Source: https://www.shouselaw.com/ca/defense/fraud/mail-fraud/
Timestamp: 2020-07-03 09:31:04
Document Index: 678022651

Matched Legal Cases: ['in fine', '§ 1341', '§ 1341', '§ 1341', '§ 1346', '§ 1346', '§ 1341']

"Mail Fraud" Laws In California
Mail Fraud Laws in California
Shouse Law Group › California › Criminal Defense › Fraud › Mail Fraud
Mail fraud, also known as postal fraud, is a serious federal crime. You can be charged with mail fraud if the authorities believe that you used a United States post office or even a private mail carrier to send or receive any materials related to a scheme to commit fraud. 1
The term “mail fraud” or “postal fraud” can actually be a little misleading. It sounds like it would mean a fraud that is carried out entirely or primarily through the mail. But, in fact, the role that “mail” plays in a “mail fraud” scheme can often be rather minor. As we’ll explain in more detail below, the “mail” aspect of mail fraud just gives the federal Department of Justice (as opposed to individual states) the right to prosecute and imprison people for carrying out fraud.
Penalties for mail fraud in California
Mail fraud may be a so-called “white collar crime “…but these charges carry surprisingly harsh penalties. If convicted, you can face up to twenty (20) years in federal prison and/or a steep fine. 2
Because mail fraud is a federal crime in California, not a state crime, you will need the help of a criminal defense attorney who is licensed to practice in the United States federal courts.
Fortunately, there are multiple legal defenses that you may be able to assert if you are accused of mail or postal fraud.
We are a California criminal defense law firm that deals extensively in the area of federal law and the defense of mail fraud charges in particular. Based on our experience, our criminal defense attorneys 3 will explain the following:
1. Definition of mail fraud
1.2. Use of the mail
2. Legal defenses against mail fraud / postal fraud charges
3. Federal criminal penalties for mail fraud / postal fraud
4.1. Use of a fictitious name to commit mail fraud
4.2. Attempt or conspiracy to commit mail fraud
4.4. Wire fraud
4.5. Internet fraud
4.6. California fraud crimes
To give a legal definition of mail fraud, we look to its elements. The “elements” of a crime are the things that a prosecutor has to prove beyond a reasonable doubt in order to get a guilty verdict. The definition / elements of mail fraud are:
Use of the mail to further that scheme; and
Specific intent to commit fraud. 4
Many people have heard the word “fraud” but aren’t sure exactly what it means. There are a wide variety of California criminal fraud laws and corresponding federal laws that can cover a wide range of misconduct.
For the purposes of the federal crime of mail fraud, fraud means: the knowing or reckless misrepresentation of a material fact in order to deprive someone else of something valuable. 5 In other words, fraud is lying to someone in order to get them to give up something they value (usually money).
Misrepresentation has to be material
In order to be fraud under the federal mail fraud statute, a misrepresentation, or lie, has to be about something material…that is, something important. 6
Example: Ralph owns a ranch in Oklahoma that he wants to subdivide and sell. He sends letters to hundreds of individuals offering them the chance to buy a piece of his ranch. The letters say that an investor from Houston, Texas, is interested in drilling for oil on the property and will pay the buyers a large sum for drilling rights. But, in fact, there are no investors interested in drilling on the land. This is a
material misrepresentation and could be fraud.
Example: Let’s say it
is true that an investor has expressed interest in drilling for oil on the ranch. But the investor is not from Houston, Texas…he’s from Dallas. This is probably not a
material misrepresentation that could lead to Ralph being charged with fraud.
The misrepresentation also has to be designed to deceive someone of “ordinary prudence”-that is, someone with a reasonable degree of common sense. So, if the lie was so outrageous that a normally prudent person would never have believed it, the prosecutor may not be able to make mail fraud charges stick.
Example: As a practical joke, Ralph sends letters to hundreds of people offering them a chance to buy plots of land in a new colony on Mars by sending him checks. It is possible that he will not be convicted under the federal mail fraud laws…because his scheme would not have fooled anyone of “ordinary prudence.”
Mail fraud can occur not just when someone says something that is untrue…it can also occur because someone fails to say something that is true, in a way that amounts to deceit. 8
Example: Sam wants to open an expensive restaurant in Los Angeles. He is looking for investors to put money into the project. He sends a letter to potential investors telling them that Brad Pitt, the movie star, has expressed interest in investing in the project. But he does
not tell them that, after expressing interest and looking into the idea further, Brad Pitt has already decided not to invest in it.
Sam did not actually say anything that was untrue…but he may have committed mail fraud anyway. This is because he is misleading potential investors by failing to disclose the important fact that Brad Pitt chose not to invest in the restaurant.
