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Fraud

Fraud is a white collar crime in which someone deceives another to secure unlawful or unfair benefits, such as financial or political gain.

Types of fraud and how a person can avoid facing fraud charges or being a victim of fraud

Many types of fraud exist, but they all share common elements. Fraud involves a deception that illegally benefits the perpetrator. For example, someone who commits fraud might pretend to be someone else or fabricate evidence to gain money from an insurance company or other entity. 

Perpetrators of fraud could face both civil and criminal penalties. In criminal court, the prosecutor can file charges against the suspect based on state or federal statutes that prohibit fraudulent acts. The victim of fraud can also sue the perpetrator to recover monetary damages as a result of the defendant’s actions.

The most common types of fraud include:

  • mail fraud
  • credit fraud
  • check fraud
  • online fraud
  • medical fraud
  • insurance fraud
  • Mail fraud

    When a perpetrator uses the mail to deceive someone else, they could be charged with mail fraud. This type of scheme could involve letters or packages that the perpetrator uses to entice someone to send them money or valuables. For instance, a scam artist might send a letter that promises a free vacation if the recipient sends an application and a small fee.

    Credit fraud

    If someone uses another person’s credit without their permission, it’s known as credit fraud. The most common example is credit card fraud. The perpetrator uses someone else’s credit card information to make purchases. Credit fraud can also be committed by taking out a loan in someone else’s name.

    Welfare fraud

    State assistance systems exist to provide aid to people experiencing financial hardships. When committing welfare fraud, an individual provides inaccurate or misleading information to obtain assistance, such as understating their income or claiming a non-existent hardship.

    Check fraud

    Check fraud can be committed by the writing of a check on someone else’s bank account without their permission or by writing checks on a closed account or an account without adequate funds. Bad checks go by many different official and unofficial names, such as hot, bounced, or worthless checks.

    Online fraud

    This is a blanket term that covers any fraudulent activity that occurs on the Internet. For instance, if identity theft occurs online, it’s often called online fraud. Other examples of online fraud could include:

    • Attempting to sell an item online that you don’t actually own (such as a car)
    • Work-at-home schemes where the victim must pay for training materials or access to proprietary systems, but never receives payment for work performed
    • Posting a fake dating profile online, then convincing prospective romantic partners to send money
    • Claiming to represent a fake (or unsuspecting) charitable organization and accepting donations for the perpetrator’s own profit
    • Generating fake “clicks” on Internet ads to boost income from pay-per-click providers

    Medical fraud

    When a doctor, nurse, pharmacist, or medical professional makes false promises about a treatment’s effectiveness or uses questionable diagnostic or treatment procedures, they might have committed medical fraud. Also called “health care fraud,” medical fraud might include the sale of unnecessary or ineffective drugs or the filing of exaggerated insurance claims. According to the FBI, medical fraud can also include the fraudulent use of someone else’s insurance coverage.

    Insurance fraud

    If a person provides false information to their insurance company or deliberately causes damage to their own property and files a claim, they could be guilty of insurance fraud because it results in a fraudulent insurance payout. These scams not only result in high costs to the insurance company, but also make it more difficult for consumers to gain coverage.

    Fraud charge classifications

    Individual states decide whether a particular crime falls under the category of misdemeanor or felony.

    • Misdemeanor fraud. A misdemeanor is a lesser offense, which means less potential jail time or lower fines. Most jurisdictions establish misdemeanor fraud as any crime where the damages fall below a certain threshold, usually around $500.
    • Felony fraud. Those facing felony fraud charges could receive a longer jail sentence and a greater fine than for a misdemeanor. The threshold between misdemeanor and felony fraud charges varies from one state to the next, but could range from $300 to $1,000.

    For first-time offenders, the prosecutor might offer a plea bargain that reduces a felony charge to a misdemeanor even if the facts of the case make the crime a technical felony. This is why it’s essential to hire a lawyer if you’ve been charged with any type of fraud.

