Consider these common scenarios: Two business partners have a falling out. One accuses the other of misusing company funds. Or an investor claims that money was spent differently than promised. Or a customer alleges that a company misrepresented its financial condition. What began as a disagreement over contracts, compensation, or business decisions suddenly becomes an accusation of criminal fraud.

In some cases, the FBI becomes involved.

The distinction between a civil business dispute and federal wire fraud is critical. Under 18 U.S.C. § 1343, a federal wire fraud conviction can carry up to 20 years in prison, with a higher statutory maximum in certain circumstances.

For individuals facing these allegations, understanding where civil liability ends and federal criminal exposure begins is essential.

What Is Federal Wire Fraud?

Federal wire fraud is a criminal offense involving a scheme to defraud that uses interstate or foreign wire communications in furtherance of that scheme.

Under 18 U.S.C. § 1343, prosecutors generally must establish:

1. A scheme to defraud or obtain money or property through materially false or fraudulent representations, promises, or omissions.
2. The defendant’s knowing participation in the scheme with intent to defraud.
3. The use, or reasonably foreseeable use, of interstate or foreign wire communications to further the scheme.

The electronic communication does not necessarily have to contain a fraudulent statement itself.

Emails, telephone calls, electronic banking transactions, and other electronic communications may satisfy the wire requirement when the statutory jurisdictional and other elements are met.

But the existence of an email, electronic payment, or failed business transaction does not automatically establish federal wire fraud.

The central issue is whether the government can prove a fraudulent scheme and the defendant’s criminal intent—not merely that someone lost money or believes they were treated unfairly.

Breach of Contract Versus Federal Wire Fraud: What Is the Difference?

One of the most important distinctions in federal white-collar criminal defense is the difference between failing to fulfill a contractual obligation and entering into a transaction with fraudulent intent.

A breach of contract generally occurs when one party fails to perform an obligation under an agreement.

For example:

• A business fails to repay a loan on time.
• A contractor does not complete a project.
• A company cannot deliver products as promised.
• A business partner disputes how company profits should be distributed.
• An investment fails to generate the anticipated return.

These circumstances may create civil liability. They do not necessarily establish a federal crime.

Wire fraud, by contrast, requires proof of a fraudulent scheme involving the requisite intent.

Consider two different situations.

Scenario One: A Business Deal Goes Bad

An entrepreneur raises $500,000 from investors to launch a new company. The entrepreneur genuinely intends to develop the business, uses the funds for legitimate operating expenses, but ultimately fails to make the company profitable.

The investors lose their money.

Although the investors may have civil claims depending on the circumstances, the failure of the business alone does not establish federal wire fraud.

Scenario Two: A Business Deal Built on Deception

An entrepreneur solicits $500,000 from investors while knowingly fabricating financial statements, inventing nonexistent customers, and falsely claiming that the company has secured major contracts.

The entrepreneur uses these representations to induce investors to transfer their money.

Those facts may support a federal wire fraud prosecution because the government could allege that the defendant intentionally used material deception to obtain money.

The distinction is not simply whether the investment succeeded or failed. It is whether the government can prove the elements of a fraudulent scheme.

Can a Business Partner Accuse You of Federal Wire Fraud?

Yes. Allegations of federal wire fraud sometimes arise from disputes between business partners, shareholders, investors, or corporate executives.

These cases can be particularly complicated because business relationships often involve informal agreements, overlapping responsibilities, disputed compensation arrangements, and disagreements about financial authority.

A business partner may allege that another partner:

• Diverted company revenue.
• Made unauthorized withdrawals.
• Misrepresented the company’s financial condition.
• Concealed business transactions.
• Used investor funds for unauthorized purposes.
• Submitted misleading financial statements.

However, an accusation does not establish that a federal crime occurred.

In closely held businesses, the authority to withdraw money, receive compensation, reimburse expenses, or make financial decisions may be governed by operating agreements, corporate documents, historical practices, or other evidence.

