Lesson: Don’t Lie to the DOS about Where Your Products Come From

The livelihood of many individuals and businesses are derived from sellings goods and services to the U.S. government. As in any business endeavor, honesty in all transactions should be the number one goal of all the parties involved. However, when it comes to doing business with the federal government, honesty is much more than a good business practice. It is the law.

 

A Texas man recently learned how hard the justice hammer can come down when doing dishonest business with the government. He plea guilty to wire fraud charges related to a scheme involving his contract to provide body armor to the Department of State for its personnel.

 

The quality of the businessman’s product came under scrutiny after it was discovered that the product did not perform as promoted leading to the revelation that the body armor had actually been made in China. The business owner is now accused of falsifying test reports from ballistic laboratories and altering other reports to conceal the fraudulent scheme.

 

The false reports led to wire fraud charges, for which he can now spend up to 20 years in federal prison.

Here’s what you need to know about wire fraud charges in the United States so you can avoid getting wrapped up in similar schemes.

 

Wire Fraud: What Is It?

 

Wire fraud is a type of fraud that is perpetrated through signs, signals, writings, pictures, or sounds that are transmitted through a form of wire, such as the internet, telephone, television, or radio.

 

Wire Fraud Elements

 

In order for a person to be found guilty of wire fraud, they must prove that certain elements existed during the commission of the crime. In general, a summary of these elements include:

 

• A scheme of some sort that is fraudulent: For wire fraud to be established, it must first be proven that there was a scheme created for the purpose of committing fraud. False statements, misrepresentations, orders to obtain money, or promises must be used to get something of value from another.
• The intent to specifically commit fraud: You must have acted knowingly in order to commit wire fraud. Simply participating in a scheme involving wire fraud is not enough for conviction. The government must be able to establish that you knew about the scheme and had the goal of deceptively obtaining something valuable from another person. You can, however, be convicted of wire fraud if you caused a transmission over the wire that was used in the scheme if it was a part of the conduct of business that was foreseeable.
• The use of television, radio, or other wire communications to help further the scheme: Wire fraud is a unique crime because it uses interstate communications to be carried out. Anything that uses wires to transmit messages can be a part of a wire fraud scheme.

Penalties of Wire Fraud

 

If you are convicted of federal wire fraud, then each act of wire fraud is counted as a separate offense. So, if six separate emails were sent as a part of a wire fraud scheme, then six different wire fraud offenses took place.

 

The penalties for wire fraud include as many as 20 years in a federal penitentiary and as much as $250,000 in fines for individuals who commit the fraud. If an organization is charged, then the fines go up to $350,000.

 

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