Most federal white-collar investigations are invisible to their targets. By the time FBI agents appear at your door, IRS special agents request an interview, or a grand jury subpoena arrives at your office, the government may have spent months — or years — building its case behind the scenes.
The scale of federal financial crime enforcement continues to grow. According to the FBI’s Internet Crime Complaint Center (IC3) 2024 Annual Report, internet-enabled financial crime losses in the United States reached $16.6 billion in 2024, a 33% increase from the prior year. That staggering figure has made financial fraud one of the fastest-growing federal enforcement priorities — and New York sits at the center of it.
The Eastern District of New York (EDNY) — covering Nassau County, Suffolk County, Brooklyn, Queens, and Staten Island — and the Southern District of New York (SDNY) — covering Manhattan and the Bronx — are two of the most active federal white-collar prosecution venues in the country. Together, these districts handled more than 1,700 federal cases in FY 2024, including hundreds of fraud, theft, and embezzlement prosecutions.
Understanding how these investigations unfold — the agencies involved, the legal tools they use, and the critical decision points along the way — is essential for anyone who may be under federal scrutiny. Lebedin Kofman LLP handles federal criminal defense cases in both the EDNY and SDNY, including matters in Nassau County and Suffolk County.
What Is a Federal White-Collar Crime?
The term “white-collar crime” was coined by sociologist Edwin Sutherland in 1939 to describe financially motivated, nonviolent crimes committed by individuals in positions of trust or professional standing. Today, federal white-collar crimes are defined by the statutes Congress has enacted — not by the collar color of who commits them.
The most common offenses prosecuted in the EDNY and SDNY include:
- Wire fraud (18 U.S.C. § 1343) and mail fraud (18 U.S.C. § 1341) — the most broadly charged federal fraud statutes, central to many New York prosecutions. Learn more about how wire fraud charges arise from digital communications.
- Bank fraud (18 U.S.C. § 1344)
- Healthcare fraud (18 U.S.C. § 1347) — a major enforcement priority across Long Island and the five boroughs. Lebedin Kofman LLP represents clients facing healthcare fraud investigations and charges.
- Securities and commodities fraud (18 U.S.C. § 1348)
- Tax evasion and tax fraud (26 U.S.C. § 7201)
- Money laundering (18 U.S.C. §§ 1956–1957)
- Identity theft and aggravated identity theft (18 U.S.C. §§ 1028, 1028A)
- Public corruption and bribery (18 U.S.C. §§ 201, 666)
- RICO / racketeering (18 U.S.C. §§ 1961–1968)
- PPP loan fraud, COVID relief fraud, and procurement fraud
Federal courts have jurisdiction when crimes cross state lines, use interstate wires, involve federally insured institutions, or violate statutes enacted by Congress. The DOJ’s overview of the federal criminal process outlines the full jurisdictional framework.
According to data compiled by the Transactional Records Access Clearinghouse (TRAC), U.S. Attorney offices filed 4,332 white-collar prosecutions in FY 2024 — a dramatic decline from the 10,269 prosecutions filed three decades earlier in FY 1994. However, recent DOJ policy under Attorney General Pam Bondi and the May 2025 “Focus, Fairness, and Efficiency” memorandum have refocused priorities on fraud harming American consumers, cartel money laundering, sanctions evasion, and trade fraud.
The Federal Agencies That Investigate White-Collar Crime in New York
Every federal investigative agency has a distinct jurisdiction. Knowing which agency is involved tells you a great deal about what category of federal crime is being investigated — and what tools the government is likely deploying.
Federal Bureau of Investigation (FBI)
The FBI is the lead investigative agency in the majority of federal white-collar cases. The FBI’s New York Field Office — one of the largest in the country — maintains dedicated squads focused on securities fraud, healthcare fraud, public corruption, cybercrime, and financial institution fraud. FBI investigations typically begin covertly, through analysis of financial records, surveillance, and the use of confidential informants, well before any overt contact with a target.
