Conspiracy to Commit Mail Fraud: An Analysis of U.S. Federal Law

An Analysis of Conspiracy to Commit Mail Fraud under U.S. Federal Law

Introduction

Conspiracy to commit mail fraud is a significant offense within the framework of United States federal criminal law, combining the intricate elements of conspiracy with the specific requirements of the mail fraud statute. This offense targets agreements to perpetrate fraudulent schemes that involve the use of the U.S. mail system. Understanding this crime requires a careful examination of two primary federal statutes: the general conspiracy statute, 18 U.S.C. § 371, and the mail fraud statute, 18 U.S.C. § 1341. This article will delve into the constituent elements of both mail fraud and conspiracy, analyze how these elements synthesize to form the charge of conspiracy to commit mail fraud, and explore key jurisprudential interpretations and challenges, drawing upon seminal case law and statutory provisions. While state laws also address fraud and conspiracy, the focus of this analysis, guided by the provided reference materials, will be predominantly on federal law.

Elements of Substantive Mail Fraud (18 U.S.C. § 1341)

To comprehend conspiracy to commit mail fraud, one must first understand the underlying substantive offense. The mail fraud statute, 18 U.S.C. § 1341, criminalizes the use of the mail system in furtherance of a scheme to defraud. As articulated in U.S. v. OCHS (United States Court of Appeals, First Circuit., 1988), the statute provides in pertinent part: "Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, . . . for the purpose of executing such scheme or artifice or attempting to do so, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service...shall be fined...or imprisoned...or both."

The government must typically prove three core elements for a mail fraud conviction: (1) the defendant's participation in a scheme to defraud; (2) the defendant's commission of the act with intent to defraud; and (3) the use of the mails in furtherance of the fraudulent scheme (UNITED STATES OF AMERICA, Plaintiff, v. MARVIN T. BELL, MONICA HERNANDEZ, and CARLOS RAYAS, Defendants. (N.D. Ill., 2019), citing United States v. Jackson, 546 F.3d 801, 810 (7th Cir. 2008)).

1. Scheme or Artifice to Defraud

A "scheme or artifice to defraud" is a plan or design to deprive another of money or property through deceptive means. The term "defraud" is broadly construed. As noted in UNITED STATES of America, Plaintiff, v. Isaac STATES et al., Defendants. (E.D. Mo., 1973), quoting United States v. Procter Gamble Co., "fraud" has been defined as "any artifice whereby he who practises it gains, or attempts to gain, some undue advantage to himself, or to work some wrong or do some injury to another, by means of a representation which he knows to be false, or of an act which he knows to be against right or in violation of some positive duty." The scheme need not be successful; the statute punishes the devising of the scheme and the use of mails in its execution (U.S. v. OCHS, 1988; U.S. v. MASSEY (Tenth Circuit), 1995). Historically, this was tied to "money or property," a concept significantly discussed in cases like McNALLY v. UNITED STATES (483 U.S. 350 (1987)), which limited mail fraud to deprivations of tangible property rights. U.S. v. SCHWARTZ (924 F.2d 410, 2d Cir. 1991) analyzed this, finding that export licenses did not constitute "property" under the wire fraud statute, a reasoning applicable to mail fraud. Congress later enacted 18 U.S.C. § 1346 to include schemes to defraud of "the intangible right of honest services."

2. Intent to Defraud

The government must prove specific intent to defraud (U.S. v. Moser, 123 F.3d 813, 820 (5th Cir. 1997)). This involves an intent to deceive and an intent to cause some harm or loss to result from the deceit, or to bring about financial gain to the schemer (Moser, 1997, citing Jimenez, 77 F.3d at 97). This specific intent may be proven wholly by circumstantial evidence (U.S. v. Pace, 579 F. App'x 178 (4th Cir. 2009), citing United States v. Burgos, 94 F.3d 849, 858 (4th Cir. 1996)).

3. Use of Mails "In Furtherance" of the Scheme

The use of the mails must be "for the purpose of executing such scheme or artifice or attempting to do so" (18 U.S.C. § 1341). This "in furtherance" element is crucial. The Supreme Court in UNITED STATES v. MAZE (414 U.S. 395, 1974) clarified that mailings incidental to a scheme that has already reached fruition do not satisfy this element. In Maze, the mailing of credit card invoices between motels and the bank after the defendant had fraudulently obtained goods and services was deemed not "in furtherance" because the scheme was complete upon Maze checking out. The mail fraud statute "is not intended to reach all frauds but only those in which the use of the mails is part of the scheme" (BELL, N.D. Ill. 2019, citing Schmuck v. United States, 489 U.S. 705, 710 (1989)).

