What is Mail Fraud?

Last Modified on Feb 16, 2025

What Exactly is Mail Fraud?

Mail fraud cases are common. On any given day you can find dozens of incidents in the news. Numerous warnings go out every year about how citizens can protect themselves from mail fraud.

A person may be found guilty of mail fraud any time prosecutors can prove that a defendant used the postal system to defraud someone out of money or property. It can include stealing the mail, committing identity theft, and using the mail to run various scams.

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Penalties for Mail Fraud

Mail fraud is punishable by up to 30 years in prison and up to $1 million in fines. It is a federal crime that should be taken extremely seriously.

Note that mail fraud is sometimes grouped with other charges that may carry their own penalties.

The Difference Between Mail Fraud and Wire Fraud

Mail fraud and wire fraud are closely related federal crimes, both involving schemes to defraud someone of money, property, or services. The key difference lies in the method of communication:

Wire Fraud: This crime involves the use of electronic communications, such as phone calls, emails, text messages, or other digital transmissions. It requires intent to deceive, often through misrepresentation or false pretenses. Wire fraud frequently overlaps with other offenses like identity theft or phishing.

Mail Fraud: In contrast, mail fraud involves using postal services or private couriers (e.g., USPS, FedEx) to carry out fraudulent schemes.

Although these crimes differ in their methods, they share similar legal principles and can even be charged together if a scheme involves both mail and electronic communication. If you are accused of wire fraud, there are some defenses that our experienced NYC wire fraud lawyer can use to help you win your case.

What the Prosecution Must Prove

In order for the prosecution to prove mail fraud, the prosecution must provide evidence as to the following.

The defendant was engaged in a scheme to defraud.
The scheme involved material misstatements or omissions.
The scheme resulted or would have resulted upon completion, in the loss of money, property, or honest services.
The defendant used the US mail in the furtherance of the scheme.
The defendant used or caused the use of US mail.

You can also be charged with mail fraud if the prosecution can prove that you used a fictitious name or address in order to complete a fraudulent scheme.

Defenses for Mail and Wire Fraud

Mail fraud charges typically arise when someone is accused of using the postal system to commit fraudulent activities. However, possible defenses include:

Lack of fraudulent intent.
There was a false representation of some sort, but it was not material.
The statements were mistakes of fact, not willful misrepresentations.
The use of the mail was not related to any other fraud that might have been committed (useful for reducing charges).
Your constitutional rights were violated during the investigation, and evidence related to the mail fraud is not admissible in court.
The prosecution has a case of mistaken identity on their hands, and you did not commit any part of the associated events named in the case or trial.

The defense we use for mail fraud will depend on the specific facts of your case.

Wire fraud is a federal crime involving the use of electronic communications to defraud someone across state lines. Here are some defenses:

You acted in good faith and unknowingly participated in a scheme by performing your regular job duties, believing your actions were lawful and having no reason to suspect any wrongdoing.
The prosecution has allowed the statute of limitations to expire, as wire fraud has a 5-year limit (extended to 10 years if it involves a financial institution), however prosecutors usually avoid this by promptly pursuing investigations, but we could take advantage if someone made a mistake.
The prosecution has insufficient evidence, and this defense involves challenging their weak case, often before trial, which can result in an acquittal or cause the prosecutor to drop the charges.
You’re completely innocent of all charges, and our defense would prove that the prosecution got the wrong person or accused you of non-fraudulent actions, building our case around your innocence from the start.

Fraud Variants

Loan Fraud: Loans and credit are an every day part of American life. Most of us fill out loan applications and take out lines of credit without giving a lot of thought to the legal implications of doing so. Yet when you take out a loan you are engaging in a legal process, and there are certain actions that you could take that could get you in trouble with the law. When you lie on a loan application you can be charged with fraud. For example, the FBI investigates cases wherein borrowers misrepresent their income or assets to obtain a home loan.
Insurance Fraud: When someone makes a false statement to their insurer for financial gain, they are knowingly attempting to deceive the insurer to get a payout. Not only does this void your right to receive benefits from the insurer but it also could open you up to criminal charges. Obviously being accused of insurance fraud is a serious matter, and it’s going to be imperative that you get the help of an experienced criminal lawyer with a solid background defending white collar crimes.