Experienced federal criminal defense attorneys like Conaway & Strickler, PC examines whether the disputed transactions were authorized, whether the accused had a legitimate ownership interest, and whether the evidence supports an inference of fraudulent intent.

A disagreement about who was entitled to company money is not automatically proof that someone committed federal wire fraud.

Can You Be Charged with Wire Fraud If Nobody Lost Money?

Yes. This is an especially important development in federal fraud law.

In May 2025, the United States Supreme Court decided Kousisis v. United States, holding that a defendant who fraudulently induces another party to enter into a transaction may be convicted of federal wire fraud even when the defendant did not intend to cause economic loss.

The case involved government contracts obtained through materially false representations about compliance with disadvantaged-business participation requirements.

The defendants argued that the government received the services it paid for and therefore suffered no economic loss.

The Supreme Court rejected the argument that an intent to cause net financial loss was required.

The decision reinforces an important principle: A defendant may face federal wire fraud liability even when the alleged victim received something of value in return.

For business owners and executives, this means that completing a contract, repaying an investor, or delivering a product does not necessarily eliminate criminal exposure if prosecutors can establish that money or property was obtained through a fraudulent scheme.

At the same time, the government must still prove the required elements of wire fraud, including material deception, criminal intent, and the use of qualifying wire communications.

Does Every Misrepresentation in a Business Deal Constitute Wire Fraud?

No.

Business negotiations frequently involve projections, estimates, opinions, and expectations about future performance.

A company may forecast revenue that never materializes. An entrepreneur may believe that financing will be secured but ultimately fail to obtain it. A business executive may make an overly optimistic prediction about future profitability.

Those statements are not necessarily fraudulent simply because events unfold differently than expected.

The analysis may turn on whether the representation concerned an existing fact, whether it was materially false or misleading, what the defendant knew at the time, and whether there was intent to defraud.

For example, there is an important distinction between predicting that a company will earn $5 million next year and knowingly presenting fabricated financial records showing that the company already earned $5 million.

The first may be an optimistic business projection. The second may constitute evidence of intentional deception.

Context matters, and prosecutors cannot establish criminal intent solely through hindsight.

The Supreme Court Has Also Limited the Reach of Federal Fraud Laws

Although federal wire fraud is a powerful prosecutorial tool, the Supreme Court has cautioned against interpreting the statute so broadly that ordinary business misconduct automatically becomes a federal crime.

In Ciminelli v. United States, the Supreme Court unanimously rejected the government’s use of a theory that treated the deprivation of economically valuable information needed to make business decisions as a deprivation of property.

The Court held that the federal wire fraud statute protects traditional property interests and does not broadly criminalize every dishonest practice affecting economic decision-making.

The decision is significant because it reinforces limits on federal prosecutors’ ability to transform conduct traditionally addressed through state contract or tort law into federal property fraud.

Read together, Ciminelli and Kousisis illustrate an important distinction.

Federal prosecutors cannot rely solely on the theory that a person was deprived of information necessary to make an informed economic decision. But when material deception is used to obtain money or property, the government need not establish an intent to cause net economic loss.

For individuals accused of business-related wire fraud, the precise nature of the alleged misrepresentation and the property the government claims was targeted can be critical defense issues.

How Do Business Disputes Become FBI Investigations?

A federal investigation may begin when a disgruntled investor, former employee, business partner, or other individual reports suspected financial misconduct.

Other investigations may originate from civil litigation, internal audits, financial institutions, regulatory agencies, or referrals to federal law enforcement.

Once investigators become involved, they may seek financial records, emails, text messages, bank statements, contracts, and communications between the parties.

They may also interview employees, accountants, investors, and business associates.

In some cases, investigators issue grand jury subpoenas for documents or testimony. In others, agents contact individuals directly and request voluntary interviews.

One of the challenges in these investigations is that the government may initially receive only one side of a complicated business dispute.

A former partner may characterize an authorized withdrawal as theft. An investor may describe an unsuccessful business strategy as intentional deception. An employee may misunderstand the purpose of a financial transaction.

