Can you go to jail for bank fraud?
You might already know that fraud involves deceiving a business or individual to gain something of value, but what is bank fraud? And, is bank fraud a felony or misdemeanor? If you’re facing charges related to bank fraud, call the lawyers at Birrell Criminal Defense and get familiar with the facts surrounding bank fraud before you proceed with your case.
What Is Bank Fraud?
When you deceive a financial institution to profit, you’re committing bank fraud. If you’re attempting to defraud a bank, credit union, mortgage lender or any other institution where people can deposit money, you could be facing bank fraud charges and should obtain the services of Birrell Criminal Defense for legal guidance.
What Are Considered Types of Bank Fraud?
If you’re concerned that you or a loved one are in violation of federal banking regulations, it’s helpful to learn what kinds of acts are considered bank fraud.
First, know that some types of federal bank fraud schemes include obtaining fraudulent appraisals, providing false information on applications for financial purposes and using fake documents. So, is bank fraud a federal offense? It can be if it falls into these types of fraud.
There are also some issues that the state considers bank fraud. Most bank fraud statutes fall into the forgery category. For example, you’re breaking forgery laws if you illegally change a financial document or the amount on a check, cash a forged check or create a fake real estate deed.
Federal Target Letter
What is a Federal Target Letter?
A target letter is the means by which the federal government informs individuals that they are targets for criminal prosecution. It is frequently used in white collar cases and is often the first indication that an individual is under investigation. The United States Attorney’s Manual defines “target” as a putative defendant against whom there is substantial evidence. The target letter notifies the recipient about a number of things, including:
- the recipient’s status as a target in a federal grand jury investigation;
- the crime or crimes that the recipient is suspected of committing;
- the recipient’s right to assert the Fifth Amendment; and
- information for obtaining court-appointed counsel.
Additionally, the target letter will caution the recipient against destroying any evidence, stating that such acts may constitute obstruction of justice, and sometimes encourage the recipient to reach out to the prosecutor to discuss the matter.
What should I do if I receive a Target Letter?
Hiring a good attorney like Birrell Criminal Defense early will give you the best chance of reaching a favorable result. In some cases, an attorney might be able to persuade the prosecutions to drop the investigation against you. Even if a criminal indictment is inevitable, we may be able to obtain early discovery, evaluate the evidence, and perhaps reach out to the prosecution to negotiate a favorable pre-indictment plea agreement. Because the prosecutor may not have spent significant time and resources investigating the case at this stage, there may be more room to negotiate than in cases where the grand jury has already returned an indictment with particular charges.
What is Healthcare Fraud?
Health care fraud is a type of white-collar crime that involves the filing of dishonest health care claims in order to turn a profit. Fraudulent health care schemes come in many forms. Practitioner schemes include: individuals obtaining subsidized or fully-covered prescription pills that are actually unneeded and then selling them on the black market for a profit; billing by practitioners for care that they never rendered; filing duplicate claims for the same service rendered; altering the dates, description of services, or identities of members or providers; billing for a non-covered service as a covered service; modifying medical records; intentional incorrect reporting of diagnoses or procedures to maximize payment; use of unlicensed staff; accepting or giving kickbacks for member referrals; waiving member co-pays; and prescribing additional or unnecessary treatment. Members can commit health care fraud by providing false information when applying for programs or services, forging or selling prescription drugs, using transportation benefits for non-medical related purposes, and loaning or using another’s insurance card.
What is Insurance Fraud?
Insurance fraud occurs when people deceive an insurance company in order to collect money to which they are not entitled. This particular fraud is a crime in all fifty states, and the majority of the states have established fraud bureaus to identify and investigate fraud incidents. In most states, fraudulent claims can be either a felony or a misdemeanor, depending on the nature and extent of the fraud committed. Certain types of fraud, such as health care fraud, are also crimes under federal law.
