Louisiana residents might find themselves facing federal fraud charges if their business solicits investors and then applies the funds to a purpose other than initially detailed. Each separate misallocation of funds may require a sound legal defense to help avoid a felony conviction.
Under certain circumstances, an individual who enters into a plea bargain may reduce the severity of a punishment. Negotiating with a prosecutor alone, however, may not provide a defendant with ideal results.
A fraud indictment requires a strong defensive action
A 39-year-old Louisiana man found himself indicted on nine separate counts of felony wire fraud. According to the U.S. Attorney’s Office, the defendant and his associate promised several investors they would receive an attractive return on the funds they invested into his energy company.
Instead of using his investors’ money to purchase equipment for the oil and gas exploration he described, the defendant allegedly spent the money on personal expenses, as reported by the Lafayette Daily Advertiser. Investors purportedly trusted him with more than $1M to grow and develop his energy company. His allegedly fraudulent actions occurred between a period of about six months and affected numerous investors throughout Northeast Louisiana.
Allegations of a Ponzi scheme
According to the indictment, the defendant purportedly created false contracts and proposals intended to convince investors to fund his business. When new investors provided him with further business capital, he allegedly used the newly acquired funds to make payments to his previous investors.
The defendant purportedly convinced his prior investors that the money they received represented returns on their investments into his company’s activities. His previous investors then provided him with more funding in hopes of receiving another high rate of return from their new investments.
Charges may not always result in convictions
To obtain a conviction, a prosecutor must prove to a jury that a defendant knowingly or willingly defrauded investors. With a strong defense strategy, however, an individual might avoid a conviction, face reduced charges, or he or she may receive a less severe punishment. In the case of felony fraud charges, punishment may include up to 20 years imprisonment for each count.