Securities and Exchange Commission (SEC)
The SEC’s Division of Enforcement investigates potential violations of the federal securities laws through informal inquiry, witness interviews, and formal orders of investigation authorizing subpoenas. All SEC investigations are conducted privately. When the SEC staff concludes an investigation, it presents findings to the Commission, which may authorize a civil action in federal court, an administrative proceeding, or a criminal referral to the DOJ.
Critically, under the SEC’s Rules Relating to Investigations, SEC staff may share nonpublic investigation materials with DOJ prosecutors after obtaining approval from a senior division official — meaning civil and criminal investigations of the same conduct routinely proceed in parallel.
IRS Criminal Investigation (IRS-CI)
IRS Criminal Investigation is the only federal agency that can investigate potential violations of the Internal Revenue Code. IRS-CI special agents are assigned to cases after a multi-level internal review determines that sufficient evidence exists to initiate a criminal investigation. Investigations are typically initiated based on referrals from civil revenue agents who notice fraud indicators, tips from whistleblowers, or information from other law enforcement agencies. IRS criminal investigations in tax fraud cases can run 12 to 24 months or longer before a referral for prosecution.
Homeland Security Investigations (HSI)
HSI is the second-largest federal investigative agency in the United States, enforcing over 400 federal statutes. HSI investigates financial crimes including money laundering, identity theft, COVID-19 fraud, commercial fraud, cybercrime, and transnational criminal organization financing — areas with direct relevance to EDNY Long Island prosecutions.
Other Key Federal Agencies
Several other agencies play important roles in New York white-collar investigations. The DEA investigates drug-related financial crimes and money laundering tied to narcotics trafficking. The U.S. Postal Inspection Service (USPIS) handles mail fraud and wire fraud cases involving postal channels. FinCEN and OFAC lead anti-money laundering and sanctions violation investigations. The DOJ Criminal Division directly prosecutes complex fraud, FCPA violations, money laundering, and organized crime.
How Federal White-Collar Investigations Begin
Most federal white-collar investigations begin covertly, often with no indication to the target that they are under scrutiny. By the time a target receives a subpoena, target letter, or search warrant, investigators have typically spent weeks to months — sometimes years — building their evidentiary foundation.
How Investigations Are Triggered
Whistleblowers and confidential informants — including disgruntled employees, former business partners, and competitors — are among the most common sources of FBI tips in white-collar cases. The DOJ’s Corporate Whistleblower Awards Pilot Program, expanded in 2025, now offers financial rewards in priority areas including healthcare fraud, trade fraud, and sanctions evasion.
Regulatory referrals from the SEC, IRS, FinCEN, and other agencies routinely alert the DOJ or FBI to suspected criminal violations after detecting suspicious patterns. Suspicious Activity Reports (SARs), filed by banks and financial institutions under the Bank Secrecy Act, flag unusual transaction patterns that may indicate fraud, money laundering, or tax evasion. Civil litigation can also reveal evidence of criminal conduct that federal prosecutors then pursue independently. And in the EDNY, federal fraud investigations frequently originate through joint task force work involving the FBI, IRS-CI, and HSI.
The Covert Phase
During this stage, federal agents may review publicly available records, court filings, business registrations, real estate records, and financial disclosures — all without the target’s knowledge. They may also interview the target’s associates, employees, accountants, and attorneys using informal inquiry methods that do not require formal legal process.
The Governing Framework
The DOJ’s Principles of Federal Prosecution (Justice Manual § 9-27.000) establish that a prosecutor may commence or recommend prosecution only if they believe the person will more likely than not be found guilty beyond a reasonable doubt by an unbiased trier of fact and that any conviction will be upheld on appeal. This threshold shapes the entire arc of how federal white-collar investigations are built and escalated.
The Grand Jury: The Engine of Federal White-Collar Investigation
The federal grand jury is the central mechanism through which evidence is gathered and charges are formally brought in nearly all federal white-collar cases. The DOJ Justice Manual on Grand Juries (§ 9-11.000) governs its operation.
