Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
First Circuit Adds to Split On Whether Use of the Internet Is ‘Interstate Commerce’
We tend to look past the distinction between the mail and wire fraud statutes, but a recent First Circuit decision reminds us that the distinction can be very important. The mail fraud statute (18 U.S.C. §1341), successor to a law enacted in 1872, derives from congress’s authority to “establish post offices” (U.S. Const., Art. I, Section 8, cl. 7).
The wire fraud statute (18 U.S.C. §1343), enacted in 1952, derives from congress’s power to “regulate commerce with foreign nations, and among the several states” (U.S. Const., Art. I, Section 8, cl. 3). To prove wire fraud the government must ordinarily show that communications crossed state or national lines in furtherance of a scheme, whereas to prove mail fraud the government needs to prove only use of the mail, even between two people in the same state, in furtherance of a scheme.
The internet is generally viewed as inherently interstate in nature, but courts have reached different conclusions as to whether use of the internet by itself satisfies the “interstate commerce” requirement in criminal statutes, or something more is needed.
In cases involving child pornography, the First, Third and Fifth Circuits have held that use of the internet by itself sufficient evidence of transmission in interstate commerce. In contrast, the Ninth Circuit requires proof that a communication concerning the transmission of child pornography moved from a server in one state to a server in another state.
In this article, after discussing the circuit split, we turn to the First Circuit’s January 2025 decision in United States v. O’Donovan, 126 F.4th 17 (1st Cir. 2025), which held that use of the Internet is sufficient to prove transmission in interstate commerce in a wire fraud case, but nonetheless set aside a conviction due to the government’s failure of proof.
This legal holding conflicts with a Tenth Circuit decision which held that use of the internet by itself was not enough. We conclude with a discussion of the law in the Second Circuit, which has not yet addressed the issue in the context of wire fraud.
Interstate Commerce
Section 1343 makes it a federal crime to devise “any scheme or artifice to defraud” when a communication “for the purpose of executing such scheme” is “transmitted by means of wire, radio, or television communication in interstate or foreign commerce.” (Emphasis added.)
According to a House of Representatives report, legislators expected the law to address “relatively isolated” instances of fraud by means of radio and television, H.R. Rep. No. 388, at 1-2 (1951)), but reliance on the law has expanded over time to include frauds via “wireless communications” of various kinds such as emails, cellphone calls and text messages.
Other federal statutes use a different phrase — “affecting” rather than “in” interstate or foreign commerce — to express the jurisdictional requirement of federal law. The phrase “affecting interstate commerce” has been understood to be broader in reach than “in interstate commerce.” See, Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 115-16 (2001) (noting that “in interstate or foreign commerce” language limits Congress’s reach).
Courts have construed “in interstate or foreign commerce” to require a wire communication to cross state lines, regardless of where the communicators were located. See, e.g., Smith v. Ayres, 845 F.2d 1360, 1366 (5th Cir. 1988) (“As several courts have recognized, [§1343] requires that the wire communication cross state lines.”)
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.