Federal Criminal Lawyer Defending Serious Allegations of Fraud
John T Floyd has over twenty years of experience representing individuals and businesses under investigation for or charged with serious allegations of fraud. Mr. Floyd is a criminal law expert and is Board Certified in Criminal Law by the Texas Board of Legal Specialization. John Floyd has been rated as a Super Lawyer in Thomson Reuter’s prestigious list of top lawyers practicing in the United States. Mr. Floyd represents clients facing allegations of fraud before federal courts in Houston, throughout Texas, and Nationwide.
Fraud is a general term encompassing countless variations of criminal conduct ranging from complex, billion-dollar corporate crimes to small-scale individual frauds. Top law enforcement officials at the Department of Justice and FBI have listed fraud as one of the top threats to our economy and have made it a renewed priority to investigate and prosecute fraud of all sorts.
Because of the prevalence of fraud and its damage to the country, federal and state prosecutors are taking fraud-related crimes very seriously. Unfortunately, in their zeal and excitement to prosecute, law enforcement agents and prosecutors sometimes lose sight of their duty to seek justice and commit misconduct. Do not be a victim to law enforcement tricks. Contact an experienced federal criminal defense lawyer immediately and develop a strategy to prevent false charges and wrongful convictions.
Fraud convictions can mean serious jail time.
Statistically, most individuals charged with fraud-related offenses have no prior contact with law enforcement and no previous criminal history. However, given the offense’s seriousness and possible punishment range, even first-time offenders will face serious consequences if found guilty of fraud. Almost all criminal fraud allegations are felonies and are punishable by serious prison time and significant fines.
Do not take to federal law enforcement agents without a lawyer.
Criminal fraud charges are investigated primarily by the FBI, but it is not uncommon for criminal investigators from other agencies like the Office of Inspector General, Health and Human Services, Internal Revenue Service, Secret Service, Immigration and Customs Enforcement, or even the United States Post Office to investigate criminal frauds and file charges with the U.S Attorney’s Office.
Federal investigators often dedicate extensive time and resources to an investigation before filing fraud charges in a federal court, often compiling a completed report, along with supporting evidence, of criminal conduct to the US Attorney’s Office. Many suspects or targets of federal investigations are contacted and fully aware of the investigation. While these investigators are professional and sometimes friendly, do not make the mistake of taking them lightly.
Again, no matter what they say, do not talk to the FBI or federal criminal investigators without a lawyer.
The FBI and all federal criminal agencies use its criminal, intelligence, and cyber resources to identify, investigate, and charge individuals and businesses it believes have been involved in fraud-related offenses. The agency works with other federal, state, and local law enforcement agencies through specialized joint task forces to conduct national and international investigations into fraud-related conduct.
If you should find yourself faced with an indictment for a fraud-related offense, or if you’ve become a target in such an investigation, it is imperative that you consult with a lawyer who has the skill and experience necessary to successfully protect you and your company from the federal government against criminal charges in federal court.
The Best Defense Begins With Preparation
While the Government’s prosecutorial powers and resources are intimidating, it is important for defendants to understand that just because the Federal government is prosecuting a case does not mean the allegations are true or that they will win. It is possible to stop a criminal investigation before criminal charges are filed or to defeat the government should they decide to fight your case before a federal court. However, the best defense begins with being prepared and following the advice of an experienced federal criminal defense lawyer who has developed a compelling, winning strategy.
John T. Floyd is a criminal law expert. He is Board Certified criminal defense attorney John T. Floyd has faced off against the federal government for over twenty years, helping many of his clients achieve victories ranging from decisions not to file charges to not guilty verdicts before federal juries. Mr. Floyd is a respected authority in matters relating to criminal law and is often called to comment on criminal issues on national television programs and in media outlets across the country.
Federal White Collar Attorney Describes the Different Types of Fraud
In legal terms, fraud covers a broad spectrum of offenses involving dishonesty, fraudulent acts, misrepresentations, and intentional deception. While the state criminal statutes covering fraud generally prosecute these cases as thefts or thefts by deception, the Federal Government uses an assortment of specific statutes to prosecute fraud. Federal frauds are serious felonies that are punished by lengthy imprisonment and large fines and restitution. Unfortunately, fraud cases also often involve actions by the government to forfeit assets to satisfy restitution orders or claims that the property was used in the offense or is the proceeds of illegal activity.
