What is Wire Fraud?

Wire fraud is a crime in which people attempt to defraud victims of property with the use of electronic communications. People can be charged with this crime whether they rely solely on electronic communications to commit the crime or simply use such communications at a stage of the crime. In the United States, this type of fraud is a federal crime accompanied with stiff penalties, especially if the victim is a financial institution.

Historically, many cases of wire fraud involved the telephone. Radio and television could also be used as means of fraud. Today, most cases involve the Internet. People can send sound, images, video, or text in association with a fraud attempt. In all cases, the information provided is intended to mislead the victim into giving up money or property.

People can be defrauded in a number of different ways, ranging from emails pretending to be from friends stranded in foreign countries who need assistance to advertisements for products that do not exist. Wire fraud may be committed by a single person or by a group of people who work together to create a more believable scenario. Some schemes have been extremely elaborate and on the Internet, people may prey on older adults and other people who are not as familiar with the Internet, using misleading emails and other communications to trick them.

The money involved in wire fraud may also be transferred electronically. This is not uncommon when such fraud takes place entirely over the Internet and the victim provides access to a bank account or payment provider. Since this sometimes results in funds being moved out of the country, it can be difficult to recover the funds and restore them to the victim.

Governments combat this type of fraud in a number of ways. In addition to criminalizing the behavior so that people can be prosecuted for it, the government also investigates financial activities for warning signs of ongoing fraud. Agents are alerted when unusually large transactions take place or when people appear to be engaging in unusual financial activity. This information creates a red flag which can trigger an investigation for wire fraud.

Several governments have also become involved in educational outreach campaigns that are designed to provide information to citizens about wire fraud and how to avoid becoming a victim. Such campaigns include publications for new Internet users to alert them to common frauds and scams, as well as campaigns in association with websites sometimes used for fraudulent purposes. Such sites publish warnings and notices that are designed to protect their users by alerting people to potentially dangerous situations.