The recent news that the U.S. Department of Justice (DOJ) is disbanding its crypto unit and shifting focus from prosecuting platforms to targeting individuals who harm crypto investors or use digital assets for illegal activities may be seen as a sign of a significant sea change in the Government’s “regulation by prosecution” approach to financial crimes. Very often, criminal prosecution in the securities, health care, and cryptocurrency arenas is focused on violations of complex and often opaque regulations, which is why such prosecutions very often emerge alongside parallel civil investigations. Criminal defendants and their attorneys have decried the Government’s blunt force approach to criminalizing what are essentially regulatory violations using the incredibly broad federal statutes for mail fraud (18 U.S.C. 1341); wire fraud,18 U.S.C. 1343); healthcare fraud (18 U.S.C. 1347); securities and commodities fraud (18 U.S.C. 1348), and the Computer Fraud and Abuse Act (18 U.S.C. 1040).

Likely, this move by the DOJ does not signal a looming retreat from such prosecutions, but instead represents a more targeted effort to promote innovation in the ever-developing digital currency platforms in alignment with President Trump’s Executive Order on digital assets. The end result is that the DOJ will no longer pursue actions that impose regulatory frameworks on digital platforms, leaving this instead to President Trump’s regulators. The DOJ will prioritize cases involving misappropriation of funds, scams, and hacks with the stated goal of protecting investors and building market confidence and will continue to target crypto use by criminal organizations.

Under this new policy, prosecutors are advised against charging regulatory violations unless there is evidence of willful misconduct (criminal intent), which really seems to be restating what should have been policy all along. Importantly, the DOJ will avoid litigating whether a digital asset is a security or commodity (a retreat from the Biden era’s position), preferring charges like wire fraud, but may consider bitcoin and ether as commodities. The U.S. Commodity Futures Trading Commission (CFTC) is adopting a similar approach, as directed by Acting Chair Caroline Pham deprioritizing registration violation actions unless there is evidence of willful non-compliance.

It is important if you are being investigated or charged with fraud to hire an attorney who has vast experience with white-collar federal criminal investigations and prosecutions. Often, early intervention in a case may prevent charges from ever being filed. Given the complexity of the federal regulations applicable to many industries, from health care to securities to banking, and the incredibly broad federal statutes that can be used to transform an investigation into a criminal case, you need to make sure that the attorney you hire has a practice that is primarily federal, with an in-depth understanding of the criminal statutes, the sentencing guidelines (driven by loss amounts and enhancements that can result in draconian sentences); federal forfeiture statutes, and restitution.

At Stahl Gasiorowski, partners Laura K. Gasiorowski and Robert Stahl have over 65 combined years of experience representing federal criminal defendants in the District of New Jersey, the Southern and Eastern Districts of New York, and in other federal courts across the United States. We have represented individuals and start-up platforms involving unregulated money transfer businesses, rug pulls, NFTs, material misrepresentations, and the use of paid celebrities and sport figures in marketing.

Stahl Gasiorowski Criminal Defense Attorneys have represented hundreds of individuals and companies subpoenaed by federal and state authorities. We have the experience and skills to effectively navigate our clients through these complex issues and investigations to achieve the best possible outcome. If you are looking for a crypto fraud lawyer,wire fraud lawyer, securities fraud lawyer or healthcare fraud lawyer, contact Mr. Stahl or Ms. Gasiorowski, call 908.301.9001 for the NJ office or 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com or Ms. Gasiowski at lkg@sgdefenselaw.com.

Federal agents and AUSAs serve subpoenas that demand the production of huge amounts of documents and data. They seek search warrants that authorize the seizure of every electronic device at the location to be searched – computers, servers, external hard drives and cell phones. They seize tens of thousands of emails, texts and other forms of communication from businesses and individuals. This common investigative tactic results in an exponential growth in seized data to be reviewed and turned over in discovery to the defense.

A few years ago, after several high profile cases exposed the Department of Justice’s failures in processing and timely disclosing seized data to the defense, the DOJ told U.S. Attorney’s Offices around the country to collect less evidence. In late 2022, a training program was implemented to teach more than 6000 federal prosecutors to be more selective in the evidence sought and seized. This was the so called “smart collection” approach.

This approach was developed because DOJ struggled to fund and find the software and personnel needed to store and analyze the volume of electronic evidence seized. In fiscal year 2023, DOJ requested $27 million for U.S. Attorneys’ offices “e-Litigation modernization”, including 52 new positions and technology upgrades. This was in addition to DOJ’s $1.5 billion e-discovery vendor services contract awarded in 2020 and set to expire in 2027.

Putting aside the government’s issues and budget, seizures of terabytes of data require an enormous expenditure of time and resources for the defense. Effective review of the data requires hosting a search platform that can search millions of pages for key words, names and dates in an expedient fashion. Outside vendor platforms can cost thousands of dollars a month just for the platform. Add to that the time spent by paralegals and associates conducting the actual searches and initial review of the documents, and then the further review by the attorney handling the case. One can quickly see that only well-funded clients, or ones with some type of insurance or corporate backing, can afford zealous representation.

The costs for the review of massive amounts of documents and other data, coupled with potentially much lengthier prison sentences post-trial rather than a negotiated plea, account for the 95-97% rate of pleas in the federal system. Few individuals can afford the costs of a trial – legal and discovery fees, expert witness fees and the so-called “trial penalty” (harsher sentences after a loss at trial).

