When Favors Become Federal Indictments


In the last few years, United States Supreme Court justices have hinted at opinions that overcriminalization and overzealous prosecution by the justice department might be getting a little bit out of control. Some of the most shocking cases are white-collar in nature. In some of these cases, honest businesspeople who ran legitimate businesses made poor decisions that technically violated federal laws, resulting in felony convictions.

While illegal favors, like transporting a bag for someone that may have drugs in it, occur frequently, the person who does the “favor” is often aware of the risks and either knows he or she is transporting an illegal substance or is “willfully blind” to the contents of the package.

However, favors in the white-collar world get more complicated. We’re not talking about political favors or money laundering, but rather those involved in advising businesses and business owners.

The Misled Mentor

In one example, a successful businessman was mentoring a young entrepreneur who found himself in a cash crunch. The entrepreneur met with the mentor and asked for financial advice. The mentor told the entrepreneur to bring his balance sheet and supporting financial documents.

The entrepreneur failed to show up for the meeting with his mentor that week, but came in the following week with all the paperwork and explained that he had just submitted the balance sheet to the bank. The mentor reviewed the balance sheet and discovered that the entrepreneur had clearly made false claims. In his defense, the more the mentor questioned the entrepreneur, the clearer it became that the entrepreneur had intentionally fabricated misleading numbers on the balance sheet.

When the mentor confronted the entrepreneur about the false information, the entrepreneur indicated that his accountant had advised him to exaggerate some of the numbers.

The entrepreneur asked the mentor to go to the bank and explain that the young man had made some mistakes that he, his mentor, discovered while reviewing the balance sheet. This request put the mentor in a difficult position. Had the mentor done the entrepreneur the “favor,” he could be federally indicted for conspiracy to commit fraud. More specifically, because the entrepreneur submitted the balance sheet to a financial institution in hopes of getting a loan, the mentor could be charged with conspiracy to commit bank fraud.

Hiring a White-Collar Criminal Defense Attorney

In the story above, the mentor ultimately advised the entrepreneur to hire the best possible criminal defense attorney he could find. In this instance, not only was the mentor wise enough to avoid doing a “favor” that could have resulted in a federal prosecution, but he gave the entrepreneur some great advice. In white-collar cases, the sooner a criminal defense attorney gets involved, the better. While the mentor could have advised the entrepreneur to take no further action with the bank, the criminal defense lawyer can proactively take measures to protect the entrepreneur in ways that the mentor cannot.

The white-collar criminal defense attorneys at Berry Law have been protecting individuals and businesses from federal criminal charges for over 50 years. If you are concerned that you may be the target of a white-collar federal criminal investigation, contact Berry Law today.

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