Criminal fraud is a crime involving a scheme to cheat or deceive another person or entity, in order to obtain a financial or similar type of gain. It is considered to be a white collar crime. According to criminal fraud law, any action that is intended to deceive another through false representation of fact, which results in legal detriment to the person or entity who relied on the information, can be considered an act of criminal fraud.
Put simply, if a person knowingly lies about an important or key fact in a transaction or relationship and the other party relies on that misrepresentation of fact and suffers harm, fraud has occurred. However, it does not occur when a person provides a fact that they believe to be true, even if they are mistaken.
The basic component of all types of fraud is that criminal fraud occurs when:
- A person lies or conceals a material truth;
- Another party or entity justifiably relies on that false information to make a decision; and
- That party suffers an injury based on their reliance on false information.
There are several elements of criminal fraud. In order for a person to be convicted of criminal fraud, the prosecution must prove:
- That there was a misrepresentation of a material fact;
- Made by a person who knew that the material fact was false;
- And intended to defraud;
- A person or entity who justifiably relied on the misrepresentation of fact in order to make a decision; and
- The person or entity suffered actual injury or damages as a result of their reliance on that false fact.
The basic elements of fraud in both civil fraud cases and criminal fraud cases are much the same. A criminal fraud conviction, however, can result in fines and/or jail time. Additionally, criminal law has a higher standard of proof, which would be beyond a reasonable doubt. Each element of the crime, as discussed above, must be proven beyond a reasonable doubt in order for a defendant to be convicted.
In criminal fraud cases, whether or not the fraud was actually successful is not a determining factor. Rather, the simple fact that a person attempted and intended to commit fraud is enough. Depending on the jurisdiction as well as the facts of the case, criminal fraud may be charged as either a misdemeanor or a felony crime.
In civil fraud cases, the fraud victim must prove the elements discussed above, and prove that they suffered damages as a result of the fraud. The defining difference between a civil and criminal fraud case would be that in a civil case, the person must show actual damages; in a criminal fraud case, the prosecution only needs to show that the defendant attempted fraud.
What Is Unclaimed Property?
According to basic property law principles, unclaimed or abandoned property can be defined as funds and/or assets that have not been used or activated for a specified period of time, generally three years. While the Revised Uniform Unclaimed Property Act (“RUUPA”) exists, only a handful of states have adopted some version of the RUUPA.
As of March 2021, these states include:
- Colorado;
- Kentucky;
- Tennessee;
- Utah; and
- Vermont.
In contrast, the majority of states have enacted their own unique set of unclaimed property laws. As such, each state has a property law that will dictate when such funds or assets may be considered unclaimed property. However, there may be some terms that overlap across some or all of the states.
Generally speaking, there are two main types of unclaimed property: tangible and intangible property. Tangible unclaimed property refers to physical property, or property that can be touched, such as the contents of a safe deposit box. Intangible unclaimed property includes property that cannot be physically held, such as bank account balances, stock shares, and lifetime annuity payments.
Most cases of unclaimed property include some form of unclaimed money. An example of this would be how if you are the owner of a bank account that carries a balance and you do nothing with that account for the period of time that is specified by your state’s property laws, that money may be considered as a type of unclaimed property.
Some activities that can help prevent a person’s funds or assets from turning into unclaimed property include:
- Regularly checking bank account balances;
- Depositing new funds into an account;
- Making cash withdrawals from an account;
- Communicating with the service provider about an issue with an account, either through verbal or written statements; and/or
- Performing any other action that would reasonably prove that an account owner is aware that the property in the account exists.
What Are Pigeon Drop Scams?
To reiterate, unclaimed property can include a:
- Bank account;
- Outstanding check;
- Proceeds; and/or
- Stock certificates that overturned to the state because the rightful owner could not be found.
Pigeon drop scams work on the premise of finding unclaimed money, and is a form of fraud. The scammer explains how they just found money and want to share it with the intended victim. However, before they can share the money, the scammer must receive some of the victim’s money.
The initial interaction most commonly occurs in parking lots, malls, or shopping complexes. A well-dressed person approaches the victim and tells them that they have just found a briefcase, bag, or envelope and asks if it belongs to the victim. As they talk to the victim, the scammer’s partner arrives to look into the bag and find large sums of money. In general, there is some indication the money was a part of illegal activity, such as gambling or a drug transaction.
The two partners discuss splitting it three ways. One of the partners will have a “connection” to a lawyer, and immediately makes a call to this “lawyer,” who is most likely another partner in the scam. The “lawyer” will advise that each person provide a percentage of the money, in order to show that they have sufficient funds to support themselves, while the lawyer locates the owner. In order to accomplish this, the lawyer recommends that the partners and victim deposit a percentage of the money into a safe deposit box or trust account.
Depositing money “proves” three things:
- Good faith;
- Proof of financial responsibility on each person’s part; and
- That each person is not attempting to scam the others.
The victim generally loses $2,000 to $3,000, while the partners find some way to leave the victim after securing the victim’s deposit. Before leaving the victim, they give the bag of money to the victim to keep; generally, the victim opens the bag to find that it is filled with paper instead of money. In terms of common victims for pigeon drop scams, the elderly are generally targeted because they are believed to be the most likely to fall for it.
If a person believes that they are a victim of criminal fraud such as a pigeon drop scam, they should contact their local law enforcement and report the fraud. When sufficient evidence exists, the case will be forwarded to the local prosecutor or District Attorney’s office for prosecution of the person who committed the fraud.
Additionally, it is important to keep records of any and all losses that resulted from the fraud; this is especially important when restitution is a possible penalty. Victims should also consult with a legitimate attorney in order to determine whether they will be able to pursue a civil fraud case in addition to the criminal fraud case.
Do I Need A Lawyer For Help With Pigeon Drop Scams?
If you are accused of committing a pigeon drop scam, or if you believe that you are the victim of such fraud, you should contact a fraud lawyer in order to determine your options. An experienced attorney can assist you throughout the entire legal process.
