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Defendants in Federal Fraud Cases Can Rely Upon Advisor’s Counsel

In federal criminal cases charging a defendant with fraud relating to the operation of a business, a common defense is asserted that the defendant relied upon the advice of a professional or other advisor, such as an accountant, and had the right to assume his/her conduct was legal. In a federal criminal trial where the defendant is charged with fraud or a related crime and the defense is a good faith reliance upon such advice, the judge should normally allow the defendant to assert such defense and should normally instruct the jury that such good faith reliance upon an advisor is a valid defense if supported by the facts.

In criminal fraud cases in federal court, the government normally must prove that the defendant intended to defraud the victim. In other words, the government must prove beyond a reasonable doubt that the defendant’s purpose in performing the acts that constitute the fraud crime was to defraud another person out of services, money and/or other property. As a result, a logical defense to criminal fraud would be that the defendant had no ill-intent, but rather thought he/she was acting lawfully based upon the advice of an advisor. This is why good faith reliance upon the advice of a professional can be a valid defense in federal criminal fraud cases. Of course, whether the defendant acted with intent to defraud someone or was honestly and innocently relying upon an advisor is a matter for the jury to decide.

However, in order for the jury to properly understand and evaluate this defense when deliberating, the judge in the case must instruct the jury about this good faith reliance defense. If the judge rejects the federal criminal defense lawyer’s request to instruct the jury about the defendant’s good faith reliance upon an advisor defense, the jury cannot consider it when deciding the case. Under federal law, the judge does not have the authority to decide what the defendant’s defense is and instruct the jury accordingly. Likewise, the federal judge in a criminal case does not have the authority to decide that the defendant’s defense of good faith reliance upon an advisor is weak or lacking in credibility and therefore refuse to instruct the jury about the defense.

The threshold to allow a jury to consider that defense is low. If there is any foundation in the evidence for the defense that the defendant relied upon the advice of an advisor, then the judge must instruct the jury to consider that defense. If the jury finds that the defendant did rely in good faith upon the advice of such a professional, it should be a complete defense to a fraud charge in federal criminal court and result in a not guilty verdict.