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White Collar Crimes in Florida: Fraud, Embezzlement, Tax Evasion and Defense

White Collar Crime in Florida: Fraud, Embezzlement, Tax Evasion and Defense

White collar crime is a big problem in Florida. Lots of people commit fraud, embezzlement, tax evasion and other financial crimes in the Sunshine State. This article will explain the most common white collar crimes, real life examples, defenses and penalties under Florida law.

What is White Collar Crime?

White collar crime refers to non-violent crimes committed by business professionals or public officials. These crimes are usually financial in nature and often involve deception or breach of trust

.Common white collar crimes in Florida include:

• Fraud (mortgage fraud, healthcare fraud, identity theft, etc)
• Embezzlement
• Bribery
• Forgery
• Money laundering
• Tax evasion

These crimes can be prosecuted at the state or federal level depending on the circumstances. Federal charges often carry stiffer penalties.

Mortgage Fraud

Mortgage fraud is a big problem in Florida. This involves misrepresenting information on a mortgage application to obtain a loan.Common mortgage fraud schemes include:

• Lying about income or assets to qualify for a bigger loan
• Using false documentation like fake bank statements
• Lying about employment status or length of employment
• Not disclosing other debts or mortgages
• Inflating property appraisals

Mortgage fraud often happens in hot real estate markets like Florida. From 2004 to 2008, Florida led the nation in mortgage fraud. The FBI reported over $1 billion in losses from mortgage fraud during this period

.In 2007, Lee Farkas, former chairman of Taylor, Bean & Whitaker Mortgage Corp, was charged in a $3 billion mortgage fraud scheme. He was convicted of bank, wire and securities fraud in 2011 and sentenced to 30 years in federal prison.

Healthcare Fraud

Healthcare fraud refers to scams that bill health insurance companies for unnecessary or fake medical treatments. Florida is a hotbed for healthcare fraud because many seniors live here and Medicare spending is high.Some common healthcare frauds include:

• Billing for services that were never provided
• Billing for unnecessary tests or procedures
• Performing unnecessary surgeries
• Billing for a more expensive service than was provided
• Accepting kickbacks for patient referrals

Healthcare fraud costs taxpayers billions each year through Medicare/Medicaid overpayments.In 2019, Philip Esformes, a nursing home owner, was sentenced to 20 years for a $1 billion Medicare fraud scheme. He bribed doctors to admit patients to his facilities even if they didn’t qualify for care.

Tax Evasion

Tax evasion involves illegally avoiding taxes by under-reporting income, overstating deductions, failing to file returns, etc.Some common tax evasion schemes include:

• Not reporting cash income
• Claiming personal expenses as business deductions
• Hiding money in offshore bank accounts
• Misclassifying employees as independent contractors
• Abusing tax shelters

In 2014, the owners of Timeshare Mega Media and Marketing Group pleaded guilty to tax fraud conspiracy. They failed to report $5.5 million in income and evaded $2 million in federal taxes.

Embezzlement

Embezzlement means stealing money or assets from an employer. It often involves employees with access to company funds or accounts.Some examples of embezzlement include:

• Forging company checks
• Making unauthorized electronic transfers
• Stealing cash receipts
• Using company credit cards for personal purchases
• Falsifying expense reimbursements

In 2018, the bookkeeper for the Key West Chamber of Commerce was charged with embezzling over $700,000. She allegedly forged checks and made unauthorized wire transfers into her personal account.

Bribery

Bribery involves offering, giving or accepting something of value in exchange for an official act like awarding a contract.Some examples include:

• Contractors bribing officials for government contracts
• Corporations bribing officials to influence legislation
• Lobbyists bribing lawmakers to vote a certain way

In 2010, the former CFO of Jackson Memorial Hospital was charged with taking over $300,000 in kickbacks from vendors seeking contracts.

Identity Theft

Identity theft means stealing someone’s personal information to commit fraud. Florida has a high rate of identity theft since it’s the third most populous state.Some common identity theft methods include:

• Stealing wallets and purses containing ID cards and credit cards
• Retrieving bank statements from trash (“dumpster diving”)
• Hacking into computer networks to steal account numbers and passwords
• “Phishing” emails pretending to be from a legitimate company to get login credentials
• Skimming credit/debit card information at ATMs and gas stations

In 2018, five people were charged with filing over 1,000 fraudulent tax returns using stolen identities. They tried to obtain $22 million in refunds.

Money Laundering

Money laundering conceals the source of illegal funds so they appear legitimate. Florida’s international banks and real estate make it prone to money laundering.Some common techniques include:

• Smurfing – breaking up large amounts of cash into small deposits to avoid detection
• Mixing dirty money with proceeds from legal businesses
• Using shell companies to disguise ownership
• Over/under invoicing import/export transactions
• Buying expensive assets like real estate and art to hide money

In 2015, a Miami man received over $100 million from Medicare fraud and funneled it through a money laundering network to buy luxury cars, boats, and real estate in Florida.

Penalties for White Collar Crime in Florida

White collar crimes in Florida can be charged as felonies or misdemeanors depending on the value involved:

• Fraud under $300 – misdemeanor up to 1 year in jail
• Fraud over $300 – felony up to 5 years prison
• Fraud over $50,000 – felony up to 30 years prison
• Embezzlement under $300 – misdemeanor up to 1 year jail
• Embezzlement over $300 – felony up to 5 years prison
• Tax Evasion – felony up to 5 years prison

Federal charges often have stiffer penalties – up to 20 years per count. Fines up to $250,000 for individuals or $500,000 for corporations may also apply.

Defenses Against White Collar Charges

There are several legal defenses that can be raised against white collar charges:No criminal intent – the accused did not knowingly and willfully commit fraud or embezzlement. It may have been an honest mistake.Entrapment – law enforcement induced the defendant to commit a crime they otherwise wouldn’t.Duress – the defendant felt threatened or coerced into committing the crime.Statute of limitations – the time window for prosecuting the crime has expired.Improper procedures – evidence was obtained illegally in violation of the defendant’s rights.An experienced white collar crime lawyer can evaluate the available defenses and build the strongest case possible. The complex nature of financial crimes means its crucial to have skilled legal representation.

How to Report White Collar Crime

If you suspect white collar criminal activity, report it immediately:

• Local Police – for smaller local crimes
• State Attorney General – for consumer and investor fraud complaints
• FBI – for large multi-state or international crimes
• IRS – for tax fraud and evasion
• Medicare – for healthcare fraud against Medicare/Medicaid programs

The sooner law enforcement learns about the crime, the better chance they have of building a successful case. Your information could protect other innocent victims too.

Conclusion

White collar crime is a serious issue that causes major financial harm in Florida each year. These complex crimes require sophisticated schemes and insider access. With proper reporting, investigation and prosecution, both individuals and corporations can be held accountable. This article covered the most common white collar crimes, real life cases, defenses and penalties in Florida. Public awareness and cooperation with law enforcement can help curb these non-violent but damaging offenses.

References

 FBI Mortgage Fraud Report 2007-2008

 Healthcare Fraud in Florida

 Miami Chamber of Commerce Embezzlement

 Overview of White Collar Crime

 Tax Evasion Case in Florida

 Florida Money Laundering