DOJ must do better at seizing and turning over data that falls within the confines of the items authorized to be seized in the warrant, and limiting the scope of the documents sought in grand jury subpoenas. Courts must enforce discovery obligations on the government and compel the government to produce the discovery in a timely and organized fashion that permits defendants to be properly and zealously represented, including those defendants that cannot afford costly search platforms.

Stahl Gasiorowski Criminal Defense Lawyers have successfully represented hundreds of individuals under complex federal and state investigations with terabytes of discovery. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rgs@stahlegasiorowski.com Ms. Gasiorowski at lkg@stahlegasiorowski.com.

Cryptocurrency has been at the forefront of debate between various law enforcement and regulatory efforts to impose stricter controls and regulations and those who view it as a form of currency that should not be closely regulated. Within the past two weeks, both the SEC and the Treasury Department have defended their enforcement actions and requested additional tools to combat cryptocurrency fraud and misuse.

The SEC again defended its authority to regulate crypto, despite critics claiming that cryptocurrency is a commodity not an SEC regulated security. At the SEC Speaks in 2024 event, Enforcement Chief Gurbir Grewal maintained that the SEC’s enforcement actions have been consistent and principled, tied to federal securities laws and court precedents. The SEC’s position is that if a crypto asset was offered and sold as an investment contract, it’s a security under the Howey test. The SEC rejects the argument that crypto products are currencies and beyond the reach of SEC regulation. To date, various courts have upheld the SEC’s position.

The Treasury Department has once again called on Congress for additional tools to combat cryptocurrency use by terrorist organizations who circumvent restrictions and embargoes to gain access to funds. One of the recent requests was to introduce secondary sanctions that would allow the Treasury Department to target digital asset providers, even extraterritorially. Included in the various requests was extra funding for the Office of Foreign Assets Control.

A number of Senators support strong anti-money laundering restrictions on cryptocurrency. Many in the crypto sector do not comply with know your customer, documentation of account holders, source of assets and other anti-money laundering measures. Other Senators want only a “light regulatory system” that imposes restrictions on centralized retail crypto exchanges to bring crypto out of the “Wild West”.

Clearly, cryptocurrencies will continue to be subject to increasing regulations and enforcement as Congress and regulatory agencies understand the nuances and complexities of ever developing and expanding platforms.

Stahl Gasiorowski Criminal Defense Attorneys are experienced in defending individuals charged with various crypto related offenses, including wire fraud, money laundering, unregistered currency exchange and securities fraud. To contact us call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com or Laura K. Gasiorowski at lkg@sgdefenselaw.com

When facing the formidable gears of the federal justice system, individuals accused of bribery and extortion are immediately thrust into a complex legal arena where the stakes couldn’t be higher. These white-collar crimes carry severe penalties, including hefty fines and significant prison time. In such high-stress, high-stakes situations, securing an experienced criminal defense attorney is not just a strategic move—it’s an absolute necessity.

Understanding the Grave Nature of Federal Charges

Bribery and extortion are federal offenses characterized by an abuse of power or position. Bribery involves offering, giving, receiving, or soliciting something of value for the purpose of influencing the action of an official in the discharge of their legal duties. Extortion, on the other hand, refers to obtaining something of value through coercion. It is critical for defendants to understand that the mere accusation carries with it a social stigma that can tarnish reputations and careers irreparably.

The Defense You Deserve: The Role of Your Attorney

The law surrounding federal bribery and extortion is complex, with numerous statutes and regulations in play. It is extremely important to hire a criminal defense attorney with experience in federal criminal defense to navigate this labyrinthine legal landscape effectively. Federal court procedures, plea negotiations and trials can vary significantly from those of state courts, with their own discovery rules, rules of evidence, pleading standards, and judicial practices. Federal prosecutions are often much more complex than state proceedings, and also involve equally complicated forfeiture and restitution issues that require the assistance of an experienced federal practitioner. At Stahl Gasiorowski, our practice is solely devoted to criminal defense, and partners Robert G. Stahl, a former Assistant United States Attorney, and Laura K. Gasiorowski have more than sixty years’ experience in federal criminal defense between them.

Strategic Defense Planning

Every piece of evidence and every statement made in the context of these charges can profoundly impact the outcome of a case. Partners Robert Stahl and Laura Gasiorowski work diligently to evaluate the prosecution’s evidence and to develop strategies that can counteract the government’s case, utilizing skilled investigators and top notch expert witnesses where necessary.

In cases where evidence is substantial and our client wants to plead, Stahl Gasiorowski will work to secure a plea deal that limits the client’s sentencing exposure and the fines and restitution payments. Where the client may have a factual or legal defense, or insists on exercising her constitutional right to a trial, we use an aggressive pretrial motion practice, investigation and meticulous preparation to mount a defense for trial. Our years of experience mean that we can advise you on the risks and benefits of a plea or trial, and assist you in making the best decision for yourself and your family.

Perhaps most importantly, we ensure that all of your constitutional rights are protected throughout the legal process. Our skilled attorneys are a buffer against potential overreach by prosecutors and work to ensure that you receive a fair trial and the most zealous and aggressive defense possible.

If you or someone you know has been charged with federal bribery or extortion, the time to secure a defense attorney is immediately upon suspicion or accusation. Early legal intervention can be pivotal as it allows for preparation time and the possibility of engaging with federal investigators on your behalf before charges are formally filed.

