Fraud Defense in New York

Fraud cases come in many flavors. The headline charge depends on who put the case together — the local district attorney, the State Attorney General, the Office of the Inspector General, HRA, HHS-OIG, the Department of Labor, or the US Attorney. We defend the full range:

• SNAP and food-stamp fraud — HRA investigations, intentional program violation hearings, and criminal welfare fraud prosecutions.
• Medicaid fraud — MFCU investigations, audit recoveries, and felony Medicaid-fraud prosecutions.
• Healthcare fraud — federal 18 U.S.C. § 1347 prosecutions, ZPIC audits, and Stark Law issues.
• Mail and wire fraud — the workhorse federal fraud charges, 18 U.S.C. §§ 1341 and 1343.
• PPP and EIDL fraud — pandemic-era loan applications under 18 U.S.C. §§ 1014 and 1343.
• Securities fraud — SEC investigations and 15 U.S.C. § 78j(b) / Rule 10b-5 prosecutions.
• Insurance fraud — Penal Law Article 176, including no-fault, workers' comp, and health-insurance fraud.
• Tax fraud — 26 U.S.C. §§ 7201, 7206, and Tax Law Article 37.

The Pre-Indictment Window

Most fraud cases run for months or years before any indictment. The pre-indictment window is when defense investigation matters most: target letters, grand jury subpoenas, document holds, Kastigar issues, civil-criminal parallel proceedings, and decisions about cooperation and proffers all have to be made before the case becomes public. The right time to call a fraud lawyer is when you first know you are a target — or sooner.

How Fraud Cases Are Defended

• Intent. Fraud requires specific intent to defraud. Mistake, negligence, and reliance on professionals are all defenses.
• Materiality. The misrepresentation must be material under Neder v. United States.
• Loss. Federal sentencing turns on loss amount. We litigate loss aggressively at the guidelines stage.
• Privilege and work product. Document productions must be screened. A privilege waiver early in the case can be irreparable.

State Fraud Charges in New York

The Manhattan, Brooklyn, Queens, Bronx, and Richmond County District Attorneys, together with the New York State Attorney General, prosecute fraud under several Penal Law articles. Article 175 covers falsifying business records — a misdemeanor under PL § 175.05, elevated to a class E felony under PL § 175.10 when the false entry is made with intent to commit or conceal another crime. Article 190 contains the larger fraud machinery: scheme to defraud in the second degree under PL § 190.60 and scheme to defraud in the first degree under PL § 190.65, the latter triggered by an aggregate loss over $1,000 or a scheme that affects more than one person.

Identity theft and unlawful possession of personal identifying information sit under PL §§ 190.78 through 190.83, with felony exposure climbing with the dollar amount taken or the number of victims. Insurance fraud is charged under Article 176, with tiered grading from PL § 176.10 through § 176.30 keyed to the value of the fraudulent claim. Residential mortgage fraud falls under Article 187. The state Martin Act (General Business Law Article 23-A) gives the Attorney General broad authority to investigate securities-related fraud without proof of scienter at the investigative stage.

The Federal Fraud Toolbox

Federal prosecutors charge fraud schemes through a familiar set of statutes that overlap by design. Wire fraud under 18 U.S.C. § 1343 and mail fraud under 18 U.S.C. § 1341 each carry a twenty-year maximum per count, raised to thirty years if the offense affects a financial institution or is committed in connection with a federally declared disaster. Bank fraud under 18 U.S.C. § 1344 reaches schemes targeting FDIC-insured institutions and carries a thirty-year cap. Health care fraud under 18 U.S.C. § 1347, securities and commodities fraud under 18 U.S.C. § 1348, and false statements to a federal agency under 18 U.S.C. § 1001 round out the core list.

Aggravated identity theft under 18 U.S.C. § 1028A imposes a mandatory two-year consecutive prison term any time the government can stack a qualifying identity offense onto an enumerated felony. The Supreme Court narrowed the reach of § 1028A in Dubin v. United States, but the statute remains a constant pressure point in plea negotiations. Tax-related fraud is charged under 26 U.S.C. §§ 7201 (evasion), 7206 (false return), and 7212 (corrupt interference), with parallel New York Tax Law Article 37 exposure.

Investigations Before Charges

A fraud case typically begins with administrative subpoenas, grand jury subpoenas under Rule 17, or a search warrant. Targets, subjects, and witnesses get different letters — understanding which category the government has placed you in dictates everything from proffer strategy to whether you sit for an interview at all. We routinely engage with line AUSAs and senior trial counsel in the Southern and Eastern Districts of New York to clarify status, push back on subpoena scope, and shape what the grand jury hears.

