Articles Tagged with fraud

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aaron-burden-149693-copy-300x225Although Chicago would like to make itself a friendly place for businesses, there are some types of businesses that will never be welcomed here. One of them is telemarketing fraud, an infringement on consumer protection laws. This offense has gotten the attention of legislative bodies and the wider legal community because it affects communities in a big way. A particularly resourceful criminal can defraud a whole segment of the community and leave them in difficult circumstances. It is for this reason that the offense is recognized as being serious and attracts prosecutorial interest whenever the facts are proven. Underpinning the law is the expectation that businesses will follow a code of ethics. Unfortunately, there are some industries that do not abide by such a code.

The self-regulation model has failed in a world of cutthroat competition. Those who play by the rules end up being priced out of the market whilst those who are taking consumers for a ride are given an expressway to seemingly insurmountable success. The law is clear about the obligations to sell in an honest manner, regardless of the temptation to take competition to its zenith. The victims are typically trusting and vulnerable. These have always been aggravating features in virtually any crime that you can think of in Chicago. The courts have continued the tradition of punishing those offenders who target the most vulnerable.

Reporting and Gathering Evidence

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The city of Chicago actively pursues those it believes to be guilty of corporate fraud. It is an offense that has the potential to affect many citizens as well as provoking the interest of federal agents. The complexity of such cases means that the use of a suitably qualified defense attorney is important to any defendant. The multiplicity of victims and perpetrators can make it difficult to decipher a single line of defense. For example, the whistleblowers may also become potential victims. The case management also incorporates a lot of research, particularly of a technical nature. The law as it stands calls for a high level of specificity before the charge can stick. That means identifying not only the defendant but also the modus operandi.

Intent is an important indicator of guilt, and its absence can make a case collapse. That is why the defense attorney will often try to portray his or her client as being well-meaning but rather incompetent. By contrast, the prosecutor will often seek to portray the defendant as being calculating, cunning, and sophisticated. Needless to say, the level of sophistication is critical in determining the severity of the punishment at conviction. The courts will consider the victim impact statements, which might be diverse depending on who was affected by the alleged crime.

Applying the Complex Strictures of the Law

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Healthcare fraud has been raised as a matter of concern not only in Chicago but in the country as a whole. It raises the costs of providing healthcare and also means that vulnerable people who need support are left behind. The cases in this category are unique because they often provide a corporate entity that is tasked with the role of distributing healthcare services. The large scale Medicare fraud occurs within the modalities of overcharging the state or alternatively charging it for services that were never delivered. In either case, the consequences for those involved can be dire. They could lose the license to practice and may be banned from government contracts for a considerable period of time.

Over time, a number of fairly consistent patterns of offending have emerged. First of all, there are three main modalities including Medicare Fraud, Medicaid Fraud, and Kickbacks. Each of these modalities are united by deceit and illegal benefits. For example, overbilling has been a persistent problem in Medicaid and Medicare programs, despite the stringent protective measures that were adopted by Congress and local legislatures. In some cases, the service provider is so overwhelmed by paperwork and bureaucracy that they end up making inadvertent mistakes. Obviously the courts will take into consideration both the act and the intention behind it before passing judgement.

Damaging the Integrity of the System

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jack-young-143113-300x200The adage of “The Chicago Way” has been used to stereotype the city as a hub of crime. Bribery is a part of corruption and mismanagement, but its subtlety means that the crime is hard to prosecute. The fact that it erodes public confidence in the system means that the jail sentences for the crime are increasing. Most of the relevant cases focus on the behavior of politicians and public officials yet bribery can also lead to questions about the conduct of the person that is offering the bribe. In some cases, the bribe is not monetary but rather influences insidious levels of influence peddling, nepotism, and cronyism. The courts will have to untangle the web of deceit that is involved in cases in which a sophisticated criminal deliberately exploits a culture of bribery.

Chicago is unfortunate in having two former governors serving jail time for bribery-related criminality. The worst affected departments include justice, law, and administration because that is where the real power is. Bribery essentially involves asking people to pay you extra for doing your job or not doing your job. In some of the worst cases, bribery leads to other forms of criminality because the public official becomes negligent or corrupt in the execution of his or her duties. The belief that officials are powerful means that the courts are harsh on defendants who commit a breach of trust. The defense attorneys typically attempt to present their clients as low-lying officials who are at worst incompetent or naïve.

The Bribery Law as it Stands Today

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igor-ovsyannykov-208345-300x200It used to be that currency creation and distribution was the sole responsibility of state agencies, such as the central bank. However, the advent of non-official and bespoke currencies has meant that there are many people who are inadvertently breaking the law. The definitions of currency have expanded so much that the law sometimes appears to be contradictory. Some of the industries that are affected in Chicago include staffing agencies and factories. Moreover, there are some online currencies such as Bitcoin that lie outside the traditional strictures of currency controls. In the worst case scenario, there is an actual factory of illegal tender. Some of these crimes can lead to significant terms of imprisonment.

Key Ingredients of the Crime

The first criterion relates to how the currency was manufactured or distributed. As stated earlier, the expectation is that only the state can make currency. It is for this reason that the federal agencies might be involved since states do not currently have the right to make currency. The case law indicates that currency schemes are sometimes considered to be a much more serious offense than counterfeiting of even forgery. Some of the constituent aspects of the crime are legislated under the instrument number 720 ILCS 5/17-0.5, but that instrument also talks about other forms of deception and fraud which may not necessarily relate to currency schemes.

