What are the steps in the legal process for retail fraud charges?

Shoplifting or retail fraud is one of Michigan’s most common criminal charges. Although good people make mistakes, the allegations are often exaggerated or due to misunderstandings.

Do Not Underestimate the Severity of Retail Fraud Allegations

Retail fraud is a serious offense with significant legal consequences in Michigan. Whether shoplifting, altering price tags, or engaging in fraudulent return schemes, retail fraud involves acts that aim to obtain goods or services without proper payment. If you face retail fraud charges in Michigan, it’s crucial to understand the legal process and the potential outcomes you may encounter.

Understanding the Steps Involved in the Legal Process

If you face felony or misdemeanor retail fraud allegations, it is best to understand the steps involved in the legal process, including reporting, investigation, court proceedings, potential penalties and consequences, and the available defense strategies. You should also know the possible outcomes of a retail fraud case, including case dismissal, guilty pleas or convictions, direct and collateral consequences, and opportunities for expungement.

The Legal Process for Retail Fraud Cases

When store employees report a retail fraud incident, the legal process in Michigan unfolds in several stages. Understanding these stages is vital for individuals accused of retail fraud to navigate the system effectively.

Reporting and Investigation

The legal process begins with reporting the retail fraud incident to law enforcement. The retailer, loss prevention staff, or store owner will typically contact the police, providing details of the incident, such as the date, time, and evidence of the alleged fraud. Once the store files a report, the police investigate to gather evidence and identify potential suspects. The report to law enforcement often occurs before the suspect leaves the store or parking lot.

During the investigation, law enforcement officers may review surveillance footage, interview witnesses, and collect any available physical evidence. It is crucial to note that the prosecutor will use any statements made by the accused as evidence against them. It is advisable to consult with an experienced retail fraud defense attorney before providing any statements to the police.

Arrest and Charges

Law enforcement officers may arrest or ticket suspects if the investigation yields evidence linking an individual to the retail fraud incident. Typically, officers inform the accused of the charges against them upon arrest. It is at this point that legal representation becomes critical. After the arrest or ticketing, the prosecutor’s office will review the evidence gathered during the investigation. The prosecutor will determine the appropriate degree of retail fraud based on the value of the merchandise and the accused’s criminal history. The charges can range from misdemeanor retail fraud (2^nd or 3^rd-Degree) to felony retail fraud (1^st-Degree Retail Fraud).

Court Proceedings

Once the prosecutor or police file the charges, the accused must appear for legal proceedings, starting with an Arraignment Hearing. The court proceedings for retail fraud cases in Michigan typically follow a structured process.

Court Hearings in the Legal Process for Retail Fraud

Arraignment: The first hearing in the legal process for felony and misdemeanor retail fraud cases is an arraignment. The judge will advise the defendant of the charges at the arraignment, accept a plea, and set a bond. The available pleas are guilty, no-contest, and not guilty. The best strategy is to “stand mute” when the judge requests a plea. When a defendant “stands mute,” the judge will enter a not-guilty plea on their behalf and schedule the case for a pretrial conference. If the plea is not guilty, the case will proceed to a pretrial conference.

Bond or Bail in Retail Fraud Cases: Part of the arraignment hearing is when the judge decides on a bond. The bond is an amount of money the defendant must post to remain out of custody while the case proceeds through the court system. Statistically, defendants on bond get much better resolutions than those in jail pending trial. Also, a defendant who posts bail can continue working or stay in school, support their families, assist their lawyers, maintain better mental health, and more.

Court Hearings (Continued)

Motions: When the defense and prosecution cannot agree upon an issue, such as what evidence is admissible or whether the police violated the defendant’s constitutional rights, a written request for a court ruling, called a motion, is filed. Usually, the judge will order the parties to appear and argue motions in open court. The judge’s rulings might impact the plea-bargaining process or the odds of a conviction or acquittal at trial.

Plea Hearings: If the defense and prosecution negotiate a plea deal, they present the terms of the agreement in court at a plea hearing. A plea bargain might include reducing or dismissing the charge and/or a sentence agreement. The defendant can also ask the judge for a preliminary evaluation of their sentence. A preliminary evaluation or estimation by the judge of the sentence, if the defendant pleads, is called a Cobbs Agreement.

