About Mail Fraud

From the career criminal's perspective, getting something for nothing is best achieved by surreptitious means. Why use brute force, when a time-honored scam will reap more consistent results?
Enter the mail fraud artist, whose boundless criminal creativity provides an awesome task for police agencies looking to shut down their operations. Greater challenges loom in the Internet era, which makes the list of potential victims--and variations of crimes designed to fleece them--available at the click of a mouse.

History

Simply stated, mail fraud can be defined as unlawfully using the postal system to gain money or valuables. King Charles II, of Britain, is credited with founding the first postal inspection system in 1660 to address complaints against corrupt mail carriers for pocketing monies they received for transporting the letters they had already delivered. Benjamin Franklin served as the first American postal inspector in 1737, a job he lost in 1774, when he dared to criticize the British Crown's imposition of the Stamp Act. However, Franklin enjoyed the last laugh, when the newly-minted Continental Congress rehired him a year later, enabling him to create the first American postal inspection system. By the 19th century, problems associated with "get rich quick" schemes had reached epidemic proportions--to the point where Congress decided that something had to be done, even in an era of so-called "robber baron" capitalism.

Time Frame

President Ulysses S. Grant was among the more prominent victims of 19th century fraud.

First passed in 1872, Sections 1341, 1342 and 1345 Title 18 of the U.S. Code create the bedrock of the U.S. Postal Inspection Service's enforcement powers. The powers are broad, and can include seizure of items deemed illegal, or questionable, even to the extent of cigarettes bought online to circumvent the user's own state taxes. For those implicated in frauds or swindles, Section 1341 provides penalties of up to 30 years in prison, and fines of up to $1 million. Congress has also toughened this language several times, as well. In 1989, the statute expanded to cover crimes against financial institutions. A 1990 amendment boosted maximum prison terms from 20 to 30 years, and in 1994, Congress included frauds that involved such private mail carriers as Federal Express.

Types

An example of a scam email purporting to come from Paypal.

Mail fraud scams are staggering in variety and complexity. Some of the simplest scams are misrepresenting or failing to deliver big ticket items, for which the fraud artist collects their money upfront. This approach seamlessly translated to the online auction world, particularly on sites like eBay. Still other scams rely on a cloak of legitimacy, such as the official-looking invoice that demands payment for nonexistent goods and services, or Cash On Delivery for items that were never shipped. The same holds true for official-looking "promotional" checks that contain slippery fine print allowing unauthorized costs to be rung up against the unwary user. These types of frauds are based on the idea that a recipient harried by life's pressures and demands will not bother to check closely, or cough up the amount to avoid the hassle. In other cases, online and printed letters will claim unauthorized access to a person's bank account, or solicit money for fraudulent or nonexistent charities. These types of frauds are only as limited as the scammers' imaginations.

Effects

A mugshot of Charles Ponzi, credited with inventing the modern pyramid scheme.

As Internet access becomes increasingly common, scam artists can refine their pitches and target audiences--all literally at the click of a mouse, without ever having to leave home. From a law enforcement standpoint, the 1990s and 2000s have seen mail fraud scams grow in scope and complexity. An example is the overpayment scam, frequently originating from the corrupt African nation of Nigeria,, which targets sellers of large consumer items like cars. On a pretext, the scammer writes a check for a greater amount than the true value, and asks the recipient to wire back the difference. The check turns out to be bogus, leaving recipients liable for the full amount. The Internet has given new life to pyramid schemes, sometimes called "Ponzi scams," whose victims are asked to invest four or five-figure sums of money in a vaguely defined venture, and recruits others to participate. What little money remains goes to the initial recruits, while those further down the pyramid get nothing.

Warning

Law enforcement agencies rely on boosting public awareness of mail fraud to stop scammers before they start, as well as gain information on newly-minted or revived schemes that may be making the rounds. Due to the sheer volume of mail fraud scams, police and postal inspectors must make hard decisions on where to dedicate time and resources. This is partially because more mail fraud rings are operating from Canada, Mexico and other territories outside of the U.S., a situation that effectively keeps them beyond the American authorities' reach. Law enforcement officials also caution victims that, unless their losses are significant enough to warrant further civil or restitution action against a defendant, their hopes of recouping such losses may be unrealistic or logistically impossible.

Resources

• Mail Fraud Complaint Form
• U.S. Postal Inspection Service Website
• History Of Mail Fraud