Appeals case a reminder of issue of intent in fraud prosecutions, P.1

In fraud prosecutions, building a strong defense is critical to ensuring that prosecutors are held to their full burden of proof. Sufficiency of the evidence is not always an issue that is decided correctly at the trial level. Sometimes it takes an appeal to get the right ruling.

For example, a federal appeals court recently held that a lender could not be convicted of fraud simply for selling substandard mortgages to government-sponsored lenders Fannie Mae and Freddie Mac. Prosecutors in the case sought to hold both Bank of American and a former executive liable for selling loans that didn’t meet contractual requirements, but the appeals court found that the evidence presented by the government didn’t meet the requirements for a fraud conviction.

Prosecutors had made allegations that Countrywide had a mortgage program which did not meet the specific requirements established in contracts allowing them to be sold to Fannie Mae and Freddie Mac. The former executive oversaw that program and was charged under federal mail and wire fraud statute.

The court found that the government, in presenting evidence of the bank’s misleading statements, failed to prove that the former executive had the requisite intent for a fraud conviction. With fraud charges, intent is an important issue since it is a required element for conviction, yet it isn’t always clear exactly what intent a defendant had in taking certain actions.

It is important for defendants in any criminal defense case, including cases involving allegations of fraud and other white collar crimes, to work with an experienced attorney to ensure that prosecutors are held to their full burden of proof, particularly with respect to intent. We’ll keep looking at this issue in our next post.


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