Most people are unaware of the level of fraud attempted each year against the government. While some of these cases receive media attention, most go unnoticed to the general public. The general rule is that, more often than not peopler attempting to defraud the government are apprehended and prosecution resulting in serious prison time and accompanying fines or restitution, as one Florida man recently found out.
A Florida business owner was recently found guilty of wire fraud and money laundering in federal court for attempting to obtain over $6 million in fraudulent Paycheck Protection Program (PPP) loans. The PPP program is meant to help ease the burden of COVID on small businesses. This Florida man submitted fraudulent information on applications for the loans, which eventually led to the charges and conviction – something he will pay for dearly in the years to come.
It may seem like an easy way to get free money based on the assumption that the federal government is too large to catch things like a single application. But you may want to think twice before committing crimes like this. Wire fraud and money laundering are serious crimes with steep consequences.
Wire Fraud: What Is It?
Fraud that is perpetrated through writings, signals, sounds, signs, or pictures that are transmitted over any form of wire – such as the internet, phone, radio, or television – is considered to be wire fraud.
In order for the government to convict someone of wire fraud, they must prove the elements of the crime. Each case is a bit different, but in general, the elements of wire fraud include:
- A plan to commit fraud
- Specific intent to carry out the fraud
- The use of a wire to further the plan to commit fraud
Often, wire fraud is prosecuted in conjunction with other crimes that take place at the same time, such as mail fraud, internet fraud, securities fraud, and conspiracy to commit wire fraud.
The Penalties for Federal Wire Fraud
Each act of wire fraud is counted separately for singular communication that furthers the wire fraud scheme. For example, if someone sends three emails in furtherance of a plan to defraud, that creates three specific counts of wire fraud. The perpetrator can be found guilty of and sentenced for each of these.
Wire fraud penalties include up to 20 years in a federal penitentiary and $250,000 in fines for individuals. If an organization is found guilty of wire fraud, then the fines rise to $500,000.
That is not the only penalty for wire fraud, however. If the wire fraud involves a scheme to take advantage of a situation involving a presidentially declared disaster, or if it targets a federal financial institution, then the penalties go up to 30 years in prison and fines of $1 million.
Federal Money Laundering
Money laundering is a financial transaction that takes money obtained through criminal activity and makes it appear as the earnings happened in a legitimate way. It’s called laundering, because the idea is to take “dirty” money and make it “clean”.
Money laundering is a crime you often see charged in conjunction with other crimes like wire fraud, mail fraud, or drug crimes. The motivation of the crime is financial.
The Penalties for Money Laundering
Under U.S. law, anyone found guilty of money laundering can be sentenced to up to 20 years in federal prison. However, the number of years to which a person is sentenced depends on the amount of money involved in the crime.