7StarsDubai

Dubai UAE News from the Press Property Market Disaster and More

  • Dubai 7 Stars
  • January 2009
    M T W T F S S
    « Dec   Feb »
     1234
    567891011
    12131415161718
    19202122232425
    262728293031  
  • Middle East Unrest Update

  • Talk of the Town

    Jo Hopworth on Justice For Natalie – Na…
    Mariam on Criminal Complaint filed in Ge…
    Martin Kraeter on ACI Dubai Funds filed bankrupt…
    Independent Observer on Iranian’s lawsuit reveals roya…
    Rado on DubaiTouristen landen schnell…
    Dubai Citizen on Al Fajer Properties Case…
    Dane on Outlook in concrete- Dubai Wor…
    jamesl fayad on RERA Dubai – Dubai Prope…
    Jacques on Malika Karoum finally arrested…
    James Brown on ACI – Alternative Capita…
    Journalist on Al Fajer Properties-500 Invest…
    ron oakeley on ACI – Alternative Capita…
    Benson Fu on Shahram Zadeh against Al Fajer…
    Monika on RERA – Dubai mulls cance…
    Ali Varahram on Shahram Zadeh against Al Fajer…
  • Top Rated Comments

  • Top Posts

  • RSS Dubai United Arab Emirates Property Real Estate Debt Fraud Developer Investor Court News

    • Criminal Complaint filed against Al Fajer Properties Sheikh Maktoum
      Criminal Complaint filed in Germany against Sheikh Maktoum Hasher Maktoum Juma Al Maktoum CEO of Dubai Developer Al Fajer Properties The Dubai Sheikh who mislead and extort a German Couple  Germany – Dubai 2011 A German elderly couple , today 80 + 50 years old who have been Dubai Tourists since a decade, bought in 2005 an apartment at Nakheel´s Dubai Residen […]
    • UAE: Human Rights Blogger, Sorbonne Lecturer Charged With ‘Humiliating' Officials
      source Human Rights Watch www.hrw.org (Beirut) - The United Arab Emirates attorney general should immediately drop all charges against five pro-democracy activists to halt their trial, Human Rights Watch said today. The charges of "humiliating" top officials relate solely to the defendants' peaceful use of speech to criticize the UAE governmen […]
    • Nakheel Dubai Sunland Case
      June 5, 2011After 21 hearings, Chris O'Donnell, the Australian chief executive of Dubai's major developer, Nakheel, came to the defence of his former colleagues Matthew Joyce and Marcus Lee. Mr Joyce and Mr Lee are accused of profiting from the sale of land that had been earmarked for a colossal high-rise development, which was to include the futur […]
    • Dubai Nakheel CEO decided to leave the company
      Dubai June 7, 2011 Nakheel said on Wednesday that its CEO Chris O'Donnell had left the company "after completing his contract terms". O'Donnell, an Australian who joined the developer in 2006, said he had decided to leave Nakheel following five years spent with the company, the statement added. O'Donnell has overseen a traumatic time […]
    • Owner of Dubai Developer Damac Hussain Sajwani files case against Egypt corruption ruling
      Dubai property developer Damac said on Tuesday it had filed an international arbitration case against Egypt over a land dispute and the conviction of its chairman and owner, Hussain Sajwani.A Cairo court last week sentenced Sajwani in his absence to jail and ordered him to pay a $40.5 million fine in connection with his 2006 purchase of land at Egypt's […]
    • Dubai Palm Jumeriah - Investors plan to take legal action
      Investors in Dubai Palm Jumeirah’s Golden Mile complex will this week serve the developer behind the project with a legal ultimatum to hand over their units or issue them with a refund.Up to ten investors in the luxury complex plan to issue Souq Residences with legal notice in a bid to force a resolution to a dispute that has been ongoing for more than a yea […]
  • Top Rated Posts

