Mail fraud

SIGNIFICANCE: Since the creation of the first government postal services, the mails have been used for countless crimes and scams that have bilked unsuspecting citizens, businesses, and even governments. Mail fraud is a unique form of white-collar crime that can range from simple forms of deceptive mail schemes to elaborate scams involving numerous perpetrators in many countries simultaneously.

Mail fraud dates back at least as far as the mid-seventeenth century, when King Charles II of England created postal inspectors to monitor corrupt carriers who were stealing revenue from his government’s mail service. Since that time, the crime of mail fraud has flourished. Modern forms of mail fraud range from schemes as simple as distributing counterfeit currency by mail to more frauds as elaborate as the so-called Nigerian scam, which attempts to persuade victims to release information on their bank and other accounts.

Among the more elaborate mail fraud schemes are scams offering prizes in return for which victims are asked for credit card and bank account numbers for alleged verification purposes; mailings that appear to be from legitimate credit card companies asking for verifying account information, such as social security numbers; and bogus sweepstakes and lotteries that require victims to pay entry fees or purchase products. During the COVID-19 global pandemic, investigators filed charges in many cases of alleged pandemic-relief fund fraud. Postal Inspection Victim Services Specialists focus on aiding elder fraud victims.

Regardless of their levels of ingenuity, all such crimes are considered serious felony offenses that are punished by both large monetary fines and, in some cases, prison sentences.

History

During the early colonial era in North America, the first postal inspector was Benjamin Franklin, who was appointed by the Crown in 1737. During the American Revolution, the Continental Congress appointed Franklin postmaster general of the new government that was forming, and Franklin set out to form the nation’s first office of postal inspectors. The newly assigned inspectors became the nation’s first and only line of defense against all forms of fraud, theft, and corruption that attempted to use the US mails.

During the nineteenth century, mail fraud proliferated in both Great Britain and the United States. The most common types of mail fraud at that time was the so-called “sob story” scam. Prosperous and upper-class persons received letters describing the woes of poor families, sick children, and similar sad stories and felt obliged to send small amounts of money to help alleviate the alleged suffering. Similar schemes are still being practiced in the twenty-first century.

In 1872, the U.S. Congress enacted the first federal law designed to combat mail fraud. The Mail Fraud Act is also considered to be the oldest and most effective consumer protection law in the United States. The statute defined fraud as schemes and ploys that used the US mails to obtain money or property through false and deceptive representations. Most mail fraud uses the mails to acquire money or other things of value from victims by offering products, services, or investment opportunities that fail to live up to their claims. The Mail Fraud Act has been amended numerous times and now includes stronger punishments for frauds against financial institutions; frauds committed against private mail carriers, such as Federal Express and United Parcel Service; and frauds associated with organized crime or terrorist activity.

Prevalence

Mail fraud is a white-collar crime, and few agencies are tasked to gauge the prevalence and scope of white-collar crimes. The Federal Bureau of Investigation’s National Incident-Based Reporting System (NIBRS) collects data on mail fraud, but the statistics it compiles are mixed in with those of other types of fraud, making it impossible to determine exactly how many instances of mail fraud are being reported. The best source of information on mail fraud is the US Postal Inspection Service.

Investigation

The US Postal Inspection Service is the law-enforcement branch of the U.S. Postal Service empowered by Congress to enforce the more than two hundred federal statutes relating to the US mails. In 2021, the Postal Inspection Service employed about 1,300 inspectors to investigate mail fraud. The Postal Inspection Service has also created the Deceptive Mail Enforcement Team, which seeks to identify individuals and companies that disseminate false promotions and sweepstakes offerings. Postal inspectors work closely with state and local law-enforcement organizations and other federal regulatory agencies. They base their case investigations primarily on complaints received from the general public.

Postal inspectors investigate thousands of cases of mail fraud a year. In fiscal year 2022, the Postal Service secured 470 mail fraud convictions. The numbers of mail fraud complaints, however, are far larger. With the skill and proficiency of the criminals becoming more refined coupled with technological advances, the numbers of mail fraud cases are increasing annually, making it necessary for the government to improve its own methods of investigation and analysis.

Prosecution and Punishment

When postal inspectors find evidence of postal-related crimes, they may either seek federal prosecution or request administrative actions against perpetrators. Inspectors work closely with federal prosecutors. To obtain convictions, they must establish two key points. First, they must show that defendants have used deceptive practices intentionally and willfully to defraud. Second, they must show that the defendants have attempted to the use the U.S. mails to carry out their fraudulent schemes.

Mail fraud brings varying types of sanctions to those who are found guilty. Based on the extent of the harm caused by the fraud, the penalties can range from fines, asset forfeiture, and probation to long periods of incarceration. In 2005, the maximum possible punishments for mail fraud were fines of one million dollars and prison terms of thirty years. The most severe punishments were awarded to frauds directly affecting financial institutions, such as banks, credit institutions, and mortgage companies.

Bibliography

Baarslag, Karl. Robbery by Mail: The Story of the U.S. Postal Inspectors. New York: Farrar & Rinehart, 1938.

Biegelman, Martin T. Protecting with Distinction: A Postal Inspection History of the Mail Fraud Statute. Washington, D.C.: U.S. Postal Inspection Service, 1999.

"Mail Fraud." United States Postal Inspection Service, 2023, www.uspis.gov/tips-prevention/mail-fraud. Accessed 8 July 2024.

Rotert, Blair. "Was 'Varsity Blues' Actually a Crime? The Supreme Court's Crusade Against the Federal Mail and Wire Fraud Statutes." Boston College Law Review, vol. 64, no. 2, 2023, pp. 415-457. Available online at bclawreview.bc.edu/articles/3044. Accessed 8 July 2024.

Terrell, John Upton. The United States Post Office Department: A Story of Letters, Postage, and Mail Fraud. New York: Meredith Press, 1968.

Thomas, John. Law of Lotteries, Frauds, and Obscenity in the Mails. Fred B. Rothman, 1980.

United States Postal Inspection Service Annual Report 2021. US Postal Inspection Service, 2022, www.uspis.gov/wp-content/uploads/2022/07/USPIS-FY2021-Annual-Report.pdf. Accessed 8 July 2024.

U.S. National Archives and Records Administration. Deceptive Mail Prevention and Enforcement. Washington, D.C.: Government Printing Office, 1999.