Business Fraud: Definition and Possible Remedies

Business fraud can occur in a variety of ways – from breaches of contract, misrepresentation, false advertising, and more. Essentially, it means that one party in a business transaction attempted to gain an unfair advantage through theft, deception, or misrepresentation. 

If you think you’ve been a victim of business fraud, where do you start? Let’s talk about it. 

What is Business Fraud?

The term “business fraud” encompasses a wide variety of possibilities. It can include criminal actions by a company’s employees or leaders, asset misappropriation, identity theft, tax fraud, and more. 

Any employee at any level of a company can commit business fraud. Whether it’s a payroll accountant submitting false timesheets or an executive falsifying tax or investor documents, business fraud happens in many ways. Individuals today are getting creative when it comes to business fraud – from cryptocurrency scams to cases involving investor fraud on allergy testing technology, business fraud is rampant today.

Other types of business fraud include:

• False insurance claims related to a business 
• Making false contractual agreements or promises
• Advertising fraud
• Fraudulent invoicing practices 

A 2021 study found that in the United States, Nevada has the highest amount of business fraud reports per 100,000 people, followed by Maryland and Arkansas. The state with the highest losses related to reported fraud is California, with an average loss of $2,525 per fraud report – for a total loss of $316 million across the state.

Proving Business Fraud

There are different requirements for proving business fraud based on the type of fraud that allegedly occurred, but each case must essentially include:

• Proof that a false statement was made with the intent to deceive 
• Proof that the victim relied on the false statement 
• Proof of the damages the victim suffered based on that false statement 

There are nuances and complexities to every fraud case, so the documentation and evidence requirements vary on a case-by-case basis. 

Remedies for Business Fraud

The remedies for business fraud cases depend on the situation. Some cases will negotiate a settlement out of court, whereas others will go to trial. 

Compensation for financial loss is the most common type of business fraud settlement, but punitive damages are a possibility too. Punitive damages are considered a punishment for the defendant’s actions and are awarded at the court’s discretion. 

Those found guilty of business fraud can also face significant fines and criminal prosecution, which can lead to possible jail or prison time. 

Finding a Business Fraud Attorney

If you are in need of a business fraud attorney, find an experienced lawyer who has managed these types of cases in the past. Whether the case is civil or criminal, the process will be complex and it will require significant documentation and evidence, so finding an attorney who has navigated business fraud claims in the past is crucial. 

The team at McGonigle Law has extensive experience representing parties on both sides of business fraud cases.

The information contained herein is for general purposes only and does not constitute legal advice.