State vs Federal Fraud Charges

Are fraud cases typically heard in state or federal court?

Here in the District of Columbia, we have the Superior Court and we also have federal court, which is called the United States District Court for the District of Columbia. All prosecutors here are United States Attorneys, so the same prosecutorial agency will be handling cases in both Superior Court and in federal court. The determination of whether a particular fraud case will be brought in Superior Court or federal court depends mainly upon whether or not the fraudulent conduct is in violation of federal law or involved an attempt to gain benefits through either a federal agency or federal program. Those types of cases will be brought in federal court. In general, anyone using the banking system, whether it be through a debit card, a bank account, or even through the U.S. Mail, those things can be brought in federal court. The United States Attorneys’ Office has jurisdiction or discretion to file charges in either state or federal court. Generally, if it does not specifically involve a federal agency or program, they will file charges in DC Superior Court, unless the amount of money or benefits involved is fairly great, meaning at least five digits, or if it involves many alleged victims. In a fraudulent scheme where there are more than 20 or 30 alleged victims, the chances that the United States Attorneys’ Office will choose to file that case in federal court start to increase.

How is it decided if a fraud case is state or federal in nature?

It typically involves an analysis of what the fraud entailed. Many fraud cases involve a situation where a person is submitting false information to receive some benefit, for example with unemployment benefits. If the fraud involves unemployment benefits sought through the District of Columbia, then that typically would be brought in theDistrict of Columbia Superior Court. However, if the person is seeking benefits through a federal program, then those cases typically are brought in federal court. If it involves a large amount of money and the violation of a federal law, for example wire fraud or mail fraud, then the U.S. Attorneys’ Office can choose if they want to prosecute in federal court.

What is the difference in how state and federal fraud cases are handled?

They are generally handled the same way in the sense of how the prosecutors build their case. There are some important differences in the sense that federal cases typically involve the FBI or other federal agencies like the Treasury Department, the Internal Revenue Service, or the Secret Service as the investigative agencies gathering the documentation and the evidence in the case. In a state court case, typically the Metropolitan Police Department or other local law enforcement agencies would be investigating. It will involve the same prosecutorial agency, the U.S. Attorneys’ Office, but they’ll be using different law enforcement agencies and law enforcement tools to gather their information. Federal court is typically much more labor intensive and the time frames are more stringent in the sense of when discovery has to be completed and when the trial will be set. Federal cases generally involve harsher penalties than Superior Court cases, so from the defense standpoint in any fraud case, if the case has not yet been filed or not yet indicted in Superior Court or federal court, one of our goals is to keep it out of federal court and make sure that the matter is handled in Superior Court. There are much less severe penalties, and while you are typically dealing with the same prosecutors, there can be more leeway with regard to settling the case short of trial in a Superior Court case.