White Collar Crimes

White-collar crimes are financially motivated, nonviolent offenses. Offenders use concealment or deceit of material facts to obtain property or money to gain an undue advantage. Specific laws address the various crimes, including the elements prosecutors must prove to secure a conviction and the penalties imposed upon conviction. It is best to seek legal assistance if you are being investigated or facing charges for white-collar offenses. Talk to the experienced Los Angeles Criminal Attorney team for legal aid on your case.

Types of White Collar Crimes

Prosecutors can pursue charges for white-collar offenses at the federal or state level. Prosecutors will pursue charges under state law if you commit the offense within California. The crime becomes a federal issue if committed in California and other states.

Under state law, these offenses can be either misdemeanors or felonies, and a conviction results in varied penalties. Here is a look at each crime.

1. Money Laundering

Individuals commit money laundering when they obtain finances from criminal or illegal activities and channel the funds into bank accounts or legitimate businesses to conceal the source of the funds. Money laundering is a violation of Penal Code 186.10.

 A jury will only find you guilty if satisfied that the prosecution established the following elements.

• You conducted or attempted to complete a series of financial transactions or a financial transaction through a bank,
• The transaction(s) involved a sum of no more than $5,000 within seven days or more than $25,000 within 30 days, and
• You acted to promote criminal activity or with the awareness of the source of the funds or proceeds in the transaction originated from illegal activity. You are not guilty if you unknowingly initiated a bank transaction that was later flagged as connected to a crime.

In the past, offenders used money orders, businesses as fronts, or direct deposits in banks to launder money. Cryptocurrencies, real estate, and offshore banking accounts are the go-to avenues for money laundering.

Penalties If Convicted of Money Laundering

Money laundering is a wobbler offense. The D.A. could pursue misdemeanor or felony charges depending on the facts of the case and your criminal history.

Convictions on misdemeanor charges are punishable by:

• A jail sentence of up to one year,
• A fine not exceeding $1,000, or both

If found guilty of a felony, you will face the following:

• A jail sentence of up to four years, and
• A maximum fine of $250,000 or twice the value laundered, whichever is greater, or both
• If you have a prior money laundering conviction, the fine increases to a maximum of $500,000 or five times the value laundered, whichever is greater.

Should the value laundered exceed $50,000, the judge will add one year to your jail sentence. If the value of the money laundered exceeds $2.5 million, you will receive an additional four years to your jail sentence.

It is worth pointing out that in 2011, Assembly Bill 109, the prison realignment bill, was signed into law by Governor Jerry Brown. Under this statute, defendants convicted of less serious felonies would serve jail sentences instead of prison sentences. Money laundering falls in this category.

2. Embezzlement

Embezzlement, a crime under Penal Code 503, is the fraudulent appropriation of property by an individual to whom the property has been entrusted. The offense is either charged as petty theft or grand theft. The threshold for the property is $950. If the property is valued under $950, you will face petty theft charges. You will face grand theft charges if the property’s value exceeds $950.

Prosecutors must prove the following elements of the crime as accurate to secure a conviction.

• You were entrusted with a property by the owner,
• The owner did so because he/she trusted you — Trust is established in employer-employee relationships and where property owners give other individuals their property to manage. Additionally, trust exists when an individual is given temporary possession of the owner’s property, for example, when valets receive vehicles to park.

However, for employer-employee relationships, the prosecution must provide irrefutable evidence that the employee had confidence in the employee beyond the employee-employer relationship.

• You fraudulently used or converted the property for your benefit — Fraudulent action refers to conduct aiming at causing loss to the property owner through breach of trust, duty, or confidence or when the perpetrator gains an undue advantage over the property owner, and
• You intended to deprive the owner of the use of the property — Embezzlement requires you to intend to deprive an owner of his/her property, temporarily or permanently.

Note: Prosecutors do not have to prove the property’s owner asked you to return his/her property. By extension, you cannot claim you intended to give back the property to the owner as a defense. However, you will likely not face embezzlement charges if you return the property before the owner presses charges.

Penalties If Convicted of Embezzlement

Embezzlement penalties vary depending on the value of the property stolen, as pointed out earlier.

If the property’s value is $950 or less, you will receive penalties for petty theft as outlined in Penal Code 488. Petty theft is a misdemeanor violation punishable by:

• A jail sentence of up to six months
• A fine of up to $1,000 or both
• Summary probation instead of jail time

You will face penalties under Penal Code 487 if the property’s value exceeds $950 or if the property is a firearm or a vehicle. Under Penal Code 487, grand theft is a wobbler offense. A conviction on misdemeanor charges will result in up to one year in jail. However, if you are convicted of felony charges, you risk facing the following penalties:

• Up to one year on probation and a mandatory jail sentence of one year, or
• Sixteen months, two, or three years in jail

If the property in the case is a firearm, your offense is an automatic felony punishable by 16 months, two years, or three years in prison.

You will receive enhanced sentences for felony grand theft involving high-value property.

