Wire Fraud Adds Up, Part 2: Proving a Scheme to Defraud 
Wire Fraud Adds Up, Part 2: Proving a Scheme to Defraud 

As discussed earlier, the wire fraud statute can be used to impose punishment for each wire transmission that relates to a scheme to defraud. Is there a government interest in protecting us from deceitful wire transmissions and preserving the internet for virtuous intentions? Any amount of time spent on any social media platform should answer that question for you. The interest is protecting the public against schemes to defraud, and the use of wires is the jurisdictional hook—the interstate component of the crime that enables the federal government to prosecute. The crux of the offense is the scheme to defraud.

To prove a scheme to defraud, the government must prove a defendant acted with the specific intent to defraud, or to deprive someone of something of value through a misrepresentation or other similar dishonest method. The Supreme Court has affirmed this requirement and explained that the government must show that a defendant engaged in deception and that the object of the fraud was money or property.

An interesting twist to proving fraud played out in the case Kelly v. United States, which prosecuted the scheme familiarly known as “Bridgegate.” That was back in 2013 when New Jersey Governor Chris Christie’s staff retaliated against the mayor of Fort Lee for not supporting Christie’s reelection campaign. Governor Christie’s staff and state officials were accused of directing that several lanes of a high-traffic bridge be shut down for a fabricated “traffic study,” causing vehicular chaos for four days in Fort Lee.

Three people were convicted of wire fraud by a jury in connection with this scheme. In May 2020, the Supreme Court reversed their convictions, holding that the object of this scheme was political retribution rather than obtaining money or property, and therefore the scheme did not meet the requirements of wire fraud. Even though the scheme commandeered bridge lanes (property) and wasted taxpayer money by diverting resources, those losses were an “incidental byproduct” of the scheme, rather than the goal. The Court emphasized that fraud statutes protect victims from losing money and property, they are not designed to set standards of honesty.

Most wire fraud schemes are devised to obtain money, so this construction of the statute is interesting, but adds little defense value for most people. However, there are other common defenses to wire fraud such as lack of fraudulent intent. If someone accused of fraud believed the false statements to be true, and believed that there was a non-fraudulent and legitimate purpose to the conduct or communications, then that may be considered good faith, mistake of fact, or mere negligence that does not amount to fraud.

There is also a statute of limitations for wire fraud, which is five years. The government cannot charge wire fraud unless it occurred within the last five years.

If you are under investigation for fraud, it is important to consult with an attorney. Contact the Bowles Rice White Collar Defense group to review your case and discuss your options.