White Collar Crime
Defense Lawyer in Fort Myers
Federal defense attorney David Joffe specializes in criminal cases involving financial crimes
White collar crimes are typically regulated by the state and federal governments. Therefore, defendants in these cases potentially face longer sentences and may be required to pay higher fines. These offenses are typically non-violent in nature, and they most often involve government officials and people who work for financial institutions. Merely being accused of a white collar crime can be detrimental to the accused’s career and personal reputation. Therefore, anyone who is under investigation for this type of crime in should immediately contact a Fort Myers white collar defense attorney.
Fort Myers wire fraud cases
Federal and state laws classify fraud that involves the use of the phone, internet or another form of telecommunication as “wire fraud.” Other modes of communication through which wire fraud may take place include:
- text messaging
- instant messaging
- social media
Wire fraud originated with phone calls when fraudsters had to make multiple calls to find victims. Perpetrators still use the phone as a vehicle for sourcing victims; however, today, there are several other, more instant means of luring people into fraudulent schemes. Scammers create online posts requesting charitable assistance, inviting job seekers to apply for nonexistent opportunities, and conveying virtually any other convincing scenario to attract potential victims. Criminals also send emails pretending to be banking institutions, wealthy individuals, and foreign lottery organizations in the interest of tricking unsuspecting victims into parting with their money.
Establishing a case for wire fraud
The U.S. Department of Criminal Justice identifies four key elements of wire fraud:
- the perpetrator voluntarily and intentionally devised or participated in a scheme to defraud someone else out of money
- the perpetrator did so with the intent to defraud
- it was reasonably foreseeable that interstate wire communications would be used
- interstate wire communications were used
If convicted in criminal court on a wire fraud charge, a defendant may be sentenced to up to 20 years in federal prison and ordered to pay fines of up to $250,000 per count. Organizations may be fined up to $500,000. If the fraudulent activity takes place in relation to special circumstances, such as taking advantage of people during a nationally-declared state of emergency, the perpetrator may be sentenced to up to 30 years and ordered to pay a fine of up to $1 million.
Credit card fraud
Often classified as a form of identity theft, fraud involving credit cards occurs when an individual uses someone else’s card without authorization. The fraudulent use of debit cards and other types of payment cards is also considered credit card fraud, though the card types may differ significantly in terms of purpose and functionality. The fraudster may either physically obtain the card, or he or she may illegally obtain the card number and other information, including:
- cardholder’s name
- card’s expiration date
- verification code
- PIN number
There are several ways fraudsters may obtain the personal information they need to make unauthorized purchases or withdraw money from the victim’s account. Information can be skimmed from a card’s magnetic strip, obtained by visually observing the physical card, stealing the victim’s personal mail, or defrauding potential victims into providing personal information over the phone or via email.
Skimming credit card information
Skimming information from a credit card can occur in a few different ways. Employees may memorize or transcribe a card’s security code and then later retrieve the card information from the merchant’s card processing system. Some fraudsters even go so far as to fit a physical card scanner onto payment terminals and ATMs. In many cases, people have swiped their card in a card reader that has been tampered with only to later find that their account has been compromised.
Payment card duplication scams
Old-fashioned credit card machines produced a carbon copy of the customer’s card. Criminals later use the carbon copies to obtain the cardholder’s information and use the card for fraudulent transactions. Today, fraudsters strategically position hidden cameras at payment terminals to capture images of the cardholder’s information and later use the information to conduct fraudulent transactions.
Credit card fraud and hacking
Public WiFi networks are sometimes vulnerable to hackers who steal credit card information. Not only are unsuspecting internet users sometimes targeted when they use an unsecured network, but hackers sometimes set a trap for fraud victims. In some cases, hackers will deliberately create a fake hotspot in a public place. When someone who wants to access Wifi in the area logs into the network, they are met by a screen that asks for a credit card number to use the network. Victims enter their credit card information thinking they will gain access to a paid network. Instead, the victim’s information goes directly to the scammers.
Do not say anything that might incriminate you. Speak with an attorney first.
Federal credit card fraud law
Credit card fraud is a federal crime. Congress has enacted laws against credit card fraud in the interest of discouraging organized criminal organizations from trafficking devices criminals use to skim card information. These devices cost financial institutions hundreds of millions of dollars annually. Conviction and sentencing for credit card fraud depend on the specific activities in which the fraudster engages to obtain illegal access to the unauthorized payment card. Courts also consider whether a defendant has been convicted of credit card fraud before. Criminal court penalties may range from individuals who are convicted being ordered to pay a fine up to being sentenced to 15 years in federal prison. Retaining an attorney who specializes in defending federal cases can greatly increase the chances of reducing the severity of your sentence.
