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Understanding Wire Fraud

Wire fraud is unique among other white-collar crimes in that it acts as a side dish to the main course. Many people accused of crimes like racketeering or embezzlement are found to have committed wire fraud in the process. Wire fraud charges can increase the penalties for a crime. Keep reading to find out why wire fraud is more dangerous than it sounds.

WHAT IS WIRE FRAUD?

To understand wire fraud, it is important to understand the definition of fraud. According to Cornell Law School, fraud is the intentional or negligent misrepresentation or falsification of information to gain information or money. In simpler terms, fraud is deception – lying for your own benefit.

Fraud can be committed in a number of ways, but when it happens over the phone, through email, over the radio, or on television, it is considered wire fraud. For example, an executive at a corporate office emails the annual, quarterly report to the shareholders. In the report, they make it appear as though the company is doing better than it is in the hopes of getting more investment money.

If it is discovered that the numbers have been falsified with the sole purpose of getting more money, the executive may be charged with wire fraud. The interesting thing about these cases is that wire fraud is usually charged by counts – one email = one count of wire fraud.

This might not sound significant, but if the executive falsified every quarterly report for two years, they could face eight total counts of wire fraud. The same would be true if the fraud happened over the phone or in a text message – the accused would be charged for every phone call and text message containing false, fraudulent information.

Wire fraud stands on its own among other white-collar crimes, but it is usually a supporting character to other crimes like racketeering or Ponzi schemes. Let us look at an example of wire fraud: Elizabeth Holmes.

WIRE FRAUD EXAMPLE: THERANOS

An ambitious young woman named Elizabeth Holmes has become a cautionary tale for many people looking to change the world. Her vision for a one-prick blood test came to life as the research company called Theranos.

Holmes took Silicone Valley by storm as a new tech creator with drive and numbers to back her up. However, these numbers and reports would land her in deep trouble with law enforcement.

As it turns out, the promises of untold fortunes and revolutionary life-saving technology were more of a fraud to make Holmes and her business partner "Sunny" Balwani unfathomably rich. The result of this scheme? Holmes faces 12 counts of wire fraud, 20 years in prison, and a fine of $250,000.

Holmes' trial is ongoing, so it is unclear how the case will turn out, but one thing is certain: wire fraud is a messy business. Investors were lied to and sucked dry while the whole world watched, and now it is Holmes' turn to face the music.

DEFENSE

While it is true that wire fraud cases cause a lot of problems for the accused, it is important to note that these cases rely on solid evidence. There must be proof via text messages, saved emails, or recorded phone calls that the crime was committed. If there is sufficient evidence, then it is up to the court to decide whether the communication was fraudulent or not.

Like most white-collar crime cases, while it may feel like the odds are stacked against you, your case is not hopeless. The burden of proof is on the prosecutor, which can often be a herculean task.

TAKEAWAY

Wire fraud is a sneaky crime that can quickly add up and pile onto other charges. Remember: wire fraud is charged per instance, meaning every little lie in an email report or fib over the phone can count against you.

If you have been charged with wire fraud in Tennessee, contact Eldridge & Blakney, PC.

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