FederalMail Fraud

Mail fraud is a serious federal crime that involves using the U.S. Postal Service or private interstate carriers to execute or attempt to execute a scheme to defraud another party of money or property. Under 18 U.S.C. § 1341, the federal mail fraud statute, prosecutors can charge individuals who use the mail system to further fraudulent activities. Mail fraud is one of the most frequently charged federal offenses and can result in substantial prison sentences, significant fines, and mandatory restitution to victims.

If you are under investigation or facing mail fraud charges in New York, New Jersey, or anywhere in the United States, you need experienced federal criminal defense representation immediately. At the Law Offices of Matthew Cohan, we defend clients charged under 18 U.S.C. § 1341 in the Southern, Eastern, and Northern Districts of New York, as well as the District of New Jersey. Our firm provides aggressive representation both before and after charges are filed, protecting your rights and fighting for the best possible outcome.

What Is Federal Mail Fraud Under 18 U.S.C. § 1341?

Federal mail fraud occurs when someone uses the United States Postal Service or any private or commercial interstate carrier (such as FedEx, UPS, or DHL) as part of a scheme to defraud or obtain money or property through false or fraudulent pretenses, representations, or promises.

The mail fraud statute is remarkably broad. It does not require that the fraudulent scheme succeed or that anyone actually lose money. The crime is complete when someone uses the mail in furtherance of a fraudulent scheme, regardless of whether the fraud was ultimately successful. This expansive scope makes mail fraud a powerful tool for federal prosecutors, who often charge it alongside or in place of other fraud-related offenses.

Originally enacted in 1872, the mail fraud statute has been repeatedly updated to cover modern forms of communication and commerce. Today, it applies not only to traditional letters sent through the U.S. Postal Service but also to packages, documents, and items sent through any private interstate carrier.

Elements of Federal Mail Fraud

To secure a conviction for mail fraud under 18 U.S.C. § 1341, the prosecution must prove two essential elements beyond a reasonable doubt:

1. A Scheme to Defraud

The defendant must have devised or intended to devise a scheme or artifice to defraud, or a scheme to obtain money or property by means of false or fraudulent pretenses, representations, or promises.

What Constitutes a Scheme to Defraud:

A scheme to defraud is any plan, design, or artifice intended to deprive another person or entity of money, property, or the intangible right of honest services. The scheme must involve material misstatements or omissions. A misstatement is "material" if it is significant enough that it would influence the victim's decision.

The government does not need to prove that the scheme was successful or that anyone actually lost money. Even an attempted fraud that never comes to fruition can satisfy this element. The focus is on the defendant's intent to deceive, not on whether the deception succeeded.

Examples of Fraudulent Schemes:

• Making false representations about investments or business opportunities
• Concealing material facts in financial transactions
• Misrepresenting the quality, characteristics, or availability of goods or services
• Creating false invoices or billing for services never rendered
• Using false identities or documents to obtain money or property
• Operating Ponzi schemes or pyramid schemes
• Making false claims to insurance companies or government agencies

Honest Services Fraud: Under 18 U.S.C. § 1346, the term "scheme or artifice to defraud" includes schemes to deprive another of the intangible right of honest services. This provision has been used to prosecute public corruption and private sector fraud involving breaches of fiduciary duty.

2. Use of the Mail to Further the Scheme

The defendant must have used, or caused someone else to use, the United States Postal Service or a private or commercial interstate carrier for the purpose of executing or attempting to execute the fraudulent scheme.

What Satisfies the "Use of Mail" Element:

The mail does not need to contain fraudulent content itself. It is sufficient that the mailing was part of the execution of the scheme or was foreseeable as part of the scheme. Courts apply what is known as the "mailing in furtherance" test, which requires only that the mailing be incident to an essential part of the scheme or a step in the plot.

Common Examples of Mailings:

• Sending fraudulent solicitations, advertisements, or promotional materials
• Mailing contracts, applications, or agreements containing false information
• Sending invoices for payment based on fraudulent transactions
• Mailing checks or money orders obtained through fraud
• Sending confirmation letters or receipts as part of a fraudulent transaction
• Using interstate carriers to deliver goods misrepresented to buyers

Private Interstate Carriers: The statute explicitly covers private and commercial interstate carriers such as FedEx, UPS, and DHL. Any use of these services in furtherance of a fraudulent scheme satisfies the mailing element.

