Federal Bank Fraud, Wire Fraud, Honest Services Fraud and Conspiracy Investigations
Fraud and conspiracy statutes give federal investigators and prosecutors a very powerful tool. While that tool is used appropriately in many situations to indict and punish private and public corruption, the broad language used in those statutes gives federal prosecutors a tremendous amount of discretion to investigate and prosecute an almost limitless number of day-to-day situations involving otherwise innocent individuals. Because of our years of experience working in federal courts throughout the Western District of Missouri fraud and related federal investigations are an almost daily part of our work representing clients.
Bank fraud, wire fraud, health care fraud, corruption of public officials, are all just a few of the examples of acts that Congress has sought to define and codify as crimes in an ongoing attempt to combat public and private-sector corruption. One of the federal prosecutors’ most powerful tools for prosecuting this kind of corruption comes from Title 18 of the United States Code (U.S.C.) §1346 which defines the crimes of mail and wire fraud. Written by Congress in very broad terms so as to give federal prosecutors a great deal of discretion and authority the statutes criminalize the use of the mail or wires to further “any scheme or artifice to defraud,” or “for obtaining money or property by means of false or fraudulent pretenses, misrepresentations, or promises.” To secure a conviction for mail or wire fraud a prosecutor must prove beyond a reasonable doubt:
- that there was a scheme to defraud involving a material deception;
- a foreseeable use of the mail, a private commercial carrier, or a wire or radio communication in furtherance of the scheme, and;
- an intent to defraud another
- of money, property or “honest services.”
Adding to this already broad language describing criminal fraud are the federal laws criminalizing a conspiracy to commit such acts. The basic definition of criminal conspiracy involves evidence of an agreement of two or more persons to engage in some form of prohibited conduct. There are literally dozens of different conspiracy statutes contained within the United States Code. Sometimes the crime of conspiracy is complete merely upon a showing that at least two individuals reached this “agreement” to commit the crime. In other statutes, including the general conspiracy statute 18 U.S.C. §371, the prosecutor must be able to prove both an agreement and that at least one of the conspirators committed some “overt act” in furtherance of the alleged scheme. Conspiracies punished under 18 U.S.C. §371 involve conspiracies to commit any other federal crime or crimes ,and are punished by imprisonment of not more than five years, while conspiracies involving drug trafficking, terrorism, and racketeering offenses, just to name a few, all carry the same penalties as their underlying substantive offenses.
18 U.S.C. §1341 describes “mail fraud” as the use of the mails (which includes not only the U.S. Postal Service but also “any private or commercial interstate carrier) for the purpose of executing “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, misrepresentations or promises.” §1343 likewise prohibits “wire fraud” as any transmission “by means of wire, radio, or television communication in interstate or foreign commerce” in furtherance of a scheme or artifice to defraud. A scheme to defraud is generally understood to be conduct reasonably calculated to deceive, but the definition is literally as broad as the imagination of a federal prosecutor. In order to eventually secure a conviction a prosecutor must be able to prove that the defendant had an “intent to defraud” and that the intention was directed at the money, property or honest services belonging to another. Making an honest good faith statement or representation, or reasonably relying on information given by another, but that later turns out to be inaccurate cannot have the specific intent necessary to support a fraud conviction. It is often this issue of “lack of intent” that presents the best defense to these cases. However, the law also makes clear that an individual cannot deliberately disregard information and then later claim lack of intent. The Eighth Circuit Model Jury Instructions define this “deliberate ignorance/willful blindness” as when “the defendant believed there was a high probability that [whatever the criminal act was] he/she took deliberate actions to avoid learning of that fact. Knowledge may be inferred if the defendant deliberately closed his/her eyes to what would otherwise have been obvious to him/her. A willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts. Negligence, carelessness or mistake cannot be considered as proof of knowledge.”
With over 30 years of experience in federal courts throughout the Western District of Missouri we have successfully represented many clients in federal fraud investigations and defended clients against fraud charges brought by federal prosecutors. If you find yourself or your company involved in any kind of federal investigation it is important that you immediately retain experienced counsel to represent and guide you through what can be a very difficult and stressful process. We are here to help.