What are mail fraud scams? In this day of electronic communication you may think mail fraud is a thing of the past. Even though mail fraud has been a federal offense since 1872, our mail system is still being used to defraud people of money in many of the same ways as wire fraud.
The term mail fraud is used to classify any scheme carried out in a fraudulent manner using the U.S. Postal Service to deprive someone of his or her property or “honest services.”
If you are reading this, you may not be aware of using the U.S. Postal system in the way they would have when the law was passed, but there is a long list of ways the mail is used for fraud all the time. Here are a few of the schemes included in mail fraud:
There are a number of scams offering fake jobs and work-at-home opportunities which include fraudulent activities.
- Distributorship and Franchise Fraud: A distributor is a person or business who buys products from a supplier in order to hold and then sell them to retailers or customers. A distributorship or franchise scheme uses the cover of a legitimate business to advertise false opportunities, often with promises of unrealistic profits, in order to take investors’ money and “go out of business.”
- Phony Job Opportunities
- Multi-Level Marketing or Pyramid Schemes
- Work-At-Home Scams
- Mystery Shopper Scams
The original Ponzi Scheme is a great example of how the postal service can be used for financial fraud. In 1920, Charles Ponzi began purchasing postal coupons at a discount, shipping them abroad and selling them for full price. This was all legal until he began telling his investors he was making a 50% profit rather than 5%.
People began throwing their money at him and he paid early investors with the proceeds from sales to later investors. Ponzi flew the country when his scheme blew up and investors lost $10 million. Italy has Ponzi to thank for the decline of Mussolini, whose empire he joined as financial advisor after he fled the U.S.
Other financial fraud schemes include:
- “900” Telephone Number Fraud
- Loan Schemes charging an advance fee
- Charity Donation Fraud
- Credit Card Fraud
- Schemes that Charge Money for Services the Government Provides for Free
- Health Insurance Fraud
- Ponzi Schemes and other Investment Fraud
- Solicitations Disguised as Invoices
- Land Fraud
Fraud against the Elderly
Elderly Americans get targeted by a variety of scammers preying on their lack of knowledge of technology and how legitimate modern companies work. Fraud against the elderly isn’t only perpetrated through the mail, but the Postal Inspection Service offers free tips for seniors to protect themselves from mail fraud.
The legitimate sweepstakes contest provider Publishers Clearing House has issued a warning to all consumers about a scam using the Publishers Clearing House name. Originating in Jamaica, the scheme involves fake letters promising the large payout the victim has “already won” if he or she will simply send money through wire transfer to claim the prize. Further conversations build rapport with victims and solicit more money which is never forthcoming.
Sweepstakes, according to U.S. Law, are free of charge. No payment is ever allowed to be required to claim a prize. This fraud is being investigated by the U.S. Postal Inspection Service, Federal Trade Commission, Office of Homeland Security, The FBI and the U.S. Attorney’s office as well as local law enforcement because of its scope.
Other Types of Mail Fraud
Scammers can be creative, so law enforcement does its best to keep up with and warn potential victims of new scams. Here are some other examples:
- Home Improvement and Home Repair Scams
- Phony Inheritance Scam
- Receipt of Unsolicited Merchandise
- Missing Persons Fee for Location Fraud
- Prison Pen Pal Money Order Scam
- Fraudulent Health and Medical Products
- Fee for Removal of Name from National Contact Lists Fraud
Penalties for Mail Fraud Scams
Penalties for mail fraud scams can include fines as high as $250,000 or $1,000,000 if the scheme included a financial institution or federal disaster relief. Perpetrators are sometimes ordered to pay victims for their losses in addition to other financial penalties.
Mail fraud convictions may also result in probation for 1-5 years in addition or imprisonment for up to 30 years for schemes involving financial institutions, disaster relief or special victims.
Mail Fraud Defense
If you or someone you love are facing charges of mail fraud, it is imperative to seek the legal counsel of an experienced mail fraud attorney.
Please contact my office today.