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New York Criminal Defense Blog

Differences between Ponzi and pyramid schemes

When discussing fraudulent schemes to illegally obtain money from unsuspecting citizens, people in New York may mistakenly use the terms "Ponzi scheme" and "pyramid scheme" interchangeably. The confusion is understandable because both types of schemes function in a basically similar way. Each requires many investors to opt into it, each involves moving ill-gotten money around from person to person, and each inevitably collapses when it becomes too large to sustain itself, leaving only the original instigator with a profit. However, there are some fundamental differences that distinguish the two. 

According to the FBI, a Ponzi scheme involves one "recruiter" who solicits funds from unwitting victims. The initial investors pay into the scheme, and the recruiter keeps the money instead of investing it as he or she promised. Then the recruiter targets a subsequent group of investors, keeping some of the funds solicited for himself or herself while distributing the rest among the initial group of investors, deceiving them into believing that their investments are paying dividends. There are two ways that a Ponzi scheme can come to an end, and neither is good for the investors. Either the recruiter is unable to keep paying dividends to existing investors due to an inability to solicit new ones, or he or she flees with the money before it comes to that point. 

What is mail fraud and why is it a serious crime?

In New York, mail fraud is one of the most common federal charges that the average citizen will face. However, many people may not even be aware that mail-related crimes fall under the federal government’s jurisdiction. However, mail fraud is in fact a very serious deed that can result in you facing harsher penalties than you initially expected.

FindLaw has a page that takes a look at how mail fraud charges can affect a person if they are convicted. First of all, fraud itself is defined as any plan that involves getting assets under "false pretenses". It also includes the exchange, supply, selling, distribution, or use of counterfeits. If a person mails something related to or involved with a fraudulent scheme, they are therefore committing mail fraud. This can include receipts, communications, or contracts from a fraudulent deal.

How do guilty people act?

Getting accused of a crime is stressful. This stress can make you act nervous and guilty, whether you really are guilty or not. That, in turn, can lead you to make mistakes that incriminate yourself or at least make your situation worse.

As some are fond of saying, the cover-up often leads to more mistakes than the crime. A lot of people get arrested because they commit secondary crimes or make themselves appear guilty when trying to do just the opposite. You need to be very careful with what you say and how you act.

Alleged types of fraud

If you are like many people in New York, you may often struggle to understand some white collar crime charges. Most of these cases center around a person, a group of persons or a company earning a profit from their actions. This in and of itself is not only not illegal but is central to a healthy capitalist economy. The line between what is legal and what is illegal when it comes to making these profits can be quite thin and blurry at times.

As explained by the United States Securities and Exchange Commission, there are numerous actions that may contribute to criminal charges involving fraud. One of these is offering to sell shares in a then-private company prior to the company completing an initial public offering. Another situation that may result in criminal allegations is when a person or entity requests payment from a client at the outset of a deal. This is referred to as advanced fee fraud.

Social media post leads to IP lawsuit

When many people in New York think about intellectual property, they might think about patents or trademarks in the setting of what some may call traditional businesses. However, there are many creative forms of works that may be protected by copyrights as well. These protections are utilized by businesses across a wide array of industries. Artistic works including photographs may be copyrighted which opens up the possibility of legal action over them if any copyright is violated.

An example of this can be seen in a recently filed lawsuit involving a photograph and a social media post. The photo was taken by an agency that indicates it is the owner of all intellectual property rights regarding that particular image. In the photo was a woman who is a well-known model. The woman is said to personally manage her social media accounts. While it is not uncommon for a person to post a picture of themselves on social media, that does not mean it is acceptable to post a picture that is copyrighted even if it is of one's own self.

Insider trading can be hard to identify

If you have heard people in New York talk about white collar crime, you have likely heard references to things like embezzlement, money laundering or fraud. Another type of alleged white collar crime is insider trading. This particular offense can sometimes be hard to identify and may make it hard for people to avoid being charged with this crime even if they had no idea they were potentially doing something illegal.

As explained by Money Crashers, the United States Securities and Exchange Commission has over the years broadened the scope of what might be considered insider trading. The purpose of this is to cast a wider net to catch potential offenders. One of the things that may be a factor in an insider trading allegation is the active trading of securities based on information that was not common knowledge or publicly available at the time.

Seven face charges of forgery, conspiracy and more

When many people in New York think about forgery, they might automatically think about one person illegally signing another person's name. That is one type of forgery indeed but it is not the only thing that can lead a person to be charged with forgery as a crime.

An example of a different type of forgery allegation can be seen in the case of a group of men who have been arrested for their respective roles in what is being called a vehicle forgery scheme. According to a report by QNS News, the group is said to have been operating essentially a forgery business for at least three-and-a-half years, going back to July of 2015. The allegations against them indicate they made forged temporary vehicle documentation including registrations and temporary license plates.

Unique challenges associated with insider trading charges

The United States is a capitalist society in which individuals and businesses alike eagerly pursue making money for themselves and their companies. This is the nature of the system yet there are some situations in which these efforts may lead people to be faced with allegations of criminal activity.

As explained by The New York Times, insider trading is a form of white collar crime that seems to be especially difficult for defendants to navigate. It is also a type of crime that has been involved in several recent cases.

Why is it called money laundering?

You've probably heard of money laundering. You know it has to do with moving money around to try to hide illegal activity. You know that the act of laundering it is also illegal in its own right. But have you ever wondered why they call it that to begin with?

You really just have to think of the end goal of the process, and it makes a lot of sense. Initially, you start off with "dirty money." This is usually money that is related to a criminal enterprise. Maybe you got it by selling drugs or embezzling money from a company or defrauding people who thought you were going to invest the money for them. Regardless, it comes from an illegal source.

Defining different types of bribery

The word "bribe" is often applied so broadly in everyday conversation in New York that you might reasonably forget that it actually refers to criminal activity. The line between being incentivized and actually being bribed is often so razor thin that many come to us here at Sapone & Petrillo, LLP completely surprised to be facing bribery charges. Understanding exactly what constitutes a bribe can help you respond to being accused of such an offense. 

Per New York Penal Law, the state actually recognizes several different forms of bribery. These include: 

  • Commercial bribing
  • Bribery of a labor official
  • Sports bribery
  • Tampering with a sports contest 
  • Impairing the integrity of a pari-mutuel betting system
  • Rent gouging 

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