18 U.S. Code § 1029 - Fraud and Related Activity in Connection with Access Devices
Most credit card fraud cases are prosecuted under state laws, but under certain circumstances, it could be charged as a federal crime under 18 U.S.C. 1029.
Any unauthorized credit card use could be prosecuted as credit card fraud, but the methods and amount of loss will usually determine how the case will be handled.
Credit card fraud occurs in many ways, and prosecutors use numerous federal statutes to charge someone for violating federal credit card laws. As technology continues to advance, there has been an increase in the number of credit card phishing or skimming schemes.
Common examples of credit card fraud include identity theft to get credit cards in another person's name, using stolen credit card information, using skimmers on an ATM, submitting fake applications for credit cards, and creating fraudulent credit cards.
Today, the use of advanced technology to commit credit card fraud has risen sharply, such as intercepting credit card transactions over unsecured networks. Other ways include hacking devices installed on online retailer websites, sending “phishing” emails to card owners, and creating fake websites for people to submit their credit card information.
Many federal credit card schemes are taking various forms in today's society. One big one is where people are getting information about other people, either alive or dead, creating credit cards and then using those credit cards to go to ATMs to withdraw thousands of dollars.
Eventually, the government catches people. Sometimes they get lucky. Sometimes they do their due diligence and investigate the person, and then they've got their photograph at the bank machine, money moving around, and surveilling the person.
Maybe they even catch the person with fraudulent credit cards or fraudulent information from another person, and then they're in a position where the person is arrested. They're charged with a federal crime. They're trying to get bonded out, and their family is trying to help them.
In the more advanced and serious cases, some fraudsters have accessed credit card databases through computer hacking. Let's review further below.
How is Credit Card Fraud Connected to Access Devices?
Federal prosecutors typically charge someone in credit card cases with 18 U.S.C. 1029, which describes fraud in connection with access devices. Under this law, it's a felony to use or traffic in counterfeit access devices, including credit cards, debit cards, and gift cards.
Federal credit card fraud is also called access device fraud. Under 18 U.S.C. 1029, it's a federal offense to knowingly, with intent to defraud, any of the following:
- Use or traffic in counterfeit access devices,
- Possess 15 or more counterfeit devices,
- Use or possess a scanning receiver,
- Possess device-making equipment,
- Use or possess modified instruments to obtain use of telecommunications services,
- Use, produce, or possess hardware, software, or scanner receiver to modify an instrument to obtain telecommunications service,
- Obtain something of value of $1,000 or more within a year with a counterfeit access device,
- Soliciting someone for offering or selling a fraudulent access device.
A federal statute sometimes used to prosecute credit card fraud cases is 18 U.S.C 1028A, aggravated identity theft. Under identity theft laws, it's a felony offense to use, transfer, or possess by any means the identification of another person.
What Are the Related Federal Laws?
18 U.S. Code Chapter 47 Fraud and False Statements has numerous federal laws that are related to 18 U.S.C. 1029 credit card fraud, including the following:
- 18 U.S.C. 1001 – statements or entries generally;
- 18 U.S.C. 1002 – possession of false papers to defraud;
- 18 U.S.C. 1003 – demands against the United States;
- 18 U.S.C. 1004 – certification of checks;
- 18 U.S.C. 1005 – bank entries and transactions;
- 18 U.S.C. 1006 – federal credit institution entries;
- 18 U.S.C. 1007 – federal deposit insurance transactions;
- 18 U.S.C. 1010 – department of housing and urban development;
- 18 U.S.C. 1011 – federal land bank mortgage transactions;
- 18 U.S.C. 1012 – urban development transactions;
- 18 U.S.C. 1013 – farm loan bonds and bank debentures;
- 18 U.S.C. 1014 – loan and credit applications;
- 18 U.S.C. 1015 – naturalization or alien registry;
- 18 U.S.C. 1016 – an acknowledgment of appearance or oath;
- 18 U.S.C. 1017 – government seals wrongfully used;
- 18 U.S.C. 1018 – official certificates or writings;
- 18 U.S.C. 1019 – certificates by consular officers;
- 18 U.S.C. 1020 – highway projects;
- 18 U.S.C. 1021 – title records;
- 18 U.S.C. 1022 – delivery of certificate;
- 18 U.S.C. 1023 – insufficient delivery of money or property;
- 18 U.S.C. 1024 – purchase of military property;
- 18 U.S.C. 1025 – false pretenses on high seas;
- 18 U.S.C. 1026 – compromise of farm indebtedness;
- 18 U.S.C. 1027 – false statements and concealment of facts
- 18 U.S.C. 1028 – identity theft;
- 18 U.S.C. 1030 – computer hacking;
- 18 U.S.C. 1031 – major fraud against the United States
- 18 U.S.C. 1032 – concealment of assets from conservator;
- 18 U.S.C. 1033 – crimes affecting insurance commerce;
- 18 U.S.C. 1034 – civil penalties and injunctions for section 1033;
- 18 U.S.C. 1035 – false statements about health care matters;
- 18 U.S.C. 1036 – entry by false pretenses to any real property;
- 18 U.S.C. 1037 – fraud and related activity with electronic mail;
- 18 U.S.C. 1037 – false information and hoaxes;
- 18 U.S.C. 1039 – fraud with obtaining confidential phone records;
- 18 U.S.C. 1040 – fraud with disaster or emergency benefits;
- 18 U.S.C. 1341 – fraud and swindles;
- 18 U.S.C. 1341 – fraud by wire, radio, or television;
- 18 U.S.C. 1344 – bank fraud;
- 18 U.S.C. 1956 – money laundering;
- 18 U.S.C. 2325 – telemarketing fraud.
