Shemaria Law Offices

Beverly Hills Federal Criminal Defense Law Blog

High-profile figures build their defense in Theranos case

The upcoming trial of Elizabeth Holmes on fraud charges has turned into one of the most closely watched and hotly anticipated white collar crime cases of our time, a year before arguments are set to begin. The founder of science startup Theranos Inc., Holmes and former Theranos president Ramesh Balwani are accused of defrauding investors, falsifying test results and more.

Not long ago, Holmes was widely celebrated as a visionary young entrepreneur whose new blood-testing equipment was set to revolutionize medical technology. Investors flocked to her company, and in summer 2015, Theranos was valued at $10 billion. That all came crashing down after investigative journalists found former employees who said the company's much celebrated new technology didn't work, and that Holmes and Balwani lied to investors about it.

We can't always believe our lyin' eyes

"Yes, I will never forget his face," the eyewitness identifies the assailant who pulled the trigger, ending the victim's life. This is a scene out of by Jed S. Rakoff entitled "Our Lying Eyes." It is scenes like this shown in novels, movies, and televisions programs, in those pivotal courtroom scenes where the entire case comes to light and the guilty party is brought to justice. In these programs, it makes it seem like justice is so simple and black and white. When it comes to eyewitness accounts, though, it isn't.  

What is securities fraud?

Fraud is a crime in which one person knowingly makes a false statement in order to gain something of value, and another person acts in reliance on that bad information. The harm lies in the reliance. If someone makes a false statement but no one acts on it, there's no crime to prosecute.

Securities fraud deals specifically with business, especially shares of a company. For instance, if the director of a company falsifies financial information in order to boost the company's stock price, and investors spend money based on that falsified information, prosecutors will argue that the director committed securities fraud.

College admissions scandal a case study in criminal defense

Since celebrity scandals are a huge driver of traffic on the internet, it should surprise no one that we've all seen piece after piece about the college admissions scandal that focus on the celebrity parents' alleged attempts to cheat the system. We've seen much less focus on the underlying legal issues-even though these could ultimately prove more interesting.

One exception was a March article in the Los Angeles Times that offered a take on the legal issues presented at the time. It reminded readers that legal cases aren't about public opinion, but about building legal arguments.

Man convicted on drug conspiracy charges

Criminal conspiracy charges are widely misunderstood. In federal court, they frequently appear alongside other charges in indictments involving alleged drug trafficking networks.

Recently, a Southern California man was convicted of conspiracy to possess with intent to distribute five kilograms or more of cocaine. These charges carry a mandatory minimum of 10 years in prison, and could carry as much as life in prison and a $10 million fine. Sentencing is scheduled for October.

Money laundering in real estate

Money laundering is a crime in which a party that has made a lot of money through illegal means seeks to conceal the nature and source of the funds by using them in another transaction that, at first glance, appears to be legitimate. Government agencies and professional groups say that people often try to conceal ill-gotten money through the real estate industry.

The National Association of Realtors identifies three stages of money laundering in real estate. The first is called placement: The party introduces illegally acquired money into the financial system through small deposits or purchases of money orders or other financial instruments. Next is layering, in which the party disguises the origin of the money through other transactions. Finally, the integration stage returns the money to the original party's control.

Shrewd or fraudulent? The line between tax avoidance and evasion

It is natural to try to minimize your tax liability. Structuring your finances to reduce your taxes is a perfectly legitimate way to manage your affairs. However, there are limits to how you can go about decreasing your taxes. Though tax avoidance and evasion sound similar, they are two terms that are viewed entirely differently by the IRS.

SEC claims two cryptocurrency companies were a pyramid scheme

People accused of a federal crime have the right to a jury trial, so that they can defend themselves and argue against the prosecution's presentation of the evidence. But in many financial crime cases, this evidence can be difficult for the average federal judge to understand, to say nothing of the average juror.

Recently, the U.S. Securities and Exchange Commission announced it was seeking charges against a California man who ran a multimillion-dollar cryptocurrency business. The SEC claims the man's two companies were nothing more than a pyramid scheme.

What is the legal meaning of a conspiracy?

With all of the talk about conspiracy and collusion in the news recently, now is a good time to review the legal meaning of conspiracy. This is a term that can come up in a lot of federal prosecutions involving white-collar crime, drug trafficking or any other alleged criminal enterprise that involves two or more defendants.

Lawyers often talk about criminal charges in terms of elements. To sustain a certain charge, the prosecutors need to show that all the elements of that charge are satisfied.

DOJ data: White collar prosecutions recently reached all-time low

According to data obtained from the U.S. Department of Justice, federal prosecutors may be spending less time on white collar offenses. The information was obtained through the Freedom of Information Act by Syracuse University’s Transactional Records Access Clearinghouse.

“White-collar prosecutions since President Trump assumed office generally have been lower than in previous administrations,” said the researchers.

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