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Title: Internet Fraud, Access Device Fraud, Threatening Communications, and Interstate Stalking


1
Internet Fraud, Access Device Fraud,
Threatening Communications, and Interstate
Stalking
  • Sean B. Hoar
  • sean.hoar_at_usdoj.gov
  • 541-465-6792 (voice)
  • 541-465-6840 (fax)

2
18 U.S.C. 1343Internet (Wire) Fraud
  • Text of statute
  • 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, transmits or causes to be transmitted
    by means of wire, radio, or television
    communication in interstate or foreign commerce,
    any writings, signs, signals, pictures, or sounds
    for the purpose of executing such scheme or
    artifice, shall be fined under this title or
    imprisoned not more than 20 years, or both. If
    the violation affects a financial institution,
    such person shall be fined not more than
    1,000,000 or imprisoned not more than 30 years,
    or both.

3
Elements of 18 U.S.C. 1343Internet (Wire) Fraud
  • First, the defendant devised a scheme or plan to
    obtain money by making false promises or
    statements
  • Second, the defendant knew that the promises or
    statements were false
  • Third, the promises or statements were material,
    in that they would reasonably influence a person
    to part with money
  • Fourth, the defendant acted with the intent to
    defraud and
  • Fifth, the defendant transmitted or caused to be
    transmitted in interstate commerce a wire
    communication, to wit an electronic
    communication via the Internet, to carry out or
    attempt to carry out an essential part of the
    scheme.

4
18 U.S.C. 1343Internet (Wire) Fraud
  • Types of Internet fraud
  • Auction fraud
  • shill bidding
  • Non-delivery of merchandise
  • Investment fraud
  • Stock pump dump fraud
  • Ponzi/pyramid schemes
  • Phisher scams
  • Nigerian scams
  • Business opportunities Get Rich Quick schemes
  • Many others . . . any fraud facilitated by the
    Internet

5
United States Sentencing Guidelines
  • Offense Level
  • Base Offense Level
  • Specific Offense Characteristics
  • Cross References
  • Aggravating/Mitigating Factors
  • Acceptance of Responsibility
  • Departures
  • Total Offense Level
  • Criminal History Category
  • Applicable Advisory Sentencing Guideline Range

6
Sentencing Guidelines for Internet Fraud
  • U.S.S.G. 2B1.1. Larceny, Embezzlement, and
    Other Forms of Theft Offenses Involving Stolen
    Property Property Damage or Destruction Fraud
    and Deceit Forgery Offenses Involving Altered
    or Counterfeit Instruments Other than Counterfeit
    Bearer Obligations of the United States
  • (a) Base Offense Level
  • 7, if the offense of conviction has a statutory
    maximum penalty of 20 years or more.
  • 6, otherwise.

7
Sentencing Guidelines -- Actual penalties under
the sentencing guidelines --
  • Actual guideline ranges are based primarily on
    the amount of loss (U.S.S.G. 2B1.1) prior to
    adjustments, the lowest guideline ranges based on
    ranges of loss are as follows
  • If more 5,000 or less 0-6 months
  • If more than 5,000 but less than 10,000 4-10
    months
  • If more than 10,000 but less than 30,000 8-14
    months
  • If more than 30,000.00 but less than 70,000.00
    12-18 months
  • If more than 70,000.00 but less than
    120,000.00 18-24 months
  • If more than 120,000.00 but less than
    200,000.00 24-30 months
  • If more than 200,000.00 but less than
    400,000.00 30-37 months
  • If more than 400,000.00 but less than
    1,000,000.00 37-46 months
  • If more than 1,000,000.00 but less than
    2,500,000.00 46-57 months
  • If more than 2,500,000.00 but less than
    7,000,000.00 57-71 months
  • If more than 7,000,000.00 but less than
    20,000,000.00 70-87 months
  • If more than 20,000,000.00 but less than
    50,000,000.00 87-108 months
  • If more than 50,000,000.00 but less than
    100,000,000.00 108-135 mos
  • If more than 100,000,000.00 but less than
    200,000,000.00 135-168 mos
  • If more than 200,000,000.00 but less than
    400,000,000.00 168-210 mos
  • If more than 400,000,000.00 210-262 months
  • Even if there is no loss, however, the "floor" or
    minimum applicable guideline range, prior to
    other adjustments, will be 10-16 months in prison
    if certain circumstances exist. U.S.S.G.
    2B1.1(b)(10).

