Business fraud charges arise when financial malfeasance as the product of intentionally false statements and deceptive business practices is said to have happened.
In order for a court to make a finding of fraud, the five following elements must be present:
A false statement of a material fact
Knowledge on the part of the defendant that the statement is untrue
Intent on the part of the defendant to deceive the alleged victim
Justifiable reliance by the alleged victim on the statement; and
Injury to the alleged victim as a result
A commercial fraud conviction can result in seizures, civil penalties, and criminal prosecutions. When the case does not rise to the level of criminality, the alleged victim may seek redress in civil court. Under the Sarbanes-Oxley Act, following a finding of fraud, the Securities and Exchange Commission has the authority to permanently and unconditionally prohibit a person from acting as an officer or director of a corporation.
In addition to charges filed against an individual, businesses are "legal persons" capable of being sued as well, and a company may be held liable for fraud even in situations where that corporation did not reap any benefit. However, even prosecutors admit that commercial fraud allegations are not very easily established. False statements due to a mistaken belief are not fraudulent. Misleading statements are more likely to be found fraudulent when a fiduciary relationship exists.
Prosecution for commercial fraud is always aggressive, and investigations can involve such intrusive measures as interrogation, computer forensics, data analysis, and forensic accounting. The Department of Justice encourages its prosecuting agents to pursue the most serious offense likely to result in a sustainable conviction, and advises against entering into a corporate plea that negotiates away individual liability.
This is why it is so important to secure an able legal defense team as soon as possible. Are you facing commercial fraud allegations and a federal investigation? The Blanch Law Firm has significant experience successfully resolving commercial fraud cases, whether through alternative dispute resolution, arbitration, or litigation.
Contact one of The Blanch Law Firm's business fraud attorneys by calling 646-797-4771 . Your initial consultation is free and confidential.