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.

As digital currencies have become more popular and commonplace, the government has stepped up its efforts to make sure that transactions and offerings do not run afoul of established regulations.

On October 11, 2019, the SEC, CRTC and FinCEN issued a joint statement urging those dealing in digital currencies to comply with obligations under the Anti-Money Laundering (AML) and Currency Financial Transactions (CFT) regulations under the Bank Secrecy Act (BSA) – regardless of what the digital assets are called.

This joint statement was meant as a warning. All cryptocurrency trading exchanges must adhere to AML, CFT and know-your-customer (KYC) practices that apply to most other financial transactions. These include:

• Accurate and complete recording of transactions;
• Knowing who the customers are;
• Independent testing of BSA and AML compliance;
• Stringent personnel training; and
• Prompt reporting of suspicious activity to law enforcement.

These regulations apply to large trading platforms and Initial Coin Offerings (ICO), as well as individuals who trade for their own digital wallets as well as for the general public. These part-time traders are especially vulnerable because they usually do not recognize that they must comply with these regulations.

One must also be aware of federal laws governing “registered money transferor” status – when an individual or company regularly trades in digital currency. In addition to the aforementioned federal regulations, there are a host of state regulations and laws regarding registration and licensing, reporting, and bonding requirements. Digital currency transactions have been scrutinized by the IRS and state taxing authorities since at least 2014, as they are considered taxable events just like any other property transaction. When a person trades in digital currency and realizes a profit, that profit is subject to tax like any other gain.

The IRS sent over 10,000 letters to known digital currency holders over the summer, warning them that in certain cases taxpayers could be subject to criminal prosecution if they do not properly report their virtual currency transactions.

In sum, the IRS is moving to enforce various tax provisions for digital currencies, both administratively and criminally. Those that transact in digital currencies must be aware of and comply with a myriad of federal and state regulations or risk civil and potentially criminal penalties.

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.

Violations of any number of federal statutes have the potential to jeopardize a business and can, in many cases, result in individuals going to prison. In addition, restitution and forfeiture may be applicable. Below, we delve into some of the most commonly encountered federal business fraud statutes.

The Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act applies to any company that must file a report with the SEC, including companies based in the United States, their subsidiaries and those listed on the stock exchanges. This Act bars payments to foreign governments or officials to obtain a competitive advantage.

Wire Fraud and Mail Fraud

Mail fraud and wire fraud are used extensively by federal authorities. Mail fraud involves the use of the mail in a scheme to defraud another person or entity. This broad-based statute includes any mailing of a document that contains a materially false statement. “Mail” is defined as documents sent via public or private carriers. The document is not required to cross state lines to qualify as mail fraud. Wire fraud is similar to mail fraud except it includes just about all forms of media including e-mail, telephone, TV, radio, Internet, telex and facsimile.

Bankruptcy Fraud

This type of business fraud involves defrauding through a document, petition or representation tied to a bankruptcy proceeding. It includes material misrepresentations as to assets and ownership interests in assets.

Health Care Fraud

Health care fraud is the defrauding of any private or public health care benefit program. The definition encompasses the payment for/delivery of services. This a very active area of investigation for federal and state authorities. It includes paying others for patient referrals, upcoding, over billing, ordering unnecessary tests or procedures and submitting false claims. False statements made to procure payment from a federal health care program also qualifies as health care fraud.

Securities Fraud

This type of fraud refers to the sale or purchase of an investment where the return is based on the effort of a third party. An example of such an offense is the trading of stocks with insider information. The fraudulent marking of prices or material false statements in the prospectus are also forms of securities fraud.

The False Claims Act

Those who knowingly make or conspire to produce erroneous financial claims to the government can be found guilty of this type of fraud. It commonly applies to Medicaid and Medicare. False statements made on a bill can qualify as separate offenses. The operative word in this statute’s definition is “knowingly”. “Knowingly” is defined as actual knowledge, intentional ignorance or a “reckless” disregard for what is true. Examples of false claims include false affirmative certifications of compliance with federal regulations, billing and claims that stand for compliance with regulations, statutes or contract terms.

Material False Statements

An individual who makes a materially false statement to an official of the federal government or makes a false record of entry is committing a criminal offense. Though individuals certainly have the right to remain silent, they do not have the right to lie.

The Dodd-Frank Act of 2010

Passed into law as a result of the last recession, this Act is meant to spur improved transparency and accountability on Wall Street, protect investors and reform mortgages. However, its Constitutionality is currently being challenged in federal court. Stay tuned for developments.

Bank Fraud

Bank fraud is an attempt (or the actual execution) to defraud a federally insured financial institution. Bank fraud encompasses securities, funds and property owned or possessed by the institution that has been victimized. Bank fraud can still apply even if the institution does not suffer an actual loss. It also includes submitting materially false statements on loan applications, whether the loan is for a car, car lease, home mortgage, or revolving line of credit.

Uniform Fraudulent Transfer Act

Fraudulent conveyances that occur in various contexts, such as bankruptcy, have tripped up numerous individuals and businesses in the past. The language of these statutes is broad enough to include activity that is meant to defraud, delay or disrupt a creditor. Courts can go back as far as six years to uncover evidence of this style of fraud. An example in the context of the private sector is a leveraged buyout in which a company borrows against its assets and acquires stock. Such an action can be scrutinized as a fraudulent conveyance.

The Computer Fraud and Abuse Act

This Act bars the procurement of national security information, infiltrating confidential information stored on computers, password trafficking, damaging transmissions/access and any extortion involving threats to damage computing devices. It is worth noting that cell phones qualify as “computing devices”.

Immigration Fraud

Those who fraudulently use immigration documents such as border crossing cards, permits and visas can be found guilty of immigration fraud.

The Sarbanes-Oxley Act of 2002

This Act has eleven unique “Titles”, each with a section that has been written in response to corporate wrong-doings. Its purpose is to prevent future corporate scandals by requiring in-depth financial disclosures and auditor independence.

The experienced attorneys at 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 us to discuss your case, call 908.301.9001 for our NJ office and 212.755.3300 for our NYC office or email us at rgs@sgdefenselaw.com.