Mail Fraud In Organized Crime Prosecutions
Mail Fraud in Organized Crime Prosecutions: Overview
Mail Fraud (18 U.S.C. § 1341) is a federal crime involving the use of the postal service or private interstate carriers to execute or attempt a scheme to defraud. It’s one of the most commonly charged offenses in organized crime cases because it provides a broad federal jurisdiction to combat fraudulent schemes conducted by criminal enterprises.
Key Elements of Mail Fraud
Existence of a scheme or artifice to defraud or obtain money/property by false pretenses.
Use of mail or interstate commercial carriers to execute the scheme.
Intent to defraud.
In organized crime, mail fraud often accompanies racketeering, extortion, bribery, and other offenses, and is used to prosecute complex financial and fraud schemes run by criminal groups.
Important Case Studies of Mail Fraud in Organized Crime Prosecutions
1. United States v. Gambino Crime Family (The "Mafia Extortion & Fraud Scheme") (1986)
Background:
Members of the Gambino family used the mail to send fraudulent invoices, fake contracts, and correspondence to extort money from construction companies and union pension funds.
Charges:
Mail fraud
Racketeering (RICO)
Extortion
Conspiracy
Prosecution Strategy:
Traced fraudulent mailings used to conceal and facilitate extortion.
Used informants and recorded conversations to demonstrate intent.
Combined mail fraud charges with RICO to dismantle the financial networks.
Defense Arguments:
Argued that mailings were routine business correspondence.
Denied intent to defraud or extort.
Outcome:
Convictions on mail fraud and RICO counts.
Several high-ranking members sentenced to long prison terms.
Legal Significance:
Demonstrated that routine mail use in fraudulent schemes triggers federal mail fraud jurisdiction.
Combined with RICO, mail fraud charges enhanced prosecution reach.
2. United States v. Michael Franzese and Colombo Crime Family (1985)
Background:
Michael Franzese orchestrated a large gasoline bootlegging and tax fraud scheme, involving false invoicing and fraudulent billing sent through the mail.
Charges:
Mail fraud
Tax evasion
RICO violations
Conspiracy
Prosecution Strategy:
Followed paper trails of false invoices mailed to state and federal tax authorities.
Collaborated with IRS to establish the fraud’s extent.
Witness testimony from insiders and undercover agents.
Defense Arguments:
Claimed business errors, lack of criminal intent.
Challenged IRS assessment procedures.
Outcome:
Franzese pleaded guilty to mail fraud and tax charges.
Sentenced to prison and ordered restitution.
Legal Significance:
Mail fraud used to attack financial operations underpinning organized crime.
Highlighted the importance of tax authority cooperation.
3. United States v. Eddie Antar and Crazy Eddie Electronics Fraud (1987)
Background:
Though not traditional organized crime, the Antar family’s fraudulent electronics retail chain employed organized fraud techniques, including fake shipping documents sent by mail to inflate earnings and deceive investors.
Charges:
Mail fraud
Securities fraud
Conspiracy
Prosecution Strategy:
Examined fake invoices and shipping records mailed to banks and investors.
Used forensic accounting and whistleblower testimony.
Defense Arguments:
Argued errors in accounting, no criminal intent.
Claimed miscommunication rather than fraud.
Outcome:
Convictions on mail fraud and securities fraud.
Significant prison sentences and fines.
Legal Significance:
Demonstrated that mail fraud statutes can apply broadly, including in organized white-collar criminal enterprises.
4. United States v. Gambino & Genovese Families (The "Windows Case") (1990s)
Background:
Both families rigged bids and extorted companies supplying windows to NYC public housing. Fraudulent contracts and invoices were sent via mail to public agencies and contractors.
Charges:
Mail fraud
Racketeering
Extortion
Conspiracy
Prosecution Strategy:
Tracked mailed contracts and fraudulent documents as proof of the scheme.
Used testimony of cooperating witnesses who described the mail’s role in extortion.
Conducted surveillance of mail exchanges and meetings.
Defense Arguments:
Claimed legitimate business practices and competition.
Disputed characterization of extortion.
Outcome:
Convictions on mail fraud and racketeering.
Sentences ranged from 10 to 20 years for defendants.
Legal Significance:
Reinforced mail fraud as a critical tool in prosecuting construction rackets.
5. United States v. Lucchese Crime Family (The "Garment Industry Fraud") (1997)
Background:
Members of the Lucchese family conspired to control the garment industry in NYC by fraudulently invoicing clients and submitting fake contracts through the mail.
Charges:
Mail fraud
Racketeering
Labor law violations
Conspiracy
Prosecution Strategy:
Presented evidence of mailed fraudulent contracts used to coerce payments.
Testimony from industry insiders and victims.
Wiretaps and surveillance complemented mail fraud evidence.
Defense Arguments:
Argued business disputes, not fraud.
Questioned credibility of witnesses.
Outcome:
Guilty verdicts and prison sentences for key family members.
Legal Significance:
Showed the mail fraud statute’s role in targeting labor racketeering schemes.
6. United States v. John Dioguardi et al. (1993)
Background:
Dioguardi, a reputed organized crime figure, was involved in fraudulent loan schemes targeting businesses, using the mail to send false loan applications and forged documents.
Charges:
Mail fraud
Bank fraud
Conspiracy
Prosecution Strategy:
Tracked fraudulent loan documents sent through the mail to banks.
Used undercover operations to infiltrate the scheme.
Corroborated evidence with bank officials and victims.
Defense Arguments:
Claimed transactions were legitimate loans and errors.
Denied conspiracy.
Outcome:
Convicted on mail and bank fraud charges.
Sentenced to substantial prison time.
Legal Significance:
Mail fraud statute used to prosecute fraudulent financial schemes linked to organized crime.
Summary Table of Cases
| Case | Crime Involved | Outcome | Legal Significance |
|---|---|---|---|
| Gambino Extortion Scheme (1986) | Extortion, fraudulent billing | Convictions, long sentences | Mail fraud used for extortion prosecution |
| Michael Franzese Gasoline Fraud | Tax evasion, false invoicing | Guilty plea, prison | Mail fraud supports tax-related prosecutions |
| Crazy Eddie Electronics (Antar) | Securities fraud, fake docs | Convictions, fines | Broad application of mail fraud statute |
| Windows Case (Gambino & Genovese) | Bid-rigging, extortion | Convictions, prison | Mail fraud in public housing rackets |
| Lucchese Garment Industry Fraud | Labor racketeering, fraud | Guilty verdicts, prison | Mail fraud targets labor racketeering |
| John Dioguardi Loan Fraud (1993) | Loan fraud, bank fraud | Convictions, prison | Mail fraud in fraudulent financial schemes |
Legal Insights on Mail Fraud in Organized Crime
Mail fraud allows federal prosecutors to attack a wide variety of schemes by showing the use of mail as a step in the criminal plan.
The statute’s broad scope enables prosecution of fraud involving extortion, tax evasion, securities fraud, and labor racketeering within organized crime.
Mail fraud charges often complement RICO indictments to show a pattern of criminal behavior.
The use of mail fraud also expands jurisdiction to federal courts even if the underlying fraud is local.
Defendants often argue lack of criminal intent or claim the mailings were routine business; however, evidence of fraudulent documents and false pretenses often prevails.
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