8
Sentencing Guidelines -- multiple victim
enhancement --
  • U.S.S.G. 2B1.1(b) Specific Offense
    Characteristics -- multiple victim enhancement
  • (2) (Apply the greater) If the offense
  • (A)(i) involved more than 10, but less than 50
    victims, or (ii) was committed through
    mass-marketing, increase by 2 levels or
  • (B) involved 50 or more, but less than 250
    victims, increase by 4 levels
  • (C) involved 250 or more victims, increase by 6
    levels.

9
Sentencing Guidelines -- multiple victim
enhancement --
  • Victim means any person who sustained any part
    of the actual loss. Person includes
    individuals, corporations, companies, etc.
    U.S.S.G. 2B1.1, comment. (n. 1).
  • Actual loss means the reasonably foreseeable
    pecuniary harm that resulted from the offense.
    Reasonably foreseeable pecuniary harm means
    pecuniary harm that the defendant knew or
    reasonably should have known was a potential
    result of the offense. U.S.S.G. 2B1.1,
    comment. (n. 3(A)).

10
Sentencing Guidelines -- breeder document
enhancement--
  • Even if there is no loss, however, pursuant to
    U.S.S.G. 2B1.1(b)(10), the "floor" or minimum
    applicable guideline range, prior to other
    adjustments, will be offense level 12 (10-16
    months in prison) if the offense involves
  • The possession or use of any device- making
    equipment
  • The production or trafficking of any unauthorized
    access or counterfeit access device
  • The unauthorized transfer or use of any means of
    identification unlawfully to produce or obtain
    any other means of identification
  • The possession of five (5) or more means of
    identification that unlawfully were produced
    from, or obtained by the use of, another means of
    identification
  • If the guideline range is already at least 10-16
    months, then a two level increase is appropriate.
    U.S.S.G. 2B1.1(b)(10).

11
Sentencing Guidelines misrepresentation
enhancement --
  • If the resulting offense level is less than 10,
    increase to 10, or otherwise increase by 2 levels
    if the misrepresentation is
  • that defendant was acting on behalf of a
    charitable, educational, religious, or political
    organization, or government agency
  • during the course of a bankruptcy proceeding
  • a violation of judicial or administrative order
  • to a consumer in connection with obtaining,
    providing, or furnishing financial assistance for
    an institution of higher education
  • U.S.S.G. 2B1.1(b)(8).

12
Sentencing Guidelines relocation or
sophisticated means enhancement --
  • If the resulting offense level is less than 12,
    increase to 12, or otherwise increase by 2 levels
    if
  • the defendant relocated fraudulent scheme to
    another jurisdiction to evade law enforcement or
    regulatory officials
  • A substantial part of scheme occurred outside
    United States
  • The offense otherwise involved sophisticated
    means
  • U.S.S.G. 2B1.1(b)(9)

13
Sentencing Guidelines-- financial impact
enhancement --
  • (13) (Apply the greater) If
  • (A) the defendant derived more than 1,000,000 in
    gross receipts from one or more financial
    institutions as a result of the offense, increase
    by 2 levels or
  • (B) the offense (i) substantially jeopardized the
    safety and soundness of a financial institution
    (ii) substantially endangered the solvency or
    financial security of an organization that, at
    any time during the offense, (I) was a publicly
    traded company or (II) had 1,000 or more
    employees or (iii) substantially endangered the
    solvency or financial security of 100 or more
    victims, increase by 4 levels.
  • (C) The cumulative adjustments from application
    of both subsections (b)(2) and (b)(12)(B) shall
    not exceed 8 levels, except as provided in
    subdivision (D).
  • (D) If the resulting offense level determined
    under subdivision (A) or (B) is less than level
    24, increase to level 24.

