Defending Against Financial Crime Charges

Committing financial crimes has serious consequences that do not just harm a person’s finances but also reputation.

According to the U.S. Sentencing Commission’s 2025 Annual Report, 6,389 people were sentenced for federal basic economic offenses in fiscal year 2025. About 76% of these cases involved fraud, theft, or embezzlement.

But there are ways to defend an individual’s rights involved in such cases. In New York, an NYC money laundering lawyer can help you prepare a better defense to improve your chances for a favorable outcome.

Let’s take a closer look at how defendants can approach a financial crime charge and the defense strategies that may apply.

State Charges or Federal Charges

Many of the financial crimes may find themselves in either state or federal court. State prosecutors bring actions for fraud, theft, and embezzlement. On the other hand, federal agencies are mostly concerned with crimes that affect more than one state, banking, or are related to federal programs.

That split means defense lawyers outside the big coastal cities see these cases too. P. Michael Davis, Attorney at Law, L.L.C., a Shreveport, Louisiana, practice at https://www.lawdavis.com/, lists federal crimes among the criminal matters it handles in courts across Caddo, Bossier, Webster, and DeSoto parishes. Regional practices like that one often meet a financial case at the same stage the big-city firms do, when the first subpoena shows up.

The place where a case is held affects almost everything else that will happen subsequently, including issues regarding sentencing and prosecution.

How These Cases Usually Begin

White-collar criminal investigations typically occur prior to prosecution charging a case. Investigators will retrieve bank records, telephone records, e-mails, and tax records, and federal prosecutors frequently use subpoenas for document retrieval.

The Department of Justice’s manual distinguishes two different types of individuals in the process. In accordance with the Justice Manual, a target of a federal investigation is an individual about whom there is substantial evidence of involvement in criminal activity, and the individual is the potential defendant. The subject is any individual whose activities fall within the scope of the investigation.

In some cases, it is recommended by the manual that prosecutors provide notice to the target so that the individual can be heard in testimony, although the exceptions to this rule include situations when the notice might result in the fleeing or destroying evidence.

The subpoena, the visit of agents, or the target letter signifies the end of the invisible investigation process.

Where the Defense Usually Focuses

Financial crime cases tend to turn on what a person knew and intended, not just on what the money did.

Transferring large sums of money, whether it be through cash transfers or forming a company, is not an illegal act in itself. There is one exception that needs to be considered. Cash splitting in order to bypass the reporting requirements of banks is a criminal act in itself regardless of how the cash is generated. It must be proven that the transactions involve criminal proceeds or deception, which takes up all the resources for the defense.

Documents work both ways. The same papers a prosecutor uses to create a chronology of events can also prove legal business motivations, accountants’ and lawyers’ recommendations, or that someone other than the defendant controls the accounts. Forensic accountants regularly recreate the chain of events from the defense’s standpoint.

Negotiation matters too. Many federal cases end in a plea agreement rather than a trial, and the terms of that deal, from the charges to the loss figure, can move a sentence by years.

Sentencing and Forfeiture

The loss amount is a major factor in the federal sentence imposed for such crimes. According to the Sentencing Commission, the median loss in money laundering cases in fiscal year 2025 is $446,049. In addition, 11% of such sentences involved a sophisticated laundering enhancement.

There is also forfeiture. The government could try to seize any property associated with the crime, which could include accounts, houses, cars, et cetera, and that process can go on after the criminal case is resolved.

Financial crime charges are accompanied by a great deal of paperwork, as well as a certain advantage for the government. What matters here is the record, intent, and whether the case falls under federal or state jurisdiction.

This post may contain affiliate links.

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Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.

Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.

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Feel free to send Kevin a message here.