Theft Offenses

Accounting Fraud

Bank Fraud

Computer Crime
Computer crime laws in many states prohibit a person from performing certain acts without authorization, including (1) accessing a computer, system, or network; (2) modifying, damaging, using, disclosing, copying, or taking programs or data; (3) introducing a virus or other contaminant into a computer system; (4) using a computer in a scheme to defraud; (5) interfering with someone else’s computer access or use; (6) using encryption in aid of a crime; (7) falsifying e-mail source information; and (8) stealing an information service from a provider.

Credit Card Fraud
Credit card fraud often, but not always, involves the bank directly. The most common kind of credit card fraud is the illegal counterfeiting of credit cards. Sometimes defendants use desktop computer systems to produce realistic-looking credit cards with holograms and functioning magnetic strips. Lost or stolen credit cards constitute another common fraudulent use and bring many defendants before the law.  Some people obtain credit cards fraudulently through the mail, either by illegally obtaining confidential information gleaned from other peoples' mailboxes, or recovering cards or credit card applications from the trash.  The Internet has also become a part of credit card fraud, as lists of stolen credit card numbers are posted or sold in newsgroups and are sometimes used to purchase goods online.

Embezzlement
The crime of stealing the funds or property of an employer, company or government or misappropriating money or assets held in trust.

Extortion
Obtaining money or property by threat to a victim's property or loved ones, intimidation, or false claim of a right (such as pretending to be an IRS agent). It is a felony in all states, except that a direct threat to harm the victim is usually treated as the crime of robbery. Blackmail is a form of extortion in which the threat is to expose embarrassing, damaging information to family, friends or the public.

Forgery
(1) The crime of creating a false document, altering a document, or writing a false signature for the illegal benefit of the person making the forgery. This includes improperly filling in a blank document, like an automobile purchase contract, over a buyer's signature, with the terms different from those agreed. It does not include such innocent representation as a staff member autographing photos of politicians or movie stars. While similar to forgery, counterfeiting refers to the creation of phony money, stock certificates or bonds which are negotiable for cash; 
(2) a document or signature falsely created or altered.

Government Fraud

Identity Theft
Identity Theft primarily involves either "true name" or "account takeover" fraud. With "true name" someone uses a consumer's personal information to open new accounts in his or her name. With "account takeover" someone gains access to a person's existing account(s) and makes fraudulent charges. Another form of identity theft occurs when a criminal provides a victim's personal information to law enforcement when the criminal gets arrested. The victim may then have a criminal record or outstanding warrants attached to their name without even realizing it.

Insurance Fraud
Insurance Fraud includes everything from padding estimates, to under-reporting how many employees work for a business.

Insurance fraud cases involve criminal acts surrounding automobile property and personal injury, workers' compensation, health insurance and residential and commercial property claims. Some examples of the types of insurance fraud include:
                     -Staged Automobile Accidents
                     -Fraudulent Healthcare Billings
                     -False and/or Inflated Property Loss Claims
                    - Phony Workers' Compensation Claims
                     -Fraudulent Denial of Workers' Compensation Benefits  
                     -Arson for Profit
                     -Fake Life Insurance Claims
                     -Workers' Compensation Premium Fraud by Employers

Home repair fraud is related to disaster fraud. Home improvement fraud can target roofing, furnace, driveway repairs, etc. A common scheme is for a "so called" contractor to convince a homeowner that a deposit must be made before their repair work can begin. When the deposit is made the homeowner never sees or hears from the con artist again.

Internet Fraud
Internet fraud generally refers to any type of fraudulent use of a computer and the Internet, including the use of chat rooms, email, message boards, discussion groups and web sites, to conduct fraudulent transactions, transmit the proceeds of fraud to financial institutions, or to steal, destroy or otherwise render unusable (the proliferation of viruses for example) computer data vital to the operation of a business.

Online auction and retail schemes, business opportunity/"work-at-home" schemes, investment schemes and market manipulation schemes are just a few of the current known cybercrime abuses. Auction and retail schemes sometimes offer luxury merchandise, from expensive watches to high-end computers to collectible items. These schemes encourage people to send money, but either the goods are never delivered or the item is far less valuable that what the purchaser thought he was buying. Business opportunity and "work-at-home" schemes promise that individuals will earn thousands of dollars but require upfront fees ranging from $35 to hundreds of dollars. Often people never receive anything in return, or find that the materials are not what the seller warranted.

Investment Fraud

Larceny
The crime of taking the goods of another person without permission (usually secretly), with the intent of keeping them. It is one form of theft. Some states differentiate between grand larceny and petty larceny based on the value of the stolen goods. Grand larceny is a felony with a state prison sentence as a punishment and petty larceny is usually limited to county jail time.