Mortgage fraud is the act of deliberately misrepresenting information a mortgage lender or underwriter uses when an individual applies to fund, purchase, or insure a mortgage. Mortgage fraud typically falls within one of two categories: fraud for profit and fraud for property. Fraud for profit is usually committed by those who work in the mortgage industry including appraisers, bank officers, mortgage bankers, and other professionals. Borrowers are the most common culprits of fraud for property. For example, a home buyer may lie about his or her income or assets when applying for a mortgage loan. Applicants misrepresent their finances to gain approval or to obtain a better interest rate.
Property flippers and mortgage fraud
Buying properties for the purpose of quickly renovating and selling the properties is not inherently illegal. However, there are some instances that can make property flipping a fraudulent practice. For example, some flippers inflate the price of a property based on improvements the flipper has supposedly made. The transaction becomes fraudulent when the flipper does not actually make the improvements but instead hires an appraiser to rate the property at a higher value. Real estate agents also sometimes work together to perpetuate property flipping fraud.
Equity skimming involves investors who use a straw buyer or someone who purchases a property on behalf of someone else. The investor may use false income documents and credit reports to purchase the property in the straw buyer’s name. However, at closing, the straw buyer passes the property along to the investor in a quit claim deed. Once the investor takes possession of the property, he or she rents the property to a tenant until the property is foreclosed on. The investor pockets the rental income for several months up until foreclosure takes place.
Medicare and health care Fraud in Florida
Medical care providers, patients, and insurance professionals are all potential perpetrators of healthcare fraud. Different players in the healthcare system engage in fraudulent activities to obtain unlawful payments or benefits. Common types of healthcare fraud perpetuated by healthcare providers include:
- submitting multiple insurance claims for the same service
- billing for visits, services, or supplies the patient never received
- submitting multiple invoices for the same service
- billing for a more expensive service than the patient actually received
Individuals more commonly engage in healthcare fraud that involves stealing someone’s identity or illegally obtaining a prescription. Types of healthcare fraud individuals commit include:
- stealing or swapping identities with someone to use their insurance
- impersonating a healthcare professional to provide or bill for a service the individual is not licensed to provide
- convincing people to provide their health insurance information to be billed for services they did not receive, steal the individual’s identity, or enroll the individual in a fake benefit plan
- creating or using fake prescriptions
- misusing legally-prescribed prescriptions
- visiting multiple healthcare providers to get multiple prescriptions for a controlled substance
Penalties for health care and Medicare fraud
Healthcare fraud is a federal crime that carries severe penalties. If convicted, a defendant may be sentenced to a maximum of 10 years in federal prison and/or ordered to pay a fine of up to $250,000. The financial payout can exceed $250,000 depending on the amount of pecuniary gain the defendant enjoyed as a result of the fraud and the amount of suffering the defendant caused victims of the scheme.
Any act committed to defraud an insurance process is referred to as insurance fraud. Insurers and claimants may engage in fraudulent activities. Insurance fraud is categorized as either hard or soft fraud. Hard fraud occurs when a claimant plans or fabricates a loss that is covered by his or her insurance policy. Common examples of losses include car accidents, fires, and vehicle theft. Soft fraud, also referred to as opportunistic fraud, is more common than hard fraud. This type of fraud occurs when policyholders exaggerate legitimate claims. For example, a claimant whose car was stolen may claim more expensive equipment than the car actually had. An individual commits healthcare fraud if he or she avoids disclosing a preexisting condition that would cause his or her insurance premium to be higher.
Life insurance fraud
Most life insurance fraud occurs when the insured submits an application. An applicant engages in fraud if he or she misrepresents his or her personal information, health, or income in the interest of getting a lower premium. Because insurance policies can be amended by a request made over the phone or the internet, fraudsters are more easily able to add themselves as beneficiaries of an insurance policy. Another version of insurance fraud occurs when a policyholder fakes his or her death and receives the death benefit by secretly working with one of the beneficiaries.
Automobile insurance fraud
Groups of fraudsters stage collisions to collect payouts from insurance claims. Some elaborate auto insurance fraud rings may even involve insurance adjusters and others who create fake police reports. In a staged collision, a car driven by a fraudster will make an unexpected maneuver on the road that causes an innocent party to collide with the fraudster’s vehicle. The fraudster’s vehicle typically has multiple passengers. Each occupant in the fraudster’s vehicle files a claim for injuries caused by the accident. The fraud ring will typically recruit a doctor to diagnose soft tissue injuries that are more difficult to dispute. The fraudsters then attempt to receive an insurance payout for exaggerated physical injuries and property damage that may exceed the actual damage that was done to the vehicle during the staged accident.