    Avoiding fraud charges

    Knowing what fraud is defined as is only the first step to protecting yourself. While many forms of fraud are committed intentionally, it’s also possible to commit a fraudulent act without understanding that the behavior is illegal.

    For instance, you might write a check on a bank account that you have already closed. If you simply grab the wrong checkbook, you could commit fraud without realizing it. Similarly, you might attempt to sell a purse online without realizing that it isn’t a designer bag, which could expose you to charges of consumer fraud.

    Although most criminal statutes require fraud to be intentional, it can be difficult to prove that you didn’t realize you were committing a crime. Before you conduct business with another party or take money from another individual, carefully examine the transaction and its potential consequences. Should you be charged with fraud, you will most likely need the help of a criminal defense lawyer.

    Preventing fraudulent crimes

    Nobody wants to find themselves the victim of a fraudulent scheme. The best way to avoid identity theft and other types of fraud is to protect your personal information:

    • Don’t give out your social security number, bank account number, or other personal data, even to a friend, unless it is required for a legitimate reason, such as applying for credit or government benefits.
    • Shred all incoming financial documents before you dispose of them.
    • Avoid conducting financial transactions, such as accessing your bank account, on a public Internet connection.
    • Never send money to someone you don’t know (especially cash).

    If you suspect that a person you’re in contact with might attempt to defraud you, consider the circumstances. It helps to know how to look for red flags, such as:

    • Demands for money in a short timeframe
    • Requirements to use cash or money orders
    • Job opportunities that require up-front payments
    • Requests for personal or financial information, such as your social security number
    • Solicitations to provide inaccurate information or false documents to an entity, like an insurance company
    • Strange activity on your bank or credit accounts

    Reporting fraud

    If you believe that someone has defrauded you, report the incident to the police. Law enforcement will investigate the fraud and file charges against the appropriate party. To increase the chances of successful prosecution, cooperate fully with the police and prosecutors.

    You might need to report certain types of fraud to federal authorities such as the FBI or the Securities and Exchange Commission. The Inspector General’s Department of Health and Human Services Office often handles medical fraud cases on the federal level, while the Federal Trade Commission might accept reports of identity theft and consumer fraud. If you’ve been a victim of mail fraud, consider reporting it to the US Postal Service.

    However, if you report the incident to your local police department, the officers can tell you how to proceed with your complaint if the matter requires outside agency involvement. Once you file a fraud claim, law enforcement will gather evidence and interview suspects. They might ask you for documentation to support their case, such as copies of checks or money orders and any written correspondence between you and the perpetrator. If the case goes to trial, you might have to testify against the defendant.

    Hiring a lawyer

    When you’re the victim of fraud, you might need a lawyer to protect your rights and help you recover damages. Criminal cases are separate from civil cases. Even if the police do not have enough evidence to charge the perpetrator with a crime, you can still file a civil lawsuit to recover damages.

    Your attorney can help you decide when and if you should file a lawsuit and assist you in collecting evidence. Lawyers can also communicate with law enforcement and prosecutors to keep you up-to-date on the status of a criminal case.

    You might need a lawyer to help you recover from fraud, as well. For instance, in identity theft cases, an experienced attorney can help you dispute negative marks on your credit report and repair problems with financial institutions, such as your bank. In many cases, lawyers can achieve results much faster than a consumer working alone.

    Look for a lawyer who has handled fraud cases before. Even if you’re not sure whether you can prove someone else defrauded you, an attorney can provide guidance and support as you decide how to move forward.

    Fraud costs money and can impact the rest of your life, whether you’re the victim or the perpetrator. Understanding how fraud works can help you avoid committing it or becoming a victim of it. However, if you find yourself in legal trouble, hiring a fraud lawyer is the best way to protect yourself.

