Federal Mail Fraud Laws

Anyone who uses the U.S. mail or any interstate delivery service in an attempt to engage in fraud runs the risk of being prosecuted under the federal mail fraud law. One of the most frequently prosecuted federal laws, mail fraud is often charged by federal prosecutors because it can apply in so many situations, and because it applies to anyone who uses the mail or any interstate delivery service.

History of Mail Fraud Laws

The federal mail fraud statute dates back to 1872, and originally applied to persons using only the U.S. mail to perpetrate a fraud (or attempt to do so), such as using the mail to further a counterfeit or lottery scheme. Initially, the law covered only frauds involving money and tangible property. But Congress has significantly expanded the statute's reach over the years. It now covers frauds that constitute the "theft of honest services." And, a person can commit this crime by using not only the U.S. mail, but any interstate carrier or delivery service, such as FedEx and UPS. (18 USC Sections 1341 and following.)

Because the statute potentially covers so many criminal situations, it's been called the prosecution's "Uzi" or (more charitably) it's "Stradivarious." (Ellen S. Podgor, Mail Fraud: Opening Letters, 43 S.C. L. REV. 223, 224 (1992); Jed S. Radkoff, The Federal Mail Fraud Statute (Part I), 18 DUQ. L. REV. 771 (1980).) One judge described the charge as a "stopgap" weapon, which prosecutors rely upon when the behavior they wish to charge isn't yet the subject of more targeted legislation. (United States v. Maze, 414 U.S. 395, 405-06 (1974) (Burger, C.J., dissenting).) For example, the mail fraud statute is the source of more specific and recent criminal fraud statutes that criminalize bank, wire, and health care fraud.

Mail Fraud and Racketeering

Someone charged with mail fraud runs the risk not only of a felony conviction for that offense, with a significant fine and prison time, but a charge of racketeering as well. If the defendant acted in concert with anyone else, the prosecution can also charge under the Racketeer Influenced and Corrupt Organizations Act (known as "RICO"). A RICO conviction exposes the defendant to significantly more punishment in fines and incarceration.

Mail Fraud: What Does the Prosecution Have to Prove?

The prosecutor's job in a mail fraud case is relatively straightforward, requiring only that the prosecutor prove that the defendant had a plan to defraud and used the mails (or other interstate means) to carry it out.

Did The Defendant Have a Scheme to Defraud?

First, the prosecutor must convince the jury that the defendant had a scheme or plan to defraud someone of money, property, or "honest services." The courts have defined fraud as conduct that breaks a legal or moral duty to another person, causing damages. For example, substituting a lesser grade of merchandise than that ordered by a customer constitutes fraud. But because the forms of fraud are almost limitless, and the concept so obvious, courts haven't given us more precise definitions. One has said, bluntly, "to defraud is, in less nice language, to cheat." (United States v. Foshee, 578 F2d 629, 632 (1978).)

Violating accepted norms of public policy can also constitute fraud, as when the scheme violates the duty of honesty, fair play, and right dealing in business and general public life. Courts have held that all that's necessary is a "scheme reasonably calculated to deceive persons of ordinary prudence and comprehension." (Badders v. United States, 240 US 391(1916).)

In a mail fraud prosecution, the government need not prove that the scheme actually injured victims, or was even carried out completely. It's not even necessary that the victim of the scheme had knowledge of its existence.

Depriving Someone of "Honest Services"

A fraudulent scheme's reach can extend beyond the manipulation of money, property, or goods. Depriving a victim of the value of its honest services will suffice. For example, an employee who steered contracts to his best friend, rather than awarding them to the best bidder, has deprived his employer of his duty to deliver "honest services" to those with whom he does business.

Use of the Mails and Private Delivery Services

The ease with which prosecutors satisfy this element of the offense is perhaps one reason that the crime of federal mail fraud is known as "the prosecutor's best friend." Using any method of interstate delivery, including the U.S. Mail, will suffice; and it's not necessary that mailing be an essential part of the scheme (it can be an incidental piece of it). The government needn't prove that the defendant actually deposited anything in the mail or with the delivery service; it's enough to prove that mailing or depositing the item at a collection point was an eventual part of the plan. The prosecutor can even prove "mailing" by pointing to an office's regular mailing procedures.

