False Statements to Deceive A Financial Institution

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 What Are White Collar Crimes?

A white collar crime is a non-violent crime typically committed in a commercial or business setting for financial gain. The majority of these crimes are very serious in nature and are prosecuted by the federal government.

The term white collar refers to the fact that individuals who commit these types of crimes are typically high-powered professionals, as opposed to blue-collar laborers.

What are Some Examples of White Collar Crimes?

The majority of white collar crimes typically involve some form of a fraudulent scam or activity. Descriptions of some of the most common types of white collar crimes include:

  • Fraud: Fraud involves deceiving an individual for monetary gain. Fraud often involves financial transactions in corporate or business settings;
  • Securities fraud: White collar crimes are common in corporate settings that involve securities, stocks, and bonds. One common type of white collar-crime involves insider trading, in which an individual who has inside confidential information regarding the company’s investments trades or shares that information in violation of their duty to the company;
  • Misrepresentation: Another type of securities fraud occurs when an individual knowingly misstates or misrepresents inside information regarding the company’s investments and finances, which causes investors to be lured by the false and misleading information. This causes the investors to rely on such information when making business and financial decisions;
  • Embezzlement: This type of white collar crime involves an individual who has been given legal authority over property or money and then improperly takes that money for their financial gain. For example, if a manager at a store embezzles the money entrusted in their care by transferring or taking that money and placing it in their own personal account without authorization of the store;
  • Tax evasion: Tax evasion occurs when an individual attempts to avoid paying the required taxes that they owe to the IRS. Any scheme or activity which is done knowingly and intentionally to avoid paying taxes is considered tax evasion;
  • Money laundering: Money laundering is a criminal act which occurs when an individual takes money that was gained by an illegal means and converts it into a series of transactions to make it appear that the money was legitimately earned. For example, a drug dealer who makes money illegally and then takes that money and filters it into a legitimate business, which makes it appear like the business made the money, and it was not made by the sale of drugs;
  • Bribery: This type of criminal act is done by offering money or property with the intention of influencing the actions of another individual;
  • Bankruptcy Fraud: This occurs when a corporation or business lies and misrepresents to creditors who they owe money to regarding the assets and debts that they have in order to avoid paying the creditors or having the creditors reach their assets; and
  • Bank Fraud: One of the most common types of white collar crimes is fraud against a bank institution. There are many different ways to defraud a bank, including:
    • using fraudulent checks;
    • commercial loan fraud;
    • mortgage fraud;
    • use and deposit of counterfeit money; or
    • other financial misrepresentations made to the bank for financial gain.

Who Enforces White-Collar Crime Laws?

There are numerous government enforcement agencies which conduct investigations in order to determine whether or not an individual is committing a white collar crime. In many cases, a corporation will also employ internal investigators, attorneys, or the Securities and Exchange Commission (SEC) to determine whether any individuals, managers, or directors of the corporation are committing criminal acts.

When a white collar crime involves the sale of stocks and securities, the State Attorney General and the SEC investigate and enforce proceedings against individuals who they suspect committed insider trading. Numerous corporations also have regular internal audits and investigations to watch for wide varieties of alleged wrongdoing.

What Elements Are Required to Prove White Collar Crimes?

The elements which are required to prove that a white collar crime was committed includes:

  • Intent: To commit a wrongful act or to achieve a purpose which is not consistent with the law or public safety with the intent that the purpose is achieved. This typically occurs when the defendant acts or commits an act with the knowledge that it is unlawful and may be publishable by law;
  • Disguise and concealment: The concealing or hiding of the real purpose of a crime. This typically occurs when a defendant conceals or hides his criminal violation with the intent to not get caught;
  • Knowledge: In order for a defendant to be liable for a white collar crime, a defendant must have had knowledge that they were committing the crime. This typically occurs when a defendant knowingly and intentionally commits an act in order to gain a financial advantage and
  • Reliance: Reliance occurs when a plaintiff or victim relies on a defendant’s fraudulent scheme or act.

What Are False Statements to Deceive A Financial Institution?

A false statement to deceive a financial institution is as the name implies, an untrue or less than true statement which is used to deceive a bank or financial institution into a favorable position for the individual who is making the statement. It is important for an individual to be aware that certain actions may constitute white collar crime, including:

  • Making false statements;
  • Overvaluing property; and
  • Influencing a financial institution.

Examples of when individuals may make a false statement or overvalue property in order to influence a bank or financial institution may include:

  • Information on applications, including loans or home mortgages;
  • Details of purchase agreements;
  • Details of repurchase agreements;
  • Commitments; and
  • Information given for an extension of credit.

What Must Be Proven to Find an Individual Guilty?

Because each state has a different definition of deceiving a financial institution, it is important for an individual to contact a local criminal defense attorney. In general, for an individual to be found guilty of making a false statement or overvaluing property in order to deceive a financial institution, an individual must have:

  • Made a false statement or report;
    In order to influence a financial institution;
    Upon any:
    loan; or
    other documents.

It does not matter if the financial institution actually relied on the individual’s false statement or overvaluation, only that the individual intended for them to do so.

What is the Penalty for Making False Statements?

The penalties for making false statements may be severe. If it is determined that an individual made a false statement or overvalued a property when dealing with a financial institution, they may face:

  • Up to a fine of $1 million;
  • Up to 30 years in prison; or
  • A combination of both imprisonment and a criminal fine.

How Can I Avoid Making False Statements or Overvaluing Property?

In order to prevent any accusations against an individual for making false statements or for overvaluing property, it may be helpful for an individual to label their documents pro forma or hypothetical. It is also important to make any statements or valuations to the best of the individual’s knowledge, as a mistake is not a criminal offense.

Do I Need a Lawyer?

It is essential to have the assistance of a criminal defense lawyer for any issues, questions, or concerns you may have regarding making false statements or overvaluing property. If you have been accused of making a false statement or overvaluing property, your attorney can review your case, determine what defenses may be available to you, and represent you in court. It is important to contact your attorney as soon as possible, as the punishments for these offenses may be severe.

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