Any attempt to defraud a financial institution is classified as bank fraud. Schemes that are designed to obtain property that is owned or under the control of a financial institution by means of deception are also categorized as bank fraud. Due to the nature of the business financial institutions conduct, bank fraud most often includes at least one other type of fraud, including:
- loan fraud
- mortgage fraud
- mail fraud
- wire fraud
- falsifying financial documents
Businesses sometimes take unethical steps to hide serious financial problems. The company’s bookkeeper may overstate the business’ income, inflate the value of its assets, or claim a profit when the business is operating at a loss. Lending institutions and investors rely on the company’s falsified statements in determining whether to invest or extend credit to the business. If the fraud is successful, the organization is generally able to access capital an investor or banking institution would otherwise be less inclined to extend if they were privy to the company’s actual financial state. Some of the world’s most famous organizations have been implicated in accounting fraud scandals.
Individuals and businesses engage in fraud when they supply false information on loan applications. These falsified applications misstate the borrower’s income, credit history, or even personal details to obscure the borrower’s identity or financial history. Bank officers are sometimes the perpetrators of loan fraud. A common scheme involves a bank officer approving a loan for his or her own business entity or for a business owned by an accomplice. After receiving the loan, the borrower declares bankruptcy or vanishes altogether. In some cases, the borrower may be a fictitious entity.
ATM deposit fraud
ATM deposit fraud occurs when an account holder deposits an empty envelope while entering a deposit amount during an ATM transaction. In response, banks have authorized only the first $100 available to the account holder after an ATM deposit. ATM technology now allows account holders to make deposits at machines without using envelopes. Modern machines now read checks and currency to keep a real-time record of the amount an account holder deposits into an ATM.
Check floating is a type of fraud that occurs if an individual writes a check from an account that does not have funds to cover the check amount. Banks have a float system that makes funds available following a check deposit although the amount is not immediately deducted from the check writer’s account. Check forgery and check altering are other forms of check fraud. An individual forges a check when he or she imitates the depositor’s signature. Some fraudsters even illegally print checks in other people’s names. Check altering typically involves changing the listed recipient on the check, changing the check amount, or changing the check’s date.
Bank fraud penalties
Bank fraud is a federal offense. Individuals who are convicted of bank fraud may be sentenced to up to 30 years imprisonment and $1,000,000 in fines. Check-writing, financial card fraud, and computer crimes that involve financial institution fraud may also carry penalties under state law.
People who fraudulently file for bankruptcy utilize the process for several different purposes. The most common types of bankruptcy fraud are:
- hiding assets before or during bankruptcy proceedings
- misrepresenting the value of the filer’s property
- intentionally accumulating debt and filing bankruptcy
Sometimes bankruptcy filers make honest mistakes. However, there are times when people intentionally provide false information when filing for bankruptcy and when bankruptcy proceedings are underway. In some cases, an individual may hide assets prior to filing.
Because the bankruptcy process requires trustees to account for assets owned by the filer, people who will be filing for bankruptcy are often tempted to hide property, money, and other assets. Filers resort to these measures because they want to have assets left over for themselves after the process is over. Hiding assets is a bad idea because trustees are able to review the filer’s history from 90 days to two years prior to the filer initiating the bankruptcy process. If the trustee suspects fraud, the filer’s friends, family members, and anyone else who may have been an accomplice to the fraud may come under scrutiny. Activities that raise red flags in bankruptcy proceedings include:
- giving large monetary gifts prior to filing for bankruptcy
- gifting property and other expensive items prior to filing for bankruptcy
- selling property for nominal amounts
- transferring car and boat titles to friends and family members
Misrepresenting property value
Although a person may list all of his or her assets during the bankruptcy process, listing an asset at a lower value than the item is worth also constitutes fraud. In many cases, a filer may list an item at a lower value as an honest mistake. Therefore, it is important for the filer to reference old receipts or, if possible, obtain an appraisal. A Fort Myers criminal defense attorney can help bankruptcy filers obtain the necessary documentation to protect the filer against accusations of bankruptcy fraud.
Taking on debt to intentionally file bankruptcy
There are people who deliberately get loans and make large purchases with the intent of using the bankruptcy process as a “get out of jail free” card. Taking on new debt with the intent of having the debt discharged in bankruptcy is referred to as “acting in bad faith.” Bankruptcy trustees can examine past bankruptcies and purchase history to determine whether the filer’s activities resemble fraud.
Penalties for bankruptcy fraud
Individuals who are charged with bankruptcy fraud may be sentenced to up to five years in federal prison and ordered to pay up to $250,000 in fines. People who are suspected of bankruptcy fraud can be arrested and subjected to a full criminal investigation. A Fort Myers criminal defense lawyer can represent people who are accused of fraud in legal proceedings and help individuals who are under investigation protect their reputations.