That does not mean every allegation is unfounded. It does mean that a careful examination of the underlying business relationship and financial records is essential.

What Are the Potential Defenses to Federal Wire Fraud Charges?

Defending a federal wire fraud case often requires reconstructing the underlying business transactions and examining what the accused actually knew and intended when the relevant representations were made.

Depending on the circumstances, potential defenses may include:

Lack of Intent to Defraud

The defendant may have genuinely intended to perform contractual obligations, repay investors, complete a transaction, or operate a legitimate business.

Good-Faith Belief

Evidence that the defendant honestly believed representations were true, or believed the challenged conduct was authorized, may undermine the government’s allegations of fraudulent intent.

Absence of Material Misrepresentations

Not every inaccurate statement is material. The defense may challenge whether an alleged falsehood was capable of influencing the relevant economic decision.

Legitimate Business Purpose

Financial transfers or expenditures characterized as suspicious may have legitimate business explanations supported by contracts, accounting records, or historical practices.

Insufficient Evidence of a Fraudulent Scheme

A failed transaction, disputed contract, or financial loss does not alone establish the existence of a criminal scheme.

Challenges to the Government’s Legal Theory

The defense may examine whether the alleged scheme actually targeted money or property protected by the wire fraud statute and whether the government can establish the necessary interstate or foreign wire communication.

In complex cases, forensic accountants, financial experts, and other professionals may assist defense counsel in analyzing financial transactions and challenging the government’s interpretation of the evidence.

What Should You Do If a Business Dispute Turns Into a Criminal Investigation?

If a business partner, investor, or former employee threatens to report you to the FBI, it is important to understand that the dispute may have moved beyond an ordinary civil disagreement.

Do not assume that a federal investigation will disappear simply because you believe you acted appropriately.

Before responding to investigative inquiries, contact us immediately.

Avoid making substantive statements to federal investigators without first obtaining legal advice. Knowingly false statements to federal agents can create separate criminal exposure under 18 U.S.C. § 1001, even when the underlying allegations do not result in charges.

Do not delete emails, alter accounting records, destroy documents, or attempt to coordinate witness accounts.

Preserve potentially relevant records, including contracts, financial statements, correspondence, and documents showing the parties’ understanding of the transaction.

Early legal representation may allow defense counsel to assess the allegations, communicate with investigators when appropriate, identify favorable evidence, and address issues before an indictment is returned.

Frequently Asked Questions About Business Disputes and Federal Wire Fraud

Can I go to prison for failing to repay a business loan?

Simply failing to repay a loan generally does not establish federal wire fraud. However, obtaining loan proceeds through a scheme involving material misrepresentations and fraudulent intent may create criminal exposure.

Can an investor report me to the FBI because an investment failed?

Yes. Anyone can report suspected misconduct. However, an unsuccessful investment does not automatically establish fraud. The government must prove the elements of a criminal offense.

Can emails and text messages be used as evidence of wire fraud?

Yes. Electronic communications may be used to establish representations, knowledge, intent, or the use of interstate or foreign wires in furtherance of an alleged fraudulent scheme.

Can a civil lawsuit and a federal criminal investigation happen at the same time?

Yes. The same underlying business transactions may give rise to civil litigation and a criminal investigation. Parallel proceedings create important strategic concerns, particularly when testimony or discovery in the civil case could affect criminal exposure.

Does repaying the money eliminate wire fraud charges?

Not necessarily. Repayment may be relevant to the facts, intent, or sentencing, but it does not automatically eliminate criminal liability for an otherwise completed wire fraud offense.

Should I hire a federal criminal defense attorney before being charged?

Yes, particularly when there is a credible threat of a federal investigation or investigators have already made contact. Pre-indictment representation can be an important part of protecting your legal interests.

Accused of Federal Wire Fraud in Georgia? Contact Conaway & Strickler, PC

Business relationships can deteriorate. Investments can fail. Partners can disagree about money, management decisions, and contractual obligations.

But a business disagreement should not automatically be treated as evidence of federal criminal fraud.

