 'incident to an essential part of the scheme,' . . . or 'a step in [the] plot' . . . . " Schmuck, 489 U.S. at 710-11 (citations omitted); cf. United States v. Diggs, 613 F.2d 988, 998 (D.C. Cir.) ("[A]lthough the schemer need not 'contemplate the use of the mails as an essential element,' the mailings must be sufficiently closely related to [the] scheme to bring his conduct within the statute.") (footnote omitted), cert. denied, 446 U.S. 982 (1980); United States v. Alston, 609 F.2d 531, 538 (D.C. Cir. 1979) ("For conviction under the mail fraud statute, the mails must be used 'for the purpose of executing' the fraudulent scheme, and not merely 'as a result of' such scheme.") (quoting Kann, 323 U.S. 88), cert. denied, 445 U.S. 918 (1980).
As in the case of mail fraud, a wire transmission may be considered to be for the purpose of furthering a scheme to defraud if the transmission is incident to the accomplishment of an essential part of the scheme. United States v. Mann, 884 F.2d 532, 536 (10th Cir. 1984). Moreover, it is not necessary to show that the defendant directly participated in the transmission, where it is established that the defendant caused the transmission, and that such use was the foreseeable result of his acts. United States v. Gill, 909 F.2d 274, 277-78 (7th Cir. 1990); United States v. Jones, 554 F.2d 251, 253 (5th Cir.), cert. denied, 434 U.S. 866 (1977) (cases cited); United States v. Wise, 553 F.2d 1173 (8th Cir. 1977).
The gist of the offenses is not the scheme to defraud, but the use of the mails or interstate wire communication. See United States v. Garland, 337 F. Supp. 1, 3 (N.D. Ill. 1971); see also United States v. Gardner, 65 F.3d 82, 85 (8th Cir. 1995) ("The use of the post office establishment in the execution of the alleged scheme to obtain money by false pretenses is the gist of the offense which the statute denounces, and not the scheme to defraud.") (quoting Cochran v. United States, 41 F.2d 193, 197 (8th Cir. 1930)), cert. denied, 116 S.Ct. 748 and 116 S.Ct. 1044 (1996); United States v. Lebovitz, 669 F.2d 894, 898 (3d Cir.) ("The gist of the offense of mail fraud is the use of mails by someone to carry out some essential element of the fraudulent scheme or artifice."), cert. denied, 456 U.S. 929 (1982). Accordingly, each use of the mails (in the case of mail fraud) and each separate wire communication (in the case of wire fraud) constitutes a separate offense, i.e., each mailing and/or wire transmission can constitute a separate count in the indictment. See, e.g., United States v. Pazos, 24 F.3d 660, 665 (5th Cir. 1994) (mail fraud); United States v. Rogers, 960 F.2d 1501, 1514 (10th Cir.) (each use of mails is separate offense), cert. denied, 506 U.S. 1035 (1992); United States v. Castillo, 829 F.2d 1194, 1199 (1st Cir. 1987) (wire fraud).
Proof of Mailings and Transmissions
The mailing or wire communication may be proven by circumstantial evidence. See, e.g., United States v. Griffith, 17 F.3d 865, 874 (6th Cir.), cert. denied, 115 S.Ct. 149 (1994); United States v. Bowman, 783 F.2d 1192, 1197 (5th Cir. 1986) (mailings performed in the course of the bank's customary practices) (citing United States v. Ledesma, 632 F.2d 670, 675 (7th Cir.), cert. denied, 449 U.S. 998 (1980)); United States v. Brooks, 748 F.2d 1199, 1202-03 (7th Cir. 1984) (introduction of envelope). But see United States v. Hannigan, 27 F.3d 890, 895 (3d Cir. 1994) (defendant's statement that he received check was insufficient to prove check was sent through the mails).