The following is a non-inclusive list of some of the offenses used by the Federal Government to prosecute allegations of fraud:
Wire and Mail Fraud
Wire and mail fraud are essentially the same crime. These are some of the most widely used criminal statutes at the federal level due to the almost unavoidable use of mail or electronic communications in most financial transactions. The only difference between the two is the medium in which the offense is committed: mail in mail fraud; wire communications, including electronic communications, in wire fraud.
Punishment for a mail or wire fraud conviction can be quite severe. A sentence of up to 20 years can be imposed in addition to hefty fines. An individual can be fined up to $250,000 while an organization can be fined up to $350,000. Punishment is enhanced if the victim is a financial institution or if the fraud is committed in relation to a natural disaster. In either case, the defendant can be sentenced to a term of not more than 30 years, and face a fine up to $1 million. A defendant may also be sentenced to a term of supervised release that is required to be served after release. Special assessment, restitution, and forfeiture orders are routine in the sentencing scheme.
As part of the Comprehensive Crime Control Act of 1984 the federal criminal offense of Bank Fraud was created to increase success at efforts to prosecute fraud committed against federally insured financial institutions. Prior, to the bank fraud statute, criminal charges for fraud against banking institutions were primarily accomplished with traditional theft, larceny of embezzlement criminal provisions, leaving some bank frauds difficult to prosecute.
Under Section 1344 of Title 18, United States Code, the Government must prove three essential elements to establish bank fraud: 1) a knowingly executing or attempting to execute a scheme to defraud; 2) the scheme to defraud was material, and 3) the Federal Deposit Insurance Corporation insured the financial institution. As of June 2014, the U.S. Supreme Court ruled that the Government has no duty to establish intent to defraud.
The potential range of punishment is extremely serious, with a maximum term of imprisonment of 30 years and a fine $1,000,000.00, and reflects the governments “get tough” reaction to the massive fraud that plagued the Savings and Loans industry in the 1980s. In addition to massive fines and restitution, forfeiture of property is typical in these cases. Given the Department of Justice’s renewed efforts to combat fraud within the financial industry, criminal charges alleging bank fraud are expected to grow in number and seriousness.
In 1998, Congress enacted the Identity Theft and Deterrence Act. The act makes it a federal crime to “knowingly” transfer or use, without lawful authority, a means of identification of another person with the intent to commit any unlawful activity that constitutes a violation of Federal law, or that constitutes a felony under any applicable State or local law. This statute includes the fraudulent use of identifying information, credit card and ATM information.
Under 18 U.S.C. § 1028 United States Code, the penalty for identity theft starts with a mandatory minimum term of imprisonment, per count, of two(2) years or a 5-year mandatory minimum if the theft is connected to terrorism.
Minimum of Two Years to Run Consecutive, Stacked
As a general rule, these terms of imprisonment cannot be served concurrently with sentences for other offenses. This means the punishment for identity theft charge is stacked on top of the substantive offense or any other offense charged in the indictment. This often leads to serious and unreasonable sentencing, especially if the defendant had hundreds or thousands of illegally obtained personal identifiers.
Mortgage fraud is the crime of making a material misstatement, false statement or misrepresentation on a loan application used by a lender to underwrite the loan.
There are two kinds of mortgage fraud: fraud for profit and fraud for housing. The Federal government does not have a single statute that criminalizes mortgage fraud. Rather, federal prosecutors utilize a host of fraud-related criminal statutes to prosecute mortgage fraud: mail and wire fraud, bank fraud, money laundering, false entries to federally insured institutions, false statements on loan credit application, and identity theft. Attempted or actual loss amounts drive sentences, and the large amounts typically involved in mortgages can become very serious with just one loan application.
