Articles Posted in Federal Offenses

Manhattan federal agents arrested Archegos Capital Management founder Sung Kook “Bill” Hwang on April 27, 2022 on fraud charges, roughly one year after the investment firm’s huge losses back in March 2021.  Department of Justice prosecutors are charging both Hwang and Patrick Halligan, the firm’s chief financial officer, with racketeering conspiracy, securities fraud and wire fraud offenses as part of schemes allegedly designed to “unlawfully manipulate” the price of publicly traded securities.

The 59-page indictment, filed in federal court in Manhattan, alleges the men and others at Archegos sometimes timed their trades to drum up the interest of other investors, while borrowing money to make bigger and bigger bets. The Department of Justice states, “Hwang and his co-conspirators invested in stocks mostly through special contracts with banks and brokers called “swaps.” As alleged, these swaps allowed Hwang to cause massive buying of certain stocks, including at carefully selected days and times, to artificially pump up stock prices. Hwang, Halligan, and their co-conspirators lied to banks and used a series of manipulative trading techniques to keep those prices high and prevent them from falling. The lies fed the inflation, and the inflation led to more lies. The scale of this alleged fraud was stunning.  In one year, Hwang turned a $1.5 billion portfolio and fraudulently pumped it up into a $35 billion portfolio.” The effective size of the firm’s stock positions swelled to $160 billion — rivaling some of the biggest hedge funds in the world.  The case marks the biggest financial-crime charges to come out of the Southern District of New York under the leadership of Mr. Damian Williams, who was sworn in October 10, 2021.

The SEC has also filed a civil complaint stating that Mr. Becker, the former chief risk officer at Archegos, and Mr. Tomita, the firm’s former top trader, had led discussions with the banks about the firm’s trading positions but that Mr. Hwang and Mr. Halligan had directed and set the tone for those discussions.

Attorney General Merrick Garland made recent comments about what he considered to be the Department of Justice’s top priorities for 2022.  Since taking office in March 2021, Garland has tried to combat crime in a tumultuous time.  He has been criticized for his handling of January 6 investigation and has stated it’s the most urgent probe in history.

With all of this going on, the US Attorney’s office increased its prosecutions of individuals of white collar crimes in the year 2021.  White collar charges like fraud, theft, corruption, bribery, environmental crime, tax fraud, health care fraud, procurement fraud, money laundering, PPP loan fraud, etc will continue to get more attention from the Department of Justice.

What does this mean?  It means that investigations of any sort need to be taken seriously and that you should contact a lawyer immediately if any wrongdoing is alleged.

When the PPP program was first created, it was meant to assist business left struggling by the Covid-19 pandemic.  One of the key provisions of the program, was that the Small Business Administration (SBA) would guarantee the loan which meant that borrowers could secure loans more easily.  As mentioned in a previous blog, the government in the spring of 2020 started to go after the most egregious and problematic PPP loan applications and payments and really ramped up prosecutions.

But now, the DOJ, IRS, SEC etc are shifting their focus to more complex investigations.  We have clients where the government is scrutinizing every aspect of the loan application such as 

-was the box checked stating that you only had one entity

As is the case with most people in Atlanta, the thought of committing a federal offense has never even crossed your mind. The thought of playing a prank, however, may just have. You have probably heard before that damaging or destroying public mailboxes is a crime. Yet what you (and likewise many of those who have come to see us here at Conaway& Strickler, PC) may not be aware of is that it is a federal crime, and one that authorities take very seriously. 

Indeed, according to the Cornell Law School, destroying a mailbox is a federal offense that is punishable by either fines or imprisonment of up to three years (or a combination of both). Per the US Postal Service, the fines associated with this defense can be up to $250,000. Not only is damaging, defacing or destroying a mailbox punishable under this statute, but so too is entering or breaking open a mailbox (that is not yours) to gain access to others’ mail. 

You have probably seen or heard of stories of rowdy teens or young adults hitting mailboxes with baseball bats or putting firecrackers inside of them. You likely dismiss these as childish pranks, yet the damage that they cause and the impact that such an act can have is very real. Thus, it is not an acceptable defense to a charge of destroying a mailbox that you or someone you know was simply trying to play a joke. 

If you are actively employed in Georgia and are a recipient of income each on a consistent basis, you are required to fill out a tax return each year. The information you provide will be processed and verified by officials with the Internal Revenue Service who will verify that you are not missing anything on your forms that could indicate you are not filing your taxes properly. At Conaway & Strickler, PC Attorneys at Law, we are committed to advocating for people who have been accused of federal crimes. 

Tax evasion is an example of a federal crime that can leave you facing serious legal consequences for failing to properly file and claim your taxes with the IRS. While seemingly insignificant, your decision to avoid paying your taxes can actually have detrimental consequences. According to Financial Web, if you miscalculate your taxes or fudge numbers in your favor and what you are reporting cannot be effectively backed by supporting receipts, you could be accused of tax fraud or evasion. For this reason, it is critical that you double-check your work if you are filing your own taxes, and even compare your records with the paperwork you have received if you had your taxes filed by a professional. 