Mail Fraud

Medi-Cal Fraud

Money Laundering
Money laundering is the investment or transfer of money from racketeering, drug transactions or other embezzlement schemes so that it appears that its original source either cannot be traced, or appears to be legitimate.

Perjury
The crime of intentionally lying after being duly sworn (to tell the truth) by a notary public, court clerk or other official. This false statement may be made in testimony in court, administrative hearings, depositions, answers to interrogatories, as well as by signing or acknowledging a written legal document (such as affidavit, declaration under penalty of perjury, deed, license application, tax return) known to contain false information. Although it is a crime, prosecutions for perjury are rare, because a defendant will argue he/she merely made a mistake or misunderstood.

Pyramid Schemes
Pyramid Schemes may involve a structure that is laid out like a pyramid, with one person at the top, two persons on the next level, four on the next and eight on the next. The structure may also be circular with one person at the center, two on the next, four on the next and eight persons on the outer circle. The circular structure is merely a view of a pyramid looking from the top down. Pyramid selling is illegal because it runs on the basis that participants in the pyramid are required to contribute something of value, usually money, and then by reason of the contributions of other participants they become entitled to something of greater value, usually a larger sum of money. In order for any participant to become entitled to more than was contributed, a larger number of new participants is required. If every person who was approached to participate did, eventually the pyramid would fail. Earlier participants in a pyramid selling scheme are more likely to benefit than later participants. The effect is that while a few benefit the majority do not.

Racketeering
The federal crime of conspiring to organize to commit crimes, particularly as a regular business ("organized crime" or "the Mafia").

Racketeer Influenced Corrupt Organization (RICO) Statue
A federal law which makes it a crime for organized criminal conspiracies to operate legitimate businesses.

Robbery
(1) the direct taking of property (including money) from a person (victim) through force, threat or intimidation. Robbery is a felony (crime punishable by a term in state or federal prison). "Armed robbery" involves the use of a gun or other weapon which can do bodily harm, such as a knife or club, and under most state laws carries a stiffer penalty (longer possible term) than robbery by merely taking; 
(2) a term improperly used to describe thefts, including burglary (breaking and entering) and shoplifting (secret theft from the stock of a store), expressed: "We've been robbed."

Securities / Investment Fraud
Securities/investment fraud may include the following types of infractions:

(1)Unsuitability - The broker must have reasonable grounds for believing each recommendation to a customer is suitable on the basis of the customer's other securities holdings, and financial situation, among other factors.
(2)Churning - (excessive trading) - If a broker is buying and selling securities in your account to generate commissions that seem excessive, and the broker pressures you should take quick profits, there is a strong possibility that your account is being churned.
(3)Unauthorized Trades - Brokers must have expressed and detailed permission of the customer unless the broker and the broker's firm have been granted written discretionary authority by the customer.
(4) Failure to execute order (including online trading errors) - Brokers can't refuse your order and are responsible for executing orders in a timely fashion.
(5)High-Pressure Selling/Misinformation - Some brokers use illegal techniques to sell their "house stocks."
(6)Over Concentration - Brokers must assure that the portfolios of their clients are balanced with a diversity of investments.
(7)Illegal Accounts - A broker cannot place a client's money into his own personal account or set up false accounts.

Securities fraud can be described as deceptive practices in the commodity and stock markets. The Securities Act of 1933 and the Securities Exchange Act of 1934 prohibit the use of manipulative or deceptive devices, making false statements in order to increase market share, conspiracy and other acts of unfair market practices.

Like many other types of financial fraud, the web of offenders in securities fraud can include stockbrokers, promoters, traders, accountants, and lawyers. Professionals like these working together can defraud stockholders out of billions of dollars. Although the idea of boiler room schemes pushing worthless penny stocks upon unsuspecting victims comprises part of the problem, the SEC and federal courts have imposed both civil and criminal sanctions upon such diverse groups ranging from organized crime rings to high school students.

The four most prevalent types of securities crime include "churning", insider trading fraud, outsider training, and "pump and dump" fraud. Churning refers to the buying and selling of stock in order to generate commissions for the stockbroker at the expense of client's profits.  Insider trading refers to the misappropriation of nonpublic information. While the original statutes made it illegal for employees to directly benefit from market-sensitive information, the definition of insider trading has been expanded to disallow sharing privileged information to a third party who might buy shares in the company.

