18 U.S.C. § 1349 — Attempt and Conspiracy to Commit Fraud

Defendants who look up "federal conspiracy" find § 371 and its five-year maximum, and take some comfort from it.

Fraud conspiracies are usually not charged under § 371. They are charged under § 1349, which carries the full penalty of whatever was planned.

What the statute says

18 U.S.C. § 1349: "Any person who attempts or conspires to commit any offense under this chapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy."

"This chapter" is chapter 63 of Title 18 — the fraud chapter.

Why prosecutors prefer it to § 371

Two reasons, both significant.

Penalty. Section 371 caps a conspiracy at five years regardless of what was planned. Section 1349 carries the object offense's full penalty — so a conspiracy to commit wire fraud carries up to twenty years, or thirty where a financial institution is affected.

No overt act. Section 371 requires proof that a conspirator committed an overt act in furtherance. Section 1349, like the drug conspiracy statute at § 846, contains no such requirement. The agreement is the offense.

The practical consequence is that a defendant charged under § 1349 faces the same exposure as someone who completed the fraud, on proof of an agreement alone.

Which offenses it reaches

Chapter 63 includes wire fraud (§ 1343), mail fraud (§ 1341), bank fraud (§ 1344), healthcare fraud (§ 1347), securities and commodities fraud (§ 1348), and the honest services definition (§ 1346).

It does not reach offenses outside the chapter — tax offenses, money laundering, and § 1001 false statements have their own conspiracy routes, usually § 371.

The elements

1. An agreement between two or more persons to commit a chapter 63 fraud offense;
2. The defendant knew of the unlawful objective; and
3. The defendant knowingly and voluntarily joined the agreement.

As with any conspiracy, the agreement need not be express and may be inferred from conduct. But mere association with people committing fraud, and mere presence when it is discussed, are insufficient as a matter of law.

Sentencing: the loss figure, and everyone else's conduct

Sentencing runs through U.S.S.G. § 2B1.1 on the loss table, exactly as for a completed fraud. What makes conspiracy sentencing distinctive is relevant conduct under § 1B1.3: you can be held accountable for losses caused by co-conspirators, where those losses were within the scope of your agreement, in furtherance of it, and reasonably foreseeable to you.

That three-part limitation is the whole fight. A peripheral participant who joined late, whose role was narrow, or who could not have foreseen the scheme's full scale should not be sentenced on the aggregate figure — and contesting attribution is usually worth more months than any other argument in a § 1349 case.

Defenses

No agreement. Parallel conduct is not conspiracy. People pursuing similar business aims independently have not agreed to anything.

No knowledge of the fraudulent objective. Employees, contractors, and professional service providers frequently perform functions within a scheme without knowing it was one. Good faith and reliance on others' representations are genuine defenses.

Withdrawal. Affirmative withdrawal starts the limitations clock for that defendant and cuts off liability for later acts. It requires action inconsistent with the conspiracy, not merely stopping.

Scope. Even where an agreement existed, its scope is contestable — and scope determines both the counts and the loss attribution.

Related statutes and pages

18 U.S.C. § 371 — general conspiracy · Wire fraud · White collar defense · Sentencing guidelines