Fraud

According to the Association of Fraud Examiners (“ACFE”), United States businesses will lose an average of 5% of their gross revenues to fraud.[1] The ACFE reported that private companies and small business rank the highest in occupational fraud frequency at 42% compared to large corporations, governments and non-profits.Small businesses have ranked highest in fraud frequency from the ACFE’s report the nation from 2002 to 2018 with combined averages showing 28% of small businesses experienced fraud. Small business suffered the same media fraud loss, $150,000, as organizations with more than 10,000 employees. ACFE also reported that 60% of small-business fraud victims did not recover any of their losses. Here, at The Major Law Firm, we do everything possible to help victims of business fraud recover their losses.  

The Major Law Firm has a unique approach to business fraud cases. The Major Law Firm has extensive experience defending criminal defendants accused of white-collar criminal offenses. These offenses include bribery, conspiracy, insurance fraud, and embezzlement. Because of this experience, The Major Law Firm can zealously represent those who have been victims of business fraud. Our firm has been on both sides of fraud cases representing criminal defendants and civil plaintiffs. This unique experience allows The Major Law Firm to aggressively pursue your rights when you have been defrauded in a business transaction.  

Every business fraud case is unique, but business fraud cases typically involve fraudulent billings practices, deceptive trade practices, misrepresenting the value of a business or property, fraudulently concealing of facts, securities fraud, conspiracy, embezzlement, employment-related fraud. The Major Law Firm has the ability to help you recover your losses if you have been the victim of fraud.  

A Plaintiff must establish: (1) the defendant made a material representation; (2) the representation was false; (3) the defendant either knew the representation was false when made or made it recklessly without any knowledge of its truth and as a positive assertion; (4) the defendant made the representation with the intention that it be acted upon; (5) the representation was in fact relied upon; (6) damage to the plaintiff resulted.  

To determine if a representation is material, courts look at if there is a substantial likelihood exists that a reasonable plaintiff would consider the representation important in entering the transaction in question.  

Business fraud also involves the deliberately concealing a substantial material fact. In an innocent misrepresentation the defendant that made the representation reasonably believed the information provided to be true. When an innocent misrepresentation is made generally courts allow rescission as remedy. Rescission allows the parties to treat the contract as it never existed. A negligent misrepresentation on the other hand occurs when the party that made there presentation believed the information to be true, but that belief was not based on reasonable grounds. When a negligent misrepresentation happens generally courts allow the Plaintiff to recover damages.  

Another type of business fraud is fraudulent transfer. Often times debtors who want to avoid paying a debt owed to a third-party transfer their assets to another person. The transfer can be made to a relative, corporation or a friend. If the transfer was facilitated in order to hinder, delay or defraud the judgement then it is a fraudulent conveyance, even if it happened before the judgment.

Embezzlement happens when an individual, normally an employee, steals money from a company. Typically, when this happens that individual breaches their fiduciary duty and commits criminal acts.  

A person injured by common law fraud may recover direct and consequential damages. Exemplary damages also available in a fraud action. Direct damages are those that are the necessary and usual result of the defendant’s wrongful act; they flow naturally from the wrong. Direct damages may be measured in two ways (1) by determining the out-of-pocket loss the plaintiff suffered; or (2) by determining the benefit-of-the-bargain the plaintiff lost.

The Major Law Firm focuses on protecting businesses against fraud, breach of fiduciary duty, misrepresentation, and breaches of contract. Proving a fraud case requires an evaluation of facts surrounding your case. Please call the Major Law Firm today for a free consultation with a business fraud litigation lawyer.

[1]ACFE 2018 Report to the Nations Global Study on Fraud and Abuse