Investigating financial crimes is a tricky business

“Serial market manipulators” is the way federal prosecutors described the 14 people recently indicted for conspiring to manipulate publicly traded stock prices and bilk more than 20,000 investors of over $30 million. These white-collar charges are so egregious that if convicted many of these defendants face up to life in prison.

The government alleges that these defendants worked together to purchase stock in publicly traded companies in industries that appeared to be on the edge of breakthrough developments or deals. Such industries included green technologies, pharmaceuticals and e-commerce websites. The defendants would then launch misleading marketing campaigns, issue deceptive press releases and trade stock amongst themselves to fraudulently inflate the price.

The high costs of high stakes “monkey business”

Using the nature of the emerging industries to provide cover for high trading volumes and soaring prices, the group would then allegedly sell the stock at its inflated height and hide the profits in offshore accounts. One CEO involved in the scheme was caught in a wiretapped conversation saying, “There’s nothing in there, there’s nothing to the company. It’s monkey business.” Unfortunately, over 20,000 people paid money for the monkey business, only to find their stock relatively worthless.

Speaking of the indictments, André Birotte Jr., the U.S. Attorney for the Central District of California, said, “This case has dismantled a far-reaching stock market manipulation scheme run with ruthless efficiency and operated with one goal in mind – to steal money from the investing public.” He continued, “This type of predatory behavior cheats the average investor, erodes overall confidence in the markets and has a devastating impact on companies and their employees.”

Financial crimes takes many forms

Financial crimes come in many different forms, but they always involve the illegal taking of money or property for someone else’s benefit. The crime could be bribery, forgery, embezzlement, tax evasion, securities fraud, mortgage fraud or white-collar crimes like Ponzi schemes. Unlike theft or robbery where money or property is taken by force, financial crimes involve some form of deceit or a violation of a position of trust.

A good defense will hold the government accountable

To investigate and prosecute financial crimes, law enforcement uses sophisticated techniques to look into bank accounts, tax records, contracts, stock transaction records, e-mails, phone conversations and text messages. If the government can show it needs some type of evidence to prove a crime has occurred, it can usually get it. This often includes secret subpoenas and could involve wiretaps. Once an investigation reaches that level, the evidence is extremely hard to refute.

Nevertheless, the government must follow strict laws to obtain evidence and always has the burden of proof in a criminal case. Because the evidence in a financial case is often strong, it is critical to have the help of a skilled white-collar defense attorney to challenge the government’s evidence. If you or a loved one has been charged with, or is under investigation for, a financial crime, contact an experienced attorney to evaluate your case, protect your rights and hold the government to its burden.