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Federal Mail Fraud

16 February, 2016 - 10:29

The federal government criminalizes theft by use of the federal postal service asfederal mail fraud, a felony.  1 Like every federal offense, federal mail fraud is criminal in all fifty states. In addition, a defendant can b e prosecuted by the federal and state government for one act of theft without violating the double jeopardy protection in the Fifth Amendment of the federal Constitution.

The criminal act element required for federal mail fraud is perpetrating a “scheme to defraud” using the US mail.  2Scheme has been given a broad interpretation and includes “everything designed to defraud by representations as to the past or present, or suggestions and promises as to the future.” 3 Even one act of mailing is sufficient to subject the defendant to a criminal prosecution for this offense. 4 In addition, the defendant does not need to actually mail anything himself or herself. 5 The criminal intent element required for federal mail fraud is general intent or knowingly or awareness that the mail will be used to further the scheme.  6 The defendant does not have to intend that the US Mail will be used to commit the theft, as long as use of the postal service is reasonably foreseeable in the ordinary course of business.  7 The defendant’s criminal act, supported by the appropriate intent, must be the factua land legal cause of the harm, which is the placement of anything in any post office or depository to be sent by the US Postal Service in furtherance of the scheme to defraud.  8

The Mail Fraud Act has been used to punish a wide variety of schemes, including Ponzi schemes, like the recent high-profile Bernie Madoff case.  9 In a Ponzi scheme, the defendant informs investors that their investment is being used to purchase real estate, stocks, or bonds, when, in actuality, the money is appropriated by the defendant and used to pay earlier investors. Eventually this leads to a collapse that divests all investors of their investment.

Federal statutes also punish bank fraud,  10 health care fraud,  11 securities fraud,  12 and fraud in foreign labor contracting.13 Fraud committed by wire, television, and radio also is federally criminalized.  14

KEY TAKEAWAYS

  • The criminal act element required for consolidated theft statutes is stealing real or personal property or services. The defendant can commit the theft by a physical taking (larceny), conversion of property in the defendant’s possession (embezzlement), or a false representation of fact (false pretenses or larceny by trick).
  • The criminal intent element required for consolidated theft statutes is either specific intent or purposely, or general intent o r knowingly to perform the criminal act, depending on the jurisdiction. When the criminal intent is specific or purposely, the defendant must intend the criminal act of stealing and must also intend to keep the stolen property. For false pretenses or larceny by trick theft, in many jurisdictions the defendant must have general intent or knowledge that the representation of fact is false and must make the false representation with the specific intent or purposely to deceive.
  • All theft generally requires the attendant circumstances that the property stolen is the property of another, and victim consent to the taking, conversion, or transfer of ownership is lacking.
    • In many jurisdictions, embezzlement theft under a consolidated theft statute requires the attendant circumstance element of a relationship of trust and confidence between the victim and the defendant.
    • A false pretenses or larceny by trick theft under a consolidated theft statute requires the additional attendant circumstance element of victim reliance on the false representation of fact made by the defendant.
  • The harm element required for consolidated theft statutes is the victim’s temporary or permanent loss of property or services, no matter how slight the value. When the defendant gains possession of personal property by a false representation of fact, the theft is larceny by trick theft. When the defendant gains ownership of personal property or possession of money, the theft is false pretenses theft.
  • Theft can be graded by degrees or as petty theft, which is theft of property with low value, and grand theft, which is theft of property with significant value. Petty theft or theft of the second or third degree is generally a misdemeanor, while grand theft or theft of the first degree is generally a felony, felony-misdemeanor, or gross misdemeanor, depending on the amount stolen or whether the item stolen is a firearm.
  • The criminal act element required for federal mail fraud is the use of the federal postal service to further any scheme to defraud. The criminal intent element required for this offense is general intent, knowingly, or awareness that the postal service will be used. The criminal act supported by the criminal intent must be the factual and legal cause of the harm, which is the placement of anything in a depository or postal office that furthers the scheme to defraud. Federal mail fraud is a felony.

Exercises

Answer the following questions. Check your answers using the answer key at the end of the chapter.

  1. Recall a scenario in where Linda and Clara browse an expensive department store’s lingerie department and Linda surreptitiously places a bra in her purse and leaves the store without paying for it. What type of theft did Linda commit in this scenario?
  2. Ellen goes to the fine jewelry department at Macy’s and asks the clerk if she can see a Rolex watch, valued at ten thousand dollars. The clerk takes the watch out of the case and lays it on the counter. Ellen tells the clerk that her manager is signaling. When the clerk turns around, Ellen puts her hand over the watch and begins to slide it across the counter and into her open purse. Before the watch slides off the counter, the clerk turns back around and pins Ellen’s hand to the counter, shouting for a security guard. Has Ellen committed a crime in this scenario? If your answer is yes, which crime?
  3. Read Statev. Larson, 605 N.W. 2d 706 (2000). In Larson, the defendant, the owner of an automobile leasing company, was convicted of theft by temporary taking under a consolidated theft statute for failing to return security deposits to customers pursuant to their automobile lease contracts. The defendant appealed, claiming that the lease deposits were not the “property of another.” Did the Supreme Court of Minnesota uphold the defendant’s conviction? Why or why not? The case is available at this link: http://scholar.google.com/scholar_case?case=18374046737925458759q=embezzlement+%22temporary+taking%22&hl=en&as_sdt=2,5.
  4. Read Peoplev. Traster, 111 Cal. App. 4th 1377 (2003). In Traster, the defendant told his employer that it was necessary to purchase computer-licensing agreements, and he was given the employer credit card to purchase them. The defendant thereafter appropriated the money, never purchased the licenses, and quit his job a few days later. The defendant was convicted of theft by false pretenses under a consolidated theft statute. Did the Court of Appeal of California uphold the defendant’s conviction? Why or why not? The case is available at this link: http://scholar.google.com/scholar_case?case=14111729725043843748q=larceny+false+pretenses+possession+ownership&hl=en&as_sdt=2,5&as_ylo=2000.
  5. Read U.S. v. Ingles, 445 F.3d 830 (2006). In Ingles, the defendant was convicted of federal mail fraud when his son’s cabin was burned by arson and his son made a c laim for homeowner’s insurance. The evidence indicated that the defendant was involved in the arson. The defendant’s son was acquittedof the arson, and only the insurance company, which sent several letters to the defendant’s son, did the acts of mailing. Did the US Court of Appeals for the Fifth Circuit uphold the defendant’s conviction? Why or why not? The case is available at this link: http://scholar.google.com/scholar_case?case=6621847677802005327&q=federal+mail+fraud+%22one+letter%22&hl=en&as_sdt=2,5&as_ylo=2000.