TITLE 18 > PART I > CHAPTER 63 > § 1341
§ 1341. Frauds and swindles
Mail Fraud Laws
The United States Postal Service (USPS) has jurisdiction when money is sent through the mail for products or services. Postal inspection offices exist in many cities, with about 500 inspectors available to investigate all types of mail frauds. Attorneys in the civil practice section of the agency’s law department and postal inspectors with law degrees are available to prosecute cases. The case selection process is decentralized, so that different types of cases are emphasized in different regions of the country.
Title 39, Section 3005, of the United States Code can be used to block promoters of misleading schemes from receiving money through the mail. If sufficient health hazard or economic detriment exists, an immediate court order to impound mail may be sought under Section 3007 of the code. However, the Postal Service cannot proceed unless the Justice Department approves such action or takes the case itself.
Title 18, Section 1341, provides for criminal prosecution but requires proof of intent to deceive. The maximum penalties are 5 years in prison and a fine for each instance proved. The 1984 Criminal Fine Enhancement Act allows fines of up to $100,000 (or $250,000 if death results) per offense for up to two offenses. However, criminal prosecution is rarely used in cases involving mail-order health products because (a) administrative procedures are simpler and quicker and (b) intent to deceive is difficult to prove when a perpetrator pretends to believe that the product works. The Postal Service does not have jurisdiction when companies take credit card orders by telephone and deliver through private carriers such as United Parcel Service. However, the Justice Department may seek such an injunction under Section 1345, which allows federal district courts to enjoin acts of mail and wire fraud.
When a mail fraud is detected, postal attorneys can file a complaint or seek an agreement with the perpetrator. When a complaint is contested, a hearing is held by an administrative law judge assigned to the Postal Service. If the evidence is sufficient, this judge will recommend that the Postal Service issue a False Representation Order (FRO) blocking money sent through the mail in response to the misleading ads. Although the order can be appealed to the courts, very few companies do this. Each voluntary agreement and FRO is accompanied by a cease-and-desist order that forbids both the challenged acts and similar acts. Under the Mail Order Consumer Protection Amendments of 1983, if this order is violated, the agency can seek a civil penalty in federal court of up to $11,000 per day for each violation.
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, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, 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, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
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http://www.casewatch.org/usps/postallaws.shtmlTITLE 18 > PART I > CHAPTER 63 > § 1346
§ 1346. Definition of “scheme or artifice to defraud”
For the purposes of this chapter, the term “scheme or artifice to defraud” includes a scheme or artifice to deprive another of the intangible right of honest services.
http://www.law.cornell.edu/uscode/18/usc_sec_18_00001341----000-.html
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