Articles Posted in White Collar Crime

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J. Bradley Smith of Arnold & Smith, PLLC answers the question “Can I be arrested without evidence against me?”

 

Remember Enron?

Red Grouper Charlotte Criminal Lawyer North Carolina DWI AttorneyIt seemed like such a big deal until all the malfeasance that (allegedly) caused 2009’s Great Recession came to light, causing the collapse and usurpation of thousands of businesses large and small, nationwide.

Enron was an energy company. It collapsed. People were mad and, true to form, politicians seized on the madness, blamed their opponents for causing it, and proposed a solution politicians are often (or always) apt to propose: a new law.

Out came Sarbanes-Oxley, an Act designed to combat the kind of white-collar financial fraud that led to Enron’s demise. Like many laws, the Act was written broadly, was “too broad and undifferentiated,” according to United States Supreme Court Justice Elena Kagan, “with too-high maximum penalties, which give prosecutors too much leverage and sentences too much discretion.”

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J. Bradley Smith of Arnold & Smith, PLLC answers the question “Can I be arrested without evidence against me?”

 

Tech industry insiders are guffawing at new cybersecurity initiatives unveiled by the Obama administration. According to insiders familiar with the proposals, new cybersecurity-targeted criminal laws will make criminals of us all.

Man on laptop Mecklenburg DWI Lawyer Charlotte Criminal AttorneyAccording to Paul Wagenseil of Tom’s Guide US, the proposed changes to the 1984 Computer Fraud and Abuse Act would “make many commonplace security research practices—and media reporting on those practices—federal crimes.”

Nate Cardozo, an attorney with the Electronic Frontier Foundation in San Francisco, California, told researchers and intellectual property professionals at a Washington, D.C. conference that sharing passwords for online accounts or even sharing an HBO “GO” password with a friend could constitute felonies under the proposed legislation. HBO—short for “Home Box Office”—is a cable-television based distributor of movies and entertainment programs.

In sum, the proposals “broaden the definition of computer crime and stiffen penalties for existing crimes,” with maximum penalties for violations being pushed from ten years to twenty years.

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Attorney J. Bradley Smith answering the question: “What are the long term effects of being convicted of a crime?”

 

The North Carolina Insurance Commissioner made an announcement late last month that three people in Union County, NC had been arrested after authorities say they staged car accidents to collect money from insurance companies. The three friends have now been charged with insurance fraud.

 

Wrecked Car Charlotte DWI Lawyer North Carolina Criminal Defense AttorneyThe announcement revealed that Shane Glenn, Christina Stegall and Wesley Scarbrough were now facing charges related to their insurance scam. Police say that Scarbrough was driving a rented U-Haul that was used to rear-end a vehicle driven by Glenn and Stegall. The two then filed a claim with RepWest Insurance to collect payment for the damages they suffered.

 

Police say the U-Haul was only ever rented to carry out the insurance scam. Stegall and Glenn both lied to insurance claims adjusters about their knowledge of the accident, saying they did not know the driver of the U-Haul. Police say the three had been friends for a long time and that the entire incident was carefully orchestrated.

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A big push is underway in North Carolina as prosecutors have said they intend to crack down on financial and white-collar crimes this year after what they say has been several years of lax enforcement across the state.

It’s important to understand that white-collar crime encompasses many different varieties of criminal infractions. These can include embezzlement, larceny, passing bad checks even mortgage fraud. Prosecutors say that because of the complicated nature of many of these crimes, new investigative tactics will need to be employed. For that reason, the North Carolina Conference of District Attorneys has announced the launch of a new financial crimes initiative. White Collar.jpg

The group will be using some of the money it received from the National Mortgage Settlement last year to pay for the new division. The group began by officially hiring a new White Collar Crime Resources Prosecutor whose job will be devoted entirely to the prosecution of financial crimes. Tammy Smith has been named to fill the position and she will begin hiring a team of regional prosecutors expected to begin work in mid-February or early March. The team will work with district attorneys across North Carolina to crack down on financial wrongdoers.

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Arnold & Smith, PLLC Attorney J. Bradley Smith, spoke to Fox Charlotte recently regarding a case of student loan fraud. Mr. Smith told the news channel that he overheard someone tell the judge about how he had obtained federal loans for school and then dropped out. He then used the money he received from the federal government for school to invest in a tee-shirt printing business. As the man was telling the judge about how he had committed federal student loan fraud, Mr. Smith could not believe how cavalier and nonchalant the man seemed about committing a federal crime. “This guy was proud of it, I mean, I am telling you, it was crazy,” says Smith.

J. Bradley Smith told Fox Charlotte about the increasing problem of student loan fraud. Several millions of dollars have been given to students for the purpose of funding their educations. Post #2 criminal image 5.10.12.jpgThese loans are backed by the federal government and all of the money must be paid back. Should student loan fraud continue to increase, Mr. Smith believes that the bust could be even bigger than the bust seen in the real estate bubble.

The young man at the Mecklenburg County District Court who openly admitted to committing student loan fraud was once a student at Central Piedmont Community College. CPCC officials said that there is not much that they can do when it comes to policing federal student loans. The loans are an agreement between the federal government and the student. The school is only a beneficiary of the agreement, not a party to it and therefore the onus of enforcing the agreement lies with the federal government.

