10 Things to Know About Mail Fraud Prosecutions

If you are following the criminal trial of Dallas County Commissioner John Wiley Price, then you know that one of the big federal felony charges he’s facing is five counts of “Deprivation of Honest Services by Mail Fraud, Aiding and Abetting.”

John Wiley Price’s Felony Counts 2 -7: Mail Fraud

That’s in addition to the Conspiracy to Commit Bribery Count and some other things.  Read the 100+ page Indictment filed against John Wiley Price here.  For more information on his case and the current trial proceeding, check out our post, “ John Wiley Price Trial: a Dallas Criminal Defense Lawyer’s 10 Things to Know.”

It’s not surprising that the federal case against John Wiley Price includes allegations of mail fraud.

Federal prosecutors like to include mail fraud charges if they can, especially in financial fraud cases.

Many Do Not Know the Power of a Felony Mail Fraud Charge

If you ask about bribery, most everyone knows what bribery means.  It’s a pretty common plot on the popular TV law and order crime shows.

However, ask around about mail fraud and it’s a different story.  Lots of people are not really clear on what “mail fraud” involves – what is that crime, exactly?

There’s a reason prosecutors like to include mail fraud counts in their indictments.  Mail fraud can be a very powerful tool for prosecutors to use when they are trying to charge, prosecute, and convict someone for criminal activity.

Mail fraud may not sound as severe as bribery, or money laundering, or drug trafficking, but it’s usually listed alongside those charges – and it may well be a serious hurdle for that defendant to jump in order to avoid incarceration.  Mail fraud is a serious felony.

10 Things to Know About Mail Fraud Charges

Here are 10 things to know about the felony crime of mail fraud as it is prosecuted here in Dallas, Fort Worth, and the rest of Texas.

1. Mail Fraud is a Federal Crime Defined by Federal Statute

Mail fraud and wire fraud usually go hand-in-hand.  However, they are two separate crimes.

Mail fraud is defined in 18 U.S.C. Section 1341 as:

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 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.

So what does that mean?

The Supreme Court has explained mail fraud this way in Pereira v. United States, 347 U.S. 1, 8 (1954).  It’s made up of two things.

1. First, the fraud plan (“… having devised or intending to devise a scheme to defraud (or to perform specified fraudulent acts)”); and
2. Second, using the mail as part of that plan (“… the mailing of a letter, etc., for the purpose of executing, or attempting to execute, the scheme (or specified fraudulent acts).”

2.  Mail Fraud Charges Are Found in Big Federal Prosecutions

Federal prosecutors do not bother with mail fraud charges unless the case is big enough for them.  It is the policy of the Department of Justice to decline prosecution of mail fraud cases if there is not that much money involved or if there are just a few transactions.   They don’t ignore these cases, they just send them over to the local state district attorney’s office.

The Office of the United States Attorney General prosecutes for mail fraud when the underlying activity involves a scheme that allegedly defrauds “…a class of persons, or the general public, with a substantial pattern of conduct.”   See, Section 9-43.100 of the United States Attorney’s Manual.

3.  Several Federal Agencies Look for Mail Fraud

If you are following the John Wiley Price trial (this week, the prosecution’s case continues to unfold), then you may think that it’s the Federal Bureau of Investigation (FBI) that looks for mail fraud crimes.

And that’s true.  The FBI is on the lookout for mail fraud and wire fraud as part of its investigations and sting operations.  But there are a number of other agencies that also know of mail fraud and look for mail fraud in the course of their work.

They include the Securities and Exchange Commission (SEC) and the United States Postal Service.  That’s right.  The Post Office itself may forward suspicions to the U.S. Attorney General’s Office if they think they have spotted mail being used in some kind of swindle or scheme.

4.  Mail Fraud Includes FedEx and UPS

The crime of mail fraud doesn’t apply to international mail.  It is a crime to use domestic mail service as part of a plan to defraud someone.  However, that’s not limited to mailing something with the United States Postal Service.

If someone sends a communication via a private mail carrier like Federal Express (FedEx) or United Parcel Service (UPS), they can be charged with  mail fraud, too.

Federal mail fraud charges do have to involve the mail going across state lines, regardless of the carrier involved.

5.  Mail Fraud Schemes Can Be Creative and Clever

Mail fraud is a part of a bigger scheme or plan and criminal activity.  Congress has made it a crime to use the mail in criminal activity.

This means all sorts of crimes are tied to charges of mail fraud.  Over time, all sorts of clever criminals have used the mail service – so much so, that the United States Postal Service has an online list of examples.

Ponzi schemes, phony sweepstakes, telemarketing scams, and prison pen pal money order scams are among those detailed by the Postal Inspector on the USPS site.

