fraud

The Role Of The Mail Fraud Statute In Federal Mortgage Fraud Prosecutions

federal chargesMortgage fraud prosecutions are at a five-year low nationally, but California is a top-five target for federal mortgage fraud prosecutions. You can find news stories every day of individuals who have been arrested in connection with mortgage fraud schemes. Even so, there’s something unusual about “mortgage fraud.” Look wherever you like, but there is no crime called “mortgage fraud” in the US Code!

Federal Fraud Charges

Instead, the federal government uses some very high-powered, general fraud statutes to do the heavy lifting on federal mortgage fraud cases.  Most often, a federal prosecutor will file one or more charges of mail fraud, wire fraud or bank fraud against a defendant accused of participating in a mortgage fraud operation.

These statutes have been tested and reviewed by the Federal Courts again and again; prosecutors and federal Judges understand them very well and have used them for years. They pose a very serious challenge to the accused. If you’ve been charged with violations of one or more federal fraud statutes, you need a very experienced federal criminal defense attorney to help defend you in Court.

In this article, we’ll look at the elements of mail fraud.  This charge is similar to, but distinctly separate from other fraud charges, such as wire fraud and bank fraud.  The element of mail fraud is often central to the government’s ability to prosecute mortgage fraud cases.

Mail Fraud

Mail fraud is defined as a crime in Title 18, § 1341 of the United States Code.  It says:

“Whoever, having devised or intending to devise any scheme … to defraud, or for obtaining money or property by means of false or fraudulent pretenses, … or promises,…, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or … delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, … shall be fined under this title or imprisoned not more than 20 years, or both…

What Does This Statute Mean?

This statute says that anyone who puts anything into the mail that is designed to defraud another party (or gives it to a private courier for delivery) has committed mail fraud. With the rise of telephones and computers, you might be tempted to think that it would be easy to get around the federal mail fraud statute by not sending anything through the mail, but instead sending documents electronically by fax or email. Enter wire fraud, another federal fraud charge that is often used to prosecute mortgage fraud.

What Can You Do If You Are Charged With Mail Fraud?

If you’ve been accused of “mortgage fraud” or mail fraud in connection with mortgage fraud or any other type of federal fraud, you need the assistance of a competent, experienced federal criminal defense attorney. If you have been indicted or are being investigated for crimes related to mortgage fraud or bank fraud, then contacting an experienced lawyer is the first thing you should do.

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Eileen is a content contrbutor for Robert Helfend, Attorney at Law. Eileen enjoys writing about high profile criminal cases, new laws, and much more. She recommends you call Robert Helfend, Los Angeles criminal defense attorney for all of your legal needs.


4 of the Greatest Accounting Scandals of All Time

4 of the Greatest Accounting Scandals of All Time

Accounting scandals involve misdeeds by trusted executives who are responsible for large sums of money. They come up with devious ways to misuse or misdirect funds, understate expenses and liabilities, overstate revenues and the value of the assets. In no particular order, here are four of the greatest accounting scandals of all time.

Bernard L. Madoff Investment Securities LLC

Bernie Madoff, a former NASDAQ chairman, orchestrated the biggest investment scam ever and had $21.2 billion in cash losses. It was a giant Ponzi scheme rubber-stamped by his accountants and aides. His accountant, David Friehling pleaded guilty to several charges of false audits. The main assistant who helped Madoff pursue his Ponzi scheme was Frank DiPascali. He also pled guilty to creating false trade orders and has been sentenced to 125 years in prison.

A Ponzi scheme pays investors from money given by new investors and not from profit earned through investments made by the company or organization. To attract new investors, the people running a Ponzi scheme promise much higher short-term returns than the investor could get in legitimate investments.

Lehman Brothers

The accountants at Lehman Brothers lost more than $50 billion in disguised loans. They classified these loans as sales. The executives and auditor Ernst & Young manipulated the balance sheets by using an accounting trick called Repo 105. A top law firm in Britain helped Lehman Brothers hide its debts by signing off on questionable accounting techniques in order to disguise the $50 billion debt.

