About Falsifying Business Records

Innocent professionals, executives and business owners are falling victim to charges and accusations of fraud and conspiracy related to the falsification of business records.

The Blanch Law Firm specializes in white-collar investigations and complex criminal cases related to fraud, falsifying business records, and conspiracy. Our lawyers have over 50 years of combined experience in federal judicial practices and procedures.

We have successfully handled criminal cases and investigations brought by the DOJ, SEC, and U.S. attorney’s offices, as well as internal investigations involving financial crimes, money laundering, insurance fraud, securities violations, and conspiracies nationwide.

If you or a loved one has been charged with falsifying business records, do not hesitate to contact the Blanch Law Firm, for a free legal review of your case.

Falsifying Business Records in New York

A “business record” includes any writing, including computer data, maintained by a person or entity for the purpose of evidencing it’s “condition or activity.” Generally, charges for falsifying business records claim the defendant altered or forged a document for some type of personal benefit.

• Falsifying Business Records in the Second Degree (Class A Misdemeanor)
  • N.Y. Penal Law § 175.05: This statute makes it unlawful to intentionally:
    • make a false business record;
    • cause a false business record to be made;
    • alter or erase a truthful entry in a business record;
    • omit a truthful statement from a business record; or
    • prevent a truthful statement from being made.

• Falsifying Business Records in the First Degree (Class E Felony)
  • N.Y. Penal Law § 175.10: Falsifying business records in the first degree has all of the same requirements as falsifying a business record in the second degree. However, first degree charges requires intent to defraud through the commission of an additional crime–like using your false business record to carry out tax fraud.

Related Crimes

Tampering with Public Records

• Tampering with Public Records in the Second Degree (Class A Misdemeanor)
  • N.Y. Penal Law § 175.20: This statute makes it unlawful for a person to knowingly make a false entry in a document filed with a public office. Removing, destroying, or concealing a false entry is also illegal.
• Tampering with Public Records in the First Degree (Class D Felony)
  • N.Y. Penal Law § 175.25: Tampering with public records in the first degree requires intent to defraud, as well as the knowledge of the making, removing, altering, or concealing of a false entry.

Offering a False Instrument for Filing

• Offering a False Instrument for Filing in the Second Degree (Class A Misdemeanor)
  • N.Y. Penal Law § 175.30: Penalties for offering a false instrument for filing require a person know that the document contains false information. If you know a document contains false information, and then you submit it for filing at a public office or present it for filing with the belief it will be filed, you may be liable for offering a false instrument for filing.

• Offering a False Instrument for Filing in the First Degree (Class E Felony)
  • N.Y. Penal Law § 175.35: Offering a false instrument for filing in the first degree requires the intent to defraud the state, in addition to the presenting of a false document which you know to be false.

Issuing a False Certificate

• Issuing a False Certificate (Class E Felony)
  • N.Y. Penal Law § 175.40: Public servants may be liable for issuing a false certificate if they issue a certificate knowing it contains false information.

Issuing a False Financial Statement

• Issuing a False Financial Statement (Class E Felony)
  • N.Y. Penal Law § 175.45: This statute makes it unlawful to fraudulently describe the financial condition of a person or their ability to repay a debt. In order to be found liable, you have to have represented in writing that the person was in good financial standing, when in fact you knew that was not the case, and they were in fact in poor financial standing.

Federal Falsification of Business Records – 18 U.S.C. § 1519

According to the federal statute, you may be liable for falsifying business records if you:

Knowingly
– alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any,
– record, document, or tangible object;

With the intent to
– impede, obstruct or influence the investigation or proper administration of any
– department or agency of the United States.

Falsifying business records or government documentation can lead to probation, fines, restitution payments and imprisonment.

Aiding and Abetting – 18 U.S.C. § 2:

You can be found liable as the principal of a crime for knowingly assisting someone else in creating or concealing false business records and government documentation.

If you both intend to impede or obstruct a government investigation, you both may be equally liable for the falsification of records.

This means that regardless of how large or small you feel your part may have been in the grand scheme of the crime, you may face equal punishment.

Conspiracy – 18 U.S.C. § 371

A “conspiracy” involves two or more people–known as “co-conspirators”–who agree to participate in criminal activity. Federal law requires at least one party to the conspiracy to have committed an “overt act” in furtherance of the crime.

“Co-conspirators” are criminally liable for all actions taken on by all other co-conspirators, regardless of whether or not you even knew who your co-conspirators were.

If you are found to be in a conspiracy to distribute drugs with five people, only one of which you have met, you may still be charged for criminal actions taken by the other four individuals in furtherance of the overall conspiracy.

In order to be found guilty of conspiracy, prosecutors must prove beyond a reasonable doubt that you agreed to further the conspiracy, or agreed to try to conceal the conspiracy in some way.

Racketeering (“RICO”) – 18 U.S.C. § 1961

If a defendant falsifies business records and it affects interstate commerce, then charges may be filed under RICO statutes. The RICO statutes grant federal jurisdiction over individuals engaged in “continuous or repeated” criminal conduct on behalf of a criminal enterprise. Penalties can include probation, fines, and imprisonment.

In order to be found guilty of violating the RICO statute, the prosecution must prove beyond a reasonable doubt that:
– An enterprise existed;
– The enterprise affected interstate commerce;
– The defendant engaged in a pattern of racketeering activity;
– Associated with or employed by an enterprise; or
– Conducted or participated in the conduct of the enterprise through a pattern of racketeering activity by the commission of at least two acts of racketeering.

