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Home / The Legal Process for Financial Fraud Cases in California

The Legal Process for Financial Fraud Cases in California

Financial fraud cases are complex legal matters that can have serious consequences for those involved. Courtroom proceedings are complicated, and even getting to that stage involves multiple critical stages, with the assistance of a criminal defense attorney crucial every step of the way. At The Law Offices of Stanley L. Friedman, we specialize in defending clients against financial fraud charges in Los Angeles and throughout California. This article provides a detailed, step-by-step guide to how financial fraud cases are prosecuted in California. If you are facing charges or under investigation for financial fraud, contact The Law Offices of Stanley L. Friedman for immediate assistance from a skilled and experienced Los Angeles white-collar criminal defense lawyer.

1. Investigation


The legal process for prosecuting financial fraud typically begins with an investigation. Investigations can be initiated by various agencies, including the Federal Bureau of Investigation (FBI), the Securities and Exchange Commission (SEC), or state law enforcement agencies. These investigations often start based on tips, suspicious activity reports, audits, or routine regulatory checks.

Evidence Gathering

Investigators collect evidence through methods such as surveillance, reviewing financial records, interviewing witnesses, and executing search warrants. The goal is to gather sufficient evidence to establish probable cause that a crime has been committed.

2. Indictment and Charges

Grand Jury

If the evidence is compelling, prosecutors may present the case to a grand jury. The grand jury reviews the evidence and decides whether there is enough to formally charge the individual with a crime. This process is known as an indictment.

Filing Charges

Once an indictment is obtained, formal charges are filed. The accused is then notified of the charges and may be arrested or summoned to appear in court.

3. Arraignment

Initial Appearance

Typically the first court appearance is an arraignment. During this hearing, the accused is formally read the charges and asked to enter a plea (guilty, not guilty, or no contest). The judge may also address bail and set conditions for release if applicable.

Bail Hearing

In financial fraud cases, bail may be set based on the severity of the charges, the defendant’s criminal history, and the risk of flight. The defense attorney can argue for lower bail or for the defendant to be released on their own recognizance.

4. Pre-Trial Proceedings


During the pre-trial phase, both the prosecution and defense engage in discovery, where they exchange evidence and information related to the case. This includes witness lists, documents, and other relevant materials.


Pre-trial motions may be filed by the defense to challenge the admissibility of evidence, dismiss charges, or address other legal issues. Common motions in financial fraud cases include motions to suppress evidence obtained through illegal searches or motions to dismiss based on violation of constitutional rights.

Plea Bargaining

In many cases, the prosecution and defense may engage in plea bargaining. This involves negotiating a plea agreement where the defendant agrees to plead guilty to lesser charges in exchange for a reduced sentence or other concessions. Plea agreements can help avoid the uncertainties of a trial.

5. Trial

Jury Selection

If the case goes to trial, the first step is jury selection. Both the prosecution and defense have the opportunity to question potential jurors to ensure a fair and impartial jury is chosen.

Opening Statements

Once the jury is selected, both sides present their opening statements, outlining the evidence and arguments they will present during the trial.

Presentation of Evidence

The prosecution presents its case first, calling witnesses and presenting evidence to support the charges. The defense then has the opportunity to cross-examine witnesses and present its own evidence and witnesses.

Closing Arguments

After all evidence has been presented, both sides make their closing arguments, summarizing their cases and attempting to persuade the jury to deliver a verdict in their favor.

Jury Deliberation and Verdict

The jury deliberates in private to reach a verdict. They must determine whether the prosecution has proven the defendant’s guilt beyond a reasonable doubt. The verdict can be guilty, not guilty, or, in some cases, a hung jury (where the jury cannot reach a unanimous decision).

6. Sentencing

Sentencing Hearing

If the defendant is found guilty, a sentencing hearing is scheduled. During this hearing, both the prosecution and defense can present evidence and arguments regarding the appropriate sentence.

Factors Influencing Sentencing

The judge considers various factors when determining the sentence, including the severity of the crime, the defendant’s criminal history, the impact on victims, and any mitigating or aggravating circumstances.

Possible Sentences

Sentences for financial fraud can range from probation and fines to significant prison time, depending on the specifics of the case and the charges.

Contact The Law Offices of Stanley L. Friedman for Defense Against Financial Fraud Charges in Los Angeles

Successfully navigating the legal process for financial fraud cases in California requires strategic advice and skilled legal representation at each step. At The Law Offices of Stanley L. Friedman, we are dedicated to providing expert defense for individuals facing these serious charges. If you or a loved one is involved in a financial fraud case, call 310-598-2000 to discuss your legal options and defense strategies.

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