Maryland Criminal Defense For Tax, Health Care, And Securities Fraud Charges
The government is merciless when it comes to prosecuting, convicting, and sentencing fraud-related crimes – even when the intent to deceive wasn’t actually there.
JC Law will defend your side of the story to federal courts and offer your chance at a fair and just outcome.
What Does The Government Consider To Be “Fraud?”
When an individual is charged with fraud, the government prosecutor believes that the defendant intended to take something from another person through deceit.
Quite a number of situations qualify as fraud, from something simple such as credit card fraud to a sophisticated crime involving securities and other investments.
For a fraud charge to hold water, the government must prove whether the offender’s intent was “deceitful” – as in, they knew that were fooling the victim into buying, giving away, or otherwise divesting their asset under false pretenses.
For example, ever hear someone dismissively ask, “You wanna buy the Brooklyn Bridge, too?”
That’s actually one of the most famous cases of fraud ever in the United States, perpetrated by George C. Parker. Legend has it that Parker sold the Brooklyn Bridge and other New York City public works to victims twice a week for up to $50,000 a pop.
This “sale” was fraudulent, as Parker never had the rights to the Brooklyn Bridge in the first place. And, Parker knew he didn’t possess the right to sell the bridge, thereby qualifying the “intent” portion of the legal definition of fraud.
“Ponzi” or “pyramid” schemes are a type of fraud, too. They convince investors they’ll reap rewards by selling goods or purchasing securities, when there’s actually nothing there of value. The only money in the system is generated by adding more and more investors to pay those at the top of the “pyramid.”
The fraud is often revealed when no one else can be tricked into “investing” in such a scheme.
Consequently, pyramid and Ponzi schemes are illegal in the United States as a form of fraudulent business.
Other types of fraud include:
- Health care fraud
- Mail and wire fraud
- Securities fraud
- Tax fraud
What Is Health Care Fraud?
Per federal law, health care fraud can be charged against anyone or any organization which:
“…knowingly and willfully executes or attempts to execute a scheme… to defraud any healthcare benefit program or to obtain by means of false or fraudulent pretenses, representations, or promises any of the money or property owned by… any healthcare benefit program.”
That’s quite a mouthful of legalese. What healthcare fraud boils down to is someone or some organization tricking the health care system into paying for health services or goods that it shouldn’t have.
Healthcare fraud can be charged against:
- Private individuals who make claims for reimbursement of medical expenses against their insurance that are not true. For example, if someone submits a fake receipt of medical services to their insurance company, the insurance company can charge them with fraud.
- Individual medical professionals who claim to have performed certain procedures when they have not, and then fraudulently bill private insurance or federal healthcare programs such as Medicaid for compensation. For example, a doctor who bills Medicaid for consultations that never happened can be charged with healthcare fraud.
- Private and public medical organizations who file false claims to private or federal insurers. For example, John Oliver ran a segment on alleged abuses of private dialysis providers who allegedly charged federal insurance program Medicare for entire bottles of insulin, while only using part of the bottle.
What Is Mail And Wire Fraud?
Mail and wire fraud are actually two different, though related, types of fraud charges the federal government can levy against an individual or organization.
Both mail and wire fraud charges require prosecutors to show that the defendant tricked an alleged victim out of money or other assets. The “wire” or “mail” part of the charge describes how those assets were moved.
- Mail fraud requires the United States Postal Service or a private mail carrier such as the UPS or FedEx to transport the asset or funds. For example, an alleged victim mailing a deed to a fraudster via certified mail or a check in a stamped envelope would be mail fraud.
- Wire fraud involves an “interstate wire transmission” – you can read that as “electronic delivery” – of the falsely acquired assets. For example, electronic transfers of money between banks or Venmos of cash from victim to fraudster can result in wire fraud charges.
The difference changes how prosecution of fraud charges play out. Basically, a federal prosecutor can press charges against any type of mail fraud – even within a single state – since it involves a federal service.
However, the federal government can only pursue wire fraud charges if the alleged incident happened across state lines. If your criminal defense lawyer can prove that the alleged incident only happened within a single state, then the law requires that federal charges be dropped.
