Understanding Fraud Charges
Fraud offenses cover a wide range of activity, from something relatively simple — like issuing a bad check or minor credit card fraud — to more sophisticated wire, mail, or securities fraud charges. In a fraud case the government has to prove that you lied or misrepresented something with the intent to deceive, and that the lie or misrepresentation caused legal or financial injury to someone else. In many situations the big question the government must decide is whether it can prove that someone had the criminal intent necessary to achieve a conviction.
Bankruptcy is a way to allow people or businesses to wipe out debt. The prospect for abusing bankruptcy proceedings can be tempting and, indeed, leads many individuals, small business owners, and CEOs to attempt bankruptcy fraud. The Department of Justice’s U.S. Trustees Program oversees bankruptcy proceedings and refers suspected cases of fraud to the FBI and the U.S. Attorney’s office.
Bankruptcy fraud occurs most often when a person or business filing for bankruptcy lies, produces false documents, or otherwise tries to hide financial assets – typically with the objective of preserving such assets from the bankruptcy process. However, as with all criminal investigations, many of the individuals who are investigated, accused, and charged with bankruptcy fraud are not the guilty perpetrators the federal agencies make them out to be.
The federal government is expending an enormous amount of resources to investigate health care fraud cases. As a health care provider, the potential consequences of a health care fraud investigation are extremely serious and long lasting. As with other white collar offenses, prison time is a real possibility in the event of a conviction. Suspension or revocation of a medical license or being barred from billing federal health programs, such as Medicare, can end a career.
Most often, health care fraud occurs in two basic forms. Sometimes health care providers “upcode,” or use a different billing code for a procedure that pays more than the code for the procedure that was actually done. In other situations, providers may bill for procedures that weren’t performed at all or for fictitious patients.
Mortgage fraud is a new focus of federal agencies, one that has attracted a lot of attention since the housing market crash and the resulting economic crisis. Since the crash, the number of loan organizations has substantially decreased as a result of better underwriting standards while the number of foreclosures, delinquencies, and underwater mortgages has skyrocketed. Distressed loan organizations are now targeting homeowners who are already on the brink of losing their home. This type of fraud involves the other end of the mortgage process.
The FBI’s Financial Institution Fraud Unit (FIFU) investigates several different types of mortgage fraud, such as:
- Foreclosure rescue schemes
- Loan modification schemes
- Illegal property flipping
- Equity skimming
- “Silent” second mortgages
Sentencing in Fraud Cases
In recent years, following the uproar that occurred after huge white collar scandals like WorldCom and Enron came to light, Congress adjusted the sentencing guidelines to increase the amounts of time that people spend in prison if they are convicted of a fraud offense. Now, judges don’t have to follow the guidelines, but it requires a lot of hard work, knowledge, and skill to convince a judge to give someone less time than the guidelines prescribe.
There are a few key factors that drive the potential sentence in a fraud case. One key factor is called the “loss amount,” which is defined in Section 2B1.1 of the guidelines. The guidelines indicate that this means the reasonably foreseeable financial loss, not the actual money that people lost or the money made by those convicted. This definition can result in loss amounts that are much greater than the actual, or precise, amount of money that was involved in the offense.
There are several other characteristics of the offense that the guidelines contemplate that can increase the offense Level. These characteristics include, but are not limited to, the number of victims involved, whether sophisticated means were used, and if the person convicted was in a position of trust.
No matter what the alleged crime may entail, an experienced and aggressive criminal defense lawyer is essential if you find yourself targeted by the federal government. Price Benowitz represents clients facing fraud and a variety of other white collar criminal charges, including Foreign Corrupt Practices Act (FCPA) and RICO matters. For more information on the best approach to take in your case, click here to schedule an office consultation with an attorney who has a strong track record defending against allegations of fraud.
Terry Eaton in His Own Words
Below are several links to question-and-answer pages excerpted from an interview with Terry Eaton in which he discusses mail and wire fraud cases.