Los Angeles White Collar Crime Defense Lawyer

Los Angeles White Collar Crime Defense Lawyer

FBI agents executed a search warrant at your home. 6 AM. They seized your computers, phones, business documents. Grand jury subpoena. Federal investigation for wire fraud or embezzlement. You’re terrified – federal prison, losing your professional license, business destroyed, reputation ruined. Thanks for visiting Spodek Law Group – a second generation law firm with over 50 years of combined experience. Our managing partner, Todd Spodek, has many, many, years of experience defending clients in high-profile cases covered by NY Post, Newsweek, and other national outlets – including Anna Delvey and juror misconduct allegations in the Ghislaine Maxwell trial. This article explains what white collar crime means, the difference between federal and state prosecution, the penalties you face, defenses that can get your case dismissed, and why you need a lawyer immediately.

What It Is

White collar crime refers to non-violent financial crimes motivated by financial gain. California Penal Code Section 503 criminalizes embezzlement. Common white collar crimes prosecuted in Los Angeles include embezzlement, fraud, money laundering, identity theft, and insider trading.

Federal wire fraud under 18 U.S.C. § 1343 criminalizes any scheme to defraud using wire communications – phone calls, emails, text messages, internet. If you sent an email about a fraudulent scheme, just one email, the FBI can charge you with wire fraud even if the underlying fraud would be a state crime. Wire fraud is the most common federal white collar crime charge.

What makes it federal? Wire communications = wire fraud. Banks = bank fraud. Securities violations = SEC jurisdiction. U.S. mail = mail fraud. Large amounts over $1 million typically trigger federal prosecution. Crime crossed state lines? Federal prosecutors take the case.

Federal securities fraud under 18 U.S.C. § 1348 criminalizes schemes to defraud investors or manipulate securities prices. Insider trading, Ponzi schemes, accounting fraud. The SEC investigates and refers cases to the U.S. Attorney’s Office for criminal prosecution.

Federal vs. State

Federal white collar crime prosecution is far more serious than state prosecution, it means federal prosecutors, federal judges, federal prison. Federal cases are prosecuted by the United States Attorney’s Office for the Central District of California. State cases are prosecuted by the Los Angeles County District Attorney. Federal court. Federal sentencing. Federal consequences.

The Central District of California covers Los Angeles, Orange, Riverside, San Bernardino, Ventura, Santa Barbara, and San Luis Obispo counties – approximately 20 million people. The U.S. Attorney’s Office Major Fraud Section prosecutes corporate embezzlement, securities fraud, insider trading, and Ponzi schemes.

Which crimes go federal? Wire fraud and mail fraud because they cross state lines. Bank fraud under 18 U.S.C. § 1344 because it involves federally insured institutions. Securities fraud because SEC has federal jurisdiction. Money laundering. Tax evasion. RICO violations. Large-scale fraud over $1 million. All federal.

Which crimes remain state offenses? Embezzlement from a single California employer where the money never left California. Workers’ compensation fraud. Insurance fraud. Unemployment fraud. Check fraud and credit card fraud involving small amounts.

Federal white collar crimes are investigated by the FBI Los Angeles Field Office, IRS Criminal Investigation, and SEC Los Angeles Regional Office. State white collar crimes are investigated by LAPD Commercial Crimes Division and LA County Sheriff Economic Crimes Bureau. Federal cases are prosecuted in United States District Court for the Central District of California located at the Edward R. Roybal Federal Building at 255 East Temple Street in downtown Los Angeles. State cases are prosecuted in Los Angeles County Superior Court at the Criminal Courts Building at 210 West Temple Street.

Why federal prosecution is worse: federal sentencing is more severe. Wire fraud carries up to 20 years in federal prison. Bank fraud carries up to 30 years. Securities fraud carries up to 20 years. Federal defendants serve sentences in federal prison far from California with no possibility of early release. Federal law requires defendants to serve at least 85% of their sentence.

Penalties

Wire fraud under 18 U.S.C. § 1343 is punishable by up to 20 years in federal prison and fines up to $250,000, and if the wire fraud affects a financial institution, the maximum penalty increases to 30 years and fines up to $1 million, while securities fraud under 18 U.S.C. § 1348 is punishable by up to 20 years in federal prison and fines up to $5 million for individuals or $25 million for corporations, and bank fraud under 18 U.S.C. § 1344 is punishable by up to 30 years in federal prison and fines up to $1 million, and money laundering is punishable by up to 20 years in federal prison and fines up to $500,000 or twice the amount laundered. The United States Sentencing Guidelines assign a base offense level based on the dollar loss to victims, with a fraud causing a loss of $1 million resulting in a base offense level of 14, which translates to a guideline range of 15 to 21 months in prison before enhancements, and enhancements increase the offense level based on the number of victims (ten or more victims adds two levels, fifty or more victims adds four levels), the defendant’s role in the offense (organizer or leader adds four levels), and use of sophisticated means like offshore accounts or shell companies (adds two levels), and restitution is mandatory in federal white collar crime cases meaning the court must order you to pay back the full amount of victims’ losses even if you no longer have the money.