    • 473,390 visitors 2010
  • Disclaimer 7 Stars Dubai

    This Website of the Blog 7starsdubai.wordpress.com and 7starsdubai.com content still existing media releases and comments from reputated press and websites only. The content of this Website focus to consumer protection for Investors of the Dubai Property market, the UAE and the Middle East. Press Article from the international Press who report about Fraud in relation with Property Investment and Real Estate Developer Investor Disputes in Dubai and the UAE as well reports from the Press about other criiminal acts and Civil Real Estate cases, Lawsuits before the Court in Dubai, the UAE or other countries. Furtheron we show reports about consumer protection and human rights in the Middle East. Actual Topics about the Unrest in Middle East. The information comprised in this section is not, nor is it held out to be, a solicitation of any person to take any form of investment decision. The content of this site does not constitute advice or a recommendation by us.Communications and should not be relied upon in making (or refraining from making) any decision relating to investments or any other matter. You should consult your own independent financial adviser and obtain professional advice before exercising any investment decisions or choices based on information featured in this Web site. We can not be held liable or responsible in any way for any opinions, suggestions, recommendations or comments made by any of the contributors to the various columns on this Web site nor do opinions of contributors necessarily reflect those of us.In no event shall we be liable for any damages whatsoever, including, without limitation, direct, special, indirect, consequential, or incidental damages, or damages for lost profits, loss of revenue, or loss of use, arising out of or related to this Web site or the information contained in it, whether such damages arise in contract, negligence, tort, under statute, in equity, at law or otherwise. Comment Rules: Although the administrators and moderators of 7starsdubai.com will attempt to keep all objectionable comments off this Blog, it is impossible for us to review all comments . All messages express the views of the author, and neither the owners of this Blog, nor the administrator of this Blog will be held responsible for the content of any message, comment. By agreeing to these rules, you warrant that you will not post any messages that are obscene, vulgar, hateful, threatening, or otherwise violative of any laws. The adminstrator of this Blog reserve the right to remove, edit, move or close any comment (message) for any reason This Blog content still existing media releases and comments from websites only. The information comprised in this section is not, nor is it held out to be, a solicitation of any person to take any form of investment decision. The content of this site does not constitute advice or a recommendation by us.Communications and should not be relied upon in making (or refraining from making) any decision relating to investments or any other matter. You should consult your own independent financial adviser and obtain professional advice before exercising any investment decisions or choices based on information featured in this Blog. We can not be held liable or responsible in any way for any opinions, suggestions, recommendations or comments made by any of the contributors to the various columns on this Web site nor do opinions of contributors necessarily reflect those of us.In no event shall we be liable for any damages whatsoever, including, without limitation, direct, special, indirect, consequential, or incidental damages, or damages for lost profits, loss of revenue, or loss of use, arising out of or related to this Web site or the information contained in it, whether such damages arise in contract, negligence, tort, under statute, in equity, at law or otherwise. Copyright: The copyright to the text of the blog is held by the author or link as source provided, where applicable. All images displayed are copyright their respective owners and are used either under licence or under the fair use provisions of international copyright law. The information contained in this Web site is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, and the inherent hazards of electronic communication, there may be delays, omissions or inaccuracies in information contained in this site. Accordingly, the information on this site is provided with the understanding that the authors and publishers are not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. Before making any decision or taking any action, you should consult the administrator of this website. