What is Investment Fraud, and How is it Defended? 

Investment fraud is a serious offense that can have detrimental effects on its victims. Those who commit investment fraud, if convicted, face serious penalties including imprisonment. Knowing what investment fraud consists of and how you can protect your rights if charged with investment fraud is crucial. 

Investment Fraud 

Investment fraud is a serious crime that occurs when an individual or a company uses deceptive or illegal tactics to convince someone to invest their money into a fraudulent investment scheme. Investment fraud can take many forms, such as Ponzi schemes, pyramid schemes, or insider trading. In New Jersey, investment fraud is a common problem; New Jersey ranks 5th in investment fraud cases in the US. Each of the over 40,000 fraud cases in New Jersey can have severe financial consequences for the victims involved. 

Investment fraud can happen to anyone, regardless of their age, income level, or education. Fraudsters often target vulnerable populations, such as seniors or individuals who are not experienced in investing. They use various methods to lure victims, such as promises of high returns, insider information, or exclusive investment opportunities. 

Ponzi Scheme 

One of the most common types of investment fraud is a Ponzi scheme. In a Ponzi scheme, the fraudster promises high returns to investors and uses the money from new investors to pay returns to earlier investors. The fraudster typically keeps a portion of the money for themselves and uses the rest to perpetuate the scheme. Eventually, the scheme collapses when there are no more new investors, and earlier investors cannot be paid back. 

Pyramid Scheme

Pyramid schemes are another type of investment fraud that involves recruiting new investors who are promised a commission for bringing in more investors. These schemes rely on an ever-increasing number of participants, and eventually, they collapse when there are not enough new investors to sustain the scheme. 

Insider Trading 

Insider trading is yet another form of investment fraud that occurs when an individual uses non-public information to make a profit in the stock market. This is illegal because it gives the individual an unfair advantage over other investors. 

What To Do If You are Facing Investment Fraud Charges

Investment fraud is a serious crime in New Jersey, and being charged with it can have devastating consequences. If you are facing investment fraud charges, you need to take action immediately to defend yourself. Here are some steps you can take to protect your rights and build a strong defense: 

  1. Hire an Experienced Criminal Defense Attorney 

The first thing you should do when facing investment fraud charges is to hire an experienced criminal defense attorney who has knowledge of these types of cases. Your attorney can help you understand the charges against you, the potential consequences, and the legal strategies available to you. 

  1. Gather Evidence 

To build a strong defense, you need to gather as much evidence as possible to support your case. This may include documents, emails, financial records, and other relevant information that can prove your innocence or cast doubt on the prosecution’s case. 

  1. Stay Organized

Make sure that you keep all of your documents and records organized and easily accessible. This will make it easier for you and your attorney to prepare your defense and respond to any requests for information from the prosecution. 

  1. Be Honest

One of the worst things you can do when facing investment fraud charges is to lie or withhold information from your attorney or the court. Be honest and forthright about your actions, even if you think they may be incriminating. Your attorney can help you craft a defense strategy that takes into account all of the facts and circumstances of your case. 

  1. Cooperate with the Authorities

While you may feel tempted to avoid talking to the authorities or providing information, it is important to cooperate with them as much as possible. This can help to build a relationship of trust and credibility that can work in your favor. 

  1. Be Patient

Investment fraud cases can take a long time to resolve. Be patient and stay focused on building a strong defense. Your attorney will work with you to create a strategy that maximizes your chances of success. 

Investment fraud charges can be daunting, but with experienced legal representation from the Law Offices of Robert J. DeGroot, your defense strategy will be strong. Your attorney will help protect your rights and create the best defense strategy for your case. 

Reach out today for a free consultation.