14
Sentencing Guidelines -- Role adjustments
aggravating role --
  • 3B1.1. Aggravating Role -- Based on the
    defendants role in the offense, increase the
    offense level as follows
  • (a) If the defendant was an organizer or leader
    of a criminal activity that involved five or more
    participants or was otherwise extensive, increase
    by 4 levels.
  • (b) If the defendant was a manager or supervisor
    (but not an organizer or leader) and the criminal
    activity involved five or more participants or
    was otherwise extensive, increase by 3 levels.
  • (c) If the defendant was an organizer, leader,
    manager, or supervisor in any criminal activity
    other than described in (a) or (b), increase by 2
    levels.

15
Sentencing Guidelines -- Role adjustments
mitigating role --
  • 3B1.2. Mitigating Role -- Based on the
    defendants role in the offense, decrease the
    offense level as follows
  • (a) If the defendant was a minimal participant in
    any criminal activity, decrease by 4 levels.
  • (b) If the defendant was a minor participant in
    any criminal activity, decrease by 2 levels.
  • In cases falling between (a) and (b), decrease by
    3 levels.

16
Sentencing Guidelines -- Abuse of trust/special
skill --
  • 3B1.3. Abuse of Position of Trust or Use of
    Special Skill
  • If the defendant abused a position of public or
    private trust, or used a special skill, in a
    manner that significantly facilitated the
    commission or concealment of the offense,
    increase by 2 levels. This adjustment may not be
    employed if an abuse of trust or skill is
    included in the base offense level or specific
    offense characteristic. If this adjustment is
    based upon an abuse of a position of trust, it
    may be employed in addition to an adjustment
    under 3B1.1 (Aggravating Role) if this
    adjustment is based solely on the use of a
    special skill, it may not be employed in addition
    to an adjustment under 3B1.1 (Aggravating Role).

17
Indictments
  • Allege all statutory subsections in heading
  • Track statutory elements
  • Include penalty subsections
  • Include forfeiture count when applicable

18
Credit Card Fraud
  • Credit card fraud, encompassed in the broader
    definition of access device fraud, is
    prohibited by 18 U.S.C. 1029.

19
Text of 18 U.S.C. 1029(a)(1)Production, use, or
trafficking in counterfeit access devices
  • (a) Whoever--
  • (1) knowingly and with intent to defraud
    produces, uses, or traffics in one or more
    counterfeit access devices
  • shall, if the offense affects interstate or
    foreign commerce, be punished as provided in
    subsection (c) of this section.

20
Definition of access device
  • The term "access device" means any card, plate,
    code, account number, electronic serial number,
    mobile identification number, personal
    identification number, or other
    telecommunications service, equipment, or
    instrument identifier, or other means of account
    access that can be used, alone or in conjunction
    with another access device, to obtain money,
    goods, services, or any other thing of value, or
    that can be used to initiate a transfer of funds
    (other than a transfer originated solely by paper
    instrument). 18 U.S.C. 1029(e)(1).

21
Definitions of counterfeit access device and
unauthorized access device
  • The term "counterfeit access device" means any
    access device that is counterfeit, fictitious,
    altered, or forged, or an identifiable component
    of an access device or a counterfeit access
    device. 18 U.S.C. 1029(e)(2).
  • The term "unauthorized access device" means any
    access device that is lost, stolen, expired,
    revoked, canceled, or obtained with intent to
    defraud. 18 U.S.C. 1029(e)(3).

22
Elements of 18 U.S.C. 1029(a)(1) Production,
use, or trafficking in counterfeit access devices
  • First, the defendant knowingly used, produced, or
    trafficked in a counterfeit access device
  • Second, the defendant acted with intent to
    defraud
  • Third, the defendants conduct in some way
    affected commerce between one state and another
    state, or between a state or the United States
    and a foreign country.

23
Text of 18 U.S.C. 1029(a)(2)Using or
trafficking in unauthorized access devices
  • (a) Whoever--
  • (2) knowingly and with intent to defraud traffics
    in or uses one or more unauthorized access
    devices during any one-year period, and by such
    conduct obtains anything of value aggregating
    1,000 or more during that period
  • shall, if the offense affects interstate or
    foreign commerce, be punished as provided in
    subsection (c) of this section.