What to Do if You’re Accused of PPP Loan Fraud?

On March 29, 2020, lawmakers responded to the Covid-19 pandemic by passing the CARES act. The Paycheck Protection Program (PPP) was a part of that package. The program allowed small businesses to take out a loan for the purpose of keeping their employees on the payroll.

Nearly a year later, the Justice Department has prosecuted 209 cases of PPP loan fraud. This is a federal crime and one the government is prosecuting vigorously, especially in cases where the loan amount accepted was in excess of $2 million.

If the government is suddenly scrutinizing your PPP application then you could be in for a world of trouble.

What Would Constitute PPP Fraud?

There are four common types of PPP fraud, and you would be surprised to learn how many otherwise ordinary business owners indulged in one or more forms of this fraud.

The first would be “fudging” the numbers. You should know any time you misreport financial data while seeking a loan that you are committing the white collar fraud of crime.

For example, some individuals convicted of PPP fraud allegedly inflated the number of employees on the payroll to take advantage of the fact that the maximum loan a person could receive was an amount that was 2.5 times the monthly payroll. Even adding one inflated employee number to the list could be worth a significant sum of money. It’s easy to see why some were tempted.

Others resorted to more overt forms of fraud such as creating fake companies with fake employees, fake tax documents and falsified payroll documents, applying in the name of defunct companies, or using stolen identities to falsify ownership of existing businesses.

The third type of fraud happens when a business owner runs afoul of the uncertain language in the PPP application. For example, applicants had to sign a document stating that the “current economic uncertainty makes this loan request necessary to support the ongoing applications of this applicant.”

“Necessary” is very fuzzy language, and can take into account everything from the business activity of the applicant at the time of the loan to whether or not they could have conceivably gotten money from any other source.

Another pitfall would be seeking forgiveness when you’re not eligible for it. To be eligible for forgiveness, employee and compensation levels must have been maintained, the loan proceeds had to be spent on payroll costs and other eligible expenses, and at least 60% of the proceeds had to be spent on payroll costs. If any of your expenses were ineligible then there is a chance you could run afoul by the law.

Signs Your PPP Loan May be Under Investigation

The SBA audits these loans first. If you receive an adverse audit determination from the SBA then you may expect that your loan could come under scrutiny from the Justice Department.

It might be a good idea to retain a federal criminal attorney the moment you realize the SBA didn’t like what it saw. This can keep you from making vital mistakes as an investigation proceeds.

Because a PPP loan fraud investigation would be a federal criminal investigation, you might well receive a target letter or a subject letter informing you that you are under investigation.

Charges for PPP Loan Fraud

The federal government can charge you with several crimes if they believe they have a case against you for PPP fraud. You can be charged with wire fraud, identity theft, mail fraud, bank fraud, and making false statements.

The penalties for these charges are severe.

What to Do After Contacting a Federal Criminal Defense Lawyer?

After you contact a federal criminal lawyer, you should gather all of your documentation, including the PPP loan application, the PPP forgiveness application, all of your business expense documentation, your employee documentation, names and contact information for employees, and a detailed accounting of how PPP money was spent.

All of this is evidence which can be used to both evaluate and defend your case.

How Can Your Attorney Defend a PPP Fraud Case?

The three most common defenses are lack of intent, legitimate purposes, and identity.

If our defense is “lack of intent” then we will show that you did not knowingly or intentionally misrepresent the facts. Instead you were simply wrong about what you reported, for whatever reason.

The second defense is to show that the government is mistaken, working to prove that you used your PPP loan for legitimate purposes.

Finally, we may be able to make an identity-based defense if the government cannot prove you were the one who submitted the loan application.

Either way, if you think you’re in trouble you’re better off with a qualified federal criminal attorney by your side. Reach out today to schedule an appointment.