Fraudulent insurance claims affect society as a whole, not just insurance companies, and for that reason, it is punished harshly. According to the Coalition Against Insurance Fraud, fraud schemes steal at least 80 billion dollars per year in the United States. The costs are ultimately borne by policyholders and consumers, because insurance companies charge higher premiums to cover their losses from fraud. Individual and business premium rates go up, and businesses often pass along the increased costs to their consumers.
What kinds of penalties are imposed for Insurance Fraud?
Insurance fraud can generally be divided into two categories, known in the industry as “soft fraud” and “hard fraud.”
- Soft fraud occurs when a person exaggerates an existing claim, such as overstating the damages caused by a car accident. Soft fraud is usually considered a misdemeanor, punishable by fines, jail time of up to one year, community service, and probation.
- Hard fraud, on the other hand, occurs when a person either causes or fabricates a loss for the deliberate purpose of obtaining insurance payments. Hard fraud is almost considered a felony, punishable by strict penalties including the possibility of incarceration in state prison for a number of years.
The penalties for insurance fraud vary widely depending on the state where the prosecution occurred, the amount of money fraudulently sought or obtained, and the criminal history of the defendant. If you are charged with insurance fraud, especially if you are facing felony charges, consider consulting Birrell Criminal Defense as early as possible in your case. We can help you understand the laws in your area, counsel you on defenses you may raise, explain your options, and inform you of your rights.
What Is Identity Theft?
Identity theft and identity fraud are often used interchangeably. However, while identity fraud refers to a broad category of crimes involving the use of false identification, identity theft is a form of identity fraud that specifically involves the use of someone else’s personal information.
Identity theft is defined under federal law as the knowing transfer, possession, or use of “a means of identification of another person” without any lawful authority and in connection with an activity that would violate federal law or would constitute a felony under state law.
There are a variety of methods that identity thieves use to acquire personal information. Some of the more common methods include:
- Stealing wallets or purses
- Dumpster diving for discarded mail or other records
- Stealing mail from the mail box or redirecting your mail to a different address
- Telephone scams
- Eavesdropping or surfing over your shoulder in public
- Data breaches of financial institutions or major retail companies
- Internet scams
The FBI also provides additional information about various identity theft and identity fraud schemes currently in use.
What Does an Identity Theft Attorney Do?
Identity theft is the type of crime that can cause significant damage that lingers for many years, especially when it results in a negative credit history or reputational harm. Because of this, it’s important to take immediate action to protect yourself if you find that your identity has been stolen.
Fortunately, there are many resources that can help you recover from identity theft and protect your identity in the future. Identity theft attorneys such as Birrell Criminal Defense are one such resource. Our attorneys have experience with protecting the rights of identity theft victims and also understand the rights and remedies that may be available to you under federal and state laws.
How Can An Identity Theft Attorney Help You?
The task of recovering your identity and clearing your name can be challenging and time consuming and, especially in the immediate aftermath, often requires:
- Filing a police report
- Filing a report with the Federal Trade Commission
- Contacting financial institutions to initiate fraud alerts or close accounts
- Contacting credit bureaus to remove fraudulent information from a credit report
- Contacting creditors or debt collection agencies
An identity theft attorney has experience communicating with such entities and also understands their legal obligations to cooperate with you. Also, if you retain an identity theft attorney, these entities, particularly debt collection agencies, will be prohibited from contacting you directly.
Identity theft attorneys can also advise you of all of the rights and the remedies available to you under federal and state law. Under federal law, for example, a victim of identity theft has a right to restitution not just for the actual harm incurred but also for the time spent trying to fix such harm. Many state laws provide additional remedies to victims, such as the ability to file suit against the perpetrators and recover damages. Victims of theft can not only file suit, but can also recover triple the amount of actual damages incurred. Birrell Criminal Defense can advise you of such rights as well as any relevant statutes of limitations.
What Is Insider Trading and Is It Illegal?
An insider is a person who possesses either access to valuable non-public information about a corporation or ownership of stock equaling more than 10% of a firm’s equity. This makes a company’s directors and high-level executive insiders.