24
Elements of 18 U.S.C. 1029(a)(2) Using or
trafficking in unauthorized access devices
  • First, the defendant knowingly used or trafficked
    in one or more unauthorized access devices at any
    time during a one-year period
  • Second, by using or trafficking in the
    unauthorized access devices during that period,
    the defendant obtained anything of value
    aggregating 1,000 or more during that period
  • Third, the defendant acted with intent to
    defraud
  • Fourth, the defendants conduct in some way
    affected commerce between one state and another
    state, or between a state or the United States
    and a foreign country.

25
Section 1029 also proscribes a variety of other
access device fraud
  • knowingly and with intent to defraud possesses
    fifteen or more devices which are counterfeit or
    unauthorized access devices 1029(a)(3)
  • knowingly, and with intent to defraud, produces,
    traffics in, has control or custody of, or
    possesses device-making equipment -- 1029(a)(4)

26
Section 1029 also proscribes a variety of other
access device fraud
  • knowingly and with intent to defraud effects
    transactions, with one (1) or more access devices
    issued to another person or persons, to receive
    payment or any other thing of value during any
    1-year period the aggregate value of which is
    equal to or greater than 1,000 -- 1029(a)(5)
  • without the authorization of the issuer of the
    access device, knowingly and with intent to
    defraud solicits a person for the purpose of (A)
    offering an access device or (B) selling
    information regarding or an application to obtain
    an access device -- 1029(a)(6)

27
Section 1029 also proscribes a variety of other
access device fraud
  • knowingly and with intent to defraud uses,
    produces, traffics in, has control or custody of,
    or possesses a telecommunications instrument that
    has been modified or altered to obtain
    unauthorized use of telecommunications services
    -- 1029(a)(7)
  • knowingly and with intent to defraud uses,
    produces, traffics in, has control or custody of,
    or possesses a scanning receiver -- 1029(a)(8)

28
Section 1029 also proscribes a variety of other
access device fraud
  • knowingly uses, produces, traffics in, has
    control or custody of, or possesses hardware or
    software, knowing it has been configured to
    insert or modify telecommunication identifying
    information associated with or contained in a
    telecommunications instrument so that such
    instrument may be used to obtain
    telecommunications service without authorization
    -- 1029(a)(9)

29
Section 1029 also proscribes a variety of other
access device fraud
  • without the authorization of the credit card
    system member or its agent, knowingly and with
    intent to defraud causes or arranges for another
    person to present to the member or its agent, for
    payment, one or more evidences or records of
    transactions made by an access device --
    1029(a)(10)

30
Attempt/conspiracy provisions for 18 U.S.C.
1029
  • Whoever attempts to commit an offense under
    subsection (a) of this section shall be subject
    to the same penalties as those prescribed for the
    offense attempted -- 1029(b)(1)
  • Whoever is a party to a conspiracy of two or more
    persons to commit an offense under subsection (a)
    of this section, if any of the parties engages in
    any conduct in furtherance of such offense, shall
    be fined an amount not greater than the amount
    provided as the maximum fine for such offense
    under subsection (c) of this section or
    imprisoned not longer than one-half the period
    provided as the maximum imprisonment for such
    offense under subsection (c) of this section, or
    both -- 1029(b)(2)

31
Penalties for 18 U.S.C. 1029
  • (c)(1) Penalties generally --
  • (A) in the case of an offense that does not occur
    after a conviction for another offense under this
    section--
  • (i) if the offense is under paragraph (1), (2),
    (3), (6), (7), or (10) of subsection (a), a fine
    under this title or imprisonment for not more
    than 10 years, or both and
  • (ii) if the offense is under paragraph (4), (5),
    (8), or (9), FN1 of subsection (a), a fine
    under this title or imprisonment for not more
    than 15 years, or both
  • (B) in the case of an offense that occurs after a
    conviction for another offense under this
    section, a fine under this title or imprisonment
    for not more than 20 years, or both and
  • (C) in either case, forfeiture to the United
    States of any personal property used or intended
    to be used to commit the offense.

