Updated on August 21, 2018
Consumers and businesses come across deceptive behavior in the regular course of their dealings. Some deceptive behavior is actionable, especially when a victim suffers financial or legal damages as a result. A victim of such behavior can turn to the courts for relief from these damages under a cause of action for fraud. However, proving fraud requires specific items of evidence under a higher burden of proof. A judgment for fraud can have very longstanding implications for personal and professional dealings. As such, courts are careful to make sure there is sufficient evidence to substantiate a claim of fraud.
Fraud can be either civil or criminal. Civil fraud involves a misrepresentation of the truth to persuade another to act a certain way. The misrepresentation must be “knowing.” That is, the party accused of fraud must have known the statement was untrue at the time it was made. Also, the victim of fraud must have acted on the misrepresentation to his or her detriment. Criminal fraud is similar to civil fraud, except that it is based on a statute. For example, under federal law, using the mail to carry out fraud constitutes a criminal fraud offense. (18 U.S.C. §§ 1341, 1342.) Likewise, submitting a fraudulent tax return is an act of criminal fraud under the Internal Revenue Code, which may lead to a penalty or even imprisonment. (I.R.C. § 7201.)
A judgment for fraud can have a very serious effect on your life. Once a court enters a judgment for fraud, it becomes public record. Therefore, it shows up in the regular course of a background check and a credit report. This has a huge implication because, for example, employers conduct background checks before hiring a new employee. A student who wishes to go to law school will have to undergo an extensive background check before the state bar will issue a license. A record for a judgment for fraud can prevent a student from receiving a license to practice law. Even in the course of buying a handgun the prospective owner will have to undergo a background check. Because a judgment for fraud, whether civil or criminal, points to morally reprehensible and dishonest conduct, a lot of opportunities are not available in light of a fraud judgment. The United States Supreme Court has even held that a party who owes money under a fraud judgment cannot discharge that debt through bankruptcy. (Cohen v. de la Cruz (1998) 523 U.S. 213, 218.) The Court explained that to hold otherwise would cut against the purpose of the Bankruptcy Code—to allow the “honest but unfortunate debtor” another chance. (Id.)
The attorneys at Schorr Law, APC have a wide array of experience trying cases involving fraud. Whether you are looking to secure a fraud judgment against another party, or if you are looking to avoid a wrongful fraud judgment yourself, our knowledgeable attorneys can help you with your legal concerns. To see if you qualify for a free 30-minute consultation, contact us by phone at (310) 954-1877 or by email at [email protected].