There are a variety of different schemes that fall under the mortgage fraud umbrella. Some of the more common ones include:
- Foreclosure rescue schemes – An individual convinces a homeowner that he is at risk of losing his home, convinces him to transfer the deed to an investor, and then sells the property.
- Illegal property flipping – An individual purchases property, has it falsely appraised, and then sells the property.
- Equity skimming–An investor uses a straw buyer (that is, any individual other than the investor) and false documents to obtain a mortgage loan in the straw buyer’s name. The straw buyer will transfer the property to the investor, who will make no payments and will rent out the property for as long as possible.
Health Care Fraud
The Federal health care fraud statute is found in 18 U.S.C. § 1347. While there are three elements the Government must prove to secure a health care fraud conviction under Sec. 1347, the primary element requires a showing beyond a reasonable doubt that the defendant knowingly and willfully executed or attempted to execute a scheme or artifice to defraud a health care benefit program. The penalty for violating this subsection is a fine and term of imprisonment not exceeding ten years unless serious bodily injury results, which increases the term of imprisonment to not more than twenty years. If a violation of death results from a violation of this subsection, the imprisonment range can increases to a possible life.
There are two federal money laundering statutes: 18 U.S.C. §§ 1956 and 1957. Of the two, Section 1956 is the one most often used statute to prosecute money laundering offenses. The statute prohibits four kinds of money laundering. Each can occur only in connection with what the statute defines as “specified unlawful activities” (SUA). Section 1956’s companion, § 1957, prohibits depositing or spending more than $10,000 of the proceeds from Section 1956 SUA.
In short, money laundering has been defined as the act of transferring illegally obtained money through people or accounts, typically so that its original source cannot be trace. But this is not a requirement, and it has been said that simply moving proceeds of illegal conduct from one pocket to another could be seen as money laundering. Section 1956 carries a penalty of not more than 20 years, while § 1957 carries a penalty of not more than ten years. Violations of these two statutes may implicate other federal statutes, such as RICO which involves additional 20-year possible terms of imprisonment. Violations of these two statutes may also involve simple conspiracies to commit separate federal offenses punishable by imprisonment of not more than five years.
Bankruptcy fraud is a federal crime that occurs when a defendant undertakes a fraud scheme against anyone and then carries out or conceals the scheme by filing for bankruptcy or by filing any false or misleading entry or document in the bankruptcy. 18 U.S.C. § 157 punishes a defendant found guilty under this section with imprisonment of not more than five years. Section 157 is patterned after the Federal mail and wire fraud statutes and was created by the Bankruptcy Reform Act of 1994.
Tax fraud generally involves a host of crimes: filing false tax returns, failure to pay taxes, filing false documents, failure to collect employment taxes, and failure to file a tax return. Tax fraud can trigger a host of criminal law violations found in both Title 26 and Title 18 of the United States Code. Tax fraud can be punished both as a criminal or civil offense. Civil offenses are usually prosecuted under Title 26 while criminal offenses are prosecuted under Title 18. If two or more people are involved in any tax fraud scheme, the Government will generally indict under the conspiracy statute, 18 U.S.C. § 371.
Tax evasion is charged more often by Federal prosecutors than tax fraud. This offense is generally tied to the taxpayer’s deliberate misrepresentation of taxable income. For the individual, the crime is punishable up to five years in prison, a fine of up to $250,000 (or both), and an assessment for the cost of the prosecution. These crimes are most often prosecuted under Section 7201 of Title 26, the Internal Revenue Code.
Law Enforcement and Experts Proclaim Fraud Endemic
Fraud experts report that fraud is endemic in this country, if not worldwide. Some fraud experts estimate that as many as 90 percent of employees in this country engage in workplace fraud, from large scale thefts to minor falsified sick leave abuses. One expert said as many as one-third of the employees have stolen money, merchandise or property from their employers, including “executives.”
According to the Association of Certified Fraud Examiners, there are three primary components that lead to fraud behaviors: perceived unshareable financial need (individual financial pressure); perceived opportunity (position of trust), and rationalization (justification).
John T. Floyd has over twenty years experience representing businesses and individuals under investigation for allegations of complex business fraud and securities fraud.
