Issuing a False Financial Statement is a financial fraud crime under New York Section 175.45, carrying serious legal consequences if convicted.
Issuing a False Financial Statement Charge Explained
Under New York Penal Law Section 175.45, a person is guilty of issuing a false financial statement when, with intent to defraud, s/he:
- Knowingly makes or utters a written instrument which purports to describe the financial condition or ability to pay of some person and which is inaccurate in some material respect;
- Represents in writing that a written instrument purporting to describe a person`s financial condition or ability to pay as of a prior date is accurate with respect to such person`s current financial condition or ability to pay, whereas he knows it is materially inaccurate in that respect.
What Specific Documents Might Constitute A “Written Instrument” Under This Law?
The term “written instrument” in the context of issuing a false financial statement is broadly interpreted under New York law. It encompasses various financial documents that purport to describe a person’s financial condition or ability to pay, including loan applications, personal financial statements, credit applications, corporate financial statements, and investment prospectuses. Courts examine whether the document materially misrepresents a person’s or business’s financial condition rather than focusing on the specific format of the instrument.
What Is Considered “Materially Inaccurate” Regarding Financial Condition?
A financial statement is considered “materially inaccurate” when it contains misrepresentations that would influence a reasonable person’s decision-making regarding a transaction. This typically includes substantial overstatements of assets or income, significant understatements of liabilities or expenses, omission of significant debts, or falsely representing the current status of prior financial obligations. The key factor is whether the inaccuracy would be important to someone relying on the statement to make financial decisions.
Sentencing and Penalties for Issuing a False Financial Statement
Under New York Law, issuing a false financial statement is a Class “A” Misdemeanor. As such, this particular charge is punishable by:
- Up to 1 year in jail
- Probation (2 to 3 years);
- A split sentence (up to 6 months in jail, rest of the time on probation);
- Conditional Discharge (with the Court setting additional conditions at sentencing, such as restitution or completion of community service);
- Unconditional Discharge (no sentencing conditions set by the sentencing court);
- Time Served (even if just the few hours spent on arrest processing).
How Does a Prosecutor Prove “Intent To Defraud” In These Cases?
Proving intent to defraud in false financial statement cases typically requires prosecutors to demonstrate that the defendant knowingly made or uttered a written instrument containing materially inaccurate information about a financial condition or ability to pay. Evidence often includes documentation of significant discrepancies between the represented financial condition and actual finances, patterns of similar misrepresentations, or direct evidence showing the defendant knew the statement was false when presented. The prosecution must establish that the misrepresentation was made deliberately rather than through honest mistake or negligence.
Frequently Asked Questions Regarding Issuing a False Financial Statement Charge
1. What is the Statute of Limitations for Issuing a False Financial Statement?
Under New York State Law, the severity of the charge controls the length of the statute of limitations As this charge is a Class “A” misdemeanor, the applicable statute of limitations is 2 years. Importantly, many things can toll or delay the statute of limitations, such a being absent from a jurisdiction. You should consult an attorney to see if any of the exclusions apply to your case.
2. Am I eligible for a Desk Appearance Ticket (DAT) for Issuing a False Financial Statement?
Yes, you will be eligible to receive a Desk Appearance Ticket for this charge, assuming you don’t have any other warrants, or holds. Additionally, most other white collar crimes (misdemeanors, Class “E” and Class “D” felonies) are eligible for Desk Appearance Tickets. Thus, if you are arrested for these charges, you will receive a ticket to come to court at a later date. Importantly, do not be misled into thinking your case isn’t serious. Even if you receive a desk appearance ticket, you may end up with a misdemeanor on your criminal record.
3. Will I Have a Criminal Record if I am Convicted of Issuing a False Financial Statement?
Yes, if you plead guilty or at convicted at trial of Issuing a False Financial statement, you will have a misdemeanor on your record. Importantly, under New York’s new sealing law (CPL 160.59), you should be able to seal your conviction after 10 years after you complete all of your sentencing requirements (such as probation, community service, or jail time).
4. What Criminal Charges are Related to Issuing a False Financial Statement?
Issuing a False Financial Statement is typically part of a fraudulent scheme designed to obtain money, or something else of value based on usually overinflated assets. As such, this charge is frequently coupled with:
- Scheme to Defraud,
- Grand Larceny,
- Petit Larceny,
- Falsifying Business Records,
- Forgery,
- Criminal Possession of a Forged Instrument.
5. How Does Issuing a False Financial Statement Differs From Falsifying Business Records?
While both charges involve misrepresentations in written documents, they differ in several key respects. Issuing a false financial statement specifically targets misrepresentations of financial condition or ability to pay, while Falsifying Business Records (PL §175.05) addresses the broader act of making false entries in business records or preventing true entries from being made. Falsifying Business Records can be elevated to a felony when done to commit or conceal another crime, whereas issuing a false financial statement remains a misdemeanor regardless of circumstances. The false financial statement charge focuses specifically on deceptive representations of financial status rather than general record falsification.
Contact Experienced New York White Collar Defense Attorneys
If you or your loved one has been charged with New York Issuing a False Financial Statement, you need experienced white collar criminal defense counsel. We have handled countless white collar fraud cases in federal and state courts. Check out our representative cases and please call us at 212-729-9494 or schedule your consultation today.