When we think of “white collar crimes” like fraud, we think of business executives defrauding shareholders for millions of dollars while escaping with a slap on the wrist.
For everyday people, this couldn’t be further from the truth.
State and federal authorities treat fraud very seriously, and if you or someone you love is convicted of fraud, you could face significant penalties. Generally speaking, you could be in violation of criminal fraud laws anytime you:
- Commit an act that results in an unfair or undeserved benefit to you, and/or
- Cause harm or loss to another person.
This can be anything from putting a fake registration sticker on your car to passing fake checks, skimming credit cards or running a telemarketing scheme. To make matters worse, the federal government also has the authority to prosecute a number of different fraud crimes, so you could find yourself facing not only state level charges but federal charges as well.
Understanding fraud under the law
While fraud is similar to theft, it also involves the pretense of inducing a victim to entrust you with their property or financial wealth. Because fraud involves more planning, it is typically punished more severely.
In order to establish fraudulent behavior, it must be proven that:
- The defendant made a false statement;
- The defendant knew the statement was false;
- The defendant intended to deceive the victim;
- The victim relied on the statement;
- Injury to the victim occurred.
If any of the statements above aren’t true in a case, the defendant cannot be convicted of fraud. This means that if you were an unwitting participant in a fraud — that someone else had duped you into participating in their scheme — then you are not guilty of fraud.
The federal government can get involved in cases where the fraud crosses state lines, if it involves a federal agency (such as mail fraud) or if it involves electronic communication (wire fraud).
Under state and federal law, there are a number of different types of specific charges that relate to fraud. That includes:
It’s illegal under federal law to use false pretenses to obtain money under the custody of a financial institution.
Doing so is the crime of bank fraud.
Bank fraud can include situations like check kiting or “booster checks,” which is when someone writes a bad check to increase the credit limit on a credit card they plan to abuse. It also includes situations like phishing, credit card fraud and accounting fraud.
Bank fraud is a very serious crime. Bank fraud investigations are run by federal agents, who have substantially more resources than traditional police departments. A conviction for bank fraud could carry penalties as high as 30 years in federal prison and fines of up to $1 million.
If you suspect that you or someone you love is under investigation for bank fraud, it’s important to speak with a federal defense attorney as soon as possible.
What is bank fraud?
Bank fraud is defined as “knowingly using a scheme or artifice” to either:
- Defraud a financial institution, or
- Obtain any of the money or other property under custody of the financial institution by false pretenses.
For example, let’s say Mike goes to the bank to apply for a small business loan. Mike’s business nets around $70,000 per year in profits, and because they don’t want to give Mike an amount of money he can’t handle, the bank has specific rules around how much they will lend him.
However, Mike intentionally misrepresents his annual business profits on his loan application as $700,000 in order to receive a larger amount of cash. Mike has likely committed bank fraud.
Penalties for bank fraud
As we mentioned above, bank fraud is treated very seriously by the federal government. Depending on the facts of the case, it carries penalties up to:
- 30 years in federal prison
- $1 million in fines
While you might expect leniency for first-time offenders, federal courts have shown a track record for handing down stiff penalties to people who otherwise don’t have any criminal record.
If you have been charged with embezzlement, either at the state or federal level, there are some things you need to know about your criminal defense. The prosecutor’s primary objective is to seek restitution for the victim, and not necessarily to throw you in jail. However, in order to fight your charges fully and to preserve your freedom and happiness, it is imperative you have the right legal assistance on your side.
As a Los Angeles embezzlement attorney with more than 20 years of experience, I understand that embezzlement, fraud and all other white collar crimes are serious charges. Many of my embezzlement clients tell me that they never intended to take things to the point of committing a crime. Many more tell me that they thought they were engaging in an honest activity, and weren’t aware of the law. Others, of course, are entrapped by federal investigators.
Regardless of the particular circumstances of your charges, I have the knowledge and experience to conduct an accurate assessment of the matter. I can determine what approach will be most advantageous at this point to negotiate with the prosecuting attorney or fight to the end in criminal court. When I am able to get involved early in the process, sometimes even before formal charges are filed against my client, I am often able to get better results. I may even be able to keep the matter out of court and off your record.
