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Federal Wire Fraud Charges (18 U.S.C. § 1343): Defense Strategies
The statute that governs federal wire fraud is not a scalpel. It is a net, and for the better part of three decades, federal prosecutors have cast it as one. Section 1343 of Title 18 criminalizes the use of interstate electronic communications in furtherance of a scheme to defraud, and its reach extends to virtually every commercial transaction that involves an email, a telephone call, or an electronic transfer. The penalties are severe: up to twenty years of imprisonment per count, or thirty if the fraud involves a financial institution or federal disaster relief funds. Each individual communication can constitute a separate count. A case constructed from twelve emails carries, on paper, a sentencing exposure that exceeds two centuries.
The breadth of the statute is also its vulnerability. A charge that can be assembled from any electronic communication must still satisfy specific elements, and it is in the architecture of those elements that a defense assumes its form.
The Statute After Kousisis
In May of 2025, the Supreme Court delivered its unanimous opinion in Kousisis v. United States, and in doing so, it resolved a question that had divided the federal appellate courts for years: whether the wire fraud statute requires the government to prove that a defendant intended to cause economic harm to the victim. The Court held that it does not. Under the fraudulent inducement theory, a defendant who obtains money or property through material misrepresentations can be convicted even if the victim received everything they were promised in the transaction.
Justice Barrett, writing for the Court, examined the plain text of Section 1343 and found no textual basis for an economic loss requirement. The statute speaks of obtaining money or property by means of false pretenses. It does not condition liability on the victim’s balance sheet.
The practical consequence is worth considering in full. Before Kousisis, defense attorneys in the Third, Seventh, and Eighth Circuits could argue that their client’s misrepresentation, however dishonest, caused no economic injury and therefore fell outside the statute’s reach. That argument is closed. The Court was unambiguous: the focus rests on the defendant’s intent and the materiality of the misrepresentation, not on whether the victim emerged with finances intact.
A client once described the statute to me as “a law that makes it illegal to send an email.” He was not entirely wrong.
This does not mean the statute operates without limit. Two years before Kousisis, the same Court struck down the “right to control” theory in Ciminelli v. United States, holding that depriving a victim of information necessary to make economic decisions does not constitute a deprivation of property under Section 1343. And in Kelly v. United States, the Court confirmed that the fraud statutes protect property rights alone, not the government’s regulatory interests. The doctrine is moving in two directions at once: expanding liability where material misrepresentations are used to obtain property, contracting it where the alleged harm is informational or abstract. The Second Circuit’s recent reversal in Johnson v. United States, where a foreign exchange trader’s conviction was vacated after Ciminelli eliminated the right to control theory on which the jury may have relied, illustrates how unsettled this area of law remains.
Whether the Court intended this outcome or merely failed to prevent it is a question worth considering.
The materiality requirement is now performing most of the doctrinal work. The Court in Kousisis acknowledged concerns that the fraudulent inducement theory could criminalize every intentional misrepresentation designed to induce a property transaction. Its answer was that the materiality standard from Universal Health Services v. Escobar narrows the universe of actionable misrepresentations. How much narrowing that standard provides in practice is a question I cannot answer from this desk, though the concurrence from Justice Thomas (who expressed skepticism about whether the misrepresentations in Kousisis itself were material to the core contractual obligations) suggests the Court will have occasion to revisit the question.
Elements of the Offense
To obtain a conviction under Section 1343, the government must establish four elements beyond a reasonable doubt: the existence of a scheme or artifice to defraud; specific intent to defraud; the foreseeability that interstate wire communications would be used; and the actual use of such communications in furtherance of the scheme.
The third element deserves attention. The defendant need not have composed the email or placed the telephone call. If it was reasonably foreseeable that someone involved in the scheme would use interstate wires, the element is satisfied. In a commercial environment where every transaction generates electronic communications as a matter of course, this element is almost never the ground on which a case is contested. It is, if we are being precise, less an element than a jurisdictional hook.
The second element carries the weight. The government must demonstrate a conscious, knowing intent to deceive. A transaction that fails, a projection that proves optimistic, a business decision that produces losses: none of these, standing alone, constitute wire fraud. The distance between a bad outcome and a criminal scheme is a matter of intent.
Courts have recognized that the complexity of modern commerce can produce false impressions without fraudulent intent. A claim submitted under an honest misunderstanding of billing rules, for instance, may look identical to a fraudulent one on paper. The distinction is between a mistake one makes and a deception one constructs.
Good Faith and the Question of Intent
The good faith defense is the structural center of most wire fraud defenses, even when it is not denominated as such. Because Section 1343 requires specific intent, a defendant who acted with an honest belief in the legitimacy of the transaction has not committed the offense. Good faith negates the government’s burden rather than establishing an independent affirmative defense, a distinction that matters at trial because the prosecution retains the obligation to disprove it beyond a reasonable doubt.
The Department of Justice’s Criminal Resource Manual recognizes good faith as a defense to wire fraud. The case law is extensive: United States v. Casperson in the Eighth Circuit, the certiorari proceedings in Green v. United States. But the defense is easier to articulate than to execute. The government is not required to demonstrate that the defendant succeeded in defrauding anyone. It must prove only that the defendant acted with the purpose to deceive. A plan that fails is still a scheme.
In practice, the defense requires a record:
- Emails or communications showing genuine belief in the viability of the venture.
- Financial projections prepared by third parties and relied upon without reason to doubt them.
- Advice of counsel, documented and contemporaneous.
- A pattern of conduct, before and after the alleged scheme, consistent with honest dealing.
The defense is constructed before the indictment, often before the defendant perceives that an investigation exists. Once a target letter arrives, the evidentiary picture is, for the most part, fixed. What remains is the selection and presentation of what was always there.