To be accused of insider trading, you must usually be someone who has a fiduciary duty to another person, institution, corporation, partnership, firm, or entity. You can get in trouble of you make an investment decision based upon information related to that fiduciary duty that is not available to everyone else. This insider information allows a person to profit in some cases, and avoid loss in others.
Insider trading can also arise in cases where no fiduciary duty is present, but another crime has been committed, such as corporate espionage. For example, an organized crime ring that infiltrated certain financial or legal institutions to systematically gain access to and exploit non-public information (perhaps through the use of computer viruses or recording devices) might be found guilty of insider trading among other charges for the related crimes.
What is the Sentencing and Punishment for Insider Trading
Insider trading can be punished strictly by civil sanctions, or involve criminal prosecution, or both. Federal law authorizes what are known as “treble” damages if the SEC brings a civil action against you for violating insider trading rules. This means the amount you can be fined can be up to three times the amount of profits gained or losses avoided.
How you are fined is typically up to the court and determined by whether you played a direct or indirect roll in the unlawful activity.
If you are convicted in a criminal insider trading prosecution, you are subject to a maximum of $5 million in fines as an individual (up to $25 million for a business entity), up to 20 years imprisonment, or both fine and imprisonment.
Additional prosecution may result from fraud-related charges that often accompany insider trading violations. Also, you may face other collateral consequences stemming from civil sanctions or a criminal conviction imposed if you are found to be in violation of U.S. securities laws.
What Are Other Consequences of Illegal Insider Trading?
Insider trading is a complex area of federal law and can often result in related criminal charges being brought against you. For example, you may also face prosecution for any of the following:
- Bank fraud;
- Wire and mail fraud;
- Computer fraud;
- Securities fraud;
- Tax fraud;
- Making false statements;
- Obstruction of justice;
- Racketeering; and
Non-punitive collateral consequences may impact you professionally as well. For example, in addition to civil and criminal penalties, you could be banned from serving as a director, CEO, CFO, or any other officer role responsible for preparing, auditing, or disclosing financial results of any public company.
A violation of insider trading laws also is likely to adversely affect any professional licensure you hold. You may be subject to disciplinary proceedings by a state licensing board, which could result in suspension or revocation of your license to practice in your professional field.
What is money laundering?
Money laundering is the generic term used to describe the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source.
The processes by which criminally derived property may be laundered are extensive. Though criminal money may be successfully laundered without the assistance of the financial sector, the reality is that hundreds of billions of dollars of criminally derived money is laundered through financial institutions, annually. The nature of the services and products offered by the financial services industry (namely managing, controlling and possessing money and property belonging to others) means that it is vulnerable to abuse by money launderers.
What is Racketeering?
Racketeering refers to crimes committed through extortion or coercion. A racketeer attempts to obtain money or property from another person, usually through intimidation or force. The term is typically associated with organized crime. The law defines 35 different offenses that constitute racketeering in the U.S. The list includes gambling, kidnap, murder, arson, drug dealing, and bribery. Convicted racketeers can serve up to 20 years in prison, in addition to paying a fine of up to $25,000.
What are examples of Racketeering?
Racketeering takes many forms. Recently, cyber extortion on a user’s computer has become more common. In this case, a hacker may illegally push malware onto a user’s computer, which blocks all the access to the computer and to the data stored on it. The hacker (or their partner), then demands money to restore the user’s access.
Racketeering may also take the form of a protection racket. In a protection racket, a criminal entity may threaten to cause harm to a business or an individual’s private property if the owner does not pay a fee for protection. In both examples, the criminal entity created a specific problem in order to offer a fix and earn money illegally.
Other common examples of racketeering include:
- Kidnapping: An individual is illegally detained and their captors agree to set the kidnapped individual free once a ransom is paid.
- Fencing racket: Individual(s) act as intermediaries to buy stolen goods from thieves at low rates and resell them for a profit to unsuspecting buyers.
- Numbers racket: A form of illegal gambling in which a corrupt dealer colludes with his associates disguised as gamblers to cheat other unsuspecting gamblers of their money.