• Title III wiretaps and pen registers. Long-running fraud investigations often include wire and electronic surveillance, all of which produce suppression issues under 18 U.S.C. § 2518.
• Parallel proceedings. The SEC, CFTC, FTC, OIG, and state regulators frequently run civil investigations alongside the criminal case. A deposition or sworn statement in the civil case can determine the criminal outcome.
• Whistleblowers and qui tam. Many federal fraud prosecutions originate with a relator complaint filed under seal pursuant to 31 U.S.C. § 3730. When the United States investigates the complaint, the relator's allegations frame the criminal theory.
• Internal investigations. Corporate clients facing fraud exposure often need an internal investigation before responding. Upjohn warnings, joint defense agreements, and the scope of board reporting must be set up correctly from the first interview.

Loss, Forfeiture, and Restitution

In federal court, the loss calculation under U.S.S.G. § 2B1.1 drives everything. Actual loss, intended loss, gain as a proxy for loss, relevant conduct under § 1B1.3, and credits for value returned all bear on the offense level. Enhancements for sophisticated means, ten or more victims, abuse of a position of trust, and vulnerable victims can add years. We retain forensic accountants early so the loss fight is not improvised at sentencing.

Forfeiture under 18 U.S.C. §§ 981 and 982 is now routine in fraud cases, and the government may reach substitute assets under 21 U.S.C. § 853(p) when the direct proceeds are dissipated. Restitution under the Mandatory Victims Restitution Act, 18 U.S.C. § 3663A, is non-discretionary in most federal fraud cases. Parallel civil False Claims Act exposure under 31 U.S.C. §§ 3729–3733 layers treble damages and per-claim penalties on top.

Statute of Limitations and Collateral Consequences

The default federal statute of limitations is five years under 18 U.S.C. § 3282. Bank fraud, mail and wire fraud affecting a financial institution, and a handful of related offenses get ten years under 18 U.S.C. § 3293. Conspiracy under 18 U.S.C. § 371 extends the clock as long as overt acts continue. Tolling agreements during investigation are common and must be evaluated carefully — signing one is often the wrong answer.

Collateral consequences frequently outlast the sentence. Conviction for a fraud offense involving loss greater than $10,000 is an aggravated felony under 8 U.S.C. § 1101(a)(43)(M), triggering mandatory removal for non-citizens. Healthcare and Medicaid convictions produce mandatory OIG exclusion from federal programs (LEIE), SAM debarment, and OPMC discipline. Securities-related convictions yield FINRA and SEC industry bars. Lawyers, accountants, and licensed professionals face attorney-grievance and licensing-board proceedings that the criminal disposition may or may not control.

Pretrial Motion Practice

The defense begins shaping the record long before opening statements. Motions to dismiss for insufficient indictment under Rule 12(b)(3) test whether the charging document tracks the statute and pleads each element with enough specificity to put the defendant on notice. Bills of particulars under Rule 7(f) close gaps the indictment leaves open. Severance motions under Rule 14 break up multi-defendant indictments where joinder produces spillover prejudice. Motions to suppress under Rule 12(b)(3)(C) attack defective search warrants, overbroad email returns, and statements taken without Miranda where custody is contested.

Brady, Giglio, and Jencks material in fraud cases often comes late and in pieces. We push for early disclosure orders, exhibit lists, and witness lists, and we litigate the scope of co-conspirator statements under Rule 801(d)(2)(E) before trial rather than during it. Daubert challenges to the government's loss expert and to summary-chart witnesses under Rule 1006 are filed before jury selection where possible.

Trial and Plea Strategy

Most federal fraud cases plead. The work of the defense is to make the plea worth taking — through motion practice, loss litigation, cooperation where appropriate, and a sentencing record that earns variances. When trial is the right answer, fraud trials are document-driven, narrative-heavy, and won on cross-examination of cooperating witnesses and government experts. Severance under Zafiro, motions in limine to exclude prejudicial summary charts, and Daubert challenges to government loss experts shape what the jury hears.

Cooperation is its own track. A § 5K1.1 motion or a post-sentencing Rule 35(b) motion can move a sentence dramatically, but cooperation only works if it is offered to the right office at the right time with the right proffer. A reverse proffer — the government laying out its case to the defendant — is sometimes the cheapest way to gauge a case's real weight before deciding which way to go. We have done both sides of that conversation many times in the SDNY and EDNY.

Related practice areas: criminal defense, wire fraud, healthcare fraud, Medicaid fraud, and SNAP fraud.

If you have received a target letter, a subpoena, or have been charged in a fraud case, call us at 212-233-1233 or email [email protected].