In the above examples, Ralph and Sam may be charged with mail fraud even if none of the people they sent letters to actually took the bait and gave them money. This is because the crime of mail fraud does not require that the scheme to defraud be successful. 9 All that’s required for someone to be tried and convicted for mail fraud is that they use the mail to try to pull off a fraud.
The examples above involve people trying to swindle other people out of their money or property. This is the more typical, better-known form of fraud. But you can also be charged with federal mail fraud in connection with a more complicated kind of fraud known as “honest services fraud.” 10
Honest services fraud occurs when someone (like a government official) abuses a position of trust by committing either of the following two white collar crimes:
Kickbacks. 11
A ‘kickback’ occurs when someone returns a portion of money they’ve received to someone else in order to receive a benefit they should not be receiving. 12
Example: Tom is a government official whose job involves deciding what construction companies will get lucrative contracts to build new schools. Jerry owns a construction company. They make a deal in which Tom agrees to steer contracts to Jerry’s company, and Jerry in return gives 25% of the profits from these contracts back to Tom.
This is a kickback. If Tom and Jerry use the mail to discuss their deal or put it into practice, they may be charged with mail fraud.
If someone commits fraud entirely through face-to-face interactions, they can’t be charged under federal mail fraud laws. This may seem a little silly-fraud is fraud; why should it matter whether it is committed in person or through the mail?
The reason use of the mail matters is because mail fraud is a federal crime. The United States Constitution doesn’t allow the federal government to make just anything a crime. But the so-called “Commerce Clause” of the Constitution allows the federal government to regulate commercial activity that’s carried out between different states. 13 Because the mail is considered a form of commerce between the states, the federal government can punish behavior that involves the mail.
Use of the mail for purposes of the mail fraud laws can mean several things:
Placing materials in a post office, mailbox, or other facility to be delivered by either the U.S. Postal Service or a private interstate mail carrier like Federal Express or UPS;
Taking or receiving anything that’s been delivered to you by the U.S. Postal Service or a private mail carrier; or
Otherwise causing something to be delivered by mail (for example, by asking someone else to put it in the mailbox for you). 14
Here are some examples, drawn from actual cases, of uses of the mail that can lead to a conviction for mail fraud:
Example: James travels around the country trying to sell popcorn machines. He takes money from people who want to buy the machines but then never delivers the machines. He meets Clifford at a marketing presentation. They talk about the machine face-to-face. Then Clifford hands James a check.
James later sends Clifford several pieces of mail confirming his order and telling him (falsely) that the reason he doesn’t have his popcorn machine yet is because bad weather delayed the delivery.
The fraud was pretty much already complete when Clifford handed James the check. But the letters James later sent to Clifford helped support the lie that a popcorn machine was actually on its way to him. Thus, James has committed mail fraud.
Example: John works for a company (FraudCo) that is trying to get a contract to supply materials for a nuclear power plant. In order to get the contract, he gives the company that is building the plant (NukeCo) fake test reports that are supposed to show that Fraudco’s materials were up to standard.
The government had no evidence that John had sent anything through the mail in support of his fraud. But it did have evidence that someone at NukeCo had placed a letter to John approving the contract in an outgoing mail basket. This is enough to show that the mail was used in furtherance of John’s fraud scheme.
1.3. Intent to defraud
In order to be convicted of mail fraud, the accused has to have specifically intended to deceive or defraud someone else. Even if the prosecution can show that someone participated in a mail fraud scheme, that’s not enough for a conviction…they also have to show that the person knew about the scheme and had the specific goal of committing fraud. 18
In some cases, though, people can be convicted of mail fraud even without a showing of specific intent…IF the prosecution is able to show that they acted with “reckless indifference” to the question of whether the statements they were making were true. 19
Here is an example of how this “reckless indifference” theory might work:
Example: Pete invents a new kind of juicer. He sends flyers in the mail marketing his juicer to potential customers. These flyers say that Pete’s invention juices an orange twice as fast as any other juicer on the market. But in reality Pete has not tested his juicer against the other juicers on the market and has no way of knowing whether this actually true.
Pete did not lie
per se in his letters…but he may still be charged with
mail fraud, because his statements showed a reckless indifference to the truth.
An experienced attorney can help you assert various legal defenses against a mail fraud charge. These may be asserted during your trial or as part of the federal criminal appeals process, if you are convicted and file an appeal.
Two of the most important potential defenses to mail fraud are lack of intent, and mistake of fact.
As we discussed above, specific intent is a key element of the crime of mail fraud. According to Santa Ana criminal defense attorney John Murray 20:
“The specific intent requirement is very important because mail fraud often involves complicated schemes that are hatched in a business environment. It’s easy for innocent people to get caught up in a fraudulent scheme that is actually run by, say, their supervisor at work, without really understanding what is going on. Unless the prosecutor can show beyond a reasonable doubt that you specifically intended to help with the fraud, you can’t be found guilty.”