A federal grand jury consists of 16 to 23 jurors, and at least 12 must vote in favor to return an indictment. Grand jury proceedings are secret — no judge presides, and only the prosecutor, witnesses, and grand jurors are present in the room. Unlike a trial jury, which decides guilt or innocence, the grand jury’s role is exclusively investigative: to determine whether probable cause exists to formally charge a person with a federal crime.
The Two Types of Grand Jury Subpoenas
A subpoena ad testificandum compels a person to appear and testify before the grand jury under oath. A witness who testifies before a federal grand jury has no right to have an attorney present in the grand jury room, although they may step outside to consult with counsel.
A subpoena duces tecum compels the production of documents, records, or other tangible evidence. In white-collar cases, these subpoenas routinely demand years of bank records, email correspondence, financial statements, tax returns, contracts, and internal communications.
Both types of subpoenas are legally binding commands backed by the contempt power of the federal court. They cannot be ignored without serious legal consequences.
What Receiving a Grand Jury Subpoena Means
Receiving a grand jury subpoena signals that the government is actively gathering evidence in a federal criminal investigation, even if no charges have been filed. A subpoena recipient may be classified as a witness (someone with relevant information but not suspected of wrongdoing), a subject (someone whose conduct falls within the scope of the investigation), or a target (someone against whom the government believes it has substantial evidence of a crime).
Under DOJ policy, prosecutors are required to advise a grand jury witness of their target status before the witness testifies, upon request. The Fifth Amendment right against self-incrimination applies in grand jury proceedings, and any witness who is a target or subject should consult with a federal defense attorney before appearing or producing documents.
The Target Letter: The Federal Government’s Warning Shot
A federal target letter is a formal written notice from a U.S. Attorney’s Office informing a person that they are the target of a federal grand jury investigation — meaning federal prosecutors believe they have substantial evidence linking that person to a federal crime.
Target letters typically include the statute or statutes under investigation, notice of the recipient’s Fifth Amendment rights, a statement that the recipient is a target rather than a witness, and often an invitation to testify before the grand jury or meet with prosecutors.
A target letter does not mean an indictment is certain — but it signals that charges may be imminent and that the investigation has reached an advanced stage.
Witness vs. Subject vs. Target — The DOJ Designations
Understanding the DOJ’s classification system is essential for assessing your level of risk:
- Witness: A person with relevant information who is not suspected of wrongdoing.
- Subject: A person whose conduct falls within the scope of the investigation. Status may escalate as the investigation progresses.
- Target: A putative defendant against whom there is substantial evidence of criminal wrongdoing. This is the highest risk classification.
What to Do Immediately
Do not respond to a target letter without retaining experienced federal defense counsel first. Do not make any statements to investigators without counsel present. Do not destroy, alter, or conceal any documents. An attorney engaged at this stage can contact the Assistant U.S. Attorney’s office, assess whether cooperation or a pre-indictment proffer is appropriate, and in some cases persuade the government to decline prosecution.
Search Warrants and Electronic Surveillance
Federal Search Warrants
Under the Fourth Amendment and 18 U.S.C. § 3103a, a federal search warrant may be issued to search for and seize any property that constitutes evidence of a criminal offense in violation of federal law. Warrants are issued by a neutral federal magistrate judge upon a showing of probable cause.
In white-collar cases, search warrants are typically executed at businesses, residences, and storage facilities. Agents may seize computers, phones, servers, financial records, corporate documents, and any other items described in the warrant. Under Federal Rule of Criminal Procedure 41(d), the subject of a search is entitled to receive a complete copy of the search warrant — and reviewing it carefully is the first step in understanding the scope of the government’s investigation.
Courts may also authorize delayed-notice warrants — sometimes called “sneak and peek” warrants — under 18 U.S.C. § 3103a(b), where notification of the search is delayed for up to 30 days after execution (extendable for good cause) if immediate notification would adversely affect the investigation.