Criminals and organizations that are engaged in illegal revenue-generating activities often engage in money laundering to “legitimize” their ill-gotten proceeds. The process typically involves multiple steps to obscure the money’s origins. Money laundering takes place in three main stages:
Placement involves dividing large sums of cash into smaller amounts and depositing the amounts into financial institutions. Alternatively, fraudsters may purchase checks, money orders, and other monetary instruments that are deposited into a bank account at a separate location. The layering stage focuses on concealing the origins of the money through a series of financial transactions and bookkeeping tricks. During this stage, the money may be used to purchase real estate or exchanged for casino chips, cash, gold, or other valuable items. Layering can be so complex that the money makes its way around the world through multiple transactions. Integration is the final stage, in which fraudsters withdraw the money from a legitimate bank account and are able to use the money for their desired purpose. Common vehicles of money laundering include:
- investment commodities
- real estate
- shell companies
Embezzlement occurs when an individual, company, or other entity misappropriates funds or other entrusted assets. The embezzler receives the asset lawfully. However, he or she uses his or her lawful right to possess the assets to ultimately misuse the assets for an unauthorized purpose. Ponzi schemes are examples of embezzlement cases in which an individual or fraudulent entity solicits money by deceiving victims into believing they are making investments from which they will receive a return. Meanwhile, the perpetrators use the money to fund their own elaborate purchases, extravagant lifestyles, and other unauthorized uses. In a more casual example, a cashier engages in embezzlement if he or she secretly pockets money from the cash register he or she uses at work.
Elements required for an embezzlement conviction
Prosecutors are required to establish several elements in an embezzlement case. A betrayal of trust is the key underlying theme in embezzlement cases. To obtain a conviction, the prosecution must prove the defendant:
- Had a fiduciary relationship with the victim; one party is required to have relied on the other
- Acquired the property through the fiduciary relationship with the victim
- Intentionally embezzled the property
- Taken ownership of the property before transferring, destroying, or hiding the property
Penalties for embezzlement
People who embezzle assets may be subjected to criminal and civil consequences. Penalties for embezzlement vary based on the value of the asset. If convicted in a Florida court, the defendant may be sentenced to up to 30 years in prison and fined up to $10,000. In large-scale embezzlement cases like Ponzi schemes, defendants can face several counts and be sentenced for each count. Therefore, the penalties can quickly add up.
RICO & racketeering
Racketeering is an organized crime in which the participants set up a coordinated illegal scheme or “racket.” The most popular type of racket is one in which an organized criminal group offers to protect a person or business from criminal activity against a person or property. The racketeers threaten to perpetuate violence or vandalism against the individual or business if the entity does not accept the racketeer’s “protective” services. Nevertheless, a racket can be any scheme in which the perpetrators engage in illegal activities to repeatedly collect a profit.
In 1970, the Racketeer Influenced and Corrupt Organizations (RICO) Act became federal law. The RICO Act made racketeering a federal offense for which law enforcement could charge individuals and groups of people who have committed certain violations on multiple occasions within a 10-year period. Crimes typically included in racketeering schemes include:
- drug trafficking
- protection rackets
- loan sharking
Congress enacted the RICO statute with the intent to stop organized crime groups from infiltrating legitimate organizations operating in interstate commerce. Through the RICO Act, the federal government successfully prosecuted leaders of some of the most infamous criminal organizations in the U.S.
Penalties under the RICO statute
Defendants prosecuted under the RICO Act may be sentenced to up to 20 years in federal prison. The defendant may also be required to forfeit all proceeds from the racket. The individual may also face charges for each individual crime in which he or she participates as part of the scheme.
Tax evasion and tax fraud
Tax evasion is defined as the act of using illegal means to avoid paying taxes. Similarly, tax fraud is defined as the act of an individual or entity falsifying documentation in the interest of avoiding paying taxes. Tax evasion is often considered to be a type of tax fraud. Other examples of tax fraud include:
- claiming false deductions
- claiming personal expenses as business expenses
- using a false Social Security Number
- not reporting income
- not paying taxes for business employees
Penalties for tax fraud
Individuals who are convicted of tax evasion or tax fraud may be sentenced to a maximum of five years in federal prison or ordered to pay a fine of up to $100,000 in addition to paying taxes owed. State tax fraud charges are also possible. In Florida, penalties for tax evasion depend on the amount owed. State charges range from a third-degree felony, which carries a penalty of up to five years in prison and a fine of up to $5,000, to a first-degree felony, which carries a sentence of up to 30 years in prison and a fine of $10,000 or more. Individuals who are under investigation for tax fraud should immediately contact a Fort Myers criminal defense attorney to potentially avoid paying hefty fines and possibly going to prison.