Category Archives: Financial Crimes

Negligence vs Income Tax Fraud in Raleigh, NC

Tax time is here. Maybe you’ve already e-filed your return and are awaiting a refund, or you’re awaiting some additional information before you can file. Or like many Americans, you’re procrastinating until the last minute, which isn’t recommended.

We’ve discussed what you could face if you fail to pay your North Carolina state taxes in a previous blog. If you’ve done something wrong, you’ll generally be audited. But is it negligence, or tax fraud?

Negligence

Tax laws are complex, and not easy for the everyday taxpayer to understand. Even with tax software, mistakes can happen. In the absence of evidence of fraud and/or criminal activity, the IRS will generally assume you (or your tax preparer) have made a genuine mistake.

Negligence vs Income Tax Fraud in Raleigh, NC

That doesn’t mean that you won’t face a penalty for making a mistake. You can expect a penalty of about 20% on a return with errors. In this case, you likely won’t face criminal charges, only a potential fine, and penalty.

If you are unable to pay your taxes, North Carolina also offers an installment agreement as well as a settlement plan, called “Offer In Compromise.” Waivers are available in special hardship circumstances. You’ll need to complete Form NC-5500 and submit it to the North Carolina Department of Revenue to request one.

You can get help from a tax attorney or tax preparation professional to take care of tax return mistakes. For taxpayers who have not filed previous years’ tax returns, the IRS offers guidance on its website.

Tax Fraud

There is a difference between minimizing your tax burden through deductions, credits, contributions, and other options and intentionally misrepresenting your income to lower your taxes.

When questioning your tax returns, the state of North Carolina and the IRS focus on the intent of the taxpayer. Was this an honest error, or was there a deliberate attempt to conceal income, assets, and any other taxable items?

Income tax fraud can take the form of:

  • Knowingly failing to file your income tax return
  • Deliberately failing to pay any taxes that are due
  • Consciously failing to report all received income
  • Preparing and filing an intentionally false return
  • Making false or fraudulent claims

The IRS will review your return for common signs of fraudulent activity, such as:

  • Intentionally under-reporting your income
  • Transfers and/or concealed income
  • Two or more sets of ledgers
  • Stating personal expenses as business expenses
  • Altered and fabricated documents
  • Frivolous tax claims, including exaggerated exemptions and deductions
  • Using a bogus Social Security number
  • Claiming exemptions for a child or other dependent that doesn’t exist

If you have a cash-based business, are self-employed, or are primarily paid in cash when you work, you may find it easy to under-report your income. This doesn’t mean that you can’t be caught for tax fraud. The State of North Carolina and the IRS are well-versed in identifying fraudulent tax returns as well as tax evasion.

Penalties

There are different penalties for both negligence and tax fraud.

For an unintentional error, you will still likely be assessed a 20% penalty. But for intentional tax fraud, a conviction can include penalties of:

  • Fines of up to $100,000
  • Imprisonment for up to five years
  • A combination of both

Additionally, you may be susceptible to more frequent audits and have a difficult time finding someone to take care of your tax returns.

Call Dewey P. Brinkley For Financial Crimes Defense

If you’ve been charged with willful failure to file a tax return, tax evasion, or any financial crimes, you’ll need the help of a financial crimes defense attorney immediately to avoid a potential jail sentence, fines, and penalties, along with a permanent criminal record.

Call the law offices of Dewey P. Brinkley immediately for a free initial consultation to discuss your case at (919) 832-0307. You can also email us at dewey@deweypbrinkleylaw.com, or use our online contact form.

Can Social Media Posts Be Used As Evidence In Raleigh, NC Court Cases?

Many users post to social media without considering that their words, pictures, or other content could have adverse consequences. Most people like to post pictures of food, their pets, children, or discuss other everyday things. But sometimes what you post can have serious repercussions.

If you are involved in a court case—whether criminal, family law (including divorce and child custody cases), worker’s compensation, or personal injury, for instance—anything posted on social media is available to anyone who finds it. Many people have lost their cases because of something found on their social media.

Divorce lawyers are particularly devious when it comes to finding evidence on social media that can win the case for their clients. In any court case, content posted on social media can and likely will be used as evidence by opposing counsel. Technology means that unless you can prove that your account was hacked, everything can be authenticated before the trial.

Criminal Postings

It seems ridiculous, but many people have been caught and arrested after posting pictures of themselves on social media and even confessing to a crime.

Can Social Media Posts Be Used As Evidence In Raleigh, NC Court Cases?

