Criminal fraud involves activities such as schemes to cheat or deceive another individual or entity for financial or similar type of gain. Criminal fraud is classified as a white collar crime.
White collar crimes are non-violent crimes that are generally committed in a business or commercial context for financial gain. The majority of these types of crimes are prosecuted by the federal government and, therefore, are very serious in nature.
Under criminal fraud laws, any action can be considered an act of criminal fraud if that action is intended to deceive another individual using false misrepresentation of fact which results in detriment to the individual who relied on that information. In simpler terms, if an individual knowingly lies regarding an important fact in a relationship or transaction and the other party relies on that misrepresentation of fact and suffers harm, fraud occurred.
The basic elements of criminal fraud and civil fraud are the same. With criminal fraud, however, if an individual is convicted, they may face jail time, criminal fines, or both.
In addition, criminal law cases have a higher standard of proof, beyond a reasonable doubt. This means that each element of the offense must be proven beyond a reasonable doubt in order for the defendant to be convinced of fraud.
In cases of criminal fraud, whether or not the fraud was successful is not a factor. Instead, the mere fact that the individual intended and attempted to commit fraud is enough to form the basis of a fraud charge.
Depending on the jurisdiction as well as the facts of the case, criminal fraud may be charged as either a misdemeanor or a felony offense. In the alternative, in civil cases, a victim, or plaintiff, must prove the fraud elements in addition to showing that they suffered damages as a result of the fraud.
What Is Internet Fraud?
Generally, the same types of schemes that victimized individuals and investors for years prior to the creation of the Internet and e-commerce are not showing up online. The term Internet fraud is used loosely to describe a type of scheme that uses one or more components of the Internet, for example, e-mail, message boards, or chat rooms, to accomplish the following:
- To present fraudulent solicitations to prospective victims;
- To conduct fraudulent transactions; and
- To transmit the proceeds of the fraud to a financial institution or to other individuals connected with the scheme.
Internet fraud is often associated with computer fraud. Common examples of Internet fraud include, but may not be limited to:
- Auction and retail schemes;
- Work-from-home schemes;
- Identity theft;
- Market manipulation schemes, or using false or fraudulent information to cause dramatic price increases in thinly traded stocks or stocks of shell companies, then immediately sell their holdings to realize substantial profits;
- Scalping schemes, which are used to disseminate false or fraudulent information in an effort to cause price decreases in a particular company’s stock; and
- Credit card fraud, where a scammer uses unlawfully obtained credit card numbers to order goods and services online.
If an individual believes they have been a victim of Internet fraud, they should consult with a fraud lawyer as soon as possible.
What Are the Most Common Types of Internet Fraud?
Examples of internet fraud crimes and internet scams include:
- Auction and retail schemes: These are the most commonly reported types of Internet fraud;
- This type of scheme generally proposes to offer high priced merchandise for low prices and to induce the consumer to send money for the promised items but then they will receive nothing or something of far lesser value;
- Work-at-home schemes: Fraudulent schemes commonly use the Internet to advertise opportunities that will allow an individual to earn thousands of dollars a month in a work-at-home venture;
- This type of schemes induces the consumer to send money for start-up materials but the materials received are typically not adequate for the purposes of starting a successful business;
- Identity theft: Some forms of Internet fraud involve identity theft. An Internet posting will induce an individual to send their driver’s license number or a social security number for the purpose of fraud or deception;
- Market manipulation scheme: Action taken by the SEC and criminal prosecutors indicate that criminals are using two basic methods under this type of fraud:
- Pump-and-dump schemes that use false or fraudulent information in an effort to cause dramatic price increases in thinly traded stocks or stocks of shell companies, then immediately sell their holdings of the stocks to obtain a substantial profit; and
- Scalping schemes disseminate false or fraudulent information in an effort to cause price decreases in the stock of a particular company; and
- Credit card fraud: Credit card fraud is a variation on an auction scheme;
- In credit card fraud cases, the con-artist uses unlawfully obtained credit card numbers to order goods and services online.
What Should I Do if I Am a Victim of Internet Fraud? What If I Am Being Accused of Internet Fraud?
If an individual believes they have been a victim of criminal fraud, they should first contact their local law enforcement to report internet fraud. If there is sufficient evidence to pursue a claim, the case will be forwarded to the local prosecutor or district attorney’s office.
It is important for an individual to keep records of any and all losses that result from the fraud. This can be especially important when restitution is a possible penalty.
A local attorney will be best suited to helping an individual understand their legal options as well as how to proceed once they have reported the fraud. The penalties for criminal fraud may vary depending on several factors, including:
- The jurisdiction;
- The severity of the fraudulent act;
- The victim of the fraud; and
- The amount of money or property that was lost as a result of the fraud.
If an individual is charged with criminal fraud, they should consult with a criminal defense attorney as soon as possible. These charges can be very serious and result in serious punishment.
If the offense is charged as a felony, it may affect other aspects of an individual’s life, including:
- The right to vote;
- The right to own firearms;
- The ability to gain employment; and
- The ability to have visitation or custody of children.
How Are These Cases Being Prosecuted?
Because the issue of jurisdiction may be complex in cases that involve e-commerce, the most active prosecution of Internet fraud cases has been in the federal court system.
Backed by the SEC, FCC, as well as countless statutes, perpetrators of Internet fraud can face a wide variety of fines and, in some cases, federal prison time.
What Are the Penalties for Internet Scam Crimes?
If an individual is convicted of criminal fraud they may face penalties including, but not be limited to:
- Jail or prison time
- This is determined by whether the crime is classified as a misdemeanor or a felony;
- Probation or parole;
- Fines;
- Restitution; or
- A combination of these punishments.
Examples of factors that the court will take into consideration include:
- The severity of the fraudulent act;
- Whether the defendant has prior convictions, especially any associated with fraud;
- Whether the defendant is currently on probation or parole;
- The amount of money or property that was stolen; and
- The person or entity that was the targeted victim.
The penalty an individual receives may also be influenced by the attitude of the community or the court towards this type of crime. For example, if the victim is the federal government, the charges can be brought under federal laws which would result in harsher penalties.
If an individual has been a victim of Internet fraud, they should consult with an online scam lawyer who can assist them in recovering damages, if possible.
Should I Contact a Business Attorney?
If you have been the victim of Internet fraud, it is important to consult with a local law enforcement or district attorney’s office to report the offense. It may also be helpful to consult with a business lawyer who can initiate a civil action against the individual or entity who perpetrated the fraud.
If you have been charged with or arrested for Internet fraud, it is important to consult with a criminal defense attorney. As noted above, the charges can be serious as well as the consequences.