When allegations of financial misconduct attract the attention of federal investigators, the consequences can be devastating. A federal wire fraud investigation can threaten a person’s freedom, professional reputation, financial security, and future.

At Conaway & Strickler, PC, our Atlanta federal criminal defense attorneys represent individuals facing federal criminal investigations and prosecutions, including allegations of wire fraud, financial fraud, conspiracy, and other white-collar offenses.

We understand the importance of examining the facts behind a business dispute, challenging unsupported allegations of criminal intent, and protecting our clients’ rights throughout the federal investigative and criminal justice process.

If a business dispute has escalated into allegations of federal wire fraud, or you believe you may be under investigation by the FBI or Department of Justice, contact Conaway & Strickler, PC to discuss your legal options.

This article is intended for general informational purposes and does not constitute legal advice. Every case depends on its specific facts and applicable law.

The government has a special United States Guideline Chapter dedicated to “basic” economic offenses. For purposes of this blog, this chapter will be discussed in more detail below. As with anything involving federal criminal litigation, nothing is crystal clear in the law. Therefore, there is also a chapter in the United States Guidelines dedicated to tax offenses, election fraud, gambling, and money laundering in the United States Sentencing Guidelines.

This USSG chapter DOES cover extortion, bribery, kickbacks, counterfeiting, embezzlement, health care fraud, computer fraud, insurance fraud, securities fraud, mortgage fraud, identity fraud, bankruptcy fraud, etc. What is most important in this chapter is the loss amount. All charges start off with a base offense level of 6 or 7 depending on the statutory max of the offense charged. Then, you look at what the “loss amount” is using the below table.

The loss amount is a pandora box of confusion and the government is able to add all kinds of relevant conduct and intended loss conduct to inflate these numbers.

To further make things complicated, there are enhancements in this section that permit the government to add levels for things such as the use of sophisticated means, role in the offense, number of victims, a defrauding a charity, mass marketing, among others.

Navigating the federal criminal system is a task that should not be endured alone. Contact our team today for more information about we can protect your rights and your freedom.

“THE ATL COURT MISSION: Our mission is to provide the opportunity to avoid some of the consequences of aberrant criminal conduct to certain individuals charged with non-violent crimes in the Northern District of Georgia who would most greatly benefit from intense supervision, education, or treatment.”

HOW ATL COURT WORKS

Procedurally, a request to apply must be granted by the ATL Court Team before a full application can even be submitted. Then, like other criminal cases pending in the federal criminal courts, a guilty plea will be entered by a formal plea agreement. In this agreement, participants will agree to do certain “chores” such as counseling, educational courses, completion of GED, etc. The “chores” are individualized for each defendant entering in to the program, but most will require counseling at the minimum. Once these “chores” are completed, the participants will receive what was delineated in the formal plea agreement: a sentence on the original charge with NO prison time, a reduction of their charge to a misdemeanor, or a complete dismissal of the case. Again, the resolution and specific chores are individualized for each participant depended on circumstances.

ATL Court is meant for the less serious of charges, and those without prior serious criminal convictions. It can only be implemented for people who were formally charged in 2022 or later. Therefore, not everyone will be eligible for the program.

Conaway & Strickler, PC is very knowledgable on how to navigate this new program. Please contact us to find out more information and see if we can help you.

The 59-page indictment, filed in federal court in Manhattan, alleges the men and others at Archegos sometimes timed their trades to drum up the interest of other investors, while borrowing money to make bigger and bigger bets. The Department of Justice states, “Hwang and his co-conspirators invested in stocks mostly through special contracts with banks and brokers called “swaps.” As alleged, these swaps allowed Hwang to cause massive buying of certain stocks, including at carefully selected days and times, to artificially pump up stock prices. Hwang, Halligan, and their co-conspirators lied to banks and used a series of manipulative trading techniques to keep those prices high and prevent them from falling. The lies fed the inflation, and the inflation led to more lies. The scale of this alleged fraud was stunning. In one year, Hwang turned a $1.5 billion portfolio and fraudulently pumped it up into a $35 billion portfolio.” The effective size of the firm’s stock positions swelled to $160 billion — rivaling some of the biggest hedge funds in the world. The case marks the biggest financial-crime charges to come out of the Southern District of New York under the leadership of Mr. Damian Williams, who was sworn in October 10, 2021.