"To constitute a violation of [§ 1341] . . ., it is not necessary to show that [defendants] actually mailed . . . anything themselves; it is sufficient if they caused it to be done. Pereira v. United States, 347 U.S. 1, 8 (1954) (citing 18 U.S.C. (Supp. V) § 2(b)); United States v. Kenofskey, 243 U.S. 440, 443 (1917) ("Cause" is used "in its well-known sense of bringing about . . . ."); accord United States v. Diggs, 613 F.2d 988, 998 (D.C. Cir.) ("One must 'cause' the mails to be used" to satisfy the element of "use of the United States mails 'for the purpose of executing the scheme.'") (quoting United States v. Maze, 414 U.S. 395, 400 (1974) (quoting Kann v. United States, 323 U.S. 88, 94 (1944), cert. denied, 446 U.S. 982 (1980). The government need show only that the defendant "caused" the mailing by acting "with knowledge that the use of the mails follow in the ordinary course of business, or where such use can reasonably be foreseen, even though not actually intended." Pereira, 347 U.S. at 8-9.
"'[I]nnocent' mailings - ones that contain no false information - may supply the mailing element." United States v. Schmuck, 489 U.S. 705, 715 (1989) (citing Parr v. United States, 363 U.S. 370, 390 (1960)). Moreover, the elements of mail fraud may be satisfied where the mailings have been routine. Mailings that may lead to the uncovering of the fraudulent scheme may also supply the mailing element of the mail fraud offense. Id. ("The relevant question at all times is whether the mailing is part of the execution of the scheme as conceived by the perpetrator at the time, regardless of whether the mailing later, through hindsight, may prove to have been counterproductive and return to haunt the perpetrator of the fraud.").
Conspiracy to Violate the Mail Fraud or Wire Fraud Statutes
Where a scheme and artifice to defraud is shared by two or more, it becomes a conspiracy to defraud. The essential elements of conspiracy to commit mail fraud or wire fraud in violation of 18 U.S.C. § 371, are (1) an agreement between two or more persons; (2) to commit mail fraud or wire fraud; and (3) an overt act committed by one of the conspirators in furtherance of the conspiracy. See United States v. Brumley, 79 F.3d 1430, 1442 (5th Cir. 1996) (citing United States v. Hatch, 926 F.2d 387, 393 (5th Cir.), cert. denied, 500 U.S. 943 (1991)); United States v. Massey, 827 F.2d 995, 1001 (5th Cir. 1987); United States v. Gordon, 780 F.2d 1165, 1170 (5th Cir. 1986)). "Conspiracy to commit a particular substantive offense cannot exist without at least the degree of criminal intent necessary for the substantive offense." Massey, 827 F.2d at 1001 (quoting Ingram v. United States, 360 U.S. 672, 678 (1959)).
As in any conspiracy, it is sufficient that the defendant knowingly joined the conspiracy in which wire fraud or mail fraud was a foreseeable act in furtherance of the conspiracy. United States v. Leahy, 82 F.3d 624 (5th Cir. 1996) (citing United States v. Basey, 816 F.2d 980, 997 (5th Cir. 1987) (holding that once a defendant's knowing participation in a conspiracy has been established, "the defendant is deemed guilty of substantive acts committed in furtherance of the conspiracy by any of his criminal partners")).
Venue in Mail Fraud
Generally, 18 U.S.C. § 3237(a) provides that in cases where the offense was begun in one district and completed in another, venue may be laid in any district through which the offense was continued.
Section 1341, however, has its own "built-in" venue provisions. The locus of the offense under section 1341 has been carefully specified; and only the acts of "placing", "taking" and "causing to be delivered" at a specified place have been penalized. Venue should therefore be placed according to the specific prohibitions of section 1341, irrespective of section 3237(a). See Travis v. United States, 364 U.S. 631, 636-37 (1961) ("[V]enue should not be made to depend upon the chance use of the mails, when Congress has so carefully indicated the locus of the crimes."). The locus for mail fraud prosecutions is specifically set forth in section 1341; since Congress has "otherwise expressly provided," section 3237 is inapplicable to mail fraud.
Accordingly, venue must be charged in either (1) the district in which the letter was placed in the mail by the defendant; (2) the district in which the defendant took or received the letter from the mails; or (3) the district in which the defendant knowingly caused a letter to be delivered according to the direction thereon. Hagner v. United States, 285 U.S. 427 (1932)); see also United States v. Turley, 891 F.2d 57, 60 (3d Cir. 1989) (government conceded that section 3237 is not applicable to mail fraud).
Several decisions, citing as authority the provisions of section 3237(a), have held that venue for mail fraud prosecutions also lies in any district through which the count letter passed. Section 3237(a) must, however, be read in light of the constitutional requirements and the explicit provisions of section 1341.