Electronic Surveillance — Title III Wiretaps
Federal law enforcement may apply for court authorization to intercept wire, oral, and electronic communications — including phone calls, emails, and text messages — under Title III of the Omnibus Crime Control and Safe Streets Act (18 U.S.C. §§ 2510–2522).
To obtain a wiretap order, federal agents must demonstrate probable cause that a specific enumerated offense is being committed, a necessity showing that conventional investigative techniques have been tried and failed or cannot reasonably succeed, and particularity about the communications to be intercepted and the persons involved. Wire intercepts must be authorized by a senior DOJ official before application to the court, and the resulting order is limited to 30 days, with extensions requiring a renewed application.
The necessity requirement is one of the most litigable aspects of a federal wiretap authorization. A flawed necessity showing — one in which agents inadequately described the failure of conventional techniques — can result in suppression of all intercepted communications, making this a critical area for defense challenge.
The Proffer Session: “Queen for a Day”
A proffer session — colloquially called “queen for a day” — is a meeting between a federal target or subject, their defense attorney, and federal prosecutors and agents at which the target provides information about their knowledge of criminal activity in exchange for limited-use immunity.
The proffer is governed by a written proffer letter, which typically protects the target’s statements from direct use against them in the government’s case-in-chief at trial — but does not prevent the government from using those statements for impeachment, rebuttal, or sentencing purposes, or from following up on leads derived from the session.
The Strategic Risks
The risks of a proffer session are substantial. Anything said during the session that later contradicts other evidence can be used to charge the defendant with false statements under 18 U.S.C. § 1001 or obstruction of justice. Leads generated from the proffer can be pursued independently by agents and used against the defendant at trial without restriction. And a proffer agreement binds only the U.S. Attorney’s Office that issued it — not other federal districts, state prosecutors, or foreign authorities.
The Strategic Opportunity
A proffer can also be the first step toward a formal cooperation agreement and a § 5K1.1 substantial assistance motion at sentencing — one of the most powerful sentence-reduction mechanisms in the federal system.
The decision to proffer should only be made after thorough preparation with experienced federal defense counsel who has reviewed all available evidence and assessed the government’s case strength.
From Arrest to Indictment: The Overt Phase
Arrest
Federal arrests in white-collar cases typically occur after an indictment has been returned — not before, as is common in violent crime investigations. The defendant may be permitted to self-surrender with counsel, which is far preferable to a public arrest at home or at the workplace. In some cases, the government files a criminal complaint before convening the grand jury, and a magistrate issues an arrest warrant based on a showing of probable cause.
Initial Appearance and Arraignment
Either the same day or the day after arrest, the defendant is brought before a U.S. Magistrate Judge for an initial hearing, at which they are informed of the charges, arrangements are made for legal representation, and the court determines bail or detention. Federal detention hearings in white-collar cases can be vigorously contested, particularly for defendants facing detention under the Bail Reform Act’s risk-of-flight or danger-to-community provisions.
At arraignment, the defendant is formally presented with the indictment and enters a plea. In virtually all federal white-collar cases, the initial plea is not guilty — preserving all pretrial options.
The Grand Jury Indictment
For all federal felonies, unless the defendant waives this right, the Fifth Amendment requires formal charges to be brought by grand jury indictment. The DOJ’s Justice 101 – Charging page explains how a federal grand jury listens to the prosecutor and witnesses and votes in secret on whether sufficient evidence exists to charge the defendant. Federal grand juries indict in the overwhelming majority of cases presented to them — reflecting the extremely low evidentiary threshold of probable cause required at this stage.
For Long Island defendants, federal grand jury proceedings take place at the EDNY courthouse in Central Islip (100 Federal Plaza) or Brooklyn (225 Cadman Plaza East), depending on the county of the alleged offense.
Post-Indictment: Discovery, Motions, and the Resolution Decision
Discovery
Under Federal Rule of Criminal Procedure 16, the government must produce certain categories of materials — including statements of the defendant, documents, and expert reports — to the defense. Exculpatory evidence must be disclosed under the constitutional mandate of Brady v. Maryland (1963), and witness statements are governed by the Jencks Act.