The complexities of federal bribery and extortion charges demand a defense that is sophisticated, tactical, and rooted in comprehensive legal knowledge. The intervention of a criminal defense attorney is integral in safeguarding rights, securing fair treatment under the law, and ensuring that the defendant’s side of the story is heard. Do not underestimate the gravity of federal criminal charges—invest in the defense you unquestionably need.

For expert legal assistance and a defense that leaves no stone unturned, reach out to Stahl Gasiorowski Criminal Defense where our unwavering commitment to our clients is matched only by our deep understanding of federal criminal law.

Stahl Gasiorowski Criminal Defense Attorneys actively and aggressively protect clients’ rights and offer big law skills at boutique firm prices. To contact us call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com or Laura K. Gasiorowski at lkg@sgdefenselaw.com.

Tommy Cetnar:
We’re back to The Tommy Cetnar Show, August 15th. We’ll get into this special date in our last 10 minutes. Robin, we have a great man here. I’m going to have to read it as is. This former Detective Sergeant, who then went and put himself through law school. Mr. Robert Stahl was Assistant US Attorney from ’91 to ’97, handling many, many trials — major fraud, tax evasion, money laundering, 18 month FBI IRS undercover operation tagged Operation Red Daisy, where he prosecuted La Costa Nostra and the Russia mob, stealing hundreds of millions of dollars from the federal and state taxes for motor fuels.

More importantly, he received the Department of Justice highest award. This award-winning Lawyer of the Year in 2022 is a friend and a special guest, who knows how to prosecute and also knows how to defend when people are wronged. Bob, how are you my friend? Thank you for joining Robin and I on The Tommy Cetnar Show today.

Robert Stahl:
I’m good, Tommy and Robin. Good to be with you.

Robin DiLauri:
Hi, Bob. Thank you so much. I have to tell my husband that he could just say the word, the mob, instead of La Costa Nostra.

Tommy Cetnar:
Well, I wanted to be Italian like you for a minute.

Robin DiLauri:
He didn’t even say it right.

Robert Stahl:
Exactly. He sounded very official though, Robin.

Robin DiLauri:
That’s true. Well, you’re a highly esteemed attorney, and so absolutely … you deserved that intro. So thank you for being on this show. Thank you so much.

Tommy Cetnar:
Hey, Bob, you have worn several hats. And I’ll ask you to put your defense hat on right now, because that’s more or less … it is what you’re practicing. This fourth indictment of the former President of the United States, let’s stipulate that most the Trump supporters think it’s dead wrong and all this. But this last one, does it make anybody a little more nervous in his camp when you see 16, 18 other people indicted?

And as we both know, it’s the squeeze time. Are they going to try to flip people? Is this a legitimate charge, when you see racketeering and conspiring charges like this, or is this just a pile on? And are we to believe the county leaked it out before they even told Trump that he was getting indicted, his lawyers? What say you, from a defense attorney here?

Robert Stahl:
Well, I think, Tommy, that the word from the Trump camp behind the scenes is this is the one that they’ve been concerned the most with. And why is that? One, like you just said, there’s 18 other defendants. And you and I both know that the more people that are indicted, the more people feel pressure to try to cooperate. And that is always a defense attorney’s concern, is that co-conspirators plead guilty. Say, “I was part of this conspiracy, and so were these other people.”

And so when you have a Racketeering Influenced Corrupt Organization Act charge, which faces up to 20 years in prison, that brings together … why did they use RICO? Because that permits charging multiple people who commit separate crimes while working towards a common goal. And here they charge that all these acts were part of an ongoing criminal enterprise to overturn the 2020 election results. So I think that that has some weight to it because the state charges more seem to fit, as opposed to some of the federal charges that some people think are being stretched to fit the alleged facts.

Tommy Cetnar:
Now, does he get a whole new legal team for this indictment? How is this being broken up over all these indictments? Certain lawyers take number one, number two, number three, and now the fourth?

Robert Stahl:
It seems that way. I mean, former President Trump has a number of attorneys working for him. My colleague and friend John Lauro from Florida and New York is representing him in the latest federal indictment. And so it would be difficult for the same set of attorneys to handle all these cases, although you would think that there would be an overarching leadership team of attorneys to help defend, because the charges are similar in some of the jurisdictions.

So the DC recent federal case with the special counsel, although Jack Smith kept it lean and just charged former President Trump, many of these overt acts … and there’s 161 of them listed in the Georgia indictment will relate to the conduct that the federal government charges as well.

Tommy Cetnar:
And without bouncing around on you, special counsel was just … the AG issued the Delaware prosecutor all the power now, basically to explore Biden. Are they really … is the Department of Justice supposed to take somebody that close? Or should it be somebody independent, from the outside, if they’re really going to be seriously looking into Hunter Biden?

Robert Stahl:
Well, that’s a good question. This was … the US attorney from Delaware was a Trump appointee, and held over for this. And so it depends how you want to look at it. So the Department of Justice looks at it that he knows the case. If we appoint a new special counsel, that person has to get up to speed, and that’s going to be an even larger delay. And so this is a way of fast tracking it.

And friends on the other side look at it as that’s not appropriate, that it should be somebody independent, because this is the same person that authorized the two misdemeanor charges that were going to be pled to. So it depends how you look at it. And each side sees it differently.