Defenses—Statute of Limitations
The statute of limitations for mail fraud and wire fraud prosecutions is five years (18 U.S.C. § 3282), except for mail and wire fraud schemes that affect a financial institution, in which case the statute is ten years (18 U.S.C. § 3293).
COMMENT: Consider that a scheme may extend back beyond the limitations period; the gist of the offense is the use of the mails, and if the prohibited use of the mails was within the period, the prosecution is timely. See O. Obermaier and R. Morvillo, White Collar Crime: Business and Regulatory Offenses, § 9.04[5], at 9-67 (Rel. 2, 1991) (citing cases); cf. United States v. Garfinkel, 29 F.3d 1253, 1259 (8th Cir. 1994) (mail fraud scheme may continue after mailing). That a scheme may extend back beyond the limitation period does not preclude prosecution of an offense committed in furtherance of the scheme within the period.
Defenses—Good Faith
Good faith is recognized as a defense to a charge of mail or wire fraud. See, e.g., United States v. Casperson, 773 F.2d 216, 223 (8th Cir. 1985). For a discussion of the defense of good faith and the entitlement of jury instructions on this issue, see Green v. United States, 474 U.S. 925 (1985); see also Laura A. Eilers & Harvey B. Silikovitz, Mail and Wire Fraud, 31 Am. Crim. L. Rev. 703, 719 (1994) (and cases cited).
Drafting a Mail Fraud and/or Wire Fraud Indictment
The Criminal Division has published a collection of indictment forms, Drafting Indictments most recently updated in March, 1995. These forms can be conveniently accessed and saved as word processing documents using USABook:
Mail Fraud
Mail Fraud Scheme/Artifice
Sufficiency of Indictment—Generally
Generally, Rule 7(c)(1) of the Federal Rules of Criminal Procedure requires an indictment to provide "a plain, concise and definite written statement of the essential facts constituting the offense charged." United States v. Yefsky, 994 F.2d 885, 893 (1st Cir. 1993) ("The Supreme Court has instructed that an indictment is sufficient if it contains the elements of the offense charged, fairly informs the defendant of the charges against which he must defend, and enables him to enter a plea without fear of double jeopardy.") (citing Hamling v. United States, 418 U.S. 87, 117 (1974)); see also Collins v. Markley, 346 F.2d 230, 232 (7th Cir.) (en banc) ("The sufficiency of an indictment is to be measured by certain guide lines. First, the indictment standing alone must contain the elements of the offense intended to be charged, and it must be sufficient to apprise the accused of the nature of the offense. Second, after conviction, the record of the case must be sufficient so that the accused can plead the judgment in bar of any subsequent prosecution for the same offense."), cert. denied, 382 U.S. 946 (1965).
Accordingly, a mail fraud or wire fraud indictment should contain a reasonably detailed description of the particular scheme the defendant is charged with devising to ensure that the defendant has sufficient notice of the nature of the offense. See Yefsky, 994 F.2d at 893 ("The indictment may incorporate the words of the statute to set forth the offense, but the statutory language '"must be accompanied with such a statement of the facts and circumstances as will inform the accused of the specific offense, coming under the general description, with which he is charged."'") (quoting Hamling, 418 U.S. at 117-18 (quoting United States v. Hess, 124 U.S. 483, 487 (1888))); cf. United States v. Nance, 533 F.2d 699, 702 (D.C. Cir. 1976) (noting with approval mail fraud count that specifies misrepresentations); United States v. Curtis, 506 F.2d 985, 990 (10th Cir. 1974) (citations omitted) (dismissing mail fraud indictment that excludes false pretenses).
In Yefsky, the court held that the indictment was defective in that it did not provide the defendant with adequate notice of the charge (conspiracy to commit mail fraud) against him. 994 F.2d at 993 ("Where guilt depends so crucially upon . . . a specific identification of fact, . . . cases have uniformly held that an indictment must do more than simply repeat the language of the criminal statute.") (citing Hamling, 418 U.S. at 118).
