Securities / Investment Fraud

Securities and investment fraud represent a wide variety of financial crimes. Although many would describe these crimes as atypical or victimless in a sense, the penalties if convicted can be quite harsh. The federal government takes crimes associated with securities and investment fraud very seriously. If convicted of a felony financial crime like securities fraud, you could be facing extensive fines and a prison sentence. Even if it’s your first criminal charge, and it’s non violent, you could still get locked up for years or even decades if convicted, depending upon the severity of charges and amount of money involved in your particular case. No matter what kind of charges your facing, after any arrest, your top priority needs to be speaking with an experienced and skilled criminal defense lawyer.

White Collar Crime

Crimes involving security and investment fraud are known as white-collar crimes. These crimes are associated with the financial sector and typically involve business people and other financial professionals. In most cases, these crimes are non-violent. These crimes don’t involve theft in the traditional sense. They don’t involve holding anybody up at gunpoint or the burglarizing of anybody’s home. They are often conducted over phones, computers and through elaborate paper trails. Since these are a specialized type of crime, it’s important to have a specialized criminal defense lawyer who has proven white-collar crimes experience. Listed below are some common types of financial crimes associated with securities and investment fraud.

Common Types of Securities and Investment Fraud and Crimes

Ponzi Scheme

Most people are familiar with Ponzi schemes. This type of investment fraud typically involves promises of high rates of returns to investors who are contributing funds. In an effort to create a façade of high returns, the creator will recruit more investors or members to contribute funds. A Ponzi scheme is all about the façade or show of high returns, when in reality, the scheme is neither successful nor legit. In most cases, one or more creators are the only ones who stand to profit. Ponzi schemes are illegal and if you’re facing investment or security fraud charges associated with a Ponzi scheme, you need to get in touch with a criminal defense attorney with white-collar criminal defense experience as soon as possible.

Pump and Dump Scheme

A pump and dump scheme is also a form of securities and investment fraud. In this type of scheme, a stock is artificially inflated. In most cases, this artificial inflation involves misleading statements to potential investors. This is essentially the act of “talking up” a particular stock. These stocks are then essentially dumped at higher inflated prices, leaving investors to pick up the pieces. Many of these pump and dump schemes have been pushed through boiler rooms through the tactic of cold calling.

Pyramid Scheme

Pyramid schemes are a pretty familiar concept to most Americans. We’ve all heard of the scheme where one person recruits two more people, and those people recruit more people underneath them. These investment schemes rely on the participants to recruit additional people and use the money contributed by those investors to pay people higher up on the pyramid. This scheme relies on the promise of payment from legitimate sources, however, in actuality, it involves the “enrollment” investments of other members and investors further down the pyramid.

REIT Fraud

Real Estate Investment Trust (REIT) fraud involves defrauding investors pooling together to purchase large-scale real estate deals. Where REIT fraud is concerned, it’s typically a case of “too good to be true.” Many investors may pool their funds together to buy what looks like a really great and large property. However, if they’re defrauded, they might purchase a really volatile property or a property that wasn’t accurately represented to them by the organizer.