When we think of “white collar crimes” like fraud, we think of business executives defrauding shareholders for millions of dollars while escaping with a slap on the wrist.

For everyday people, this couldn’t be further from the truth.

State and federal authorities treat fraud very seriously, and if you or someone you love is convicted of fraud, you could face significant penalties. Generally speaking, you could be in violation of criminal fraud laws anytime you:

Commit an act that results in an unfair or undeserved benefit to you, and/or
Cause harm or loss to another person.

This can be anything from putting a fake registration sticker on your car to passing fake checks, skimming credit cards or running a telemarketing scheme. To make matters worse, the federal government also has the authority to prosecute a number of different fraud crimes, so you could find yourself facing not only state level charges but federal charges as well.

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Table of Contents

Understanding fraud under the law

While fraud is similar to theft, it also involves the pretense of inducing a victim to entrust you with their property or financial wealth. Because fraud involves more planning, it is typically punished more severely.

In order to establish fraudulent behavior, it must be proven that:

The defendant made a false statement;
The defendant knew the statement was false;
The defendant intended to deceive the victim;
The victim relied on the statement;
Injury to the victim occurred.

If any of the statements above aren’t true in a case, the defendant cannot be convicted of fraud. This means that if you were an unwitting participant in a fraud — that someone else had duped you into participating in their scheme — then you are not guilty of fraud.

The federal government can get involved in cases where the fraud crosses state lines, if it involves a federal agency (such as mail fraud) or if it involves electronic communication (wire fraud).

Under state and federal law, there are a number of different types of specific charges that relate to fraud. That includes, but isn’t limited to:

Mail Fraud – Involves using postal services to execute a fraudulent scheme.
Wire Fraud – Involves the use of electronic communications, such as phone calls or emails, to commit fraud.
Bank Fraud – Defrauding a financial institution or obtaining money from a financial institution through false pretenses.
Securities Fraud – Deceptive practices in the stock or commodities markets that induce investors to make financial decisions based on false information.
Insurance Fraud – Submitting false claims to an insurance company to receive payment.
Credit Card Fraud – Using someone else’s credit card information without permission to make purchases or withdraw funds.
Identity Theft – Stealing someone’s personal information to commit fraud or other crimes.
Tax Fraud – Willfully falsifying information on tax returns to reduce tax liability.
Mortgage Fraud – Providing false information on mortgage applications to obtain loans or better loan terms.
Health Care Fraud – Submitting false claims or misrepresenting services to receive higher payments from health care programs or insurers.

Wire Fraud

Wire fraud refers to cases of fraud committed over electronic communication, such as the telephone, radio or e-mail. Penalties for wire fraud are steep, with convictions carrying prison sentences as high as 20 years.

Because of this, if you or someone you love has been accused of wire fraud, it’s important to speak with a federal criminal defense attorney who specializes in wire fraud cases. The attorney can help you build your defense and preserve your freedom.

What is Wire Fraud?

The crime of wire fraud has three “elements,” which the prosecutor must prove to convict someone. There must be:

A scheme to commit fraud;
Use of wire, radio or television communication to further that scheme; and
Specific intent to commit fraud.

Fraud, of course, is a crime with a lot of nuance. The federal government must prove you made a deceitful omission of material facts, caused a material loss, and many other things. This is also where working with an experienced wire fraud defense attorney can benefit you.

Next, the prosecutor must prove that you used any type of wire, radio or television medium to commit the fraud — this can be anything from a fax to telephone or e-mail.

And finally, the federal government must prove that you had “specific intent” to commit fraud. In other words, you had to know that you were participating in a fraud scheme and meant to go along with it.

Penalties for Wire Fraud

Wire fraud is a serious offense under federal law. Penalties can include:

Up to 20 years in federal prison.
Significant fines, often up to $250,000 for individuals or $500,000 for organizations.
Restitution to victims for financial losses incurred due to the fraud.

In cases involving financial institutions or federal disaster relief, penalties can be more severe, with prison terms up to 30 years and higher fines.

Defenses Against Wire Fraud Charges

Fortunately, there are a number of legal defenses you can use to fight wire fraud charges.

As we mentioned above, fraud is a crime with a lot of complexity and loopholes to it. A federal defense attorney specializing in wire fraud can work with the evidence in your case and the framework of federal law to get the best possible judgment for you.

Bank fraud

It’s illegal under federal law to use false pretenses to obtain money under the custody of a financial institution.

Doing so is the crime of bank fraud.

Bank fraud can include situations like check kiting or “booster checks,” which is when someone writes a bad check to increase the credit limit on a credit card they plan to abuse. It also includes situations like phishing, credit card fraud and accounting fraud.