In white-collar cases, discovery typically involves hundreds of thousands to millions of pages of financial records, email communications, and business documents. The sheer volume of discovery itself becomes a strategic consideration for both sides.
Pretrial Motions
Defense attorneys in EDNY and SDNY white-collar cases regularly file suppression motions challenging the legality of searches, wiretaps, and grand jury subpoenas; motions to dismiss for selective prosecution or failure to state an offense; and motions in limine to exclude prejudicial evidence at trial. Learn more about strategies for fighting wire and mail fraud allegations in New York.
The Resolution Decision
The DOJ’s overview of the federal criminal process outlines the full pathway from investigation through trial or guilty plea. Approximately 98% of federal criminal convictions result from guilty pleas rather than trials — a figure driven in substantial part by the severity of the “trial penalty” in the federal sentencing guidelines. The decision of whether to plead guilty, cooperate, or proceed to trial is the most consequential decision a federal defendant will make, requiring comprehensive knowledge of the evidence, the applicable guideline range, the cooperation landscape, and the individual judge’s sentencing practices.
White-Collar Prosecution in the EDNY and SDNY: Local Context
EDNY — Nassau County, Suffolk County, Brooklyn, Queens, Staten Island
According to the U.S. Sentencing Commission’s FY 2024 statistical data for the EDNY, the Eastern District reported 727 total federal cases sentenced in FY 2024, with 130 fraud, theft, and embezzlement cases — representing 17.9% of all EDNY cases. The mean sentence for EDNY fraud cases was 18 months, and the median was 5 months, reflecting the substantial portion of cases resolved with probation or short sentences for nonviolent defendants.
In FY 2024, 54.1% of all EDNY sentenced defendants received downward variances from the guideline range, and 17.5% received § 5K1.1 substantial assistance reductions — among the highest cooperation rates of any district in the country.
The EDNY’s Long Island Criminal Division at 100 Federal Plaza in Central Islip prosecutes federal crimes affecting Nassau and Suffolk County’s approximately 2.8 million residents, including PPP fraud, healthcare fraud, securities fraud, and financial institution fraud.
SDNY — Manhattan, the Bronx
The USSC’s FY 2024 data for the SDNY shows the Southern District reported 1,048 total federal cases sentenced in FY 2024, with 264 fraud, theft, and embezzlement cases — representing 25.2% of all SDNY cases, the highest proportion of any major crime category in the district. The mean sentence for SDNY fraud cases was 26 months, and the median was 14 months.
In FY 2024, 65.5% of SDNY sentenced defendants received downward variances, reflecting the district’s aggressive cooperation culture and the high proportion of complex financial cases resolved through cooperation agreements. The SDNY handles the nation’s most complex securities fraud, insider trading, cryptocurrency, and public corruption cases.
2025–2026 Enforcement Shift
In May 2025, the DOJ Criminal Division issued its “Focus, Fairness, and Efficiency” memorandum, refocusing white-collar enforcement on fraud harming the American public, cartel money laundering, sanctions evasion, and trade/tariff fraud. In March 2026, the DOJ released its first-ever Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy, which provides companies that self-disclose, cooperate, and remediate with a clear commitment to declination of prosecution absent aggravating circumstances. Both the SDNY and EDNY will implement this policy while maintaining their independent prosecutorial cultures.
Why Early Intervention Is Critical
The single most important decision in a federal white-collar case is often made before an indictment is ever returned. Attorneys who engage at the pre-indictment stage can assess the government’s evidence through careful analysis of subpoenas, search warrants, and third-party contacts; present exculpatory information to prosecutors before a charging decision is made; negotiate the scope of cooperation and the terms of a proffer; and challenge unlawful surveillance or search and seizure before evidence is formally introduced.
