An email. A wire transfer. A loan application. In a federal fraud case, ordinary business communications become the government’s evidence. By the time you hear the words “wire fraud,” agents may have spent months, sometimes years, subpoenaing bank records, pulling emails, and running forensic accounting on your business.
The feds rarely indict on suspicion. In fiscal 2022, about 9 in 10 federal criminal defendants pleaded guilty, and fewer than 1 in 100 was acquitted at trial (Pew Research Center). Those numbers aren’t a reason to give up. They’re a reason to bring in someone who knows how these cases are built, before the government finishes building yours.
Keith & Lorfing defends individuals and businesses accused of wire fraud and other financial crimes in Houston and across the Southern District of Texas. The firm is led by a former Assistant U.S. Attorney, with a retired federal judge of counsel. We’ve sat on the side of the table that decides who gets charged. From there, one lesson is clear: in a federal fraud case, the government’s numbers are just its opening bid.
If you’ve received a target letter, a subpoena, or a visit from federal agents, speak with our federal wire fraud defense team before you say a word to the government.
What wire fraud actually means under federal law
Wire fraud is charged under 18 U.S.C. § 1343. It is one of the most common and most flexible tools federal prosecutors have, because almost every modern financial transaction touches a wire. That flexibility is why it shows up in everything from PPP loan cases to CFO embezzlement.
Stripped of the legalese, the government has to prove four things. Each one is a place where a case can be defended.
- A scheme to defraud: A plan to obtain money or property through false statements or promises. A hard-nosed business deal that went bad is not, by itself, a crime.
- Intent to defraud: You had to actually intend to deceive. An honest mistake, a good-faith belief, or a misunderstanding is not fraud.
- A material misrepresentation: The false statement or omission had to matter. It must be capable of influencing the victim’s decision.
- Use of interstate wires: An email, phone call, text, bank transfer, or website used to carry out the scheme. The wire itself can be routine; what matters is that it advanced the plan.
Intent is usually the whole battleground. Emails and bank records rarely explain themselves, so prosecutors supply the story that connects them. Our job is to show the jury the other story the same documents tell.
Two details catch people off guard. First, the wire can be innocent on its face, like a routine work email, as long as the government says it helped carry out the scheme. Second, the scheme doesn’t have to succeed. Devising the scheme and using a wire to execute it is the crime. In 2025, the Supreme Court also held in Kousisis v. United States that lying to induce a deal can be wire fraud even if the victim suffered no economic loss. And at sentencing, the government can count what it says you intended to take, even if no one lost a dime. That is where the loss fight begins (more on that below).
The broader financial-fraud umbrella in Houston
Houston is a front line for federal fraud enforcement. In the June 2025 national health care fraud takedown alone, nearly 50 people were charged in the Southern District of Texas across 22 cases. Wire fraud rarely travels alone here. Prosecutors often stack it with related charges, especially in the complex financial cases handled by our Houston federal criminal defense team.
These cases are heard in the U.S. District Court for the Southern District of Texas, Houston Division, at the Bob Casey U.S. Courthouse, 515 Rusk St.
The “financial fraud” umbrella usually includes:
- Mail fraud (18 U.S.C. § 1341): The mail-based twin of wire fraud, charged whenever the postal service or a private carrier is used to carry out a scheme.
- Bank fraud (18 U.S.C. § 1344): Schemes to defraud a financial institution or obtain its funds by false pretenses, often loan and mortgage cases. See our federal bank fraud defense page.
- Securities fraud: Misstatements and insider conduct under 15 U.S.C. § 78j(b) and Rule 10b-5, frequently with parallel SEC and DOJ action. See our Houston SEC and white-collar defense page.
- Healthcare fraud (18 U.S.C. § 1347): Upcoding, medically unnecessary services, and billing that grows more aggressive over time. These are often charged alongside wire fraud.
- Honest-services fraud (18 U.S.C. § 1346): A theory used in kickback and public-corruption cases where the alleged victim lost someone’s honest services rather than money.
- Embezzlement and vendor schemes: Fake invoices, diverted payments, and undisclosed side deals by controllers, office managers, or CFOs. When the money moves by wire, these schemes can be charged as federal wire fraud.
