You have likely heard a story similar to this before: an unsuspecting person in New York receives an email from someone claiming to be an African prince in exile. He has millions of dollars tied up in banks in his home country that he needs to transfer to a U.S. bank account. The email states that if the recipient will simply provide his or her account information, the prince will pay him $10,000 for allowing him to temporarily use the account. The recipient sends the information, only to discover a few days later that all of his or her money is missing.
This is a classic example of phishing, or scamming people through email. Federal authorities have another name for it: wire fraud. The U.S. Department of Justice defines wire fraud as any sort of scheme carried out via interstate telephone calls or electronic communication. If you transact business online, you could potentially face such an accusation from an unhappy client.
Say your business involves investing. You contact a potential client via email about what you believe is a good opportunity. He or she invests, yet the product performs poorly and the client has to take a loss. He or she then accuses you of wire fraud. Are you guilty?
According to the DOJ, four elements must be present in order for a case to qualify as wire fraud:
- You voluntarily devised or participated in a scheme to collect money
- Your intent was to defraud the investor
- It was reasonably foreseeable that wire communications would be used in your scheme
- Such communications were indeed used
Notice how it states that intent must be present. If you are able to show that you operated in good faith when conducting your business, you may not meet the criteria to be charged with fraud.