Fraudulent Schemes

Fraudulent schemes are taken seriously by prosecutors throughout Arizona. This crime is charged when someone lies or makes false promises to someone else as part of a scheme to defraud in order to get a benefit. The scheme may be quite complex or very simple. For example, if you procure goods for your employer that have a certain value from a vendor, and you write a check from your employer's account to the vendor for more than what the goods are worth with the agreement that you will get half of the extra money back from the vendor, this is likely to be charged as a fraudulent scheme. Phoenix white collar crime lawyer James Novak provides knowledgeable legal representation to people charged with fraudulent schemes or related offenses.

Under A.R.S. 13-2310, you may be charged with a fraudulent scheme if you knowingly get any benefit by means of fraudulent or false pretenses, promises, representations, or material omissions under a scheme or artifice to defraud. Nobody needs to actually rely on what you said or promised in order for you to be convicted of this serious Class 2 felony charge.

Instead, the prosecution will need to establish three elements beyond a reasonable doubt: you received a benefit, the benefit was obtained through fraudulent or false representations, promises, pretenses, or material omissions, and these were part of a scheme or artifice to defraud.

Schemes and artifices to defraud include any kind of plan or pretense used to deprive someone of an intangible right of honest services. Suppose, for example, that a real estate broker is asked to act on behalf of an undercapitalized corporation by locating interesting properties for the corporation and drawing offers for those properties on which the corporation is listed as the buyer. The defendant then mails the offer, involving minimal earnest money and installment payments, to whoever represented the seller.

However, the offers provide that the deferred balance is to be secured by a "money assignment" that consists of an assignment by the buyer to the seller of an interest in unsecured and sham promissory notes. The buyer then closes escrow and gets title free of any lien to the seller, and the buyer borrows against the acquired property, for which the seller has failed to reserve a lien. These funds are used for corporate expenses. The seller only discovers the fraudulent scheme as defaults occur, and they realize that they have worthless assignments from which they can never recover. This is a fraudulent scheme.

If you are convicted of a fraudulent scheme that involves a benefit valued at $100,000 or more, you will not be eligible for a suspension of your sentence, probation, pardon, or release from confinement until your sentence is served, unless certain other narrow circumstances apply.

People charged with a fraudulent scheme should retain experienced counsel. In Arizona, the presumptive term for a class 2 felony is five years, but if there are aggravating factors, it may be increased to 12.5 years.

A skillful white collar crime attorney can examine the facts closely to determine a strategy. You may defend on the grounds that you never intended to defraud someone and did not have the requisite state of mind—a knowing state of mind—to do so. In that case, you will need to show that you did not create a scheme to get a benefit from someone else.

You may also be able to use the defense of consent. You may do this by proving that any benefit that you got was either through a mutual understanding or through the consent of the person whom the prosecution has deemed a victim.

You may be able to defend on the ground that you did not get a benefit. For example, if the person who has accused you is dishonest, you may call that person's credibility into question. This may be done directly or indirectly by bringing the witness onto the stand and impeaching them.

Other potential defenses are procedural. For example, if you were denied your right to counsel or not read your Miranda rights, you may be able to get that evidence suppressed. This may have a harmful or even fatal effect on the prosecution's case. Depending on the nature of the charges, there may also be forensic weaknesses.

Fraudulent schemes are serious charges to face in Arizona. In addition to a wide range of procedural defenses, there are often numerous substantive defenses that may be available, such as consent, mistake, or lack of a scheme. Our principal is a former prosecutor who can provide aggressive, knowledgeable representation in the area of white collar crime. Contact Phoenix attorney James Novak at (480) 413-1499 or via our online form for a free appointment. He also represents people who need a forgery attorney in Tempe, Mesa, Chandler, Gilbert, Scottsdale, and other cities in Maricopa County.