White-collar crime is a hot topic. Seemingly, for the last decade it has been a parade of one financial fraud after another. From Enron and World Com to Bear Sterns and Lehman Brothers to Bernie Madoff and Raj Rajaratnam, the headlines are full of white-collar financial scandals.
A result of the scandals is the public's growing frustration, demonstrated by the growth of the Tea Party at one extreme to the Occupy Wall Street at the other extreme. And judges, even federal district court judges with lifetime tenure, sense the change in the public's mood.
White collar suspects, once treated as less of a threat than more violent offenders, are now less likely to receive short sentences and easy bail, and more likely to have all bail withheld and receive substantial amounts of prison time at sentencing.
Record Sentences
As recently as October, Raj Rajaratnam, a prominent manager of the Galleon Group hedge fund was convicted of insider trading and received an 11-year sentence. This is a new record for insider trading sentences, and many legal experts had expected had expected the sentence to be closer to 20 years.
The court appears to have taken into consideration his charitable efforts and his poor health. However, it underscores the type of sentences that prosecutors demand in cases involving multi-million dollar frauds.
This is in part due to the size of the fraud and how the dollar amount is factored into the calculation of the sentencing guidelines. It is also due in part to the pressure prosecutor's face to make examples of these executives.
Overcriminalization?
The growing sentences are also part of an overall increase in the criminalization of many activities, especially at the federal level. As Congress attempts to satisfy a constituency outraged by crimes ranging from the importation of illegal endangered species to drug trafficking to child abduction to massive corporate frauds, the overlapping and laberynthian net of activities chargeable as a federal crime grow.
This leads to an unimaginably complex matrix of possible crimes. Combined with the increasingly draconian federal sentencing guidelines and the use of mandatory minimums for more crimes, the possible ways in which to become ensnared in crimes that carry substantial federal prison terms becomes ever easier.
Flight Risk
The Detroit Free Press reports a new aspect of this, in the difficulty of some foreign-born defendants charged with Medicare fraud, to obtain bail. Prosecutors and courts are refusing bond to these defendants, citing their foreign connections and significant assets they could access.
The defendants, especially those from nations with questionable or nonexistent extradition treaties with the United States, are seen by prosecutors as presenting too great a flight risk to allow bond.
One suspect described in the story is a wealthy Pakistani executive charged with a $31 million Medicare fraud scheme. Records indicate he owns "16 home health agencies and a mosque in metro Detroit, along with a rice factory, a religious school and a farm in Pakistan."
He travels to Pakistan often and supports a family-owned company with funds from his U.S. businesses. According to the Justice Department's prosecutor, Catherine Dick, "There is a serious risk that Mr. Mehmood will flee to Pakistan. And if he goes, we will not be able to get him back."
The Free Press notes this argument is working with the courts. The article points to the examples of Babubhai (Bob) Patel, who is charged with a $51 million prescription drug billing fraud. He has made four separate requests for bail, all of which have been denied.
The defense attorney for Mehmood was quoted in the article as saying, "This idea that these white-collar criminals in this health care fraud stuff are more likely to flee -- I think is demonstrative of a prejudice."
Massive Scale Of Medicare Fraud
The scale of Medicare fraud is enormous. The article includes the figure that since 2007, more than 900 people have been charged with $2.7 billion of Medicare fraud.
Federal prosecutors are feeling the pressure to stop the bleeding of taxpayers, so defendants who may present a flight-risk and are allegedly responsible for millions of dollars in fraud, pose a public-relations nightmare potential for those prosecutors.
White-collar cases are often difficult for the public to understand, but for defendants who are charged with Medicare fraud, the public thinks it understands all too well the problem. If you believe you may be the target of an investigation involving Medicare billing or other fraud, you need the advice and counsel of an experienced defense attorney as early in the process as possible.
Because of the complexity of the law and the ease with which inadvertent statements can be made to sound incriminating at a later date, and attorney can help to ensure you don't say anything that could come back to haunt your defense, should a formal indictment appear.
