White-collar criminal offenses typically involve individuals engaging in some kind of financial misconduct. They lie to businesses or people in the hope of gaining access to money or engage in other forms of illegal financial activity, like insider trading.
Every state in the country has laws against different kinds of white-collar crimes, including various forms of fraud. However, it is common for those accused of white-collar crimes to face federal prosecution instead of state charges. These are some of the financial crimes that are frequently prosecuted at the federal level instead of at the state level.
Money laundering
When the state charges someone with a money laundering offense, the allegations relate to trying to legitimize illegal income. Money laundering often has ties to organized crime and may make use of interstate banking systems, which is why federal prosecution is common when there is evidence connecting an individual or multiple parties at a business to a money laundering scheme.
Mortgage fraud
There are provisions in banking laws that make misrepresenting one’s financial circumstances on a mortgage application a federal offense. Therefore, individuals who commit mortgage fraud for housing or profit could very well find themselves facing federal prosecution. Professionals within the financial industry accused of mortgage fraud may also find themselves facing federal prosecution, as the case may involve interstate commerce or the use of the federal reserve to transfer funds.
Investment fraud, like Ponzi schemes
When an individual or business tricks others into investing money with the intent of defrauding them, the situation could very easily lead to federal prosecution. Anytime that offenses cross state lines, which is common with large-scale investment schemes, the federal government will likely be the entity to prosecute the parties accused of fraud.
Federal charges can mean mandatory minimum penalties and other challenges for a defendant, such as the risk of incarceration states away from their loved ones. Additionally, they will need to be cautious when selecting an attorney, as not all lawyers have experience in federal court. Making sense of why the charges someone faces stem from federal authorities instead of the state may help that person formulate a more effective defense strategy with the lawyer they’ve retained to fight their charges.
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