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Articles Posted in WHITE COLLAR CRIME

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New York Criminal Lawyers Tilem & Associates have been seeing an increase in the enforcement of economic crimes generally and insurance fraud cases more specifically, especially as those cases pertain to Disability Fraud and Workers Compensation Fraud (collectively known as health care fraud). Currently, the firm is involved in a jury trial, defending a person accused of Workers Compensation Fraud. As violent crime has fallen, prosecutors and law enforcement officers have definitely turned their attention to fraud cases but these types of cases can be difficult to prove and filled with pitfalls.

In addition, enforcement by the government can take many forms including the above mentioned criminal prosecution but enforcement can also take the form of civil or administrative proceedings to terminate benefits, seek repayment of benefits paid out (restitution) or impose civil statutory penalties. These types of proceedings each have nuances and complications and a person who finds themselves the target of any investigation or enforcement action should seek an attorney experienced with disability or workers compensation fraud cases and not just go back to their prior attorney who helped them obtain the benefits.

In the criminal trial currently pending in Bronx Supreme Court, our client is accused of fraud for obtaining workers compensation benefits based upon Post Traumatic Stress Disorder (PTSD). While the client was collecting benefits and stating that s/he was a prisoner in her own home and unable to leave her home, the government alleges that she went on cruises and was earning income doing odd jobs for others. Highlighting the complexity of these cases, attempts to cut off the client’s workers compensation benefits before her arrest were unsuccessful and the client still collects benefits to this date despite her arrest almost two years ago.

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The Wall Street Journal Reported last week, that criminal charges were being prepared against British Petroleum and/or individuals who worked for British Petroleum and who were supposedly responsible for the oil spill that occurred in the Gulf of Mexico last year after the Deep Water Horizon drilling platform caught fire. This news highlights another troubling trend in the national trend toward over criminalization; “there are no accidents.”

Traditionally, criminal liability required two elements; a criminal act and a criminal mind referred to in Latin as “MENS REA”. The criminal mind required for criminal liability traditionally and under New York law was either that you acted intentionally, knowingly, recklessly or with criminal negligence. Specifically absent from the list was acting negligently or carelessly. Under New York law one who merely acts negligently or carelessly could be held liable for financial damages but could not be found guilty of a crime. As we over criminalize our society the traditional rule is giving way to attempts to hold someone criminally liable for every tragedy.

Recently in New York, three individuals were indicted by a grand jury, tried and acquitted of Manslaughter and related charges after a tragic fire in the Deutsche Bank building in lower Manhattan tragically killed two firefighters. The sadness and the outcry were great as the City attempted to place blame for the tragedy. Ultimately, a site safety officer, a contractor and an an abatement foreman, all of whom worked at the site were indicted for Manslaughter under the theory that they recklessly caused the death of the two firefighters. All were ultimately found not guilty in separate verdicts.

Whatever the tragedy, our society has moved to the point where it is not enough to merely hold someone civilly responsible and force them to pay for the damage they caused. Rather someone must be indicted, tried and if convicted sent to prison. It does not really matter whether the tragedy is a crane collapse, elevator accident, collapse of a company, oil spill or fire. The issue of who is to be held criminally responsible seems to take a back seat to the outrage and the need to find anyone who can be sent to prison. In the Deutsche Bank case, the jurors who were interviewed after specifically rejected such scapegoating.

As we have discussed in our prior blog, the element of having a criminal mind has been substantially relaxed or eliminated in many newer statutes, particularly in statutes that punish “Environmental Crimes.” As a result, convictions are easier to obtain in many of these cases brought as a result of tragic accidents.

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Rod Blagojevich was the lasted in a line of high profile people to be convicted of lying to law enforcement even though juries fail to convict them of the underlying crime. In the latest case former Illinois governor Blagojevich was convicted of lying to the FBI even though a federal jury was unable to reach a unanimous verdict on the underlying federal corruption charges. This situation is reminiscent of the Martha Stewart case in which Martha Stewart was tried and convicted of Obstruction of Justice and lying to investigators even though she was not charged or convicted of insider trading. Martha Stewart was eventually sentenced to a prison sentence in that case.