Penalties for Embezzlement
You could be charged with grand theft if the amount you are accused of stealing is worth more than $950. In order to prove that you are guilty of embezzlement, a prosecutor must show: that you had a relationship of trust with the victim, that you were entrusted with money / property, or that you intended to deprive the victim of those funds or property by taking them as your own. Many different individuals can be accused of embezzlement: care-givers, retail workers, contractors, valet drivers, jewelers, tenants, etc.
If you are convicted of embezzlement, you could face some harsh consequences. You could be charged with either a misdemeanor or a felony, depending on your criminal record and the details of your case. If you are convicted of a grand theft embezzlement misdemeanor, you could spend one year in jail and be forced to pay $1,000. If, however, you are convicted of a felony embezzlement charge, you could spend up to 16 months in jail or even two to three years in prison, and have to pay $10,000.
If you are convicted of petty theft embezzlement, you could spend six months in jail and pay up to $1,000. If you did not embezzle more than $50, you might be able to get your charges dropped to an infraction- which would only result in a $250 fine. If you embezzled more than $950 over the course of a year, each act of embezzlement can be added up to charge you with grand theft. If you embezzled more than $65,000 this is an aggravated offense and you could face an additional year added to your prison sentence. If you embezzled against a dependent or a senior citizen, you could also face additional sentences.
If federal authorities suspect that you used the mail as part of a scheme to commit fraud, you might find yourself facing charges of mail fraud.
You can be found guilty of committing mail fraud for involving the United States Postal Service or any other mail carrier in a fraudulent scheme, even if the mail was only involved in a minor way. A fraud does not need to be carried out primarily through the mail in order to constitute mail fraud.
Mail fraud is a federal crime that is often charged alongside other federal or state crimes and carries severe penalties. Like most federal crimes, a conviction for mail fraud carries long sentences and steep fines.
What is mail fraud?
When a mail fraud case makes it to court, the prosecution must prove three facts beyond a reasonable doubt in order to convict the defendant:
- There was specific intent to commit fraud,
- A scheme to commit fraud, and
- Use of the mail as a means to further that scheme
If the prosecution can’t prove all three of these facts, a defendant can’t be found guilty of committing mail fraud. The language above is pretty vague, so we’ll explain what this means below.
1. Specific intent to commit fraud
“Specific intent” means that the defendant committed fraud knowingly and intentionally. The prosecution must prove that the defendant knew about the scheme and participated in it for the purpose of committing fraud.
However, there are certain instances when a person can be convicted of mail fraud without demonstrating specific intent to defraud. If a person does not intentionally lie or deceive anyone but shows a “reckless indifference” to the truth, it may still be considered fraud.
Below is an example of a case where reckless indifference might constitute mail fraud:
Claudia runs a company that manufactures cleaning products. She sends out a flyer marketing their newest household cleaner. The flyer that states that the product kills more germs on contact than any of the brand-name cleaners on the market. But Claudia and her company never conducted any research to test the effectiveness of the cleaner against other cleaners and have no evidence that the statement is true.
While Claudia did not have specific intent to deceive customers, she also wasn’t sure that her advertisement was true and accurate. Claudia could be found guilty of mail fraud because the statement on her flyer demonstrates a reckless indifference to the truth.
2. A scheme to commit fraud
In the case of mail fraud, “fraud” is knowingly or recklessly misrepresenting a material fact in order to deprive someone else of something valuable, or in simpler terms, lying to get someone to give up something valuable. In most instances, that “something valuable” is money. Below are some important facts to know about fraud as it relates to mail fraud charges:
- You don’t need to say something untrue to commit fraud. Even if you don’t blatantly lie or make a false statement, it is possible to be found guilty of fraud by omitting important facts.
- The misrepresentation must be a material fact. In other words, the lie or information that was left out has to be something important.