Innocent Third Parties: The defendant does not need to personally send the mailing. If the defendant's fraudulent conduct causes an innocent third party to use the mail in furtherance of the scheme, this satisfies the element. For example, if a defendant submits a fraudulent insurance claim and the insurance company mails a check in response, the defendant has used the mail for purposes of the statute.

Penalties for Federal Mail Fraud Under 18 U.S.C. § 1341

The penalties for federal mail fraud are severe and can result in lengthy prison sentences, substantial fines, and significant financial obligations.

Imprisonment

Standard Maximum: A conviction for mail fraud carries a maximum sentence of up to 20 years in federal prison for each count. Because each use of the mail can constitute a separate offense, defendants charged with mail fraud often face multiple counts, resulting in the possibility of consecutive sentences.

Enhanced Maximum for Financial Institution Fraud: If the mail fraud affects a financial institution (banks, credit unions, savings and loan associations), the maximum sentence increases to 30 years in federal prison per count.

Enhanced Maximum for Disaster-Related Fraud: If the mail fraud occurs in relation to or involves any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with a presidentially declared major disaster or emergency, the maximum sentence increases to 30 years in federal prison per count.

Federal Sentencing Guidelines

While the statutory maximum provides the ceiling for sentencing, actual sentences are calculated using the United States Sentencing Guidelines. The guidelines determine a defendant's offense level based on multiple factors, with the amount of loss being the most significant:

Base Offense Level: The base offense level for fraud offenses is 7.

Loss Amount Enhancements: The guidelines add levels based on the amount of loss:

• Loss under $6,500: no increase
• Loss between $6,500 and $15,000: add 2 levels
• Loss between $15,000 and $40,000: add 4 levels
• Loss between $40,000 and $95,000: add 6 levels
• Loss amounts continue to add levels exponentially
• Loss over $550 million: add 30 levels

Other Enhancements:

• More than minimal planning: add 2 levels
• Sophisticated means (offshore accounts, shell companies, false documents): add 2 levels
• Use of mass-marketing: add 2 levels
• Violation of securities law or commodities law: add 2 levels
• Deriving more than $1 million in gross receipts from financial institution: add 2 levels
• Role in the offense (organizer or leader): add 2-4 levels
• Obstruction of justice: add 2 levels

These enhancements can stack, resulting in very high offense levels that correspond to lengthy prison sentences even for first-time offenders.

Fines

Individuals convicted of mail fraud face fines of up to $250,000 per count. Corporations face fines of up to $500,000 per count. However, under the alternative fines provision of 18 U.S.C. § 3571, courts may impose fines equal to twice the gross gain derived from the offense or twice the gross loss to victims, whichever is greater. In cases involving substantial fraud amounts, these alternative fines can reach millions of dollars.

Mandatory Restitution

Courts must order restitution requiring defendants to compensate victims for their actual losses. Restitution is mandatory in fraud cases and must be paid in full before any fines are satisfied. Restitution obligations create federal liens on all assets and remain enforceable even after the defendant completes their prison sentence.

Forfeiture

Under 18 U.S.C. § 981 and § 982, defendants convicted of mail fraud may be required to forfeit property constituting or derived from proceeds of the fraud, as well as property used to commit or facilitate the offense. This can include real estate, vehicles, bank accounts, and business assets.

Supervised Release

Following any term of imprisonment, defendants typically face a period of supervised release (federal probation) lasting three years or longer. During supervised release, defendants must comply with numerous conditions, including regular reporting to a probation officer, restrictions on travel and employment, and prohibitions on engaging in certain business activities.

Collateral Consequences

A federal mail fraud conviction carries significant collateral consequences beyond the criminal penalties:

• Permanent Criminal Record: A felony conviction appears on all background checks
• Professional Licenses: Loss of professional licenses for attorneys, accountants, financial advisors, real estate agents, and other regulated professions
• Employment: Difficulty obtaining employment, particularly in positions involving financial responsibility or fiduciary duties
• Immigration Consequences: Non-citizens face deportation for crimes involving fraud or dishonesty
• Security Clearances: Loss of federal security clearances
• Firearms Rights: Loss of the right to possess firearms
• Reputation: Permanent damage to personal and professional reputation