If you have deliberately refrained from paying your taxes, you could be fined anywhere from $100,000, to $25,000 for every year that you were delinquent on your taxes. Additionally, depending on the length or severity of your crimes, you could be sentenced to serve time in prison. 

The thought of paying taxes may not be anyone’s idea of a good time, and some people in Georgia make decisions to purposely report improper information on their tax returns so they do not owe as much money. This is known as tax evasion. This is different than tax avoidance, and there may be serious federal charges for those who intentionally fool the Internal Revenue Service.

According to Investopedia, tax evasion, also known as tax fraud, costs the government millions of dollars every year. As a result, the consequences for getting caught may include fines, interest, penalties and potential imprisonment. The IRS understands the tax code can be complicating and confusing, and they know some tax preparers make mistakes, so this is not the same as tax evasion. Examples of fraud include:

  • Claiming personal-related expenses as business ones

Those who have been charged with any type of immigration offense may be under an incredible amount of pressure. These charges can make someone feel very vulnerable and completely unsure about their future. Unfortunately, many people have found themselves in this position over a misunderstanding or accidental failure to abide by various immigration laws. However, the consequences can turn their lives upside down regardless. If you are facing charges related to immigration, you should review your case carefully and be aware of how these charges could have an impact on your future.

Many people worry about deportation, but this is not the only consequence of an immigration-related case. Some people may face financial hardships as a result of these allegations and the emotional impact can be staggering. After all, many who are going through this feel very stressed out and they may also struggle with anxiety. From a career standpoint, these charges can be extremely detrimental. Not only could someone lose their job, but they may have a hard time finding work in their field down the road.

Immigration offenses can be tough for those facing charges, but they can also create emotional and financial difficulties for loved ones. If you have kids or are married, you may be worried about what will happen to your family depending on the outcome of your case. It is imperative to thoroughly go over your legal options and have a solid understanding of the best way to handle your case, taking all unique details of your circumstances into consideration.

Popularized by movies and television, many people in Georgia have heard of the Racketeer Influenced and Corrupt Organizations (RICO) Act. While it was enacted and is often associated with organized crime, the state’s RICO Act does not only apply to mobsters. Therefore, it is important for people to understand the act in order to help avoid unnecessary arrests and prosecutions.

According to FindLaw, carrying out illegal activities in order to sustain or further the reach and influence of organizations or criminal enterprises is considered racketeering. Under the Georgia RICO Act, obtaining or keeping control of or interest in any businesses or types of property through racketeering activities is prohibited. In order to prove a pattern of racketeering, there must be at least two felony illegal activities involved.

The RICO Act is charged as a felony level offense. If convicted, people could be fined up to $25,000 for each count against them, sentenced to between five and 20 years in prison, or both.

Most in Atlanta have been raised believing that there are only two inevitabilities in life: death and taxes. There are some, however, that might say that the latter is not necessarily inevitable. Advertisements from providers offering advice and services to help people reduce their tax liabilities often pepper popular media. Some might even claim to know the secrets to avoid having to pay taxes altogether. Many may wonder which (if any) of these services are legitimate. 

Understanding which tax avoidance strategies is critical if one wants to avoid facing federal tax evasion charges (indeed, according to information shared by the Internal Revenue Service, 2,886 criminal tax evasion cases were initiated in 2018 alone). Minimizing one’s tax liability is viewed as being a component of a successful personal finance strategy. The trick understanding how to do so within the confines of the law. 

The issue typically comes down to a matter of reporting. Tax avoidance is typically legal as long as one still provides all of their pertinent financial information on a return and said information is accurate. This offers proof that one’s claims of not having to pay a certain tax are credible. One should keep in mind, however, that such information must be able to be verified. In its Tax Crimes Handbook, the IRS lists the most common form of tax crime as individuals under-reporting income or falsely inflating their deductions. 

Federal offenses take many forms and the consequences associated with these charges can be devastating. From steep financial penalties to time in prison, someone charged with a federal offense may see their life change for the worse in various ways. Moreover, the damage to one’s reputation in the wake of these charges can be significant too. We have covered different federal offenses on our blog and in this post, we will concentrate on mail fraud. If you are facing mail fraud charges, it is pivotal to go over each and every detail and make sure that you have a clear understanding of all legal options.

Mail fraud takes a number of forms, but many people find themselves accused of this offense over an alleged scam that involves mailings sent through the U.S. Postal Service. With respect to mail fraud cases, each is unique. Some may involve exaggerated or fabricated details, while others may be baseless altogether. Even if someone is innocent, however, they may face harsh penalties if they do not take the right steps and are unable to successfully defend themselves in court.

Being charged with mail fraud or any other federal offense can be incredibly overwhelming and we understand that some people who find themselves in this position are unsure of how to approach their case. It can help to look over some of the details of the case and it is extremely important to be aware of your legal options. Our federal offenses page has more related to mail fraud.

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