Federal prosecutors may use phone, mail and email communications as evidence. Materials used to attract investors may raise allegations of fraud if they appear misleading.
The Federal Deposit Insurance Corporation’s website notes that fraud includes false promises of money. Communicating false promises through the phone or mail may classify as wire fraud. If the information moves across one or more state lines, the senders may face federal charges.
Money laundering charges may also result
Individuals charged with wire fraud may also face money laundering charges. The FDIC notes that U.S. laws consider proceeds received from fraudulent activity as illicit funds. Individuals generally may not deposit funds from unlawful actions into U.S. financial institutions.
When making deposits, customers may need to disclose where they received their money. Attempts to disguise the source of illicit funds may violate the law. Using money to continue promoting unlawful activities could also lead to money laundering allegations.
Arkansas residents convicted of wire fraud and money laundering
Two Arkansas residents faced charges of wire fraud and money laundering, as reported by the Arkansas Democrat-Gazette. The defendants contacted investors and claimed to have built a wind turbine prototype. They also claimed to have received a $10 million grant from the government to develop its technology.
The defendants’ claims, however, did not hold true when reviewed by the federal jury tasked with evaluating the investment materials. The court found the wind farm’s potential investment returns misleading. The defendants also deposited investors’ funds into their personal bank accounts. Placing money from an allegedly unlawful action into a U.S. bank account led to money laundering charges.
Based on the circumstances, federal prosecutors may file both wire fraud and money laundering charges. Wire fraud requires proof of false or misleading materials sent by mail or phone. Depositing proceeds obtained through an alleged fraud may result in additional money laundering charges.