    Emanwel Josef Turnbull | Dec 6, 2019

    Disputing You Credit Card Bill? Avoid These 3 Mistakes

    Leaving It Until Tomorrow You have a limited time to make your dispute. You have 60 days, but the time starts when your bank sends you a statement with the dispute charge on it - not when you get, or look at, the statement. And you haven't met the limit until your dispute arrives at the bank. If you miss the deadline, you'll miss out on some important rights under the Fair Credit Billing Act. So, write your dispute letter quickly, and send it by certified mail, so that you can prove when it arrived. If you meet that deadline, but the bank still doesn't fix your problem, you have a year to file a lawsuit. So start looking for a lawyer as soon as your bank tells you that it disagrees with your dispute. Leaving It To A Telephone Call A lot of people who discover a fraudulent charge just call their bank and complain about it. Some banks even encourage this approach. Many times that may work. But, if you don't put your dispute in writing, within the time limit, you lose some important rights under the Fair Credit Billing Act. Leaving It Up To The Bank Once a bank refuses to fix a billing error, it might be tempting to give up, assuming that the bank is right to reject the dispute, or it just seems like too much trouble to fix. However, if you're the victim of a billing error, you can take the bank to court over the charges, and you may be able to recovery attorneys fees for doing so - which should make it easier to find an attorney.

    Timothy L. Miles | Dec 3, 2019

    FREE PORTFOLIO MONITORING SERVICES PROVIDES SIGNIFICANT BENEFITS TO SHAREHOLDERS

    INVESTORS ARE LOSING MONEY BECAUSE THEY ARE UNAWARE OF THE EXISTANCE OF CORORATE FRAUD With billions of dollars in recoveries at issue in securities class cases, many investors are are not recouping all the money they could because few have the time or possess the legal knowledge to monitor their investments. As a result, most investors are not even aware of the existence of fraud in connection with securities they own because often the red flags indicating corporate fraud are unapparent and could otherwise go unnoticed until investors have incurred substantial losses. Therefore, when corportate fraud occurs investors are unually unaware and are not advised of their legal options. Futhermore, investors usually have no way of being updated on the status of the case including, most notably, when a case has settled and of the necessaty of submitting the required claim forms to recover their losses which can be significantly in many instances. Fortunately for investors, with the emergence of portfolio monitoring services which is offered by plaintifff’s securities firms (“Firms”) of charge, they now have a way to prevent this from happening in the future. With portfolio monoriting investor are advised of their legal options when fraud has been detected or committed in connection with stocks they own and are notified if a case settles and are provided help filling out claims ensuring they recover a portion of their losses. WHAT IS PORTFOLIO MONITORING? Generally, portfolio monitoring utilizes sophisticated technology, along with other research tools and subscription services to track the stock market in real time and is managed by attorneys. accountants and analysts trained to identify indicators of corporate fraud. Portfolio Monitoring a typically free service offered by plaintiff firms to investors. Investors provide the Firm with information on their stock holdings and the Firm monitors the investments in order to alert investors to corporate wrongdoing and potential claims premised upon violations of the securities laws or breach of fiduciary duty. Attorneys will advise investors of their legal options, and explain the case process, and will even help investors fill out class action claim forms so they can receive their share of the settlement proceeds. FREE PORTFOLIO MONORITING SERVICE PROVIDES SIGNIFICANT BENEFITS TO INVESTORS Investments Monitoring Whenever corporate fraud or other wrongdoing is exposed to the market, the market responds and the company’s stock