Outsider trading evolved from insider trading laws. The United States Supreme Court first recognized a form of outsider trading in the 1997 case United States v. O'Hara. The court in that case applied what they called the "misappropriation theory." The misappropriation theory, "subjects individuals who trade on material, non-public information to prosecution, regardless of whether they worked for the company whose stock was being traded or otherwise owed the corporation's shareholders a fiduciary duty.  "While originally involving a strict interpretation of the Securities Exchange Act, Decisions from cases before O'Hara in the early eighties limited the criminal liability of outside traders to only those instances in which the outsider should have known that the information resulted from a breach in the first place.

One of the most common Internet scams is in fact, one of the oldest investment schemes of all time: the "pump-and dump" scam. Historically pump-and-dump schemes are run out of makeshift offices staffed with fast talking telemarketers that convince innocent investors to buy debatable stock. The high pressure sales tactics generate enough demand to push up the share price of stock. This phase of the scheme is known as, the "pump". The "dump" occurs when the price of the stock reaches a specific objective and the operation that was originally encouraging investors to buy, sells its shares for a significant profit. The sell-off will also lower demand and consequently the share price, leaving unsuspecting investors with a loss.

Using online investment newsletters positioned as objective to the trade, and which promote the purchase of specific securities may constitute another form of investment fraud.

Shoplifting 

Tax Evasion
Intentional and fraudulent attempt to escape payment of taxes in whole or in part. If proved to be intentional and not just an error or difference of opinion, tax evasion can be a chargeable federal crime. Evasion is distinguished from attempts to use interpretation of tax laws and/or imaginative accounting to reduce the amount of payable tax.

Tax Fraud
Many federal white-collar prosecutions are for tax crimes, such as tax evasion, failure to file income tax returns, or tax fraud. Because of the war on drugs, and the war on terrorism, criminal investigations into personal and business tax filings have become more intense. As defense attorney and tax specialist Kathryn Keneally writes in a recent issue of The Champion, "IRS Criminal Investigation is uniquely entrusted with the enforcement of criminal tax statutes." Adds Keneally, "The IRS looks to criminal enforcement not only to punish the small number whose wrongful acts are detected and can be proven, but also to deter the majority of taxpayers from attempting to cheat on their taxes.

There are some special considerations to keep in mind if you are under investigation for violations of the Internal Revenue Code, as Kathryn Keneally explains:

In a bank fraud case, for example, the federal investigative agency is typically the FBI. The FBI usually works directly with the local United States Attorney's office. When the FBI has completed its investigation, it forwards its case to the local U.S. Attorney's office, and the local office determines whether to prosecute or not.

In tax crime cases, the procedure is significantly different. The typical criminal tax case is investigated by the Internal Revenue Service Criminal Investigation section. IRSCI investigators are federal agents trained in law enforcement techniques and tactics; they are also trained accountants, and many have achieved their CPA. There are CID offices throughout the country.

When an IRSCI agent completes an investigation and recommends that an individual be prosecuted, there are at least two stages of review by Internal Revenue Service attorneys prior to the approval of prosecution. Once the Internal Revenue Service approves prosecution at its highest level, the case is forwarded to the United States Department of Justice Tax Division in Washington, DC, where federal prosecutors specializing in criminal tax violations review the case and decide whether or not to authorize prosecution. If the Department of Justice Tax Division in Washington approves prosecution, the case is sent to the local US Attorney's office with the direction that the individual or individuals named be indicted and prosecuted for the offenses alleged.

In tax crime cases, the multi-tiered approval process can work to your advantage. The process gives you a number of different opportunities to derail a federal criminal case before it ever gets to grand jury. At each of the IRS approval levels and at the Department of Justice Tax Division level, your lawyer will have the opportunity to schedule a conference where he or she can sit down with government attorneys and attempt to convince them to decline prosecution of the case. If the government has a strong case against you, it is unlikely that he or she will be successful in convincing either the IRS or the Department of Justice Tax Division to refrain from prosecuting.

However, if there are misunderstandings that can be explained away and the government can be convinced that there was no criminal conduct, you have the opportunity to convince the government to decline prosecution prior to grand jury. It is always less stressful to have your attorney address matters in meetings with government attorneys than to present your side of the story to a jury at a federal criminal trial.

Also, in tax crime cases it is important to have an attorney who is not only well experienced in federal criminal matters, but who also has had significant experience in federal criminal tax cases. If you are comfortable with a lawyer who is experienced in federal criminal defense but lacks tax experience, consider adding a former IRSCI agent to your defense team. However you accomplish your objective, you will want both federal criminal defense and tax crime experience on your side.

Telemarketing Fraud
Telemarketing Fraud is a term that refers generally to any scheme to "deprive victims dishonestly of money or property or to misrepresent the values of goods or services."

