New York residents are likely familiar with the concept of white-collar crime that involves fraud by those in the business or financial sectors. One type of white-collar crime is securities and commodities fraud, and this involves various schemes related to investments and the stock market.
Investment fraud typically involves offering enticing financial instruments with guaranteed returns, unregistered securities or investments with little risk. These opportunities might seem too good to be true, but those who concoct these schemes gain the trust of those in a group or community to avoid suspicion and attract multiple investors as people in the community can encourage others to get involved. Pyramid schemes and Ponzi schemes are two other types of methods used for investment fraud.
Commodities fraud refers to scams dealing with raw or unfinished goods that are sold on exchanges. High-pressure sales tactics and false claims are used to secure investors. One might create fake account statements and keep any money invested or trade excessively to earn commissions.
Nonexistent or relatively unheard of companies might commit promissory note fraud by offering little risk and a high rate of return on the short-term debt vehicles. Promissory notes are not securities, so this scheme is appealing when attempting to avoid SEC scrutiny. Offering a lucrative reward that first requires an upfront fee is advance fee fraud. Additional funds are requested while the larger prize or opportunity never comes.
The FBI in conjunction with federal and local law enforcement agencies pursue those who are suspected of financial fraud. Investigating these cases take time, so one could be charged years after an alleged incident occurred. People may wish to consult an attorney as soon as they believe that they are suspected of this type of a white-collar crime instead of waiting until charges are filed.