Conspiracy to Commit Securities Fraud (18 U.S.C. 1348; 18 U.S.C. 371)

Last Updated on: 23rd April 2025, 01:25 am

CONSPIRACY TO COMMIT SECURITIES FRAUD
18 U.S.C. § 1348 + 18 U.S.C. § 371

You’re here, on our criminal defense law firm’s website, because you—or someone you care about—just heard the words “conspiracy to commit securities fraud,” and now you realize you might need a criminal defense attorney. Under 18 U.S.C. § 1348 the government can hit you with up to 25 years for a single fraud count, and under 18 U.S.C. § 371 it can add on five more for the agreement itself. That is real prison time, real fines, and a felony record that follows you – your entire life, to every job interview, apartment application, and border crossing. Pretending it’s “white-collar so they’ll go easy” is silly—ask hedge fund owner Raj Rajaratnam, who woke up a billionaire and went to bed with an 11-year sentence.

Our job, at Spodek Law Group, is to turn that panic into a plan, because fear alone never saved anyone and our criminal defense attorneys can help you win your case, if you are honest and work with us. Let’s get blunt and walk through what the statutes mean, why the feds use the conspiracy hook, how sentencing works, and what moves give you leverage instead of excuses.

THE TWO-PRONGED PUNCH First prong: securities fraud means a scheme to lie about, manipulate, or steal value in connection with buying or selling a security that trades on the public markets. It covers a wide array of legal issues like fake earnings, insider tips, pump-and-dump hype—anything that involves deceit for money.

Second prong: conspiracy means two or more people agreed— a verbal handshake counts—to engage in that that scheme, and someone took a concrete step to make it happen, maybe just an email, or a draft press release. Even if the fraud never closes, the conspiracy is already a finished crime. That’s why prosecutors stack these charges; they know juries sometimes choke on complicated accounting but rarely miss a simple “they planned it together.” If the conspiracy sticks, you face the five-year penalty even when the fraud count wobbles. Translation: walking away early, or never touching the shovel yourself, does not save you once you joined the digging crew.

Let’s cut to the penalties because that is the only language most defendants finally respect. A straight § 1348 conviction brings up to 25 years, plus a fine that can reach twice the gross gain or loss—so in a ten-million-dollar scam the fine alone can run twenty million. § 371 throws in five more years and another quarter-million fine for individuals. Judges calculate your advisory range under the U.S. Sentencing Guidelines; once the loss number crosses $9.5 million the base offense jumps, and sophisticated-means, leadership-role, and 10+-victim enhancements pile on fast. A blue-collar foreman who fudges overtime reports does less time than a CFO who inflates quarterly revenue, but don’t fantasize about probation—federal courts seldom hand it out when investors collectively lose seven figures. Prison is the default. Period. Added sting: supervised release, mandatory restitution, asset forfeiture, SEC civil penalties, and a lifetime ban from serving as an officer of a public company. You will not “bounce back” without a customs-sized red flag on your résumé.

WHY THE FEDS CHARGE CONSPIRACY They do it because it widens the net. With conspiracy in play, every co-schemer becomes liable for acts done by every other member, so the government needs only one chat log or voice-mail to drag you into the center. That evidence slides in under the co-conspirator hearsay exception, meaning the jury hears things you never said but that your partner blurted out. You think you’re safe because you never signed the phony invoice? If you nodded, stayed silent, or kept cashing paychecks while the bigger lie rolled forward, the prosecutor paints you as the loyal wheel-man. Jurors love clear stories; “they all drove the getaway car” is clearer than “the GAAP footnote on deferred revenue was misleading.” Understand the strategic consequence: conspiracy lets the government threaten multiple decades, which pressure co-defendants to flip, which supplies more testimony, which makes the next plea offer even worse. It snowballs.

Stop telling yourself “I didn’t mean it.” Intent is what they will infer from emails, Slack threads, and trading records. If the file shows you dumping shares minutes after insider chatter, prosecutors hand the jury a timeline and call it motive. Saying “but everyone at the office did it” admits the agreement element. Saying “my lawyer approved the press release” only works if you gave full facts and followed advice in good faith—half-truths kill that defense. Your biggest blind spot is believing your internal narrative matters more than documents. It does not. The paper trail speaks louder, and it never sweats on cross-examination.

CASE FLASH—WORLD COM Bernard Ebbers, once hailed as a visionary CEO, green-lit bogus accounting tricks to prop up WorldCom’s stock. The books showed billions in fake income. When the fraud collapsed investors lost almost eleven-billion dollars. Ebbers was hit with one count of conspiracy and one count of securities fraud; the judge stacked 25 years. Consequence: the man died in custody. Lesson: the conspiracy count acted as glue—jurors could convict even if they didn’t grasp the accounting footnotes. When you conspire you hand the prosecutor a simple narrative that overrides technical fog.

