Insights
A curated collection of observations, industry developments, and firm perspectives on legal trends and business issues. These materials are provided for general informational and educational purposes only and are not legal advice. For guidance tailored to your specific situation, please contact our attorneys.
Financial Crime
Financial fraud in New York refers to any deceptive activity involving financial transactions designed to gain unlawful advantage. This article outlines the common types of financial crime prevalent in the state of New York, how to prevent them, and the available legal recourse for victims of financial fraud.
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1. New York Financial Crime | Common Types of Fraudulent Schemes
In New York, financial fraud takes many forms, often leveraging technology to deceive victims. While some cases are simple impersonation scams, others involve sophisticated phishing or malware campaigns designed to steal sensitive information and funds. Understanding these common schemes is the first step in protecting yourself from financial crime.
Voice Phishing (Vishing)
Voice phishing involves phone calls where fraudsters pose as law enforcement, banks, or IRS agents to induce immediate action from the victim. They often use spoofed caller IDs and may reference confidential personal information to convince victims to transfer funds or disclose sensitive data. Many of these vishing operations are conducted by organized financial crime rings operating across state or national borders, making them difficult to track and prosecute.
Phishing and Smishing Scams
Phishing and Smishing are related forms of digital financial fraud that utilize email and SMS, respectively, to trick users. Phishing involves redirecting a user’s browser to a fake website via malware or DNS hijacking, while Smishing uses text messages claiming to be from delivery services, public agencies, or acquaintances. Both methods urge victims to click on a malicious link or call a fraudulent number, which can trigger the installation of malicious apps, compromise login credentials, or allow the attacker to gain remote access to the victim's phone.
- Common smishing bait examples include:
“Your package is waiting. Click here to verify delivery.”
“IRS payment confirmation needed. Call now.”
“This is your friend. I lost my wallet—can you send me $200?”
2. New York Financial Crime | Essential Prevention Strategies
Prevention of financial crime requires vigilance, secure habits, and an understanding of common scam behaviors that exploit trust and urgency. Simple actions can significantly reduce exposure to fraud and the resulting financial losses. Establishing strong digital hygiene is a vital defense against becoming a victim of financial fraud.
Key Preventive Measures
| Measure Category | Action to Take |
|---|---|
| Data Security | Never share banking credentials, PINs, or verification codes over the phone or via text message. |
| Transaction Vigilance | If prompted to go to an ATM or purchase gift cards to resolve a payment issue, immediately suspect financial fraud (especially voice phishing). |
| Reporting & Recovery | Report any suspicious transactions immediately to your bank and request a freeze from your financial institution. |
| Digital Hygiene | Always verify whether the financial institution’s website is secure (look for “HTTPS”) before entering login information, and be cautious with attachments or links from unknown emails or text messages to prevent malware-related financial crime. |
| Investment Safety | Confirm that any investment professionals you engage with are properly registered with FINRA or the SEC to avoid investment fraud. |
Even minor negligence—like clicking a random link or using an unsecured Wi-Fi connection—can lead to serious financial loss, particularly if remote access tools or banking apps are compromised by a sophisticated financial crime operation.
3. New York Financial Crime | Legal Recourse and Accountability
If you’ve become a victim of New York financial fraud, both civil and criminal procedures are available to help you recover losses and hold perpetrators accountable for their actions. Understanding the legal landscape for financial crime in New York is crucial for victims seeking justice.
Criminal Complaint and Penalties
Fraudulent financial conduct is punishable under specific sections of the New York Penal Law, establishing serious consequences for those who engage in financial crime.
Penal Law $190.65 – Scheme to Defraud (First Degree): Punishes those who defraud multiple individuals by scheme, potentially resulting in up to 4 years imprisonment.
Penal Law $155.42 – Grand Larceny (First Degree): Targets the most severe theft offenses, carrying up to 25 years imprisonment for the theft of over 1 million through financial fraud.
When schemes like voice phishing involve impersonation of a government official or the unauthorized abuse of communication devices, additional charges under $190.25 (Criminal Impersonation) and $190.85 (Unauthorized Use of Personal Data) may also apply to enhance the severity of the financial crime charges.
Civil Litigation and Recovery Options
Victims of financial crime may file civil lawsuits for damages to seek compensation outside of the criminal justice process. These claims are based on legal theories that address the unauthorized transfer of property or funds due to deception.
Civil claims typically include:
- Fraudulent Misrepresentation
- Conversion ("Unauthorized control over another’s property")
- Unjust Enrichment
- Negligent Misrepresentation
If funds were deposited into another individual’s bank account as part of the financial fraud scheme, victims can seek restitution from the account holder under civil forfeiture or unjust enrichment doctrines, aiming to recover the stolen assets.
4. New York Financial Crime | Response and Reporting Channels
Responding swiftly to an incident of financial crime can prevent deeper financial damage and improve your chances of recovery, making immediate reporting essential. To initiate restitution or enforcement action, you must report the financial fraud to the relevant authorities as summarized below.
Key Reporting Channels
| Type of Assistance Sought | Where to Report the Financial Crime Incident |
|---|---|
| Freezing Target Account | Your financial institution or the bank holding the scammer’s account to prevent fund dissipation. |
| Criminal Complaint | Local Police Department (Contact their non-emergency line or visit the precinct) to officially document the financial fraud. |
| Phishing/Smishing Website | New York State Office of Information Technology Services for digital forensics and takedown. |
| Financial Fraud Consultation | New York Department of Financial Services Consumer Division for guidance and consumer protection. |
In most cases, the bank typically responds to a freeze request within 3 business days, providing a critical window for action. Afterward, you may proceed with an official complaint or pursue court injunctions to prevent further dissipation of funds related to the financial crime.
The information provided in this article is for general informational purposes only and does not constitute legal advice. Reading or relying on the contents of this article does not create an attorney-client relationship with our firm. For advice regarding your specific situation, please consult a qualified attorney licensed in your jurisdiction.
Certain informational content on this website may utilize technology-assisted drafting tools and is subject to attorney review.
