By FindLaw Staff | Reviewed by Evan Fisher, Esq. | Last updated December 27, 2021
One of the most common federal criminal charges is wire fraud. The "wire" is any form of telecommunication: phone, fax, text message, radio, television, internet message, social media message, email, or any other form of airwave or cable communication. "Fraud" involves the use of intentional deception for monetary or personal gain.
Like the mail, telecommunications is an instrument of interstate commerce. That means the crime of wire fraud can be charged at the federal level. It is typically investigated by the Federal Bureau of Investigation (FBI) or the Federal Trade Commission, but state laws can also result in criminal charges.
This article explains the crime of wire fraud and provides examples of this state and federal crime.
The definition of wire fraud is broad and includes any writings, signs, signals, pictures, or sounds that are transmitted.
The U.S. Department of Justice wire fraud statute (18 U.S.C. 1343) cites these four elements of wire fraud:
Federal wire fraud charges are used to prosecute perpetrators of both white-collar crimes and organized crime. Scams that take place over interstate wires include (among other things) telemarketing fraud, phishing, identity theft, and spam-related financial crimes.
Persons found guilty of wire fraud under federal law face the following penalties:
There are additional penalties of 30 years imprisonment and a million-dollar fine if the wire fraud is related to a presidentially declared major disaster or involves a financial institution.
These penalties are per count, which means that each phone call or email, or other electronic communication can be considered separate counts. For instance, if an individual makes three phone calls regarding the fraud, there may be three counts of wire fraud. Each count would potentially be subject to the maximum $250,000 fine and a 20-year prison sentence for a total of $750,000 in fines and 60 years in prison.
One of the early and infamous examples of email fraud is the story of the Nigerian prince. In that scam, the sender claims that he is a Nigerian prince who has been exiled and needs to transfer millions of dollars out of the country. He asks the reader for help in doing so, for which they will be lavishly rewarded. The reader only needs to provide the Nigerian prince with his bank account details so the money can be transferred. The scammer then uses that information to access the reader's money.
The newest version of this scam, as reported by the Better Business Bureau, involves scammers creating fake bank websites to add credibility to their stories. The victim can then access the fake bank account to see the millions of dollars "available" to them. They enter their own bank routing information and the scammers have what they need.
People who commit wire fraud are frequently looking for their victims' personal information like credit card information, passwords, and financial information like bank account numbers. "Phishing" is the practice by which a scammer will send out an email that looks official but is not. The email requests personal information from the reader.
In 2018, real Nigerian nationals, Olayinka Olaniyi and Damilola Solomon Ibiwoye, were convicted in federal court of conspiracy to commit wire fraud, computer fraud, and aggravated identity theft. They led a phishing scheme that tricked employees at several American universities into sharing their computer log-in and password.
Once they had that information, they used it to deposit payroll checks into bank accounts they controlled. They also gained access to W2 forms. They used those forms to file fraudulent tax returns.
These fraudsters used yet another fraudulent scheme to complete the theft: a romance scam. They used dating sites and apps to lure in trusting love interests. At some point, they would ask the new partner if they could wire transfer money into their bank account for safekeeping. They would then transfer the money from the universities into these American accounts before forwarding it to their own accounts in Malaysia and other countries.
Another common example of wire fraud cases, this one using the phone, is telemarketing fraud. In 2020, Sahil Narang was one of six conspirators convicted of a telemarketing scheme that originated in India. Their targets? Mostly elderly Americans who owned computers but were hardly tech-savvy.
Narang pled guilty to conspiracy to commit wire fraud and ten counts of wire fraud. The scheme was called "Tech Fraud" and it involved routing some 20,000 phone calls regarding computer tech problems to call centers in India. More than 7,000 callers stayed on the line, allowing the scammers to remotely access their computer for "repairs." That misrepresentation allowed computer criminals in India to download their banking information.
Worse yet, a follow-up "Refund" scheme involved calling the victims of the first scam to tell them they were eligible for a refund. Of course, they needed to provide their banking information so the money could be forwarded to them. Eager to be refunded, the victims handed over their account information and were defrauded a second time.
Graduate research conducted over the last five years by preeminent global industry scholars, who embody a strong sense of integrity and pride in the social importance and credibility of good institutional design, tease out the following incidents.