Traditionally fraudulent telemarketers have operated out of boiler rooms. "Boiler room" operations involve rented offices with banks of telephones operated by high-pressure salespersons who peddle investment offers, charity solicitations, and telephone billing scams to name a few. Some boiler rooms employ a multi-tier approach with customers.

After a less experienced caller makes an initial contact, more seasoned telemarketers handle sales, follow-ups, verifications, and reloads. All fraudulent operators, however, are persuasive and persistent in order to swindle as many people as possible.

Boiler rooms represent the ideal office setup for fraudulent telemarketers. Typically, such offices consist of an open space with numerous phone lines and few furnishings. Once fraudulent telemarketers suspect that they are under investigation, or that their frauds are about to be detected, they can quickly disband their operation and relocate.

The California Department of Corporations has reported that 100 new boiler rooms have opened in the last year in Los Angeles alone. Other areas experiencing growth of boiler room operations include Florida, Canada, and increasingly, the Caribbean.

As law enforcement and regulatory authorities have become more vigorous in prosecuting fraudulent telemarketing, telemarketers have increasingly engaged in what's known as "rip-and-tear." Rip-and-tear telemarketers will utilize pay telephones, mobile phones, cloned phones, and long distance cards to carry out their schemes. Fraudulent telemarketers try to make it appear that their service or charitable cause is worth the money that they are asking the consumer to send.

Because these telemarketers' objective is to maximize their profits, fraudulent telemarketers will typically adopt one or both of two approaches. The first is to fail to give the consumer anything of value in return for their money. The second is to provide items far below what the consumer had expected the value to be.

According to the National Fraud Information Center, the top telemarketing "scams" for 2000 were:
   -Prizes/Sweepstakes
   -Magazine sales
   -Credit Card Sales
   -Work-at-Home
   -Advance Fee Loans
   -Telephone Slamming
   -Credit Card Loss Protection
   -Buyers Clubs
   -Telephone Cramming
   -Travel/Vacations

These top ten frauds of 2000 make up 80 percent of all telemarketing complaints received by the National Fraud Information Center.

As an example of law enforcement against alleged telemarketing fraud, during "Operation Disconnect" a few years ago, FBI undercover agents pretended to sell a special machine that would allow fraudulent telemarketers to dial as many as 12,000 calls per hour. Such a machine would have increased the ability of telemarketing schemes to contact large numbers of prospective victims throughout the United States. Undercover agents obtained many damaging and revealing admissions from the telemarketers about the fraudulent and criminal nature of their business activities.

As a result of Operation Disconnect, several hundred fraudulent telemarketers were successfully prosecuted, in some cases receiving prison sentences as high as ten years.

Theft
The generic term for all crimes in which a person intentionally and fraudulently takes personal property of another without permission or consent and with the intent to convert it to the taker's use (including potential sale). In many states, if the value of the property taken is low (for example, less than $500) the crime is "petty theft," but it is "grand theft" for larger amounts, designated misdemeanor or felony, respectively. Theft is synonymous with "larceny." Although robbery (taking by force), burglary (taken by entering unlawfully) and embezzlement (stealing from an employer) are all commonly thought of as theft, they are distinguished by the means and methods used and are separately designated as those types of crimes in criminal charges and statutory punishments.

Wire Fraud
Wire fraud makes it a Federal crime or offense for anyone to use interstate wire communications facilities in carrying out a scheme to defraud. A person can be found guilty of that offense only if all of the following facts are proved beyond a reasonable doubt:
   -First: That the person knowingly and willfully devised a scheme to defraud, or for obtaining money or property by means of false pretenses, representations or promises; and
   -Second: That the person knowingly transmitted or caused to be transmitted by wire in interstate commerce some sound for the purpose of executing the scheme to defraud.
It is not necessary that the Government prove all of the details concerning the precise nature and purpose of the scheme; or that the material transmitted by wire was itself false or fraudulent; or that the alleged scheme actually succeeded in defrauding anyone; or that the use of interstate wire communications facilities was intended as the specific or exclusive means of accomplishing the alleged fraud.

What must be proved is that the person knowingly and willfully devised or intended to devise a scheme to defraud; and that the use of the interstate wire communications facilities was closely related to the scheme because the person either wired something or caused it to be wired in interstate commerce in an attempt to execute or carry out the scheme. To "cause" interstate wire facilities to be used is to do an act with knowledge that the use of the wires will follow in the ordinary course of business or where such use can reasonably be foreseen. Each separate use of the interstate wire facilities in furtherance of a scheme to defraud constitutes a separate offense.