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les-anderson-207333-300x196The pyramid scheme has become one of the favorite conduits for confidence fraudsters to make illicit money on a grand scale. That is why organizations like the Federal Trade Commission were set up to fight this type of crime. Chicago, like many parts of the USA, is not immune to this scourge. For the defense attorney, pyramid scheme cases in Chicago present unique challenges which, although difficult, are not insurmountable. The fraudsters are always coming up with new ways to mask their true intentions and hoodwink an unsuspecting public. A case in point are the chain letters that ask for group contributions. There will be some people at the top who have the highest culpability as the masterminds of a criminal enterprise. The middlemen and middle women will have a range of roles that may determine their level of culpability once before the court.

The Criminality of Recruiting Unsuspecting Victims

The pyramid scheme may be deemed a form of confidence fraud because it promises that which is impossible to deliver. Like the Ponzi scheme, it is marketed on the basis of profit levels that are just not sustainable. The crime therefore reduces public confidence not only in the judicial system but also in the other structures that are designed for societal functionality, like the economic system. The requirement may not necessarily be monetary. Sometimes it is a call for your time or expertise in a particular field. Therefore, the crime focuses on the implicit deceit rather than merely restricting the jurisdiction to money alone.

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800px-One_US_dollar_note_0127_22Whenever another story comes in, there is shock from the legal and non-legal community. Even as the defendant desperately seeks an attorney; the prosecutor is working full-time to ensure a conviction and an exemplary sentence. The annals of embezzlement in Chicago include the relatively recent case of Caryn Benson, a former Field Museum employee who managed to embezzle up to $400,000 without getting noticed. Even as the case its case made its way through the courts, there was a lot of interest from the legal community in terms of establishing the technicalities of the crime and the responses of the court. Museums are normally places of leisure and cultural enlightenment. One would not expect large-scale and sustained thefts to be taking place there over a period of ten years.

Interestingly, Benson admitted to only half a million whereas the employer protested that the figure was closer to one million. In the event a compromise was reached on the understanding that the culprit would be spending some time in jail. The guidelines are in the range of 35-40 months, a penalty that some may consider to be harsh given the fact that the courts have handled cases of large scale corporate fraud that has led to the loss of millions. The aggravating circumstances in this case include the fact that the crime took over a long period of time and the defendant had been in a position of trust. The negotiation for a plea agreement is an interesting lesson for defense attorneys where the facts of the case indicate that a long drawn out trial may not yield the results that the prosecutor is looking for. This puts the defense at an advantage and in this case the attorney got the best possible deal for the client.

Understanding the Legal Ramifications of Embezzlement

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DSC04156-BThe state and definition of counterfeiting laws will tell you a lot about the community in which they are designed and implemented. Illinois is no exception. The state has a set of complex and situational rules relating to counterfeiting and forgery; a true Pandora’s Box for a diligent attorney. For the most part, the law seems to target those who create forged money, but there are many other forms of falsification that are captured by the legislation. A person is guilty of a crime in Illinois when he or she creates or uses written documents that have been falsified or altered in significant ways. In this case the constituent ingredients of the crime can encompass both the making of forged/altered documents as well as possessing them with the intention of using them for illegal purposes.

A Counterfeiting Law for the New Age

As criminals in this area have become more sophisticated in their modus operandi, the law has been forced to play catch-up. For example it recognized the use of false documents for defrauding in which possession is disputed as well as the effects of subtle alteration using digital means (720 Ill. Comp. Stat. § 5/17-3). The classic case is that of a forged check that is successfully cashed by a third party because the signature on it appears to be authentic to the recipient bank regardless of whether or not the account holder actually gave permission for that cheque to be paid. The elderly and those with disabilities are particularly vulnerable to this type of fraud. As the case made it through the courts, it became a gradually-established norm that the instrument used to defraud must be credible to an ordinary reasonable person. Hence where the forgery is almost comical in its design and presentation, the user may be able to escape a criminal charge.

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A combination of two ultimate fraud charges, identity theft and counterfeiting, resulted in a major potential felony bomb threat at the Midway Airport. All of these elements came to light when a Chicago woman attempted to smuggle counterfeit and stolen credit/debit cards out of the state, and ended up as what the authorities thought was a bomb threat. See DNAinfo Chicago.

The Identity Theft Incident, Now a Major Crime

Prior to 1998, identity theft was not considered a major crime. Identity theft and identity fraud is pretty much the same thing. This is a crime where one person obtains and uses the personal information of a victim to advance his or her own personal gain. The personal information used, such as birth date, social security number, etc., allows the perpetrator to pose as the victim for the purpose of obtaining a loan, buying merchandise or obtaining credit in the victim’s name. This fraud has far reaching consequences for the victim, because once the identity has been used, to run up credit debt, or for criminal activity, they will have major problems in trying to restore their good name.

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credit cardThe holiday season always sees a rise in property crimes, as people become even more desperate trying to “keep up with the Joneses,” or just trying to provide a decent holiday season for their family. Whatever the reason, much of the fraudulent activity on credit cards throughout the year occurs during the holiday season, so it is a good time to review the various prohibited behavior.

Illinois Credit Card Fraud Laws

The Illinois statute prohibiting credit card fraud prohibits and penalizes many different crimes, all of which stem from the wrongful possession, use, or sale of a credit or debit card. All of the following are prohibited by law:

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