What You Need to Know About Federal Fraud Charges


Scrofano Law PC is located in Virginia, Northern Virginia, DC and Maryland. Our legal defense team understands the intricacies of federal fraud charges. Contact us today.

Are Federal Fraud Crime Convictions Severe?


In 2009, Bernard Madoff, an elderly gentleman, was found guilty of the most intricate Ponzi scheme in the history of the United States. According to the federal court, Madoff has fleeced billions from his victims.

As such, he was charged and convicted of several federal fraud offenses that included: mail or wire fraud, securities fraud, false filings with the United States Securities and Exchange Commission (SEC), three counts of money laundering, perjury, false statements, theft from an employee benefit plan, and investment adviser fraud.

Madoff got a 150-year sentence in federal prison and was ordered to pay his victims the $170,799,000,000 he had taken from them.

Even though Madoff was slapped with a hefty prison sentence and fine for an 11-count charge, federal fraud crimes of a more minor degree than Madoff’s will still carry severe consequences.

Why You Need a Lawyer When Facing Federal Charges for Fraud-Related Offenses


Federal criminal law outlines several charges and the penalties for federal criminal charges, including tax evasion fraud, credit card fraud, securities fraud, and Medicaid fraud.

Federal fraud cases usually attract harsher penalties, particularly if you use fraud when committing a violent or drug trafficking crime.

Federal crimes tend to attract harsher penalties, including significant fines, lengthy prison sentences, and the loss of certain certifications and licenses.

Contacting a federal criminal defense attorney if you are charged with a federal fraud case is critical. For years, Scrofano Law has worked with clients charged with federal fraud crimes. We know the ins and outs of criminal defense that may just be able to help you.

Federal Charges For Fraud Offenses


Fraud is a grave criminal matter, no matter its form. It is a highly complex crime. You could be charged with fraud for a simple misunderstanding, accident, or even something you had no knowledge about.

Anyone accused of committing fraud against financial institutions, the government, or violating federal law will be aggressively investigated by the FBI and other federal agencies.

Fraud carries penalties, including several years in prison, asset forfeiture, hefty fines, and other adverse consequences such as a significant blow to your career and professional reputation. For instance, bankruptcy fraud could attract up to $250,000 in fines and up to five years in prison. For the crime of federal embezzlement, you could be fined up to $1 million and get a maximum prison sentence of 30 years.

Depending on the circumstances of the case and the alleged victim, you may also find yourself charged with several counts of fraud. For instance, an accusation of Medicaid fraud could result in additional charges for healthcare fraud, computer fraud, wire fraud, and providing a false statement.

When Is Fraud A Federal Crime?

Most fraud charges tend to be federal crimes and state crimes. The United States Attorneys’ office usually prosecutes federal fraud crimes. A crime is generally defined as a federal crime if it violates United States federal law or if it is carried out over multiple states.

Whether a particular fraud case will be brought to Superior Court to be prosecuted by the state or federal court depends on several circumstances. For the most part, it depends upon whether the fraudulent activity violates federal law or involves an attempt to gain benefits through either a federal program or a federal agency. If that is the case, or if the U.S. Mail or banking system were used to commit fraud, the case will be prosecuted by a federal prosecutor.

The federal government regulates major business transactions like wire transfers and bank transactions, so federal fraud may involve a range of white-collar crimes, including:

  • Mail fraud
  • Bank fraud
  • Computer fraud
  • Mortgage fraud
  • Securities fraud
  • Wire fraud
  • Auto registration fraud
  • Healthcare fraud
  • Medicare and Medicaid fraud

State and federal fraud cases are generally handled in similar ways when it comes to how the prosecutors build their cases. The crucial difference is that federal criminal cases involve federal agencies such as the Internal Revenue Service or the FBI. On the other hand, state cases are investigated by the Metropolitan Police Department or other local law enforcement agencies.