The SEC has also filed a civil complaint stating that Mr. Becker, the former chief risk officer at Archegos, and Mr. Tomita, the firm’s former top trader, had led discussions with the banks about the firm’s trading positions but that Mr. Hwang and Mr. Halligan had directed and set the tone for those discussions. For more background on this case, please click here.

• The grand jury is conducting an investigation of possible violations of Federal criminal laws involving: e.g., conducting an illegal gambling business in violation of 18 U.S.C. § 1955
• You may refuse to answer any question if a truthful answer to the question would tend to incriminate you.
• Anything that you do say may be used against you by the grand jury or in a subsequent legal proceeding.
• If you have retained counsel, the grand jury will permit you a reasonable opportunity to step outside the grand jury room to consult with counsel if you so desire.

What Type of Subpoena Have I Received? There are two types of subpoenas: (1) a subpoena duces tecum which commands the person to produce certain documents (2) a subpoena ad testificandum which commands a person to appear before the grand jury on a particular date to testify. A subpoena duces tecum may seek all non-privileged documents and physical evidence including documents or information which another party may have already produced, or information which may readily be available other than from the subpoenaed party. Moreover, a subpoena duces tecum may require the production of original documents. This may be especially important; for example, where it is important to capture notations, erasures, or colored markings on documents that may not show up on copies. A subpoena duces tecum may also be served on anyone at any place in the United States provided that service is proper. Subpoenas may also be served on persons in foreign jurisdictions as long as the government follows certain procedures. During actual Grand Jury testimony, what can my lawyer do? During the proceeding your attorney may be present, but not in the grand jury room since grand jury proceedings are secret. The only persons permitted in the grand jury room are the Assistant United States Attorney, the grand jurors, the witness, and a court reporter. During the proceeding, a grand jury witness may ask to be excused to confer with an attorney before answering each question. While this process is disruptive and a bit awkward, it is absolutely critical to have an attorney present during any grand jury proceeding. Again, your lawyer can’t be with you in the grand jury room, but we can be right outside the room and you have the right to consult with us after each and every question. In fact, you can spend as much time as you need conferring with us, as long as you are not attempting to disrupt the grand jury process. You can also leave the grand jury room in order to brief your attorney about the questions being asked and your responses. In most federal jurisdictions you can also take notes of any questions asked during the grand jury session. These can later be shared with your attorney. NOTE: If a truthful answer to a grand jury question would incriminate you, you can invoke the 5th Amendment right to not incriminate yourself and refuse to answer. Please click here for a good description of grand jury subpoenas. Conaway & Strickler, PC can help you through this process and take the anxiety away from you and your attempt to understand this very complicated process. Call us now at 404-816-5000. Click here for additional blogs.

Cases have included:

• Offers to purchase COVID-19 vaccination cards
• Requiring payment for testing or vaccines.
• PPP loan fraud
• EIDL (Economic Injury Disaster Loans) fraud
• Unemployment fraud – weekly federal unemployment benefits worth $600 a week. The Justice Department has charged more than 140 people so far for fraud related to the program.
• Identity Fraud – used stolen identities to try to file for benefits illegally
• Purchase and resale of Personal Protective Equipment (PPE) to hospitals and retailers at a significant profit

“The Department of Justice will use every available federal tool—including criminal, civil, and administrative actions—to combat and prevent COVID-19 related fraud. We look forward to working with our federal government colleagues to bring to justice those who seek to profit unlawfully from the pandemic,” wrote Attorney General Garland in a memo announcing the Task Force.

Conaway & Strickler, PC has handled each type of case delineated above. It is crucial to reach out to us early on in one of these type of investigations. With a task force created, the DOJ and related ent