New York Criminal Defense Blog

As someone working in New York, you've likely heard of pyramid schemes and Ponzi schemes before. Sometimes, they're lumped together. Other times, people call Ponzi schemes a "type" of pyramid scheme. But is that actually accurate? While these two types of schemes are similar in many ways, they also have a number of fundamental differences.

FindLaw defines a Ponzi scheme as an illusion of profitability which is created by paying early investors with the money that is obtained from later investors. This makes it appear as though the enterprise is growing and returning the profits of original investors. In reality, that isn't the case at all. Rather than any actual investment taking place or any growth occurring, investors are simply paying each other.

The common conceptual image that many in New York may have of fraud schemes is likely of a high-profile executive who steals millions from a large company and corporation. In reality, however, fraud can occur amongst anyone from any walk of life. Any action meant to financially injure a person or organization perpetuated through deceit and misrepresentations may qualify as fraud. Many such cases may even arise from people supposedly looking to take advantage of procedural holes in systems with which they are familiar. 

This is what is being alleged in the case of a Connecticut psychologist. She first came to the attention of authorities after a former employee told them that the doctor continued to receive payments from Medicaid despite frequently canceling appointments with patients. A subsequent investigation into the matter supposedly revealed that the doctor had bilked the state's Medicaid program of close to $80,000 by billing for hundreds of claims for services with reportedly were never rendered. The doctor was recently arrested by authorities and now faces several felony charges that could leave her facing several years in prison. 

Most in New York hear the word "embezzlement" and picture someone relaxing on the deck of a lavish home in some tropic paradise that was completely paid for by the company's dime. At least that is the assumption that many had prior to coming to us here at Sapone & Petrillo, LLP after having been accused of embezzlement themselves. In theory, any misappropriation of company funds that is linked to you could qualify as embezzlement. How, then, are you to protect yourself from such a charge? 

The easiest and most effective way is to show that any of your company's money that you spent was used strictly for business purposes. This is where meticulous record keeping comes in handy. Provided that you can provide a legitimate paper trail to all of your business transactions, it is difficult to prove that you acted inappropriately. 

Most New Yorkers could agree that filing taxes is hardly an exciting activity. Each year, as that season comes and goes, countless residents walk away having evaded tax returns in some way. Many of those who commit tax fraud are unaware that the act was committed in the first place. Regardless of intention, this type of white collar crime can come with heavy penalties, giving the process potential to linger on much longer than the tax season itself. 

Forbes shares in an article on tax fraud and the role of the IRS that even the most innocent activites can seem suspicious. For this reason, it can be helpful to note the IRS statute of limitations. Unfortunately, Forbes goes on to state that the laws surrounding tax evasion are only becoming more strict: as of 2016, the IRS has six years to audit taxes in some cases. Depending on the details of the case, the statute of limitations could go beyond the normal three-year timeframe. For instance, if one omits a portion of income or skips over certain forms, they could face penalties down the road.