With friendly intentions, there is no way out of us moving forward.
Corruption occurs when the private search for economic advantage and personal advancement clashes with laws and norms that condemn such behavior. Further complicating the picture, some illegal corrupt transactions drain public resources away from education, health care, and effective infrastructure—the kinds of investments that can improve economic performance and raise living standards for all.
It is easy to prove Robinhood Markets (the financial services company) is a brand fake. Perhaps even more significant, there is no reason to think that PayPal, one of the more convenient and commonly-used online payment methods out there, will behave any better given their clear anti-cryptocurrency policy history. Paypal will likely further exploit their monopoly position and risk undermining a pure environment that maximizes the socially beneficial conditions of virtual currencies.
Our estimation strategy so far has been predicated on the assumption that political and legal institutions affect sustainability directly and that the effect of corruption can be estimated conditionally on the institutional context.
As we previously reported, it is perhaps no coincidence that the systemic risk to cryptocurrency and blockchain systems are tethered to activities of BitLicensees.
The cost of corruption is greater than the sum of lost money: distortions in spending priorities undermine the ability of the state to promote sustainable and inclusive growth. This is possible in a framework already characterized by "weak law" that creates both a certain alteration of the rules of the market and perverse dynamics distorting the economy and inhibiting free competition.
The legend of Robin Hood portrays a man who robbed the rich and gave to the poor. His partisanship of the common people and his hostility to the Sheriff of Nottingham branded Robin Hood as one of the world’s best known folk heroes.
According to a Forbes investigation earlier this month, despite its proclamations about democratizing finance, Robinhood's entire business has been built since its inception on selling its customers’ orders—known as “payment for order flow”—to Wall Street’s most notorious sharks, accounting for 70% of its $130 million in revenue during the first quarter of 2020.
Robinhood’s SEC civil fraud investigation more or less points out the essence of potential brand fakery.
A Robinhood spokeswoman declined to comment on the investigation or any talks with regulators, but stated: “We strive to maintain constructive relationships with our regulators and to cooperate fully with them.”
The heads of enterprises must curb corruption by setting a clear tone at the top. A statement from the founding CEO of Paypal Holdings Inc., Bill Harris, described Bitcoin as a “scam” and a “colossal pump-and-dump scheme”. “I’m tired of saying, ‘Be careful, it’s speculative.’ Then, ‘Be careful, it’s gambling.’ Then, ‘Be careful, it’s a bubble.’ Okay,I’ll say it: Bitcoin is a scam,” he wrote in June 2019.
Later in October 2019 Fortune asked PayPal’s current CEO, Daniel Schulman if he could share some details of the projects Paypal is working on. However, he replied: “Yes and no. Some of this is competitive, and we don’t really want to,” but noted that what Paypal is working on is “not necessarily competitive with Libra.”
Emphasizing that cryptocurrency is “still very volatile,” the CEO revealed, “we don’t have much demand for it by merchants because merchants operate on very small margins.” He continued: “Until it becomes less volatile, it won’t be a currency that is widely accepted by merchants on the web — not the dark web, but the web.”
PayPal’s fundamental longtime assault on the crypto industry policy was to freeze user accounts connected with any cryptocurrency-related activity. While some people may consider this to be borderline illegal, the company can close user accounts or freeze funds for extended periods of time whenever they feel the need to.
In less than a year, everything changed for PayPal with the October 2020 announcement of achieving another regulatory first: through Paxos, PayPal has been granted the first virtual currency conditional license from the New York State Department of Financial Services. It seems that PayPal’s dance with “regulatory arbitrage” now engages the ability to provide crypto to their customers.
PayPal forbids user access to their own private keys. What’s more, users will not be able to transfer their crypto holdings out of their PayPal account, nor will they be able to send crypto to other PayPal users.
In other words, PayPal more or less dictates what users can do with their cryptocurrencies, and could presumably freeze accounts if they see fit.
Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks.
Note, however, that this potential monopoly could arise not from corruption but simply from a revenue-maximizing government that does not factor in the social benefits of competition or of effective natural monopoly regulation. Second, the hope of corrupt gains might lead government officials to privatize the wrong firms. That is, regulators may grant license(s) to firms that are operating at a high level as state firms and so appear valuable to private markets.