Posted On: April 27, 2009

More on Sentencing for Online Crimes From a Miami Cyber Crime Criminal Defense Lawyer

Last week, I mentioned a cyber crime proposal that was considered and (luckily) rejected by the U.S. Sentencing Commission. As you may recall, that proposal would have branded anyone who used a proxy server in an online crime as part of a “sophisticated” criminal enterprise. Because proxy servers are also in widespread use as security and “net nanny” applications, this caused an outcry that may ultimately have been responsible for the Commission’s decision to drop the proposal.

Those issues were on my mind when I read in the Washington Post that experts say organized crime is responsible for most computer security breaches. A lot of people have an image of hackers as loners who break into systems just to prove that they can, or for the fun of causing havoc. That may have been true ten years ago, but these days, cyber crime is a business. Often but not always based in Eastern Europe, these criminal cartels find security holes, then exploit them to steal financial information and identities. Once they have a credit or debit card number, they can buy things online or make false credit cards and use ATMs to extract large amounts of cash.

Of course, I support law enforcement efforts to track down online thieves and bring them to justice. But as a South Florida cyber crime criminal defense attorney, I can’t help wondering whether lawmakers might overreact to the fact that organized crime is now the leading source of hackers. As with the Sentencing Commission proposal, we may see more proposals to harshly punish cyber crime, piling on sentence enhancements extra penalties like asset forfeiture and asset freezes -- all predicated on the assumption that prosecutors are dealing with a sophisticated criminal enterprise. When the accused is a lone hacker or a teenager whose prank went wrong, those laws could be inappropriately harsh.

Unfortunately, this sort of unintended consequence is a common feature of laws on other hot-button issues, including drug crimes and child pornography charges. Improvements have been made in the last few decades, but drug laws in particular are notorious for being overly harsh on offenders whose only crime is simple possession. And as a Fort Lauderdale cyber crime criminal defense lawyer, I am well-versed in the overreaching and civil rights questions posed when child pornography laws are applied too broadly, as with teenagers accused of sexting.

Piling on harsh sentences and civil penalties may be appealing during an election, but even when the full cost -- in lives and money -- becomes obvious, it can be hard for politicians to back down on “tough on crime” positions. That’s why, as a Miami criminal defense attorney, I support careful consideration and flexibility in any change to sentencing guidelines, on the federal level or here in Florida.

Posted On: April 21, 2009

South Florida Cyber Crime Criminal Defense Attorney on the Importance of Understanding Technology in Cyber Crimes

The U.S. Sentencing Commission, a panel that sets sentences for federal crimes, avoided making a potentially serious mistake last week. The Associated Press reported April 15 that the panel has dropped a proposal to make the use of a proxy server a sentence enhancement for people who are convicted of cyber crimes. According to the piece, the change would have increased sentences by about 25% for people accused of using a proxy server to hide their identities online. Critics said the proposed language was too broad.

To understand why they think so, it might help to review what proxy servers are. Whenever you view a Web page like this one, your computer -- called the client in networking lingo -- is sending a request for information to the Web server that hosts the page. A proxy server is an optional go-between that would receive your request and relay it to the Web server, then send the page to your machine.

Law enforcement is interested in proxy servers because criminals use them to hide their internet provider (IP) addresses, so they can commit online crimes anonymously. However, proxy servers can also be used to avoid viruses, filter out inappropriate content and cache frequently visited pages for quick retrieval. That means proxy servers are very widespread -- and indeed, some people advocate them as an easy way to make your computer more secure. That’s why privacy advocates and internet security experts were upset at the Justice Department’s proposal to increase sentences for anyone convicted of using a proxy server to commit a crime. The Sentencing Commission rejected that proposal April 15.

As a cyber crime criminal defense lawyer in Miami, I applaud that move. This is a good example of how important it is for law enforcement and legislators to understand technology thoroughly before they make new laws. The Justice Department’s proposal was aimed at criminal organizations using sophisticated networks of proxy servers to cover their tracks -- but under the proposed language, it was just as likely to net someone who used a computer at a public library to commit a crime. That crime might be quite serious, but the use of proxy servers there would not only not be a sign of “sophistication,” but not even voluntary.

