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Hobbs Act

18 U.S.C. 1951

The Hobbs Act, 18 U.S.C. 1951, makes it a crime to commit robbery or extortion that affects interstate or foreign commerce.  The Hobbs Act also makes it a crime to attempt to commit those listed offenses.  More often than not, Hobbs Act is used in the context of robbery.  It is also sometimes used to prosecute extortions, but to a lesser extent.  In either case, the Hobbs Act carries significant penalties.  Usually  charges under the Hobbs Act are accompanied by a series of other charges including, 924(c) offenses, conspiracy elements and sometimes RICO violations

The Henry Law Firm PLLC represents people charged with robbery and extortion under the Hobbs Act.  We have successfully argued for reduced sentences and dismissal of charges.  Our attorneys are well versed in challenges to the interstate and foreign commerce prong of the offense, and stand ready to argue against forensic evidence (DNA, fingerprints, cell site history) the government may use.

The Hobbs Act states:

Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be [punished].

18 U. S. C. §1951(a).

Hobbs Act Robbery

The United States Attorney’s Manual makes clear that “the robbery offense in 18 U.S.C. § 1951 is to be utilized, as a general rule, only in instances involving organized crime, gang activity, or wide-ranging schemes.”  Historically, this crime has been used to prosecute robbery sprees involving gas station robberies, commercial institution robberies and other types of robbery that are not classified as bank robbery or pharmacy robbery.  Bank and pharmacy robbery are separate offenses.  In some instances, the government has used the Hobbs Act to prosecute gang on gang violence and the robbery of a drug dealer finding that those offenses affect interstate commerce.

In the context of the Hobbs Act, robbery is defined generally as:

Robbery is the unlawful taking or obtaining of personal property from the person or in the presence of another, against their will, by means of actual or threatened force, or violence, or fear of injury, whether immediately or in the future, to their person or property, or property in their custody or possession, or the person or property of a relative or member of their family or of anyone in their company at the time of the taking or obtaining.

Hobbs Act Extortion

Hobbs Act extortion differs from robbery in one very significant way; consent.  Where as in robbery property is obtained without the consent of the person being robbed, extortion involves the taking of property from a consenting individual.  However, that consent must be induced through force or threats.  Extortion is generally defined as:

Extortion is the obtaining of another person’s property or money, with (his)(her) consent when this consent is induced or brought about through the use of actual or threatened force, violence or fear.

In addition to traditional extortion, the government may also charge that occurs under color of official right.  This particular crime is aimed at government officials or employees.  In essence, this crime attempts to regulate the authority of public office.  As further explanation, the definition of extortion under color of official right is:

A public official or employee commits “extortion under color of official right” if they uses the power and authority of their office in order to obtain money, property, or something of value from another to which neither that public official or employee nor that government office has an official right.   Extortion under color of official right means that a public official induced, obtained, accepted, or agreed to accept a payment to which he or she was not entitled, knowing that the payment was made in return for taking, withholding, or influencing official acts.

Interstate and Foreign Commerce

Robbery and extortion are both crimes that have traditionally been prosecuted by state courts.  However, the government has some ability to regulate traditional state criminal offenses, but only in limited circumstances.  In order for the United States government to regulate robbery and extortion under the Hobbs Act the law looks to the Commerce Clause of the Constitution.

There are three categories of activity that Congress may regulate under its commerce power: (1) the use of the channels of interstate commerce; (2) the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities; and (3) those activities having a substantial relation to interstate commerce, i.e., those activities that substantially affect interstate commerce. U.S.C.A. Const. Art. 1, § 8, cl. 3.
Taylor v. United States, 136 S. Ct. 2074 (2016)

By alleging that a robbery or extortion has somehow affected commerce, the government may be authorized to prosecute crimes under the Hobbs Act.  The impact of the crime on interstate commerce does not have to be significant, and the courts have made clear that a minimal impact is sufficient for a conviction.  In some cases, the Courts have found that drug dealing affects interstate commerce as a general principle because drug crimes are regulated under federal law, even if they only occurred intrastate.  The expansion of the commerce prong of the Hobbs Act is troubling.

The Court in Taylor left open the question of how interstate commerce is impacted in cases other than drug robberies.  However, prior cases have determined that the robbery of a fast food restaurant, a gas station, or a pizza delivery man also impacts interstate commerce because of their status as a business with ties to out of state activities and the movement of money and goods.
In explaining how drug dealing affects interstate commerce the Court said:

The production, possession, and distribution of controlled substances constitute a “class of activities” that in the aggregate substantially affect interstate commerce, and therefore, Congress possesses the authority to regulate and to criminalize the production, possession, and distribution of controlled substances even when those activities occur entirely within the boundaries of a single State. U.S.C.A. Const. Art. 1, § 8, cl. 3.

