Criminal Fraud Laws

Numerous types of crimes might fall within the definition of “fraud.” Both federal and state prosecutors may pursue these charges. A defendant charged with any form of criminal fraud should not try to explain their version of events to law enforcement on their own. This could jeopardize their ability to craft an effective defense. Instead, they should consult a lawyer as soon as they believe that they may be suspected of fraud. An attorney can handle any interactions with police or prosecutors on their behalf.

What Is Fraud?

You might be charged with fraud if you got money or another benefit by lying or misrepresenting something.

Elements of Fraud

A prosecutor trying to get a fraud conviction must prove beyond a reasonable doubt that the defendant committed an act within the scope of the applicable statute. Most criminal codes do not have a single offense labeled “fraud.” Instead, various statutes prohibit specific forms of fraud, ranging from check fraud and credit card fraud to securities fraud and tax fraud.

Generally, though, the defendant must have intentionally used some form of falsehood or misrepresentation in an effort to get something of value. The prosecutor also may need to prove that the victim relied on the falsehood or misrepresentation.

Civil Lawsuits Based on Fraud

In addition to criminal charges, a defendant might face a civil lawsuit from the target of the fraud. This would seek compensation for any financial losses. A civil lawsuit has a much lower standard of proof than a criminal case, so a defendant might be civilly liable even if they are not convicted of a crime.

Examples of Fraud

Struggling with debt, Phil sets fire to a property covered by an insurance policy. He then files a claim of accidental loss with the insurance company so that he can collect the proceeds of the policy. This would be considered insurance fraud.

Penelope is a self-employed person who works two jobs. She reports the income from only one job on her tax return. Failing to include the income from the other job would be tax fraud.

Offenses Related to Fraud

Some other offenses that might be charged in situations similar to those that might support a fraud charge include:

  • Larceny: essentially the generic form of theft, which involves taking someone else’s property without authorization and with the intent to deprive them of it
  • Embezzlement: misappropriating property with which the defendant was entrusted
  • Extortion: perhaps the defendant threatened someone into giving them money or property, rather than deceiving them
  • Blackmail: a form of extortion involving reputational threats
  • Forgery: various crimes involving a false or falsified legal instrument and an intent to defraud someone
  • Perjury: may be charged when someone lies under oath or in other situations when they have pledged to tell the truth

The definitions of these crimes vary by state and sometimes may overlap. A local attorney can explain what a prosecutor must prove under a particular statute.

Defenses to Fraud

Someone charged with fraud often will argue that they lacked the required intent. Even if they lied or misrepresented something, this is not fraud if they did not intend to get anything from it. Or a defendant might raise entrapment. This defense shields someone from criminal liability if law enforcement induced them to commit a crime that they were not predisposed to commit. Meanwhile, a defense called duress might defeat a charge if the defendant committed a fraudulent act under an imminent threat of serious harm from someone else.

Anyone charged with a crime has certain constitutional rights. If law enforcement fails to respect those rights during an investigation, the defendant generally can ask the court to exclude evidence resulting from a violation. This can greatly undermine a charge. For example, a prosecutor may struggle to get a conviction if their case relies on evidence obtained in a violation of Fourth Amendment rules for searches and seizures.

Mistaken Identity and the Internet

When fraud occurs online, it may be difficult to identify the person who was responsible. A defense attorney might review the digital data involving the fraud to see whether it points to an alternative perpetrator.

Penalties for Fraud

The potential prison term for a fraud conviction may vary not only by jurisdiction but also by the type of fraud. Here are some examples of sentencing ranges for various types of fraud in the federal system:

  • Bank fraud: up to 30 years
  • Government contract fraud: up to 5 years
  • Health care fraud: up to 10 years
  • Mail fraud: up to 20 years
  • Securities fraud: up to 25 years
  • Wire fraud: up to 20 years

Here are some examples of sentencing ranges for various types of fraud in California:

  • Check fraud: up to 1 year in jail, or 16 months or 2 or 3 years in jail
  • Credit card fraud: up to 1 year in jail, or 16 months or 2 or 3 years in jail (amount greater than $950); up to 6 months ($950 or less)
  • False insurance claim for loss or injury: 2, 3, or 5 years in jail
  • Health care fraud: up to 1 year in jail, or 2, 3, or 5 years in jail (amount greater than $950); up to 6 months ($950 or less)
  • Insider trading: 2, 3, or 5 years
  • Telemarketing fraud: up to 1 year in jail, or 16 months or 2 or 3 years in jail
  • Unemployment/welfare fraud: up to 6 months

In certain circumstances, a defendant could face both federal and state charges for the same sequence of events. This does not violate the constitutional principle of double jeopardy if the defendant violated both federal and state laws.

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