May 9, 2014
 crimes in The Wolf of Wall Street
The crimes in The Wolf of Wall Street are prosecuted aggressively.

Jordan Belfort, a former stockbroker and motivational speaker, is the real life subject of the memoir he authored entitled “The Wolf of Wall Street.” His life during the 1980s and 1990s of extraordinary wealth, corruption and illegal drugs was also the inspiration behind the Academy Award-nominated 2013 film of the same name starring Leonardo DiCaprio.

Belfort was the founder of Stratton Oakmont, a Long Island, N.Y. brokerage firm which functioned as a boiler room bilking unsuspecting investors out of hundreds of millions of dollars in a penny stock swindling operation. According to the film, his life involved frequently soliciting the services of a prostitutes and becoming addicted to Quaaludes and cocaine during his years as a stock swindler.

The FBI prosecuted Belfort in 1998 for securities fraud and money laundering. Belfort agreed to cooperate with the FBI in exchange for a reduced four-year sentence in federal prison for his role in the “pump and dump” scheme.

Law enforcement investigation of “The Wolf of Wall Street” could have resulted in many state and federal charges. Let’s review some of these crimes depicted in the movie and the punishment you could receive if you were convicted of committing these crimes…

California Possession of a Controlled Substance (Health & Safety Code Section 11350)

“The Wolf of Wall Street” broker Jordan Belfort and his cohorts led an excessive lifestyle, constantly partying using illegal drugs. Eventually, Belfort became addicted to Quaaludes and cocaine.

Like cocaine, Quaaludes are highly addictive with little or no accepted medical use. They are illegal to possess, use, distribute and manufacture.

Simple possession of a controlled substance is typically prosecuted as a state crime. If you are caught in possession of illegal drugs in California, prosecutors could charge you with a felony, punishable by 16 months, or two or three years in jail and a maximum $20,000 fine.

Fortunately, you may be able to avoid serving jail time by participating in a California drug diversion program, including:

  • Drug probation (Proposition 36);
  • Deferred Entry of Judgment (Penal Code 1000); or
  • California Drug Courts.

Possession of a Controlled Substance under Federal Law (21 U.S.C. Section 844)

Generally, possession of a controlled substance may be prosecuted under federal law whenever you and/or the drug travels in interstate or international commerce (21 U.S.C. § 844). Crossing state lines is probably the most common way you can be federally prosecuted for unlawful drug possession.

Federal law distinguishes between possession of a controlled substance for personal use (simple possession) and drug trafficking. Simple possession is punishable under federal law as follows:

  • First offense: up to one year imprisonment; a minimum fine of $1,000, or both.
  • Second offense: 15 days to two years imprisonment; a minimum fine of $2,500, or both.
  • Third or subsequent offense: 90 days to three years imprisonment; a minimum fine of $5,000, or both.

Engaging in/Soliciting Prostitution (Penal Code Section 647 (b))

federal and state crimes
The Wolf of Wall Street involved both federal and state crimes.

Jordan Belfort hires the services of many prostitutes in “The Wolf of Wall Street.” He could have been charged with participating in prostitution if he had been in California under Penal Code Section 647(b). Prostitution, like drug possession, is usually prosecuted as a state offense, unless the crime involves crossing state lines or foreign travel.

Penal Code Section 647(b) defines prostitution as any “lewd act between persons for money or other consideration.” You can be prosecuted for soliciting, participating, or agreeing to participate in an act of prostitution whether the medium of exchange is money, drugs or something else of value.

Both a alleged prostitute and his or her customer (a “john”) are subject to California prostitution laws. Prostitution in California is generally a misdemeanor offense, punishable by up to six months in jail and a fine of up to $1,000.

Your minimum sentence would increase depending on the number of times you are convicted of a prostitution crime.

Additionally, ordering you to register as a sex offender is also within the judge’s discretion under California Penal Code Section 290. However, this devastating consequence is not a mandatory requirement of a prostitution conviction (provided that no one under the age of 18 was involved).

