Wire Fraud Defense in New York

Wire fraud under 18 U.S.C. § 1343 is the federal prosecutor's everyday tool. Any scheme to defraud that uses an interstate wire — phone call, email, bank transfer, text message, website — can be charged. The statute carries up to twenty years per count, with thirty-year exposure for offenses affecting a financial institution or in connection with a federally declared disaster (including pandemic-related fraud).

Elements

1. A scheme or artifice to defraud
2. Specific intent to defraud
3. Use of an interstate wire in furtherance of the scheme
4. Materiality of the misrepresentation

Where Wire-Fraud Cases Break Down

• Intent. Wire fraud requires specific intent. Honest dispute, business optimism gone wrong, and reliance on professionals are all consistent with innocence.
• Materiality. The misrepresentation must be one a reasonable person would attach importance to. Puffing is not materiality.
• Property interest. Following Ciminelli v. United States and Kelly v. United States, the "right to control" theory and pure regulatory deceit no longer support wire-fraud convictions. The government must show a traditional property interest.
• Venue. Venue lies in any district where the wire originated, passed through, or was received. Multiple-defendant cases create venue-severance opportunities.
• Statute of limitations. Five years under 18 U.S.C. § 3282, with extensions to ten years for offenses affecting financial institutions.

Sentencing

Federal sentencing in wire-fraud cases turns on loss amount, number of victims, and sophisticated-means enhancements under U.S.S.G. § 2B1.1. The loss calculation is often where the real fight happens — the difference between $100,000 and $1.5 million in loss is years of guideline exposure. We litigate loss aggressively, both legally and through forensic accounting.

How a Wire-Fraud Investigation Builds

Most wire-fraud cases in the SDNY and EDNY begin long before the defendant knows about them. A bank suspicious activity report, a victim referral to the FBI, an SEC market-surveillance hit, or a cooperating witness in an unrelated case opens the file. The case agent then assembles wire records, bank subpoenas under the Right to Financial Privacy Act, and email returns under 18 U.S.C. § 2703. Grand jury subpoenas under Rule 17 follow, and the office decides whether to deliver a target letter or to lead with a search warrant.

The pre-indictment window is where the defense has the most leverage and the most ways to lose ground. Document holds, document productions, witness interviews, civil parallel proceedings, and the question of whether to sit for a proffer all play out before the public charging document exists. Kastigar protection for immunized statements has to be set up correctly — a sloppy proffer or queen-for-a-day letter can deliver the government's case to it on the record. We make those decisions slowly and on paper.

Common Charging Combinations

• Wire fraud conspiracy, 18 U.S.C. § 1349. No overt-act requirement; carries the same twenty- or thirty-year cap as the substantive offense.
• Bank fraud, 18 U.S.C. § 1344. Stacked when a federally insured financial institution is in the loop; thirty-year maximum.
• Money laundering, 18 U.S.C. §§ 1956 and 1957. Concealment laundering and transactions over $10,000 in criminally derived property; up to twenty years.
• Aggravated identity theft, 18 U.S.C. § 1028A. Mandatory two-year consecutive term when a real person's identifiers are used — narrowed by Dubin v. United States but still pervasive.
• False statements, 18 U.S.C. § 1001. Often added to capture the FBI interview rather than the underlying fraud.
• Securities fraud, 15 U.S.C. § 78j(b) and 18 U.S.C. § 1348. Where the scheme touches securities, the indictment doubles up.

Defending the Loss Number

U.S.S.G. § 2B1.1 builds the guideline range almost entirely off the loss figure. Loss is the greater of actual or intended loss under the commentary, with credits for funds returned before the offense was detected and for the fair market value of services actually rendered. Sophisticated means, ten-or-more victims, abuse of a position of trust, vulnerable victims, and substantial-financial-hardship enhancements can each add levels. The relevant-conduct rules under § 1B1.3 let the government sweep uncharged conduct into the calculation; the defense work is to police that boundary.

We retain forensic accountants and damages experts before the PSR is drafted. A clean accounting of payments out, services in, and money returned often cuts the government's loss number in half. Where the loss number cannot be moved, we develop the sentencing record for a downward variance under 18 U.S.C. § 3553(a) — family, health, restitution, acceptance, and the over-statement-of-loss argument that courts in the Second Circuit have credited in fraud cases.