Of course, that means the Maryland state prosecutor’s office could pick up the charges on its own behalf, but your lawyer should already have planned for such an outcome.
What Is Securities Fraud?
Securities fraud is when investors of any sort are fooled into making purchases or sales of investments based on deliberately false, misleading, or otherwise illegal information.
Securities fraud examples include:
- Encouraging real estate investors to purchase a commercial property with a false inspection report that hides major structural repairs needed;
- Selling or buying stocks and other investments based on illegal “inside information” – facts that the public wouldn’t know about and therefore can act before the market shifts for a better deal; or
- Falsifying company data in federally mandated reports to artificially boost stock prices.
A famous real-world example of securities fraud involves Martha Stewart. In 2003, Stewart was indicted on securities fraud charges. Federal prosecutors claimed – and later proved in court – that she had dumped a specific part of her stock portfolio based on inside information that the company owner planned to sell their own stock.
(She compounded the error by lying to prosecutors and trying to destroy evidence of the fraudulent sale, which added to her prison sentence.)
What Does The IRS Consider “Tax Fraud?”
The Internal Revenue Service – the federal government agency responsible for collecting taxes – can charge someone with tax fraud when a private citizen, organization, or company lies on their tax return to reduce the amount of taxes owed.
Don’t mistake tax fraud for filing mistakes. Everyone can put the wrong number in the wrong slot and accidentally either owe extra or less than they truly do. That’s known as “negligent reporting,” and can typically be fixed without any charges being filed.
However, the IRS charges people with tax fraud when they think someone’s purposefully lied on their tax return, either as an individual or as an entire company.
Tax fraud can happen when:
- A company pays an employee “under the table,” avoiding required federal and state taxes;
- People don’t report cash tips, freelance jobs, and other earnings over $600 in a given year;
- Individuals knowingly claim dependents they know they shouldn’t, just to get extra tax credits; or
- Payroll services don’t actually pay the IRS any withheld taxes.
Tax fraud is also different from tax avoidance, where wealthy individuals and companies use clever legal loopholes and accounting practices to reduce the total amount of taxes they owe.
Tax fraud is straight-up illegal; tax avoidance is technically legal, though certainly frowned upon.
What Are Possible Penalties For Tax Fraud And Other Fraud Charges?
Federal fraud convictions can result in:
- Federal imprisonment
- Five- and six-digit fines
- Restitution to anyone affected by the fraud
- Probation
These punishments vary according to how much was taken, under what circumstances, from whom, and for how long.
Depending on the unique circumstances of the case and the situations involved, this can range drastically. Some large-scale fraud cases have resulted in up to 30 years in prison and millions of dollars in fines and restitution.
For tax fraud specifically, penalties can include:
- Up to five years in federal prison for a single count of tax fraud, with probation afterward;
- Fines up to $250,000 for individuals and $500,000 for tax evasion charges; and
- Repayment of any owed taxes to the federal or state governments, plus court costs.
For securities fraud felony convictions, you might face up to 20 years in federal prison and up to $5 million in fines – and give up any profits made due to the deceit.
Both mail and wire fraud felonies can result in up to 20 years in prison and a $250,000 fine for each individual count you’re convicted on.
Finally, health care fraud sentences can include both fines and time in federal prison. Those sentenced to prison in 2018 for healthcare fraud convictions averaged 30 months behind bars.
How Can A Criminal Defense Lawyer Help With Fraud Charges?
The main allegation in a fraud case is proving that there was the intent to take something from another person through deceit.
That means that in any federal fraud case, the main focus is on whether or not the government is able to prove the intent was, in fact, deceitful.
An excellent federal fraud lawyer will interpret the claims made against you to see if what the federal government insists occurred actually happened as described.
For example, was it an honest mistake or genuine deceit? Did you believe in what you were claiming to be true, or did you know that was false? No one can know a man’s heart, and proving intent is one of the hardest tasks set before prosecutors in fraud cases.
When you’re facing sentences as severe as those for federal fraud convictions, you should definitely talk to a criminal defense lawyer regarding any fraud charges levied against you, and how to defend yourself against them.
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