Many criminal offenses lead to state charges, but certain types of illegal activity can result in federal criminal charges instead. White-collar crimes, or financial crimes, often lead to federal prosecution.
Various types of fraud and financial misconduct, such as embezzlement and insider trading, are illegal at both the state and federal levels. A variety of factors influence what jurisdiction applies during white-collar criminal prosecution.
Why do federal authorities pursue many white-collar criminal cases instead of state prosecutors?
The use of federal infrastructure
Many times, financial crimes, such as fraud and embezzlement, make use of federal infrastructure. People who embezzle from their employers might transfer money using the Federal Reserve, for example.
Those engaging in investment fraud could use telecommunication systems or the United States Postal Service (USPS) to trick aspiring investors. Making use of government infrastructure to commit a crime may open an individual up to federal prosecution.
The investigating agency
State and local authorities can investigate financial crimes. However, the Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission (SEC) often play a role in investigating more complex white-collar offenses. When federal agencies investigate crimes, they may eventually refer the case to the Department of Justice (DOJ). Federal prosecutors may ultimately bring the charges against the party accused.
In some cases, white-collar crimes become federal offenses because they cross state lines or involve people living in multiple different jurisdictions. Those facing federal charges for white-collar offenses may need help fighting back to minimize their consequences. Securing legal representation as early as possible in a federal criminal investigation can help people reduce their risk of a life-altering conviction.