Fraud involves intentional deception to gain something of value, typically money. It includes false statements, misrepresentation or dishonest conduct intended to mislead or deceive.
The government prosecutes criminal fraud, and convictions can result in lengthy prison sentences. Civil fraud, on the other hand, is brought by the victim to recover financial losses, usually resulting in monetary compensation but not imprisonment.
Types of criminal fraud offenses
Federal fraud charges cover a broad spectrum of offenses, which usually fall under federal jurisdiction because they often involve interstate or international elements. Here are some common charges:
- Insurance fraud: Misappropriating insurance premiums or submitting false claims.
- Credit card fraud: Using someone’s credit or debit card information without authorization.
- Mail fraud: Using the U.S. Postal Service to commit fraudulent acts.
- Securities fraud: Providing false information about a company’s stock value.
- Check fraud: Creating counterfeit checks or using bad checks to withdraw funds.
- False representation: Misleading others with false information.
- Mortgage fraud: Misrepresenting information on mortgage documents.
- Wire fraud: Using electronic communications to commit fraud.
- Welfare fraud: Obtaining government benefits through false representations.
These offenses can lead to severe consequences if convicted in a federal court.
How do civil fraud cases differ?
In civil fraud proceedings, guilt is determined by a “preponderance of the evidence.” This means it is more likely than not that the alleged fraud occurred. In criminal cases, guilt must be proven “beyond a reasonable doubt.” The penalties in civil cases usually involve monetary compensation to the victim rather than imprisonment. Courts may order restitution or damages, but the defendant will not face jail time.
Criminal fraud penalties can be severe
Punishment for federal fraud convictions can be harsh. It often includes lengthy prison sentences, substantial fines and orders for restitution. For instance, someone convicted of securities fraud might face up to 20 years in prison and a fine of up to $5 million. Additionally, the number of victims and the financial loss involved can influence the severity of the penalties.
Given the serious nature of these charges, it is crucial to seek advice from a criminal defense lawyer with experience trying these cases in the federal justice system. A skilled attorney can help protect your legal rights and build a robust defense against these serious allegations. If you face federal fraud charges, do not delay seeking knowledgeable legal counsel.
Why the distinction matters: Rights, defenses, and next steps
The differences between civil and criminal fraud are critical for those accused of fraudulent conduct, running businesses or pursuing restitution after fraud occurs. Criminal fraud cases generally require evidence beyond a reasonable doubt that fraud occurred.
The standard of evidence for civil fraud cases is significantly lower. Plaintiffs only need to show that a preponderance of the evidence supports their allegations against the financial professional or business that they claim defrauded them.
For defendants, litigation tends to have a less damaging effect than criminal prosecution, as there is a difference in the civil penalties versus the criminal penalties for fraud. They are typically not subject to an order of restitution. Instead, the courts may hold them responsible for verifiable economic damages sustained by the plaintiff.
One of the first questions defendants may have is, “Can you go to jail for civil fraud in New York?” The good news for those facing civil fraud litigation is that criminal prosecution is unlikely. The outcome of proceedings in the civil courts can inspire criminal prosecution, but the disparity in evidence requirements means that many strong civil suits are not adequate reason for the state to prosecute a professional or business owner for fraud.
The party accused of fraud also does not need to worry about jail time or other criminal penalties. They can typically still pass a background check, as they do not have a criminal record after a fraud-related lawsuit. While even litigation can damage the reputation of a person or a business, criminal convictions tend to have a much more profound negative impact than civil lawsuits.
Individuals facing civil fraud accusations often need to consult with a specialized attorney familiar with not just complex federal fraud statutes but also litigation. They may need support with preserving and reviewing evidence and learning about their legal rights. Those rights include the right of discovery, which allows them an opportunity to assess the evidence gathered by the plaintiff.
Depending on whether allegations of fraud lead to criminal charges or civil litigation, there are numerous defense strategies available. In some cases, it is possible to show that there is a lack of intent to defraud despite the negative financial outcome of a situation. Other times, it may be possible to prove that an outside party, rather than the accused individual, may have played a critical role in the alleged fraud.
People defending against fraud charges likely need support. Reaching out to the team at Sapone & Petrillo, LLP, with locations in both Manhattan and Long Island, can be a smart move for those who need legal advice about fraud. The insight of a New York fraud lawyer can make a major difference for those trying to preserve their finances and reputations while facing accusations of fraudulent conduct.