New York City White Collar Crime Legal Defense Strategies

Betty Q. Hixson

The best way to defend against an allegation of white-collar offenses or crimes in New York City will depend on the facts or circumstances of the particular case, as well as the specific law that has allegedly been violated. However, some defense strategies come up more often than others. 

Here are 8 of the top legal defense strategies that can be used to combat a charge of a white-collar crime in the Big Apple.

  1. Lack of Intent

Perhaps the most common legal defense to get raised in a white-collar crime case in New York is that the defendant did not act with the requisite intent to make the offense a crime. 

Many white-collar crimes require a certain level of intent for the conduct to be illegal. Generally, people can act with 4 different levels of purpose:

  1. Intent

  2. Knowledge

  3. Recklessness

  4. Negligence

Lots of financial crime statutes require the defendant to act intentionally, often to defraud someone. The federal crime of embezzlement (18 U.S.C. § 666(a)(1)(A)) is a good example. According to federal appellate courts, one of the elements of the crime of embezzlement is that the defendant must have acted with the intent to deprive the owner of the use of his or her property (U.S. v. May, 625 F.2d 186 (8th Cir. 1980)).

It is up to law enforcement to prove, beyond a reasonable doubt, that the defendant acted with the requisite level of intent. They often do this through circumstantial evidence that suggests but does not directly prove that the defendant was acting for some intentional purpose. Challenging that evidence can make for a strong defense.

But not always. Some federal white-collar offenses do not require proof of intent for sanctions to be imposed. For example, the federal False Claims Act (31 U.S.C. §§ 3729 – 3733) imposes civil penalties for inadvertent or even accidental conduct.

  1. Illegal Search or Seizure

The Fourth Amendment to the U.S. Constitution prohibits unreasonable searches and seizures by law enforcement. Entire books have been written about what amounts to a search or a seizure. Even more, it has been written about when a search or seizure is reasonable or not. 

In the end, though, the result is the same. When New York law enforcement performs a search or seizes a person or property and that search or seizure is unreasonable, a white-collar defense attorney can get that evidence banned from the trial. This is called the exclusionary rule, and it penalizes law enforcement for violating the civil rights of a suspect or a criminal defendant.

In many cases, prosecutors who have had evidence excluded from the trial have no option but to drop the criminal case.

  1. Entrapment

Another common legal defense in white-collar cases is entrapment. 

Entrapment happens when law enforcement induced or coerced the defendant into committing a crime that he or she would not have committed, otherwise. Hypothetical examples of police entrapment are if officers, often undercover, threaten someone with harm if they do not commit a crime, or if they offer someone known to be in desperate need of money $100,000 to commit a minor offense (U.S. v. Evans, 924 F.2d 714 (7th Cir. 1991)).

If the defendant can show that he or she was induced into committing a white-collar crime that they were not predisposed to commit before the inducement, it can be a strong defense to the charges.

  1. Statute of Limitations

Occasionally, the statute of limitations will be an excellent defense to raise against a white-collar crime charge.

The criminal statute of limitations is the amount of time that law enforcement has to initiate a criminal case against a particular defendant. Unless otherwise specified, the federal statute of limitations for criminal activity is 5 years (18 U.S.C. § 3282). There are exceptions for certain white-collar crimes committed against financial institutions, which can be brought within 10 years (18 U.S.C. § 3293).

If charges are not filed within the applicable time frame, defendants can raise the statute of limitations as a defense. However, this is not always a surefire defense. Many white-collar crime cases are charged as a federal conspiracy. In these cases, the statute of limitations does not begin to run until the latest act is done by any of the co-conspirators. Even if the defendant has done nothing for the conspiracy in over a decade, if one of his or her co-conspirators did something 6 months ago, the statute of limitations is still open against the defendant.

  1. Bad Advice of Legal Counsel

Sometimes, defendants end up committing a white-collar crime because they relied on the bad legal advice of a New York lawyer. This can undercut the prosecutor’s attempts to show that the defendant had the requisite intent to commit the crime. However, raising an advice-of-counsel defense comes with a unique risk: It requires the defendant to waive attorney-client privilege with the lawyer at issue. All of the communications between the lawyer and the defendant become evidence in the case. This can be beneficial for the defense. However, it can also be very damning for the defendant. 

  1. Ignorance of the Law

Ignorance of the law is not a defense to a criminal charge. However, when the prosecutor has the burden of proving that the defendant acted with an intent to commit the crime, this defense can undercut the prosecutor’s case. At the very least, evidence that the defendant did not know that he or she was committing a crime can be used to mitigate the penalties at the sentencing stage.

  1. Ignorance of a Pertinent Fact

Ignorance of a pertinent fact is another potential defense that can undercut the prosecutor’s attempts to show that the defendant acted intentionally. This is a common defense in conspiracy cases in New York City, where lots of different parties are working together to commit a white collar crime. If the defendant had no idea that the others were conspiring to commit a crime, it could be an effective defense.

  1. Cooperating with the Government

In some cases, the best defense strategy for a particular defendant is to “flip” and cooperate with the government in its federal white-collar cases against co-defendants. Doing so is exceptionally risky, though, and often involves pleading guilty and waiving all other legal defenses, leaving the defendant very vulnerable and at the mercy of law enforcement.

Oberheiden P.C. © 2022
National Law Review, Volume XII, Number 97

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