price will fall dramatically when the truth is revealed. Additonally, the stock price will continue to drop for some time afer the truth has been exposed. Investors who purchased shares before the truth is revealed to the maket, purchased those shares at artificially inflated prices. When the fraud is exposed and the stock price collapses, investors incur losses due to the fraud and other wrongdoing by company insiders or directors. Many investors simply do not have the time to constantly monitor all of their investments and do not realize when one of their investments has been negatively affected by corporate wrongdoing and the price of the stock has dropped causing them to suffer losses. Many times these loses can be significant. When investors utilize a Portfolio Monoriting Service, the Firm will alert them when one their investments is under an active investigation or has been negatively affected by fraud or other corporate misconduct. Advice and Legal Representation After explaining the results of their investigation, including analizing losses, and evaluating the merits of a potential claim, the Firm will advise investors of all their legal options including whether they may have a potential claim. There is no obligation to take action, but if an investor chooses to do so, plaintiff Firms will usually represent investors free of charge on a contingency basis, and there is no obligation to retain the Firm monitoring an investors portfolio. Alerts and Notifications Generally, the Firm will contact investors if they identify violations of securities laws, insider trading, accounting fraud, unfair mergers or acquisitions, and other unlawful activity that may negatively impact investor holdings. Class Action Settlement Claims Simplified If a company in which an investor has invested decides to settle a case brought against it, the Firm will notify investors, for example, by sending them a link to the claim form and the Firm willl assist investors in filling it out. After that, investors will receive a check for their portion of the settlement. THE DATA INVESTORS PROVIDE TO FIRMS IS COMPLETELY CONFIDENTIAL Protecting the privacy, confidentiality, and security of their clients’ information is of utmost importance to plaintiff Firms, and all data is protected by administrative, physical, and technical controls. THERE ARE NO RISK BUT SUBSTANTIAL BENEFITS TO UTILIZING A FREE PORTFOLIO MONORITING SERVICE Because Portfolio Monoriting Service are offered free of charge and the information investors provide regarding their holings is treated as strictly confidential, there are no risk to investors in utilizing a Portfolio Monoriting Service. On the other hand, investors will receive significant benefits in utilizing a Portfolio Monoriting Service. Investors do not have to worry about monitoring their investment twenty-four hours a day – the Firm do this for investors. In the event one of an investor’s investment has been negatively effected by corporate fraud, the Firm will alert an investor, explain the the results of their investigation, including analizing an investor’s losses, and will evaluate the merits of a potential claim, and the Firm will advise investors of all their legal options including whether the investor may have a potential claim. While there is no obligation to take action, if an investor choose to do so, most Firms will represent them free of charge on a contingency basis. Finally, if there has been a settlement in a case involving an investor’s holdings the Firm typically will send an investor a link to the claim form and assist them in filling it out. After that, investors will receive a check for their portion of the settlement. CONCLUSION In short, there are no risk or costs to utilizing a Portfolio Monoriting Service and investors will receive the benefits of having their investments constantely monitored by a team of professionals, adivised when their investments have been effected by cororate wroingding, advised of their legal options, and helped with the claims process when a case involving one of their investment settles ensuring investors reeive their fair share of the settlement proceeds.

