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.

Whether you are in federal or state court, well-crafted pretrial motions are essential to a successful defense. Pretrial motions are requests by way of formal motion, which may ask for the court to compel the prosecutor to turn over evidence, to dismiss the indictment or certain counts, to exclude or limit certain evidence, or to prevent the prosecutor from making certain arguments to the jury, among other things. These types of motions may also raise discovery violations; challenge the admission of evidence from searches, electronic surveillance, identifications, and custodial interrogation; and/or challenge the sufficiency of grand jury proceedings. Discovery motions in particular are critical because often times the prosecution does not turn over a complete set of discovery or evidence favorable to the defense. Defense counsel should set forth its detailed discovery demands in writing to the prosecution both early in the proceedings and later, as discovery is received. As the discovery is reviewed, counsel may uncover items missing or referred to in documents that lead him to believe that there are other reports that should be turned over as well. Written discovery demands establish specific requests that put the prosecutor on notice and can later establish discovery violations for failure to disclose those requested items. Defense counsel can also submit Freedom of Information Requests to certain agencies that may be compelled to turn over reports that may not otherwise be obtainable. For instance, Child Protective Services can be compelled under certain circumstances to turn over reports of interviews or psychological evaluations in their files that the prosecutor may not possess or request. Such information can be highly probative of credibility or inconsistent statements about the alleged conduct.

Pretrial motions to exclude or limit certain evidence are known as motions to suppress. A motion to suppress can ask for the exclusion of a range of evidence, including physical evidence seized pursuant to a search warrant, consent searches, or warrantless searches; custodial statements from the defendant, with or without Miranda warnings given; recorded communications, whether by an informant or cooperator, or by court-authorized wiretap; and searches of electronic devices such as cellphones and computers. If the court grants a hearing on any of these issues, the prosecutor must present witnesses under oath to establish that the items were lawfully seized or recorded. This is the defense’s opportunity to learn what potential witnesses may testify to at trial, and to cross-examine those witnesses prior to trial in an attempt to establish a violation substantial enough for the court to exclude that evidence.

Pretrial motions to dismiss the entire indictment or specific counts are based upon the sufficiency of evidence presented – and/or legal instructions given – to the grand jury. While difficult to win, successful motions to dismiss can force the prosecution to either dismiss the case or counts, or re-present the case to another grand jury with additional evidence or legal instructions.

A successful defense starts with a thorough review of the facts and discovery that enables the attorney to research and draft effective, case-specific motions tailored to uncover weaknesses in the prosecutor’s case and establish defenses to the charges. Boilerplate motions using form, canned briefs are ineffective and fail to alert the court to specific important issues that could affect the course of the proceedings.

Stahl Gasiorowski Criminal Defense Lawyers aggressively defend individuals charged with complex federal and state crimes. Founder Robert G. Stahl is recognized as one of the top criminal defense attorneys in the NY/NJ area for his skills, knowledge and success. To contact the firm, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

Goldman Sachs (NYSE: GE) recently agreed to a $5.6 billion dollar settlement for its role in bundling subprime mortgages for sale to investors without disclosing that the mortgages had an unusually high percentage of credit and compliance issues. In doing so, it joins a number of other high profile banks who have admitted wrongdoing with regard to their roles in the mortgage frenzy that led up to the financial crisis in 2008.

Goldman Sachs took advantage of the mortgage boom. When the mortgage industry was in full swing, Wall Street made sure to benefit as well. Originators were making so-called stated income and stated asset loans with little or no underwriting controls, and passing along the risk to successive lenders. Goldman Sachs, and others, bundled thousands of toxic subprime mortgages and sold them to investors.

Surprisingly, many prosecutors don’t see the banks as part of the machinery of fraud, and have targeted only the borrowers, appraisers, and mortgage brokers involved in fraudulent mortgages for criminal charges. Many of the banks engaging in this risk shifting behavior are considered “victims” in the multitude of mortgage fraud cases that arose during this period. The tide may be turning. In a noteworthy case in California, a straw buyer in a mortgage fraud case mounted a successful defense to charges of mortgage fraud, with the very simple question: how can the borrower have committed fraud if the lender didn’t care whether his answers on the mortgage application were truthful? The success of the defense relied, in part, on testimony from a former banking regulator that it was well known in the banking industry that so called “stated income” loans–also known as “liar’s loans”– were 90% fraudulent, and that making such loans meant banks had to gut their own underwriting controls. The jury found that the truth or falsity of the documentation provided by the borrower was immaterial because the lenders would have made the loans anyway.

The contributory conduct of “victim” originators and banks is also relevant in the context of pleas and sentencing for our clients accused of bank fraud, wire fraud, and money laundering. In cases where a trial is not possible, we aggressively challenge the “loss” calculation, which determines the possible Guidelines sentencing range. We have also argued that the knowing participation of the “victim” banks and lenders in the mortgage meltdown should be considered as a basis for a variance from the Sentencing Guidelines range, resulting in a lower sentence for our mortgage fraud clients.

Importantly, the industry’s business practices may also impact how the courts determine restitution for mortgage fraud victims. Typically, the formula for calculating actual loss for restitution purposes calls for subtracting the value of the collateral–or, if the lender has foreclosed on and sold the home, the amount of the sales price–from the amount of the outstanding balance on the loan. That restitution formula is not always appropriate, especially when loan originators were selling loans almost immediately after they were made, and the mortgages were often pooled, as Goldman Sachs did, into derivative products sold to investors. Very often these mortgages were sold at a discount. When the “victims” of mortgage fraud are the purchaser or successive lenders, and the loans may have been acquired for less than the amount of the outstanding principal balance, courts must use a different formula to avoid providing a “windfall” to the victim in restitution.

In these cases, the loss amount is determined by calculating the amount the successive lender paid the original lender for the loans (less any principal repayments by borrowers) and what it received for the property at the foreclosure sale. In simplest of terms, the formula for loss for restitution purposes is how much the successor lender paid, minus how much it made. Using this formula and demanding supporting documentation, mortgage fraud defendants may persuade the judge that the restitution amounts calculated by Probation and the Government are far greater than what can be proved, or is ultimately due the “victims” in these cases.

The lawyers at the Stahl Gasiorowski Criminal Defense Lawyers are dedicated to finding law and facts to defend our clients, whether at trial, across the table from a prosecutor during plea negotiations, or before a sentencing judge. We are constantly updating our knowledge and coming up with novel, creative and effective arguments to provide our clients the best defense.