Tommy Cetnar:
You’re very generous to us with your time today. And I know when you’re prepping for trial or getting ready with your clients, there’s no time for anybody to really breathe, because you want to give the best effort you can. You want to represent the right way. And if you were on the other side and you’re prosecuting, like we talked about, the cases that you’ve tried before, you don’t even go home half of the time. You’re with your colleagues and you’re getting ready for trial. How is President Trump going to run for office throughout all this?

Robert Stahl:
Well, that’s the big question, right? I mean, as you said, when myself and my other attorneys are getting ready for trial, we stay in hotels, we devote seven days a week to preparing and trying a case. And we rely on our clients to be with us and help prepare. And now facing four indictments, even if they get pushed out, as most of his attorneys are trying to do, it’s still going to be practically impossible not to divert someone’s attention. When clients are under these types of pressures, that becomes first and foremost in your mind. You have to worry about yourself and your family.

Former President Trump seems to do a good job of separating them and continuing moving forward, but the time constraints are huge. And as other of his attorneys have said, “These investigations have been going on for years, and now we want to fast track the trials.” So never does the defense get the same amount of time the government does in investigating cases. But certainly, the judges have to be concerned that there’s ineffective assistance of counsel and violating someone’s Sixth Amendment rights and other rights by rushing something to trial that’s gone on for years, and has dozens and dozens of potential witnesses and hundreds of thousands of documents. So counsel has to have time to prepare.

Tommy Cetnar:
So he could actually become the 47th President of the United States, and he would still be going on trial after he’s in the Oval Office?

Robert Stahl:
That’s possible. And I think that the trials would have to be delayed while he’s in office. So maybe looking at something five years from now.

Tommy Cetnar:
And Robin asked the question, could he pardon himself prior to going to trial?

Robert Stahl:
Well, that’s a question that’s up for debate. But in the state cases, no. So that’s the other reason that the Georgia case has greater jeopardy for the former president, is he can’t pardon himself or anyone for state charges. And even the governor, under Georgia law, has no pardon power. So even if a Republican governor wanted to pardon him, he or she would have no ability. So that’s one of these things.

And this case, Georgia, unlike federal courts, allows TVs most times in court. So that this may be publicized from the first appearance next week, through the whole trial. And that might be something that creates greater jeopardy for the trial, being publicized and being broadcast live.

Tommy Cetnar:
We got about a minute and a half to go. I got one last question for you. It was reported today that the judge in the New York case has made contributions to the Bidens. Does he have to recuse himself? He’s refusing to do it. Should he recuse himself as a result of that? Or she?

Robert Stahl:
Well, does the judge have to? No, because judges are still individuals and can make contributions. And the argument would be on the other side, as well, judges that make donations to the Republican Party, should they be foreclosed from hearing cases with Republican politicians. So I think that … and always, disqualifying a judge is a very uphill battle. So I don’t think it carries much weight in the judicial forum. And I don’t think you’ll have an appellate court overturn the judge’s decision.

So it’s always tough. And obviously when you do that, in normal cases, defense attorneys have to worry about, now what does the judge think about the defense? This is a unique set of circumstances.

Tommy Cetnar:
Well, it’s historic and it’s –

Robert Stahl:
As far as someone now publicly challenging the judges.

Tommy Cetnar:
Yeah. It’s historic, what’s going on here. It’s kind of frustrating. But I guess as we have learned, you’re innocent until proven guilty, but they’re really coming after him. Bob, thank you for coming on. It means a lot to us and our listeners. I mean, your expertise is one that we value in a tremendous way. And I know your schedule, so I really, really appreciate the time today, and hope you’ll keep in touch with us throughout the four indictments that are before us. And we’ll see what happens in 2024.

Robert Stahl:
Well, I look forward to talking with you both, and your audience, again. These are complicated matters and it’s hard to just get them down in a short period of time. So let’s see how everything plays out.

Tommy Cetnar:
Thanks, pal. I appreciate your coming on.

Robin DiLauri:
Thank you so much.

Tommy Cetnar:
Bob Stahl, everybody. One of the best in the business. One of the best in the business. Thanks, Bob.

News reports today indicate that Bravo celebrity Jen Shah was sentenced to 78 months for her role in a wire fraud that resulted in $5 million in losses.

For people unfamiliar with the federal sentencing guidelines, the base offense level for a wire fraud is enhanced by a number of levels that corresponds to the loss amount. For a loss of more than $3.5 million but less than $9.5 million, USSG 2B1.1 instructs that 18 additional levels should be added to the base offense level. The resulting offense level may then be further enhanced by additional characteristics of the crime including the number of victims and the the special vulnerability of victims, or additional characteristics of the offender, such as whether he or she used a special skill or abused a position of trust. The total offense level then corresponds to a range of months which increases vertically by the prior criminal history of a defendant.

In this case, Jen Shah’s attorneys requested a significant variance down from the applicable 130 month guideline range, insisting that Ms. Shah should serve no more than 36 months, or 3 years. To challenge Jen Shah’s recommended sentencing range, and justify such a significant variance, her lawyers presented mitigating factors pursuant to 18 U.S.C. 3553, which requires a sentencing court to consider the personal history and characteristics of the defendant, the nature and circumstances of the offense, and any other relevant factor that mitigate or reduce the defendant’s culpability.

Even though there are guidelines instructing recommended sentencing ranges for specific offenses, defendants are entitled to individualized sentencing that takes into account their personal history and circumstances, and the specific circumstances of the crime that may distinguish it from the “heartland” case. For defendants facing federal charges, it is crucial to hire a criminal defense attorney with experience in federal criminal matters, and the special skill required to assemble and present a compelling sentencing mitigation argument.

