White Collar and Government

Investigations Attorneys


Drug Prosecutions

The mail and wire fraud statutes are often used in drug prosecutions. A hypothetical example will help to show how they are applied. Suppose Dan the drug dealer gets a kilo of cocaine to sell. Before he weighs out the individual bags, he dilutes the cocaine with baby powder to increase his yield and sell less cocaine for the same price. By diminishing the value of the drugs below their sale price in order to profit off unsuspecting customers, Dan has engaged in a scheme to defraud. When a customer calls Dan to ask if he has any cocaine, the “use of the wires in connection with the scheme” element is satisfied, since an inquiry to the availability of the drugs is incidental to an essential element of the scheme to sell them for an artificially high price. Moreover, even though the call might be a local one, the network of cables extends beyond the state borders and could be argued to constitute use of interstate wires. Finally, the use of the wires is “in furtherance” of the scheme since the profit still remains to be reaped from the customer. But what if there were two such phone calls? In that case, the prosecutor has even more options. Since two or more counts of wire fraud can serve as predicate racketeering activity, Dan could be prosecuted under the RICO statutes as well. Not only illegal drug transactions are subject to prosecution under the mail and wire fraud statutes; they have been applied to patient-client settings as well. Suppose a doctor, who is paid a fee by drug manufacturers to dispense their prescription medications, prescribes the manufacturer’s drug to patients under false pretenses in order to boost his commission. Not only has he effected a scheme to deprive his patients of their money by prescribing them drugs they don’t need, but prosecutors may also argue that he has also deprived them of his honest services by breaching his duty under the patient-physician relationship. Since use of the mails or wires is reasonably foreseeable in communicating the prescription data to the pharmacy as well as the manufacturer, it is considered incidental to an essential element of the scheme. And since the profits remain to be reaped, the use of mails is in furtherance. Thus, the doctor could be charged with mail fraud, wire fraud, and honest services fraud. A patient could face mail or wire fraud charges in a similar context if he forges a doctor’s prescription in an effort to obtain drugs to which he has not been prescribed, as long as the mail or wire are integrated into this plan.