Criminal fraud is a crime that involves a scheme to cheat or deceive another individual or entity in order to obtain a financial gain or similar type of gain. It is considered a white collar crime. According to criminal fraud law, any action intended to deceive another through false representation of fact that results in legal detriment to the individual who relied on the information can be an act of criminal fraud.
Put simply, if an individual knowing lies about an important or key fact in a transaction or relationship and the other party relies on that misrepresentation of fact and suffers harm, fraud has occurred. It does not occur when an individual provides a fact they believe to be true, even if they are mistaken.
Are there Different Types of Fraud?
There are many types of fraud, although the basic elements of fraud remain the same. Examples of fraud may include:
- Mail fraud;
- Romance scam fraud;
- Identity theft;
- Gambling fraud;
- Bankruptcy fraud;
- Wire fraud;
- Pharmacy fraud;
- Securities fraud;
- Check fraud;
- Charity fraud;
- Insurance fraud;
- Welfare Fraud;
- Credit and/or debit card fraud;
- Perjury; and
- Pigeon drop scams.
This is, of course, not an exhaustive list of all types of fraud.
The basic component of all types of fraud is that criminal fraud occurs when:
- An individual lies or conceals a material truth; and
- Another party or entity justifiably relies on that false information; and
- That party suffers an injury based on their reliance.
There are several elements of criminal fraud. In order for an individual to be convicted of criminal fraud, the prosecution must prove:
- There was a misrepresentation of a material fact;
- By an individual who knew the material fact was false;
- And intended to defraud;
- A person or entity who justifiably relied on the misrepresentation of fact; and
- The individual or entity suffered actual injury or damages as a result of their reliance on that false fact.
What’s the Difference between Criminal Fraud and Civil Fraud?
The basic elements of fraud in both civil fraud cases and criminal fraud cases are the same. A criminal fraud conviction, however, can result in fines and/or jail time. In addition, criminal law has a higher standard of proof, which is beyond a reasonable doubt. Each element of the crime, discussed above, must be proven beyond a reasonable doubt in order for a defendant to be convicted.
In criminal fraud cases, whether or not the fraud was actually successful is not a factor. The mere fact that an individual attempted and intended to commit fraud is enough. Depending on the jurisdiction and the facts of the case, criminal fraud may be charged as a misdemeanor or a felony crime.
In civil fraud cases, the individual who was the victim must prove the fraud elements discussed above and prove they suffered damages as a result of the fraud. The difference between a civil and criminal fraud case is that in a civil case, the individual must show actual damages and in a criminal case the prosecution only needs to show that the defendant attempted fraud.
What If I’ve Been Accused of Criminal Fraud?
A criminal fraud conviction can carry serious consequences. The penalties for a criminal fraud conviction will vary depending on:
- The jurisdiction;
- The severity of the fraud;
- The person or entity that was a victim of the fraud; and
- The amount of money or property lost as a result of the fraud.
A conviction of criminal fraud may include penalties such as:
- Jail or prison time;
- Probation or parole;
- Fines; and/or
A court will take several factors under advisement when determining sentencing for a criminal fraud conviction, including:
- The severity of the fraud;
- Whether the defendant has any prior convictions;
- If the defendant is currently on probation or parole;
- The amount of money or property that was stolen; and
- The person or entity that was the targeted victim.
The penalty may also be influenced by the attitude of the community and/or the court towards this type of crime. If the entity that was a victim of the fraud is the Federal Government, the charges may be brought under federal law instead of state law and may result in harsher penalties.
What Should I do If I’m a Victim of Criminal Fraud?
If an individual believes they are a victim of criminal fraud, they should contact their local law enforcement and report the fraud. If sufficient evidence exists, the case will be forwarded to the local prosecutor or District Attorney’s office for prosecution of the individual who committed the fraud.
It is important to keep records of any and all losses that resulted from the fraud. This may be especially important where restitution is a possible penalty. It is also important to consult with an attorney to determine if an individual will be able to pursue a civil fraud case as well as the criminal fraud case.
What are Some Potential Defenses Against an Accusation of Fraud?
There are several defenses that may be available to a charge of criminal fraud. These include:
- Insufficient evidence;
- Lack of intent to commit a crime;
- Non-fraudulent statements; and/or
Insufficient evidence means there is not enough evidence available to show that the defendant was the individual responsible for the fraudulent acts. It may also indicate there is not enough evidence to prove the defendant’s actions amounted to fraud as defined in the statute.
A second possible defense is lack of intent to commit a crime. In order to obtain a fraud conviction, the prosecution must prove the defendant intended to deceive another individual or entity. Sometimes, it is difficult to prove intent. For example, an individual may accidentally use their friend’s insurance card, which is not fraud. However, if they did so intentionally, it would be fraud.
Non-fraudulent statements may be made by accident, especially if an individual believes they are true. In addition, not all false or deceitful statements are considered fraudulent. Mere statements of opinion are not considered criminally fraudulent. In order to be fraudulent, a misleading statement must be related to an existing fact. It must not be based on a promise to complete a future action.
Entrapment is another possible defense to a criminal fraud charge. It occurs when law enforcement or the government compels an innocent person to commit a crime they otherwise would not have committed. Entrapment may be difficult to prove in court because simply being presented with an opportunity to commit a crime is not considered entrapment. In addition, the government will most likely argue against this defense and cite a reason the defendant intended to commit the crime anyway.
An experienced attorney will be able to assist in presenting any defenses during a criminal trial. An attorney will be knowledgeable how to successfully present the defense and argue against the evidence presented by the prosecution.
Do I Need a Lawyer for Help with Criminal Fraud Charges?
Yes, it is important to consult with an experienced fraud lawyer if you are facing criminal fraud charges. Whether you are charged with a misdemeanor or a felony, the consequences may be serious and long-lasting. An attorney will be able to review your case, determine what defenses may be available to you, and represent you during any court proceedings, if necessary.
If you are a victim of fraud, it is also important to consult with an attorney. An attorney will help you gather necessary evidence, review your case, determine whether you can also pursue a civil case, and represent you during any court proceedings, if necessary.