Steps You Should Take If Accused

If you find yourself accused of PPP loan fraud, it is crucial to act quickly and strategically to protect yourself. Here are the key steps you should take:

Do Not Ignore the Accusation: PPP loan fraud is a federal crime, and ignoring an investigation or hoping it will go away is not a viable strategy. The government is aggressively prosecuting these cases, so taking action immediately is in your best interest.
Retain a Federal Criminal Defense Attorney: The moment you suspect you are under investigation, hire a lawyer who specializes in federal white-collar crime. A legal expert can guide you through the process, help you avoid self-incrimination, and build a strong defense.
Gather and Organize Documentation: Your defense will largely depend on the records you provide. Collect and organize your original PPP loan application, PPP loan forgiveness application, payroll records, business expense records, tax returns or financial statements, correspondence with lenders or the SBA and any other relevant financial documents.
Do Not Speak to Investigators Without Legal Counsel. Federal agents may contact you for information or request an interview. Any words you speak could potentially be used as evidence against you. Kindly refrain from answering any questions until your lawyer is present.
Identify the Nature of the Investigation: Your attorney will help determine whether you are a target (someone the government is likely to prosecute), a subject (someone under investigation), or a witness. This classification can shape your defense strategy.
Understand the Charges and Potential Penalties: The government may charge you with crimes such as, wire fraud, bank fraud, identity theft, mail fraud, making false statements and conspiracy to commit fraud. Each charge carries severe penalties, including large fines and significant prison time. Knowing what you are facing allows your attorney to prepare an effective defense.
Develop a Strong Defense Strategy: Your attorney may pursue defenses including lack of intent:, demonstrating that any inaccuracies in your application were unintentional, legitimate use of funds or proving that you used the funds in compliance with PPP guidelines and mistaken Identity establishing that you were not responsible for the alleged fraud.
Comply with All Legal Requirements and Court Orders: If charged, you must comply with all court proceedings, hearings, and document requests. Failure to do so could negatively impact your case.
Avoid Discussing Your Case Publicly: Refrain from discussing your case on social media, with friends, or with business associates. Anything you express may be utilized as evidence in a legal proceeding.
Remain Proactive and Prepared: Stay informed about your case and work closely with your attorney to prepare a strong defense. The more proactive and cooperative you are, the better your chances of achieving a favorable outcome.

If you are facing PPP loan fraud allegations, the most critical step is to seek professional legal counsel immediately. A qualified attorney can help you navigate the complexities of federal fraud investigations and work towards the best possible resolution.

Examples of Modern Fraud Cases

Recently, The New York Times reported on a case wherein a New Jersey man and his girlfriend got 5 years in prison for GoFundMe fraud. Mark D’Amico and Katelyn McClure teamed up with Johnny Bobbit Jr. to make up a story about a homeless man in need of help. They raised over $400,000 after the story went viral.

The couple gave $75,000 to Bobbit, the homeless man, and spent the rest on gambling, vacations, a BMW, a helicopter ride over the Grand Canyon and Louis Vuitton handbags. Bobbit sued, bringing the scheme to light.

Bobbit himself was charged because the story was predicated on the idea that Bobbit gave up his last $20 to help McClure while she was stranded on the highway. He helped perpetuate the story and so was charged with conspiracy to commit theft by deception. Text messages revealed the story was just that—a story.

Crowdfunding Fraud

Crowdfunding fraud occurs when a party fails to deliver on promised goods or gifts, or when donor money is misused. While it is permissible for a product to underperform or fail, out and out fraud is a crime.

The two, however, could look pretty similar if you run a campaign and things don’t go quite as expected.

Defenses

The defenses for crowdfunding fraud are similar to the defenses for any other fraud case. Lack of Intent is a likely one, especially if you had a good reason for the failure or shipped promised products that the recipients simply did not like. It is also possible to use the constructive fraud defense, which claims the fraud was the result of reckless business practices with no intent.

Mistake of fact is another potential defense. For example, if you started a GoFundMe to help a person and you truly believed they were homeless when they were not, in fact, homeless, then you yourself did not commit the fraud. You simply responded out of the goodness of your heart to someone who fooled you.

Finally, the puffery defense could be a good one in a crowdfunding fraud case. Puffery is simple exaggeration; marketers, salespeople, and individuals running Kickstarters use it all the time to make the sale…or get the backing. While lying is prohibited, exciting, puffed up language is not. That’s why the home shopping channel can tell you that a vegetable spiralizer will “change your life,” when, in fact, it’s just going to help you make zoodles.

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