UPDATED: October 10, 2012
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Financial fraud encompasses several types of so-called “white collar” financial crimes, including corporate fraud. Corporate fraud is one of the financial crime focus areas for the Department of Justice and Federal Bureau of Investigations (FBI). These crimes are characterized by deceit, concealment, or violation of trust, and are not dependent upon the application or threat of physical force or violence.
The laws used to prosecute financial fraud cases can be found in a number of federal statutes, including Title 18 of the U.S. Code at Section 1347, for Health Care fraud, and Section 1956, for Money Laundering, among others. Federal statutes related to health care, bank, and tax fraud are enforced by the Department of Justice with investigative assistance by the Federal Bureau of Investigations and U.S. Secret Service.
The majority of corporate fraud cases pursued by the FBI involve accounting schemes designed to deceive investors and Wall Street analysts about the true financial condition of a corporation. During such a scheme, the perpetrator manipulates a corporation’s financial data in order to artificially inflate the stock price and provides fictitious performance indicators to the investing public.
Corporate Fraud investigations focus on various activities, including falsification of financial information and criminal transactions by corporate insiders, such as kickbacks, misuse of corporate property for personal gain, and tax violations related to so-called “self-dealing.”
Since the Enron convictions for corporate fraud, penalties for those caught cheating have increased. Fines and settlements now regularly top $100 million for cases that would have cost just a few million dollars a decade ago. If you are under investigation for financial or corporate fraud, you will need an experienced criminal defense attorney on your side.