However, the mailing need not be an indispensable part of the fraud; it need only "be incident to an essential part of the scheme" (BELL, N.D. Ill. 2019). Mailings that are part of an ongoing scheme, such as the mailing of deeds from county recorders' offices that allowed a fraudulent scheme to continue, can satisfy this element (UNITED STATES OF AMERICA, Plaintiff, v. CHARLES C. HEAD, JEREMEY M. HEAD, Defendants. (E.D. Cal., 2013)). Conversely, mailings that serve to disclose or oppose the fraud, rather than execute it, will not suffice (UNITED STATES OF AMERICA, APPELLEE, v. VIVIAN K. LEYDEN, APPELLANT. (8th Cir., 1988), discussing United States v. Bonansinga, 773 F.2d 166 (7th Cir. 1985)).

Importantly, for substantive mail fraud, "there is no need to prove the intent of the defendant to use the mails. It is sufficient to show that the mailings were in furtherance of the scheme, and were caused by the defendants" (UNITED STATES v. CRAIG, 573 F.2d 455, 486 (7th Cir. 1977)). The defendant need not personally mail the item; it is enough if they "knowingly cause[] to be delivered by mail" or if such use is reasonably foreseeable (18 U.S.C. § 1341; UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE, v. STEPHEN JAMES STAPLETON (9th Cir., 2002)).

Elements of Federal Conspiracy (18 U.S.C. § 371)

The general federal conspiracy statute, 18 U.S.C. § 371, makes it a crime for "two or more persons [to] conspire either to commit any offense against the United States, or to defraud the United States...and one or more of such persons do any act to effect the object of the conspiracy" (U.S. v. OCHS, 1988). A conviction for conspiracy under 18 U.S.C. § 371 generally requires the government to prove beyond a reasonable doubt: (1) an agreement between two or more persons; (2) to commit a crime against the United States (the unlawful object); and (3) an overt act committed by one of the conspirators in furtherance of the agreement (U.S. v. Moser, 1997, citing United States v. Krenning, 93 F.3d 1257, 1262 (5th Cir. 1996)).

The "essence of the crime of conspiracy is an agreement to commit such an offense" (UNITED STATES v. CRAIG, 1977). Conspiracy is an inchoate offense, meaning it criminalizes the agreement itself, even if the underlying crime is not successfully completed (UNITED STATES v. FEOLA, 420 U.S. 671 (1975), "Complex Concepts Simplified" section).

Synthesizing Conspiracy and Mail Fraud

Conspiracy to commit mail fraud combines these two sets of elements. As stated in U.S. v. MASSEY (827 F.2d 995, 1001 (5th Cir., 1987)), "Conspiracy to commit mail fraud ... is a different offense from the crime of mail fraud.... The crime of conspiracy can be established without proof of actual use of the mails."

To establish conspiracy to commit mail fraud, the government must prove:

  • An agreement between two or more persons to participate in a scheme to defraud (U.S. v. MASSEY (Fifth Circuit), 1987; UNITED STATES v. CRAIG, 1977).
  • That the defendant knowingly and willingly became a member of this conspiracy with an intention to further it (U.S. v. SIMS, 329 F.3d 937 (7th Cir. 2003); U.S. v. Pace, 2009). This requires a specific intent to defraud (U.S. v. Pace, 2009, citing U.S. v. Ham, 998 F.2d 1247, 1254 (4th Cir. 1993)).
  • That the scheme reasonably contemplated the use of the mail, or that the nature of the scheme was such that the use of the mail was reasonably foreseeable, or that the conspirators intended that the mails be used in furtherance of the scheme (U.S. v. MASSEY (Fifth Circuit), 1987; UNITED STATES v. CRAIG, 1977; U.S. v. SIMS (Seventh Circuit), 2003).
  • That at least one conspirator committed an overt act in furtherance of the conspiracy (U.S. v. SIMS (Seventh Circuit), 2003).

Crucially, for conspiracy to commit mail fraud, "culpability ... requires only that one agree with others to commit the acts which constitute the substantive offense of mail fraud, i. e. one must agree to participate in a scheme to defraud in which the reasonably foreseeable use of the mails in furtherance of the scheme is caused by a co-schemer/co-conspirator" (UNITED STATES v. CRAIG, 1977). Proof of a specific intent to use the mails is not required for the conspiracy charge (UNITED STATES v. CRAIG, 1977; U.S. v. SMITH, 934 F.2d 270, 275 (11th Cir. 1991); United States v. Solakyan (9th Cir., 2024)). This aligns with the Supreme Court's reasoning in UNITED STATES v. FEOLA (1975), which held that for conspiracy to assault a federal officer, knowledge of the victim's federal status was not required if the substantive offense did not require such knowledge. By analogy, if the substantive mail fraud offense does not require specific intent to use the mails (only that they were foreseeably used in furtherance), then the conspiracy to commit mail fraud similarly does not require a heightened intent regarding the mail element beyond its reasonable foreseeability in executing the agreed-upon fraudulent scheme. As the Ninth Circuit affirmed in United States v. Solakyan (2024), "A conspiracy to commit mail fraud does not require a higher showing of intent than the underlying substantive charge."