What is considered embezzlement?
Embezzlement is defined as the act of theft or misappropriation of funds placed in the trust of someone, such as funds that belong to an employer. In essence, when a person entrusts their property to another person, but the person in possession of the property unlawfully converts the ownership rights with the intent to defraud the true owner, they are embezzling the person who trusted them with that property.
An example of this is an employee who is allowed access to a certain amount of the company’s money. Although such a person has lawful possession of the funds, if they were to move the funds to another account for their own personal use, it could be considered embezzlement.
When Does Embezzlement Become a Felony, and What are the Consequences?
Embezzlement is typically a misdemeanor, but becomes a felony charge based on the value of what is being embezzled. The requirements for enhancing a misdemeanor embezzlement charge to a felony embezzlement charge varies by a state’s local jurisdictional rules; however, many state laws classify embezzlement crimes into tiers, with a varying degree of punishments.
For instance, the penalties for embezzlement charges are outlined as follows:
- Misdemeanor Charge: Embezzlement of property valued at less than $2,500 is a misdemeanor punishable by up to 9 months in prison, a fine of up to $10,000, or both;
- Class I Felony: Embezzlement of property valued between $2,500 and $5,000 is a felony punishable by up to three and a half years in prison, a fine of up to $10,000, or both;
- Class H Felony: Embezzlement of property valued between $5,000 and $10,000 is a felony punishable by up to 6 years in prison, a fine of up to $10,000, or both; and
- Class G Felony: Embezzlement of property valued at greater than $10,000 is a felony punishable by up to 10 years in prison, a fine of up to $25,000, or both.
Do I Need an Attorney for Help with Felony Embezzlement Issues?
Although white collar crimes typically occur without any violence or physical harm involved in the crime, embezzlement is still a very serious offense that could result in a felony conviction. A qualified and knowledgeable criminal defense attorney like Birrell Criminal Defense will help you determine if you have any appropriate defenses to embezzlement.
Additionally, they will help you understand your state’s laws regarding when embezzlement becomes a felony, instead of simply a misdemeanor. Alternatively, if you find yourself the victim of embezzlement Birrell Criminal Defense will help you file a lawsuit in court, so that you may recover your losses.
What is considered a RICO case?
RICO stands for the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. § 1961), a law that increases the severity of penalties for crimes performed in conjunction with organized crime. The law states that any person or group who commits any two out of a list of 35 crimes (known as racketeering activity in the U.S. Code) within a decade and can be determined to have committed them with similar results or similar intentions can be charged with racketeering.
The maximum penalties for racketeering include a fine of up to $25,000 and up to 20 years in prison in addition to the forfeiture of all business interests and gains gleaned from the criminal activity. In addition, the case can be re-tried in civil court; plaintiffs are allowed to sue for triple damages. The law covers crimes such as bribery, extortion, money laundering, counterfeiting, gambling, murder, arson, robbery, kidnapping, harboring certain illegal aliens, obstruction of justice, slavery and others.
What is the difference between Criminal RICO and Civil RICO cases?
After being indicted for either a civil or criminal racketeering allegation, it is crucial to immediately hire a federal racketeering attorney like Birrell Criminal Defense. RICO is an extremely complex law, which can be difficult for many amateur lawyers to properly utilize. Only an experienced RICO lawyer will be able to work with the strength and determination your specific case requires. We can help to ensure that any and all possible penalties that are being brought against you are minimized and that there are no longstanding effects incurred from such a charge.
A civil plaintiff will still have to prove the basic elements required in the RICO statute to prove a claim, including a person, an enterprise engaged in or affecting interstate commerce, pattern of racketeering activity, the operation and management test, and the through requirement. Although the standard of proof in a civil action is based upon a preponderance of the evidence, the civil RICO plaintiff must additionally prove “causation,” injury to business or property, and that he or she is subject to a more complicated statute of limitations. Also, in a civil racketeering action alleging fraud, the claim must be pleaded with particularity.
What Is Securities Fraud?
