Ponzi Schemes Criminal Defense Attorney

Facing criminal charges in a Ponzi scheme case can be an unsettling experience. The complexities of navigating federal court and the anxiety over potential penalties add to the stress. However, this complex journey can become manageable with the right legal representation.

The offices of Mehdi Essmidi P.L.L.C. are familiar with the intricacies of these cases and know how to navigate them. Our lead attorney, Mehdi Essmidi, is a former New York City prosecutor with extensive experience defending clients against charges related to Ponzi schemes. He knows prosecutors’ tactics and how to counter them strategically. Contact us today for a free consultation.

Understanding Pyramid and Ponzi Scheme Charges

A Ponzi scheme is a false investment scheme where returns are paid to earlier investors using capital contributed by newer investors instead of disbursement of profits earned by the underlying enterprise.  

In contrast, a pyramid scheme recruits members with a promise of revenue for enrolling others in the scheme rather than supplying investments or selling products. As recruiting multiplies, it becomes impossible to sustain, and most members see little to no profit. 

Both Ponzi and pyramid schemes are considered white-collar crimes involving deception and can lead to financial loss for many people. Ponzi schemes fall under financial fraud and can be prosecuted under state and federal laws. 

The legal consequences of orchestrating a Ponzi or pyramid scheme can include charges of fraud, securities violations, and theft. Federal agencies such as the Securities and Exchange Commission (SEC) and the FBI often investigate these schemes.  

Smart Ponzi 

Smart Ponzi schemes are a new type of investment fraud that recruits investors using digital platforms and cryptocurrency. These schemes often promise high returns and use complex algorithms or “smart contracts” to give the illusion of legitimacy. However, they rely on funds from new investors to pay existing investors, leading to their eventual collapse.

If you’re facing charges related to Ponzi scheme fraud, you need a lawyer who understands the legal implications of investment schemes. 

Ponzi Scheme Convictions

Several federal and state charges can be applied to prosecute Ponzi schemes. At the federal level, the most commonly used statutes include:

Securities Fraud (18 USC § 1348)

This law targets fraud related to securities, including stocks, bonds, and other investment instruments. Ponzi schemes often involve the sale of securities under false pretenses, making this statute directly applicable.

Mail and Wire Fraud  (18 USC §§ 1341 and 1343)

These laws are used to prosecute schemes involving mail or electronic communications to defraud others. Since Ponzi schemes typically involve communicating with investors to solicit funds or provide false statements, mail and wire fraud laws frequently apply.

Money Laundering  (18 U.S.C. §§ 1956 and 1957)

Ponzi schemes sometimes involve transferring funds from illegal activities, which can be prosecuted under money laundering statutes.

New York Ponzi Scheme Laws

In New York State, similar crimes can be prosecuted under specific state laws, such as:

The Martin Act (NYC Article 23-A, § 352–353​)

This act grants the attorney general powers to investigate securities fraud in New York. While it does not explicitly mention Ponzi schemes, the act can be applied to investment fraud.

Scheme to Defraud (New York Penal Law § 190.65):

This law targets schemes to defraud ten or more persons or obtain property by false or fraudulent pretenses, representations, or promises.

Prosecution under these laws requires demonstrating elements such as intent to defraud, the deceitful nature of the Ponzi scheme fraud, and the harm or potential harm to others. The charges and the penalties can vary based on the size of the scheme, the victims, and the specific actions taken by the defendant.

Common Ponzi Schemes Defenses 

Defending against charges related to Ponzi schemes requires a deep understanding of the law and a strategic approach. The right defense strategy can make a significant difference in the outcome of your case. Here are some common defenses that may be applied in your case:

Lack of Knowledge or Intent: One of the critical elements prosecutors must prove in a Ponzi scheme case is that the defendant intentionally defrauded investors. Proving you were unaware of the fraudulent nature of the scheme or did not intend to defraud anyone could be a strong defense.

Insufficient Evidence: If prosecutors cannot prove that you committed the crime or provide insufficient evidence, the charges against you may be dismissed.

Statute of Limitations: There are time limits for when different types of charges can be brought. If these limits have passed, the charges against you may be dismissed.

Hire a Defense Attorney Against Ponzi Scheme Accusations

Facing charges related to a Ponzi scheme can be overwhelming. The legal process is complex, the potential penalties are severe, and the stakes are high. Here’s why hiring a skilled defense attorney is essential: 

Experience in Financial Laws and Regulations: Ponzi schemes involve intricate financial transactions and a sophisticated understanding of securities law. A defense attorney can navigate these complexities, ensuring that your defense is as strong as possible.

Representation in Court: An experienced attorney can represent you effectively in court, making compelling arguments on your behalf and challenging the prosecution’s evidence. They know the legal system’s ins and outs, including procedural rules, which can significantly influence the outcome.

Protecting Your Rights: Your attorney ensures your rights are protected throughout the legal process. This includes protecting you from self-incrimination, ensuring lawful evidence collection and handling, and advocating for your right to a fair trial.

Other White-Collar Crimes We Have Experience With

Besides Ponzi schemes, our attorneys have years of experience working on similar while-collar cases such as embezzlement, money laundering, and forgery. We’re one phone call away. Get in touch.

Contact Us for a Free Consultation

Don’t wait to seek legal representation if facing charges related to a pyramid or Ponzi scheme. The sooner you have an experienced attorney on your side, the better your chances of achieving a positive outcome against federal law enforcement agencies.

Our law firm has a successful track record of defending New Yorkers against criminal charges. Whether you were involved in multi-level marketing or charged with a federal government investigation, our Ponzi scheme fraud lawyer, Mehdi Essmidi, builds aggressive defenses. Contact us today to schedule your free consultation.