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, 7starsdubai.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will 7starsdubai its related partnerships or corporations, or the partners, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this site or for any consequential, special or similar damages, even if advised of the possibility of such damages. Certain links in the Web site connect to other sites maintained by third parties that may or may not be presented within a frame on the Web site. 7starsdubai.com has not verified the contents of such third party sites and does not endorse, warrant, promote or recommend any services or products, that may be provided or accessed through them or any person or body which may provide them. 7starsdubai.com has not issued or caused to be issued any advertisements which may appear on these Web sites. We do not review, monitor or endorse any third party web sites linked to Our Site and We are not responsible for the content of any web site linked to Our Site. Your access to any web site that links to Our Site is at your sole risk. We are not responsible for the information, material, products, or services contained on or accessible through such other web sites and will not be liable for any form of loss or damage arising as a result of or in connection with your visits to such web sites. Any links to other web sites are provided merely for the convenience of the users of this Site and the inclusion of these links does not imply an endorsement of the linked web sites or the content therein. In addition, you agree not to link your web site or any other third party web site to Our Site or frame Our Site as part of any other web site without Our express prior written consent. We reserve the right, at any time and for any reason not prohibited by law, to deny permission to anyone to link a web site to, or frame, Our Site. We reserve the right to withdraw Our consent at any time to a link to, or framing of, Our Site at Our sole discretion without notice. Your use of this Site and the operation of these Terms and Conditions shall be governed by and construed in accordance with the laws and regulations of and applicable in Germany You agree, acknowledge, and submit to the Court in Germany having non-exclusive jurisdiction over all and any dispute or difference between us arising out of or in connection with this Agreement. Please review these Terms and Conditions carefully before using this Site. Your use of this Site indicates your irrevocable agreement to be bound by these Terms and Conditions (as may be amended by Us from time to time). If you do not agree to be bound by these Terms and Conditions please stop accessing and using this Site immediately. Warning: We are aware that several times Cybercriminals mirrowed our Website and posted on several Forums, Website comments by misuse of our email adresses. These Cybercriminals registerd several similar looking Domains and installed several 1:1 mirrowed Websites which look like our Website 7starsdubai. We have already taken the necessary steps by filing criminal complaints against the Individuals behind this Identity theft an Cybercrime, by misusing fraudulently our Blog Identity 7starsdubai. In Search engines like Google, Yahoo, Bling and others you should always take a close view to the links. If this links do not originaly start with www.7starsdubai.com or http://7starsdubai.worpress.com/.... you will end on a faked mirrowed modificated Website. The genral Background of this Cybercriminals is a Stalking and Smear campaign, faking stories for their personal use, to discriminate Persons with the goal to destroy their reputation.
  • RSS ZDF Heute Germany