32
Sentencing guidelines for 18 U.S.C. 1029
  • Same sentencing guidelines section as used for
    identity theft and other fraud-related cases
    U.S.S.G. 2B1.1
  • Special rule for determining loss for stolen or
    counterfeit credit cards
  • Loss includes any unauthorized charges and shall
    not be less than 500 per access device. U.S.S.G.
    2B1.1,comment.(n.3(F)(i)).

33
Sentencing guidelines for 18 U.S.C. 1029
-- enhancement for production or trafficking in
access devices --
  • U.S.S.G. 2B1.1(b) Specific Offense
    Characteristics (continued) enhancement for
    production or trafficking in access devices
  • (9) If the offense involved (A) the possession or
    use of any device-making equipment (B) the
    production or trafficking of any unauthorized
    access device or counterfeit access device or
    (C)(i) the unauthorized transfer or use of any
    means of identification unlawfully to produce or
    obtain any other means of identification or (ii)
    the possession of 5 or more means of
    identification that unlawfully were produced
    from, or obtained by the use of, another means of
    identification, increase by 2 levels. If the
    resulting offense level is less than level 12,
    increase to level 12.

34
18 U.S.C. 875(c)Threatening Communications
  • Text of statute
  • Whoever transmits in interstate or foreign
    commerce any communication containing any threat
    to kidnap any person or any threat to injure the
    person of another, shall be fined under this
    title or imprisoned not more than five years, or
    both.

35
Elements of 18 U.S.C. 875(c) Threatening
Communications
  • First, the defendant must cause a transmission in
    interstate or foreign commerce
  • Second, the communication must contain a threat
    which a reasonable person would take as a serious
    expression of an intention to inflict bodily harm
    and would perceive as being communicated to
    effect some change or achieve some goal through
    intimidation
  • Third, the threat must be a threat to injure or
    kidnap the person of another. United States v.
    Alkhabaz, 104 F.3d 1492, 1494 (1997). See also
    United States v. LeVison, 418 F.2d 624, 626 (9th
    Cir.1969) ("a general intent to threaten is an
    essential element of the crime").

36
Sentencing Guidelines for 18 U.S.C. 875(c)
  • The sentencing guidelines recognize that the
    seriousness of the conduct depends upon the
    defendants intent and the likelihood of the
    threat being carried out.
  • The specific offense characteristics are intended
    to distinguish such cases.

37
Sentencing Guidelines for 18 U.S.C. 875(c)
Threatening or Harassing Communications
  • U.S.S.G. 2A6.1 (a) Base Offense Level
  • 12 or
  • 6, if the defendant is convicted of an offense
    under 47 U.S.C. 223(a)(1)(C), (D), or (E) that
    did not involve a threat to injure a person or
    property

38
Sentencing Guidelines for 18 U.S.C. 875(c)
  • U.S.S.G. 2A6.1 (continued)
  • (b) Specific Offense Characteristics
  • (1) If the offense involved any conduct
    evidencing an intent to carry out such threat,
    increase by 6 levels.
  • (2) If the offense involved more than two
    threats, increase by 2 levels.
  • (3) If the offense involved the violation of a
    court protection order, increase by 2 levels.

39
Sentencing Guidelines for 18 U.S.C. 875(c)
  • U.S.S.G. 2A6.1 (continued)
  • (b) Specific Offense Characteristics
  • (4) If the offense resulted in (A) substantial
    disruption of public, governmental, or business
    functions or services or (B) a substantial
    expenditure of funds to clean up, decontaminate,
    or otherwise respond to the offense, increase by
    4 levels.
  • (5) If (A) subsection (a)(2) and subdivisions
    (1), (2), (3), and (4) do not apply, and (B) the
    offense involved a single instance evidencing
    little or no deliberation, decrease by 4 levels.

