A New York City Investment Fraud Lawyer Explains Affinity Fraud
Affinity fraud is a type of investment fraud scam that is perpetrated against an identifiable group. Affinity fraud targets members of the particular group, which is often a religious organization. The individuals who are allegedly participating in or running the scam may become a part of the group in order to promote a questionable investment.
Because of group dynamics, affinity fraud is not always brought to the attention of authorities and often those who were allegedly conned as part of the fraud scheme are unwilling to come forward and provide testimony in criminal cases or regulatory actions. If you have been accused of affinity fraud, it is important to develop a strategic approach to responding to charges. This may include trying to settle the pending legal actions against you, or developing defenses and legal strategies to undermine the case being made to prove your guilt.
At Bukh Law Firm, PLLC, our New York City investment fraud lawyers provide legal representation in cases where affinity fraud has been alleged. We can help you to respond proactively and assertively to defend yourself from all state and federal legal proceedings against you.
What is Affinity Fraud?
Affinity fraud usually involves either a Ponzi Scheme or a Pyramid Scheme. Ponzi and Pyramid schemes are similar.
- A Ponzi scheme takes money from investors by promising high returns; old investors and money managers running the scheme are paid from funds provided by new investors.
- A Pyramid scheme usually involves convincing people to buy in to a multi-level marketing scam or similar scam in which individuals are told they will make money by signing people up to sell products. Money is not actually made from the sale of the product people claim to be selling, but instead comes from selling the registrations to market the product.
Ponzi and Pyramid schemes rely on finding new investors or new “sellers” to buy into the investment opportunity or the multi-level marketing program. Affinity fraud is the ideal solution to continue to get more investments.
Affinity fraud involves becoming part of a specific demographic group, like a particular religious organization. Once a part of the group, other group members are targeted as “marks” in the investment scam, with group members pushed to make the investment or join the MLM scam.
What are the Penalties for an Affinity Fraud Scheme?
Affinity fraud is simply a method of carrying out other types of investment fraud. As a result, an individual who has been accused of involvement in an affinity fraud scam can face criminal charges for state and federal offenses including:
- Mail fraud (18 U.S. Code Section 1341)
- Wire fraud (18 U.S. Code Section 1343)
- Securities and Commodities Fraud (18 U.S. Code Section 1348)
- Embezzlement and Larceny (NY Penal Code Article 155)
These are just a few of the potential criminal charges that could be brought depending upon the type of affinity fraud you are accused of being involved in. If you joined a group in order to convince group members to participate in fraudulent investment, you can be charged with all crimes committed by any co-conspirators involved in the scam.
This means even if you were just a front-man who talked to group members, you could be looking at a very lengthy prison sentence. Mail and wire fraud alone each carry a possible maximum penalty of 20 years imprisonment or 30 years if a financial institution was defrauded.
How an Affinity Fraud Lawyer Can Help
To be found guilty of a crime related to affinity fraud, your guilt would need to be proved beyond a reasonable doubt. At Bukh Law Firm, PLLC, we are dedicated to helping you introduce doubts about your guilt into a jury’s minds.
We can help with not just criminal actions but also SEC proceedings, civil lawsuits, and other legal actions taken against you based on alleged affinity fraud.