What Are the Factors that Determine the Penalties?
So, if it's you that's in trouble, or you're trying to help one of your loved ones who is involved in a federal credit card scheme, let me give you an idea of how the judge is going to decide how much time in custody the person is going to get.
One of the most significant factors is the amount of loss to an entity or an individual. Usually, in this credit card scheme, banks are being defrauded out of money; therefore, the federal government will look at how much money the bank lost. Simply put, your sentence will depend on the amount of money lost, for example:
- There are specific amounts of money that, when stolen, trigger points on a person's criminal profile in the federal sentencing guidelines, and
- That person will be looking at a certain amount of time determined by the amount of loss.
The federal government can also look at the intended loss. Let's say you had 20 credit cards and could charge a million dollars on those cards. They will try to use that against you, especially if they don't have any actual loss, then they try to go after the intended loss to give you federal criminal time.
What About Criminal History and Amount of Loss?
Another way a judge evaluates how much time they will give you is your criminal record. You will face more time in federal prison if you have any criminal history points. Also, when it comes to these credit card schemes at the federal level, the judge is going to look at the following:
- The sophistication level involved in what you did, and
- Whether you were in a position of trust (embezzlement).
In other words, if you're an employee of a huge corporation and you're diverting thousands of dollars by way of credit cards or stealing credit information, that will be a factor that the judge will consider.
In many of these cases, though, I see people shopping with credit cards at real retail locations, going to ATM machines, and pulling money out. In this circumstance, the judge will review the following factors;
- They're going to look at the person's criminal history;
- They're going to look to see how much money they took, and
- They will see if they can pay back any of the money.
They're going to look at how sophisticated it was, and the final piece of the puzzle when you talk about these federal scams is the person willing to cooperate with the federal government to get time served off their sentence.
If you cooperate with the government and help them catch other people, maybe you're a small player, and there are other higher-ups; that's a vital sentencing factor for the judge.
What Are the Penalties for 18 U.S.C. 1029?
If convicted of federal credit card fraud in violation of U.S.C. 1029, the penalties include the following:
- Range from 10 years to a maximum of 15 years in federal prison,
- A fine of up to $250,000, depending on the subsection that was violated,
- You could also be ordered to pay restitution, and
- You must forfeit the money or items defined under federal forfeiture laws.
What Are the Defenses for 18 U.S.C. 1029?
Suppose you are accused of violating 18 U.S.C. 1029 credit card fraud laws. In that case, our experienced federal criminal defense lawyers could use different strategies to obtain the best possible outcome, as discussed below.
Perhaps we can argue there was a lack of intent to defraud. You could avoid a conviction if we show you had no specific intent to defraud. To obtain a conviction, a federal prosecutor must be able to prove that you acted knowingly, willingly, and with an intent to defraud.
Perhaps we can argue that there was no effect on interstate or foreign commerce. To be convicted, it must be connected to interstate or foreign commerce, such as making an online purchase using another person's credit card crossing state lines.
Perhaps we can argue that you had a reasonable belief that you had authorization to use the credit card. Maybe the transactions were due to poor communication with the cardholder who thought someone was fraudulently using their credit card and reported it.
Your attorney might argue that you are a minor player, therefore, get points shaved off your sentence. You can also get a 5K department where the government agrees that you gave them substantial assistance, and now you're in a position to get the lowest sentence possible. Contact our law firm for a free case consultation. The Hedding Law Firm has offices in Los Angeles, CA.