Federal and state charges for fraud

On Behalf of | Apr 5, 2024 | Federal Criminal Charges |

Most crimes are charged under state law. For instance, a person accused of robbery in Tennessee is typically charged under Tennessee law and put on trial in a Tennessee court.

Other crimes are charged exclusively under federal law. For instance, counterfeiting money is illegal under federal law, and the federal courts handle the prosecution of anyone charged with counterfeiting.

However, there are also many laws that can be charged under either federal or state law, depending on the circumstances. This is the case with fraud.

Fraud is a category

In the eyes of the law, the term “fraud” applies to a wide variety of illegal behavior involving deception. Most fraud involves one party who makes a false statement in order to gain money from another person, business, government or other entity.

Fraud carries both civil and criminal penalties. This means that, in addition to criminal charges, a wronged party can sue another party for fraud in order to collect damages.

Some relatively common subcategories of fraud include:

  • Credit card fraud: For instance, misusing someone else’s credit card number in order to purchase goods
  • Insurance fraud: For instance, when a health care provider bills an insurer for procedures they never actually performed
  • Securities fraud: This includes insider trading and other illegal maneuvers involving stocks and other investments
  • Mortgage fraud: This includes lying about the value of property for the purposes of securing a mortgage

Federal or state?

Both federal and state laws can apply to some types of fraud. Whether a defendant faces federal or state charges can depend on the exact circumstances of the case.

Generally, jurisdiction falls to the federal courts for any alleged fraud that involves the U.S. government, multiple states or the U.S. government and a foreign government. For example, the U.S. government oversees the United States Postal Service, so the federal courts handle cases involving fraud committed through the mail. Similarly, the federal courts would handle a case involving fraud committed over the telephone from one state to another.

For example, Tennessee’s law against theft includes embezzlement by fraud. An employee who is accused of falsifying timecards and fraudulently taking money from their Tennessee employer may be charged under Tennessee’s theft law.

However, there is at least one federal law that can apply to similar circumstances. The requirements for securing a conviction under this law are different from the requirements for the Tennessee charges.

If the defendant worked for a U.S. government agency in Tennessee when they allegedly committed embezzlement, they will likely face federal embezzlement charges. Their defense strategy must be tailored to the exact charges against them.