There is a version of this defense that succeeds and a version that does not, and the difference is not one of skill. The version that fails is the one assembled after the fact, from pieces of the record that look favorable in isolation but that do not hold together when the government presents the full picture. Juries perceive this. The version that succeeds is rooted in contemporaneous documentation, the kind that exists because the defendant was operating in good faith, not because they anticipated a prosecution.
We tend to allocate more time to the second and third years of a client’s records than to the period the government identifies as the heart of the scheme. Patterns of honest conduct before and after the alleged misconduct reveal more about intent than the transactions at issue. A person who has maintained consistent practices for years, who encounters a situation that produces a false impression, and who continues to act in the same manner afterward presents a narrative the government must overcome. Three cases we examined this spring, all in the Eastern District, followed this pattern with only minor variation.
The Pre-Indictment Period
The period between the beginning of a federal investigation and the return of an indictment is, for most defendants, the period they did not know existed until it was nearly over. FBI agents may have been conducting interviews for months. A grand jury may have already received subpoenas. The target of the investigation is often the last person informed of it, and by the time a target letter arrives (which tends to appear on a Friday, tends to arrive when cash flow is already strained or when the recipient has sensed, without being able to name the source, that something in the business has shifted) the investigation has reached a stage where the government believes it possesses sufficient evidence to charge.
This period is also the most consequential for the defense.
Before an indictment, the defense has the opportunity to engage with the prosecution in ways that become unavailable afterward. Presentations to the assigned Assistant United States Attorney can reframe the government’s theory. Proffer sessions, conducted under a written agreement, allow the target to provide context that documentary evidence cannot supply on its own. In cases where the evidence is ambiguous (and wire fraud cases are, by their nature, built on ambiguous evidence, because every email and every financial statement admits of more than one reading) the pre-indictment period is the window in which the defense can shape the narrative before it becomes an indictment.
The conventional approach is to wait for the government to reveal its hand and respond. We find this insufficient in wire fraud matters, where the volume of electronic communications gives the prosecution the ability to select and arrange evidence in ways that construct an appearance of intent the full record does not support. In a case involving thousands of emails, the fifty the government presents to the grand jury are the fifty that tell the government’s story. The remaining correspondence may tell a different one. Early engagement with the prosecution, substantive rather than confrontational, presenting evidence of good faith and alternative interpretations of the conduct under review, has in several of our matters resulted in the declination of charges or a reduction in the indictment’s scope. I am less certain about whether this approach produces the same results in districts where the U.S. Attorney’s office operates with a more aggressive posture, but in the districts where we practice with regularity, the early presentation has proven its value.
Materiality and Its Limits
After Kousisis, materiality is the primary doctrinal constraint on the statute’s reach. A misrepresentation must be capable of influencing the victim’s decision to enter the transaction. Puffery, the overstatement of a product’s qualities, the optimistic projection that no reasonable counterparty would treat as a guarantee, falls outside the statute.
The standard, borrowed from Universal Health Services v. Escobar, asks whether a reasonable person would consider the misrepresentation significant to the transaction. What constitutes significance in this context varies by circuit, by judge, and, if one is candid, by the composition of the jury. The line between a material misrepresentation and a trivial one is not drawn with the precision that criminal law demands, and that imprecision is itself a source of both risk and opportunity for the defense.
Statute of Limitations and Procedural Timing
The statute of limitations for wire fraud is five years from the date of the offense, extending to ten years if the scheme affected a financial institution. Each use of the wires in furtherance of the scheme constitutes a separate offense with its own limitations period. The clock does not begin when the scheme is conceived but when the last qualifying communication is transmitted.
Five years is a shorter window than most defendants assume. Federal investigations are not rapid, and it is common for the government to devote two or three years to an investigation before seeking an indictment. If the alleged conduct occurred six or seven years before the investigation matures, the statute of limitations becomes a genuine defense.
The timing of the investigation affects the defense in less apparent ways as well. Witnesses relocate. Documents are discarded in the ordinary course of business. The memories of those involved degrade. A prosecution that reaches back several years must contend with the fact that the evidence it preserved through subpoenas and warrants will be evaluated alongside evidence that no longer exists. The absence of evidence can itself become an argument, though whether the court will permit the defense to draw that inference depends on the specific facts and the disposition of the judge.
In a case we handled two years ago, the government’s investigation consumed so much of the limitations period that several of the original counts could not be charged. The remaining counts were weaker without them.
Constructing the Defense
The defense of a federal wire fraud case is a sequence of decisions, each one shaping the options available for the decision that follows.
The first decision is whether to engage the government before indictment or to preserve all arguments for trial. The second is the identification of the government’s theory of the case before the indictment is returned. The theory determines which elements the government will emphasize and which it considers vulnerable. A prosecution built on the volume of wire communications, many emails, many calls, the weight of electronic contact, is a prosecution that is strong on the jurisdictional element and weak on intent. A prosecution that focuses on specific misrepresentations in specific documents concedes the scheme was narrow and places everything on materiality.
The third decision involves expert testimony. In wire fraud cases concerning complex financial transactions, the government will present a summary witness, often an FBI agent or a forensic accountant, who synthesizes documentary evidence into a narrative of fraud. Challenging that witness, or presenting an expert who offers an alternative interpretation of the same documents, is the mechanism through which the defense introduces reasonable doubt in a case the government has designed to feel inevitable.
If you have received a target letter or believe you are the subject of a federal investigation, the sequence of decisions described above has already begun. A consultation with our firm is where this conversation starts. It costs nothing and assumes nothing; it is the beginning of a diagnosis, not a commitment.
There is a particular silence in a conference room at the end of a long proffer session, after the client has spoken and the prosecutors have taken their notes and no one is certain what happens next. What happens next depends on what was said inside that silence, and on the preparation that made the saying of it possible.