Case Story: Preventing an Unjust Fraud Conviction

DISCLAIMER:

CASE RESULTS DEPEND ON A VARIETY OF FACTORS UNIQUE TO EACH CASE. CASE RESULTS DO NOT GUARANTEE OR PREDICT A SIMILAR RESULT IN ANY FUTURE CASE.

Accidents happen.

They happen at home. They happen at work. They happen everywhere.

And when they happen, they’re nobody’s fault. Because if they were somebody’s fault, then they wouldn’t be accidents, would they?

But what about when the line between considering something an accident and considering it something more is blurred? When is an accident no longer an accident?

That’s what this case was about.

Our client was caught up in a massive fraud at her job. She claimed her involvement was a complete and total accident. But the authorities didn’t believe her, so they charged her with a crime.

We got involved and immediately went to work un-blurring the line between what qualifies as an accident and what qualifies as a crime. Our hard work paid off, as the felony charge against her was ultimately dismissed.

Here’s how we did it.

The Fraud

Our client did work on behalf of a company we’ll simply call The Corporation, which has a major Minnesota project in its portfolio.

This project is huge. Billions of dollars huge.

Our client’s job was to work with small companies who had contracted with The Corporation to help build the project. A large part of that work was making sure these small companies got paid for their work.

While this sounds simple, it’s no easy task. Hundreds of companies, doing hundreds of jobs, under hundreds of contracts, for hundreds of different amounts. And each of them wanting to be paid as fast as possible once the job was completed.

It’s against this backdrop that the fraud occurred.

Our client began working with a small company that did about $225,000 worth of work for The Corporation. When the work was done, the company submitted a request for payment. Our client was the point-person and began working to process the payment.

Our client and the company corresponded regularly, and they worked together until The Corporation eventually wired the total amount owed.

Or so they thought.

A few weeks after the wiring was complete, the company called our client asking when they’d get paid. Puzzled, our client said they had been paid weeks ago. Equally puzzled, the company said no, they hadn’t.

That’s when everyone realized something had gone horribly wrong.

What happened is that a fraudster hacked into The Corporation’s computer system, got the company’s confidential information, and began communicating with our client as if he were the company. So the whole time our client thought she was talking with the company who had done the work for The Corporation, she was actually talking to the fraudster.

You know where this is going.

Eventually, the wired payment that was meant for the company instead went to a bank in New Jersey and then immediately offshore to England.

The Corporation was now out $225,000, and the company they owed it to still needed to be paid. Unsurprisingly, The Corporation was livid. They wanted answers and they wanted them fast.

Since our client was the one who authorized the payment, she had a giant target on her back.

The Charge

Once the fraud was identified, The Corporation went to work trying to figure out who was involved and who was to blame. And from the beginning, our client was 100% cooperative with The Corporation.

Not exactly something the mastermind of a fraud would do, right?

But that’s what she did.

She sent them all her email correspondence with the fraudster, and she answered all their questions. She did anything and everything she could to prove she wasn’t part of the fraud.

And for a while, The Corporation believed her. But as the evidence began to point to the fraud being an accident — an admittedly expensive and embarrassing one — The Corporation’s tune changed.

Rather than accept responsibility for what happened, The Corporation instead shifted its focus to our client. They decided she must have been involved and that she was somehow to blame. Knowing this was not true, our client stood her ground and defended her actions, but to no avail.

She was eventually fired from the job she loved and excelled at. Devastated, she thought this was the worst thing that could come from this tragic situation.

She was wrong.

Months later, unexpectedly and without warning, she learned she had been charged with the crime of theft by swindle – a felony that carried with it the possibility of prison time and a significant fine.

The state claimed that she had somehow participated in the fraud committed against The Corporation.

They weren’t specific about exactly how that was, but the gist of their argument seemed to be that our client’s behavior was so negligent and reckless that it transformed it from being an accident into being a crime.

Knowing what’s required for conduct to qualify as a crime, we were skeptical of the state’s argument, and we began fighting to clear our client’s name.

The Dismissal

At its core, something just didn’t feel right about calling what our client did a crime.

Was she part of a fraud that ended up costing The Corporation a quarter million dollars?

Absolutely.

Could she have been more careful in her dealings with the person who turned out to be a fraudster?

Sure.

But was her conduct a violation of criminal law?

No way.

Knowing that in our gut, we set about proving it using the law.

After significant research, we got to the heart of the matter, legally speaking. And that was the requirement that to find a person guilty of theft by swindle when a fraud has been committed, the state must prove that the person had “the specific intent to defraud another.”

This was our kill shot.

We knew there was no evidence proving our client intended to defraud anyone. She was one of the fraud’s victims; how could she have possibly intended to defraud anyone else if she herself had been defrauded?

It didn’t make any sense.

And so we carefully laid out our position to the prosecutor in the case. We explained how at first blush it might look like our client was involved, but really she had nothing to do with the fraud, and she had been defrauded herself. We also brought up the fact that she had been punished enough by losing her job at The Corporation, and that a criminal charge on top of that was like rubbing salt in the wound, not to mention an injustice.

In short, what she had done was an accident in the eyes of the law – not a crime. And since it wasn’t a crime, the charge should be dismissed.

To the prosecutor’s credit, he agreed.

It was refreshing to see cooler heads prevail. And while it would have been nice if that measured approach had occurred from day one, it was better late than never.

The charge against our client was dismissed, which allowed her to go back to her normal life as a wife, hockey mom, and office professional. We were honored to be part of righting the wrong committed against her, and we hope her case serves as a cautionary tale for prosecutors to be more diligent in the future when charging people with crimes they didn’t commit.

It turns out sometimes accidents really are just accidents.