Crimes Related to Falsifying Business Records

• Possession of a Forged Instrument
• Filing of a False Instrument
• Receiving a Commercial Bribe
• False Declaration Before a Court
• Wire and Mail Fraud- 18 U.S.C. § 1343
• Tax and Insurance Fraud

Penalties

Penalties for fraud related to the falsification of business records can include a fine of up to $1,000,000, imprisonment of not more than 20 years, or both. If convicted, further restitution to the individuals wronged and other monetary penalties may arise.

Any sentence is determined by the discretion of the court after careful consideration of the Federal Sentencing Guidelines. These guidelines take into account a number of different variables, including how many counts a defendant is facing and the nature of the crimes.

Investigating and Reporting

Enforcement of statutes relating to the falsification of information on business records, tax records, or any government document involves a variety of federal and state agencies.

The Federal Bureau of Investigations (“FBI”), U.S. District Attorney’s Office, Office of the Inspector General, and the Internal Revenue Service Criminal Investigation Unit all have a particular interest in charges of falsifying records because these charges often relate to identity theft, tax fraud, and insurance fraud.

The Federal Election Commission (“FEC”) is also involved in all cases involving political campaigns and the misappropriation of campaign finance funds. To see how campaign finance relates to the falsifying of business records, see our “High Profile Cases of Falsifying Business Records” section below.

8 Best Defenses to Falsifying Business Records

Charges related to the falsification of business records requires knowledge and criminal intent. In these cases, it is difficult for prosecutors to prove you had the requisite knowledge and criminal intent at the time you carried out the alleged criminal act.

Below are examples of some of the best defenses to falsifying business records, conspiracy, fraud and racketeering:

You executed orders of a superior officer. There is an affirmative defense available for bookkeepers and clerks who merely execute orders of their employer. However, in order to be eligible for this defense, you must not have had any personal benefit.

1. You did not knowingly alter, destroy, or conceal the business records.
2. You did not knowingly file falsified or forged documentation.
3. You did not intend to impede or obstruct a U.S. investigation.
4. You did not agree to the conspiracy.
5. You withdrew from the conspiracy or criminal enterprise.
6. You did not engage in a pattern of criminal activity.

High Profile Cases of Falsifying Business Records

The charges and indictments listed below are merely accusations. The defendants are presumed innocent until proven guilty beyond a reasonable doubt in court of law.

Falsifying Campaign Finance Records

(August 21, 2018) Republican Duncan D, Hunter and his wife, Margaret E. Hunter, were indicted for allegedly converting campaign finance funds to pay for personal expenses. In order to do so, the husband and wife allegedly filed false campaign finance records with the Federal Election Commission (“FEC”).

The indictment highlights a number of instances which the couple allegedly misused the campaign funds including payments for their children’s tuition, vacations, and dental bills. One example of the alleged fraud in the falsifying of FEC campaign finance reports was the characterization of the family dental bills as a charitable contribution to “Smiles for Life.”

Basically, the election commission is claiming they falsified these documents to “cover their tracks” by falsely characterizing their expenses.

To see the DOJ press release, click here.

Corporate Campaign Contributions Lead to Falsifying Business Records

(August 31, 2018) The former president of S.R. Holding Company Inc., Gerald G. Lundergan, and his political consultant were indicted in late August for using corporate funds to make contributions to the campaign of a candidate for the U.S. Senate and for causing the concealment of those contributions from the Federal Election Committee.

Lungerdan was charged with conspiracy, making corporate campaign contributions, causing the submission of a false statement to the FEC, and causing the falsification of documents with the intent to obstruct and impede a matter within the FEC’s jurisdiction.

According to the indictment, Lundergan concealed these activities from other officials associated with the campaign. Their concealment allegedly caused the campaign to unwittingly file false reports with the FEC, in that the reports failed to disclose the source and amount of corporate contributions.

To see the DOJ press release, click here.

Senator Indicted for Falsifying Documents:

(September 12, 2018) While doing a routine audit of a Puerto Rican municipality in 2013, the Puerto Rican Comptroller’s Office discovered that employees of the municipality were forced to adhere to a voluntary work requirement which was in violation of the Fair Labor Standards Act.

As a result, Senator Abel Nazario-Quinones was required to sign a Back Wage Compliance Payment Agreement with the Department of Labor and complete all payments by 2018.

According to the indictment, instead of paying the back wages and not taking any retaliatory action against the employees for accepting the payments–like he certified he would under the agreement–Nazario-Quinones withheld future earnings of these employees.

Furthermore, since the forms used to certify the payments to the Department of Labor were sent via email, the Senator is also facing charges of wire fraud. Nazario-Quinones is facing a fine of up to $1,000,000 and imprisonment of up to 20 years or both.

To see the DOJ press release, click here.

Social Security Employee Falsified Records:

(April 27, 2018) A claims representative for the Social Security Administration (“SSA”) in California allegedly made false entries in SSA records to mislead U.S. officials conducting a naturalization proceeding on another individual.

The claims representative, Nelli Kesoyana, was charged with falsifying records and faces a fine of up to $250,000, imprisonment for up to ten years, or both.

To see the DOJ press release, click here.

Falsifying Tax Return

(January 15, 2016) Anne Beatty-Waters was sentenced to five years probation and ordered to pay almost $15,000 in restitution to the IRS after falsifying her 2013 tax return by underreporting her income tax liability. The case was investigated by the FBI and the IRS-Criminal Investigation Unit.

To see the DOJ press release, click here.

Falsifying Mortgage Documents:

(April 22, 2015) After falling behind on her mortgage payments, Amanda Bishop of West Virginia decided to create and submit fake bank statements which purported to show that she had made mortgage payments when in fact she had not.

Bishop was charged with “false declaration before a court,” for which she faces a fine of up to $250,000, imprisonment for up to five years, or both.

To see the FBI press release, click here.

^[1] N.Y. Penal Law § 175.00
^[2] N.Y. Penal Law § 175.15