Being accused of investment fraud is a serious situation. It means that someone believes you misled people into investing in an asset that wouldn’t produce the stated financial outcome.
There are many ways a person can commit investment fraud. If you find yourself in this situation, it’s crucial to contact an investment fraud lawyer immediately.
What is Investment Fraud?
Investment fraud is the act of encouraging investors to purchase stocks or invest in commodities markets by sharing false or misleading information. The goal is to help the fraudster earn money while causing investors to hold stocks or commodities with little to no value.
Alternatively, someone may promise to invest your money on your behalf, but they end up taking off with it.
It’s possible to perform investment fraud on both individuals and businesses. Phone calls and emails are a common way to encourage people to give up their money to investment fraud schemes. These fraudsters use high-pressure sales techniques with get-rich-quick lines, often focusing on extraordinarily high returns.
Investment fraud schemes also tend to prey on specific groups of people, such as those from a particular religion or culture. In fact, the most successful investment fraud schemes often involve fraudsters who build trust with a set group of people.
Investment Fraud Examples
There are several categories of investment fraud. Some investment fraud examples include:
- Pump-and-dump
- Pyramid schemes
- Ponzi schemes
- Advance fee
- Boiler room
Pump-and-dump schemes occur when the person planning the fraud purchases many low-quality stock shares or cryptocurrency coins. They then spread false information about the future of the asset, selling their holdings when people buy into it and leaving them in the red.
Pyramid and Ponzi schemes are similar in that they both require new people to join the program, generating income for people higher up in the pyramid. However, they differ because Ponzi schemes don’t usually require their investors to recruit new people. In either case, once the money stops coming in from more recent recruits, the system collapses.
Advance fee fraud is the act of offering to purchase a poorly performing investment from a prospective victim in exchange for a service fee. The investor must pay the fee first. Once the money is sent through, the scammer disappears and never buys the victim’s low-priced investment.
Boiler room scams involve a fraudulent company renting an office space and creating an appealing website, fake business address, and a company number. They then contact potential victims, letting them know that their cutting-edge business will soon be on a major stock exchange and that they can become early investors.
If someone has accused you of investment fraud, but you don’t see your situation listed here, it doesn’t mean that you’re in the clear. The Securities and Exchange Commission offers a more in-depth account of the many types of investment fraud.
Why Is Investment Fraud a White Collar Crime?
Investment fraud is a white-collar crime because it has illegal financial motivations. It occurs at all levels, from individuals to businesses and government professionals.
The concept of white-collar crimes dates back to the late 1930s. Many skills go into conducting white-collar crimes, including building trust, creating persuasive lies, and making a false narrative to deceive.
However, white-collar crimes notably do not involve violence. Nevertheless, isolated white-collar investment frauds can unexpectedly involve physical harm, in which case the law would treat this as a separate crime in addition to the fraud.
The federal punishment for being convicted of a white-collar crime such as investment fraud is severe. Individuals may face fines of up to $250,000 per incident and up to five years in jail for non-violent cases.
In contrast, companies involved in investment fraud may pay twice the fines and jail time for those convicted.
How Zoukis Consulting Group Can Help
Hiring the knowledgeable investment fraud lawyers at Zoukis Consulting Groups offers you the best chance of defending yourself if someone accuses you of running an investment scam. Your investment fraud attorney will work with you to go through the prosecution’s claims with a fine-tooth comb and to counter their claims of intention.
Investment fraud carries stiff penalties, including heavy fines and possibly even jail time. Even if you are found guilty of investment fraud, having a good investment fraud lawyer by your side can help you negotiate better terms and reduced penalties.
Common Defense Strategies to Resolve Investment Fraud Claims
Depending on the underlying facts and circumstances, there are several potential defenses your team of investment fraud lawyers may assert on your behalf. Some of the strategies your attorney may use include the following:
- Rebutting the facts
- Conducting thorough investigations
- Stressing your good character/the good character of your company
- Cooperating with prosecutors, which may lead to reduced penalties/leniency
Regardless of your role – or lack thereof – in someone’s investment fraud claim accusations, the sooner you get an investment fraud lawyer on board to help you, the better your chances of a smoother trial.
You Need a Skilled Advocate on Your Side
If you are facing investment fraud charges, you need skilled, knowledgeable legal representation in your corner. The team at Zoukis Consulting Group understands the intricacies of federal securities laws as well as the court process for white-collar crimes. We can help our clients navigate these types of proceedings more confidently.
While most investment fraud cases are dismissed or settled before they ever reach the courtroom, your attorney will be prepared to litigate in court on your behalf, protecting your rights and your professional reputation.
In fact, your fraud defense lawyer will be there for you every step of the way, helping you avoid accidental incrimination when you are questioned by law enforcement and building a vigorous defense to the prosecution’s charges. Having a competent legal defense team in place can have a meaningful impact on the outcome of your case, as your lawyers work to keep you out of prison.
Statistically, most federal criminal actions — including investment fraud charges — result in a conviction. Your investment fraud attorneys will play a critical role in advocating on your behalf, arguing for the most lenient sentencing possible, such as:
- No prison sentence
- Reduced prison time
- Home confinement
- Probation
Even if you have already been sentenced on investment fraud charges, Zoukis Consulting Group may be able to help with a direct appeal or a habeas corpus petition, or a post-sentence time reduction cooperation agreement with the government.
Contact Zoukis Consulting Group today to schedule your initial consultation.
Published Feb 15, 2022 by Christopher Zoukis, JD, MBA | Last Updated by Christopher Zoukis, JD, MBA on May 12, 2023 at 12:53 pm
