Corporate Business Crimes

Business crimes, regulatory offenses and corporate fraud are considered a high priority for the FBI and U.S. Justice Department. Vigorous enforcement actions are increasingly the norm, with more cases targeting not just the firm, but individual directors, officers, employees and shareholders.

While corporations are technically “legal persons” capable of being criminally prosecuted and sued civilly, prosecutors are instructed not to use this as a substitute for action taken against individuals within an organization who may be criminally culpable.

Miami corporate defense lawyers at Jacobs Keeley understand the complex nature of these crimes, and are prepared to launch a multi-disciplinary defense for corporations, officers and shareholders who face criminal investigation or indictment.

In many cases there may be opportunities for a corporate deferred prosecution or non-prosecution agreement, particularly where a guilty plea or verdict might inflict damage or collateral consequences to the company, employees, the community or the economy. These outcomes might still come with steep financial penalties, policy reform and independent monitoring arrangements, but they typically allow individuals to avoid prison.

Our attorneys can offer individuals and companies accused of wrong-doing a variety of services:

  • Pre-indictment representation;
  • Internal investigations;
  • Management of media crisis;
  • Criminal appeals;
  • Parallel proceedings;
  • Representation at both federal and state-level criminal and civil proceedings.
Corporate Fraud

One of the primary focuses of the FBI is corporate fraud, of which the majority involves self-dealing by executives, accounting schemes, tax fraud and obstruction of justice.

Accounting schemes are primarily designed to deceive investors, analysts and auditors regarding the financial condition of a business through the manipulation of share price, financial data or other measurements of valuation.

Federal investigators report a particular increase of insider trading investigations, which is investigated by both the FBI and the U.S. Securities and Exchange Commission.

Self-dealing by executives is largely realized in the form of a Ponzi schemes. Traditionally, these took place on a much smaller scale, but in recent years have been reported on a corporate level, often involving companies largely viewed as legitimate.

Another area of corporate fraud spotlighted in recent years involves the housing market. In particular, subprime lending institutions, home-building companies, brokerage firms, hedge funds and banks. Although many companies have made non-prosecution agreements and paid billions in fines and settlements, very few individuals have been criminally prosecuted for conduct connected to these actions. Those who were targeted were often lower-level workers.

Still, companies can be held criminally liable for actions of employees in accordance with the doctrine of respondeat superior, so long as prosecutors can adequately establish the agent’s actions were within the scope of his or her duties and were intended, at least in some part, to benefit the corporation.

During Fiscal Year 2011 (the most recent year for which figures were available) the FBI reported 242 indictments/informations and 241 convictions for corporate crimes. That represented a 37 percent increase in prosecutions since 2007 and resulted in $2.4 billion in restitution orders, plus more than $16 million in fines.

Corporate Fraud Cases in Florida

Investigations and prosecutions of corporate fraud in Florida are numerous.

Just a few examples include:

  • A Miami businessman operating a wholesale electronics distributing company sentenced to 12 months in prison and ordered to pay $243,000 in restitution after he pleaded guilty to one count of filing false income tax returns for an S Corporation. Court records indicate he inflated amounts listed as mortgages, notes and bonds payable, as well as corresponding interest deductions on his tax returns.
  • Three Florida residents (of Boca Raton, Coconut Creek and Wellington) pleaded guilty to one count of conspiracy to commit mail fraud after conceding they operated a series of fraudulent companies that sold coffee display racks to customers who were falsely told they would receive the racks, displays and assistance in maintaining the business and sales. The scheme reportedly cost businesses $30,000 and was perpetuated over the course of 11 years with a series of five different companies. Each faces a maximum 20 years in prison.
  • A prominent Orlando business owner was arrested on claims he fraudulently sold $150 million in 25 loans to a company in Wisconsin, promising the loans were guaranteed by the U.S. Department of Agriculture, which was false.

Individuals facing corporate fraud allegations must consult immediately with an experienced attorney to formulate a formidable defense and increase the chances of avoiding severe penalties and prison time.

Deferred Prosecution and Non-Prosecution Agreements

In the early 1990s, federal prosecutors began using non-prosecution agreements and deferred prosecution agreements in cases where corporate wrong-doing was alleged. The use of these has sharply increased in the last 15 years.

Such agreements are viewed by prosecutors as viable alternatives to pursuit of cases that are costly, lengthy and ultimately could have a negative impact on innocent parties should a conviction be secured.

In 2000, the Department of Justice reported two such agreements. In 2005, there were 14. In 2010, there were 37. As of mid-2014, there were 11. These don’t include agreements reached by the SEC and other federal regulators.

While these agreements are largely preserved for corporations, the SEC entered into its first deferred prosecution agreement with an individual in 2013.

Of the DOJ agreements reached in 2014, 8 were for foreign corrupt practices, 7 for fraud, 3 for trade-related offenses, 2 for violation of the food, drug and cosmetic act and the rest for false claims, false statements, occupational safety violations and public corruption.

No matter what charges you are facing, our experienced team of legal professionals is here to help.

Contact the Miami Corporate Defense Lawyers at Jacobs Keeley Trial Lawyers for a confidential appointment to discuss your rights.

Call us at (305) 358-7991.

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