Aiding and Abetting Fraud

The most critical element of the defense is the requirement of specific intent. The Supreme Court has ruled that the aider and abettor must share the criminal intent of the principal.

We argue that our client lacked this specific intent. In a bank fraud case, for example, the government must prove that the teller knew the loan application was false and processed it with the specific purpose of helping the borrower steal from the bank. If the teller was simply lazy or incompetent that is not aiding and abetting fraud. We present evidence of the lack of motive. If the client received no kickback or financial bonus for their participation it supports the argument that they had no intent to commit fraud.

Federal jury instructions explicitly state that mere presence at the scene of a crime is not sufficient to convict. This is a powerful shield for defendants who were in the room where it happened but did not participate.

We use this doctrine to defend spouses and business partners. If a wife signs a tax return prepared by her husband that turns out to be fraudulent the government often charges her with aiding and abetting tax fraud. We argue that her signature was a formality and that she was merely present in the financial life of the couple without being an active participant in the deception. We highlight the passivity of the client. By contrasting the aggressive actions of the mastermind with the passive role of our client, we reinforce the mere presence defense.

Lawyers are often charged with aiding and abetting fraud for writing opinion letters that validate a fraudulent investment. We defend the legal work of the attorney.

We argue that the lawyer relied on facts provided by the client. An attorney has a duty to advocate for their client not to investigate them. We produce the engagement letters and the disclaimers included in the opinion. We show that the advice was legally sound based on the information available at the time. We argue that if the client lied to the lawyer to get the opinion the lawyer is a victim of the fraud not an accomplice. We vigorously protect the attorney-client privilege while defending the professional reputation of the lawyer.

Auditors are charged when they sign off on financial statements that hide losses or inflate assets. The government alleges that the auditor must have known about the fraud because it was so massive.

We employ forensic accounting experts to counter this hindsight bias. We show that the fraud was concealed through sophisticated means that a standard audit would not detect. We argue that a failure to follow Generally Accepted Accounting Principles or GAAP is professional malpractice but it is not a federal crime. We distinguish between a negligent audit and a fraudulent one. We demonstrate that the auditor was deceived by the same fabricated documents that fooled the investors.

The government will present a list of red flags that the defendant allegedly ignored. These might include suspicious wire transfers or implausibly high returns on an investment.

We contextulize these red flags. We show that what looks suspicious now looked normal in the heat of business. We present evidence of the chaotic work environment or the trust the client placed in their superiors. We argue that the client was overwhelmed or inexperienced rather than willfully blind. We urge the jury to view the evidence through the eyes of the defendant at the time not through the lens of the prosecutor after the collapse.

When the judge gives an ostrich instruction telling the jury they can infer knowledge it lowers the burden of proof for the government. We file motions In limine to prevent this instruction.

We argue that the government has not presented the factual predicate required for the instruction. The government must show that the defendant took affirmative steps to avoid learning the truth. Simply failing to ask questions is not enough. We argue that if the client did not investigate it was because they trusted their partner not because they were trying to manufacture a defense to aiding and abetting fraud. We fight to keep the burden of proof squarely on actual knowledge.

To prove conspiracy the government must prove a meeting of the minds. We attack the existence of the agreement.

We argue that our client was an independent contractor or a service provider who had a transactional relationship with the fraudster but no shared goal. A printer who prints fake lottery tickets for a scammer aids the fraud but if they simply charged their standard rate and did not share in the profits they are not a co-conspirator. We differentiate between a business transaction and a criminal partnership. We aim to secure an acquittal on the conspiracy count which often carries the heaviest sentencing weight due to the volume of the fraud attributed to the group.

Under the Pinkerton doctrine a co-conspirator is liable for all substantive crimes committed by their co-conspirators in furtherance of the conspiracy. This is how a low-level mule gets charged with millions in wire fraud.

We fight to sever the client from the conspiracy to avoid Pinkerton liability. If we cannot defeat the conspiracy charge we argue that the substantive acts of fraud were not foreseeable to our client. We argue that the mastermind went rogue and committed crimes that were outside the scope of the original agreement. We limit the financial and custodial exposure of the client by narrowing the scope of the conspiracy they supposedly joined.

Good faith is an absolute defense to fraud. If the defendant honestly believed that the representations were true or that the business was legitimate they cannot be convicted.

We build the good faith defense by showing the deception practiced on the client. We show that the mastermind lied to our client just as they lied to the victims. We present evidence that the client invested their own money or recruited their own family members into the scheme. A person who defrauds their own mother is a sociopath but a person who brings their mother into a deal they believe in is innocent. We use this powerful fact to prove good faith.

Even if a client initially aided the scheme they can avoid liability if they withdrew from the crime before it was completed. This requires more than just quitting. It requires an affirmative act to defeat the crime.

We investigate the end of the employment or relationship. If the client resigned and reported the fraud to compliance or tried to stop a transfer we argue renunciation. We use the resignation letter or the internal memo as proof. We argue that the client should be rewarded for stopping their participation rather than punished for their initial involvement. This defense is particularly effective in limiting the loss amount attributed to the client at sentencing.