When Does Commodities Trading Become Illegal?
Definition of Fraud
The Federal Bureau of Investigations defines commodities fraud to include “the sale or purported sale of a commodity through illegal means.” Commodities fraud is a serious white collar crime that can lead to decades in jail. Federal authorities may be prompted to investigate commodities fraud schemes and defendants can face multi-count indictments with each potential offense carrying a lengthy prison sentence.
Many commodity fraud scams are very complex and challenging for judges and juries without a financial background to understand. Prosecutors have the burden of proving criminal acts occurred, which is difficult when many financial transactions took place and when there is no clear way to prove a trader’s intent. The challenges prosecutors face provide opportunities for defendants accused of involvement in fraud
Accusations of commodities fraud can result not only in criminal charges but also in civil actions that could result in substantial monetary judgments. At Bukh Law Firm, PLLC, our attorneys are ready to represent you when you are facing a criminal or civil case that could affect your future.
We will work hard to defend you if you have been accused of commodities fraud and we will bring significant legal experience to the table to help you try to stay out of jail, keep your money, and avoid a conviction that could hurt your future business opportunities. Call today to learn more about how we can help if you have been accused of commodities fraud.
Types of Commodity Fraud
Commodities fraud schemes can take many different
While there are vast numbers of commodities sold on exchanges, the FBI indicates that the majority of commodity fraud cases
- The Forex market: Brokers may entice investors through false promises and high-pressure sales tactics, and will then “churn” the client’s money. Churning involves investments designed not to make money for the
to maximize commissions and provide financial benefits for the investor but and trading firm. Brokers can also divert money invested by clients for personal use, while creating false statements that reflect purported investments into the foreign currency market. broker
- The precious metals market: False promises may be made to entice investors to purchase gold, silver, and rare earth. Funds can be embezzled for personal use or investment records falsified so profits are taken by brokers and investors experience
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These are just two of many potential examples of securities fraud. Any time high-pressure sales tactics are used, false and misleading statements are made, funds are embezzled, or markets are manipulated, criminal charges and civil actions can result.
Penalties for Commodities Fraud
Penalties for commodities fraud can vary depending upon the specific nature of the charges.
Many defendants are charged under 18 U.S. Code Section 1348, which specifically addresses securities and commodities fraud. Penalties can include up to 25 years of imprisonment and a fine for violations of section 1348.
- Section 1348
(1) prohibits participation in a scheme or artifice to “defraud any person in connection with any commodity for future delivery, or any option on a commodity for future delivery.”
- Section 1348
(2) prohibits the use of false or fraudulent pretenses, false promises, or material misrepresentations to obtain any money or property “in connection with the purchase or sale of a commodity for future delivery, or any option on a commodity for future delivery.”
7 U.S. Code Section 13 also indicates that a defendant could face 10 years in prison and a fine up to $1 million for manipulating or attempting to manipulate the price of a commodity.
Getting Legal Help
When you face serious criminal and civil consequences, you need to have an attorney on your side and looking out for your interests. A NYC commodity fraud lawyer at Bukh Law Firm, PLLC can provide you with the legal representation that you need and deserve as you face your charges.
To learn more about your options for defending yourself, negotiating a plea deal, or otherwise working to resolve a criminal case against you, contact us today.