A federal fraud conviction carries harsher penalties than a state conviction for these cases. Although every Scrofano Law’s federal criminal defense attorney has experience handling cases in federal court, keeping a case out of federal court would be one of our goals.

Examples of Federal Fraud Crimes

Generally, when the investigators believe the fraud committed qualifies as a federal crime, the federal government can enforce laws related to fraud. Specific examples of when fraud falls within the jurisdiction of the federal government include the following:

  • It involves the corruption of government officials or trying to embezzle or unlawfully get money from government programs such as Medicare and Medicaid.
  • The offenses are committed against the US government or its agencies.
  • The crimes involve multiple alleged victims, or a lot of money are involved in fraud crimes.

Also, if the defendant agreed with at least one other individual to commit fraud, he might be facing fraud conspiracy charges according to federal fraud statutes (United States Code, Section 371). It doesn’t really matter if the defendant followed through with the fraud offense or not. If only one person involved in the agreement made one step further to committing the crime, everyone involved could be charged with conspiracy to commit fraud.

Contact our office today for an initial consultation on how to move forward with your defense. We have a range of criminal law practices, and we may be able to help you.

What Are the Penalties for Fraud?


Similar to state crimes, federal fraud crimes may also be charged as felonies or misdemeanors. Even though some minor offenses could result in probation with fees or six-month sentences in county jails, a felony could cost you thousands in fines and several years in prison.

Punishment for fraud includes the following:

  1. Jail or Prison sentence: A misdemeanor conviction could carry a sentence of up to a year in a local jail, while a felony conviction carries a maximum sentence of 20 to 30 years in federal prison. The sentence also varies depending on the laws violated and the offender’s criminal history. However, it is essential to note that sometimes you may be sentenced to softer alternatives for prison sentences such as home confinement.
  2. Probation: While probation keeps you out of jail, it significantly curtails your freedoms. As a probationer, you must obey conditions imposed by the court, including reporting to a probation officer, taking random drug tests, finding stable employment, and not committing any other crimes. The minimum probation period is 12 months.
  3. Fines: Federal fraud crimes carry significant fines, usually in the thousands. In contrast, misdemeanor fraud convictions can cost you a few thousand dollars or less. The fine imposed usually depends on the facts of the case and the amounts involved.

What Are Common Federal Fraud Charges?


Federal charges for fraud-related offenses may be defined as charges against a person who has engaged in intentional misrepresentation or deception intended to benefit themselves or someone else. Some examples of federal fraud crimes include:


Mail and Wire Fraud

Under federal law, it is a crime to use any wire or mail communications technology, including the internet, in a conspiracy to defraud another person or institution.

Given the broad nature of applying these laws, wire fraud and mail fraud can be charged in various cases. For instance, paying kickbacks or bribes to government officials may require the use of mail or phone communications at some point.

This will result in the person getting charged with mail and wire fraud in addition to corruption and bribery charges.

Tax Fraud

This is commonly known as tax evasion, which happens when a taxpayer attempts to avoid paying income taxes due to the federal government. It includes not filing tax returns, underreporting income, and overestimating business expenses.


Securities Fraud

The federal government is responsible for regulating securities and commodities markets. Some activities that may be charged under federal fraud include broker embezzlement, Ponzi or pyramid schemes, foreign currency fraud, and investment schemes.

These fraudulent activities usually happen when a stockbroker or brokerage company deceives investors or clients by misrepresenting information to provide false information. Insider trading can also be charged as fraud.


Medicare and Medicaid Fraud

Millions of Americans depend on Medicaid and Medicare for their health insurance. This can often be a massive target for fraudulent organizations and individuals that attempt to defraud the health schemes through scams such as performing unnecessary procedures or overbilling.

Since such programs are, for the most part, funded by the federal government, any fraudulent activity is usually charged as a federal crime under federal law.

Contact a fraud lawyer at Scrofano Law today if you have been charged or are being investigated for fraud.


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