Securities Fraud (18 U.S.C. Section 1348)

Securities fraud covers a broad range of illegal activities, all of which involve investor deception or the manipulation of financial markets. Examples of securities fraud include Ponzi or pyramid schemes, investment schemes, broker embezzlement and foreign currency fraud.

If you trade stock or other securities using information that is not available to the public, you can be prosecuted for what is commonly known as “insider trading.”

Brokers at Jordan Belfort’s investment firm in “The Wolf of Wall Street” were predominately involved in high yield investment fraud, trading undervalued securities known as “penny stocks” to mostly low income investors who could ill-afford to lose their hard earned money.

High yield investment scams typically involve:

  • Promises of high rates of return with little or no risk;
  • Many different forms of investments (for example: stocks, bonds, commodities, real estate, precious metals);
  • “Too good to be true” investment opportunities; and
  • Unsolicited offers by telephone, email or in person.

Securities fraud under federal law is a felony. You face up to 25 years imprisonment, a fine of up to $250,000 ($500,000 for an organization), or both if you are convicted of this very serious federal offense.

Money Laundering (18 U.S.C. Section 1956)

Money laundering is the practice of making proceeds from a crime appear to have been legitimately earned. You can be federally prosecuted for money laundering whenever you:

  • Conduct or attempt to conduct a financial transaction which involves the proceeds of an illegal activity, knowing the funds involved represent proceeds from unlawful activity;
    • With intent to promote furtherance of the illegal activity; or
    • With intent to defraud the Internal Revenue Service; or
  • Knowing the transaction is intended to:
    • Conceal or disguise the nature, location, source or ownership of the unlawfully obtained funds; or
    • Avoid a transaction reporting requirement under state or federal law.

Knowing he is being investigated by the FBI, Jordan Belfort launders about $20 million dollars he obtained though his various investment schemes. “The Wolf of Wall Street” swindler recruits his British aunt to secure a Swiss bank account for his ill-gotten money in an effort to hide and therefore prevent the funds from being seized by the U.S. government.

If you are convicted of money laundering under federal law, you can be ordered to pay a $500,000 fine or twice the value of the property involved in the transaction, whichever is greater, or you can be imprisoned for up to 20 years, or both.

Contact a Federal Attorney at Wallin & Klarich Today

If you are facing charges for any of the crimes depicted in “The Wolf of Wall Street,” you should contact our experienced criminal defense attorneys at Wallin & Klarich today. Hiring an attorney from Wallin & Klarich to represent you is your best chance to avoid the serious consequences of a state or federal conviction.

federal attorneys
Our federal attorneys can help you get the best possible result in your case.

Our team of skilled and knowledgeable attorneys has over 30 years of experience employing the most effective strategies to successfully defend our clients facing severe sentences and heavy fines. We may be able to negotiate for a reduction or dismissal of the charges against you. If your case goes to trial, we have one objective: a not-guilty verdict.

With offices in Los Angeles, Sherman Oaks, Torrance, Tustin, San Diego, Riverside, San Bernardino, Ventura, West Covina and Victorville, our attorneys at Wallin & Klarich are available 24 hours a day, 7 days a week to make certain all of your constitutional rights are protected. We will help you get the best result possible in your case.

Call us today at (877) 4-NO-JAIL or (877) 466-5245 for a free telephone consultation. We will get through this together.

Author

Author: Paul Wallin

Paul Wallin is one of the most highly respected attorneys in Southern California. His vast experience, zealous advocacy for his clients and extensive knowledge of many areas of the law make Mr. Wallin a premiere Southern California attorney. Mr. Wallin founded Wallin & Klarich in 1981. As the senior partner of Wallin & Klarich, Mr. Wallin has been successfully representing clients for more than 30 years. Clients come to him for help in matters involving assault and battery, drug crimes, juvenile crimes, theft, manslaughter, sex offenses, murder, violent crimes, misdemeanors and felonies. Mr. Wallin also helps clients with family law matters such as divorce and child custody.

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