What are Fraud Disputes?

Bankruptcy, mortgage, tax, and other kinds of fraud could have consequences in civil and/or criminal court.

Fraud, intentionally misstating a current material fact to produce unlawful gain, violates civil and criminal laws in Georgia. The primary difference between these disputes, aside from the burden of proof, is the role of the alleged fraud victim. In civil court, the alleged victim is usually the plaintiff and usually has complete control over the presentation of the case. In criminal court, the alleged victim is simply a witness.

Most criminal and civil fraud disputes are settled out of court. These resolutions avoid the uncertainty of a trial and greatly reduce legal fees in civil cases. So, to successfully resolve a fraud dispute, a Norcross criminal defense lawyer must be a good negotiator, as well as a good litigator. Good negotiators know when to stand firm and when to compromise. Good negotiators also take all factors into consideration. They do not just look for an easy way out.

Civil Disputes

We mentioned the elements of a fraud case, as well as the burden of proof, above. Now, let’s break these items down further.

Fraud has a specific meaning. One-sided transactions are not always fraudulent, even if one party outright lied. The basic elements of a civil fraud case are:

• Intentional Misstatement: Obviously, there is a difference between intentional and mistaken. A Norcross litigation attorney typically uses conduct to prove intent. If a real estate agent did not tell a buyer the house had foundation problems, that misstatement was probably intentional. Misstatements include not only outright lies but also misleading statements and white lies.
• Material Fact: The factfinder usually draws the line between material and immaterial. If a realtor lied about the kind of grass in the yard, s/he probably did not commit fraud, even if the type of grass prompted the buyer to purchase the home.
• Current Fact: The classic example is a new company borrowing money. If the company exaggerates its future income potential to secure the loan, it did not make a misstatement about a current fact. It may be guilty of something, but it is not guilty of fraud.
• Unlawful Gain: The gain could be obtaining money the defendant is not entitled to or saving money the defendant should have rightfully spent. For example, in a tax fraud case, which could be a civil or criminal matter, fraudulently claiming a deduction satisfies the unlawful gain requirement, even if the deduction only lowered the defendant’s tax liability.

The burden of proof in a civil matter is a preponderance of the evidence, or more likely than not. So, a little proof goes a long way.

Criminal Disputes

In contrast, the burden of proof in a criminal fraud matter is beyond a reasonable doubt. Let’s go back to the tax deduction example. If Tim exaggerates his expenses to claim a deduction, that case might hold up in civil court, but probably not in criminal court. If Tim claims his daughter lived with him instead of his ex-wife, he probably committed fraud in both civil and criminal court.

Very few fraud disputes reach criminal court. Usually, the alleged victims simply want their money back. A civil case is easier to prove, and state prosecutors are often uninterested in these cases. Usually, prosecutors only pursue fraud matters in extreme cases or if the alleged fraudster refuses to pay a civil damages award.

One final note. The penalties for fraud are different in civil and criminal court. Civil plaintiffs are entitled to compensation for the economic losses and perhaps their noneconomic losses. Courts usually sentence criminal defendants to prison or community supervision, but may also require restitution to be paid to the victim.

Connect With a Gwinnett County Criminal Defense Attorney

Fraud could have civil and criminal consequences. For a confidential consultation with an experienced criminal defense attorney in Norcross, contact Zimmerman & Associates, Attorneys at Law. The sooner you reach out to us, the sooner we start working for you.