• An additional year if the property’s value exceeds $65,000
• A further two years if the property’s value exceeds $200,000
• An additional three years if the property’s value exceeds $1,300,000
• Another four years if the property’s value exceeds $3,200,000

Note: You could be accused of multiple counts of embezzlement. This situation is common in employer-employee relationships. In this situation, prosecutors will charge you with multiple counts of embezzlement, and each count carries a separate sentence. However, if the numerous incidents of grand theft were part of a single scheme or plan, you will face charges for one count of embezzlement.

3. Securities and Commodities Fraud

Securities fraud is defrauding another individual of a commodity or security or obtaining property or money from the sale or purchase of securities through false pretenses, promises, or representations.

Most people perceive securities and commodities fraud as crimes involving high-net-worth individuals and bankers in complicated illegal schemes involving vast sums of money. However, based on the definition, simple transactions that meet the definition of securities fraud will also result in prosecution. Therefore, entrepreneurs raising funds for small or medium-sized firms or employees carrying out orders from their bosses could face charges.

Stocks and bonds come to mind when securities are mentioned. However, the actual definition incorporates other investments. Securities are defined as fungible, negotiable financial instruments that hold monetary value. This definition then includes the following:

• Stocks — A representation of ownership in a partnership, private or publicly-traded company.
• Bonds — Loans advanced by investors to a company, the borrower in this relationship.
• Options — A right to purchase ownership interest, a stock, bond, or other assets at a particular price within a specified period.
• Investment contracts — An agreement between an investor and the company protecting the investor’s financial investments in the entity. These contracts stipulate the returns the investor is entitled to on their investments.
• Banknotes — A negotiable promissory note which allows one party to pay another a specified amount of money.
• Any combination of the above

It bears emphasizing that securities laws do not always apply when people engage in business transactions. The law does not deem an investment as a security if you invest in a business you will be involved in running.

On the other hand, commodities refer to goods traded in an open market. Examples include gold, natural gas, silver, and oil.

Prosecution of Securities and Commodities Fraud

The Corporate Securities Law of 1968 regulates securities trading in California. This statute provides the regulations relating to licensing, filing requirements, and issues about securities trading. The Department of Financial Protection and Innovation handles any violations of the law. This department decides whether to pursue the violation in civil court, resolve the matter administratively, or forward the case to the D.A. for criminal prosecution.

A jury will find you guilty if you:

• Offer misleading or false statements on the sale of securities
• Sell securities non-compliant with qualification terms
• Engaging in market manipulation — Expressing deceptive behavior in the trading of securities
• Sell unqualified securities or securities exempt from qualification — An unqualified security is one the government has not cleared for sale.

Engaging in insider trading is also a violation of the Corporate Securities Law. Insider trading involves buying or selling of public company’s securities or stock using non-public material information about the company.

A company’s employees, directors, or any individual with access to the company’s non-public information will face prosecution for insider trading. Their actions are deemed a breach of a relationship of confidence and trust or, more importantly, a breach of fiduciary duty.

Penalties If Convicted of Securities and Commodities Fraud

Under state law, securities and commodities fraud is a wobbler offense.

Willfully offering to sell or selling securities without meeting the qualification requirements or selling securities in a manner that violates the terms of qualification will result in the following penalties upon conviction:

• A maximum fine of $1,000,000,
• A jail sentence of 16 months, two or three years, or both.

Willfully engaging in market manipulation, making misleading or false statements in a securities transaction, or engaging in insider trading results in harsher penalties. You will face the following upon conviction:

• A maximum fine of $10,000,000,
• A jail sentence of two, three or five years, or both.

4. Misappropriation of Public Funds

It is a crime under Penal Code 424 for a trustee of public resources or public officer to misappropriate finances for improper use. Misappropriation of funds involves several actions. The elements prosecutors are specific to the acts you are accused of.

1. Appropriating Public Resources Without Authority

One way of misappropriating public funds is by appropriating them for personal use without a legal basis. Under this, the prosecution must prove the following:

• You are a local or state government official or an individual charged with the receipt, safekeeping, disbursement, or transfer of public funds — A state or government official is an employee of the state or local government or any individual with a role in the state or local government. The list includes appointed and elected officials and government employees.

• You appropriated money for personal use or the use of another individual illegally — Appropriation refers to disbursing public funds for personal use or to other unauthorized persons, including friends and family.

• You were criminally negligent in failing to ascertain whether you had the legal authority to effect the appropriation or knew the appropriation's illegality — Knowing that your actions were illegal does not necessarily mean you understood or were aware of all the details of the law. You only need to know that a non-criminal law prohibits your actions.

Further, when the prosecution asserts criminal negligence, he/she points to behavior that exceeds ordinary carelessness or a failure to exercise reasonable care.

2. Profiting From, Misusing, or Loaning Public Funds Without Authority

A jury will only find you guilty of profiting from, misusing, or loaning public funds without authority if the prosecution establishes the following:

• You are a state or local government official charged with the receipt, safekeeping, disbursement, or transfer of public funds.
• A non-penal statute authorized or prohibited the loaning of public funds or using public finances under specific circumstances.
• You made a profit, loaned, or utilized public funds for an activity not authorized under law.
• You understood your actions to be illegal or were criminally negligent since you did not establish whether your conduct was legal.

