The federal wire fraud statute is very broad and used often by United States Attorneys offices in presenting indictments to grand juries. Essentially, a person commits wire fraud when he/she uses a wire communication (i.e. a telephone, among other methods) to defraud someone out of money or property using false statements or pretenses. The crime carries a maximum penalty of up to twenty years in federal prison.
Is it still wire fraud if a person uses false statements to obtain property but does not actually defraud the other party out of money? That is not a question often asked in a wire fraud or mail fraud case because the object of the scheme is normally to defraud someone out of money or out of property without paying for it. However, in a recent case out of Ohio, the government charged two people who were operating an illegal pain clinic with wire fraud under such questionable circumstances. We had a lot of these pain clinic cases here in Florida with the federal and state law enforcement agencies shutting down a lot of so called pain clinics they claimed were distributing pain pills to people en masse without conducting proper medical evaluations and diagnoses. In the Ohio case, those issues were present, but the government also charged the defendants with wire fraud for telling their supplier, a pharmaceutical company, that they were prescribing the pain pills for low income patients. That misrepresentation allowed them to obtain the pills from the pharmaceutical company, but the defendants paid full price for the pills.
The government alleged this was wire fraud because the defendants made false statements to get the pharmaceutical company to sell them the pills. The criminal defense lawyer defended the case by arguing that the pharmaceutical company was not defrauded because it received full compensation for the pills. The fact that the pharmaceutical company received false information should not be the basis for a wire fraud conviction.
The Appellate Court agreed with the criminal defense attorney, and the wire fraud count was thrown out.