| With consumer fraud on the rise, federal and | | | | you don't have to personally wire anything so |
| local law enforcement agencies crack down | | | | long the wire communication is from the |
| increasingly on individuals and groups | | | | victim of the fraud, or even a third party, |
| suspected of this crime. But what is consumer | | | | and it is done in furtherance of the |
| fraud to begin with? Generally, there is no | | | | fraudulent scheme. In the past, the wire |
| universal definition of consumer fraud, which | | | | fraud statute was used against businesses |
| is usually prosecuted under federal mail or | | | | engaged in a ''boiler room'' operation to |
| wire fraud statutes. | | | | solicit customers by phone from across the |
| | | | country as well as in cases involving false |
| The reason prosecutors love to use these | | | | advertisement on radio and TV. |
| statutes in fraud cases is because both apply | | | | |
| to ''scheme to defraud''. Obviously there is | | | | This said, mailing or interstate or foreign |
| an unlimited number of ways to defraud | | | | wire communication is not criminal unless it |
| others, which will guarantee that criminal | | | | has some nexus to the scheme, and is either |
| defense lawyers handling fraud and white | | | | ''incident to an essential part of that |
| collar crime cases will never be hungry. | | | | scheme'' or in some way furthers the scheme. |
| | | | |
| Actually, the law is quite liberal to the | | | | A good question is when consumer fraud will |
| requirements of proving a fraudulent scheme. | | | | become of interest to federal prosecutors. In |
| The government doesn't have to show that | | | | most cases, where schemes involve only a few |
| defendant actually swindled or tricked | | | | isolated incidents and losses to the victims |
| anyone, only that he devised the plan with | | | | are relatively minor, cases will end up state |
| the capacity to defraud. | | | | criminal courts. Other cases, where |
| | | | defendants acted on a larger scale against |
| The mail fraud statute is a power tool in the | | | | general public of numerous victims and where |
| arsenal of federal prosecutors because it | | | | damages are substantial, will likely be |
| makes it a crime to commit fraud by using | | | | investigated and prosecuted by federal |
| mails and it's hard to envision any sort of | | | | authorities. Corporations are often targets |
| business activity without using mail. So, in | | | | of consumer fraud investigations. |
| an average scenario, if a person is engaged | | | | |
| in fraud and uses mail to promote the plan, | | | | A corporation is not a physical entity and it |
| the activity is controlled by the mail fraud | | | | acts through its officers, employees, and |
| statute, even where the mailing is done | | | | agents and it may be responsible for their |
| within one state. Moreover, you don't even | | | | criminal acts if such acts are done within |
| have to physically mail anything so long you | | | | the scope of employment and with intent to |
| cause someone else to use mail to promote | | | | benefit the corporation or further the |
| your fraudulent scheme. One example: you | | | | corporate business. Does participation by a |
| defraud Mr. X to buy something from you and | | | | corporation in a scheme to defraud |
| Mr. X mails you payment. | | | | automatically make its officers criminally |
| | | | liable? No, however, to establish such |
| Another power tool is the wire fraud statute | | | | liability, prosecutors will have to show that |
| that makes it a crime to wire information in | | | | corporate officers consciously promoted the |
| furtherance of the scheme be an interstate or | | | | scheme. |
| foreign communication. In a similar fashion, | | | | |