Repo 105 is an accounting ploy to classify a short-term loan as a sale. The cash that is received from this so-called sale is used to pay down debt which allows the company to appear to reduce its leverage. It pays down its liabilities temporarily, so the published balance sheet looks good. After the financial report is published, they borrow money and purchase back their original assets.

Enron

Enron was once the seventh largest company in the U.S. In 2001, it collapsed because the executives used special purpose entities so that large debts would not appear on their balance sheets. This was the biggest accounting fraud of all time at the time. This false financial reporting hid the company’s true financial position from shareholders and analysts.

The unscrupulous executives including Jeffrey Skilling, Kenneth Lay, Andrew Fastow and others kept their multi-billion debt off the books and the firm was portrayed as having a positive financial footing. When it fell, Enron was the largest bankruptcy ever at that time. The leading auditor Arthur Andersen, who audited Enron’s books, was dissolved. They looked the other way when they saw misdeeds and also shredded evidence of the scandal.

WorldCom

The executives at WorldCom organized an $11 billion accounting fraud scheme where Bernie Ebbers, the former CEO, took hundreds of millions of dollars in personal loans. At one time, WorldCom was the second largest long-distance operator in the U.S. Ebbers masterminded an accounting fraud that was the largest in U.S. history at that time.

Ebbers needed to keep World Com afloat because his personal wealth was based on shares in the company. He borrowed from the company to buy more stock as well as mansions and a hockey team among other things. He used hidden expenses, phantom revenue and hype to inflate earnings and perpetuate the illusion that the company was financially healthy. Scott Sullivan, the former CFO, pleaded guilty to conspiring with Ebbers to submit false reports to investors as well as regulators to hide the fact that WorldCom had weakening results. Not only did they use fraudulent and sloppy bookkeeping, they also overvalued several acquisitions and instead of the profit they reported, they had a total of $79.5 billion loss.

Citations:

Larry Parker is a corporate accountant and guest author at Best Accounting Schools, a site with rankings of top-rated accounting schools.


The Law and Fraud

The Law and Fraud

The law & fraud

Fraud is a crime that involves a person intentionally deceiving another in order to either gain something such as money, valuables, or success. In recent years, fraud has become more accessible to criminals due to the popularity of the internet. For example, a fraudulent individual could con a person out of their money, or their valuables, by setting up an illegitimate website, or by using an existing website to deceive that person into sending items or money on terms in which the fraudulent person may disregard.

Fraud may cause not only the loss or harm to a victim, but it may also potentially have damaging psychological effects, such as distrust to legitimate services and people.

It is against the law to commit fraud and those found guilty could receive punishment ranging from a fine to a custodial sentence. There are several different types of fraud which can be committed; some of these are: benefit fraud (claiming benefits when a person is ineligible), counterfeiting (producing or utilising false items, such as money/cheques), false insurance claims (falsely claiming money or services from an insurance company), identity theft (claiming someone else’s identity as your own), tax fraud (evading to pay tax) and false advertising (using false information to advertise a product/service).

“The Fraud Act 2006” was put in place in the United Kingdom to help prevent and put a stop to fraud being committed. According to http://www.legislation.gov.uk; “A person is guilty of fraud if he/she is in breach of any of the sections listed below;

The sections are—

(a) Fraud by false representation.

(b) Fraud by failing to disclose information.
(c) Fraud by abuse of position.

If a person is taken to court due to a fraudulent offence, the court will consider how culpable the defendant is, and from that a Judge will decide on a penalty. The defendant in question will have the right to be defended by criminal defence solicitors. Some of the options a Judge will take into account are;

  • How much planning has gone into the offence
  • How long the fraud was carried out for
  • The motivation behind the offence
  • The value of the money or possessions involved
  • How many people where involved in the offence
  • If there were any physical risks of injury
  • How much of an impact there was on the victims involved

Depending on the seriousness of the crime, a person could be given a fine, a community order or a prison sentence, with a maximum of 10 years. They may also have certain privileges taken away from them, if those privileges played a specific role in the offence.

Daniel Travis Brown is an avid writer of both articles and scripts you can follow him on twitter @DanTravisBrown. This article has been written on behalf of Gray and Co Criminal Defence Solicitors.


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