6.  No Loss or Harm to the Victims Is Needed for Conviction on Mail Fraud

The courts have ruled that mail fraud convictions do not need proof that anyone got hurt in the deal.  Prosecutors don’t have to identify a particular kind of victim, either.

You can have a bad plan to defraud someone and it doesn’t work.  No one is fooled.  No one gets hurt or loses any money.

None of that is a viable defense against a mail fraud charge.  If the prosecutor can prove you tried a scheme to defraud someone and used the mail to do it, then that’s all they need.  United States v. Reid, 533 F.2d 1255, 1264 (D.C. Cir. 1976).

The victim can be gullible and dense and that does not matter either. You can’t point at the intended victim in your defense to a mail fraud charge.  “[I]t makes no difference whether the persons the scheme is intended to defraud are gullible or skeptical, dull or bright . . . .” United States v. Brien, 617 F.2d 299, 311 (1st Cir.), cert. denied, 446 U.S. 919 (1980)).

7.  Use of the Mails Must Happen; It Need Not be a Part of the Scheme

To get a conviction for mail fraud, prosecutors do not have to prove that the mail service (USPS, FedEx, or UPS) was a key part of the plan or grift.  The fraud does not have to depend upon the mail service – it is enough if the mail service is used at some point by those attempted to defraud their mark.

“It is sufficient for the mailing to be ‘incident to an essential part of the scheme,’ . . . or ‘a step in [the] plot’ . . . . ” Schmuck v. U.S.,  489 U.S. 705, 710-11 (1989).

8.  Mere Intent to Commit Fraud Is All That Must Be Shown in Mail Fraud Case

The prosecution must have sufficient evidence that the defendant intended to defraud someone to prove up a mail fraud conviction.  This does not mean that actual fraud must be shown.  The government only has to have enough evidence to prove that the defendant intended to defraud his or her victim.

“Proof that someone was actually defrauded is unnecessary simply because the critical element in a ‘scheme to defraud’ is ‘fraudulent intent and therefore the accused need not have succeeded in his scheme to be guilty of the crime.” Durland v. United States, 161 U.S. 306 (1896).

9. Mail Fraud Proven With Circumstantial Evidence

To establish mail fraud, the prosecutor does not have to have evidence showing the defendant mailed the document.  It’s enough for the government to have circumstantial evidence that the mailing took place and the defendant caused it to happen.  Pereira, 347 U.S. at  8.

How?  If the letter was sent as part of the customary practices of the business operations, then that’s enough.  United States v. Bowman, 783 F.2d 1192, 1197 (5th Cir. 1986) (mailings performed in the course of the bank’s customary practices).  Routine mailings can be enough evidence for a mail fraud charge.

And the mailings need not have any false information in them.  These are called “innocent mailings,” and they can still prove up a mail fraud charge if they are shown to be a part of the scheme.   Parr v. United States, 363 U.S. 370, 390 (1960)).

10.  Defenses to Mail Fraud Charges

No wonder prosecutors love mail fraud charges – they don’t have to have a successful fraud, much less a harmed victim, and they can use routine or innocent mailings to support their case!  How can someone defend successfully against a mail fraud allegation brought by the federal prosecutor?

A.  Argue Prosecutor Has Not Met Burden of Proof

First of all, the defense can challenge the efforts of the federal government.  Motions to exclude and suppress evidence can be filed.  Motions to dismiss can argue that the prosecutor has not provided enough evidence of mail fraud to meet the burden of proof.

Just because the prosecutor thinks he has enough evidence to prove up his case does not make it so.  Defense attorneys work hard to review and assess the weaknesses and holes in any prosecution case.

B.  Good Faith

If the defendant acted in good faith, this is a defense to mail fraud charges See,  United States v. Casperson, 773 F.2d 216, 223 (8th Cir. 1985).   Good faith is a complete defense to such specific intent crimes like fraud.

If someone acted with honest intentions, then they acted without the required malicious intent for a mail fraud conviction.  Good faith can be shown by evidence of mistake, accident, or other innocent reasons.

C.  Statute of Limitations

The prosecution has a limited time frame within which to file any case alleging mail fraud.  Under federal law, that deadline is five (5) years (18 U.S.C. § 3282).  It’s longer if a bank or financial institution is involved (that’s ten (10) years) (18 U.S.C. § 3293).

If the prosecution files its charges after the limitations deadline, the defense can move to dismiss the case based upon the statute of limitations, arguing that the prosecution is time-barred.

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For more information, check out our web resources, read Michael Lowe’s Case Results, and read his in-depth article,” Pre-Arrest Criminal Investigations.”