Here is an example of a case where lack of intent was successfully asserted as a legal defense:
Example: James from our earlier example, who travels around the country selling popcorn machines that will never be delivered, has a wife, Joan. Joan has only a ninth grade education and worked as a waitress before marrying James. Now she works as the secretary for his company. She answers the phone and writes and sends letters to James’ “customers.” But she has no idea that James’ business is built on fraud and that his customers will never receive their popcorn machines.
Joan cannot has not committed mail fraud along with James, because there is no evidence that she specifically intended to defraud anyone.
2.2. Mistake of fact in mail fraud cases
Mistake of fact as a criminal defense applies to a number of different crimes, including mail fraud. It can be especially helpful in a mail fraud case, where the underlying facts might involve complicated business issues and be hard to understand.
Because specific intent is an element of the crime of mail fraud, 22 you cannot be convicted if you can show that you committed the acts in question while you were mistaken about certain key facts. For example, you may have put a misrepresentation into a letter because you mistakenly believed that it was actually true. If this is the case, then the prosecution will not be able to show that you specifically intended to deceive anyone.
3. Federal criminal penalties for mail fraud / postal fraud in California
Because mail fraud / postal fraud is a federal crime, the penalties may include time spent in federal prison (not the California state prison system).
Mail fraud is punishable with up to twenty (20) years in prison, a fine, or both. 23 If the fraud involves a federal disaster or a financial institution (like a national bank), then the maximum sentence increases to thirty (30) years in prison. 24
Sometimes people try to cover their tracks by using a fake name or address when they carry out a mail fraud scheme.
But if this attempt is unsuccessful, and the person is caught, they can face even harsher penalties. Using a fictitious name or address to carry out mail fraud is a separate federal criminal charge. 25 A defendant convicted of this crime can be fined, sentenced to up to five (5) years in federal prison, or both. 26
Let’s say someone tries to commit mail fraud by writing a fraudulent letter and giving it to his or her assistant to mail…but then the assistant gets suspicious, opens the letter, and calls the authorities instead of dropping it in the mailbox. This unsuccessful attempt to commit mail fraud is an attempted crime in California.
Anyone who unsuccessfully attempts to commit mail fraud may be convicted just as if the attempt had been successful, and they are subject to the same criminal penalties. 27
Likewise, anyone who participates in a criminal conspiracy (Penal Code 182 in California) to commit mail fraud can be punished just as if they had committed mail fraud themselves. 28 So, for example, if three people get together and make plans for a fraudulent scheme that involves use of the mail, but only one of them actually sends and receives the letters involved in the fraud…all three of them may still be prosecuted for mail fraud.
Securities fraud is both a federal crime and a California state crime. 29
Securities fraud laws prohibit a wide range of behavior involving investment securities, including making false or misleading statements in connection with a sale or purchase of securities. 30 Thus, if someone uses the mail to advance a fraud involving securities, with the intent of defrauding someone else, they may be charged with both mail fraud and securities fraud.
Securities fraud violations carry hefty penalties. Violations of California state securities fraud laws can result in fines up to ten million dollars ($10,000,000) or imprisonment for as much as five (5) years. 31 Federal securities fraud convictions can mean imprisonment for up to twenty (20) years. 32
The federal crime of wire fraud is a very similar crime to mail fraud. Wire fraud is also a federal crime. 23 Just as with mail fraud, a wire fraud conviction requires a showing of: 1) a scheme to commit fraud, and 2) specific intent to commit fraud. 34
The difference between mail fraud and wire fraud is that, instead of a use of the mail, wire fraud requires a use of radio, television, or wire communications in furtherance of the scheme to defraud. 35 Because an elaborate fraud scheme may involve both use of wire communications like the telephone and the use of mail, wire fraud and mail fraud are often charged together.
Like mail fraud, wire fraud is also punishable with up to twenty (20) years in prison, a fine, or both. If the fraud involves a federal disaster or a financial institution (like a national bank), then the maximum sentence increases to thirty (30) years in prison. 36
Internet fraud, also known as cybercrime, is a catch-all term that covers any fraudulent scheme carried out through the internet.
In some cases, internet fraud can be a type of wire fraud – for example, when someone uses email to advance a scheme to defraud. 37 In these cases, the person accused of internet fraud may be prosecuted under the federal wire fraud statute. These days it is quite common for people to use the internet or email to carry out fraudulent schemes, including non-delivery merchandise fraud, advance fee fraud, work-at-home scams, and real estate overpayment fraud. 38
Other violations of internet fraud laws in California include “phishing”-obtaining other people’s personal or credit card information over the internet and using it for fraudulent purposes-and unauthorized access to computers or computer data, sometimes through hacking. These crimes may be prosecuted under either
federal law or California state criminal law. 39
California’s criminal fraud laws cover a wide range of specific offenses. These include:
automobile insurance fraud;
identity theft (530.5 PC);
Medi-Cal fraud;
real estate fraud, including foreclosure fraud and
rent skimming;
senior fraud;
unemployment insurance fraud;
welfare fraud; and
Depending on the facts of the particular case, a person could be charged with mail fraud in federal court AND with another form of fraud in the California courts.