Cheating to Get Into College: Mail Fraud

Cheating on college entrance exams is nothing new, but even jaded court-watchers were amazed at the news, in March 2019, that some fifty people had been charged in a wide-ranging scheme to get high-school kids into elite colleges and universities. Parents allegedly paid hundreds of thousands of dollars to a ring leader, coaches, test proctors, admissions personnel, and SAT test-taking proxies in an effort to present the applicants in a false and attractive light. A 204-page affidavit prepared by the FBI agent investigating the case ended with the words, "…I respectfully submit that there is probable cause to believe that the defendants conspired to commit mail fraud and honest services mail fraud, in violation of Title 18, United States Code, Section 1349." Parents, coaches, test administrators, test-proxies, school officials, and the mastermind were charged.

How will these charges fare when measured against the requirements of a mail fraud prosecution as explained above? Let's look at each element:

• A plan or scheme. The prosecutor will have to prove that the parents and the ring leader acted together to accomplish the goal of presenting false information to college admissions offices. The FBI affidavit is replete with excerpts of conversations between the leader and parents (obtained pursuant to a wiretap), where details were explained and agreed to.
• Fraud: Deceived SAT testing company. SAT tests are tangible, valuable items, and the testing company's reputation rests with the accuracy of the reports. If the prosecution can prove that proxies took the tests, the testing company has had its credibility undermined (remember, it's not necessary that the recipient knew of the deception). Put another way, the testing company's goodwill—its "honest services"—was compromised. The SAT is administered in part by the Educational Testing Service (ETS), who is no stranger to fraud of the type alleged here. In an eerily similar case, a federal appellate court concluded that their honest services were taken when the defendants arranged for proxies to take a standardized test for the defendants. (U.S. v. Hedaithy, 392 F.3d. 580 (2004).)
• Fraud: Deceived admissions offices. College admissions offices try very hard to be objective and honest. To the extent that they were deceived by the receipt of false descriptions of applicants and false test reports, their "honest services" were sullied.
• Fraud: Rejected honest applicants. For every student who gained admission fraudulently, one honest applicant was rejected. That applicant, who was promised a fair and objective evaluation of his application, failed to get the "honest services" of the admissions staff.

Use of the mail or interstate delivery companies. The parents and ring leader allegedly used the mail and private delivery services to transmit checks, photos (applicants' head shots were photoshopped onto stock photographs of student athletes), and reports. Wiretapped conversations captured these plans.

Other Fraud: What Doesn't Count as Mail Fraud?

While mail fraud is a widely applicable crime, it doesn't apply in all fraud cases. For example, if you use a phone or email to fraudulently convince someone to pay you money and the crime never involves use of the mail, you have not committed mail fraud. However, there are numerous other federal fraud laws that can apply in other fraud schemes which do not use the mail, such as wire fraud or computer fraud.

Penalties

Mail fraud penalties are potentially very significant. While the specific penalty a court imposes will differ significantly based on the circumstances of the case, any mail fraud conviction can result in high fines, long prison sentences, and other penalties.

• Incarceration. The potential prison penalty for a federal mail fraud crime is very high. Each offense can result in a sentence of up to 20 years in federal prison. However, the penalty can be harsher if the crime involves specific victims or elements. When, for example, a fraud scheme involves federal disaster relief or where the victim is a financial institution, sentences of 30 years per offense are possible.
• Fines. Mail fraud fines are also very high. A conviction for a single count of mail fraud can result in a fine of up to $250,000. For fraud involving financial institutions or federal disaster relief, fines of up to $1 million per offense are possible.
• Probation. Mail fraud convictions can also result in a probation term. Anyone sentenced to probation has to spend a specific amount of time, typically one to three years or more, abiding by specific court conditions in lieu of serving prison time. These conditions limit the person's liberties, such as by requiring the probationer to regularly report to a probation monitor, submitting to random home searches or random drug tests, not associating with known criminals, and not committing other crimes.
• Restitution. When a mail fraud scheme succeeds in defrauding someone of property or causes harm to a victim, courts make restitution a part of the sentence. Restitution payments are made to the victims so they can recover what they lost as a result of the fraud. Restitution payments must be made in addition to fines, and when probation is given, are made a condition of the sentence.

Speak With an Attorney

If you're facing a mail fraud charge, you need the advice of an experienced criminal defense attorney. As soon as you learn that you are being investigated for, or charged with, any federal crime, you need to seek out a local criminal defense attorney immediately. You can unknowingly and detrimentally affect your case by speaking to investigators without competent legal representation. Talking to a criminal defense lawyer who is familiar with mail fraud laws and who has experience with the local federal prosecutors and courts is the only way to ensure that your rights are protected at every stage of the criminal justice process.