  • Mooresville NC— Jade Tyson Brannon, 44, was arrested in June of 2020 for posting threats of violence against law enforcement on social media.
  • Fayetteville, NC— Lacy Kornegay, 21, made social media posts with threats against an ethnic group and listed someone else’s address to lead a reader to someone else’s home.
  • San Diego, CA—bank employee Arlando Henderson, 29, is arrested by the FBI in December of 2019 after stealing over $88,000 from the bank’s vault. He posted multiple pictures of himself with stacks of cash on both Facebook and Instagram. He used some of the money to put a down payment on a new luxury vehicle, and committed loan fraud to pay the balance.

Last year, the FBI admitted that it searched through social media to try and identify “potential flashpoints for violence.”

Even if your settings are “private,” it’s not uncommon for law enforcement to connect with someone on your friend’s list to obtain evidence. Witnesses can also provide evidence from a social media page.

But doesn’t this come under free speech? Yes, it does—and it’s placed online for the world to see. Therefore, law enforcement may not need a warrant to get it, since discussing anything on social media is no different than discussing it in any public place.

A Real-Life Case

On 9/10/2012, a grand jury indicted Antonio Delontay Ford of involuntary manslaughter and obstruction of justice in the death of Eugene Cameron. The matter went to trial on 7/23/2014, and he was convicted of involuntary manslaughter.

In State Of NC vs. Ford (No. COA15-75, filed in the appellate court, 2/16/2016), the defendant appealed a decision based on the unlawful introduction of some of his social media postings from his MySpace page. The page included pictures of his dog, a pit bull named “DMX,” which attacked and killed Cameron unprovoked.

Neighbors reported previous encounters with this dog, including three incidents of bites. The dog was known to be vicious, and it had been allowed to run through the neighborhood unsecured and unsupervised. The owner of the home where Cameron was found suggested to detectives that they speak with next-door neighbor Ford, a dog owner.

Detectives questioned Ford, he admitted that DMX was his. DNA analysis of both the victim and DMX showed that the dog was responsible for Cameron’s injuries that led to his death.

The night before the trial, a detective discovered Ford’s MySpace page. In addition to pictures and videos of the dog, the page contained a video captioned, “DMX tha Killer Pit.” A second video contained the caption, “After a Short Fight, he killed that mut.”  One picture bore the description, “undefeated.” Screenshots of several videos were submitted into evidence, and a rap song sung by the defendant was played for the jury. The song was posted on his Myspace page, and the lyrics denied that the dog was the cause of death.

In his appeal, Ford stated that the court erred in submitting his rap song about the dog, evidence from his online presence, and committed an error in admitting opinion testimony. He attempted to stop the admission of his rap song as evidence but was denied. The jury heard the rap song in its entirety, including racial epithets and other profanities. Ford contended that the content offended the jury, which caused them to overlook the “holes in the State’s case.” Conversely, the prosecution showed that not only did Ford know that DMX was a dangerous and vicious animal, but he was also proud of it. Ford’s social media supported this assertion.

The court disagreed with Ford’s appeal:

“Pursuant to North Carolina General Statutes, section 8C-1, Rule 402, “[a]ll relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, by the Constitution of North Carolina, by Act of Congress, by Act of the General Assembly or by these rules. Evidence which is not relevant is not admissible.” N.C. Gen. Stat. § 8C-1, Rule 402 (2013)

Your Criminal Defense Counsel In Raleigh

If you’ve been charged with a crime—any crime—the first thing to do is stay off social media, and avoid posting anything until you speak with a criminal defense attorney.

Even as a misdemeanor, any type of conviction can have long-ranging consequences that impact your life, including a permanent criminal record.

If you’ve been arrested and are facing any kind of criminal charges, call the law offices of Dewey P. Brinkley today for a free initial consultation to discuss your case at (919) 832-0307. You can also email us at dewey@deweypbrinkleylaw.com, or use our online contact form.

Extortion And Bribery In North Carolina?

They’re words that some people use interchangeably, but don’t mean the same thing. Both are considered “white-collar” crimes and usually involve money. There are some similarities, but the elements are different.

On a basic level, both extortion and bribery involve the exchange of property in return for something else. Here, we’ll discuss the difference.

Extortion

Extortion And Bribery In North CarolinaThis generally involves an individual demanding payment or other compensation in exchange for doing or not doing something. This felony is covered by North Carolina (G.S. 14-118.4), which reads:

Any person who threatens or communicates a threat or threat to another with the intention thereby wrongfully to obtain anything of value or any acquittance, advantage, or immunity is guilty of extortion and such person shall be punished as a Class F felon.

This can take the form of someone who threatens to publish embarrassing information about an individual if the victim doesn’t pay or a person who threatens to do harm to a business unless the business owner pays the demander a sum of money. Celebrities are frequent targets of such activity, but anyone can be in the same situation.

