Federal White-Collar Crime: Investigation, Defense, and Resolution

The Legal Framework for White-Collar Prosecutions

Federal wire fraud (18 U.S.C. § 1343) and mail fraud (18 U.S.C. § 1341) are the most commonly charged white-collar offenses. These statutes require proof that the defendant devised or participated in a scheme to defraud, with the specific intent to defraud, using interstate wire communications or the U.S. mail. Each carries a maximum sentence of 20 years, or 30 years if the fraud affects a financial institution.

Securities fraud under 15 U.S.C. § 78j(b) and SEC Rule 10b-5 prohibits fraudulent conduct in connection with the purchase or sale of securities. This includes insider trading, market manipulation, and material misrepresentations. Criminal violations carry penalties of up to 20 years imprisonment and $5 million in fines for individuals.

Money laundering under 18 U.S.C. §§ 1956-1957 criminalizes financial transactions involving proceeds of specified unlawful activity. Section 1956 addresses transactions designed to promote unlawful activity, conceal the nature of proceeds, or avoid reporting requirements, carrying penalties of up to 20 years. Section 1957 addresses monetary transactions over $10,000 in criminally derived property.

The Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968, allows prosecution of individuals who participate in an enterprise through a pattern of racketeering activity. RICO charges carry enhanced penalties and allow for forfeiture of assets, making them a powerful tool in complex white-collar prosecutions.

Effective Approaches to White-Collar Defense

Early intervention during the investigation phase is critical. Retaining experienced federal defense counsel before charges are filed can influence the scope of the investigation, facilitate proffer sessions with prosecutors, and potentially prevent indictment through pre-charge negotiations.

Challenging the government's evidence of intent is often the most effective defense strategy. White-collar cases frequently involve complex business transactions where the line between aggressive business practices and criminal fraud can be blurred. Demonstrating that the defendant acted in good faith or relied on professional advice can negate the required criminal intent.

Cooperation with the government under a proffer agreement can lead to reduced charges or favorable sentencing recommendations. However, cooperation must be carefully managed to protect the client's interests, as statements made during proffer sessions can be used against the defendant if the cooperation agreement breaks down.

Forensic accounting and financial analysis are essential tools in white-collar defense. Expert witnesses can challenge the government's loss calculations, identify legitimate business purposes for questioned transactions, and present alternative interpretations of financial evidence.

Critical Errors in White-Collar Defense