- PPP, COVID-relief, and investment fraud: Pandemic-loan and investor cases that federal prosecutors still actively pursue, usually charged as wire or bank fraud.
These charges are commonly joined with conspiracy under 18 U.S.C. § 1349 and money laundering for moving the alleged proceeds. Conspiracy lets the government charge people for an agreement, even without completing the fraud. See our federal conspiracy defense page. Laundering counts add exposure of their own, covered on our Houston money laundering defense page.
How the government builds a financial-fraud case
When our managing partner was a federal prosecutor, many fraud cases started the old-fashioned way: a whistleblower and a spreadsheet. That is no longer how they start. Today the government leads with data.
Federal agencies now use data analytics across whole industries, from banking records and loan portfolios to billing and tax data. They look for accounts that behave differently from their peers. You no longer need an angry employee to draw scrutiny. Transacting or billing differently from everyone around you can be enough. In this space, you do not want to be an outlier.
Houston sharpens that risk. Its energy, finance, and real-estate economy produces exactly the high-dollar transactions these programs are built to flag.
How fraud cases actually get caught
From the prosecutor’s desk, three triggers came up again and again:
- The numbers stopped looking normal. Billing or transaction data drifted away from peers until it flagged itself.
- An insider noticed something small. A missing invoice, an unusual wire, a duplicate payment, or a financial report that stopped making sense. Many of these cases involved trusted controllers, office managers, and CFOs nobody suspected.
- A vendor picked up the phone. A surprising number of schemes unraveled when a vendor called to ask why a payment it had already made wasn’t credited. That one call led to fake invoices, diverted payments, and side deals.
The other shift is who gets charged. In May 2025, DOJ’s Criminal Division declared that its “first priority is to prosecute individual criminals”: the executives, officers, and employees who commit the crimes, not just companies. A corporate settlement no longer ends the story for the people who signed the documents.
What happens once a matter opens
The work is largely paper and people. The agencies you’ll most often see in a Houston case include:
- The FBI, which handles a broad range of wire, bank, and investment fraud.
- IRS-Criminal Investigation, which follows the money and often drives cases involving tax loss or laundering.
- The U.S. Postal Inspection Service, SEC, and FDIC-OIG, depending on whether mail, securities, or a bank is involved.
Their tools are quieter than a raid. Grand-jury subpoenas pull bank records and accounting files. Agents analyze email metadata and interview bookkeepers, analysts, and former employees without warning. These cases don’t move fast on the surface, but underneath they are moving the entire time. By the time it feels real to you, the government may already hold years of your records.
That is why timing matters. Getting to counsel before the government finds the issue is about leverage, not a deadline. Once investigators get there first, you are reacting instead of deciding.
Two mistakes that cost people everything
Our former prosecutors have watched both play out from the inside.
- Deleting or “cleaning up” records. Destroying emails, documents, or financial files doesn’t make a problem go away. It creates a new one: obstruction. That is often easier to prove than the original conduct, because the government can show what existed, what was removed, and when. Preserved evidence, produced strategically through counsel, can instead become leverage: reduced exposure, a better outcome, or a stronger position if you choose to cooperate.
- Putting your head in the sand. Ignoring the problem and delaying a call to a lawyer lets the government gather records and talk to witnesses in peace. By the time people react, their leverage is gone.
Keep every contact controlled
Don’t walk in alone to “explain your side.” A lawyer should make the first contact, often without naming you at first, to learn what the government already knows. If there is any resolution or cooperation, it must be clearly defined and documented. Never rely on informal assurances.
If you sense you’re under review, preserve everything and have us step in early to manage contact.
What a wire fraud conviction puts at risk
Federal fraud cases are not scaled-up state cases. They are sentenced under advisory federal Guidelines, and there is no parole in the federal system. Good-conduct credit is capped at 54 days a year, so most people serve the large majority of the sentence imposed.
Here is what federal fraud sentences actually look like. In fiscal 2025, 4,804 people were sentenced nationwide for theft, property destruction, and fraud offenses. Three in four were sentenced to prison, and the average sentence was 23 months (U.S. Sentencing Commission). Only about one in four avoided prison. If your lawyer gets you there, you have beaten the odds.
