The Major Types of Mass-Marketing Fraud

The Major Types of Mass-Marketing Fraud

Fraud schemes are often classified by the communication mechanism used in furtherance of the fraud. For example, mail fraud uses the postal service in furtherance of the fraud scheme, internet fraud uses the internet, and telemarketing fraud is carried out via telephone communication.

However, law enforcement authorities recognize that fraud schemes can use multiple communication methods in an effort to reach more people. Fraud schemes that utilize more than one communication medium are known as mass-marketing fraud schemes. The Department of Justice defines mass-marketing fraud as “any fraud scheme that uses one or more mass-communication methods – such as the Internet, telephones, the mail, or in-person meetings – to fraudulently solicit or transact with numerous prospective victims” or to transfer proceeds of fraud to a financial institution or others connected with the scheme.

The Two Categories of Mass-Marketing Fraud

There are generally two broad categories of Mass-marketing fraud schemes:

  • Mass-marketing fraud schemes that defraud numerous people out of relatively small amounts of money, such as a few hundred dollars each; and
  • Mass-marketing fraud schemes that defraud comparatively fewer people out of large amounts of money, perhaps thousands or millions of dollars from each person.

The Major Types of Mass-Marketing Fraud

A mass-marketing fraud scheme can be carried out in a number of different ways, over various communication mediums. There are a few major types of mass-marketing frauds that are prosecuted regularly, including:

  • Advance-Free Fraud Schemes: These schemes occur when someone pays money to someone in anticipation of receiving something of greater value, such as lottery winnings, a valuable contract, or substantial return on investment, and then receives little or nothing in return. It must be noted that a business deal that requires investors to pay an upfront fee does not necessarily make it a fraud scheme.
    • An example of an advance-fee, mass-marketing fraud scheme may use a mass spam email to make initial contact, which encourage recipients to call a telephone number for further information about the fraudulent investment opportunity.
  • Bank and Financial Account Schemes: These schemes occur when a person provides their bank or financial account information, so that the schemers can gain unauthorized access to their accounts.
    • Bank and financial account schemes involve identity theft.
    • A financial account scheme may involve unauthorized charges to accounts or siphoning funds directly from bank accounts.
  • Investment Opportunity Schemes: These schemes occur when securities or commodities are bought or sold as part of the scheme.
    • An example of a “pump and dump” market manipulation, mass-marketing fraud scheme may use a mailer to encourage people to visit an Internet webpage with instructions on purchasing a specific stock. The “pump and dump” scheme creates artificial buying pressure for a targeted security, which induces purchases that drives up the stock price. Then the fraud perpetrators rapidly sells of their shares of the stock at the artificially inflated price.

Defending Against Criminal Charges for an Alleged Mass-Marketing Fraud Scheme

Ashley D. Adams understands the federal and state laws behind fraud prosecutions and knows how to cast doubt on whether a crime was committed. As a former fraud prosecutor with the United States Attorney’s Office, she knows how prosecutors operate and the best tactics to use to get criminal charges dropped or dropped to lesser charges.

There is no white collar criminal case that is too complex or too challenging for us. No matter how difficult your case may appear, contact Ashley D. Adams, PLC for the legal protection you need.

Contact our Arizona fraud and criminal defense attorneys on the web or call (480) 219-1366 for a consultation and case evaluation. There is no substitute for the type of experience and diligent legal representation that a high-quality attorney can provide.

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