Example 1: John tries to get people to invest in a new restaurant in Santa Clarita by advertising that a big investor, a man from New York, has already invested over $500,000, even though that man actually decided not to invest in the restaurant.
John’s misrepresentation was of a significant fact to other potential investors and likely constitutes fraud.
Example 2: John tries to get people to invest in a new restaurant in Santa Clarita by advertising that a big investor, a man from New York, has already invested over $500,000. However, the investor is actually a woman from New York.
Because the fact of whether the investor is a man or a woman is probably not considered to be material, John would most likely not be convicted of fraud in this case.
- The misrepresentation must be meant to deceive someone of “ordinary prudence.” In simpler terms, this means that someone with a normal amount of common sense has to be susceptible to believing the lie. If the misrepresentation is outrageous or absurd, it may not constitute fraud.
Example: A novelty shop in Carlsbad, CA mails out flyers advertising that their shop is selling “real pet aliens from a distant galaxy.”
It is possible that the shop would not be considered guilty of fraud since the lie would be considered outrageous by someone with a reasonable degree of common sense.
- The scheme to commit fraud does not have to be successful. Even if nobody buys into the scheme and no money or materials are gained from other people, you can still be convicted of committing mail fraud for trying to do so.
3. Use of the mail as a means to further a scheme to commit fraud
Mail fraud, like many other federal crimes, is handled by the federal court because it can be carried out across state lines. However, state lines do not need to be crossed in order for a crime to constitute mail fraud. The use of the mail in order to carry out or further a fraudulent scheme can take a number of forms including the following:
- Having materials delivered by the United States Postal Service or any other mail carrier or shipping company
- Having someone deposit materials into a mailbox for you
- Receiving materials delivered by the United States Postal Service or any other mail carrier or shipping company
The federal government has broad and far-reaching powers to investigate and prosecute suspected cases of wire fraud.
Wire fraud refers to cases of fraud committed over electronic communication, such as the telephone, radio or e-mail. Penalties for wire fraud are steep, with convictions carrying prison sentences as high as 20 years.
Because of this, if you or someone you love has been accused of wire fraud, it’s important to speak with a federal criminal defense attorney who specializes in wire fraud cases. The attorney can help you build your defense and preserve your freedom.
What is Wire Fraud?
The crime of wire fraud has three “elements,” which the prosecutor must prove to convict someone. There must be:
- A scheme to commit fraud;
- Use of wire, radio or television communication to further that scheme; and
- Specific intent to commit fraud.
Fraud, of course, is a crime with a lot of nuance. The federal government must prove you made a deceitful omission of material facts, caused a material loss, and many other things. This is also where working with an experienced wire fraud defense attorney can benefit you.
Next, the prosecutor must prove that you used any type of wire, radio or television medium to commit the fraud — this can be anything from a fax to telephone or e-mail.
And finally, the federal government must prove that you had “specific intent” to commit fraud. In other words, you had to know that you were participating in a fraud scheme and meant to go along with it.
Legal defenses against fraud charges
“Mr. Helfend absolutely saved my bacon. After finding myself charged with fraud, I was terrified. I have never been introduced to the legal system from this side before, and it was unsettling. However, Robert was able to calm me down and help me figure out my situation. He even got the case dropped before trial! I don’t want to be in another situation where I need a criminal defense lawyer, but if I ever am, I know who I will call!”Pete, CA
No matter what kind of fraud you’ve been accused of, these are the most common defense against your charges:
- You didn’t have fraudulent intent;
- You were a victim of mistaken identity;
- Authorities violated your right to protection from illegal search and seizure.
If you’ve been accused of fraud, it’s important to speak with a skilled criminal defense attorney as soon as possible. Your attorney can carefully review the facts of your case and work with you to build your defense.
Robert M. Helfend has been defending white collar crimes such as fraud since 1984, securing successful judgments for thousands of clients in that time. He is rated by SuperLawyers, the National Trial Lawyers Top 100 and Lead Counsel. Call today for your free case evaluation — 800-834-6434.