Criminal Penalties for Mail Fraud

Mail fraud involves a material deception with an intention to defraud and hence deprive another person or business of either honest services or property. Mail Fraud is a federal crime and vigorously investigated and pursued by the FBI. Mail fraud is also the most frequent charge in white collar criminal cases filed by the United States Attorney.

To be criminally penalized for mail fraud, the crime must consist of these elements:

Devising a scheme to defraud or perform fraudulent acts Intent to defraud, deprive another of property or honest services Involved a material deception Mailing a letter or material substance by use of the United States Postal Service (USPS), private or commercial mail carrier to execute or attempt to execute the scheme

Intent to Defraud

There is a difference between an intent to deceive and an intent to defraud recognized by the courts. Many times marketing campaigns or sales solicitation may engage in some trickery but the product or service offered is legitimate. When the marketing material is intended to acquire new customers and get clients to buy a legitimate product or service, and with no intent to cause damage then there is no intent to defraud.

Mail fraud is congruous to wire fraud as the laws mirror each other. Wire and mail fraud laws basically outlaw dishonesty, more specifically the intentional use of dishonesty to deprive another of either honest services or property. The only difference is the means of communication used, mail or wire, in advancing the scheme to defraud another. Mailing, as well as wiring, does not have to be the essential element of the fraudulent act; it can merely be incidental to an essential element of the scheme. Even if you have not personally mailed the communication, if you caused the mailing in some way you may be charged with mail fraud.

Mail fraud usually occurs with violations of other federal crimes and thus a defendant may be charged with additional crimes and face other penalties. Money laundering and racketeering is characteristic of mail fraud.

When being investigated or charged for mail fraud it is best to consult with an experienced criminal defense lawyer, as mail fraud can lead to significantly higher penalties, especially if more criminal charges are added. It is much easier for criminal defense lawyers to prevent charges from being filed than it is to get charges dismissed and thus the sooner you get an attorney the better. In federal courts, rarely do charges get dismissed, only 7% according to the U.S. Department of Justice (2000) Report, "Defense Counsel in Criminal Cases." The report also states that of the defendants found guilty, the defendants who had either public defenders or free court-appointed attorneys had significantly higher incarceration rates than the defendants with private criminal lawyers in both state and federal courts. In other words, defendants with public defenders or free court-appointed attorneys were sentenced to prison more.

Criminal Penalties for Mail Fraud are:

Imprisonment of 20 years or 30 years, if the crime was committed against a financial institution or in the context of an emergency or major disaster. If the convicted person has a prior criminal record or aggravating circumstances the penalties are more severe, including longer imprisonment sentences. Fine of $250,000 or $500,000 if the crime was committed by an organization. Fine of $1,000,000 if the crime was committed in relation to a natural disaster or against a financial institution. Restitution paid back to victims, which includes anyone directly harmed through the course of the fraudulent act. Forfeiture of property. Special assessment fee of $100. Probation or supervised release after imprisonment.

Federal Sentencing Guidelines and Penalties for Mail Fraud

The federal sentencing guidelines are used by the federal courts to determine the criminal penalty of a federal crime. It is a sentencing guide based on different offense levels in an attempt to standardize the length of imprisonment. Each federal crime is assigned with a base offense level grade, and thus a base penalty, which may include imprisonment, probation and fines. When a person is convicted of a federal offense, such as mail fraud, offense levels are subtracted or added according to the prior criminal record and any mitigating or aggravating circumstances.

If the mail fraud involved the corruption of a public official the penalty is more severe. There are also enhancements, which are harsher penalties, based on greater amounts of losses due to the fraud.

Restitution

When convicted of mail fraud restitution is usually required. Restitution paid back to all victims involved also includes victims that are directly, or of close proximity, harmed as a result of the mail fraud.

Forfeiture of Property

All property gained from the fraudulent act is subject to forfeiture, that is confiscation by the United States. The confiscated property may be pursued by either criminal forfeiture or civil forfeiture procedures. The main difference between the types of forfeiture is the defendant in the case. The property itself is the victim in civil forfeiture proceedings. The property owner is the defendant in criminal forfeiture proceedings as a component of the prosecution, if convicted.

Supervised Release after Imprisonment

The Federal Sentencing Guidelines recommends supervised release for all felony cases. Supervised release is like parole and is imposed after the time in prison has been served. For mail fraud the term for supervised release is three to five years. During supervised release three conditions must be complied with: no new crimes committed; DNA sample taken; and periodic drug testing to be performed. The third condition is not required, but it may be enforced even if the defendant has no known history of drug abuse.

Probation

If a defendant served less than 25 years in prison, the sentencing court may impose a probation term of 1 to 5 years.

Additional Federal Criminal Penalties

Wire or mail fraud is often co-occurring with other federal criminal offenses. Most commonly it predicates money laundering and racketeering which carries additional penalties. If the mail fraud is associated with a criminal enterprise, the defendant may also be subject to Racketeering and Influenced and Corrupt Organization (RICO) violations. If the defendant participated in the operation or management of the enterprise itself or acted under the direction of upper management then the defendant is generally regarded as being associated with a criminal enterprise. To be convicted of RICO there must be a pattern of "continuity plus relationship." RICO violations carry a prison term of 20 years and a $250,000 fine, and a $500,000 fine for an organization. If convicted of a RICO violation, victims may also sue for treble damages in a civil law suit when injured in their business or property.

A money laundering violation may also be charged if a financial transaction involved the proceeds of an unlawful activity, such as money gained from the mail fraud and laundered. Money laundering is punishable by imprisonment of 20 years and $500,000 fine. Property associated with the transaction is also subject to criminal and civil forfeiture.

Criminal Penalties for Mail Fraud against the United States

If the defendant knowingly committed mail fraud against an agency of the United States, the term for imprisonment is 5 years and a $250,000 fine, and restitution must be paid. The fine is $500,000 if the defendant is an organization.