Federal white-collar investigations in the EDNY and SDNY often unfold over 12 to 36 months before charges are filed. Engaging counsel when an investigation first becomes apparent — upon receipt of a grand jury subpoena, a target letter, or a request for an FBI interview — can be decisive in determining whether charges are filed at all.
The DOJ’s Principles of Federal Prosecution expressly allow prosecutors to decline prosecution when the evidence does not meet the beyond-a-reasonable-doubt threshold, or when declination would better serve the interests of justice — a decision that competent federal defense counsel can meaningfully influence.
Frequently Asked Questions
What triggers a federal white-collar investigation?
Federal white-collar investigations are typically triggered by tips from whistleblowers or confidential informants, referrals from regulatory agencies like the SEC or IRS, Suspicious Activity Reports filed by financial institutions, civil litigation that reveals criminal conduct, or coordinated multi-agency law enforcement operations. In New York, many EDNY and SDNY white-collar investigations originate through joint FBI/IRS-CI/HSI task force work.
What is a federal grand jury subpoena, and do I have to comply?
A federal grand jury subpoena is a legally binding court order compelling the production of testimony, documents, or both. It cannot be ignored without risking contempt of court. Recipients may be witnesses, subjects, or targets of a federal investigation. If you receive a federal grand jury subpoena, you should consult with a federal defense attorney immediately before appearing or producing any documents.
What is the difference between a federal target letter and a grand jury subpoena?
A grand jury subpoena is a legal command to produce documents or testimony. A target letter is a notification from the U.S. Attorney’s Office that you are specifically believed to have committed a crime and are the intended subject of prosecution. Target letters indicate a far more advanced stage of the investigation and a higher likelihood of charges. Both require immediate consultation with experienced federal defense counsel.
How long do federal white-collar investigations take?
Federal white-collar investigations — particularly those involving complex financial crimes, healthcare fraud, or securities fraud — routinely take 12 to 36 months or longer before charges are filed. IRS criminal investigations involving complex schemes can take 12 to 24 months in the investigation phase alone, before any referral for prosecution.
What is a proffer session, and should I agree to one?
A proffer session is a meeting at which a federal target or subject provides information to prosecutors in exchange for limited-use protection. The decision to proffer is one of the most consequential in any federal case and should only be made after thorough preparation with experienced defense counsel. The protections offered by a proffer letter are real but limited — the government retains significant investigative benefits from the session regardless of outcome.
What happens if the FBI or IRS wants to interview me?
You have the right to decline any interview with federal agents and to require that any communication go through your attorney. You should exercise this right. Federal agents are experienced at obtaining incriminating statements — even from individuals who believe they are innocent — and any statements you make can be used against you in a subsequent prosecution. Do not speak with federal agents without retaining a federal defense attorney first.
Which federal court handles white-collar crimes on Long Island?
Federal crimes committed in Nassau County and Suffolk County are handled by the Eastern District of New York (EDNY), specifically its Long Island Criminal Division based at 100 Federal Plaza in Central Islip. In FY 2024, the EDNY sentenced 130 individuals for fraud, theft, and embezzlement offenses. Cases are also heard at the EDNY’s Brooklyn courthouse at 225 Cadman Plaza East.
Protect Your Future — Contact Lebedin Kofman LLP Today
Federal white-collar investigations are methodical, resource-intensive, and — by the time they become visible to the target — often well advanced. The agencies that investigate these cases in New York’s federal courts are among the most experienced and well-funded in the country.
Understanding the process — how investigations begin, how the grand jury functions as an investigative engine, what a target letter means, and what rights you have during a search or interview — is the first step toward protecting yourself, your business, and your family.
Lebedin Kofman LLP represents clients facing federal white-collar criminal investigations and charges in the EDNY and SDNY, including throughout New York City, Nassau County, and Suffolk County. Whether you have received a grand jury subpoena, a target letter, or a visit from federal agents, the time to act is now.
Contact our office at (646) 663-4430 for a free and confidential consultation. Review our case results to see how we have helped clients navigate the federal criminal process.