Furthermore, principles of vicarious liability apply. "Like co-conspirators, 'knowing participants in the scheme are legally liable' for their co-schemers’ use of the mails or wires" (UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE, v. STEPHEN JAMES STAPLETON (9th Cir., 2002)).

Key Jurisprudence and Interpretive Challenges

1. The "In Furtherance" Requirement in Conspiracy

While UNITED STATES v. MAZE (1974) limits the "in furtherance" element for substantive mail fraud, for a conspiracy charge, the focus is on the agreement. The agreement must be to a scheme where mailings that would qualify as "in furtherance" (i.e., integral to executing the scheme, not merely incidental or after its fruition) are reasonably foreseeable. For instance, in U.S. v. SMITH (11th Cir., 1991), the defendant's substantive mail fraud convictions were overturned because the mailing (an internal accounting copy) occurred after Smith had received the insurance payout and was not deemed "in furtherance." However, his conspiracy conviction was affirmed, implying the agreement to the fraudulent scheme, where some use of mails was foreseeable in the insurance claim process, was sufficient for the conspiracy charge, even if the specific mailing relied upon for the substantive count failed.

2. Scope of "Property" and its Impact

The definition of "property" remains a critical threshold. As established in McNALLY v. UNITED STATES (1987) and discussed in U.S. v. SCHWARTZ (1991) in the context of wire fraud, if the object of the fraudulent scheme does not constitute "money or property" under the statute, then a mail fraud charge (and consequently, a conspiracy to commit mail fraud charge) cannot be sustained on that basis. SCHWARTZ found that government-issued export licenses, being regulatory tools, did not qualify as "property." While 18 U.S.C. § 1346 later expanded the definition of fraud to include "honest services" fraud, the fundamental requirement of a scheme to defraud of either money, property, or honest services remains.

3. Evidentiary Issues and Distinctions

Proving a conspiracy often relies on circumstantial evidence and the testimony of co-conspirators or informants. Courts have held that juries are entitled to believe such testimony even if the witnesses have questionable backgrounds (UNITED STATES v. ANDERSON, 642 F.2d 281 (9th Cir., 1981)).

A notable aspect is that a defendant can be convicted of conspiracy to commit mail fraud even if acquitted of the underlying substantive mail fraud charges (U.S. v. SIMS (Seventh Circuit), 2003). This is because, as U.S. v. MASSEY (Fifth Circuit) (1987) highlights, the offenses are distinct; conspiracy focuses on the agreement and an overt act, while the substantive offense requires the completed act of using the mails in furtherance of the scheme. The evidence sufficient for one may not be sufficient for the other, or a jury might exercise lenity. For example, in U.S. v. SMITH (11th Cir., 1991), the evidence was insufficient for the substantive mail fraud counts due to the nature of the specific mailings, but sufficient for the conspiracy conviction. Cases like United States v. Verasawmi (3d Cir., 2019) and United States v. Fleifel (5th Cir., 2017) illustrate convictions for both conspiracy to commit mail fraud and substantive mail fraud counts, often involving complex schemes.

State Law Considerations

While this analysis has centered on U.S. federal law, it is important to acknowledge that individual states have their own statutes criminalizing fraud and conspiracy. These state laws may define the elements of these offenses differently, including the types of fraudulent schemes covered, the requisite intent, and the specific requirements for use of mail or other communication systems. The principles of agreement and overt act for conspiracy are common, but variations in the definition of the underlying fraud can lead to different outcomes under state versus federal law. The provided reference materials, however, focus almost exclusively on federal jurisprudence, thereby limiting a detailed comparative analysis with state law in this article.

Conclusion

Conspiracy to commit mail fraud under U.S. federal law is a complex charge that hinges on proving an agreement to engage in a fraudulent scheme where the use of the U.S. mails is a reasonably foreseeable part of executing that scheme, coupled with an overt act by a conspirator. The prosecution does not need to prove that the defendant personally used the mails or specifically intended that the mails be used, only that such use was foreseeable in the context of the agreed-upon scheme. The distinction between the inchoate crime of conspiracy and the completed substantive offense of mail fraud is critical, allowing for convictions on conspiracy even when substantive counts may fail or are not charged.

Key jurisprudential developments, particularly regarding the "in furtherance" requirement for mailings and the definition of "property," continue to shape the application of these statutes. Cases like MAZE and SCHWARTZ provide essential boundaries, while FEOLA and its progeny clarify the intent standards for conspiracy relative to substantive offenses. Ultimately, the robust framework of 18 U.S.C. § 371 and § 1341, as interpreted by federal courts, provides a powerful tool for prosecuting coordinated fraudulent activities that exploit the U.S. mail system.