The single number that drives those sentences is the loss amount. It is so central that it gets its own section below. The damage rarely stops at prison, though. Depending on the facts of your case, you may also face:
- Asset forfeiture: The government can freeze or seize accounts, homes, and funds it claims are tied to the alleged fraud. Sometimes it does this before you’re ever indicted, cutting off the money you need to live and to defend yourself.
- Restitution: Courts routinely order repayment to alleged victims on top of any fine.
- Immigration consequences: A fraud conviction can trigger removal for non-citizens. Under Padilla v. Kentucky, your lawyer must advise you on these effects before you plead.
- Professional licensing loss: Financial professionals, real-estate agents, accountants, physicians, and executives can lose the credentials their careers depend on.
None of these outcomes is automatic. How early and how well a case is defended can change every one of them.
Where Houston financial fraud cases are actually won: the loss amount
In federal fraud sentencing, one number drives almost everything: the loss amount under U.S.S.G. § 2B1.1. If loss is the engine of your sentence, loss reduction is how you cut the fuel line. As a federal prosecutor, our managing partner watched loss set the tone of a case before almost anything else. That is exactly why the defense has to attack it head-on.
The government likes to present its loss figure as if it were handed down on stone tablets. It wasn’t. It is usually a spreadsheet full of assumptions, and the defense’s job is to poke holes in every single cell. You don’t just plead; you litigate the math.
Loss is a ladder, and the rungs move on November 1, 2026
The Guidelines raise the offense level each time loss crosses a set threshold. For sentencings on or after November 1, 2026, the U.S. Sentencing Commission has raised every rung for inflation, the first adjustment since 2015 (amendment text). If your sentencing date is close to November 1, the timing is worth discussing with your lawyer.
Nationally, the median loss in these cases was $239,730 in fiscal 2025 (U.S. Sentencing Commission).
Loss thresholds go up on November 1, 2026
The sentence goes up a step each time the loss passes a dollar line. On November 1, 2026, every line moves higher, so the same loss can score lower.
The median sits about $10,000 under the old $250,000 rung and about $40,000 over the new $200,000 one. A few contested line items can change the range.
Three places we press hardest on a loss calculation
Actual loss must be reasonably foreseeable harm that resulted from the offense. Intended loss must be harm the defendant purposely sought to inflict. Those definitions are where the tactical work happens.
- Credits against loss. Money returned, plus the value of property returned or services provided to the victim before the offense was detected, comes off the top. So does collateral the victim has recovered or can recover by sentencing.
- Double counting. Is the government counting the same dollar twice through different “victims” or transactions? It should be counted once.
- Overstated intended loss. The test is what the client actually set out to take, not the biggest number the paperwork can support. Intended loss can include harm that was impossible or unlikely to happen, so the fight is over intent, not feasibility.
Actual loss vs. intended loss
The government counts not only what was lost, but what it says you intended to take. In health care cases involving government programs, the guidelines treat the total amount billed as prima facie evidence of intended loss. In other cases, prosecutors often push similarly gross figures, such as a full contract value, even when no one actually lost a dime. Picture someone who attempts a $5 million heist but gets $50 because the bank’s Wi-Fi went down. Under the guidelines, that can be scored as a $5 million loss.
That is why prosecutors push the most aggressive intended-loss number they can, and why loss litigation often becomes the real “trial within the case.” Fail to challenge the math from the beginning, and the government effectively sets your sentence before the judge ever does.
The enhancements stack
Once the base level is set, § 2B1.1 serves up a menu of sentencing upgrades you never asked for. Think of it as a dark version of a loyalty rewards program. Ten or more victims: more points. Sophisticated means: more points. Claiming you were acting for a charity: more points.
The danger is stacking. A case that starts at a base level of 7, relatively minor, can quietly turn into a level 26 before you finish reading the presentence report. For a first offender, that is the difference between a range of 0–6 months and a range of 63–78 months. When someone tells us it’s “just a simple fraud case,” we tell them that’s like saying “it’s just physics” right before a plane crash. Each enhancement has to be fought on its own, never conceded as a package.
“Sophisticated means” is easier to trigger than it sounds
“Sophisticated means” sounds like Ocean’s 11. In practice, the bar is much lower, which makes it the prosecutor’s favorite catch-all. It applied in 20% of federal theft, property destruction, and fraud sentencings in fiscal 2025 (U.S. Sentencing Commission).
