Understanding the elements of wire fraud

On Behalf of | Apr 26, 2017 | Firm News, Fraud

The online marketplace now makes it possible for companies and private citizens in New York to transact business involving untold amounts of money directly from their homes. With that freedom also comes increased exposure to people who may be looking to perpetrate fraud. According to the federal statute defining “wire fraud” (as shared by the Legal Information Institute), any communications sent by wire, radio or television with the purposes of defrauding a person or party are deemed illegal. Recent years seen internet communications included in the definition of wired communications.

Many have likely heard stories of people receiving emails or other electronic communications that announce prize winnings, promise significant returns on investments, or claim to need assistance moving money out of international bank accounts, only to later learn that these were attempts at fraud. Information shared by the Federal Bureau of Investigation shows that from late 2013 to early 2016, more than $2.3 billion was stolen in fraudulent email scams alone.

Those convicted of wire fraud could face fines of up to $1 million as well as prison sentences ranging from between 20 to 30 years. Some may question, however, if any business transacted online that results in a financial loss constitutes wire fraud?

In order to meet the standard of qualifying as a legitimate case of wire fraud, four elements must be present:

  •          One must have participated or directed a scheme to defraud another.
  •          The intent to defraud is proven.
  •          The use of wire communications to perpetuate the scheme was foreseeable.
  •          Wire communications were indeed used in carrying out the scheme.

One who consummated a business transaction online that resulted in a loss may defend his or her actions by proving that he or she was indeed operating in good faith.