Mail Fraud and False Representation Statutes
Mail Fraud and False Representation Statutes
Barry L. Johnson
Excerpt from the Mail Fraud and False Representation Statutes
Whoever, having devised or intending to devise any scheme or artifice to defraud ... for the purpose of executing such scheme or artifice or attempting to do so, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service ... shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
The federal mail fraud statute, first enacted in 1872 (§ 301, 17 Stat. 323), and originally entitled "An Act to revise, consolidate, and amend the Statutes relating to the Post-office Department," makes it a federal offense to use the mails in connection with "any scheme or artifice to defraud." Together with the similar wire fraud statute, the Communications Act Amendment of 1952, which extends the mail fraud provisions to cover the use of interstate telephone lines, radio, or television to perpetrate a fraud, the mail fraud law serves as a broad and adaptable mechanism to deal with ever-changing varieties of fraud. Prosecutors have eagerly seized on this law to go after consumer frauds, investment scams, the filing of false insurance claims, election fraud, bribery, and other forms of public corruption.
THE ORIGINAL MAIL FRAUD STATUTE
The 1872 mail fraud statute was enacted as part of a larger act revising laws governing the post office. Because there was no congressional debate specifically about the mail fraud provision, it is not clear why Congress saw the law as necessary. The widespread rise of financial frauds following the Civil War may have provided the impetus for this novel extension of federal authority.
The U.S. Supreme Court's unanimous ruling in Ex parte Jackson, an 1877 case upholding the constitutionality of a federal antilottery law, left no doubt as to the constitutionality of the mail fraud statute. Yet some courts remained suspicious of the extension of federal law enforcement authority over crimes traditionally prosecuted by the states. The language in the statute emphasized that misuse of the post office was central to the definition of the crime, and the courts relied on this language in their narrow interpretations of the statute. This interpretation limited the law's application to frauds that could not have occurred without use of the mails. As one court explained, "not every fraudulent scheme in which mails may happen to be employed ... is made an offense against the federal law, but only such as are 'to be effected' through that medium as an essential part ...." (United States v. Clark 1903). An amendment to the mail fraud statute by Congress in 1909, however, rejected this narrow interpretation of the statute, setting the stage for a more expansive modern interpretation.
Modern courts have interpreted each of the elements of the mail fraud statute broadly. For example, schemes involving virtually any use of the United States mails satisfy the statute's mailing requirement. As the 1989 ruling in Schmuck v. United States made clear, the mailing need not be essential to the scheme, or even support it, but may be merely incidental to the scheme. Similarly, courts have held that the wire fraud statute applies to schemes involving any interstate communication, including use of telephone lines, radio or television, fax machine or computer transmission.
In addition, for over 100 years courts have broadly interpreted the "scheme or artifice to defraud" language. For example, in its 1896 decision in Durland v. United States, the Supreme Court held that the statute encompassed new frauds even if they did not fit the original legal definition of fraud. Just under a century later, the Supreme Court opened the door to mail fraud prosecutions involving the fraudulent obtaining of information, extending the act's coverage beyond its traditional focus on money or goods. In the 1987 case Carpenter v. United States, the Court ruled that a Wall Street Journal reporter had engaged in mail fraud by using the newspaper's confidential information to defraud investors, trading in stocks on the basis of private information not available to the general public.
Even in rare situations in which courts have interpreted the statute narrowly, Congress has amended the law to achieve broader coverage. For example, in 1987 the Court held in McNally v. United States that the statute did not cover schemes to defraud citizens of their right to have officials conduct governmental affairs in an honest and impartial manner. Congress then amended the mail fraud statute to apply to honest services fraud. This amendment permits the use of the mail fraud law to prosecute public officials who accept bribes or otherwise act in a corrupt manner.
Judicial interpretation and congressional amendment have broadened the original narrow focus of the federal mail fraud statute. No longer applying solely to monetary fraud by means of the mail, it is a flexible provision that serves as federal prosecutors' first line of defense against newly invented frauds, and provides federal jurisdiction over a wide array of traditional frauds.
Coffee, John C., Jr. "The Metastasis of Mail Fraud: The Continuing Story of the 'Evolution' of a White-Collar Crime." 21 American Criminal Law Review 1 (1983).
Kennedy, Shani S., and Rachel Price Flum. "Mail and Wire Fraud." 39 American Criminal Law Review 817 (2002).
Moohr, Geraldine Szott. "Mail Fraud Meets Criminal Theory." 67 University of Cincinnati Law Review 1 (1998).
Rakoff, Jed S. "The Federal Mail Fraud Statute (Part I)." 18 Duquesne Law Review 771 (1980).