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Introduction

As the victim of a federal fraud crime, you may suffer financial and emotional harm and even medical problems relating to your victimization. And you are not alone. As many as 24 million people in the United States are victims of fraud crimes each year, according to a 1994 Department of Justice research report. The estimated cost of those crimes is more than $45 billion annually.

What is fraud? Fraud occurs when a person or business intentionally deceives another with promises of goods, services, or financial benefits that do not exist, were never intended to be provided, or were misrepresented. Typically, victims give money but never receive what they paid for.

Who are the victims of fraud? Virtually anyone can fall prey to fraudulent crimes. Con artists do not pass over anyone due to such factors as a person's age, finances, educational level, gender, race, culture, disability, or geographic location. And they do target certain groups based those factors.

Why are fraud crimes underreported? Although fraud victims are not alone, they often suffer their losses alone and in silence. Shame, guilt, embarrassment, and disbelief are among the reasons that only an estimated 15 percent of the nation's fraud victims report their crimes to law enforcement. Other reasons include victims' doubt about their own judgment, a sense of betrayal, and fears about how their family members, friends, and business associates will react. Some victims feel their losses are not large enough to report, do not want to get involved, think law enforcement agencies will not take the crime seriously, or think nothing will result from reporting the crime. Many victims feel they have only themselves to blame. In reality, calculating, skilled perpetrators are to blame for these criminal acts.

Who commits fraud crimes? Like their victims, fraud criminals vary educationally, socially, geographically, and financially. The image of fly-by-night con artists depicted in the news media does not describe most fraud criminals. Most con artists make a career of their criminal activities. Some even join professional organizations to legitimize their schemes and project a respectable front.

What makes your case a federal matter? Fraud crimes can be prosecuted at either the state or federal level, depending on a number of factors:

• Type of fraud scheme and amount of money stolen
• Laws violated (federal, state, or both)
• Method of operation
• Use of public services (such as the U.S. Postal Service, telecommunications systems, and Medicare) that fall under federal or state regulation and authority
• Location of the crime (within a state or across state or national borders)

What are some common types of fraud? The weapon of choice for fraud criminals is not a gun or a knife. Rather, it is most often a telephone, letter, glossy publication, or brochure offering free vacations, merchandise, investment opportunities, or services. Not all frauds involve the direct selling of goods to consumers. Some frauds target institutions or businesses.

These are examples of federal fraud crimes:

• Telemarketing fraud (telephone solicitation for phony goods or services)
• Mail fraud
• Health care and insurance fraud
• Pension and trust fund fraud
• Credit card and check fraud (including fraud by impersonation resulting from theft of mail or credit cards)
• Fraud related to securities, commodities, and other investments
• Banking fraud
• Embezzlement
• Pyramid schemes
• Advance fee schemes
• Internet fraud

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