Although Obstruction of Justice, perjury or lying to the police charges are very rare in New York state Courts they are much more common in federal courts where making a false statement to federal law enforcement can lead to a federal felony charge. 18 USC 1001 which makes it a federal felony to make any materially false or misleading statement to federal agents is punishable by up to 5 years in prison. In addition, evidence of making false statements to law enforcement or otherwise mislead federal agents or obstructing justice can be used to enhance a sentence by adding two points to a persons Federal Sentence Guideline calculation under 3C1.1 of the United States Sentencing Guidelines.

Individuals who are questioned by police or federal law enforcement such as the FBI, DEA, BATFE have constitutional rights under both the United States Constitution and the New York State Constitution to remain silent and/or speak to an attorney before answering questions. This is an important constitutional right. People who are questioned by the police can often become nervous especially if they may have committed a crime or if they have not interacted with law enforcement in the past.

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Mortgage Fraud has taken center stage in Westchester County Courts and around New York State. This national problem has taken on extra prominence in New York where property values are high. As a criminal defense law firm that has handled many mortgage fraud cases including headline making cases we are seeing an increased number of cases and increased enforcement by law enforcement authorities.

Indeed, in connection with a high profile mortgage fraud case that this firm is involved with, the Westchester County District Attorney’s Office announced the formation of a Mortgage Fraud Unit to investigate and prosecute mortgage fraud in Westchester County. The Westchester County case resulted in the arrest of 8 people, 6 of whom were mortgage professionals and two attorneys.

Mortgage Fraud can take on many different flavors. The Westchester case is alleged to involve “Equity Stripping” which is a way of stealing the equity from a person facing foreclosure. Other cases can involve appraisal fraud, falsely preparing mortgage applications, using straw buyers with good credit to purchase properties, “flipping” properties from one buyer to another, identity theft or a combination of these practices.

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On the front page of today’s New York Times, the Times is reporting a sharp increase in shoplifting and shoplifting arrests across the Country. Citing several factors including the weak economy the Times is reporting that shoplifting arrests are up ten to twenty percent over last year.

At the New York criminal defense firm, Tilem & Campbell we have also seen the increase in New York shoplifting cases through telephone inquiries to the firm, cases on which the firm has been retained, and cases we see in Court. Here in White Plains, New York, home to several shopping malls, the increase is clearly visible in the cases that the White Plains Court is handling.

It is important to remember that shoplifting in New York can result in several criminal charges including Petite Larceny and Criminal Possession of Stolen Property in the Fifth Degree both class “A” misdemeanors punishable by up to one year in jail. If the property stolen retails for more than $1000 the charges can be Grand Larceny and Criminal Possession of Stolen Property In the Fourth Degree, both felonies punishable by up to four years in prison.

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Local criminal defense attorneys have been noticing an increase in mortgage fraud cases in the New York City and Westchester County areas including White Plains. Over the last several months more than 400 people nationwide have been arrested by federal authorities in a crackdown on mortgage fraud. Those arrested include two former Bear Stearns executive. The Justice Department has been tenaciously pursuing “Operation Malicious Mortgage” in an effort to curb an ever increasing mortgage fraud problem that threatens the housing market as well as the economy. Mortgage Fraud is defined as a material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan.

Mortgage fraud (and related offenses such as falsifying business records) is one of the fastest growing white collar crimes in the country. There are several methods by which mortgage fraud is committed. The most common methods include inflating the borrowers’ income and inflating the assessed value of the property. Many times, a borrower will apply for a “no income check” loan and then illegally claim an inflated income on the loan application. In other instances, the borrower will work with unscrupulous appraisers who illegally overvalue the property so that the borrower can obtain a larger loan. This type of mortgage fraud is referred to as “Fraud for Property” as opposed to “Fraud for Profit”.

A Fraud for Property case typically involves one applicant who makes a material misrepresentation on his or her loan application in an effort to secure the loan. For example, the would be homeowner inflates his or her income, doesn’t list all of his or her debts, overstates his or her employment history or outright lies about being employed and/or lies about the source of the down payment. Typically, Fraud for Property cases involve borrowers who don’t intend to defraud the lender and truly believe they can repay the loan. However, this type of fraud makes up about 20 percent of all mortgage fraud cases. The problems arise when the borrower can’t make the payment.