Corporate Fraud is a general and broad term to describe complicated activities committed by companies with the intent of deceiving the public. There are a range of punishable crimes that fall under this area of law, but it is important to note that not all activities related to corporate fraud are state or federal crimes.
Securities fraud, or investment fraud, consists of the provision of falsified information in order to persuade investors to make stock or investment decisions. This can also include withholding information that may be important to investment decisions, or coercing an investor to make a decision that will have a negative impact on their interests. If convicted of securities fraud, an individual may face civil and criminal penalties.
The Securities and Exchange Commission investigates accusations of activities related to securities fraud. These include accounting fraud, manipulating accounting information, manipulating stock prices and falsifying SEC filings. One of the most prominent activities classified as securities fraud is insider trading—the use or exchange of private information for personal profit or gain.
If a company, executive or employee uses an electronic communication device with the intent of obtaining money or property through false pretenses, they are committing wire fraud. Conviction for wire fraud can result in fines and imprisonment of up to one million dollars and thirty years respectively.
Obstruction of Justice:
When an investigation regarding one of the various components of corporate fraud is initiated, companies may attempt to conceal or destroy incriminating evidence. In doing so, these entities or individuals are hindering an investigating agency’s ability to perform a thorough investigation. Obstruction of justice is a common accusation in corporate fraud cases, as there are a number of activities that can be classified in this way. Common forms of obstruction of justice are destroying documents, falsifying and modifying documents, creating false records or accounts and giving false statements to officials.
Fraud crimes are not taken lightly, and the penalties for corporate fraud related crimes range from fines to imprisonment. Further, they are assessed at both the company and individual level, depending on involvement. Fines for a company found guilty of corporate fraud can reach millions of dollars. Additionally, companies are often required to pay restitution to the victims of their crimes.
Individuals who are convicted of felony corporate fraud may face more than a year in federal prison. Regardless of prior penalties served, both misdemeanor and felony corporate fraud charges often carry probation sentences.
If you or your company have been a victim of a corporate fraud crime, it is imperative that you contact an experienced attorney regarding your case. Azrael, Franz, Schwab & Lipowitz, LLC, has taken on industry giants as well as smaller corporations with outstanding success in various industries. Contact Keith S. Franz or Jonathan A. Azrael for further information.