Taylor v. United States, 136 S. Ct. 2074 (2016)

The point of contention as to whether a particular act affects interstate or foreign commerce is a significant issue in the Hobbs Act context.  This is an issue that can and should be raised as there is some reason to believe there still remains division in the Supreme Court on the issue.  The Supreme Court, in a dissent by Justice Thomas pointed out that the decision in Taylor, “creates serious constitutional problems and extends our already expansive, flawed commerce-power precedents.”  Justice Thomas makes the point that the commerce clause has been expended to such a great extent that it should be limited, “[t]o avoid giving Congress a general police power…”

Attempt and Conspiracy

The Hobbs Act can be violated through both attempt and conspiracy.  Attempt and conspiracy are inchoate crimes, meaning they are committed by seeking to or preparing to commit another crime.  In this context, attempt means that a “substantial step towards the completion” of the Hobbs Act violation has occurred.  A conspiracy criminalizes the agreement to commit a Hobbs Act crime.  In both instances, something less than the completion of the actual robbery or extortion is required.

How Can We Help

The federal criminal defense attorneys at The Henry Law Firm PLLC have significant experience representing individuals charged or being investigated for Hobbs Act crimes.  We have represented individuals charged with sophisticated extortion schemes and and a variety of robbery crimes.  Our knowledge of the law behind commerce clause litigation, violent offense sentencing enhancements and the use of forensic evidence by the government gives us the upper hand in Hobbs Act defense.  Call the Henry Law Firm PLLC at 646-820-0224 to learn how our innovation and experience can help you.

What to Do If You Are Facing a Money Laundering Investigation

According to experts, around $5 trillion is money laundered around the world each year, and law enforcement authorities recover only a small fraction of that money. But, in spite of this gap – and quite possibly because of it – U.S. law enforcement authorities take an extremely hard line in pursuing the money laundering investigations that do end up on their radar, and it is often tertiary and unsuspecting individuals and entities that find themselves in the crosshairs of a money laundering investigation. While we might think of large banks and other financial institutions when we think of money laundering, it is common for business partners, service providers, art and antique dealers, auction houses, trustees, directors and board members, and all types of financial service providers to get caught up in a money laundering investigation. It is certainly frightening to get a visit, call, or other inquiry from a federal agent or agency – or even to hear rumors of those close to you being approached – but what you do next can have enormous implications for your future.

Understand That Criminal Liability Can Exist Even If You Were “Ignorant”

Again, federal law enforcement takes a very aggressive approach to policing money laundering, and they do this for a number of reasons. One is that it is often more feasible for law enforcement to collect evidence of financial crimes than the crimes that produced the money being laundered, such as international trafficking. Law enforcement can also approach those who may played a secondary and/or unwitting role in the money laundering and use methods to intimidate them and their businesses that might lead them to the persons committing the crimes from which the money profits flowed.

Unlike with many other criminal laws, prosecutors do not have to show that a person willfully (in other words, intentionally) violated federal laws on money laundering in order to secure a conviction. Using the concept of “willful blindness,” prosecutors can successfully argue that a person is guilty of money laundering when he makes efforts to conceal the profits of criminal activity even if he did not know the money was the product of illegal activity but had strong reason to suspect it was. For example, an art dealer facilitating transactions on behalf of a wealthy drug dealer to conceal profits might be charged with money laundering if it can be shown there was a reason to suspect the nature of the funds.

Furthermore, anyone who merely encourages or assists such a transaction (e.g. service providers) could potentially be liable even if he or she was not a primary party to the transaction.

Do Not Wait to Speak With a Criminal Defense Attorney

Does this mean every person connected with a transaction involving money derived from illegal activity is criminally liable? Absolutely not, but it does mean that prosecutors can find a way to pin criminal liability on persons in ways they may well not have imagined. Thus, it is a mistake to speak with law enforcement – or any other non-attorney for that matter (any conversation you have not protected by a privilege may be used against you) – without an attorney under the impression that you have nothing to worry about.

By speaking with a criminal defense attorney experienced in federal investigations at the first sign of a money laundering investigation, you can take steps to determine what your potential criminal liability might be (which may be none, but better to find that out in a confidential consultation with an attorney who represents only your interests), and work with that attorney in communicating with law enforcement to reach your best possible outcome, which can include a dropped investigation or favorable agreement.

Contact a New York Defense Attorney Today

The Henry Law Firm PLLC provides criminal defense to individuals and businesses throughout New York in all state and federal investigations and prosecutions. If you believe you may be under investigation for money laundering, do not hesitate to contact us today to schedule a confidential consultation regarding your matter.  

FAQ: Tax Fraud Penalties

Can I be charged with a crime if my taxes are done incorrectly?