The lawyers at Stahl Gasiorowski. PC have represented hundreds of federal defendants before sentencing courts in New York, New Jersey and elsewhere. For each and every case, we delve into a client’s personal history, and the facts of the case, to present an exquisitely crafted sentencing memo that puts the client’s criminal conduct into context and establishes a reasoned and emotional basis for leniency. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300.

A recent high profile case highlights the federal government’s ability to seize a convicted defendant’s accounts to satisfy an Order of Restitution after a conviction at trial or a guilty plea. The Second Circuit recently held that the retirement funds of Evan Greebel, the former convicted attorney and Martin Shkreli’s codefendant, could be seized in partial satisfaction of the restitution amount owed. Greebel was convicted in a separate 2017 trial for assisting his client Shkreli’s fraudulent taking of funds from Retrophin to pay Shkreli’s hedge fund debts, and for manipulating the stock price of Shkreli’s drug company. After conviction, Greebel was sentenced to 18 months in prison and ordered to pay $10.4 million in restitution.

In its opinion, the Second Circuit upheld the trial court’s decision that Greebel’s 401(k) accounts at his former law firm were subject to garnishment in an effort to collect the restitution amount. The Second Circuit held that the Mandatory Victims Restitution Act (MVRA) gives the government full access to retirement funds, and that ERISA’s prohibition on disbursing retirement funds to third parties is trumped by the MVRA.

It is well-established that under 18 U.S.C. § 3664(m)(1)(A), the Government may enforce a restitution order in the manner provided by subchapter B of Chapter 229, or 18 U.S.C. § 3613. An order of restitution may be executed in accordance with the practices and procedures for the enforcement of a civil judgment under federal law or state law or by all other available and reasonable means. 18 U.S.C. § 3613 (a) and (f).

The MVRA broadly permits the United States to enforce a restitution order “against all property or rights to property of the person fined.” Pursuant to §3613(c), once restitution is ordered, all the defendant’s property becomes subject to a lien in favor of the United States, and for purposes of debt collection, such lien is treated like a tax lien. §3613(c). Thus, any property the IRS can reach to satisfy a tax lien, a sentencing court can also reach in a restitution order – bank accounts, retirement funds, stock accounts and even Social Security benefits. Additionally, while periodic payments (usually monthly payments through the Probation Department) in satisfaction of a restitution order are limited to 25% of the defendant’s disposable income, one time lump sums payments, such as the garnishment of a retirement or bank account, are not limited.

The only issue left unanswered by the Second Circuit in Greebel was whether the government could seize all the funds, or whether it had to leave the defendant sufficient funds to pay the 10% tax penalty for early withdrawal of retirement funds. In many instances, the amount left to a defendant to pay tax penalties and taxes on garnishment of retirement accounts can be negotiated with the government.

Stahl Gasiorowski Criminal Defense Attorneys have represented scores of clients facing restitution and forfeiture orders and garnishments. We actively and aggressively protect clients’ rights. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rstahl@stahlesq.com.

Earlier this month, the U.S. Department of Health and Human Services, Office of Inspector General (HHS, OIG) issued a special fraud alert advising healthcare providers to exercise caution when contracting with telemedicine companies. Such alerts are significant as they put providers on notice that OIG intends to investigate and prosecute potential fraud regarding telemedicine/. Such notices provide the opportunity for healthcare providers to review their practices and compliance, as well as list examples of suspect practices in the industry.

Historically, federal regulations limited the use and scope of telemedicine. It became widely available, however, during the COVID crisis that necessitated the loosening of government regulations. While a relaxation of regulations and restrictions offered patients greater access to physicians, it also opened the door to fraudulent conduct. In previous articles, we explored schemes involving compound medicines, genetic cancer screening (CGx and PGx tests) and durable medical equipment (DME) such as orthotic braces.

This latest fraud alert confirms that OIG is still aggressively targeting DME companies, laboratories and pharmacies using telehealth services. The OIG alert offers a non-comprehensive list of factors that they examine in potential fraud cases, including:

1. Patients that are referred to a practitioner through a telemedicine company, telemarketing, recruiter, call center, health fair or internet;
2. Practitioner has only limited access or contact with the alleged patient to meaningfully access the medical necessity of the services solicited;
3. Telemedicine company compensates the practitioner based on the volume of prescriptions and services;
4. Telemedicine company only provides services to federal health care program beneficiaries, and does not accept private insurance;
5. Telemedicine company only provides a single class of products such as braces, genetic testing, compound medicines – pain, scar and vitamin creams – thus limiting a practitioner’s treatment options; and
6. Telemedicine company does not expect its physicians to follow up with the patients regarding their prescriptions or services.

This alert expressly notes that proactive marketing that advertises free or low cost items or services covered by federal healthcare programs and exclusively marketed to such beneficiaries is “suspect”. Additionally, any program that limits a practitioner from contacting a patient to follow up or offer other medical services is suspect.

While HHS, OIG alerts provide valuable guidance for practitioners and other healthcare professionals, they also provide federal prosecutors the opportunity to argue that a provider’s good faith defense is limited after such an alert has been issued, i.e. that providers are on notice that such practices as suspect.

