Running a business in the United States is complicated. Business owners
have to follow laws and regulations set not only by state officials but
ones enforced by federal agencies as well. These can be confusing to follow
for even the savviest business owner, and in some instances the business
decisions can even lead to accusations that a white collar crime has occurred.

Take the complicated nature of running a business under U.S. law alone
and add to it conducting business with investors and other interested
parties in foreign countries where a whole new set of laws are added.
With the connected status of the current era, conducting business with
or in a foreign country is more common than one might think. For one New
Jersey-based consultant, this complicated relationship led to federal
fraud charges.

According to the Securities and Exchange Commission, the consultant and
his firm conducted something called reverse mergers that they say violate
federal securities laws. The agency claims that the consultant used his
position to obtain access into U.S. capital markets for 20 privately owned
companies in China.

With these companies, the consultant than allegedly failed to disclose
specific holdings as required by the SEC. Other violations were not specifically
listed in the report but were called “outright fraud” by the
SEC. U.S. investors allegedly lost a large amount of money while the consultant
and his firm retained the consulting fees measuring into the millions.

Source: Insurance Journal, “U.S. SEC Charges N.J.-based Consultant with Fraud in Chinese Reverse Mergers,” Sarah N. Lynch, Dec. 12, 2012

If reverse mergers sounds like a confusing term, you are not alone. White
collar crimes are often some of the most confusing both prior to accusations
and after. Our New Jersey law firm has extensive experience handling these
types of cases.