In Curtis, the court stated the following in considering the sufficiency of the allegations contained in an indictment charging mail fraud:
Mere evidential matters or detail more appropriate in bills of particular need not be pleaded in an indictment based upon 1341. [citations omitted] But as these cases demonstrate, some substantial indication of the nature or character of any scheme or artifice to defraud, or to obtain money or property by means of false pretenses, representations or promises is requisite. And it is not sufficient in this regard to merely plead the statutory language. [citations omitted] A reference to the cases cited first above will disclose that in each instance the nature of the schemes or artifices is identified or described, including the particular pretenses, representations or promises claimed to have been false.
506 F.2d at 989-90 (holding that the indictment, which pleaded little more than the statutory language without any fair indication of the nature or character of the scheme or artifice relied upon, or the false pretenses, misrepresentations or promises forming a part of it, was fatally defective); see also United States v. Crummer, 151 F.2d 958 (10th Cir. 1945) ("While the particulars of the scheme are matters of substance and therefore must be described with a degree of certainty sufficient to show its existence of character, and fairly to acquaint the defendant with the particular fraudulent scheme charged against him, still the scheme itself need not be pleaded with all the certainty in respect of time, place, and circumstance requisite in charging the mailing of the letter or other matter.") (allegations of the scheme held to be sufficient), cert. denied, 327 U.S. 785 (1946); cf. United States v. Azad, 809 F.2d 291, 295 (6th Cir. 1986) ("What distinguishes this indictment from the indictment found defective in [Curtis], . . . is the clear and specific description of the fraudulent scheme found in the present indictment. The indictment before us does provide some 'substantial indication of the nature or character' of the scheme involved, and 'the scheme itself need not be pleaded with all the certainty in respect of time, place, and circumstance requisite in charging the mailing of the letter or other matter.'" ) (quoting Curtis, 506 F.2d at 990), cert. denied, 481 U.S. 1004 (1987); United States v. Adamo, 534 F.2d 31, 35 (3d Cir.) ("The Curtis indictment was so vague that trial might have proceeded upon an entirely different concept of the scheme than that contemplated by the grand jury when it returned the indictment. By contrast, the indictment in this case explicitly outlines the elements of the fraudulent plan."), cert. denied, 429 U.S. 841 (1976).
Sufficiency of Indictment—Victims and Loss
Victims of the fraud do not have to be identified by name in the indictment. United States v. Mizyed, 927 F.2d 979 (7th Cir.), cert. denied, 500 U.S. 937 (1991). Moreover, actual monetary loss need not be alleged. United States v. Barber, 881 F.2d 345, 348-49 (7th Cir. 1989) ("It is true that the indictment does not allege an actual monetary or economic loss to any insurance company. However, it is not necessary that an indictment charging mail fraud contain such an allegation."), cert. denied, 495 U.S. 922 (1990); see also United States v. Ginsburg, 909 F.2d 982, 988 n. 8 (7th Cir. 1990) ("McNally does not require that actual loss of money or property be alleged in the indictment."); United States v. Bucey, 876 F.2d 1297, 1311 (7th Cir.) ("[S]ince the mail fraud statute punishes the scheme to defraud, this court has reiterated on numerous occasions that the ultimate success of the fraud and the actual defrauding of a victim are not necessary prerequisites to a successful mail fraud prosecution."), cert. denied, 493 U.S. 1004 (1989).
Sufficiency of Indictment—Mailings or Transmissions in Furtherance of Scheme
"The Government need not allege the subordinate evidentiary facts by which it intends to prove the 'in furtherance' element of the crime charged, and an indictment setting out the mailings charged and alleging that they were in furtherance of the scheme should not be dismissed as insufficient on its face unless there is no conceivable evidence that the Government could produce at trial to substantiate its 'in furtherance' allegation." United States v. Castor, 558 F.2d 379, 385 (7th Cir. 1977), cert. denied, 434 U.S. 1010 (1978). In Castor, the court observed the following concerning the requirement of alleging that the mailings were in furtherance of the scheme:
The question is not whether the indictment particularly alleges sufficient facts from which a jury could find that the mailings charged were in furtherance of the scheme, but rather whether the Government conceivably could produce evidence at trial showing that the designated mailings were for the purposes of executing the scheme. United States v. Sampson, 371 U.S. 75, 76, 83 S.Ct. 173, 9 L.Ed.2d 136 (1962). The resolution of the question of whether the mailings alleged were in furtherance of the scheme must await trial "unless it so convincingly appears on the face of the indictment that as a matter of law there need be no necessity for such delay." United States v. Feinberg, 50 F. Supp. 976, 977 (E.D.N.Y. 1973), aff'd, 140 F.2d 592 (2d Cir.), cert. denied, 322 U.S. 726, 64 S.Ct. 943, 88 L.Ed. 1562 (1944).
