What Is Wire Fraud

What Is Wire Fraud

You got a target letter from the Department of Justice or FBI agents showed up asking about emails you sent, phone calls you made, business transactions you conducted electronically. The investigation mentions wire fraud. You don’t understand what that means. You sent emails – everyone sends emails. You made phone calls to clients, to investors, to business partners. You transmitted documents electronically, transferred funds, communicated about deals. Now federal prosecutors are saying those communications constitute wire fraud and you’re facing twenty years in federal prison. You need to understand what wire fraud actually is, why prosecutors charge it so frequently, what makes an email or phone call criminal versus just business communication. Wire fraud under 18 U.S.C. § 1343 requires proof of a scheme to defraud and use of interstate wire communications to execute that scheme. It’s one of the most frequently prosecuted white-collar crimes in federal court because it covers virtually any fraud involving phones, emails, or internet. The statute is broad, the penalties are severe, and federal prosecutors use it aggressively.

Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek, who has defended wire fraud cases for many, many years. We’ve represented clients charged with wire fraud for business deals that went wrong, investors who lost money and complained to prosecutors, emails taken out of context by federal agents building fraud cases. Wire fraud requires specific elements prosecutors must prove beyond reasonable doubt. Understanding what those elements mean determines whether you committed a federal crime or just engaged in business transactions that failed.

The Four Elements Prosecutors Must Prove

Wire fraud has four elements: scheme to defraud, material false representations, intent to defraud, and use of interstate wire communications. Prosecutors must prove all four beyond reasonable doubt. The scheme to defraud means a plan to deceive someone of money, property, or honest services. It doesn’t require elaborate conspiracy – just an intent to deceive for financial gain. Material false representations means statements that are capable of influencing the victim. If you lied about something that would have changed the victim’s decision to pay money or transfer property, that’s material. Intent to defraud requires prosecutors to prove you made false statements with the purpose to deceive, not for some other reason like mistake or misunderstanding. Use of interstate wire communications means you used phones, emails, internet, text messages, or any electronic transmission that crossed state lines to execute the fraud.

The interstate wire element is easy to prove. Every phone call that touches cell towers in different states, every email that routes through servers in different states, every internet transmission that crosses state lines – that’s interstate wire communication. Prosecutors don’t need to prove you knew the communication crossed state lines. They just need to prove it did. In modern electronic commerce, virtually every communication satisfies this element. That’s why wire fraud charges are so common in federal prosecutions. The wire element that once limited federal jurisdiction now encompasses nearly all electronic business communication.

What Counts as Wire Fraud

Investment fraud where you misrepresent returns, risks, or use of investor funds – if you sent emails or made phone calls about those investments, that’s wire fraud. Business fraud where you lie about product quality, delivery timelines, or financial condition – if those lies were communicated electronically, that’s wire fraud. Telemarketing scams, phishing emails, fraudulent prize notifications – obvious wire fraud. But wire fraud also covers situations that look like normal business deals gone wrong. You promised results you couldn’t deliver. You exaggerated capabilities. You knew your company was in financial trouble but told investors everything was fine. If any of those communications happened via phone or email – which they always do in modern business – prosecutors can charge wire fraud.

The difference between failed business venture and wire fraud is intent. If you genuinely believed your representations were true when you made them, that’s not fraud even if you were wrong. If you knew they were false when you made them or had no basis to believe they were true – that’s fraud. Federal prosecutors prove intent through emails where you admitted doubts privately while making confident claims publicly, through financial records showing you knew the business was failing while telling investors it was succeeding, through witness testimony that you deliberately misrepresented facts. Intent is the hardest element to prove but also the element prosecutors focus on most aggressively because it separates criminal fraud from civil breach of contract.

Penalties and Federal Sentencing

Wire fraud carries up to 20 years in federal prison per count. If the fraud affected a financial institution, the penalty increases to 30 years. Every wire communication can be a separate count. Send ten emails as part of a fraud scheme? Ten counts of wire fraud, each carrying 20 years maximum. Federal prosecutors stack counts to create exposure that pressures guilty pleas. The sentencing guidelines calculate recommended sentences based on loss amount. Fraud causing $1 million loss adds significant offense levels compared to $100,000 loss. Intended loss counts even if the fraud didn’t succeed – if you attempted to steal $5 million but only got $1 million, sentencing is based on the $5 million intended loss.

Role in the offense affects sentencing. If you organized or led the fraud scheme, you receive leadership enhancements that add offense levels. Number of victims matters – more than ten victims adds levels, more than fifty adds more levels. Sophisticated means – using offshore accounts, shell companies, or complex financial instruments to conceal fraud – adds levels. These enhancements compound. A wire fraud case with $2 million loss, leadership role, thirty victims, and sophisticated means can reach guideline ranges of 10-15 years before any downward departures or cooperation credit. The statutory maximum of 20 years becomes realistic for defendants who go to trial and lose.

Defenses to Wire Fraud Charges

No intent to defraud – you believed your representations were true when you made them, you had reasonable basis for optimism about business prospects, you didn’t know facts were false. Lack of materiality – the misrepresentations didn’t matter to the victims’ decisions, they would have proceeded regardless, other factors drove their decisions. No scheme to defraud – the transactions were legitimate business deals with risks both parties understood, losses resulted from market conditions not deception. Good faith – you disclosed risks, made honest mistakes in judgment but didn’t deliberately deceive anyone. These defenses require evidence: contemporaneous documents showing honest belief, expert testimony about industry standards, witness statements confirming disclosures were made.

Prosecutors anticipate these defenses and structure cases to defeat them. They search emails for statements showing knowledge of problems, for internal discussions contradicting public representations, for any evidence you privately doubted what you publicly claimed. They interview employees, business partners, anyone who might have heard you acknowledge issues you later concealed from victims. They analyze financial records to show you knew the business was failing when you told investors it was thriving. Wire fraud prosecutions turn on intent, and prosecutors build intent through documentary evidence and witness testimony that shows you knew you were lying.

Why Federal Prosecutors Love Wire Fraud Charges

Wire fraud is a federal prosecutor’s favorite charge because it’s broad, easy to prove, and carries severe penalties. The wire element federalizes conduct that might otherwise be state fraud. The scheme to defraud element covers virtually any deceptive business practice. The penalties create pressure to plead guilty. And wire fraud pairs with other charges – money laundering, tax evasion, RICO – to build massive indictments with life-destroying sentencing exposure. Prosecutors charge wire fraud in cases that could be handled as civil disputes or state fraud because federal jurisdiction, federal resources, and federal sentencing make conviction more likely and punishment more severe.

You sent emails about a business deal. You made phone calls to investors. You used electronic payment systems. Those normal business communications become wire fraud if prosecutors believe you were lying when you made them. The difference between civil liability and federal prosecution is often just prosecutorial discretion – the same facts can support either. When someone loses money and complains to federal agents, those agents start reviewing emails and phone records looking for evidence of fraud. Ambiguous statements get interpreted as lies. Optimistic projections become material misrepresentations. Business risk becomes criminal intent. Wire fraud transforms business disputes into federal crimes.

Todd Spodek has defended wire fraud cases throughout his career – SDNY, EDNY, federal courts nationwide. We’ve represented defendants charged with wire fraud for failed investments, business deals gone wrong, communications that prosecutors interpreted as fraud. We’ve challenged intent, contested materiality, fought loss calculations at sentencing, negotiated cooperation agreements when the evidence was overwhelming. When you’re facing wire fraud charges or under investigation for business communications federal agents are calling fraud, call 212-300-5196.