A company advertises a brand-new 1957 car. They claim to have several in stock and will ship it right away. They know they don't have those cars and cant get them because they don't exist and never will be built again. You order a car and they take your money knowing the sale cannot happen.

Isn't this fraud? If so, at what jurisdictional level would stealing money this way online relate to? State, interstate or federal government laws?


1 Answer 1


In general, knowingly making a false statement as part of a commercial or financial transaction, or as part of a contract, with the intention that the other party will rely on that statement and be harmed by this is likely to be fraud.

However, there are some limitations. For the lie to be common-law fraud:

  1. The other party must in fact rely on the false statement.
  2. The other party must suffer harm as a result of relying on the false statement.
  3. The reliance must be reasonable.

If a seller advertises having new 1957 model cars in 2020, a court might well find that this was so improbable that no reasonable person would have relied on hte statement, and that therefore it is not fraud. Whether the reliance is reasonable depends on the overall facts of the case, and the details might affect what is considered reasonable.

In some jurisdictions such a false statement might be actionable false advertising even if it is not fraud.

If the US mails are used as part of a fraud or attempted fraud 18 U.S. Code § 1341 applies. This law applies whether any actual harm occured or not, adn whether the victim relied on the false statement or not. It is commonly known as "mail fraud".

18 U.S. Code CHAPTER 47 is a US Federal law that prohibits a variety of false statements and false documents.

Section 1001 of this chapter prohibits false statements and documents "in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States" but I am not clear if this would apply in the case described in the question.

Other sections of chapter 47 deal mostly with false statements made to the US Government, or to obtain money or benefits from the government, Or in connection with various particular regulated activities, and do not seem to apply to the case in the question.

According to the Justia article on Fraud:

Federal fraud statutes, along with most state laws, require proof of a “scheme or artifice” to defraud. The statutes do not provide an explicit definition of these terms, but courts have developed definitions through precedent. The U.S. Supreme Court held in Carpenter v. United States that the terms apply to any plan intended to deprive another of property, regardless of whether it would cause immediate financial harm.

However, I think that a scheme such as the one described in the question would be more likely to be prosecuted by a US State than by the US Federal government. Either the state where the maker of the false statements was at the time of the statements, or the state where the victim was present could prosecute.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .