White Collar and Fraud Charges in Virginia: When Business Problems Become Criminal Cases

The information in this article is for general informational purposes only and does not constitute legal advice. Laws change and individual circumstances vary. Consult a licensed Virginia attorney about your specific situation. Reading this article does not create an attorney-client relationship nor does merely contacting our office through this website or any other means.

---

White collar criminal charges can arise from conduct that, at the time, may have seemed like a business dispute, a financial setback, or even a misunderstanding. The line between civil liability and criminal prosecution is not always obvious, and many people facing fraud investigations or charges are genuinely surprised to find themselves in the criminal justice system. This article explains the most common white collar and fraud charges in Virginia, the legal elements that distinguish criminal conduct from civil wrongs, and why involving a defense attorney early in any investigation is critical.

Obtaining Money by False Pretenses: Va. Code § 18.2-178

Virginia Code § 18.2-178 makes it a crime to obtain money, property, or other things of value from another person through false pretenses. The crime requires:

• A false representation of a material fact
• Knowledge that the representation was false
• Intent to defraud
• The victim relied on the false representation and parted with something of value

The distinction between this crime and a civil fraud claim is largely one of intent. In civil fraud, the plaintiff must prove the defendant made a false statement with knowledge of its falsity and with the intent to induce reliance. In the criminal version, the prosecution must prove the same elements beyond a reasonable doubt.

Classification by amount: The severity of the charge depends on the value obtained:

• Less than $1,000: Class 1 misdemeanor
• $1,000 or more: Class 5 felony (1 to 10 years, or up to 12 months at jury’s discretion)
• $200,000 or more: Class 4 felony (2 to 10 years)
• $500,000 or more: Class 3 felony (5 to 20 years)

This statute is frequently charged in cases involving fraudulent sales, fake business transactions, misrepresentations in connection with services never rendered, and similar conduct.

Embezzlement: Va. Code § 18.2-111

Virginia Code § 18.2-111 prohibits embezzlement, which involves the wrongful taking of property by a person who was lawfully entrusted with it. This commonly arises in employment contexts: an employee who takes money from a cash register, uses an employer’s accounts for personal expenses, or diverts client funds.

The key distinction from ordinary theft (larceny) is that in embezzlement, the defendant had lawful initial possession or access to the property. The criminality lies in the conversion of that property for their own use or the use of another without authorization.

Penalties for embezzlement follow the same value thresholds as larceny and false pretenses:

• Less than $1,000: Class 1 misdemeanor
• $1,000 or more: Class 5 felony
• Amounts above $200,000 and $500,000: enhanced felony classifications

Embezzlement investigations often begin internally, with an employer discovering discrepancies in accounts. By the time criminal charges are filed, the employer may have already conducted a substantial internal investigation. If you are an employee who learns that your employer is investigating financial irregularities in which you may be implicated, consulting a criminal defense attorney before speaking with company investigators or law enforcement is essential.

Bad Checks: Va. Code § 18.2-186

Virginia Code § 18.2-186 makes it a crime to issue a check or other payment knowing at the time that there are insufficient funds in the account to cover the payment, with intent to defraud.

There is an important nuance: the statute creates a presumption of intent to defraud if the check is not paid within five days of written demand. This means that a bounced check that is not made good promptly after notice can support criminal prosecution.

Classification:

• Check amounts less than $1,000: Class 1 misdemeanor (with some ability to avoid prosecution by making the check good within five days of written demand)
• $1,000 or more: Class 6 felony

This charge often surprises people who wrote checks on overdrawn accounts not with fraudulent intent but due to cash flow problems. The intent element is genuine and can be contested, but the presumption created by the statute shifts the burden once the threshold conditions are met.

Identity Theft: Va. Code § 18.2-186.3

Virginia Code § 18.2-186.3 prohibits identity theft, which involves using another person’s identifying information, without their consent, to obtain money, credit, goods, services, employment, or other things of value, or to avoid legal obligations.

“Identifying information” is broadly defined and includes Social Security numbers, financial account numbers, credit card numbers, passwords, biometric data, and similar personal information.

Identity theft charges are treated seriously and the penalties are scaled by the number of victims and the value obtained. The offense ranges from a Class 1 misdemeanor (use of one person’s information, less than $500) to a Class 4 felony (multiple victims or larger amounts).

