A federal judge recently sentenced the former city clerk of Coldwater, MS to 21 months in federal prison for wire fraud. About 35 miles south of Memphis, the town’s 1,500 residents will not soon forgive a loss of over $216,000 with nothing to show for the expense.

But while the phrase “wire fraud’ sounds profoundly serious, few Americans know what the crime really is. What does it take to commit federal wire fraud? How do you recognize when someone you know is, or you yourself are, committing wire fraud?

Small town finds it funded unauthorized spending

Coldwater city clerk George Nangah used a City of Coldwater debit card to buy gift cards that he then used at retail stores and hotels and to purchase airplane tickets, according to the U.S. Department of Justice (DOJ).

The DOJ says he also siphoned off money from Clearwater’s bank accounts to pay himself as well as another person as part of a kickback scheme. The total cost of $216,400 allegedly went to nothing that would benefit the city.

Aside from federal prison for a year and 9 months for wire fraud, Nangah might also face embezzlement charges in Mississippi. He would have to serve any sentences back to back, not concurrently, by order of the federal judge. The federal sentence also requires Nangah to pay the city back.

Mississippi case leads to FBI investigation

Wire fraud has a long history and prehistory. Much as the federal government began overseeing the old paper postal service in the 1700s, it now also oversees interstate wire communications and radio transmissions. The U.S. created modern laws against mail fraud about 150 years ago and laws against the crime of wire fraud soon after the invention of wire communication.

Today, almost every credit card transaction, hotel or plane reservation, and text or email message passes through multiple states, if not continents. So, almost all swindles other than face-to-face flimflams are possible cases of interstate fraud and thus potential federal matters.

According to the DOJ, Nangah’s case is straightforward. They say he used a city debit card at stores in Tennessee to draw money from Coldwater’s bank account. The purchases were not for Coldwater business.