    Adam S. Alexander | Nov 23, 2019

    BUYING A USED VEHICLE - YOUR LEGAL RIGHTS

    Let the Buyer Beware The old English law of Caveat Emptor (let the buyer beware), is a very good rule to remember when you are purchasing a used vehicle. Generally, the Michigan Lemon Law does NOT apply to used vehicles. (Unless it is covered by a manufacturer's express warranty at the time of purchase or lease). Moreover, dealers are not required by Michigan law to give used car buyers a three-day right to cancel. So what can you do to avoid purchasing a defective used vehicle? Do Your Homework Purchasing a used vehicle requires more preparation than you may think. What seems like a relatively minor life choice can turn your world upside down in a matter of hours. I know this because I have spoken with hundreds of Michigan consumers over the past 24 years and I have filed hundreds of breach of warranty auto cases. Lives are altered and finances are ruined based on this seemingly simple decision. You have limited legal options if you got a bad deal, and what options you do have may cost you a lot of money in attorney fees to address. Used Vehicle Warranties If your used vehicle comes with a warranty, be sure to read the terms and conditions and understand the limitations. Most used vehicle warranties are short term, have limited coverage for only specific mechanical problems, and sometimes come with a co-pay or labor-only coverage. And of course, most used vehicle warranties have a “pre-existing condition” exclusion. A pre-existing condition is a current problem or repair that a vehicle had before you purchased the vehicle or extended warranty. This is very problematic for consumers because, from my experience, sellers and warranty companies almost always claim that a defect was pre-existing in an effort to deny coverage. So, if you are considering purchasing an expensive after-market or third-party warranty for your vehicle, understand the potential drawbacks and know what is covered Buyer's Guide (The sticker on the window) The seller is required by federal law to include a window sticker on the vehicle with very detailed information, including: -the major mechanical and electrical systems on the car, including some of the major problems you should look out for; -whether the vehicle is being sold "as is" or with a warranty; -what percentage of the repair costs a dealer will pay under the warranty; -to get all promises in writing; -to ask to have the car inspected by an independent mechanic before you buy; -the dealer’s contact information, including the contact for complaints; and -to remember: spoken promises are difficult to enforce. Be sure there is a Buyer’s Guide on display and be very careful to read that guide before you make the purchase. If there is no Buyer’s Guide, seriously consider passing on that vehicle. If there are inconsistencies with the information on the Buyer’s Guide and what the seller is telling you, beware. As-Is Disclaimer If you purchased the vehicle “as-is” it means you buy it with all its defects and nonconformities. Essentially, because there are no implied warranties, you may not have a legal claim if it breaks down. The only potential claim you may have is for fraud. Fraud is Difficult to Prove In general, to constitute actionable fraud you must establish that (1) defendant made a material representation; (2) it was false; (3) when it was made and defendant knew that it was false, or made it recklessly, without knowledge of its truth and as a positive assertion; (4) defendant made it with the intent that it should be acted upon by plaintiff; (5) plaintiff did act in reliance upon it; and (6) plaintiff thereby suffered injury. Hi-Way Motor Co v Int'l Harvester Co, 398 Mich. 330, 336; 247 N.W.2d 813 (1976), quoting Candler v Heigho, 208 Mich. 115, 121, 121; 175 NW 141 (Mich. 1919). My biggest hurdle as a lawyer is proving the seller made ANY material representation. Many statements made by salespersons are verbal. This creates a “he said, she said” scenario which does not play well in a court room. Auto sales professionals know that most of their verbal promises are not binding in court. Therefore, they will tell you a lot of good things about the used vehicle, such as: “It runs great;” “you won’t have any problems with it;” “everything is in working order;” “it has a few problems, but we’ll fix those for you;” or “it’s never been in an accident”. You and I know these are sometimes lies. But, unfortunately, statements like these do not create a warranty and they likely won’t support a fraud claim in court. Michigan courts view statements like this as “opinions” or “puffing.” In sum, salespeople will say just about anything to get you to buy. The documents you sign at the dealership will often include disclaimers and other legal language that prevents you from filing a successful legal claim against them. So how can you avoid being lied it? Hire a Mechanic to Inspect the Vehicle Before you Purchase it Ask the seller to allow you to have the car inspected by an independent mechanic before you buy it. In fact, ask before you start talking price, before you test drive it, and actually the minute you walk on the lot. If they don’t allow this, walk away. While it is not a requirement to allow an inspection, most sellers will let you do it. Sometimes they send a salesperson along with you while other dealers will simply put a temporary plate on the vehicle and allow you to drive it away after providing proper identification. These days there are companies who specialize in pre-sale inspections in most metropolitan locations. If there are no options in your area, make a few phone calls to local mechanics and see what they would charge. It’s worth every dollar you have to spend to avoid purchasing a wreck. Ask the Seller to Put it in Writing If the salesperson makes representations about the mechanical health of the vehicle, ask them to write it down and sign and date it. If they won’t do that, how can you trust the representation? Do Some Research on the Vehicle Consider paying for some information on the vehicle prior to purchase. For example: CarFax offers a vehicle history for $39.99 at https://www.carfax.com/vehicle-history-reports/. The CarFax report often includes basic information regarding accidents, prior repairs and sometimes allows you to spot odometer rollbacks. The Michigan Secretary of State offers a title history. The order form is here: https://www.michigan.gov/documents/bdvr154_16269_7.pdf A title history is important in used car cases if you suspect the vehicle had a salvage title, the odometer was rolled back or the vehicle was in a significant accident. Conclusion Your legal rights in a used vehicle transaction are limited. If a seller lies to you about a very specific and material fact you may have a potential cause of action for fraud. If a seller hides known defects from you, or you feel you have been defrauded, contact the Alexander Law Firm at (248) 246-6353.