These sorts of technological details are often very important in my practice as a Fort Lauderdale cyber crime criminal defense attorney. Thanks to my experience in the Cyber Crimes unit of the Miami-Dade State’s Attorney’s office, I understand that things are not always exactly as they seem when it comes to computers. Very small details can hold the key to an Internet crime case. Just as importantly to my South Florida cyber crime criminal defense clients, I understand how law enforcement investigates cyber crimes -- and can use that knowledge to mount them the best possible defense.

Posted On: April 15, 2009

South Florida Cyber Crime Criminal Defense Attorney on Montel Across America!

This morning, I had the honor of appearing on the Air America radio show Montel Across America to talk a little about "sexting." This practice (teens sending each other explicit photos via email or text message) has gotten multiple teenagers charged with sex crimes. In response, the Vermont legislature is considering legislation that would lift criminal penalties for kids ages 13-18 caught sending or receiving the pictures, as long as the sender voluntarily sent a picture of him- or herself. The Associated Press reports that experts believe that kids could still be prosecuted for lewd and lascivious conduct, or disseminating indecent materials to a minor, but the law would end the possibility of sending them to adult prisons and requiring them to register as sex offenders for the rest of their lives. As a Miami cyber crime criminal defense lawyer, I strongly support this effort and others like it -- to make the penalties for sexting better fit the crime.

I joined other legal, policy and medical experts to talk about the legal implications of the practice and the proposed Vermont legislation. You can listen to the audio on Air America's Web site.

Posted On: April 13, 2009

More on Mortgage Fraud from a South Florida Mortgage Fraud Criminal Defense Lawyer

In the past weeks, I’ve launched a series of posts about mortgage fraud, a crime that is generating substantial media attention and law enforcement action right now. As a Miami mortgage fraud criminal defense attorney, I feel that this is especially important here in Florida, where we have some of the highest rates of foreclosure and mortgage fraud in the nation. So far, I have talked about two current major categories of mortgage fraud: “foreclosure rescue” or “foreclosure prevention” scams against homeowners, and a complicated straw buyer scheme in which several people along the mortgage lending chain conspired to defraud a lender. Today, I’d like to continue discussing mortgage fraud by focusing on other mortgage fraud schemes uncovered around the United States.

Maybe most interestingly, a street gang is believed to be partly behind a large-scale mortgage fraud ring in San Diego. According to Reuters and the San Diego Union-Tribune, two dozen people were indicted for the scheme, which used inflated appraisals and straw buyers to buy 220 distressed homes for more than their asking prices, then pocketed the extra money. The lead defendants are Darnell Bell, a documented member of the Lincoln Park gang who used his gang experience to recruit and control the players, and business partner Michael Ivy, who negotiated the purchase deals. Other participants include a series of crooked real estate agents, escrow agents, appraisers, brokers and investors. The Union-Tribune said prosecutors are seeking the return of at least $11 million in the ring’s profits.

Meanwhile, in Kansas City, authorities are prosecuting a home builder and a real estate agent for their roles in a $12.6 million mortgage fraud scheme. Builder Jerry Emerick pleaded guilty to conspiring with a real estate agent to sell 25 upscale homes at inflated prices. The buyers involved received kickbacks totaling $2.3 million. Emerick admitted to submitting false documents and lying to title companies to further the scheme. It’s unclear whether the homeowners themselves lied to the lenders, but as a Fort Lauderdale mortgage fraud criminal defense lawyer, my guess is that the kickbacks mean they weren’t completely honest.

Finally, another article out of San Diego looks at an unintended consequence of the real estate bust: Homeowners lying about being laid off to get their mortgage loans modified. Because it’s difficult to get a lender to agree to a loan modification, some homeowners are falsifying documents or having colleagues lie to the lender to get a modification, short sale or deed in lieu of foreclosure approved. Others are working under the direction of crooked “foreclosure consultants” who assure them that fudging their incomes is okay. In either case, lying to a lender is still mortgage fraud, whether they’re overstating or understating their income. Even if the homeowners didn’t realize they were doing anything wrong, they could still suffer serious legal penalties.