Stahl Gasiorowski Criminal Defense Attorneys have represented dozens of physicians, marketers, telehealth companies and pharmacists in federal healthcare fraud investigations. We proactively and aggressively protect our clients’ rights. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

In many types of criminal cases, the right expert can be invaluable. Whether it is a forensic accountant in a complex fraud or tax investigation; a medical or billing expert in a healthcare fraud investigation; a forensic psychiatrist for a sex abuse or child pornography case; a computer expert for a computer crimes matter or to download and organize a searchable database for millions of documents in discovery; or a drug or gang expert in a serious drug case, the proper expert retained early in the investigation can assist the client’s criminal defense attorney in their efforts to prevent the charges from being filed, or to assist in developing a defense to aid in plea negotiations or to prevail at trial.

Often the government employs or hires its own experts to analyze a wide variety of data, information or documents. These government “experts” may be recognized in their fields, or they may be opining on evidence in fields in which they are not truly qualified. It is critical in such cases, that the defense attorney have at his disposal the best possible expert in the relevant field of inquiry to conduct their own review and analysis of the evidence and to potentially refute the conclusion of the government expert.

In recent years, there have been notable cases that have demonstrated that government “experts” have either overreached or provided false reports and testimony. For instance, state drug labs around the country have discovered state laboratory technicians that have failed to conduct drug tests on tens of thousands of drug seizures and simply falsified their reports. Other so-called experts have opined on subjects that do not meet generally accepted scientific standards, including hair and fiber analysis, bite marks and lead analysis of bullets. Too often the testimony by these alleged experts have resulted in convictions based on false or unsound results.
Experts can be used to analyze the evidence and discover the weaknesses or fallacies in the government’s theory of the case. The ability to independently review and analyze varied and complex financial transactions, computer code, thousands of emails and attachments, billing records or scientific results can mean the difference between a conviction and acquittal. In addition, most fraud cases and potential sentences are driven by the loss amount. Experts can provide valuable analysis that reduces the loss amount and the potential sentencing ranges.

Aggressive, experienced defense attorneys use experts as early in the process as possible. There are certain procedures that must be followed to protect and preserve the attorney-client and work-product privileges. To do so, the law firm retains the expert to work under the firm’s supervision and direction. While the client is responsible for the fees and expenses, the expert communicates with the law firm rather than with the client so that the expert cannot be cross-examined by the government about any statements or information provided by the client.

Stahl Gasiorowski Criminal Defense Lawyers have extensive experience using experts in their representation of individuals charged with federal and state felonies. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rstahl@stahlesq.com.

Cybercrimes – hacking, phishing, ransomware and the like – are well-known to every user of the internet. We are bombarded weekly with emails and texts claiming that we need to update our passwords, personal profile, and the like. Now comes the rise of what has been called “romance scams”. The typical scheme starts with a fake dating profile on an online dating site. Fake name, picture, background, likes and what the alleged person is looking for in a mate is established. Once selected, the fraudster starts a series of on-line communications that lure the unsuspecting victim in with attention, romance and affection. The fraudster then sets out a story about why s/he needs money – lost their passport and credit cards while on a trip; a co-worker was injured and it was the fault of the scammer; needs money for a sick relative – always with the promise to return the money.

In 2021, it was reported that victims were scammed out of at least $547 million, an 80% increase over 2020. This figure is likely conservative since many victims of romance scams are too embarrassed to report them or the amounts are too small for law enforcement to actively investigate. Not unexpectedly, recently divorced and windowed women are frequent targets of romance scams.

Federal law enforcement has discovered that many of these types of scams are run out of Nigeria by organized groups, a well-known hotbed for cyber fraud and money laundering schemes. Many others, however, are simply con artists here in the United States looking for easy marks by preying on someone’s kindness, loneliness and vulnerabilities.

While older woman are common targets, the government reported that people between the ages of 18-29 are increasingly targets resulting in a tenfold increase from 2017 to 2021. Netflix documented one such scam in its documentary “The Tinder Swindler”. The film recounted the exploits of Shimon Hayut who held himself out as the son of a famous Russian-Israeli diamond scion. He lavished his victims with first class travel, jewelry and clothing using the proceeds from prior victims. His promotion of his lavish lifestyle on social media – private jets, yachts, expensive watches and clothes – was one way he recruited his victims. Once he lured a woman in, he then fabricated tales of being in danger and needing money for his safety.

These types of schemes are particularly heinous. They not only deprive the victims of often limited resources, they prey on their vulnerabilities, often leaving the victims psychologically scarred and feeling deeply violated. Victims are often too embarrassed to tell family, friend or law enforcement. Some are even left believing that the person who romanced them was genuine and something bad must have happened to him after they lose contact.

Recently, U.S. Attorney’s Offices, FBI and other federal agencies have been aggressively investigating and prosecuting these hideous schemes as often there are multiple victims totaling substantial losses.

Stahl Gasiorowski Criminal Defense Attorneys actively and aggressively protect clients’ rights. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

The Department of Justice just announced charges against 21 individuals in a nationwide crackdown of COVID-19 related prosecutions that resulted in $150 million worth of fraud. The schemes were varied and involved medical doctors, medical labs, marketers and others in the healthcare field.

For instance, two owners of a lab in California allegedly billed more than $125 million in fraudulent claims. In Maryland and New York drive through test site operators are accused of using confidential patient information to bill for lengthy office visits that never occurred. In New Jersey, five individuals were accused of paying or receiving kickbacks for referring COVID tests to a particular lab. Even though the tests were medically necessary, and the lab only billed the allowable rate to the government program, the lab was accused of violating the anti-kickback statute that prohibits paying individuals or companies to refer tests.