3. Transferring Public Funds or Refusing to Pay

Another form of misappropriation of public funds is:

• Willfully refusing or omitting to pay funds you received to officers or individuals legally authorized to receive the money, or
• Willfully omitting or refusing to legally transfer or pay public funds in your control when ordered to, presented with a draft or warrant drawn by a competent authority.

4. Fraudulently Altering, False, or Destroying Accounts

You can also misappropriate funds if you:

• Knowingly make false entries, materially falsify accounts, or make erroneous erasure of accounts relating to public funds, or
• Conceal, alter, destroy, or obliterate accounts relating to public money to commit fraud.

Penalties If Convicted of Misappropriation of Public Funds

Misappropriating public resources is a felony. A conviction will result in the following penalties:

• Two, three, or four years in prison, or
• A maximum fine of $10,000, or both.
• Felony probation instead of prison time

Additionally, a conviction bars you from holding a public office in California.

5. Filing False Documents

Penal Code 115 makes it a crime to knowingly register, record or file forged or false documents in a public office within California. You are only guilty if the following are true:

• You provided documentation for recording, registration, or filling with a public office,
• You knew that the documentation was forged or false when filing it, and
• The document would be legally filed if it was authentic.

Penalties If Convicted of Misappropriation Of Public Funds

Filing false documents is a felony. You will face the following penalties if convicted of the offense:

• A prison sentence of up to three years,
• A fine not exceeding $10,000, or both.
• Formal probation instead of prison time. However, you will not qualify for probation if:
1. You have a prior conviction for filing false documentation or
2. You have a prior conviction for more than one count of filing false documentation, and the value of the loss exceeded $100,000

You could also receive penalty enhancements if prosecutors prove the following aggravating factors in your case:

• You were involved in more than two felonies involving embezzlement or fraud in the same proceeding. A conviction on these felonies and a PC 115 violation will result in enhanced penalties,
• The felonies show a pattern of criminal conduct
• Your actions allegedly cost the victim(s) a loss exceeding $100,000, and
• You committed the felonies against more than two separate victims or the same victim on two or more occasions

The penalty enhancements are:

• One to five years added to your sentence, or
• An extra fine of up to $500,000, or double the value of the fraud, whichever is greater, or both

6. Forgery

You will face prosecution under Penal Code 470 for making false, unauthorized, or material alterations to a document to defraud another person. The most common forms of forgery include signing another person’s name on documentation that transfers property ownership or money to yourself or a third party.

All prosecutors need to prove that you:

• Signed another person’s name without his/her approval
• Forged another’s handwriting or used a counterfeit seal on a document
• Altered, falsified, or forged specific documents
• Falsified or changed a legal document — Several legal documents make this list, including wills, bonds, court orders, contracts, checks, lottery tickets, property deeds, money orders, and stock certificates, and
• You acted intending to defraud the victim — Defrauding means deceiving another individual to deprive him/her of his/her property or money. The courts deem your actions as defrauding the victim even if the individual suffered no loss.

Penalties If Convicted of Forgery

Penal Code 470 violations are wobbler offenses.

You will face misdemeanor charges if you forge a money order, check, or similar instrument valued at $950 or less. Convictions on misdemeanor charges result in the following penalties:

• A jail sentence of up to one year,
• A fine not exceeding $1,000, or both
• Misdemeanor probation

Convictions on felony charges result in the following penalties:

• A jail sentence of up to three years,
• A fine not exceeding $10,000, or both
• Formal probation

7. Forging Or Altering A Prescription

Forging or altering a prescription violates Health and Safety Code 11368. This statute defines the crime as altering or forging prescriptions or issuing prescriptions with a fictitious or forged signature for a narcotic drug. Additionally, having a narcotic drug acquired using a fictitious, altered, or forged prescription is a punishable offense under this statute.

The drugs considered in trials for HS 11368 violations include heroin, oxycontin, cocaine, morphine, heroin, valium, Percocet, fentanyl, opium, Vicodin, Demerol, Ambien, Percocet, Demerol, Xanax, Dilaudid, and codeine.

Prosecutors must prove the following:

• You altered, forged, or used an altered or forged prescription
• The prescription was issued for a narcotic drug
• You were aware that the prescription was altered or forged — Prosecutors rely on witness or law enforcement officer statements and evidence of prior convictions of similar crimes to prove your awareness.

Penalties If Convicted of Forging Or Altering A Prescription

A violation of Health and Safety Code 11368 is a wobbler offense.

Convictions on misdemeanor charges result in a jail sentence of six months to one year, a maximum fine of $1,000, or both. Felony convictions, on the other hand, are punishable by 16 months, two or three years in prison, formal probation, a fine of $20,000, or both.

Contact an Experienced White Collar Crimes Defense Attorney Near Me

White-collar crimes, though non-violent offenses, impose significant penalties upon conviction. It is in your best interest to contact an experienced white-collar defense expert to help formulate a winning defense strategy for your case. The Los Angeles Criminal Attorney has the experience you need to challenge white-collar charges properly. We are ready to help you. Contact us at 424-333-0943 to set up the initial case review.