Civil Fraud Defense Lawyer in Phoenix

Civil fraud charges are far different than criminal fraud charges. We understand the difference!

When we hear about allegations of fraud in the media, they often relate to an existing or threatened criminal prosecution. There are, however, a variety of fraud charges that are not prosecuted as criminal charges. These are referred to as “civil fraud.” Civil (versus criminal) fraud does not mean that the fraud, if proven, will go unpunished; rather, it involves the nature of the possible sanctions imposed in a civil fraud case – usually, money damages.

If you are facing an existing or potential civil fraud case, it is important to understand what is being alleged, what the plaintiff needs to prove, and what defenses might be available.

What is Civil Fraud?

In Arizona, the elements of civil fraud – what a plaintiff must prove in order to succeed on a fraud claim – are as follows:

1) a false representation, (2) its materiality, (3) the awareness by the speaker of the false nature of the representation or ignorance of its truth, (5) the speaker’s intent that the information should be relied upon by the hearer in a manner reasonably contemplated, (6) the listener’s ignorance that the information is false, (7) the reliance by the listener on its (supposed) truth, (8) the listener’s right to rely thereon, and (9) the hearer’s subsequent and related injury.

To sum up the requirements for civil fraud, it requires that a person or company knowingly make a significant, false statement with the intention of having another person rely on that false statement. The alleged victim must have believed the false statement, relied on the false statement, and suffered damages because of the false statement.

Categories of Civil Fraud

There is really no limit to the possible situations in which a civil fraud charge might arise. In fact, any case alleging a supposedly false statement, reliance on that statement, and damages resulting from it will qualify. There are, however, a number of situations where allegations of civil fraud are relatively common. They include, among others:

1. Identity theft.
2. Wire fraud.
3. Insurance fraud.
4. Healthcare fraud.

In addition, allegedly making a false statement relating to contracts, bank accounts, checks, or government assistance applications (e.g., SNAP or unemployment insurance) may be categorized as civil fraud.

Civil Fraud vs. Conversion/Theft

Conversion is the actual appropriation of someone else’s property. It’s just a fancy word for theft. Civil fraud, on the other hand, does not require that you or anyone else “take” any property. The essence of fraud is a false statement, and while allegations of civil fraud and conversion – or theft – may appear in the same case, it is the false statement that differentiates the two.

Civil Fraud vs. Criminal Fraud

When comparing civil fraud and criminal fraud, note that in some cases, the same act can constitute both. For example, credit card fraud is a specific offense under A.R.S. 13 – 2105. That statute specifically makes it a crime, for example, to use a credit card to obtain money or anything else of value, without the knowledge and consent of the cardholder. As a criminal charge, it is a class 1 misdemeanor or a class 6 felony. This means that a conviction will create a criminal record for the defendant, with the possibility of jail time. As in other fraud cases, the underlying claim could also be the basis for a civil lawsuit seeking damages by the rightful owner of the credit card against the person allegedly committing fraud.

Always remember that when comparing civil and criminal liability for a particular act – in this case fraud – they differ in a number of other ways as well, including:

• Case filing. In a civil case, the alleged victim is ordinarily the plaintiff in the case. In a criminal case, the case is filed by the government.
• Burder of proof. Guilt by a preponderance of the evidence, i.e., more likely than not, is enough for most civil cases (sometimes a higher standard, known as “clear and convicting evidence,” may apply. Proof beyond a reasonable doubt – the highest standard of proof – applies in criminal cases.
• Consequences/Penalties. Penalties for civil fraud include money damages, injunctive relief, and rescission. Criminal fraud may lead to fines, restitution, and possible jail/prison time. Also remember that if you are convicted of criminal fraud, that conviction becomes part of your public record, and can affect job opportunities, housing, and other factors.

Phoenix Civil Fraud Defense Lawyer

If you have been sued for civil fraud, or if you believe a civil fraud case against you may be contemplated, act now. At the Law Offices of David A. Black, we are experienced in defending fraud claims. We can advise you how best to proceed, and how to negate or minimize any negative consequences – civil or criminal – as a result of the claim or claims against you. Contact us for a free consultation.

For a free consultation, call our office at (480) 280-8028.