Pretrial Motion Practice

Pretrial motions decide most of what the jury sees. Motions to dismiss under Rule 12(b)(3) test whether the indictment alleges a traditional property interest after Ciminelli and Kelly and pleads each element with sufficient particularity. Bills of particulars under Rule 7(f) close gaps about which wires the government will rely on. Severance motions under Rule 14 break up multi-defendant indictments where spillover prejudice would corrupt the jury's evaluation of one defendant.

Suppression motions under Rule 12(b)(3)(C) attack defective search warrants, overbroad § 2703(d) email returns, and statements taken without Miranda where custody is contested. Where a defendant or witness gave a queen-for-a-day proffer or testified under immunity, Kastigar v. United States requires the government to prove an untainted source for every piece of its evidence — a hearing that can gut a case before trial.

Forfeiture, Restitution, and Civil Exposure

Criminal forfeiture under 18 U.S.C. § 981(a)(1)(C) and § 982(a)(2) reaches the proceeds of wire fraud and, through 21 U.S.C. § 853(p), substitute assets when the direct proceeds have been dissipated. The government often seeks pretrial restraining orders and lis pendens filings that can freeze a client's operating accounts and real property before trial. Restitution under the Mandatory Victims Restitution Act, 18 U.S.C. § 3663A, is mandatory in fraud offenses against identifiable victims. Civil parallel cases — SEC, FTC, FINRA, or private — multiply the financial exposure and create deposition risk that has to be managed against Fifth Amendment considerations.

Post-Ciminelli Landscape

The Supreme Court's 2023 decision in Ciminelli v. United States rejected the Second Circuit's "right to control" theory of wire fraud, holding that intangible interests in valuable economic information are not "property" within the meaning of § 1343. Kelly v. United States (the Bridgegate decision) had already narrowed the statute by rejecting prosecutions premised on pure regulatory deceit. Percoco v. United States trimmed honest-services fraud under 18 U.S.C. § 1346 for non-government defendants. Taken together, these decisions force prosecutors to identify a traditional property interest the scheme aimed to obtain — money, real property, or tangible economic value of the kind the common law recognized. We routinely use these decisions in motions to dismiss, Rule 29 motions for judgment of acquittal, and jury-charge fights over the property element.

Cooperation, Proffers, and Reverse Proffers

Cooperation is the single largest sentencing variable in federal wire-fraud practice. A § 5K1.1 motion based on substantial assistance can move a sentence below the guideline range — sometimes far below — and a Rule 35(b) motion preserves the option post-sentencing. Cooperation also carries risk: a queen-for-a-day proffer must be papered correctly to preserve Kastigar protection, and a cooperator who is judged unhelpful can end up worse off than a defendant who pled straight.

A reverse proffer — where the government walks the defense through its case — is often the cheapest way to test the strength of an investigation before deciding whether to fight, plead, or cooperate. We use them strategically. We also use joint defense agreements in multi-defendant cases to coordinate without waiving privilege, while keeping a sharp eye on conflicts that can blow up the joint defense when a client decides to cooperate.

Trial Issues

Wire-fraud trials are document cases. The government typically calls a case agent, one or more victims, a cooperating witness, and a summary-chart expert under Rule 1006. The defense fights live on cross-examination of the cooperator and on motions in limine to exclude prejudicial summary charts and 404(b) evidence. Severance under Zafiro matters in multi-defendant cases. Theory-of-defense charges, good-faith instructions, and reliance-on-counsel instructions are negotiated late and matter enormously. Post-Ciminelli, jury charges defining the property interest at stake are themselves contested issues.

Immigration and Collateral Consequences

A wire-fraud conviction in which the loss to the victim or victims exceeds $10,000 is an aggravated felony under 8 U.S.C. § 1101(a)(43)(M), triggering mandatory removal and a bar to most forms of relief for non-citizens. The plea record — loss amount stipulated, restitution figure, and the offense-of-conviction itself — controls the immigration outcome and has to be drafted with that in mind. Licensed professionals face attorney-grievance proceedings, accountancy and securities-industry bars (FINRA Rule 8310 and SEC bars under § 15(b)(6)), and federal-program exclusion. Many of these collateral tracks open the day the indictment is unsealed.

Related practice areas: fraud defense overview, healthcare fraud, Medicaid fraud, and criminal defense.

If you have been charged or are under investigation for wire fraud, call us at 212-233-1233 or email [email protected].