Trial: A retail fraud trial involves presenting evidence, cross-examining witnesses, and arguing before a judge or jury. The burden of proof lies with the prosecution, who must establish the accused’s guilt beyond a reasonable doubt. During the trial, the defense may present its own evidence, question the prosecution’s witnesses, and argue for the accused’s innocence. It is essential to have skilled legal representation to ensure a fair trial and to protect the accused’s rights throughout the process. Once the trial concludes, the judge or jury will deliver a verdict of either guilty or not guilty. If the accused is found guilty, the court will move on to determine the appropriate penalties at a sentencing hearing.

Sentencing: After a plea or trial-based conviction, the judge sentences the defendant. The degree of retail fraud (1st, 2nd, or 3rd) determines the maximum jail and probation periods. If the judge elects to order a term of probation, the defendant might have to report to a probation officer, engage in therapy or theft education, perform community service, follow a curfew, not travel out of Michigan, abstain from drugs/alcohol, not possess firearms, etc.

Probable Cause Conference: In felony retail fraud cases, the hearing following the district court arraignment is the probable cause conference or PCC. At the PCC, the defense and prosecution must decide whether to conduct or waive their right to a preliminary examination. The parties might ask the judge to reconsider the bond, decide motions, or discuss possible plea bargains or sentence agreements.

Preliminary Examination: The prosecution and defense have a right to district court preliminary examinations on felony charges. The prosecutor calls witnesses and admits evidence at the preliminary examination to prove the defendant committed felony retail fraud. If the prosecution presents sufficient evidence, called probable cause, the judge sends the case to the circuit court (felony court) for further proceedings. The judge dismisses the charges if the prosecutor fails to meet its probable cause burden of proof.

Penalties and Consequences

The penalties and consequences for retail fraud in Michigan vary depending on the severity of the offense and the individual’s criminal history. Understanding these potential consequences is crucial for individuals accused of retail fraud. The possible direct and indirect consequences are as follows:

• jail and probation,
• fines, costs, and statutory fees,
• restitution (up to 10x the value of the merchandise),
• community service,
• loss of employment or inability to advance in a career,
• damaged reputation,
• loss of civil rights (such as firearm rights, the right to hold public office, and voting rights),
• for non-U.S. citizens – immigration consequences of retail fraud such as deportation,
• damaged credit or inability to obtain loans, and
• a criminal record that can be used to increase the severity of future charges or allegations.

Felony Retail Fraud

Felony retail fraud, called 1st Degree Retail Fraud, occurs when the value of the stolen goods exceeds $1,000.00 (or over $200 if the accused has prior retail fraud convictions). Felony retail fraud carries more severe penalties, including higher fines, up to five (5) years of imprisonment and probation, and loss of firearm and other civil rights.

Misdemeanor Retail Fraud

Misdemeanor retail fraud is typically charged when the value of the stolen goods is below $200.00 or $1,000.00. The penalties for misdemeanor retail fraud can include fines, two years of probation, community service, and possible imprisonment.

Retail Fraud 2^nd Degree – Merchandise valued between $200.00 and $1,000.00 (or less than $200.00 with a prior retail fraud conviction) – Maximum sentence up to 1 year in jail.

Retail Fraud 3^rd Degree – Merchandise valued $200 or less – Maximum sentence up to 93 days in jail and up to 2 years of probation.

Restitution and Fines

In addition to potential jail time and fines, a sentencing judge might require individuals convicted of retail fraud to pay restitution to the affected retailer. Restitution aims to compensate the retailer for any financial losses resulting from the incident and can be as high as ten times the value of the merchandise in question. The court may also impose fines, costs, supervision fees, and other monetary statutory penalties.

Defense Strategies

When facing retail fraud charges in Michigan, it is crucial to have a strong defense strategy in place. A skilled defense attorney can help you navigate the legal process and explore various defense options. Here are some common defense strategies employed in retail fraud cases:

• mistaken identity,
• actual innocence,
• lack of intent,
• mistake or misunderstanding,
• claim of right, or
• an equitable defense.

An equitable defense might be appropriate when the evidence of retail fraud is strong, and a conviction is likely. Every defendant has a story worth telling. Good, honest people make genuine mistakes. Someone might fail to pay for merchandise because they were overwhelmed with a stressful situation or suffer from anxiety or depression. A defense lawyer can present a strong, credible equitable defense to persuade a prosecutor to reduce or dismiss charges and/or convince a judge to impose a lenient sentence.

