Facing Federal Wire Fraud Conspiracy Charges?

Conspiracy to commit wire fraud occurs when two or more people agree to carry out a scheme designed to defraud another person or entity using interstate communications, such as:

• Emails
• Text messages
• Phone calls
• Online platforms
• Bank wire transfers

Under 18 U.S.C. § 1349, the government doesn’t need to prove that wire fraud actually happened. Simply agreeing to the scheme, with the intent to defraud, is enough to trigger a conspiracy charge.

Key Definitions

• Wire Fraud: Using interstate or foreign wire communications (phone, email, fax, internet) to intentionally devise or execute a scheme to defraud someone of money or property.
• Conspiracy: An agreement between two or more persons to commit wire fraud, with the intent to further the scheme.
• Scheme to Defraud: A plan or artifice to deceive someone to unlawfully obtain money, property, or valuable services.
• Deprivation of Money or Property: The victim’s loss resulting from the fraudulent scheme.
• Interstate Wire Communication: Any transmission crossing state lines or international borders via electronic means, which establishes federal jurisdiction.
• Intent to Defraud: The deliberate purpose to deceive or cheat someone for personal or financial gain.
• Overt Act: An act committed in furtherance of the conspiracy, which can be any step taken by one of the conspirators to carry out the scheme.

How It Differs From Substantive Wire Fraud

• Wire fraud (18 U.S.C. § 1343) requires proof of the scheme's execution via a wire communication
• Conspiracy charges (18 U.S.C. § 1349) can stand alone even without actual fraud. It simply is based on an agreement to commit wire fraud.

This means federal prosecutors in NYC frequently charge conspiracy early in investigations, before actual wires have been used.

What Must a Prosecutor Prove?

New York-based prosecutions often stem from schemes involving internet scams, fraudulent contracts, or investment deceptions carried out across state lines.

To secure a conspiracy conviction, the government must show beyond a reasonable doubt that the accused:

1. Entered into an agreement with at least one other person to commit wire fraud,
2. Formally intended both to join the conspiracy and to further its illegal purpose

Unlike general conspiracy statutes (18 U.S.C. § 371), § 1349 does not require proof of an overt act. As mentioned earlier, the agreement to commit wire fraud is sufficient to secure conviction.

New York-Specific Nuances

In the Second Circuit (covering NYC), prosecutors often emphasize wire usage and interstate elements to meet jurisdictional requirements.

Also, jury instructions in the Eastern and Southern Districts of New York emphasize agreement and common purpose where each conspirator must have knowingly joined the plan.

How We Fight Wire Fraud Conspiracy Charges

A conspiracy charge is particularly dangerous because the government does not need to prove that the underlying fraud was successful or that you personally committed every act. However, this also provides multiple avenues for a robust defense. Our defense is built on a multi-pronged approach that attacks the foundations of the government’s case.

Core defense strategies include:

• Challenging the “Agreement”
  
  • No Actual Agreement: We can argue you were simply associated with others without sharing a criminal plan.
  • Not a Member: We can show you were unaware of the fraud or misled by others.
  • Withdrawal: If applicable, we can prove you took steps to leave the conspiracy before any overt act.
• Negating Fraudulent Intent 
  
  • Good Faith: Demonstrate you believed your statements were true and had no intent to deceive.
  • Lack of Knowledge: Show you were unaware that any statements were false or that fraud was happening.
  • Puffery: Clarify that statements of opinion or optimistic projections are not criminal fraud.
  • Reckless Conduct: Argue any misrepresentations were due to negligence, not intent.
• Attacking the “Scheme to Defraud”  
  
  • Material Misrepresentation: Show any false statement was trivial or unlikely to influence decisions.
  • Wire Use “For the Purpose” of Fraud: If wires weren’t used to further the fraud, the charge may fail.
• Challenging Evidence
  
  • Illegal Searches: We will move to suppress evidence obtained unlawfully.
  • Unreliable Witnesses: We will cross-examine co-conspirator witnesses to expose motives and inconsistencies.

Possible Sentencing & Penalties in New York

Federal sentencing for conspiracy to commit wire fraud mirrors the penalties for substantive wire fraud under 18 U.S.C. § 1343, including:

• Up to 20 years in federal prison
• Fines up to $250,000 or more
• Restitution to victims
• Asset forfeiture
• A permanent federal criminal record

Enhanced Penalties: If the alleged scheme targets a financial institution or involves significant losses, sentences can increase to 30 years in prison and fines up to $1 million.

Federal judges use the U.S. Sentencing Guidelines to calculate potential penalties, considering factors like:

• The amount of financial loss
• The defendant’s role (leader, organizer, minor participant)
• Prior criminal history
• Obstruction of justice or abuse of trust

Examples and Related Cases

Bernard Madoff (2008)

• Scheme: Bernard "Bernie" Madoff orchestrated the largest Ponzi scheme in history, a multi-decade fraud estimated at approximately $65 billion. Madoff, a former NASDAQ chairman, purported to be running a legitimate investment advisory business. In reality, he was not making trades and was simply using new investors' money to pay returns to earlier investors. The fraud was concealed with fabricated trading confirmations and account statements.
• Wire Fraud & Conspiracy: The scheme was dependent on wire transfers to move investor funds into a specific bank account from which payments were made. Madoff also used wires to transmit falsified account information to clients globally. He pleaded guilty to 11 federal felonies, including wire fraud, mail fraud, securities fraud, and conspiracy. His CFO, Frank DiPascali, and other employees were also convicted for their roles in the conspiracy, which involved creating fake books and records to deceive regulators and clients.
• Outcome: The scheme collapsed during the 2008 financial crisis when redemption requests overwhelmed the inflow of new capital. Madoff was arrested in December 2008 and later sentenced to 150 years in prison. The case resulted in catastrophic losses for thousands of investors, including charities and pension funds.

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Billy McFarland (Fyre Festival) (2017)

• Scheme: A more recent, high-profile example, William "Billy" McFarland defrauded investors of over $27 million to promote his company, Fyre Media, and the ill-fated Fyre Festival. He used fraudulent documents and false representations about his company's financial health and the festival's viability to attract investment. The festival itself was a disaster, leaving attendees who had paid thousands of dollars stranded in the Bahamas without basic provisions.‍
• Wire Fraud & Conspiracy: McFarland was charged with wire fraud for using interstate electronic communications to solicit investments based on false information and to defraud a ticket vendor. He pleaded guilty to two counts of wire fraud.‍
• Outcome: McFarland was arrested in 2017. In 2018, he was sentenced to six years in federal prison and ordered to forfeit $26 million. The case became a cultural touchstone, illustrating modern fraud facilitated by social media marketing.

Our office has also handled wire fraud matters, ranging from “lower-level” offenses in the $50,000 range to those well into the millions. Each matter is different, despite the overlapping elements and intricacies of the wire fraud statute.

As described, because wire fraud encompasses federal crimes which are effected “by wire,” this is a common charge that is brought alongside other white-collar offenses. In a recent matter, we represented an individual who was charged with wire-fraud merely because the money collected during the commission of other offenses was through zelle transfers. These transfers were voluminous, despite the fact that each one in and of itself amounted to no more than $5,000. We were able to argue, successfully, for a below-guidelines sentence which amount to probation only, despite a federal guidelines range of approximately 42 months’ imprisonment. 

Your Defense Begins Now

Allegations of conspiracy to commit wire fraud can derail your life, but you are not alone. With legal guidance from an experienced criminal defense attorney, you may be able to challenge the charges, reduce potential penalties, or explore alternatives to incarceration. Contact The Law Offices of Jason Goldman today for a confidential consultation.