Los Angeles Accounting Fraud Defense Lawyers

Accounting Fraud Defense Attorneys Counter Los Angeles Federal Prosecutors

Honest accounting is essential for maintaining trust in our financial institutions. That’s why certified public accountants (CPAs) are legally required to uphold high standards of professional integrity.

People may like to joke about “creative accounting” practices, but state and federal prosecutors take accounting fraud seriously. And huge companies like Enron, Bear Stearns, Washington Mutual, and Anderson Accounting have been brought to ruin by improper accounting practices. The result of accounting fraud is often hefty fines and lengthy prison sentences.

If you’ve been charged with accounting fraud, the entire weight of the federal government could come crashing down on you all at once. Our nationally recognized criminal defense lawyers at Werksman Jackson & Quinn LLP won’t back down from anybody, including federal prosecutors. We’ll explore every avenue of defense and take advantage of nuances of the law to protect your freedom.

Call (213) 688-0460 to schedule your case evaluation with a Los Angeles accounting fraud defense lawyer today.

What Is Accounting Fraud?

Fraud involves unethical practices designed to gain an unfair or undeserved benefit or to cause harm or loss to others. Accounting fraud is the deliberate manipulation of financial data in a way that purposely misleads investors, potential investors, tax collectors, or regulating agencies.

Examples of accounting fraud may include:

• Payroll fraud
• Money laundering
• Insider trading
• Embezzlement
• Falsifying sales reports
• Falsifying bank entries
• Falsifying quarterly reports
• Overstating revenue or assets
• Misreporting income or losses
• Understating expenses or liabilities
• Purchasing or selling unregistered securities
• Falsifying SEC statements or leaving out pertinent facts
• Failing to report gifts, bonuses, or any type of benefit

Who in Los Angeles Investigates Accounting Fraud?

Accounting fraud is investigated by state and federal agencies. The California State Attorney General’s Corporate Fraud Section investigates financial wrongdoing in coordination with other sections, including those responsible for Consumer Protection, Antitrust & Business Competition, and Medi-Cal Fraud. State prosecution often involves embezzlement, theft, or misrepresentation prosecuted under the Corporations Code and other statutes.

The US Department of Justice takes an active role in prosecuting accounting fraud. Several government agencies, including the IRS, SEC, FBI, ATF, Secret Service, and DEA, investigate financial crimes.

Penalties for Accounting Fraud in Los Angeles

In California, many types of financial fraud are wobblers, which means they may be prosecuted as a misdemeanor or a felony, depending on the amount of money involved and other factors. District attorneys exercise a lot of discretion in these cases, and having the right Los Angeles white-collar crime defense lawyer can make a big difference in the type of sentence you receive.

In federal cases, the penalties for fraud may be extremely harsh. For example, bank fraud carries a maximum federal prison sentence of up to 30 years, and you could also be forced to pay several million dollars in fines and restitution.

Signs of Accounting Fraud in Los Angeles

There are certain types of accounting practices that prosecutors may scrutinize. For example, discrepancies in financial records, such as unexplained adjustments or missing documentation, are often seen as red flags. Sudden changes in financial performance, especially when unsupported by market conditions, may indicate manipulation. Unusually complex transactions or those that lack transparency could also attract attention from regulators and law enforcement agencies.

One major indicator of accounting fraud is the presence of unusual financial relationships that do not align with standard business practices. Transactions involving related parties that lack clear business rationale can attract suspicion. Another possible indicator of accounting fraud is the apparent manipulation of financial statements to meet company goals or expectations. Unexplained variances between budgeted and actual figures, especially if recurrent, can also attract the attention of investigators.

Lifestyle changes of employees that are inconsistent with their known income levels may hint at the misappropriation of assets. High employee turnover, particularly in the finance department, can also signal underlying issues.

Legal Defenses for People Charged with Accounting Fraud in Los Angeles

Corporate fraud prosecutions can be extremely complex. They’re often the result of lengthy government investigations involving mountains of documents and countless witness statements. In many cases, the witnesses who implicate others have already cut a deal with prosecutors, rendering their testimony suspect at best.

An experienced Los Angeles criminal defense lawyer knows how to exploit weaknesses and inconsistencies in the government’s case. Effective defenses against accounting fraud include:

• There was no intent to defraud
• Insufficient evidence that a crime has occurred
• Untrustworthy government witnesses
• Illegal government searches
• Failure to inform the suspect of their rights
• Demonstrating holes in the prosecution’s case

Role of Forensic Accountants in an Accounting Fraud Investigation

Forensic accountants bring specialized knowledge in analyzing financial data and identifying discrepancies that may indicate fraudulent activities. When they are working for the prosecution, forensic accountants follow a structured approach to uncover accounting fraud. They start by determining the objectives of the investigation and the specific areas to be examined. Then, the forensic accountant will gather and preserve evidence. This involves collecting financial documents, electronic records, and any other relevant information.

Detailed analysis follows, where forensic accountants scrutinize the data for discrepancies, unusual transactions, and patterns indicative of fraud. This often includes comparing financial records against external sources such as bank statements and third-party confirmations. Forensic accountants will frequently conduct interviews with key personnel to gain insights and corroborate evidence. Once the analysis is complete, forensic accountants compile their findings into a comprehensive report.

Criminal defense attorneys like Werksman Jackson & Quinn LLP rely on the expertise of forensic accountants to protect our clients. By meticulously reviewing financial statements, transaction records, and other relevant documents, forensic accountants can uncover evidence that supports the defendant’s case. Forensic accountants can also help interpret complex financial information, making it easier for defense lawyers to present it to the court.

Forensic accountants can provide essential testimony at trial, explaining financial nuances to judges and juries clearly and concisely. Their knowledge can be invaluable in challenging the prosecution’s evidence, identifying weaknesses, and presenting alternative explanations for financial inconsistencies. This collaboration ensures the defense is well-prepared to counter allegations against their client and build a robust legal strategy.

The Legal Process in an Accounting Fraud Trial

The legal process usually begins with an investigation, where authorities gather evidence to establish the existence of fraud. This stage can take months, depending on the complexity of the case and the volume of financial records to be examined. When they think they have a strong enough case, prosecutors will formally accuse the individuals or entities involved.

Pre-trial proceedings typically include arraignments, plea negotiations, and pre-trial motions. If the prosecution’s case contains errors, omissions, or insufficient evidence, a defense attorney may file a motion to dismiss the case. If the motion is granted by the judge, then the case will end right there.

Trials can last from a few weeks to years based on several factors, such as the venue, the number of motions filed, and the overall complexity of the case. During the trial, the prosecution presents its case, and then they are followed by the defense. Each side will call witnesses and experts, such as forensic accountants, to testify.

After hearing all evidence and arguments, the judge or jury deliberates and reaches a verdict. If the defendant is found guilty, the court proceeds to sentencing. If they are found not guilty, the process ends right there. If the jury is unable to reach a verdict, then a mistrial will be declared, and the prosecution will have to decide if they wish to retry the case.

Our Los Angeles Lawyers Can Help With Your Accounting Fraud Charges

Federal prosecutors get promoted by putting people in jail; they’re used to just rolling over the other side. But our defense attorneys at Werksman Jackson & Quinn LLP have experience—we’ve won several high-profile cases against the toughest prosecutors in the nation. Our firm’s success has been documented by major news sources such as the Los Angeles Times, Fox News, CNN, Esquire, and the BBC.

Our lawyers will do everything we can to protect your freedom. Call our Los Angeles accounting fraud defense attorneys at (213) 688-0460 to learn more today.

Additional Information

• What Are “Cooked Books”? What Charges Could It Lead to?