Hiring an Attorney

The first step in building a solid defense against retail fraud allegations is to hire an experienced attorney specializing in criminal defense, particularly in retail fraud cases. An attorney will assess the evidence, advise on the best course of action, and advocate for the accused’s rights throughout the legal proceedings.

A thorough evaluation of the evidence is crucial in determining the strength of the prosecution’s case. The defense attorney will carefully review the surveillance footage, witness statements, and physical evidence to identify inconsistencies, errors, or potential defenses.

Plea Bargaining is Part of the Legal Process in Retail Fraud Cases

In some cases, it may be beneficial for the accused to negotiate a plea bargain with the prosecution. Plea bargaining involves reaching an agreement where the defendant pleads guilty or no contest to a lesser charge or receives a more lenient sentence in exchange for avoiding trial. A skilled attorney can help negotiate a favorable plea bargain if it is in the accused’s best interest. Even in cases where the evidence is solid, a savvy defense lawyer can find a way to encourage prosecutors and judges to focus on rehabilitation rather than punishment. Additionally, there are statutes and court rules in Michigan that attorneys can use to help their clients avoid jail and a conviction.

Possible Outcomes in the Retail Fraud Legal Process

Once the legal process concludes, there are several potential outcomes for retail fraud cases in Michigan. These outcomes depend on the specific circumstances of the case and the actions taken during the legal proceedings. The consequences can include jail, probation, a delayed sentence, a deferred prosecution, a plea under advisement, dismissal, acquittal, and more.

Legal Process for Case Dismissal of Retail Fraud Charges

Sometimes, the retail fraud charge can be dismissed with or without prejudice if there is insufficient evidence or the defense successfully challenges the prosecution’s case. Dismissal results in clearance of the charges and no criminal penalties. A dismissal with prejudice means that the case is gone forever and can never come back to court. A dismissal without prejudice means that, under certain circumstances, the prosecutor can bring the charge again, and the legal process can restart.

Probation and Rehabilitation Programs

In some instances, the court may offer probation as an alternative to imprisonment. Probation requires the accused to adhere to specific conditions, such as regular check-ins with a probation officer, community service, or participation in rehabilitation programs to address underlying issues. Misdemeanor probation can be up to two (2) years, and felony probation can last as long as five (5) years. If the defendant violates a term or condition of probation, a probation officer will file a probation violation or “show cause” with the judge. A defendant accused of a probation violation can plead guilty or demand a hearing. It is essential that the defendant have skilled defense counsel if charged with violating probation. Upon a conviction, the judge can incarcerate the accused up to the maximum possible sentence on the original charge.

Legal Process for Expungement of Retail Fraud Convictions

Under certain circumstances, individuals convicted of retail fraud in Michigan may be eligible for expungement. Expungement allows for removing the conviction from their criminal record, providing a fresh start and improved prospects for the future. However, complex eligibility criteria and waiting periods apply. Because shoplifting is called “retail fraud,” employers, charitable organizations, schools, and other organizations take these convictions seriously. There is little room for error when seeking expungement because many judges will not give a defendant a second bite at the apple if the expungement is not granted on the first try. It is best for a defendant seeking to set aside a conviction to consult with an experienced defense lawyer.

You’ll Want a Top Retail Fraud Defense Attorney by Your Side

Facing retail fraud charges in Michigan can be a daunting and complex process. Understanding the legal process, potential penalties, defense strategies, and possible outcomes are crucial for individuals accused of retail fraud. Seeking the assistance of a skilled retail fraud attorney can make a significant difference in achieving the best possible outcome. You can expect the following from a top retail fraud defense lawyer:

• outstanding communication skills,
• the prompt return of phone messages and emails,
• fearless and tenacious advocacy in court,
• skilled support and negotiations with the prosecutor out of court,
• respectful and compassionate treatment by the lawyer and their staff,
• clear and truthful explanation of options, strategies, and case status, and
• loyalty to the client (not the court, prosecutor, or other third parties).

Call us today at (248) 263-6800 for a free consultation or complete an online Request for Assistance Form. We will contact you promptly and find a way to help you.

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