In a 2008 speech at the Southwest Securities Enforcement Conference in Fort Worth, Texas, Lori Richards, then Director of the Office of Compliance Inspections and Examinations Securities and Exchange Commission, discussed the different types of fraudsters she had encountered during investigations.
The labels may be offensive, but they are instructive in understanding law enforcement perspective and investigative assumptions.
This is a person who commits fraud with a specific intent to steal money. They are usually creative and cunning, like those who engage in Ponzi schemes, offering products with no products behind the pitch, up-front money fee schemes, and “pump and dump” schemes.
This is a person who borrows money with the intent to pay it back, but things happen that prevent this. Ms. Richards said, “they may do it to cover a shortfall in the firm’s revenues or to conceal less-than-expected performance results.” So they dip into clients’ accounts to get the money needed to “pay the firm’s operating expenses.” They justify the unlawful action by telling themselves it is a “loan” they will pay back.
This person is positioned to take from the “open cash drawer” scenario. Examples of this type of fraud, Ms. Richards said, can be seen in “insider trading cases involving people who otherwise may hold positions of respect and authority—corporate executives, lawyers, even compliance professionals. These people may not have sought out the material non-public information, but rather came into possession of it through their positions, and becoming opportunists, used that information for trade.”
The “Crowd Follower”
This type of fraud is committed by people who believe they are just “going with the flow” because everyone else is doing it. Examples of this, Ms. Richards said, can be found “in our market timing and late trading cases, where some people convince themselves that their actions [are] acceptable because other industry participants [are] purposely doing the same thing.” This behavior will often be found among corporate employees “who work in an environment that places pressure on them to make earnings projections and who may believe that ‘doing what it takes’ to make the numbers is acceptable or even expected.”
This type of fraud is committed by individuals who know what they are doing is unethical or illegal but justify their actions by “minimizing the impact.” This fraud is often committed by people who sell investment products to customers to whom they are unsuitable. As Ms. Richards said “they are motivated by the sales commission, winning the sales contest, or other remuneration. These people may minimize the harm they cause in selling a product with excessive fees or risk, because the customer is obtaining some real benefit from the investment product.”
Don’t Go It Alone – Work with an Aggressive Fraud Lawyer Who Understands the Process
All fraud-related investigations and prosecutions are inherently complex, and developing a defensive strategy can be difficult, if not impossible, for the inexperienced. But this does not necessarily mean the government can prove its case or that the accused will be found guilty and sent to federal prison. In some cases, investigators and prosecutors cannot build a strong enough case against you to merit the filing of criminal charges. Experienced federal fraud lawyers understand that the government, in its zest to crack down and wipe out fraud, sometimes assumes too much and fails to document critical evidence when building its case. These details are hidden in the complex nature of fraud cases that lawyers unfamiliar with fraud cases miss. An experienced federal criminal lawyer can attack these weak points to bring the case tumbling down.
Team of Forensic Experts Fights Allegations of Fraud
John T. Floyd and his team of forensic experts, including private investigators and accountants, have learned how to spot these weaknesses and exploit them, and they do so with an understanding that only experience can bring. They have the expertise and knowledge to challenge the government and face it.
Get Back to Business
We believe we achieve the best possible outcome when we can help close a criminal fraud investigation before charges have been filed. Because this allows you to do what you do best, get back to business. Resolving a fraud allegation prior to charges being filed is undoubtedly the best-case scenario. An investigation is not in the public record. Your good name and reputation remain intact.
However, if an indictment is handed down and a trial becomes necessary, you can rest assured that we will do everything in our power to guarantee you receive the best possible outcome. At the John T. Floyd Law Firm we remain dedicated to being the best lawyers in the courtroom and achieving results others thought impossible.
Dedicated to Successful Defense Against Federal Allegations of Fraud
Do not let fraud charges ruin your livelihood, business, or reputation. If you are facing fraud charges, fight back with a white-collar criminal lawyer dedicated to helping individuals and businesses win types of cases. Do not risk defending yourself with a criminal attorney who is anything less than the best – contact the John T. Floyd Law Firm today.