There are several types of crimes that fall under the broad category of federal currency schemes. Historically, such crimes are related to counterfeiting money or forging documents, such as bank notes, with the intent to defraud.
However, with the recent emergence of virtual currencies such as Bitcoin, there is an increasing possibility of potential scams using cryptocurrencies. A knowledgeable attorney could help explain what qualifies as Michigan federal currency schemes. And if you have been charged with a federal currency scheme offense, consult with a seasoned financial criminal defense lawyer.
Counterfeiting U.S. CurrencyOne of the most common Michigan federal currency schemes is counterfeiting currency. According to Article 1, Section 8, Clause 5 of the U.S. Constitution, the United States federal government has exclusive authority to produce U.S. print and coin money. Money printed anywhere other than the two U.S. Mints operated by the Treasury Department, and any valid currency that has been fraudulently modified is considered counterfeit.
Under 18 U.S. Code Chapter 25, it is prohibited for an individual or entity to forge, counterfeit, or alter any obligation or security of the U.S. with the intent to defraud another individual or entity. Obligation or security essentially means not just coins and paper money, but also any U.S.-issued financial instrument. Using counterfeit money or introducing it into the commerce system – such as depositing counterfeit money into a bank or using it to make a purchase – is also a federal offense, as is possessing any instrument that can be used to counterfeit money.
The penalties associated with counterfeiting U.S. currency vary depending on the specific crime but can be as high as a $250,000 fine and a maximum prison sentence of 20 years. The statute of limitations for the federal crime of counterfeiting money is five years, according to 18 U.S.C. 3282.
Rise of Virtual Currency-Related Schemes in MichiganIn May 2014, the U.S. Securities and Exchange Commission (SEC) issued an investor alert to make investors aware of the possible risks associated with investing in virtual cryptocurrencies such as Bitcoin. Bitcoin is essentially a decentralized, digital currency that is not regulated or backed by any government. This currency can be exchanged for traditional currencies, such as the U.S. dollar, or used to purchase goods and services as if it were a traditional form of currency.
Because Bitcoin is a relatively new innovation, there is the potential for an increase in Michigan federal currency schemes trying to get individuals to invest in this new technology. In fact, the SEC already charged one individual with running a Bitcoin-related Ponzi scheme in July 2013. The organizer used an online Bitcoin forum to attract investors and used the money from investors to pay off personal expenses.
In addition, because Bitcoin's exchange rate has fluctuated significantly since the first bitcoins were created, early Bitcoin purchasers are now wealthier than before, making them attractive targets to fraudsters. Fraudsters also prefer the greater privacy associated with digital currencies, as well as the absence of federal regulation.
The rise in Bitcoin users and digital currency, in general, led the Internal Revenue Service (IRS) to issue guidance in March 2015 on virtual currency, stating that it would treat it as property for federal tax purposes. Accordingly, tax principles that apply to property transactions now also apply to transactions using Bitcoin.
Consult with an Attorney About Michigan Federal Currency SchemesGiven the complex nature of financial schemes, it can be difficult to fully understand the offenses that fall into this category. If you were arrested or believe you are being investigated for Michigan federal currency schemes, it is important to understand your rights may be in danger.
These offenses carry harsh penalties including hundreds of thousands of dollars in fines and decades of prison. Further, as a felony, they can also result in the permanent loss of certain rights. Speak with an aggressive Michigan criminal defense attorney to learn more.