The guideline commentary says hiding assets or transactions through fictitious entities, corporate shells, or offshore accounts ordinarily qualifies. The Fifth Circuit has gone further. It has upheld the enhancement where a method simply made the offense harder to detect, even if the method itself wasn’t especially sophisticated. Routing money through a shell or secondary account to disguise spending can be enough.
Three ways we push back when the facts allow:
- It wasn’t you. The enhancement applies only if the defendant intentionally engaged in or caused the sophisticated conduct. A co-schemer’s complexity isn’t automatically yours.
- The standard-business defense. The separate entities or accounts were legitimate LLCs formed for ordinary tax or business reasons.
- Deconstruction. The conduct wasn’t a layered conspiracy. It was repetitive, simple transfers that only look busy on a chart. Courts look at the scheme as a whole, so this argument needs records, not adjectives.
- Proportionality. Compared to a global cartel, routine paperwork and panic shouldn’t qualify.
If it’s routine, the enhancement shouldn’t apply. Saying so early, with the records to back it, keeps a single label from adding years.
The victim count is a number too
In a federal fraud case, the government doesn’t just look at the money. It looks at the bodies. The offense level goes up 2 levels for 10 or more victims, or if even one victim suffered substantial financial hardship. It goes up 4 levels when five or more victims suffered substantial financial hardship, and 6 levels at 25 or more. Who counts as a victim can be broader than people expect. In identity cases, it includes anyone whose identifying information was used without permission.
So we go through that list with a fine-tooth comb. We look for duplicates, people already reimbursed, and “victims” whose loss was actually caused by something else. In sentencing, victims are numbers that move judges emotionally. Our job is to make sure those numbers are accurate.
How the math actually adds up: a PPP example
PPP loan fraud has been one of the signature federal fraud prosecutions of this decade, so it makes a useful illustration. Take a $300,000 fraudulent PPP loan, sentenced on or after November 1, 2026. These numbers are for illustration only.
How the math adds up,
and comes back down
Each bar is one step in the calculation. A higher offense level means a longer prison range.
One successful argument and one earned credit take 16 months off the bottom of the range. Ranges assume Criminal History Category I.
One successful argument and one earned credit take 16 months off the bottom of the range. Under the pre-November 2026 table, the same $300,000 loss adds 12 levels instead of 10, so the case would start at level 23 (46–57 months). Ranges assume Criminal History Category I. A first-time offender may also qualify for a two-level “zero-point offender” reduction. Using a real person’s identity can also bring a separate aggravated identity theft charge, which carries a mandatory two years in prison on top of the fraud sentence (18 U.S.C. § 1028A). That is the whole point of this section: the math is litigable, and every level fought is time back.
If the government has already put a loss number in front of you, remember it’s an opening bid. Have us pressure-test that math before you respond to it.
How we defend wire and financial fraud cases in Houston
The best fraud defense often starts before an indictment exists. Get us involved during the investigation, and we can sometimes shape the outcome while the government is still deciding, or keep a case from being charged at all. Our approach is built around a few concrete strategies:
- Investigation-stage intervention: If you’ve received a target letter or subpoena, we handle all contact with agents and prosecutors. Often we reach out first, without naming you, to learn what the government already knows. Then we present your side while charging decisions are still open.
- Attacking intent and good faith: Fraud requires intent to deceive. We build the record of a genuine belief, a disclosed risk, reliance on accountants or lawyers, or a deal that simply failed.
- Challenging the government’s loss math: Because loss drives the sentence, our team, including a CPA financial analyst and a Certified Fraud Examiner, tests the government’s spreadsheet cell by cell, as the section above lays out.
- Suppression and challenging the evidence: We examine every search, seizure, and interview for constitutional violations, because evidence obtained illegally can be kept out.
- Negotiation from a trial-ready position: Prosecutors treat a defense that is ready for trial very differently from one negotiating out of fear. When the government won’t offer a fair resolution, we try cases.
- Fighting for a sentence below the guidelines: In fiscal 2025, only 41% of federal theft, property destruction, and fraud sentences fell within the guideline range. Forty percent were downward variances. We pursue a variance by dismantling the loss calculation and presenting the full picture of who you are under 18 U.S.C. § 3553(a). Done right, that can take significant time off a sentence.