I’m interested in these cases because they highlight the diversity of people who commit mortgage fraud -- people from desperate homeowners to suburban home builders to urban gangsters. As a South Florida mortgage fraud criminal defense attorney, I have seen all kinds of people involved in mortgage fraud scams in our state as well. But regardless of background and prior convictions, people accused of mortgage fraud need good legal help, preferably as soon as possible. With federal and state law enforcement pursuing cases of mortgage fraud more aggressively than ever, authorities could be all too happy to find a scapegoat. As a mortgage fraud criminal defense lawyer in Miami, I will work hard to ensure that none of my clients ends up in that role.

Posted On: April 6, 2009

Fort Lauderdale Mortgage Fraud Criminal Defense Attorney on ‘Mortgage Rescue’ Scams

As I mentioned last week, I am writing a series of posts on mortgage fraud -- an important topic in Florida right now. In 2008, Florida was second in the nation (behind Rhode Island) in mortgage fraud, and many of our cities are experiencing very high rates of default and foreclosure. In response, organizations specializing in stopping foreclosures or modifying home loans have sprung up throughout Florida. Some of these may be legitimate -- but as the Obama Administration warned today, others are just fronts for a type of mortgage fraud perpetrated against homeowners.

Thanks to the 2008 Foreclosure Rescue Fraud Prevention Act, it’s illegal in Florida for a foreclosure consultant to demand up-front payment. But some of them do it anyway, then simply fail to help -- and that’s not the only scam. Other common schemes include persuading the homeowner to sign away ownership of the home; selling insurance for foreclosure and relocation; setting up a “refinance” deal that really transfers ownership; and signing the distressed homeowner up for unnecessary, expensive services or loans. At best, these schemes take homeowners’ money and hope without giving them anything in return. At worst, they actually steal the home and leave the victim deeper in debt than ever.

The Florida Department of Justice has promised to crack down on mortgage fraud, and as a Miami mortgage fraud criminal defense lawyer, I have been watching the news -- and I’ve already seen the results. On April 3, Jacksonville’s News 4 reported that the state sued a company called National Foreclosure Counseling Services for false advertising, charging up-front fees and then failing to perform any services. On the same day, the Orlando Business Journal said another company, Homestead Protection Services, had agreed to voluntarily dissolve and pay restitution to its customers for multiple violations of the Foreclosure Rescue Fraud Prevention Act.

These schemes are mortgage fraud, just as lying to a bank in a loan application is mortgage fraud. In fact, some of them involve lying to banks, as well as homeowners, about issues like the homeowners’ consent or knowledge, or the value of the home. As a South Florida mortgage fraud criminal defense attorney, I only expect to see more news reports like these in the next few months. If the amount of political and media attention paid to this issue is any indication, law enforcement is going after mortgage fraud in a big, big way. That means lots of headlines and big, splashy news conferences.

Most of the people charged will probably be guilty -- but I’ve been a Miami mortgage fraud criminal defense lawyer too long to think prosecutors and police never make mistakes. I hope that legitimate companies doing their best to help distressed homeowners aren’t caught up by law enforcement’s enthusiasm for punishing con artists.

Posted On: April 2, 2009

Miami Criminal Lawyer on Tax Evasion (UBS)

Well as we all knew this was inevitable. The US government today made their first big arrest in prosecuting those involved in hiding money from Uncle Sam. Boca Raton accountant was arrested for allegedly hiding millions in tax dollars. As a Miami Criminal Lawyer who practices Tax Evasion, this is just the beginning. After speaking with various colleagues, both attorneys and forensic accountants alike, the United States government is going to look for its money.

The question is, is it worth it to the US government and taxpayers? Will the cost of prosecution be reflective of what they will recover? I submit to you the answer has to be NO. Generally tax issues settle for pennies on the dollar, so why will these instances be any different? With the economy heading the way it is, is this the best use of our government resources? I believe they should attempt to negotiate and resolve these matters outside court once the individuals are identified. If no resolution can be reached, then let the Courts get involved. But I do not believe that on a cost basis recovery analysis this venture will prove fruitful to Uncle Sam. Stay tuned, more to follow I grantee it...the government never goes away quietly...