Extortion occurs when an individual communicates a threat or outright threatens another person with a “wrongful intent” to acquire:

  • Something of value
  • Confirmation of the settlement of a debt or a fine
  • Immunity
  • Any type of advantage

The courts interpret the “wrongful intent” as the acquisition of the property, and not the threat. Because extortion is a Class F felony, a conviction can bring anywhere from 10 to 41 months of incarceration, depending on any prior convictions.

Although blackmail is frequently combined with extortion, North Carolina treats it as a separate charge under NC General Statutes 14-118 and is a Class 1 misdemeanor.

Bribery

Different than extortion, bribery frequently involves government employees or officials, and involves the exchange for a sum of money or something else of value, usually influence or other favorable treatment, such as the awarding of government contracts. Bribery can also involve private citizens or corporate entities that pay another person or entity for something of value. These arrangements frequently have no paper trail, so it’s up to the prosecutor to prove that bribery took place.

Conversely, a public official can also be guilty of bribery if they solicited and initiated the activity. Bribes can be monetary, or anything of value, such as any type of goods, property, favors, or services.

The act of bribery does not have to involve the possibility of harming the public interest in order to be illegal. NC Gen Stat § 14-218 (2019) states that individuals convicted of bribery will be punished as a Class F felon, which can include jail time from 10 to 41 months depending on any prior convictions. This applies whether an individual offers a bribe and is accepted or not, or attempting to bribe a juror.

Dewey P. Brinkley Is Ready To Defend You

Although extortion and bribery are similar, they are two separate charges with different meanings. Accusations of either or both charges can be devastating. A conviction can lead to serious, long-term consequences.

Dewey P. Brinkley is an experienced criminal defense attorney in Raleigh, NC who understands the criminal justice system, and how to defend you against both of these charges.

Call Dewey P. Brinkley today for a free initial consultation to discuss your case at (919) 832-0307. You can also email us at dewey@deweypbrinkleylaw.com, or use our online contact form.

Can I Go To Jail For Not Paying State Taxes In North Carolina?

Springtime in North Carolina brings a number of stressors, including filing tax returns. Although this year’s state and federal tax deadlines have been extended, you’re still responsible for taking care of both returns, federal and state, as well as paying tax amounts. North Carolina is also considering eliminating tax penalties due to the COVID-19 pandemic.

When you don’t complete your tax returns and fail to pay state taxes, you’re actually breaking the law. However, the penalties will depend on whether you made an honest mistake, or you deliberately committed fraud to avoid paying taxes.

Willful Failure

Tax Evasion and Financial Crimes DefenseIt is possible to receive jail time—and incur a criminal record—for not paying your state taxes.

North Carolina General Statutes Ch. 105 addresses the intentional failure to pay one’s state income taxes. According to the statute, “willful failure” is a Class 1 misdemeanor, which can include jail time of as much as 120 days, as well as a discretionary fine.

The penalties for willful failure include:

  • 5% penalty per month, up to a maximum of 25% of the balance due
  • 10% late penalty
  • 20% “collection assistance” fee if you don’t pay within 90 days
  • An additional 50% “fraud penalty” upon conviction

Penalties can also include tax liens against properties and a damaged credit record.

Tax preparers who participate in willful failure or other misleading tax schemes can also be charged. Filing a “frivolous return” also incurs penalties, including a $500 fine.

Intentional Fraud

Tax fraud or tax evasion is the intentional act of submitting false and/or misleading information on a tax return in order to change the amount owed. Both the federal government and the state of North Carolina have penalties for purposely committing tax fraud.

In addition to the above sanctions, any actions that lead to under-paying state income taxes is a Class H felony, which carries potential jail time from 4 to 24 months. A conviction will also bring substantial financial penalties including fines and interest, as well as an additional 50% penalty of the defrauded amount.

Mistakes

It happens and is correctible. Making a mistake is not the same as a willful failure or intentionally committing fraud.

If you’ve made a mistake on your tax return, it’s easy to file an amended one. For a 2019 return, you’ll fill in the circle on Form D-400 indicating that you’re filing an amended return. Complete and attach the Form D-400 Schedule AM for a North Carolina Amended Schedule to the front of Form D-400.  Then attach all the required schedules and supporting forms.

Call Dewey P. Brinkley For Financial Crimes Defense

You really can go to jail for as long as 120 days for willful failure to file your North Carolina tax return.

If you’ve been charged with willful failure, tax evasion, or any financial crimes, you’ll need the help of a financial crimes defense attorney immediately to avoid a potential jail sentence, fines, and penalties, along with a permanent criminal record.

