Many white-collar crimes allow a defense of good faith, particularly those involving fraud. Securities fraud, mail fraud, and other such crimes require that the government show that the defendant knowingly and intentionally committed the crime. The good faith defense applies when a defendant engaged in the alleged illegal conduct, but did not have the requisite knowledge and intent to commit the crime because they believed in good faith that they were acting lawfully.
Showing specific intent to commit a crime is an element of fraud and other federal white-collar crimes. The good faith defense directly counters this element by showing that the defendant did not act with intent.
To establish a good faith defense, the defendant’s illegal actions must have been inadvertent or careless or based on a mistake or error in judgment. For example, the defendant passed along inaccurate financial information to investors or shareholders unaware of the mistakes. While the defendant intentionally gave the documents to the other parties, there was no intent to defraud because the defendant thought the information was accurate.
A good faith defense may also apply if the defendant misinterpreted the law because it was vague or unsettled. Federal laws are often complicated, and it may be reasonable for a defendant to violate the law unintentionally believing they were in compliance.
There isn’t a statutory definition of good faith so it can be challenging to establish the defense. Intent is subjective but must be shown with evidence. Judges must make a determination whether the defendant had the requisite intent based on the specific facts and evidence in the case. Lack of intent or good faith may be shown through communications (e.g., emails, texts), documents (e.g., financial records and reports, operational manuals), testimony by the defendant and other witnesses, and other evidence.
Because of the difficulty in establishing good faith, it is critical to have an attorney experienced in successfully handling the type of crime a defendant is accused of committing. A skilled attorney can attack the prosecution’s proof of intent and build a strong case for the good faith defense.
If you are being investigated or have been charged with a crime, contact our firm to learn how we can defend you and protect your rights.