Federal crimes involving fraud encompass a broad range of offenses. While there are many different fraud offenses, a federal offense involving fraud always includes some form of deceitful conduct, false statement or misrepresentation for the purpose of gaining something of value. Penalties for federal crimes involving fraudulent acts may include substantial fines, asset forfeiture, jail sentences, probation or all of the above.
A California man was arrested the other week on charges of buying and selling counterfeit or stolen Cisco equipment. Federal prosecutors claim that the San Jose man purchased the stolen equipment from Cisco employees and then resold them at his business Network Genesis. Prosecutors further claim that the man altered the serial numbers on the equipment before selling them in order to make it more difficult to track.
The federal criminal complaint alleges the suspect made approximately $37 million through the purchase and sale of the stolen Cisco merchandise. Before collecting payment, federal prosecutors claim the suspect had his customers send payment to co-conspirators who deposited the money in their own bank accounts before funneling it back. The man is currently charged with conspiracy, mail fraud and money laundering.
In general, there are several essential elements in fraud claims. First, there must be a material misrepresentation of fact made by a person who knows or believes the misrepresentation to be false. In addition, the misrepresentation must be made to a person who reasonably relies on the misrepresentation. Finally, the person's reliance on the misrepresentation must result in loss or injury. If a criminal defense attorney can disprove any of the elements, a defendant cannot be found guilty in a federal case for the crime of fraud.
Source: San Jose Mercury News, "CA man charged in $37M Cisco resale fraud scheme," July 25, 2013