Fraud is generally recognized as an illegal act, but whether it is prosecuted as a federal crime, a state crime, or both depends on several factors. Some of these factors include the nature of the fraud, the status or identity of the parties involved, and in which jurisdictions the fraudulent activities occurred.
For residents of Florida, knowing when fraud crosses the threshold from a state offense to a federal crime is crucial for understanding the potential consequences of engaging in fraudulent activities.
Stechschulte Nell, Attorneys at Law has extensive experience representing people accused of fraud in federal and state courts. In this article we explain fraud charges as they are prosecuted in federal and Florida law, and how they intersect with federal regulations.
Understanding Fraud in the Legal Context
Essentially, fraud involves intentional deception to secure unfair or unlawful gain. This broad definition covers a range of activities, from insurance fraud and credit card fraud to more complex schemes like securities fraud or identity theft. The legal distinction between state and federal fraud offenses primarily hinges on the scale of the operation, the methods used to execute the fraud, and whether the fraudulent activity crosses state or international borders.
State-Level Fraud in Florida
Under Florida law, fraud can take various forms, including but not limited to, fraudulent insurance claims, credit card fraud, and mortgage fraud. The Florida Statutes Title XLVI, Chapter 817, outlines a long list of fraudulent practices and their penalties. For example, Florida treats schemes like filing a false insurance claim or using someone else’s credit card without authorization as felonies, with punishments that vary based on the amount of money involved and the specific circumstances of the crime.
In Florida, the severity of fraud charges and the associated penalties are frequently determined by the value of the property or services wrongfully obtained through deceptive means. As the value increases, so do the potential penalties.
Examples of general fraud classifications under Florida law:
- Fraud involving property valued at $50,000 or more is considered a first-degree felony carrying up to 30 years in prison, a $10,000 fine, probation, and restitution. (817.034(4)(a)(1))
- Fraud involving property valued at $20,000 or more is considered a second-degree felony carrying up to 15 years in prison, a $10,000 fine, restitution, and probation. (817.034(4)(a)(2))
- Fraud involving property valued at less the $20,000 can be classified as a third-degree felony with a maximum of up to 5 years in prison, a $5,000 fine, restitution, and probation. (817.034(4)(a)(3))
- If a fraud involves property worth less than $300, the offense can be a first-degree misdemeanor and be punishable by up to 1 year in prison, a $1,000 fine, a year probation, and restitution. (817.034(4)(b)(2))
When Fraud Becomes a Federal Crime
Fraud becomes a federal offense when it violates U.S. federal statutes (not just Florida law), involves a federal agency, crosses state lines, or employs mail or interstate communication systems in the commission of the crime.
Federal fraud charges cover a wide variety of activities, including but not limited to:
- Mail and Wire Fraud: Using the postal service or electronic communications to commit acts of fraud automatically brings the offense under federal jurisdiction. (Penalty: Up to 20 years in prison)
- Bank Fraud: Schemes designed to defraud a financial institution, such as check kiting or loan fraud, are considered a federal crime because most banks and credit unions are insured by federal agencies. (Penalty: Up to 30 years in prison and a $100,000 fine)
- Securities Fraud: Manipulating the stock market, insider trading, and Ponzi schemes often involve deceptive practices that affect investors across state lines, making these offenses federal crimes. (Penalty: Up to 20 years in prison and up to $5 mil. fine.)
- Healthcare Fraud: Attempts to defraud healthcare programs, including Medicare and Medicaid (which receive federal funding), also fall under federal criminal jurisdiction. (Penalty: from a maximum of 10 years, up to 20 years if serious injury occurs, and up to life in prison if death occurs.)
Prosecution in Both State and Federal Court?
In many cases, a fraudulent scheme can violate both Florida and federal laws. For example, a Florida resident involved in an insurance fraud that targets a federally funded program could face charges under Florida law and federal statutes. Federal prosecutors can prosecute someone for the same crime they were prosecuted for by Florida state prosecutors.
Why is it not a violation of the “double jeopardy” rule when both state and federal prosecutors charge a person for the same crime in both jurisdictions? The answer is a doctrine called “dual sovereignty.” Double jeopardy only applies when a person is put twice in jeopardy for the same crime by the same sovereign. In the United States, each state is legally considered its own sovereign, as is the U.S. government a sovereign. Since a person charged in both jurisdictions is not being prosecuted by the same sovereign, no double jeopardy occurs.
In such cases, state and federal prosecutors usually collaborate to determine the most appropriate venue for prosecution or may decide to pursue separate charges in both state and federal courts.
Defense Strategies in Fraud Cases
Given the complexity of fraud cases and the significant differences between state and federal substantive and procedural law, individuals accused of fraud must get an experienced criminal defense lawyer who is deeply knowledgeable about the intricacies of both state and federal justice systems to represent them.
Whether in Florida state court or federal court, prosecutors are legally required to prove the defendant’s guilt beyond a reasonable doubt. One of the main elements they must prove is that the defendant acted with intent to deceive the victim. Skilled fraud defense lawyers challenge the evidence the government relies on to prove criminal intent.
Among the other defense strategies proven to be effective in fraud prosecutions are challenges to the legality of the government’s investigation, preventing the introduction of evidence obtained in violation of the defendant’s constitutional rights, whether the case is in the appropriate jurisdiction, and disputing the alleged value of the purported fraud.
Read More > Federal Sentencing Guidelines for Fraud Cases
Experienced Fraud Criminal Defense in Florida
If you are charged with a fraud-related crime in Florida, whether in state or federal court, the criminal defense team at Stechschulte Nell in Tampa will apply their extensive courtroom experience and knowledge of the law to your defense. Contact Stechschulte Nell, Attorneys at Law today.
