New York City Criminal Lawyer Explains Boiler Room Scams
When aggressive sales tactics are used to convince potential buyers to purchase a stock, the behavior of those making the calls is often perfectly legal. The use of high pressure tactics, however, attracts negative attention and the term boiler room has come to be used for operations in which sellers use cold-calling and aggressive sales tactics on potential investors. In some cases, federal and state authorities may accuse individuals who are working in or running these operations of investment fraud crimes or of boiler room fraud. These accusations can lead to very serious criminal penalties.
A defendant who has been accused of participation in boiler room scams may be able to avoid conviction through undermining evidence, or through raising counterarguments and defenses. In some cases, a good attorney can help to get charges dropped or can provide assistance negotiating an immunity deal or a plea agreement.
Bukh Law Firms, PLLC has a long history of helping defendants accused of investment fraud crimes and our legal team excels in providing knowledgeable and aggressive legal representation in these complex cases. Give us a call as soon as possible when accused of involvement in boiler room fraud so we can help with your case.
What is Boiler Room Fraud?
Boiler room fraud occurs when consumers are intentionally misled into buying into a scam investment opportunity. Merely giving bad investment advice is NOT boiler room fraud, even if investors suffer losses. There must have been some intent to defraud and/or reckless disregard for the truth of statements made to try to entice investors to buy. Examples of boiler room fraud may include:
- Ponzi Schemes: Investors are encouraged to buy into investments where the only profit is generated from bringing in new business. Older investors are paid with money from new investors.
- Microcap Fraud: A penny stock is chosen and its value artificially inflated through aggressive sales tactics. After the stock is sold at a profit by individuals involved in the scam, the push to sell the stock ends and the price collapses.
- Pre-IPO Scams: Buyers are told they can buy into an exciting IPO, but are sold shares in a company that does not exist, are sold unregistered securities, or are sold shares of an existing company without actual authorization.
These are just a few of many types of investment fraud scams which may be perpetrated as part of a boiler room operation.
Penalties for Boiler Room Scams
Penalties for boiler room scams can vary depending upon how the operation was structured, the defendant’s level of involvement in the scam, the amount of money stolen, and a variety of other factors.
Defendants can be charged not only with crimes specific to investment fraud, but also with other offenses including wire fraud and mail fraud– each of which can carry 20 year maximum sentences or 30 year maximum periods of imprisonment when a financial institution was defrauded.
Defendants do not get control over whether they face state or federal charges. They may also find their accounts are frozen, their assets are subject to civil or criminal forfeiture, or they face civil lawsuits or a requirement to pay restitution as part of a criminal sentence.
How a New York City Criminal Lawyer Helps Defendants in Investment Fraud Cases
Bukh Law Firms, PLLC understands that many defendants are frightened to find themselves facing charges for participation in boiler room scams, especially if they were unaware the products they were selling were not legitimate investment products.
We fight aggressively to protect the rights of all our clients who are accused of involvement in boiler room fraud, regardless of what your alleged role was in the conspiracy. We can help you to undermine a prosecutor’s case, raise defenses, or negotiate an immunity agreement or a plea deal to reduce or avoid consequences of criminal actions. Give us a call to schedule a consultation to learn more about the ways in which our New York City criminal defense firm can provide assistance.