40
Text of 18 U.S.C. 2261AInterstate Stalking
  • Whoever
  • (2) with the intent--
  • (A) to kill or injure a person in another State
    or tribal jurisdiction or within the special
    maritime and territorial jurisdiction of the
    United States or
  • (B) to place a person in another State or tribal
    jurisdiction, or within the special maritime and
    territorial jurisdiction of the United States, in
    reasonable fear of the death of, or serious
    bodily injury to--
  • (i) that person
  • (ii) a member of the immediate family of that
    person or
  • (iii) a spouse or intimate partner of that
    person,
  • uses the mail or any facility of interstate or
    foreign commerce to engage in a course of conduct
    that places that person in reasonable fear of the
    death of, or serious bodily injury to, any of the
    persons described in clauses (i) through (iii),
    shall be punished as provided in section 2261(b).

41
Maximum statutory penalties for 18 U.S.C.
2261AInterstate Stalking
  • Life imprisonment if death to the victim results
  • 20 years imprisonment if permanent disfigurement
    or life threatening bodily injury to the victim
    results
  • 10 years imprisonment if serious bodily injury to
    the victim results or if the offender uses a
    dangerous weapon during the offense
  • The applicable penalty under sections 2241-2246
    (proscribing sexual abuse) if the offense would
    constitute an offense under those sections and
  • Five (5) years imprisonment in any other case
  • And/or a 250,000 fine

42
Definitions for 18 U.S.C. 2261AInterstate
Stalking
  • The term "bodily injury" means any act, except
    one done in self-defense, that results in
    physical injury or sexual abuse.

43
Definitions for 18 U.S.C. 2261AInterstate
Stalking
  • The term "serious bodily injury means bodily
    injury that involves
  • A substantial risk of death
  • Extreme physical pain
  • Protracted and obvious disfigurement or
  • Protracted loss or impairment of the functions of
    a bodily member, organ, or mental faculty

44
Definitions for 18 U.S.C. 2261AInterstate
Stalking
  • The term "course of conduct" means a pattern of
    conduct composed of two (2) or more acts,
    evidencing a continuity of purpose.

45
Definitions for 18 U.S.C. 2261AInterstate
Stalking
  • The term "spouse or intimate partner" includes--
  • (A) for purposes of
  • (ii) section 2261A, a spouse or former spouse of
    the target of the stalking, a person who shares a
    child in common with the target of the stalking,
    and a person who cohabits or has cohabited as a
    spouse with the target of the stalking and
  • (B) any other person similarly situated to a
    spouse who is protected by the domestic or family
    violence laws of the State or tribal jurisdiction
    in which the injury occurred or where the victim
    resides.

46
Elements for 18 U.S.C. 2261AInterstate Stalking
  • First, the defendant acts with the intent to kill
    or injure a person or to place a person in
    reasonable fear of the death of, or serious
    bodily injury to--
  • (i) that person
  • (ii) a member of the immediate family of that
    person or
  • (iii) a spouse or intimate partner of that person
  • Second, the defendant uses the mail or any
    facility of interstate or foreign commerce (the
    Internet) to engage in a course of conduct that
    places a person in reasonable fear of the death
    of, or serious bodily injury to and of the
    persons listed above.

47
Sentencing Guidelines for 18 U.S.C. 2261A
  • Base Offense Level 18
  • Specific Offense Characteristic
  • (1) If the offense involved one of the following
    aggravating factors (A) the violation of a court
    protection order (B) bodily injury (C)
    possession, or threatened use, of a dangerous
    weapon or (D) a pattern of activity involving
    stalking, threatening, harassing, or assaulting
    the same victim, increase by 2 levels. If the
    offense involved more than one of these
    aggravating factors, increase by 4 levels.
  • Cross Reference
  • (1) If the offense involved the commission of
    another criminal offense, apply the offense
    guideline from Chapter Two, Part A (Offenses
    Against the Person) most applicable to that other
    criminal offense, if the resulting offense level
    is greater than that determined above.

48
Questions?
49
Internet Fraud, Access Device Fraud,
Threatening Communications, and Interstate
Stalking
  • Sean B. Hoar
  • sean.hoar_at_usdoj.gov
  • 541-465-6792 (voice)
  • 541-465-6840 (fax)
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