If you or a loved one is charged with mail fraud and you are looking to hire an attorney for representation, we invite you to contact us at Shouse Law Group. We can provide a free consultation in office or by phone. We have local offices in Los Angeles, the San Fernando Valley, Pasadena, Long Beach, Orange County, Ventura, San Bernardino, Rancho Cucamonga, Riverside, San Diego, Sacramento, Oakland, San Francisco, San Jose and throughout California.
To learn about mail fraud and other federal crimes in Nevada, go to our pages on federal laws for “mail fraud” in Nevada and on federal crimes in Nevada.
1 18 United States Code (“U.S.C.”) § 1341 – Mail frauds and swindles. (“Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter [mail fraud] or thing, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.”)
3 Our California and federal criminal defense attorneys defend clients accused of mail fraud. We have local Los Angeles law offices in Beverly Hills, Burbank, Glendale, Lancaster, Long Beach, Los Angeles, Pasadena, Pomona, Torrance, Van Nuys, West Covina, and Whittier. We have additional law offices conveniently located throughout the state in Orange County, San Diego, Riverside, San Bernardino, Ventura, San Jose, Oakland, the San Francisco Bay area, Sacramento, and several nearby cities.
4Miller v. Yokohama Tire Corp., (9th Cir. 2004) 358 F.3d 616, 620. (“To allege a violation of mail fraud under § 1341, it is necessary to show that (1) the defendants formed a scheme or artifice to defraud; (2) the defendants used the United States mails or caused a use of the United States mails in furtherance of the scheme; and (3) the defendants did so with the specific intent to deceive or defraud.”) (internal quotations marks omitted)
5 Black’s Law Dictionary (9th ed. 2009), fraud. (“1. A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment. . Fraud is usu. a tort, but in some cases (esp. when the conduct is willful) it may be a crime. – Also termed intentional fraud. . . . 2. A misrepresentation made recklessly without belief in its truth to induce another person to act….”)
6Neder v. United States, (1999) 527 U.S. 1, 25. (“[W]e hold that materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes.”)
7 United States v. Green, (9th Cir. 1984) 745 F.2d 1205, 1207. (“The government satisfies the requirement of proof of specific intent under section 1341 if it proves the existence of a scheme which was reasonably calculated to deceive persons of ordinary prudence and comprehension, and this intention is shown by examining the scheme itself.”) (internal quotation marks omitted)
8 Cacy v. United States, (9th Cir. 1961), 298 F.2d 227, 229. (“Deceitful concealment of material facts is not constructive [mail] fraud but actual fraud.”)
9 United States v. Stewart, (10th Cir. 1989) 872 F.2d 957, 960. (“Appellant also contends the trial court erred by refusing to instruct the jury on the elements of common law fraud. It is well established, however, that an offense under § 1341, unlike common law fraud, does not require the successful completion of the scheme to defraud. . . . It follows from this that the government does not have to prove actual reliance upon the defendant’s misrepresentations nor do they have to prove that the victim suffered actual pecuniary losses from the scheme.”)
1018 U.S.C. § 1346 – Definition of scheme or artifice to defraud. (“For the purposes of this chapter, the term ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.”)
11 See Skilling v. United States, (2010) 130 S.Ct. 2896, 2930. (‘The “vast majority’ of the honest-services cases involved offenders who, in violation of a fiduciary duty, participated in bribery or kickback schemes.”)
See also same, at 2931. (“To preserve the statute without transgressing constitutional limitations, we now hold that § 1346 criminalizes only the bribe-and-kickback core of the pre- McNally case law.”)
12 United States v. Pelisamen, (9th Cir. 2011) 641 F.3d 399, 405. (“Black’s Law Dictionary defines a kickback’ as a ‘return of a portion of a monetary sum received, esp. as a result of coercion or a secret agreement.’. . . In contrast, the paradigmatic kickback is made ‘for the purpose of improperly obtaining or rewarding favorable treatment’ in some area ( e.g., government contracts).”)
13U.S. Const., art. I, sec. 8. (“The Congress shall have power . . . To regulate commerce with foreign nations, and among the several states, and with the Indian tribes . . . .”)
14 18 U.S.C. § 1341 – Frauds and swindles. (“Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation of mail fraud laws occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.”)
Mail fraud, also known as postal fraud, is a serious federal crime. You can be charged with mail fraud if the authorities believe that you used a United States post office or even a private mail carrier to send or receive any materials related to a scheme to commit fraud. 1 The term “mail fraud” ...