There are some people who refuse to make an honest day’s living. Instead, they become scammers and fraudulently cheat other people of their hard-earned money. The best way to protect yourself against these frauds is to understand their methods and what they’re after.
Below are the top ten most common or infamous frauds in recent history, although there are several other kinds of fraud out there, including pharmacy fraud and for-profit school scams.
What is Criminal Fraud?
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. An act of criminal fraud can occur if an individual is deceived through false representations of fact that result in legal harm to that individual.
Fraud occurs when an individual intentionally misrepresents an important or key fact in a transaction or relationship, and the other party relies on that misrepresentation and suffers harm as a result. Even if they believe it to be true, people who provide a false fact do not commit this crime.
Are there Different Types of Fraud?
Fraud can take many forms, but its basic elements remain the same. Fraud may take the form of:
This is, of course, not an exhaustive list of all types of fraud.
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.
Criminal fraud involves several elements. The prosecution must prove the following in order to convict an individual of criminal fraud:
- 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?
In both civil and criminal fraud cases, the basic elements of fraud are the same. Fines or jail time can result from a criminal fraud conviction, however. In addition, criminal law has a higher standard of proof, which is beyond a reasonable doubt. For a defendant to be convicted, each element of the crime must be proven beyond a reasonable doubt.
Criminal fraud cases do not consider whether the fraud was successful or not. Fraud is sufficient if an individual attempts and intends to commit it. Depending on the case’s jurisdiction and facts, criminal fraud may be charged as a misdemeanor or felony crime.
Victims of civil fraud must prove the fraud elements discussed above, as well as that they suffered damages as a result of the fraud. An individual must prove actual damages in a civil fraud case, while the prosecution only needs to prove that a defendant attempted fraud in a criminal case.
This fraud is new and is currently trending. The victim sees an advertisement for a vacant apartment. The victim meets with the landlord, pays the rent, and begins moving in. Later, the victim’s purportedly rented property is shown off by a realtor. No one answers the victim’s call to the landlord’s phone. A subsequent investigation reveals that the “landlord” never owned the property, and the property is in foreclosure.
It’s not just criminal; it’s downright evil. A scammer conducts a thorough online search about you before calling your grandparents. Scammers pretend to be you and tell grandma or grandpa that you’re in trouble. There’s no way you can tell anyone else that you’re in debt or that Mexican police have apprehended you. Grandpa, would you mind sending $5,000 to a Spanish account without telling anyone?
There is nothing sacred to scammers. The majority of churches accept donations and do good work. Scammers promise to exchange money for God’s favor. Patients with fatal illnesses and people with mountains of debt are their favorite targets.
This fraud is an example of a “get rich quick” scheme. In fact, Ponzi was a real person who promised investors that he would invest their money. As a result, Ponzi deposited the money into various bank accounts for his own use. Ponzi would pay any investor who asked for his money with money he obtained from another investor. Bernie Madoff used the same scheme decades later and carried on Ponzi’s legacy.
The modeling scams aim to lure young women into sex slavery. The scammers call young women and claim to represent multi-million dollar companies or are a part of a reputable small business or agency. The representative offers to fly the young women to foreign countries to do some modeling after months of applications and phone interviews. If these young women call the company and discover the “representative” doesn’t work for the company, the process appears real.
Nigerian Prince Phishing
People would receive emails asking for several thousand dollars. In exchange, the victim would receive the fortune of a “Nigerian prince.” Nigeria’s government is modeled after the United States. Nigeria has presidents, senators, and judges, but not royalty.
Charitable Organization Frauds
An organization that hires an entire staff to help cancer patients must be the real deal, right? Actually, no. The organization is a fraud if it claims to send medication to patients but only sends tissue paper. If an organization claims to drive patients to chemotherapy, but there is no such program, then it is a fraud. No matter how legitimate they appear or how legitimate they sound, charitable frauds receive a tax break for their “good work.” Do your research, regardless of how legitimate they seem.
Trusts are commonly used tools for estate planning. However, trusts only work if the trustee is competent and loyal. If the trustee decides to spend the money on himself or “borrow” the money and return it when it’s all gone, the trustee has abused his position. If trustees betray the trust bestowed upon them, they are liable to the beneficiaries who were entitled to the trust.
Frauds like this are among the most deceptive. The scammer pretends to be a police officer or bank and calls the victim to inform them that their identity has been stolen. As a condition of helping the victim, the scammer will ask for the victim’s credit card information.
Subprime Mortgage Crisis
It’s scary to deal with anonymous scammers. What happens when well-known financial institutions commit fraud? Banks such as Wells Fargo and Bank of America offered low-interest loans to homebuyers. These loans were bundled together with other loans for a quick profit and sold to the highest bidder. To ensure that the loans were sold quickly, the mortgage papers were often forged or fraudulently signed. The sheer scale of this enterprise pulled the world economy into a recession.
Do I Need a Lawyer for Help with Criminal Fraud Charges?
Yes, it is important to consult with an experienced fraud lawyer. If necessary, an attorney can review your case and represent you during any court proceedings.