Identity theft charges frequently arise alongside other charges, such as credit card fraud, computer crimes, and financial institution fraud.

Computer Fraud: Va. Code § 18.2-152.3

Virginia Code § 18.2-152.3 is Virginia’s computer fraud statute, prohibiting unauthorized access to a computer or computer network to obtain property or services, commit fraud, or obtain personally identifying information.

The statute covers a range of conduct, from unauthorized access to financial systems to phishing schemes and account takeovers. Computer fraud charges can arise in both business contexts (a former employee accessing company systems after termination) and personal contexts (accessing someone else’s email or financial accounts without authorization).

Classification depends on the value obtained and the nature of the conduct. Violations can range from Class 6 felonies to more serious felony classifications for more significant harm.

Federal Wire Fraud

When a fraud scheme involves the use of interstate wires (including emails, phone calls, wire transfers, and electronic communications), federal prosecutors may charge wire fraud under 18 U.S.C. § 1343. Wire fraud is a federal felony carrying up to 20 years in federal prison per count.

Federal prosecution for wire fraud is common in cases involving:

• Multi-state schemes
• Bank fraud or mortgage fraud
• Large-scale investment or securities fraud
• Internet-based fraud schemes
• Government contracting fraud

Federal charges are handled in U.S. District Court rather than Virginia state court. Federal investigations are conducted by the FBI, the Secret Service, or other federal agencies. Sentences in federal court are governed by the Federal Sentencing Guidelines, which can result in lengthy prison sentences even for first-time offenders in white collar cases.

The possibility of both state and federal charges for the same underlying conduct is real. A business fraud case investigated locally in Montgomery County may attract federal attention if the scheme involves interstate elements. Anyone who is the subject of a fraud investigation should consult with an attorney experienced in both state and federal criminal defense.

When Civil Disputes Become Criminal Referrals

A frequent question from business owners and individuals is: can a civil dispute become a criminal case? The answer is yes, under certain circumstances.

Civil fraud and criminal fraud often arise from the same underlying conduct. A person who loses a civil lawsuit for fraud may also be charged criminally with the same conduct. A creditor who is owed money may file a civil suit and simultaneously refer the matter to law enforcement. An employer who discovers employee theft typically pursues civil recovery and may also report to police.

The key factors that drive a civil matter toward criminal prosecution include:

• Clear evidence of intent to deceive, not merely a failure to perform a contract
• Significant financial loss to identifiable victims
• Multiple victims or a pattern of conduct
• The defendant’s denial of wrongdoing even when confronted with evidence
• Prior similar conduct

Not every breach of contract or business dispute reaches the level of criminal fraud, even if one party believes they were deceived. A contract claim, for example, does not become fraud simply because the other party failed to deliver on a promise, unless there was never any intent to perform at the time the promise was made. The line between a business dispute and criminal fraud is heavily fact-dependent and is often aggressively contested.

The Importance of Early Legal Counsel

White collar investigations often proceed for months before charges are filed. During this period, investigators may be gathering documents, interviewing witnesses, reviewing financial records, and building a case. A target of such an investigation may be approached for an interview by investigators who describe it as routine or informational.

Speaking with investigators without counsel in a white collar case is one of the most significant risks a subject can take. Anything said can be used as evidence, including statements that seem innocent at the time. The Fifth Amendment right against self-incrimination applies, and a person is not obligated to answer investigators’ questions.

If you learn you are under investigation for fraud, embezzlement, or any white collar offense in the New River Valley or elsewhere in Virginia, contacting a criminal defense attorney before any interview with law enforcement is the most protective step you can take. Early involvement by defense counsel often shapes how an investigation develops, whether charges are ultimately filed, and what the resolution of the matter looks like.

---

This article is general information only and is not legal advice. Do not rely on this article to make decisions about your specific situation. Contact Valley Legal or another licensed Virginia attorney to discuss your case. Attorney advertising.

Valley Legal, PLLC is located at 107 Pepper St SE, Christiansburg, Virginia 24073, and serves clients throughout the New River Valley of Virginia, including Montgomery County, Blacksburg, Radford, Pulaski, and surrounding communities.