Review of Federal Internet Fraud Crimes and Defenses
Technological advances of the internet have made specific white collar fraud crimes much easier to commit than they were before.
Since fraudulent transactions over the internet normally cross state lines, they can be charged as a federal offense which carry more severe penalties than a state crime.
Internet fraud is not one specific crime. Rather, it refers to a collection of fraud crimes that transpire either over the internet or on a computer.
Sometimes internet fraud is also referred to as cybercrimes.
However, many serious felony internet fraud offenses are investigated by the Federal Bureau of Investigation and the United States Department of Justice.
While there are a wide range of federal internet fraud cases, the most common are related to:
- 18 U.S.C. § 1028 - identity theft,
- 18 U.S.C. § 1029 - credit card fraud,
- 18 U.S.C. § 1030 – computer hacking,
- 18 U.S.C. § 1343 – wire fraud,
- 18 U.S.C. § 1344 – bank fraud.
For more information, our Los Angeles criminal defense attorneys are including an overview below.
Computer Fraud and Abuse Act
The Computer Fraud and Abuse Act (CFAA) was first legislated in 1986 as an amendment to the first federal computer fraud law (the Comprehensive Crime Control Act of 1984).
Since 1986, the CFAA has undergone many updates, for a total of five expansions of the law's scope in 1994, 1996, 2001, 2002, and 2008. The Comprehensive Crime Control Act was codified as 18 U.S. Code § 1030.
Federally, the FBI established the Internet Crime Complaint Center in 2000 to address internet fraud.
Throughout its 21-year history, individuals have made over 4 million complaints. For example, in 2016, there were over 298,000 complaints reporting losses of more than $1.3 billion.
With these severe losses, federal prosecutors continue to focus on addressing internet fraud cases.
What are Some of the Federal Regulations for Internet Fraud?
Some common areas that often fall under the purview of internet fraud include:
- phishing schemes,
- ponzi schemes,
- business opportunity schemes,
- identity theft,
- wire fraud,
- bank fraud,
- credit card fraud,
- auction fraud,
- unauthorized computer use or access.
Although 18 U.S. Code § 1030 was initially designed to protect "classified information, financial records, and credit information on governmental and financial institution computers," the CFAA widens its reach, and today there are other applications that prosecutors often use.
Another law that is often used to address internet fraud is 18 U.S.C. § 1343 federal wire fraud statute, passed in 1952.
Wire fraud is defined as any criminally fraudulent activity involving the use of electronic communications of any kind, such as devising a scheme to defraud, or obtain money or property by false pretenses or promises.
Because it applies to crimes to "interstate wire communications," it could be anything from fax to telephone to internet communication.
18 U.S.C. § 1028 identity theft occurs when somebody uses another person's personal information for economic gain or to take the identity of someone else.
This type of federal crime normally involves fraud, deception, false statements, or misrepresentations. In other words, identity theft is stealing someone's identifying information and using stolen identities for their own financial benefit.
Credit card fraud
Federal prosecutors will often indict someone for large-scale credit card fraud cases under 18 U.S.C. § 1029. This type of internet fraud is directly connected to access devices.
Under this federal statute, it is a felony crime to produce, use, or traffic in counterfeit or unauthorized access, which includes credit cards, debit cards, and gift cards.
What Does a Prosecutor Have to Prove in Order to Convict?
To convict an individual of internet fraud, a prosecutor must prove different factors that are commonly called the elements of the crime, including
- defendant had a plan to commit fraud, known as “intent;”
- defendant explicitly intended to defraud someone else;
- defendant used electronic communication: social media, email, website forms, Craigslist, etc., as a part of their plan.
It's critical to note that the fraudulent plan doesn't have to succeed for it to be prosecuted. In other words, just the attempt to defraud is sufficient for an arrest, indictment, and conviction.
Further, these elements of the crime offer insight into how an effective federal criminal defense attorney might craft a strategy to fight the charges.
If we can demonstrate the defendant did not intend to commit fraud, the prosecutor might not have a viable case.
What are Possible Penalties Associated with Federal Internet Fraud?
The possible sentencing for federal internet fraud varies depending on the specific type of crime that occurs. Here are several examples:
- the maximum prison sentence for internet fraud that results in federal identity theft can range from five to twenty years;
- 18 U.S. Code § 1030 outlines that the possible penalties may include "not more than one year" to "imprisonment for any term of years or life."
- the prison sentence for federal credit card fraud ranges from a fine or imprisonment for up to ten, fifteen, or twenty years depending on the specifics of the situation.
Statute of limitations
There is a statute of limitations for most federal internet fraud cases. According to 18 U.S. Code § 3282, an individual may not be prosecuted for a noncapital offense after five years or sixty months. The law states:
- "Except as otherwise provided by law, nobody shall be prosecuted, tried, or punished for any offense, not capital, unless the indictment is found or information instituted within five years next after such offense shall have been committed."
Criminal Defense for Federal Internet Fraud Cases
If you or a loved one is currently facing internet fraud charges, you must find a federal defense attorney who understands how to navigate the U.S. District Court system and the United States' Attorney's Office.
The federal criminal court process and procedures are different than a state criminal court. This means you need a lawyer with experience dealing with federal crimes.
Most internet fraud charges are the result of a long-term investigation by federal law enforcement agencies.
You might be asked to answer some questions from investigators, which will place you at risk of making incriminating statements.
You should never make any statements to federal law enforcement without first discussing the case with a defense lawyer.
Eisner Gorin LLP is a top-rated criminal defense law firm comprised of former prosecutors and seasoned federal criminal lawyers.
We have two office locations in the greater Los Angeles area.
Call our office for an immediate consultation at (310) 328-3776, or contact our firm online.