Houston Criminal Defense Attorney, John T.

Floyd, has both the

expertise and resources to provide vigorous representation through
every stage of the criminal process for individuals, businesses and/or
organizations accused of committing corporate crime violations. It is
evident that an accused facing allegations of corporate crime faces
formidable obstacles in defending against such charges. The John T.
Floyd Law Firm is dedicated to providing the kind of vigorous legal
representation needed to surmount those significant obstacles.

White Collar Crime Major Target of Federal Prosecutions

“Corporate crime,” or what most Americans call “white collar crime,” is

generally characterized as some sort of “fraud.” It ranks third on the list of
investigation priorities established by Federal Bureau of Investigation in its
“Strategic Plan 2004-2009.” At the end of the fiscal year 2006 [October 1,
2005 – September 30, 2006], the FBI reported that its field offices were
investigating 409 corporate fraud cases – 19 of which involved losses to
public investors exceeding $1 billion. The FBI defines “corporate fraud” as
involving the following criminal activities:

• Falsification of Financial Information, including: (a) false accounting

entries, (b) bogus trades designed to inflate profit or hide losses,
and/or false transactions designed to evade regulatory oversight.
• Self-dealing by Corporate Insiders, including: (a) insider trading, (b)
kickbacks, (c) backdating of executive stock options, (d) misuse of
corporate property for personal gain, and/or (e) individual tax
violations related to self-dealing.
• Fraud in Connection With an Otherwise Legitimately-Operated
Mutual or Hedge Fund, including: (a) late trading, (b) certain market
timing schemes, (c) falsification of net asset values, and/or (d) other
fraudulent or abusive trading practices by, within, or involving a
mutual or hedge fund.
• Obstruction of Justice, designed to conceal any of the above-noted
types of criminal conduct, particularly when the obstruction impedes
the inquiries of the Securities and Exchange Commission (SEC), other
regulatory agencies, and/or law enforcement agencies.

In addition to fraud, corporate crime includes all forms of theft and

embezzlement committed within or against the national and international
financial community. The FBI characterizes corporate crimes by “deceit,
concealment, or violation of trust, and are not dependent upon the
application or threat of physical force or violence.”

Individuals or organizations accused of these crimes, reports the FBI, are

generally motivated by a personal or business advantage. In addition to
corporate fraud, the FBI focuses its investigative resources against what it
calls “public corruption” crimes which include:

• Health care fraud

• Mortgage fraud
• Identity theft
• Insurance fraud
• Mass marketing fraud
• Money laundering

The FBI has created a Financial Crimes Section (FCS) which is divided into
the following four units:

• Economic Crimes Unit (ECU)

• Health Care Fraud Unit (HCFU)
• Financial Institution Fraud Unit (FIFU)
• Asset Forfeiture/Money Laundering Unit (AF/MLU)

The ECU targets individuals, businesses and industries in the following

areas:

• Corporate fraud
• Insurance fraud (non-health care related)
• Securities and commodities fraud
• Mass marketing fraud
• Telemarketing fraud
• Ponzi schemes
• Advance fees schemes
• Pyramid schemes

The HCFU targets individuals and businesses defrauding public and private
health care systems in the following areas:

• Billing for services not rendered

• Billing for a higher reimbursable service than performed (upcoding)
• Performing unnecessary services
 • Kickbacks
• Unbundling of tests and services to generate higher fees
• Durable medical equipment fraud
• Pharmaceutical drug diversion
• Outpatient surgery fraud
• Internet pharmacy sales

The primary goal of the FIFU, according to the FBI, is to identify, target,
disrupt, and dismantle “criminal organizations and individuals engaged in
fraud schemes” against the nation’s financial institutions in the following
areas:

• Financial institution failures

• Insider fraud
• Check fraud
• Counterfeit negotiable instruments
• Check kiting
• Loan fraud
• Mortgage fraud

The primary goal of AF/MLU is, according to the FBI, “to promote the
strategic use of asset forfeiture” by making sure that its “field offices” utilize
money laundering violations in all appropriate investigations “to disrupt
and/or dismantle criminal enterprises.” The unit’s resources are directed in
the following areas:

• Identity theft
• Data entry and analysis of financial documents
• Forensic accounting
• Tracing assets subject to forfeiture

Of the 490 corporate fraud cases investigated by the FBI during 2006, 171
resulted in indictments and 124 of those led to convictions. The agency lists
the following accomplishments:

• $1.2 billion in restitutions

• $41.5 million in recoveries
• $14.2 million in fines
• $62.6 million in seizures
During 2006, the FBI investigated 1165 cases involving Securities and
Commodities fraud resulting in 302 indictments that led to 164 convictions.
Agency accomplishments:

• $1.9 billion in restitutions

• $20.6 million in recoveries
• $60.7 million in fines
• $62.7 in seizures

During 2006, the FBI investigated 2,423 cases involving health care fraud
resulting in 588 indictments that led to 534 convictions. Agency
accomplishments:

• $373 million in restitutions

• $1.6 billion in recoveries
• $172.9 million in fines
• $24.3 million in seizures

During 2006, the FBI investigated 818 cases involving mortgage fraud
resulting in 263 indictments that led to 204 convictions. Agency
accomplishments:

• $388.9 million in restitutions

• $1.4 million in recoveries
• $231 million in fines

During 2006, the FBI investigated 1255 cases involving identify theft
resulting in 457 indictments that led to 405 convictions. Agency
accomplishments:

• $156.5 million in restitutions

• $4.3 million in recoveries
• $1.2 million in fines
During year 2006, the FBI investigated 233 cases involving insurance fraud
resulting in 53 indictments that led to 54 convictions. Agency
accomplishments:

• $30 million in restitutions

• $3 million in seizures

During 2006, the FBI investigated 147 cases of mass marketing fraud
resulting in 13 indictments and 44 convictions. Agency accomplishments:

• $268.8 million in restitutions

• $86.9 million in fines
• $12.4 million in seizures

During 2006, the FBI investigated 473 cases involving money laundering
fraud resulting in 161 indictments that led to 95 convictions. Agency
accomplishments:

• $17 million in restitutions

• $3.3 million in recoveries

Clearly, corporate crime is a major concern of the FBI, as well as state law
enforcement agencies. The thousands of indictments and convictions
involving billions of dollars in losses have drawn the concern of the courts
in these kinds of cases. For example, the district court in United States v.
Caputo, 456 F.Supp.2d 970 (N.D. Ill. 2006) made the following observation
about the sentence it imposed on a “corporate criminal”:

“In view of all the factors outlined herein, it is this Court's hope that the
readers of this opinion will come to the realization that the ten and six year
sentences imposed here are in large measure part of our country's efforts to
create an atmosphere of general corporate crime deterrence. Serious
corporate crime sentences are needed to reflect the actions of Congress and
the Sentencing Commission and to avoid unwarranted sentencing disparities.
More importantly, the sentences provide specific deterrence for Caputo and
Riley after assessing each of their roles in the offenses proven at trial.” Id., at
985.