Yes. Not only can the IRS can hand down civil penalties for improperly doing your taxes, federal prosecutors can charge you with a tax-related crime if you fail to file a tax return, provide false or fraudulent statements to the IRS, or willfully evade paying your full share of taxes.

What are the criminal penalties for failing to file a tax return?

You face up to one year in prison and up to $100,000 in fines (or up to $200,000 in the case of a corporation). These penalties also apply when a taxpayer fails to pay taxes on time or fails to supply information to the IRS.

What are the criminal penalties for making fraudulent or false statements to the IRS?

You face up to three years in prison and up to $250,000 in fines (or up to $500,000 in the case of a corporation). Making fraudulent or false statements can apply to statements made in your tax return or to government officials.

What are the criminal penalties for tax evasion?

You face up to five years in prison and up to $250,000 in fines (or up to $500,000 in the case of a corporation).

What is the difference between tax evasion and tax avoidance?

Tax avoidance is the legal process of taking advantage of strategies allowable by the tax code to reduce your taxes. Tax avoidance is therefore legal. Tax evasion is using strategies not allowed by the tax code to reduce or eliminate the taxes you pay. Tax evasion is illegal.

What are common methods of tax evasion that can result in criminal penalties?

  • Failing to report income from a side job
  • Failing to report income from rentals
  • Failing to report income paid in cash
  • Overstating deductions that do not exist, such as charitable donations not actually made

What if a person makes a mistake on their tax returns?

If you negligently make a mistake, then you still may owe civil penalties, but the government cannot convict you of a crime unless it was willful on your part. The standard of proof in showing willfulness is guilt beyond a reasonable doubt.

Can I be charged with a crime for assisting another person or entity in tax fraud?

Yes, as with most crimes, you can be charged with a tax-related crime as an accomplice if you assisted and/or encouraged another person to commit tax fraud.

Contact a New York Criminal Defense Attorney Today

The Henry Law Firm PLLC provides criminal defense to individuals and businesses throughout New York. Contact us today to schedule a confidential consultation regarding your matter.  

Do I Need My Own Lawyer in an SEC Investigation?

If your employer is being investigated by the SEC, then you likely have some questions about the SEC investigation process but may not feel comfortable asking them of your supervisor or co-workers. This is understandable, as an SEC investigation can mean significant civil penalties such as fines, permanent career and reputational damage, or loss of a job. One of the most common questions employees of a company under SEC investigation ask is whether they need their own lawyer, and they often trip themselves up by asking the wrong people to answer that question.

Your Company’s Attorneys Cannot Tell Whether You Need a Lawyer

When an employee learns that an SEC investigation is occurring, it is common for the employee to ask the HR director, the General Counsel, or even an outside law firm representing the company whether the employee needs his or her own lawyer. First, it is critical to understand that all of those people are there to serve the interests of the company, not you the employee.  Thus, it is not their job to be concerned with whether you would be better off from a legal perspective by having your own attorney.

In addition, they might not have any idea what your role in potential SEC violations were and thus whether it would serve your interests to have your own attorney or not. If company attorneys are speaking with you about events related to a potential SEC investigation (also note that the company attorneys are likely not under any obligation to tell you whether an investigation is indeed occurring or not), there is a good chance they know less than you do about potential violations at that point and are indeed speaking with you to gather that information, thus making them even less likely to be able to answer that question accurately.

The Company Attorneys Represent the Company, Not You

Beyond the issue of presenting the question of whether you need your own attorney to company lawyers, regardless of what they might say to you, the fact of the matter is that those attorneys represent the company and not you. Simply put, their allegiance and duties are directed towards representing the company’s interests, and that will always be their overriding mission.

Does this mean they are out to get you and will ultimately throw you under the proverbial bus in an SEC investigation? Not necessarily, and the company (and by extension, its attorneys) may have a strong interest in defending, so long as your interests are aligned with those of the company.

But, when push comes to shove, it is the case that they are not there to defend your interests and formulate legal strategies to protect your reputation, career, and future. In many cases, companies under SEC or other federal investigation can curry favor with law enforcement by showing that they are taking a hard line against employees in the company who have violated laws, and so penalizing and/or terminating an employee can be an action a company takes on the advice of its attorneys to reach a favorable outcome with the SEC. And this outcome may be reached on the basis of information you as the soon-to-be terminated employee provide to the company and its attorneys under the mistaken impression that doing so would help your interests.

Contact a New York White Collar Defense Attorney Today

Thus, if you have reason to suspect you face negative consequences in an SEC investigation of your employer, it is wise to reach out to your own white collar investigations attorney to discuss your options in a confidential setting. The Henry Law Firm PLLC provides white collar defense in SEC investigations to individuals and businesses throughout New York. Contact us today to schedule a confidential consultation regarding your matter.  

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