The Maryland case charged a physician with submitting false claims to Medicare and private insurers. The defendant owned drive through COVID testing sites. Employees gathered patient information at the sites and later submitted false claims for complex in office visits for other healthcare procedures that never occurred.

In Florida, a registered nurse was charged with signing huge numbers of medically unnecessary doctor’s orders in exchange for sham telemedicine consulting fees. Another case in Florida charged individuals with fraudulent Medicare billing for medical equipment that was obtained by paying kickbacks to marketing companies that solicited patients for equipment they didn’t need.

In other schemes, defendants in California were charged with allegedly counterfeiting vaccine cards. Another case involved a hospital pharmacy director who obtained authentic Moderna dose lot numbers and used them to falsify vaccine ecards.

In New Jersey, one of the District’s first healthcare fraud trials just resulted in a guilty verdict against a medical sales representative of a diagnostic lab who paid kickbacks to a physician for referring tests to the lab. In an effort to disguise the kickbacks, the marketer placed the physician’s medical assistant on the lab’s payroll. In a related scheme, the marketer was paid for promoting medically unnecessary compound medicines that certain insurance plans covered. The defendant and others paid kickbacks to doctors to prescribe the unnecessary compounds without even examining the patients.

Other cases have charged individuals with fraudulently obtaining relief funds from the Coronavirus Aid, Relief and Economic Security Act. A 2020 bill that provided billion in emergency financial assistance.

These and scores of other cases highlight federal authorities continuing investigations and DOJ’s aggressive prosecution of a variety of healthcare fraud schemes. These schemes involve medically unnecessary compound medicines, genetic cancer tests, kickbacks on prescriptions for DME – durable medical equipment – such as braces, as well as COVID-19 tests.

Federal healthcare laws and regulations are complex. There are countless ways for doctors, pharmacists, lab owners and marketers to violate these laws. Stahl Gasiorowski Criminal Defense Lawyers have extensive experience representing individuals and corporations accused of healthcare fraud. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rgs@sgdefenselaw.com.

It’s 6 a.m. or 8 p.m., your doorbell rings and two people are standing outside holding up their badges and credentials. They say they are Special Agents with the FBI or IRS and would like to talk with you for just a few minutes about something important. They ask if they could come in to speak with you privately. Caught off-guard, and not wanting them to think that you have anything to hide, you invite them in (and, of course, you don’t want your neighbors to see them talking to you on your front steps). The agents are “friendly” and just have a few questions to get your input, your side of things, or to serve you with a grand jury subpoena. You decide to talk to them, only for a few minutes, in the comfort of your own home or office. At the end, they thank you for your time and hand you either a grand jury subpoena or a “target letter.”

After they leave, you start to wonder – what did I say? How much did I tell them? Am I in trouble, did I implicate myself or others? You start to look for an attorney. You can’t ask your family or friends who they hired last time the FBI or IRS visited them because you don’t know anyone who ever faced such a situation. So, you scour the internet to find an experienced criminal defense attorney, one with a lot of federal experience because it’s a federal investigation.

The next day you’re in the attorney’s office. After talking to the attorney you realize that what you thought was an innocuous 15 -30 minute chat with the FBI was actually an hour and a half where you told them some things, but not others. You discover that it is a federal crime to lie to the agents. You learn that it doesn’t matter that they didn’t read you your rights, like in the movies, because you weren’t “in custody.” When you tell the lawyer that you only spoke to them because you didn’t want the agents to think you were involved or guilty, the lawyer tells you that the agents already think that you’re involved, that’s why they were at your house to interview you in the first place. You then learn that there were two agents so that the interview was witnessed by two of them for credibility later on if you dispute what you said. You learn that a “target letter” is issued by an Assistant U.S. Attorney because she believes that you are involved in criminal activity and wants you to come in with your attorney to negotiate a plea of guilty. You realize that it was a mistake to say anything to the agents without first talking with an experienced white-collar criminal defense attorney.

So, what should you do in such a situation? The safest course would be to politely tell the agents that while you would like to talk with them, you need to contact your attorney and that he will get back to them. Ask them for their business cards so that you can give the information to your attorney. If they don’t have cards, write down their names, agency and contact information. Do not under any circumstances talk with them about the subject matter of their investigation. After they leave, contact an experienced criminal defense attorney to discuss your rights, potential exposure and your options.

If you did talk with the agents, experienced criminal defense counsel can help you get through the situation and protect your rights going forward. The task will be to mitigate any statements made and develop an overall strategy to succeed.

Stahl Gasiorowski Criminal Defense Lawyers have successfully represented hundreds of individuals under federal and state investigations. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rstahl@stahlesq.com.

U.S. Attorney General Merrick Garland announced that the Department of Justice (DOJ) is planning a hiring spree to investigate and prosecute pandemic related fraud and traditional white collar crimes. President Biden’s budget seeks $3.5 million to hire an additional 120 prosecutors to focus on pandemic related fraud and $325 million for 900 additional FBI agents to investigate white collar crimes.

Speaking at the ABA’s annual white collar crime conference, Garland said that DOJ’s interest in white collar crimes is once again being prioritized. DOJ is placing renewed emphasis on serving victims of white collar crime with an approach similar to that in violent crimes. What this means is that DOJ will place a greater emphasis on victims’ rights and economic losses. There will be a renewed effort on criminally prosecuting responsible corporate officers, rather than merely accepting big-dollar corporate pleas or civil resolutions with large financial penalties.