If you want a clear-eyed read on where your case stands, reach out for a confidential review of your options.
Getting ahead of it: proactive, pre-charge reviews
The most sophisticated organizations no longer wait for a subpoena, a raid, or a whistleblower complaint. They bring in experienced counsel early to find vulnerabilities, tighten internal controls, and review billing and financial practices before a small issue becomes a catastrophic one.
One of the biggest lessons from the prosecutor’s chair: most of the fraud schemes we saw could have been prevented by regular audits of internal data and company processes. It isn’t rocket science. It’s basic leadership. Do yourself a favor and complete an audit at least once a year.
What that looks like in practice
- A family office: We discreetly uncovered embezzlement by a CFO while protecting the family’s privacy and day-to-day operations.
- A high-net-worth individual: We uncovered a $400 million kickback scheme involving business partners and identified significant civil RICO exposure.
- An oil services company: We uncovered a $20 million fraud that nearly bankrupted the business, while protecting the CEO from the people actually responsible.
- Financial institutions: We have identified weak internal controls and quietly uncovered employee embezzlement.
Our process when a concern surfaces
- Immediate assessment. We evaluate exposure, preserve privilege, gauge investigative risk, and set an initial strategy.
- Discreet internal investigation. Where warranted, we review financial and operational records and interview witnesses, so you understand exactly what risk exists.
- Controlled engagement with the government. When the situation calls for it, we handle communications and negotiations with DOJ, the FBI, IRS-CI, HHS-OIG, or the U.S. Attorney’s Office. First contact is made on your terms, through counsel, not in a panic.
The goal is the same every time: see the problem from the government’s side before the government does, and address it before the government controls the narrative. You focus on running your business. We handle the investigative and strategic risk.
Why choose Keith & Lorfing for your federal fraud case
Financial-fraud defense rewards experience on both sides of the courtroom. Our team has it. Having built fraud cases from the inside, we know which parts of the government’s case are solid and which are just assumptions in a spreadsheet.
- A former federal prosecutor leads the firm. Managing partner Russell Lorfing is a former Assistant U.S. Attorney recognized nationally for white-collar work by the IRS, DHS, and FBI. The U.S. Attorney’s Office designated him a Cyber Hacking Intellectual Property prosecutor, and electronic evidence is central to any wire-fraud case. In 2024 he was selected Co-Chair of the Federal Criminal Defense Committee for the Texas Criminal Defense Lawyers Association and named a Super Lawyers honoree.
- A retired federal judge sits of counsel. The Hon. E. Scott Frost (Ret.) served as a U.S. Magistrate Judge for the Northern District of Texas, after more than 20 years as a federal prosecutor. He brings more than 30 years of federal courtroom experience to our strategy.
- A deep bench that has seen every side. Our team includes former federal prosecutors, a former federal defender, former FBI agents, a retired IRS criminal investigator, a CPA financial analyst, a Certified Fraud Examiner, and a former general counsel to billionaire family offices. We can follow the money the way the government does, and test where its trail doesn’t hold up. We’ve handled these problems from the investigator’s chair, the bench, and the boardroom.
- Admitted where your case lives. Russell Lorfing is admitted in the Southern District of Texas, along with the Northern and Western Districts, the Fifth Circuit, and the U.S. Supreme Court. We also represent clients in federal courts nationwide. The same federal statutes and Sentencing Guidelines apply in every district, so what matters is how a firm defends federal cases, not where it sits.
Past results never guarantee a future outcome. Every case turns on its own facts, and we’ll tell you straight what yours looks like.
What to expect in the federal process
Federal fraud cases rarely feel urgent on the surface, but underneath they are moving the entire time. Here is the general path a Houston case follows:
- Investigation: An agency gathers records, data, and witness interviews, often for months or years before anything is filed. Target letters and subpoenas surface here. This is the stage with the most leverage, because the government is still deciding who to charge and with what.
- Charging and first appearance: The government files an indictment or information in the Southern District of Texas. You appear before a magistrate judge, who decides on release or detention.
- Pretrial: The sides exchange discovery. The defense moves to suppress evidence, dismiss counts, or narrow the loss theory. Since about 9 in 10 federal cases end in a guilty plea, this is where much of the real defense happens.