Securities fraud, also referred to as investment fraud, is a type of serious white-collar crime that can be committed in a variety of forms but primarily involves misrepresenting information investors use to make decisions.
The perpetrator of the fraud can be an individual, such as a stockbroker. Or it can be an organization, such as a brokerage firm, corporation, or investment bank. Independent individuals might also commit this type of fraud through schemes such as insider trading.
The Federal Bureau of Investigation (FBI) describes securities fraud as criminal activity that can include high yield investment fraud, Ponzi schemes, pyramid schemes, advanced fee schemes, foreign currency fraud, broker embezzlement, hedge fund related fraud, and late-day trading. In many cases, the fraudster seeks to dupe investors through misrepresentation and to manipulate financial markets in some way.
This crime includes providing false information, withholding key information, offering bad advice, and offering or acting on inside information.
What Are the Types of Securities Fraud ?
Securities fraud takes on many forms. In fact, there is no shortage of methods used to trick investors with false information. High-yield investment fraud, for example, may come with guarantees of high rates of return while claiming there is little to no risk. The investments themselves may be in commodities, securities, real estate, and other categories. Advance fee schemes can follow a more subtle strategy, where the fraudster convinces their targets to advance them small amounts of money that are promised to result in greater returns.
Sometimes the money is requested to cover processing fees and taxes for the funds that allegedly await to be disbursed. Ponzi and pyramid schemes typically draw upon the funds furnished by new investors to pay the returns that were promised to prior investors caught up in the arrangement. Such schemes require the fraudsters to continuously recruit more and more victims to maintain the sham for as long as possible.
One of the newer types of securities fraud is Internet fraud. This type of scheme is also referred to as a “pump-and-dump” scheme, in which people use chat rooms and forums to spread false or fraudulent information concerning stocks. The intention is to force a price increase in those stocks—the pump, and then once the price reaches a certain level, they sell them off—the dump.
What Are The Penalties of Securities Fraud?
Securities fraud, also known as investor or stock fraud, covers a range of activities that violate federal and state laws pertaining to buying, selling and trading securities. The most common forms of securities fraud include:
- Misrepresentation (presenting misleading or false information to investors about a company, or its securities)
- Accounting fraud (manipulating or falsifying books or records to misrepresent a public company’s assets and liabilities)
- Insider trading (buying, selling or trading securities based on information that is not readily available to the general public)
Securities fraud is governed by both federal and state laws, and legal actions can be brought about by private investors or by a government agency, such as the U.S. Securities and Exchange Commission. Violations of federal securities laws are treated as serious offenses that can carry both civil and criminal penalties. Criminal investigations can lead to felony convictions that carry penalties of up to 20 years’ imprisonment. In addition, the Securities and Exchange Commission (SEC) and National Association of Securities Dealers (NASD) may impose civil fines against corporations or individuals convicted of securities fraud.
What is considered tax evasion?
Tax evasion is an illegal activity in which a person or entity deliberately avoids paying a true tax liability. Those caught evading taxes are generally subject to criminal charges and substantial penalties. To willfully fail to pay taxes is a federal offense under the Internal Revenue Service (IRS) tax code.
Tax evasion applies to both the illegal nonpayment as well as the illegal underpayment of taxes. Even if a taxpayer fails to submit appropriate tax forms, the IRS can still determine if taxes were owed based on the information required to be sent in by third parties, such as W-2 information from a person’s employer or 1099s. Generally, a person is not considered to be guilty of tax evasion unless the failure to pay is deemed intentional.
When determining if the act of failure to pay was intentional, a variety of factors are considered. Most commonly, a taxpayer’s financial situation will be examined in an effort to confirm if the nonpayment was the result of committing fraud or of the concealment of reportable income.
How is Tax Fraud Defined?
Tax fraud occurs when an individual or business entity willfully and intentionally falsifies information on a tax return to limit the amount of tax liability. Tax fraud essentially entails cheating on a tax return in an attempt to avoid paying the entire tax obligation. Examples of tax fraud include claiming false deductions; claiming personal expenses as business expenses; using a false Social Security number; and not reporting income.