Bank fraud is a very serious crime. Bank fraud investigations are run by federal agents, who have substantially more resources than traditional police departments. A conviction for bank fraud could carry penalties as high as 30 years in federal prison and fines of up to $1 million.

If you suspect that you or someone you love is under investigation for bank fraud offenses, it’s important to speak with a federal defense attorney as soon as possible.

What is bank fraud?

Bank fraud is defined as “knowingly using a scheme or artifice” to either:

Defraud a financial institution, or
Obtain any of the money or other property under custody of the financial institution by false pretenses.

For example, let’s say Mike goes to the bank to apply for a small business loan. Mike’s business nets around $70,000 per year in profits, and because they don’t want to give Mike an amount of money he can’t handle, the bank has specific rules around how much they will lend him.

However, Mike intentionally misrepresents his annual business profits on his loan application as $700,000 in order to receive a larger amount of cash. Mike has likely committed bank fraud.

Penalties for bank fraud

As we mentioned above, bank fraud is a felony conviction and it is treated very seriously by the federal government. Depending on the facts of the case, it carries penalties up to:

30 years in federal prison
$1 million in fines

While you might expect leniency for first-time offenders, federal courts have shown a track record for handing down stiff penalties to people who otherwise don’t have any criminal record.

Embezzlement

Embezzlement occurs when an individual entrusted with someone else’s property or funds misappropriates those assets for their own personal gain. This can occur in a variety of settings, including businesses, nonprofits, or even government agencies.

In order for embezzlement to be proven in court, several elements must be established:

The defendant was in a position of trust or fiduciary duty with regard to the victim’s property or funds.
The defendant fraudulently or deceitfully took or converted the victim’s property or funds for their own personal use or benefit.
The defendant had the intent to permanently deprive the victim of their property or funds.

If all of these elements can be proven beyond a reasonable doubt, the defendant may be found guilty of embezzlement.

Penalties for Embezzlement

The penalties for embezzlement vary depending on the specific circumstances of the case, including the amount of money or property that was taken and the defendant’s criminal history. In general, embezzlement is considered a felony offense and can result in significant prison time, fines, and restitution to the victim.

For example, in California, embezzlement of property valued at more than $950 is punishable by up to three years in state prison and a fine of up to $10,000. Embezzlement of property valued at less than $950 is a misdemeanor offense, punishable by up to six months in jail and a fine of up to $1,000.

In addition to these criminal penalties, a conviction for embezzlement can also have serious long-term consequences for the defendant, including damage to their reputation and difficulty finding employment.

Defenses Against Embezzlement Charges

If you have been charged with embezzlement, it is important to understand the potential defenses that may be available to you. Some common defenses include:

Lack of intent: In order to be convicted of embezzlement, the prosecution must prove that you had the intent to permanently deprive the victim of their property or funds. If you can show that you had no such intent, this may be a successful defense against the charges.
Mistaken belief: If you believed that you had a right to the property or funds in question, this may be a defense against the charges. However, this defense is typically only successful if you had a reasonable belief that you had a right to the property or funds.
Duress or coercion: If you were forced or coerced into embezzling the property or funds, this may be a successful defense against the charges.

In addition to these defenses, it is important to work with an experienced criminal defense attorney who can help you build a strong case and advocate on your behalf in court.

Mail Fraud

If federal authorities suspect that you used the mail as part of a scheme to commit fraud, you might find yourself facing charges of mail fraud.

You can be found guilty of committing mail fraud for involving the United States Postal Service or any other mail carrier in a fraudulent scheme, even if the mail was only involved in a minor way. A fraud does not need to be carried out primarily through the mail in order to constitute mail fraud.

Mail fraud is a federal crime that is often charged alongside other federal or state crimes and carries severe penalties. Like most federal crimes, a conviction for mail fraud carries long sentences and steep fines.

What is mail fraud?

When a mail fraud case makes it to court, the prosecution must prove three facts beyond a reasonable doubt in order to convict the defendant:

There was specific intent to commit fraud,
A scheme to commit fraud, and
Use of the mail as a means to further that scheme

If the prosecution can’t prove all three of these facts, a defendant can’t be found guilty of committing mail fraud. The language above is pretty vague, so we’ll explain what this means below.

1. Specific intent to commit fraud

“Specific intent” means that the defendant committed fraud knowingly and intentionally. The prosecution must prove that the defendant knew about the scheme and participated in it for the purpose of committing fraud.

However, there are certain instances when a person can be convicted of mail fraud without demonstrating specific intent to defraud. If a person does not intentionally lie or deceive anyone but shows a “reckless indifference” to the truth, it may still be considered fraud.