- Resolution and sentencing: The case ends in a plea or a trial at the Bob Casey courthouse. Sentencing is its own fight. The court weighs the advisory Guidelines, the loss amount, and the mitigation your lawyer presents. Nationally, most fraud sentences in fiscal 2025 fell below the guideline range.
Having someone who has walked that path from the prosecution side changes how you move through it. You can contact our firm at any stage. The earlier, the better.
Talk to a Houston fraud defense team before the government finishes its case
A federal fraud investigation is frightening, but you are not out of options, and you don’t have to face it alone. In a federal fraud case, the government’s numbers are just its opening bid. The sooner a former prosecutor is reviewing your situation, the more room there is to change where it goes.
Until you talk to us, do three things:
- Preserve everything. Don’t delete or “clean up” a single email, text, or file.
- Don’t explain yourself to agents. Be polite, decline to answer, and let counsel make first contact.
- Don’t wait for it to feel real. By then, the government is usually much further along than you think.
Keith & Lorfing defends wire and financial fraud cases in Houston and throughout the Southern District of Texas. We’ll listen, tell you honestly what you’re facing, and start building a defense.
Schedule a confidential consultation with our federal wire fraud defense lawyer today.
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Frequently asked questions
What is the difference between wire fraud and mail fraud?
They are nearly identical schemes under different statutes. Wire fraud (§ 1343) covers electronic communications; mail fraud (§ 1341) covers the postal service or a private carrier. Prosecutors often charge both.
Can I be charged with wire fraud if no one actually lost money?
Yes. The government does not have to prove the scheme succeeded. In Kousisis v. United States (2025), the Supreme Court held that lying to induce a deal can be wire fraud even without economic loss to the victim. At sentencing, prosecutors may also argue “intended loss,” such as a full contract value, even when no one lost a dime. That number can and should be challenged.
What does “loss amount” mean and why does it matter so much?
It is the government’s estimate of the harm from the alleged scheme. Under the advisory Guidelines, it is the biggest driver of a fraud sentence, and each threshold it crosses raises the range. Because it is often overstated, we litigate it hard. See the loss-amount section above.
How long is the average federal fraud sentence?
In fiscal 2025, the average sentence nationwide for theft, property destruction, and fraud offenses was 23 months, according to the U.S. Sentencing Commission. Your own exposure depends mostly on the loss amount and the enhancements the government seeks.
Can I get probation for federal wire fraud?
It is possible, but most people don’t get it. In fiscal 2025, three in four people sentenced federally for theft, property destruction, and fraud went to prison. A lower loss figure, fewer enhancements, and strong § 3553(a) mitigation are what move a case toward a non-prison sentence.
Should I talk to FBI or IRS agents who contact me about a fraud investigation?
No, not on your own. Making a false statement to a federal agent is itself a crime under 18 U.S.C. § 1001. Stay polite, decline to answer, and call a lawyer. Counsel can make first contact and learn what the government already knows.
Should I delete or “clean up” emails and records?
Never. Destroying evidence creates an obstruction problem that is often easier to prove than the original conduct. Preserved records, produced strategically through counsel, can instead become leverage.
Where will my federal fraud case be heard in Houston?
Most are handled in the Southern District of Texas, Houston Division, at the Bob Casey U.S. Courthouse, 515 Rusk St.
Can the government seize my accounts before I’m even charged?
Sometimes, yes. It can pursue forfeiture of assets it claims are tied to the offense, occasionally before an indictment. Early counsel can challenge overbroad seizures.
Is a PPP or COVID-relief loan issue really a federal crime?
It can be. Federal task forces have charged many pandemic-loan cases as wire or bank fraud. Treat any questioning about a relief loan as a serious federal matter and get advice first.
Does hiring a lawyer during the investigation actually change anything?
It can. Early involvement lets us manage contact with investigators, preserve evidence, challenge the loss theory, and sometimes influence whether charges are filed at all. Once the government finds the issue first, you’re reacting instead of deciding.
How long does a federal fraud case take?
It varies widely. Investigations alone can run months or years before charges are filed. After charging, some cases resolve in months, while complex wire-fraud or conspiracy cases can run a year or more.
