Wire transfers are commonly used to quickly transfer funds electronically from one account to another. Wire transfers are much like transferring cash – once the funds have changed hands. Also like cash, it is difficult to recover the funds if fraud has occurred.
What is Wire Transfer Fraud?
Wire fraud is a Federal crime under section 1343 of title 18 of the United States Code. That statue broadly defines wire fraud as any use of wire communications (including telephone lines, television, fax, internet, or other form of electronic communications) as part of a scheme or artifice to defraud. The statue is broadly worded so that it covers nearly any conduct involving fraud in the wiring of money.
Examples of wire fraud transactions can include:
- Telling someone a lie to induce them to send a wire transfer.
- Taking someone’s bank account information (whether by copying it from a printed statement, misappropriation by a trusted relative or employee, computer hacking or other online scam, or taking the bank account information by any other means) and wiring funds from that account without the account owner’s permission.
Depending on the facts and circumstances of a particular fraudulent wire transfer, the parties engaged in the fraud may also be charged with crimes they committed in addition to wire fraud, such as bank fraud and mail fraud.
Wire fraud is a serious federal crime punishable by hefty monetary penalties and up to 30 years in prison. It is also a state crime in most states. That means a person who commits wire fraud in some cases can face both Federal and state criminal charges.
How Can You Avoid Being the Victim of a Wire Transfer Fraud?
Once the funds have been transferred fraudulently, the funds are likely quickly transferred to other accounts, often overseas.
You can protect yourself against wire fraud by using common sense and remaining vigilant. Look for the following red flags in connection with wire transfers:
1. A stranger asks you for money. A stranger, often from a foreign country, contacts you by phone or by email and asks for money. Or perhaps you have established an online relationship with a person but you have never met face-to-face. If anyone you do not know, or a person you barely know, starts asking you for money, be on guard. If you receive an email that does not ask for money but instead asks for information, it could be a “phishing” scheme. In a phishing scheme, the scammer sends out unsolicited email messages to many thousands of people. If anyone provides the requested information, the scammer can access their bank accounts and steal the funds using wire transactions.
2. Refund excess payments. This scam occurs when you a person places a classified ad or posts an electronic ad to sell an item. A buyer contacts the seller and expresses an interest in the item. The seller and the purported buyer agree on a sales price. The buyer will send the seller a check for an amount more than the sales price, and ask the seller to wire the “excess payment” back to them. Unfortunately, the buyer’s check is likely no good, so the seller will lose the sale item and the amount refunded.
3. Pay a fee to receive prize money. In this well-known scam, a fraudster will contact you by email or phone and tell you that you’ve won a jackpot or inherited some money. In order to receive it, however, you have to pay a fee.
4. Urgent sale. You may see an ad online advertising a great deal, but you’re required to transfer the money right away to receive the product.
5. Unexpected money. You may receive a check in the mail that you were not expecting. The sender then contacts you and asks you to return the funds or the”excess funds” via wire transfer. Most likely, the wired funds are to be sent to an overseas account, and any check you received was probably no good.
6. Back taxes. You receive an email or a phone call that claims the IRS wants you to pay back taxes, and you need to transfer what you owe by wire transfer or you’ll be arrested.
7. Home purchase. If you are in the process of buying a home or real property, beware of any email from an escrow company directing you to wire funds “immediately” or “today.”
In all of these cases, note that the scammers’ messages will stress the urgency of the wire transfer.
Steps to Take If You Think You Have Been Defrauded
1. Call the police. As soon as you discover the fraud, call your local police department. They probably will not be able to help you if the wired funds were sent overseas. However, some large police departments have the resources to operate units that focus on technology crime and identity theft. Others may simply refer you to the FBI.
2. Contact the wire service that transmitted the funds. The wire service will have records showing where the funds were sent. If you report it quickly, your wire service may be able to freeze the funds and open its own investigation. In some cases they may be able to reverse the transaction, but most often they cannot, and the entire process could take several weeks or more.
3. Contact the FBI. The FBI is usually the law enforcement authority that investigates wire fraud because most wire transactions cross state lines. Go to the FBI’s Report Threats and Crime webpage and submit a report.
Contact the Experts at KPPB LAW for More Information
The best protection against being a victim of wire fraud is to think twice before you wire money to any individual or organization you do not know. If you believe you have already fallen prey to a wire fraud scheme, contact one of the experienced Litigation and Dispute Resolution attorneys at KPPB LAW. They can analyze the facts of your case and determine the best course of action for you. Contact them for more information about wire transfer fraud.