This announcement comes on the heels of DOJ’s new hires for the Criminal Division’s Fraud Section late last year, as well as its renewed efforts in prosecuting environmental and antitrust matters. In addition to the new funds and hires, DOJ will use what the AG calls “force multipliers” to uncover fraud – partnerships with government agencies in the U.S. and abroad and new data analytics. Embedded in the Fraud Section are FBI data experts that model their assessments of payment anomalies and other activity patterns first developed in investigations of health care fraud.

A.G. Garland also announced the formation of KleptoCapture, its new Russian sanctions task force headed by former SDNY AUSA Andrew Adams. With more than a dozen prosecutors, the task force is designed to quickly and aggressively enforce sanctions here, and those coordinated with other countries, to punish the Kremlin and certain oligarchs for the invasion of Ukraine.

Stahl Gasiorowski Criminal Defense Attorneys actively and aggressively defend clients being investigated and prosecuted for white-collar fraud. We have successfully defended cases involving health care fraud, tax fraud, crypto currency, international money transfers and money laundering, import duties and taxes, and other types of sophisticated fraudulent schemes. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rstahl@stahlesq.com.

For years there have been articles about the advantages of telehealth to ease costs, time and travel for patients in rural and underserved areas, and those who may have difficulty getting to their physician’s office. The CARES Act of March 2020 (Coronavirus Aid, Relief and Economic Security Act), greatly expanded the availability of telemedicine by requiring Medicare to cover and reimburse doctors at the same rates as in-person services. This resulted in many more patients having access to telehealth services for many more types of medical issues, as well as expanding the base of physicians willing to employ remote services because of the parity of reimbursement. In addition, the CARES Act lessened requirements that the telemedicine physician have a preexisting relationship with the patient, handle only certain types of diagnoses and be limited to certain geographic areas.

As is the case in many areas of highly regulated activities, beneficial changes to health care to meet certain health challenges often result in increased opportunities for fraud. Over the past year, the Department of Justice announced scores of criminal cases against telemedicine doctors, marketers, and pharmacies for abusing the system resulting in more than $1 billion in losses. Closed door pharmacies and marketers paid telemedicine doctors and nurse practitioners kickbacks (fees for “completed doctor’s orders” – scripts that were reimbursed by Medicare) for prescribing unnecessary pain, testosterone and scar creams; durable medical equipment such as braces; and genetic testing for cancer without speaking with the patient, or having only a very brief interaction. Many such orders were prescribed using pre-filled prescription forms provided by the marketers or pharmacies.

Whether unwittingly, or purposely, scores of professionals and marketers jumped on the opportunity to take advantage of the expanded telemedicine opportunities afforded by the CARES Act and various state laws that were expanded to help the millions of people suffering from Covid.

The anti-kickback statute (AKS) criminalizes the knowing and willful solicitation or receipt of any remuneration

1. in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or
2. in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program.42 U.S.C. § 1320a-7b(b)(1)(A)-(B).

Likewise, the AKS forbids offering or paying any remuneration to a person to induce them

1. to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or
2. to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program.42 U.S.C. § 1320a-7b(b)(2)(A)-(B)

While there are limited safe harbor exceptions, generally physicians, pharmacists, marketers or anyone else involved in the providing of medical equipment, drugs or services cannot be paid for the referral on a per patient basis – meaning that marketers cannot be paid for referring patients to a DME company or pharmacy where the marketer’s fee is based on a percentage or flat fee of what is collected from Medicare. Similarly, doctors cannot be paid based on a completed doctor’s order (prescription that has been reimbursed) by a healthcare provider. And pharmacies cannot pay marketers to refer prescriptions to them based on a percentage or flat fee per reimbursed script. In addition, such activities can also be charged as healthcare fraud since they are often medically unnecessary.

We have represented many doctors, pharmacists and marketing companies charged with healthcare fraud in federal court. Stahl Gasiorowski Criminal Defense is here for all your criminal legal needs. We are experienced in all types of complex criminal matters involving a many types of electronic evidence. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rstahl@stahlesq.com.

Most crimes involving fraudulent conduct fall under the category of white collar crime charges because they usually do not include violence or threats to carry them out. The laws that define state and federal fraud crimes will vary depending upon the particular activities being prohibited, but there are certain elements common to all crimes involving fraudulent conduct.

Criminal charges in which plays a key role include:

• A Ponzi scheme
• Health care fraud
• Tax fraud
• Bank fraud
• Computer fraud
• Some Internet crimes
• Mortgage fraud

Each of these crimes includes a misrepresentation by the individual committing them. This is one element of a fraud crime. A second element of fraud is that the person making the misrepresentation knows, or has reason to believe, that the statement or misrepresentation is false.

The criminal conduct continues when the person making the statement does so knowing that it will be relied upon to the detriment of the person to whom it was made. This detriment is usually a financial loss of some type.

A federal investigation into someone’s business activities could lead to allegations of criminal wrongdoing. Criminal defense attorneys know that proving health care fraud, tax fraud or other forms of fraudulent conduct requires evidence to support each of the elements of the crime. For instance, a doctor who bills Medicare twice for the same services to a patient might not be guilty of a crime if the doctor did so believing the services were, in fact, performed.

The laws under which people are prosecuted for fraud are usually complex. A person in need of legal advice relating to criminal charges should speak to a criminal law attorney. This post is not intended, nor should it be relied upon, as legal advice.