Embezzlement under $950 is a misdemeanor punishable by up to 6 months in county jail while embezzlement over $950 is grand theft which can be charged as either a misdemeanor (maximum 1 year county jail) or felony (16 months, 2 years, or 3 years in state prison), and the court will order restitution to the victim. Professional licenses are suspended or revoked after white collar crime convictions. Lawyers disbarred by the California State Bar. CPAs losing their CPA licenses. Securities brokers barred by FINRA. Real estate agents losing their licenses. Doctors and nurses facing disciplinary action from the Medical Board. Professional license revoked. Career over. Reputation destroyed. You cannot work in financial services, you cannot work in banking, you cannot handle money or serve in a position of trust, and background checks reveal your fraud conviction and employers refuse to hire you.

If you are not a U.S. citizen, fraud convictions are aggravated felonies under federal immigration law making you deportable and inadmissible, and even if you are a lawful permanent resident who has lived in the United States for decades, a fraud conviction can result in deportation with no possibility of return. The SEC can bar you from serving as an officer or director of a public company and can bar you from the securities industry with lifetime bars that prevent you from working in finance. Federal white collar crime prosecutions are public with the U.S. Attorney’s Office issuing press releases announcing indictments, news media covering arrests and trials, your name appearing in newspapers and online, and Google searches of your name showing your arrest and conviction forever.

Defenses

The prosecution must prove you intended to defraud victims. An honest mistake is not fraud. An accounting error is not fraud. A business decision that turned out badly is not fraud. If you made an error but did not intend to deceive anyone, you did not commit fraud. Lack of intent. Honest mistake. Not fraud.

Good faith reliance on professional advice negates intent. If you relied on your accountant’s advice that certain financial statements were accurate, you lacked the intent to deceive investors. If you relied on your lawyer’s advice that certain disclosures were legally sufficient, you lacked the intent to violate securities laws.

Lack of knowledge is a defense when you did not know about the fraudulent scheme. If a partner or employee committed fraud without your knowledge, you are not guilty. The prosecution must prove you knew about the scheme and participated in it.

Insufficient evidence is a defense when the prosecution cannot prove the case beyond a reasonable doubt. White collar crime cases involve complex financial transactions and thousands of documents. Forensic accountants can analyze the financial records and show that the transactions had legitimate business purposes.

Fourth Amendment violations and illegal searches can result in suppression of evidence. If the FBI or IRS obtained evidence through an illegal search, that evidence cannot be used against you at trial. 18 U.S.C. § 3282 establishes a 5-year statute of limitations for most federal offenses. Wire fraud, securities fraud, and bank fraud must be charged within 5 years. Tax evasion has a 6-year statute of limitations.

Why You Need Lawyer NOW

You need a federal criminal defense lawyer immediately if you are under investigation for white collar crime. Most people make the critical mistake of thinking they do not need a lawyer until they are indicted. This is wrong. The pre-indictment phase is the most important time to have a lawyer.

Federal white collar crime investigations last months or years before charges are filed. The FBI, IRS, or SEC investigates, subpoenas documents, interviews witnesses, and presents evidence to a federal grand jury. During this investigation phase, your lawyer can negotiate with federal prosecutors to prevent charges from being filed. If you cooperate early, provide restitution to victims, and demonstrate that criminal charges are not warranted, the U.S. Attorney’s Office may decline to prosecute.

Target letters notify you that you are the target of a federal investigation. If you receive a target letter from the U.S. Attorney’s Office, you need a lawyer immediately. Your lawyer can contact the prosecutor, review the evidence, and present a defense before the grand jury votes on an indictment.

Federal sentencing guidelines make cooperation agreements critical. If you provide substantial assistance to the government, the prosecutor can file a motion for downward departure under U.S.S.G. § 5K1.1 which can reduce your sentence by 50% or more. The cooperation must happen early.

If FBI agents executed a search warrant at your home or business, you need a lawyer to ensure the search was lawful. If you received a grand jury subpoena for documents or testimony, you need a lawyer to review the subpoena and assert any applicable privileges.

An indictment alone can destroy your career even if you are ultimately acquitted, it ruins your reputation, news media cover federal white collar crime arrests, your employer may suspend you or terminate you when you are indicted, professional licensing boards initiate disciplinary proceedings based on the indictment.

Unlike other Los Angeles white collar crime lawyers who wait for indictment, Spodek Law Group intervenes pre-indictment. We negotiate with the FBI, IRS, SEC, and U.S. Attorney before charges are filed. We appear in the United States District Court for the Central District of California regularly. We know federal prosecutors and federal judges. We have experience defending clients in high-profile federal white collar crime cases. We are available 24/7 for emergency consultations.

Don’t talk to FBI without lawyer. Call now. 212-300-5196.