Many common financial crimes, also known as white-collar crimes, are subject to federal prosecution. Factors including the use of federal infrastructure and interstate financial activities put many white-collar criminal offenses under federal jurisdiction.
Anyone who is in a position to engage in financial misrepresentation or misconduct could face fraud charges. Those running small businesses, working in the financial sector or engaged in securities-related activities such as day trading could potentially be at risk of a federal investigation that eventually culminates in white-collar criminal charges.
What is likely to draw the scrutiny of federal investigators?
Federal agencies such as the Securities and Exchange Commission (SEC) or the Federal Bureau of Investigation (FBI) may investigate individuals or businesses for potential white-collar criminal offenses. They cannot consistently scrutinize every person and business. Certain issues tend to draw attention and lead to investigations.
Suspicious financial activity such as repeated transfers or deposits just below reporting thresholds may draw attention from financial institutions or regulatory agencies. Reports filed by whistleblowers who believe there is fraud or other financial misconduct occurring can lead to federal investigations.
Audits from regulatory authorities, including the Internal Revenue Service (IRS), may lead to referrals to outside agencies for continued investigations and possibly criminal prosecution. Inconsistent financial records can also lead to concern about fraud, embezzlement and other white-collar crimes.
Frequently, federal investigators request financial records, visit businesses or start interviewing outside parties long before criminal charges are a concern. Those who receive audit notices from the IRS, who receive communications from other regulatory agencies or who hear about inquiries from investigators among those they do business with may want to consult with a white-collar criminal defense attorney before they face indictment, arrest and prosecution.
Securing legal guidance during the investigation stage — not just the prosecution process — can help financial professionals and others at risk of white-collar charges limit the likelihood of the worst-case scenario. If they fail to handle the matter properly, they must serve a lengthy prison sentence, commit to a costly restitution arrangement or lose their eligibility for critical professional licensing.
The sooner those subject to scrutiny as potential white-collar criminals get the guidance of a defense attorney, the better their chances are of exonerating themselves or avoiding prosecution. Seeking legal support after learning about an investigation in progress can help protect those implicated in financial crimes.