Call the law offices of Dewey P. Brinkley immediately for a free initial consultation to discuss your case at (919) 832-0307. You can also email us at dewey@deweypbrinkleylaw.com, or use our online contact form.

 

How Embezzlement and Theft are Different?

You might be thinking that embezzlement and theft are one and the same, but they aren’t. While theft is stealing something that doesn’t belong to you, embezzlement is also more of a planned type of theft, and has the added element of violated trust.

What Is Embezzlement?

In an employment or other position of financial responsibility, you may be entrusted with money or property, and have permission to handle them in the course of your job or other position. Misusing your position of trust to steal or misappropriate money or property and convert it to your own elevates theft and embezzlement.

The crime occurs in a number of familiar settings, with the most common scenario a worker stealing money, inventory, or office supplies from their employer. While you may not be arrested for the odd ballpoint you forgot that put in your pocket and take home, embezzlement can also take the form of:

How Does Embezzlement Differ From Theft?

  • Altering employee time records
  • Adding extra to a company expense account
  • Depositing customer or vendor checks into a personal account, or moving money into one
  • Altering company books to conceal stolen, misappropriated, or loss amounts
  • “Borrowing” money from a company cash register
  • Over-charging for a product and keeping the difference
  • Adding a phony employee to the company payroll
  • Accepting kickbacks and bribes

Additionally, money or property that is entrusted to you and is mishandled is considered embezzlement, including:

  • Improperly using someone else’s Social Security money, i.e., relative or child
  • Creating a credit card or check “kiting” scheme (writing bad checks and “floating” them)
  • Using a Ponzi scheme to steal funds
  • Using a client’s settlement amount to pay for operating expenses
  • “Borrowing” funds from a civic organization, nonprofit or other organization
  • Selling a property and keeping the proceeds without notifying heirs

Although embezzlement is usually handled at the state level, should a government employee is involved, or government funds, the federal government will be involved.

Overtime As Embezzlement

Many people are dedicated to their job, and work longer hours. For some, it may be a requirement. But for others, working overtime may constitute embezzlement under certain circumstances.

Of course, if you’re working the overtime to bring in extra money, and not setting off any alarms, there isn’t much cause for concern. However, other indicators in addition to overtime may raise suspicions of possible embezzlement. This would include issues with company financial accounts, including accounts that are missing or disorganized records that make account audits difficult if not impossible.

For an individual who spends a lot of time at the office, including weekends and holidays, and uses company resources may be doing so for their own benefit (i.e., running a business or other money-making plan.) If the individual charges the company for “overtime,” the individual is defrauding the company out of money and work he or she allegedly completed.

Another method is when an individual claims to work overtime, but doesn’t appear anywhere on security footage at the time he or she claims to have worked.

This is not to say that everyone working overtime is suspect. If a company suspects fraud through overtime, it will look for other signs of possible misconduct that indicate embezzlement.

Penalties For Embezzlement in North Carolina

These depend on who committed the embezzlement and how much the individual embezzled.

  • Officers or agents, clerks, or employees at a corporation who embezzle over $100,000 are charged with a Class C felony, with a possible jail sentence of 58-73 months in prison. Anything under $100,000 is considered a Class H felony with a possible jail sentence of 5 to 6 months in prison and “community punishment.”
  • Treasurers of any charitable organizations who embezzle over $100,000 are charged with a Class C felony, with a possible sentence of 58-73 months in prison. Anything under $100,000 is considered a Class H felony with a possible jail sentence of 5 to 6 months in prison and “community punishment.”
  • Railroad officers embezzling over $100,000 are charged with a Class C felony, with a possible sentence of 58-73 months in prison. Anything under $100,000 is considered a Class F felony with a possible jail sentence of 13 to 16 months in prison.
  • Public officials and public employees, including state and government workers embezzling over $100,000 are charged with a Class C felony, with a possible sentence of 58-73 months in prison. Anything under $100,000 is considered a Class F felony with a possible jail sentence of 13 to 16 months in prison.

In addition to criminal court charges, the company or individual from whom the money or property was embezzled can also sue you in civil court. The individual or company can treat you like a debtor once they get a judgment. They can garnish your wages, put a lien on your house (or force you to sell it) and levy your bank accounts.

Dewey P. Brinkley Is Ready To Defend You

Embezzlement is a serious crime with far-reaching consequences. If you’ve been accused of or charged with embezzlement, you need someone to defend you against the charges and in court—quickly.

Dewey P. Brinkley is an experienced criminal defense attorney in Raleigh, NC who understands the criminal justice system, and how to defend you against embezzlement charges.

Call Dewey P. Brinkley today for a free initial consultation to discuss your case at (919) 832-0307. You can also email us at dewey@deweypbrinkleylaw.com, or use our online contact form.