A Quick Guide to Federal Financial Crimes

All financial crimes are things to be worried about. But federal financial crimes definitely sound a lot more serious. If you’re ever a victim of one, or are accused of one, you’re entering very troubling territory.

Here’s a quick guide to the nature of these crimes.

Federal crimes and “regular” crimes: what’s the difference?

Some people are surprised to hear crimes suddenly being described as “federal”. In case you don’t know, federal refers to the government of the country as a whole. If a given crime is a federal crime, what does that mean for the other crimes?

Crimes that aren’t federal crimes are called state crimes. In the U.S. Constitution, it is decreed that states are allowed to govern themselves. A “regular” crime is thus known as a state crime (or a “local” crime) because the courts of the given state will be the ones dealing with it. But if a crime is deemed to affect the welfare of more than one state, or the entire county, then it will be deemed federal. This will occur if the crime passes over state lines – which many financial crimes, by their nature, will do.

You shouldn’t assume that a federal crime is necessarily more “serious” than a state crime. A murder, for example, is usually treated as a state crime. But it does involve a lot more legal complexity, and the government will probably want to come down hard on offenders.

Money laundering

You may have heard of money laundering on television shows or movies involving crime. Fans of Breaking Bad will certainly be familiar with it. Essentially, it’s taking money and funnelling it through a business-provided, taxable income. The money is usually attained through ill-gotten means. But it’s “made clean” by taking it through a process that looks legitimate to the tax collectors.

The prosecution needs to prove that the taxable income included proceeds from SUA. (That’s specified unlawful activity.) Due to its connection with other crimes (which are usually federal), this one can be very serious indeed.

Credit card fraud

“Credit card fraud” can be more of a vague term than it may seem at first. It’s a general term used to describe fraud and theft directly involving a payment card. The funds taken from the card becomes fraudulent; “fraud” also describes the using of these funds to make a payment.

So it’s pretty ugly stuff. But federal credit card fraud? What’s that? Well, most of the time, it’s simply credit card fraud. Because these crimes usually take place over state lines (e.g. over the Internet), they’re usually federal. And it’s an exceedingly serious crime. Because of the vagueness of the definition, people can be accused of the crime despite not being technically guilty of it.

Medicare fraud

Medicare is a billion-dollar part of the federal budget. So any crime involving Medicare becomes, by definition, a federal crime.

This type of fraud involves someone tricking the system into getting more than they’re entitled to for medical care. Because it’s a form of social benefit, federal prosecutors will use a “take-no-prisoners” approach. (I guess that’s a misuse of the term, there – they will want to make Medicare fraudsters prisoners!)

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