Id. at 384-85.
Sufficiency of Indictment—Separate Offenses
Each mailing or transmission in furtherance of the scheme and artifice to defraud is a separate offense. See, e.g., United States v. Pazos, 24 F.3d 660, 665 (5th Cir. 1994)(mail fraud); United States v. Rogers, 960 F.2d 1501, 1514 (10th Cir.)(each use of mails is separate offense), cert. denied, 506 U.S. 1035 (1992); United States v. Castillo, 829 F.2d 1194, 1199 (1st Cir. 1987)(wire fraud). Accordingly, proper draftsmanship requires that only one mailing or transmission should be alleged in each count. Otherwise, the count may be duplicitous.
Because descriptions of the scheme are frequently quite lengthy, it is suggested that those descriptive paragraphs set out in full in one count be adopted and incorporated into another count by suitable reference pursuant to the provision of Rule 7(c), Federal Rules of Criminal Procedure.
Sufficiency of the Indictment—Special Considerations
Take care to charge the proper method of violation of the statute! For example, if the letter is mailed to the district of indictment from another district, be sure to charge a taking from the mails, or delivery according to the direction thereon, rather than a placing in the mail. Conversely, charge a placing in the mail in the district of indictment of a letter addressed to someone outside that district. See Hagner v. United States, 285 U.S. 427 (1932) (indictment loosely and inartfully drawn).
Statement of Policy concerning Venue in Mail Fraud Prosecutions
Department of Justice policy opposes mail fraud venue based solely on the mail matter passing through a jurisdiction.
18 U.S.C. Section 1341—Elements of Mail Fraud
"There are two elements in mail fraud: (1) having devised or intending to devise a scheme to defraud (or to perform specified fraudulent acts), and (2) use of the mail for the purpose of executing, or attempting to execute, the scheme (or specified fraudulent acts)." Schmuck v. United States, 489 U.S. 705, 721 n. 10 (1989); see also Pereira v. United States, 347 U.S. 1, 8 (1954) ("The elements of the offense of mail fraud under . . . § 1341 are (1) a scheme to defraud, and (2) the mailing of a letter, etc., for the purpose of executing the scheme."); Laura A. Eilers & Harvey B. Silikovitz, Mail and Wire Fraud, 31 Am. Crim. L. Rev. 703, 704 (1994) (cases cited).
Knowingly and Willfully
The prohibition of 18 U.S.C. § 1001 requires that the false statement, concealment or cover up be "knowingly and willfully" done, which means that "The statement must have been made with an intent to deceive, a design to induce belief in the falsity or to mislead, but § 1001 does not require an intent to defraud -- that is, the intent to deprive someone of something by means of deceit." United States v. Lichenstein, 610 F.2d 1272, 1276-77 (5th Cir.), cert. denied, 447 U.S. 907 (1980). The government may prove that a false statement was made "knowingly and willfully" by offering evidence that defendants acted deliberately and with knowledge that the representation was false. See United States v. Hopkins, 916 F.2d 207, 214 (5th Cir. 1990). The jury may conclude from a plan of elaborate lies and half-truths that defendants deliberately conveyed information they knew to be false to the government. Id. at 214-15.
As used in the statute, the term "knowingly" requires only that the defendant acted with knowledge of the falsity. See United States v. Lange, 528 F.2d 1280, 1287-89 (5th Cir. 1976). As in other situations, to commit an act "knowingly" is to do so with knowledge or awareness of the facts or situation, and not because of mistake, accident or some other innocent reason. See Fifth Circuit Pattern Jury Instructions, § 1.35 (1990). Knowledge of the criminal statute governing the conduct is not required.
The false statement need not be made with an intent to defraud if there is an intent to mislead or to induce belief in its falsity. Reckless disregard of whether a statement is true, or a conscious effort to avoid learning the truth, can be construed as acting "knowingly." United States v. Evans, 559 F.2d 244, 246 (5th Cir. 1977), cert. denied, 434 U.S. 1015 (1978).