Tax fraud involves the deliberate misrepresentation or omission of data on a tax return. In the United States, taxpayers are bound by a legal duty to file a tax return voluntarily and to pay the correct amount of income, employment, sales, and excise taxes. Failure to do so by falsifying or withholding information is against the law and constitutes tax fraud. Tax fraud is investigated by the Internal Revenue Service Criminal Investigation (CI) unit.
What is The Difference between criminal tax evasion and civil tax fraud
Tax fraud as a general matter is very difficult for the government to prove because they have the burden to show the court that the taxpayer has intentionally defrauded the government out of tax revenue. Proving that a taxpayer knowingly violated the highly complicated Internal Revenue Code is a very difficult task, so the government often chooses to pursue the taxpayer civilly for simply underpaying tax, which does not require proving that the taxpayer intentionally underpaid their taxes. As a practical matter, if the taxpayer has any reasonable legal argument for why they did not pay the tax due they will usually beat a criminal charge.
Tax evasion is a subset of tax fraud. “Tax evasion” is typically used in the criminal context, as in someone who is charged with the crime of tax evasion in violation of 26 USC § 7201. Tax evasion usually entails a deliberate act of misrepresentation of taxable income to the IRS. Common examples of acts which could result in a charge of tax evasion are: not declaring all your income, deliberately overstating expenses or deductions, or failing to file tax returns when you have taxable income in an attempt to avoid detection.
What Is Wire Fraud?
Wire fraud is a crime in which a person concocts a scheme to defraud or obtain money based on false representation or promises. This criminal act is done using electronic communications or an interstate communications facility. These can include a phone call, a fax, an email, a text, or social media messaging, among others.
Wire fraud is a federal crime that carries a sentence of not more than 20 years’ imprisonment and fines of up to $250,000 for individuals and $500,000 for organizations. The statute of limitations to bring a charge is five years unless the wire fraud targeted a financial institution, in which case the statute of limitations is 10 years. If the wire fraud is related to special circumstances, such as a presidentially declared state of emergency or targets a financial institution, it can carry a prison sentence of up to 30 years and a fine of up to $1 million. A person need not have actually defrauded someone or personally sent a fraudulent communication to be convicted of wire fraud. It is sufficient to prove the intent to defraud or acting with knowledge of fraudulent communications being sent.
What is the difference between Mail Fraud and Wire Fraud?
Mail fraud, unsurprisingly, requires use of the U.S. postal service to commit fraud. Wire fraud, on the other hand, involves wire-based communications including telephone, fax, television, text message, and internet.
Mail fraud and wire fraud are each specifically defined as crimes under federal statute. The definition of mail fraud is a bit simpler – in a nutshell, it is devising or carrying out a scheme to commit fraudulent acts using the mail. Wire fraud sounds more complicated – it requires an intentional scheme to defraud another out of money, with a reasonable expectation that interstate wire communications would be used and in the end are in fact used. However, federal courts have made clear that the wire fraud statute is a parallel to the mail fraud statute and the only difference is the type of communication used.
What Are The Elements of Wire Fraud?
Wire fraud is similar to regular fraud, except that it takes place over phone lines or involves electronic communications. The legal definition of wire fraud has four elements:
- The defendant created or participated in a scheme to defraud another out of money or property;
- The defendant did so with intent to defraud;
- It was reasonably foreseeable that the defendant would use wire communications; and
- The defendant did in fact use interstate wire communications.
For the purposes of wire fraud, “interstate wire communications” could mean telephone calls, faxes, internet communications, or even television transmissions.
Persons who are found guilty of wire fraud under federal law face the following penalties:
- Fines up to $250,000 for individuals
- Fines up to $500,000 for organizations
- Imprisonment of not more than 20 years
There are special circumstances and additional penalties of 30 years’ imprisonment and a million dollar fine, if the wire fraud is related to a presidentially declared major disaster or if it involves a financial institution.