STRATEGIC ADVICE—BRUTAL AND DIRECT First, shut your mouth to law-enforcement until counsel is present. The FBI will knock politely, record every word, and serve it cold at trial. Second, audit your digital footprint yesterday. Deleting files after a subpoena is obstruction—another felony. Preserve everything, then let us map what helps and what hurts. Third, decide if you are the small fish or the shark. Small fish can leverage cooperation; sharks rarely get mercy because they set the plan. Fourth, acknowledge financial exposure: restitution orders can outlive prison and garnish wages for decades. Plan for that cash-flow reality instead of day-dreaming about a quick comeback. Finally, separate ego from outcome. If your instinct is to “fight because I’m innocent,” be sure the evidence actually supports innocence, not wishful self-talk. We will tell you harsh truths; if the odds of acquittal are five percent, clinging to pride means a 30-year sentence instead of five. Choose reality over bravado.

DEFENSE PATHS—NO MAGIC, JUST WORK We start with intent. Show that you relied on accounting professionals, disclosed doubts, and tried to correct errors before the indictment. That undercuts willfulness. Next, attack the supposed agreement. Did coworkers really share a single plan, or were there separate one-offs the government lazily lumped together? Supreme Court precedent (Kotteakos v. United States) forces prosecutors to prove one integrated conspiracy, not a wheel of disconnected spokes. If venue is weak—maybe no overt act touched the charging district—we file to dismiss or transfer. We scour search-warrant affidavits for Fourth Amendment defects; if evidence was seized on stale traderumors rather than probable cause, we move to suppress, and if the court agrees, critical emails vanish from the jury’s view, which can gut the narrative. Should trial be inevitable, we humanize you—blue-collar jurors distrust Wall Street suits but respect honesty and remorse. We simplify the timeline; we hammer holes in materiality; we expose cooperating witnesses as sentence-shoppers. That is not theatre—it is survival.

Call-Out: “GOOD FAITH DEFENSE BUYS FREEDOM.” If you genuinely believed the statements were true, fraud collapses for lack of intent. But “genuine” means emails say, “I think this is accurate,” not “Let’s hope auditors don’t notice.” The difference is daylight versus handcuffs. Clients who fake optimism on Slack, then wink in private, slaughter their own defense. You cannot rehabilitate that after indictment. Either the contemporaneous record shows concern, or it buries you. Face that early so we can pivot strategies.

PENALTIES—NO HYPERBOLE, JUST NUMBERS Conspiracy alone can cost you five years, a $250,000 fine, and supervised release. Securities fraud can add 25 years and fines at twice the gain or loss. For a $5-million pump-and-dump the statutory fine ceiling may hit $10 million. Judges almost always order restitution equal to investor loss, so you could owe that $5 million forever, with interest, while the Treasury intercepts tax refunds and the U.S. Marshals seize assets. The DOJ Fraud Section also pushes forfeiture, forcing you to disgorge cars, homes, brokerage accounts—anything traceable to proceeds. Civil exposure follows: the SEC seeks its own penalties and industry bars; class-action plaintiffs then piggy-back, demanding triple damages under securities statutes. Consequence: even after release you could spend a lifetime paying judgments. Anyone telling you “do your time and reset” is selling delusion.

CALLING OUT YOUR BLIND SPOTS Blind spot one: blaming culture. “Everyone massaged numbers” is still illegal. Blind spot two: thinking private Slack channels stay private—third-party servers get subpoenaed, messages resurface. Blind spot three: believing you can out-smart sentencing guidelines with fancy mitigation letters while hiding assets offshore. Judges smell the hustle, add obstruction points, and pile on time. Blind spot four: underestimating psychological stress on family—spouses file for divorce when assets freeze, children lose college funds, parents become co-signers on restitution. If you love them, you plan for that fallout instead of pretending it won’t hit.

Now the leverage points—the parts of the system we can bend. One: timing. The first cooperator often gets the biggest discount; delay kills leverage. Two: narrative simplification. Jurors tune out jargon; we translate audits into plain-speech and hammer reasonable doubt on single-line pivots. Three: venue fights. Move the case from a finance-savvy district like Manhattan to a district less fond of Wall Street, and juror bias shifts a notch. Four: sentencing variances. Demonstrate atypical charity, caretaking obligations, service to community. These factors rarely erase prison but can cut years. Five: mental-health mitigation. If undiagnosed anxiety or bipolar disorder fed reckless trading, documented treatment can persuade a judge to moderate. None of these points works if you stay in denial or feed us half-truths. Brutal honesty with your counsel is non-negotiable; half-confessions blow strategic windows.

WHAT WINNING LOOKS LIKE IN REAL LIFE Sometimes dismissal for illegal search. Sometimes acquittal on fraud but guilt on conspiracy, trimming decades to five years. Sometimes a plea to one count, concurrent with a strong sentencing memo, slicing guideline exposure from 15 years to three. Occasionally probation in low-loss, first-offense insider cases. Winning is context; expecting a fairy-tale exoneration when terabytes of chats prove intent is childish, and we will say that to your face. Our standard is concrete improvement over the worst-case, not fictional perfection.

FINAL JUDGMENT If you’re reading this, accept that the next move is decisive. Keep hoping, and the system steamrolls you. Act, and you create leverage. The statutes are brutal. The penalties are real. The defenses exist—but only for clients who confront facts without excuses. We are Spodek Law Group. We defend nationwide, twenty-four seven. We call bullshit, then we build strategy. If you are ready to face the truth, contact us. If not, enjoy the spin—it stops when the cell door slams.

No article substitutes for legal advice on your specific facts. Reading this does not create an attorney-client relationship. Every case is different. Call us before you act.