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As a follow-up to one of our recent posts, on Wednesday, April 25, 2012, Aide to former Senator John Edwards, Andrew Young, testified at Edwards’ campaign finance violation trial. The prosecution called Young to testify about his role in hiding Rielle Hunter, Edwards’ pregnant mistress, while he was running for President of the United States. Young took the stand on Monday, April 23, 2012, and began to tell the jury about Edwards’ relationship with Rielle and about how his relationship with Edwards began to change during the presidential campaign.

Young testified that as Edwards was beginning to put an end to his campaign, he stopped communicating with Young. Post #2 criminal image 4.26.12.jpgIn December 2007, Edwards, along with Young, issued a statement to the press in which Edwards denied that he was the father of Rielle Hunter’s unborn child, saying that it was Young who was father. According to Young, Edwards was to tell the press the real story once the baby was born. Young testified that he and his wife were no longer happy about letting Hunter live with them in an attempt to keep the press away from her.

Edwards is accused of misappropriating campaign funds to hide Hunter and keep her pregnancy and subsequent child a secret. He has pleaded not guilty to six counts of campaign finance violations. If he is found guilty, Edwards could face up to 30 years in prison and $1.5 million in fines. Edwards denies knowing what the money was being used for, especially given that much of the money was put into accounts that were controlled by Young and his wife.

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A recent report in the Charlotte Observer indicates that former United States Senator John Edwards is facing serious criminal charges. He has evidently elected to take the case to trial and jury selection is set to begin any day now. Edwards is facing significant criminal charges that could land him in prison for up to 30 years and that could force him to pay $1.5 million in fines.

Last year, the federal government indicted Edwards on campaign finance violations. The government alleged that the then Senator used money that was donated to his presidential campaign to keep his mistress, Rielle Hunter, hidden from the public so as not to damage his chances of winning the election. Post #1 criminal image 4.17.12.pngAn individual close to the investigation and the case told the Charlotte Observer that Edwards was offered a plea deal where he would only serve 6 months in jail and still be able to practice law, but Edwards rejected that offer. He said that he would take his chances with a jury. In a press conference, Edwards said, “After all these years, I finally get my day in court and people get to hear my side of this, and what actually happened . . . And what I know with complete and absolute certainty is I didn’t violate campaign laws and I never for a second believed I was violating campaign laws.”

The trial is one that all will be sure to watch, not only because of the celebrity of the defendant, but because the case is poised to be legally significant. At the center of the case is the question of what constitutes a campaign donation. The legal debate surrounds Edwards’ knowledge of payments made by his campaign finance chairman, Fred Baron, and another donor, Rachel “Bunny” Mellon whose funds paid for Rielle Hunter’s medical care while she was pregnant with Edwards’ child, as well as hotels and private jets. Edwards denies any knowledge of those funds, but his attorneys believe that even if he did have knowledge of the money that knowledge would not be a violation of federal law. This is because Edwards’ motive for using the money was to keep his dying wife, Elizabeth, from finding out about the affair between him and Hunter, and not to influence the outcome of the presidential election.

In addition to the legal arguments, Edwards’ attorneys are also claiming that the prosecution has political motives. In several pre-trial hearings, lead attorney Abbe Lowell, claimed that the government’s reasoning was flawed and that the grand jury was tainted “and that the Republican federal prosecutor who led the investigation, now-congressional candidate George Holding, was motivated by partisanship.” Even the Federal Election Commission has declined to proceed against Edwards after reviewing his case. The Center for Responsibility and Ethics in Washington (CREW) filed a brief in support of Edwards’ legal position, saying “In the United States, we don’t prosecute people for being loathsome, we prosecute them for violating the law… The real reason for these payments is obvious: To prevent Mr. Edwards’ cancer-stricken wife from finding out about the affair. This makes him despicable, but not a criminal.”

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The former town administrator for Harrisburg, North Carolina is currently facing several felony charges according to a recent report by the Charlotte Observer. Michelle Reapsmith has been charged with three separate counts of receiving property by false pretenses. The charges come after an intense investigation and audit of the town’s financial records.

According to Bob Scaggs, a member of the Harrisburg Town Council, the investigation began after an inspection of the town’s financial records raised red flags while Reapsmith was reviewing contracts for the city. harrisburg town hall.jpgAt that point, the Cabarrus County Sherriff and the State Bureau of Investigation began to take a closer look at the town’s financial records. The article in the Charlotte Observer does not go into detail regarding the discrepancies in the financial records.

Back in October, the town council called an emergency Saturday meeting and voted to remove Reapsmith from her position without pay until her contract expired in November. According to Reapsmith, it was mutually beneficial for her to step down. She was hired in 2009 as the town’s financial director and then was promoted in 2010 to the town’s administrator. When she was hired, however, she was not the candidate recommended for the position by the North Carolina Council of Governments, according to Mr. Scaggs. Because of the discrepancies with the financial record, Reapsmith was not paid a severance package after she was removed from her position as town administrator.

After being charged with three counts of receiving stolen property under false pretenses, records reveal that Reapsmith’s initial appearance in court was for Monday, March 19, 2012. The district attorney, however, did not have a record of the charges as of Tuesday, March 20, 2012, according to a representative of the Carrabus County District Attorney’s Office.

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