Below is an example of a case where reckless indifference might constitute mail fraud:

Claudia runs a company that manufactures cleaning products. She sends out a flyer marketing their newest household cleaner. The flyer that states that the product kills more germs on contact than any of the brand-name cleaners on the market. But Claudia and her company never conducted any research to test the effectiveness of the cleaner against other cleaners and have no evidence that the statement is true.

While Claudia did not have specific intent to deceive customers, she also wasn’t sure that her advertisement was true and accurate. Claudia could be found guilty of mail fraud because the statement on her flyer demonstrates a reckless indifference to the truth.

2. A scheme to commit fraud

In the case of mail fraud, “fraud” is knowingly or recklessly misrepresenting a material fact in order to deprive someone else of something valuable, or in simpler terms, lying to get someone to give up something valuable. In most instances, that “something valuable” is money. Below are some important facts to know about fraud as it relates to mail fraud charges:

You don’t need to say something untrue to commit fraud. Even if you don’t blatantly lie or make a false statement, it is possible to be found guilty of fraud by omitting important facts.
The misrepresentation must be a material fact. In other words, the lie or information that was left out has to be something important.

Example 1: John tries to get people to invest in a new restaurant in Santa Clarita by advertising that a big investor, a man from New York, has already invested over $500,000, even though that man actually decided not to invest in the restaurant.

John’s misrepresentation was of a significant fact to other potential investors and likely constitutes fraud.

Example 2: John tries to get people to invest in a new restaurant in Santa Clarita by advertising that a big investor, a man from New York, has already invested over $500,000. However, the investor is actually a woman from New York.

Because the fact of whether the investor is a man or a woman is probably not considered to be material, John would most likely not be convicted of fraud in this case.

The misrepresentation must be meant to deceive someone of “ordinary prudence.” In simpler terms, this means that someone with a normal amount of common sense has to be susceptible to believing the lie. If the misrepresentation is outrageous or absurd, it may not constitute fraud.

Example: A novelty shop in Carlsbad, CA mails out flyers advertising that their shop is selling “real pet aliens from a distant galaxy.”

It is possible that the shop would not be considered guilty of fraud since the lie would be considered outrageous by someone with a reasonable degree of common sense.

The scheme to commit fraud does not have to be successful. Even if nobody buys into the scheme and no money or materials are gained from other people, you can still be convicted of committing mail fraud for trying to do so.

3. Use of the mail as a means to further a scheme to commit fraud

Mail fraud, like many other federal crimes, is handled by the federal court because it can be carried out across state lines. However, state lines do not need to be crossed in order for a crime to constitute mail fraud. The use of the mail in order to carry out or further a fraudulent scheme can take a number of forms including the following:

Having materials delivered by the United States Postal Service or any other mail carrier or shipping company
Having someone deposit materials into a mailbox for you
Receiving materials delivered by the United States Postal Service or any other mail carrier or shipping company

Welfare fraud

Welfare fraud occurs when an individual knowingly makes false statements or misrepresents information in order to receive or continue receiving government benefits, such as food stamps or Medicaid. In order for it to be proven in court, several elements must be established:

The defendant knowingly made false statements or misrepresentations in order to receive or continue receiving government benefits.
The defendant received or continued to receive government benefits as a result of these false statements or misrepresentations.
The false statements or misrepresentations were material to the defendant’s eligibility for the benefits.

In California, welfare fraud can be charged as either a misdemeanor or felony, depending on the facts of the case. When a case involves more than $950, it is punishable by up to three years in state prison and a fine of up to $5,000. Welfare fraud involving less than $950 is a misdemeanor offense, punishable by up to one year in jail and a fine of up to $1,000.

Legal defenses against fraud charges

“Mr. Helfend absolutely saved my bacon. After finding myself charged with fraud, I was terrified. I have never been introduced to the legal system from this side before, and it was unsettling. However, Robert was able to calm me down and help me figure out my situation. He even got the case dropped before trial! I don’t want to be in another situation where I need a criminal defense lawyer, but if I ever am, I know who I will call!”Pete, CA

No matter what kind of fraud you’ve been accused of, these are the most common defense against your charges:

You didn’t have fraudulent intent;
You were a victim of mistaken identity;
Authorities violated your right to protection from illegal search and seizure.

If you’ve been accused of fraud, it’s important to speak with a skilled criminal defense attorney as soon as possible. Your attorney can carefully review the facts of your case and work with you to build your defense.

Robert M. Helfend has been defending white collar crimes such as fraud since 1984, securing successful judgments for thousands of clients in that time. He is rated by SuperLawyers, the National Trial Lawyers Top 100 and Lead Counsel. Call today for your free case evaluation — 800-834-6434.

Published January 22, 2013. Updated August 8, 2024.

Los Angeles Fraud Defense Attorney