When it’s in federal court with money involved, it’s probably wire fraud

NEW HAVEN — When the CEO of a Connecticut biomedical company and a former university professor was arrested Nov. 30 for allegedly scamming an investor into giving him more than $1 million for fictitious investment opportunities, the charge wasn’t larceny.

It was wire fraud. Former state Rep. Michael DiMassa, D-West Haven, also a West Haven city employee, was arrested Oct. 20 for allegedly being part of a scheme to divert as much as $636,000 in federal funds intended for COVIDrelated expenses, some of which he allegedly then used to gamble at Mohegan Sun.

The charge was wire fraud.

Also arrested in connection with that case on Nov. 4 was West Haven Community Development Administration employee John Bernardo, a retired former New Haven firefighter. Bernardo’s charges? One count of wire fraud — and one count of conspiracy to commit wire fraud.

The charges are a familiar refrain for anyone who watches what goes on in federal court.

The recent cases shine a legal spotlight on what long has been a bread-and-butter legal tool of federal prosecutors looking to get the most out of charges in cases where people are alleged to have fraudulently separated others from their money: the federal wire fraud statute that grew out of what originally was a law against mail fraud.

“To Federal prosecutors of white-collar crime, the mail fraud statute is our Stradivarius, our Colt .45, our Louisville Slugger, our Cuisinart — and our true love,” wrote Jed S. Rakoff in a 1980 law review article quoted in a Nov. 19, 1987, story in the New York Times.

The idea is fairly simple, according to the statute: if someone is alleged to have stolen money, if it’s done through some kind of fraud, if there’s an intention to defraud and some sort on interstate wire communication was used as part of the alleged scheme — be it phone, Internet, radio or television — the wire fraud statute kicks in, making the activity a felony that can draw up to 20 years in prison.

Transfer of money between banks. for example, can use interstate wiring.

“It’s a handy dumping ground for all kinds of activity, because in today’s society, you can’t do anything without a ... cellphone in your hand,” said New Haven defense attorney William F. Dow III, a former federal prosecutor who has been a lecturer in trial practice at Yale Law School for more than 30 years.

“It’s a catch-all category” that is “the darling” of federal prosecutors, Dow said. “It fits almost all transactions” and could turn a crime into “a 20-year offense” if the defendant were found guilty, according to federal sentencing guidelines.

Overall, “it’s a handy and effective prosecutorial weapon,” Dow said.

“Wire fraud and mail fraud are really sweeping statutes that can sweep in a large” variety of crimes, said Jim Glasser, chairman of the

Litigation Department at Wiggin and Dana in New Haven and former chief of the Criminal Division for the U.S. Attorney’s Office for the District of Connecticut.

Over the past 20 years, the way the federal government uses the statute has broadened, said Glasser, who also teaches trial practice at Yale Law School. Where it once was used only when the use of email, telephone or mail was central to an alleged solicitation scheme, it now is used even when they are more peripheral, he said.

“It’s really a frustrating charge for defense attorneys,” said New Haven defense attorney Tara Knight, who also has been an instructor in trial practice at Yale Law School — and whose clients include Bernardo. “It’s very commonly charged, especially in white-collar sort of crimes.”

Whenever someone is charged in federal court with a crime involving money, “They throw in the wire fraud charge,” said Knight, who also has taught at the University of Connecticut Law School, Quinnipiac School of Law and the University of New Haven.

“The reality is that this is an easy-to-prove crime,” Knight said. “It’s commonly charged. It significantly increases the penalties” when it’s used. All that’s required “is that a wire communication is used in the commission of a fraud,” she said.

“If you’re committing a crime, there’s no way that you’re not also committing a wire fraud,” Knight said.