There are many different types of fraud prosecuted at both the state and federal levels. Wire fraud, mail fraud and mortgage fraud, as well as investment fraud, are among the most common types of financial crimes committed in the United States.
Frequently, fraud allegations lead to federal prosecution even though states may have laws against the same conduct. There are many reasons, including the three below, that fraud allegations may lead to charges in federal criminal court.
1. The need for federal investigation
In many cases, fraud charges become federal matters because a federal agency must oversee or coordinate the criminal investigation. When the Federal Bureau of Investigation (FBI) or the Securities and Exchange Commission (SEC) gathers the evidence of criminal activity, the defendant is likely to face federal charges.
2. The use of federal infrastructure
Many times, people face federal fraud charges because they use critical infrastructure as part of a fraudulent scheme. Wire transfers, online phishing scams, phone calls and mail delivered by the United States Postal Service (USPS) can all be part of fraudulent activity. The use of any federal system, ranging from the USPS and the Federal Reserve to telecommunications infrastructure, could put a defendant at risk of federal prosecution.
3. Interstate implications
Fraudulent activity often extends beyond a single jurisdiction. If financial crimes affect people in more than one state or involve activities that cross state lines, the people accused of participating are at risk of federal charges.
Understanding when white-collar crimes are classified as federal matters can help defendants respond to their particular circumstances effectively. An attorney’s guidance is critical in white-collar criminal cases, especially when the federal government brings charges, given all that is at stake.