A defendant is not relieved of the consequences of a material misrepresentation by lack of knowledge when the means of ascertaining truthfulness are available. In appropriate circumstances, the government may establish the defendant's knowledge of falsity by proving that the defendant either knew the statement was false or acted with a conscious purpose to avoid learning the truth. See United States v. West, 666 F.2d 16, 19 (2d Cir. 1981); Lange, 528 F.2d at 1288; United States v. Clearfield, 358 F. Supp. 564, 574 (E.D. Pa. 1973). Proof that the defendant acted with reckless disregard or reckless indifference may therefore satisfy the knowledge requirement, when the defendant makes a false material statement and consciously avoids learning the facts or intends to deceive the government. See United States v. Schaffer, 600 F.2d 1120, 1122 (5th Cir. 1979).
The term "willfully" means no more than that the forbidden act was done deliberately and with knowledge, and does not require proof of evil intent. McClanahan v. United States, 230 F.2d 919, 924 (5th Cir. 1955), cert. denied, 352 U.S. 824 (1956); McBride v. United States, 225 F.2d 249, 255 (5th Cir. 1955), cert. denied, 350 U.S. 934 (1956). An act is done "willfully" if done voluntarily and intentionally and with the specific intent to do something the law forbids. There is no requirement that the government show evil intent on the part of a defendant in order to prove that the act was done "willfully." See generally United States v. Gregg, 612 F.2d 43, 50-51 (2d Cir. 1979); American Surety Company v. Sullivan, 7 F.2d 605, 606 (2d Cir. 1925)(Hand, J.); United States v. Peltz, 433 F.2d 48, 54-55 (2d Cir. 1970),cert. denied, 401 U.S. 955 (1971) (involving 15 U.S.C. § 32(a). See also 1 E. Devitt, C. Blackmar, M. Wolff & K. O'Malley, Federal Jury Practice and Instructions, § 17.05 (1992).
Obstructing or Impairing Legitimate Government Activity
Under 18 U.S.C. § 371, the fraud or impairment of legitimate government activity may take any of several forms:
Bribery of a government employee, kickbacks to government employees or extortion of money or favors by government employees, misrepresentations of financial capability, alteration or falsification of official records, submission of false documents; and
Obstructing, in any manner, a legitimate governmental function.
18 U.S. Code § 1342 - Fictitious name or address
Whoever, for the purpose of conducting, promoting, or carrying on by means of the Postal Service, any scheme or device mentioned in section 1341 of this title or any other unlawful business, uses or assumes, or requests to be addressed by, any fictitious, false, or assumed title, name, or address or name other than his own proper name, or takes or receives from any post office or authorized depository of mail matter, any letter, postal card, package, or other mail matter addressed to any such fictitious, false, or assumed title, name, or address, or name other than his own proper name, shall be fined under this title or imprisoned not more than five years, or both.
An organization whose members undermined a Constitutional Challenge in the Eastern District Court of Pennsylvania where improper actions had resulted in an unsubstantiated dismissal with no evidence of ANY judicial review resulting in the continuation of unconstitutional actions and INJUSTICE in every state - NATIONWIDE - while solely attributed to the purported actions of Pennsylvania Attorney General Kathleen Kane.
The US is NOT EVEN in the Top 10 in any category.
After the first meeting where a Pennsylvania State Representative offers to address the Rule 1.6 issue, Representative Kathy Watson gets a false warning about threats against her and her office staff. The information of the threat relayed from a Pennsylvania State Senator. Kathy Watson cancels any further meetings in a phone message where you could hear the fear and peril in her voice. Kathy Watson calls the police who go to her office to take a report. The police know there is nothing to the report. 
Meetings occurred with Pennsylvania Senator Chuck McIlhinney starting in December 2013, reports are he was directed to IGNORE the issue and stop any further meetings on the topic. 
The Pennsylvania Governor through his counsel has written a letter which contains so much of the scripted misinformation it may take a volume to respond to it all. A tactic which is all too familiar. It was litigation by overwhelming chaotic misinformation and fraud which lead to the issue being experienced and exposed - a never-ending, judicial bench-clearing divorce - since 2007 over 20 judges in the unresolved matter.