» Federal Fraud

Federal Fraud

The short definition of federal fraud is when someone makes a false representation and presents it as an actual fact – by conduct, words or false and misleading statements or by concealing things that should have been revealed to the buyer. In other words, it is the desire to intentionally deceive someone so the perpetrator can act on it and financially harm someone.

To prove fraud, the plaintiff must show the defendant’s actions had five separate elements. The first is they must prove there was a false statement of fact, that the defendant knew the statement was false, that the defendant intended to deceive the plaintiff, that the victim relied on the defendant’s statements and representations and because they did, they sustained financial injury.

False statements are not always fraudulent, and that false statement must refer/relate to a material fact. That statement must also affect a victim’s choice/decision to enter into a contract. Any false statements that do not have any bearing on the transaction itself are not considered to be fraudulent.

Statements of fact that are simply a mistake are not fraudulent. To become fraudulent, they must be stated with the deliberate intent to deceive a victim, which links to the third element, that the false statement must be made with the deliberate intention to deprive the victim of a legal right.

If the victim had good reason to rely on the false statement, then it is considered reasonable. If the statement was ridiculous or absurd and someone relied on it, that does not typically give rise to fraud. The false statement made to the victim must also leave them in a worse situation than they were in prior to the fraud.