Federal prosecutors in Los Angeles have dropped stock manipulation charges after wiretap evidence was deemed inadmissible. After an extensive 3-year investigation, the charges were originally filed against nine individuals in an alleged $30 million pump-and-dump scheme.
The defendants in this while collar case were accused of heavily promoting worthless stocks, which they then sold to more than 20,000 investors worldwide for large profits. During the investigation for this alleged scheme, investigators used wiretaps on phone lines to gather key evidence. The defendants then challenged this evidence on the grounds that the government was not completely forthcoming or clear in the need for recording the phone conversations.
On Tuesday, prosecutors moved to dismiss the charges against the nine defendants with the reasoning that the wiretap evidence would be inadmissible at trial, due to "omissions and misstatements" in the application to make the recordings. Intercepting and recording phone conversations is generally considered a major invasion of privacy and is therefore only pursued or allowed if other methods of investigation have failed.
This case proves just how important it is for investigators to obtain evidence through lawful means. When evidence is procured in violation of a defendant's constitutional rights or in any way that deviates from lawful procedures or standards, this could be used to have such evidence dismissed. The defense in the stock manipulation case above was able to prove that the wiretap evidence had been secured after an incomplete application for such wiretaps was given to the defendants. Because the prosecution's case relied so heavily on this evidence, they were forced to dismiss the charges against the defendants.
White collar crime and criminal charges of any kind are only as strong as the evidence upon which indictments are made. Involving an attorney as early in the process as possible, even before formal charges are filed, may help a suspect or arrestee avoid having his or her rights violated. Pre-file intervention can help a suspect avoid formal charges in the first place. To learn more about your rights and options in the face of any criminal investigation or charges, call a Los Angeles criminal defense lawyer at Lessem & Newstat.
Our competent professionals stand up and fight for our clients' rights inside and outside the criminal courtroom, using more than 50 years of combined experience that includes more than 200 jury trials to seek the best possible result. We have secured hundreds of case dismissals on behalf of our clients; now is the time to find out how we can make a difference in your case. Protect your future and contact Lessem & Newstat today.