    • Untitled
    • Kinder, Rente, Flüchtlinge: Die Themen beim Bäcker
      BundestagswahlDeutschland wählt - aber holt vorher noch schnell Brötchen: In Filialen der Bäckerei "Wahl" in Berlin und Brandenburg diskutieren die Kunden über Kitaplätze, die Rente - und Flüchtlinge. Erst danach gehen die meisten wählen - manche mit Wut im Bauch.Video Kampf um UnentschlosseneVideo Politbarometer: Letzte UmfrageVideo Koalitionen: W […]
    • Höhere Wahlbeteiligung zeichnet sich ab
      Liveblog zur BundestagswahlBei der Bundestagswahl zeichnet sich eine höhere Wahlbeteiligung ab. Vor allem in den Großstädten gaben bis zum Mittag mehr Menschen ihre Stimme ab als zum Vergleichszeitpunkt vor vier Jahren. Auf dem Land sieht es teilweise umgekehrt aus. Die Wahllokale sind bis 18 Uhr geöffnet. Alles zur Wahl im Liveblog.Interaktiv Wahl-O-MatInte […]
    • 61,5 Millionen Wähler, 4.828 Kandidaten, 42 Parteien
      Zahlen zur BundestagswahlSo viele Parteien wie noch nie im wiedervereinten Deutschland stehen am 24. September zur Wahl. Mehr als 60 Millionen Bürger dürfen entscheiden, wer das Rennen macht. Ein Überblick über die wichtigsten Zahlen rund um die Wahl.Video Richtig wählenVideo Junge Wähler wählen anders?
    • Sogar noch spannend - der Wahlkampf im Rückblick
      Bilanz des Bundestagswahlkampfs 2017Seit 8 Uhr haben die Wahllokale geöffnet - der Bundestagswahlkampf 2017 ist zu Ende. Was zeitweise wie ein gemütlicher Durchmarsch von Angela Merkel aussah, ist noch zu einem spannenden Showdown geworden. Und nicht nur, weil die AfD zur drittstärksten Kraft werden könnte.Video Eine Partei im SpagatVideo Hass auf PolitikerV […]
    • Brüssel: Fünf Fragen an Berlin
      Hauptstädte vor der BundestagswahlBrüssel blickt vor großen Entscheidungen oft in Richtung Berlin. Aber diese Bundestagswahl fällt für die EU in eine besonders entscheidende Phase. Selten wartete man in Brüssel so gespannt auf den Ausgang der deutschen Wahl. Fünf Fragen treiben Europa dabei um.Video Brüssel nach dem TV-DuellVideo Junckers Visionen für Europa […]
    • Kurden-Referendum "verstößt gegen Völkerrecht"
      Abstimmung im NordirakAm Montag wollen die Kurden im Nordirak über ihre Unabhängigkeit abstimmen - gegen den Widerstand der irakischen Regierung. Auch die USA, die Türkei und Iran warnten vor dem Referendum. Was den Kurden-Präsidenten Barsani antreibt, erklärt der Völkerrechtler Norman Paech im heute.de-Interview.Video Kurden vor Referendum im IrakVideo Erdo […]
    • Nordkorea hält Anti-USA-Kungebung ab
      Atom-Konflikt"Tod den amerikanischen Imperialisten": In der nordkoreanischen Hauptstadt Pjöngjang wird auf einer Protestkundgebung die "Zerstörung" der USA gefordert. Unterdessen heizt auch US-Präsident Donald Trump die Kriegsrhetorik weiter an.Video Nordkorea droht USA mit AngriffVideo Weitere SanktionenVideo Trumps Rede bei der UNO
    • Senatswahl: Dämpfer für Macron erwartet
      FrankreichIn Frankreich findet heute die Senatswahl statt. Bei der Teilwahl wird rund die Hälfte des französischen Oberhauses neu besetzt. Das konservative Lager dürfte seine Mehrheit verteidigen. Es wird erwartet, dass die Partei von Präsident Macron nach zwei triumphalen Wahlerfolgen einen Dämpfer erhält.Video Macron unter DruckVideo Macrons Arbeitsmarktre […]
    • Liveticker: Hannover 96 empfängt FC Köln
      Bundesliga: Der sechste SpieltagIm ersten Sonntagsspiel am 6. Spieltag ist der 1. FC Köln in Hannover zu Gast. Während die Niedersachsen mit einem Dreier bis auf den zweiten Tabellenplatz vorrücken können, sehnen sich die Kölner nach dem ersten Punktgewinn der Saison. Verpassen Sie nichts hier im Liveticker.
    • Live: Straßenrennen der Männer
      Rad-WM in BergenNur mit Außenseiterchancen geht das deutsche Team in das Straßenrennen der Männer bei der Rad-WM im norwegischen Bergen. Nach dem Ausfall von John Degenkolb gibt es keinen festen Kapitän. Großer Favorit auf den Sieg ist der Slowake Peter Sagan. Verfolgen Sie das Rennen über 267,5 Kilometer im Livestream!
    • Berliner entscheiden über Tegels Zukunft
      Volksentscheid zum FlughafenNicht nur für die Bundestagswahl dürfen um die 2,5 Millionen Berliner heute ihre Stimme abgeben. Sie können auch darüber entscheiden, ob sie ihren Stadtflughafen Tegel behalten wollen oder nicht. Mit der Abstimmung endet vorerst ein langer und hoch emotionaler Streit in der Stadt.Video Tegel wird attraktiverVideo Tegel-Volksentsch […]
    • Vom Betonklotz zum gläsernen Wohnturm
      Scheeren-Umbau in FrankfurtMit spektakulären Wolkenkratzern und Wohnkonzepten in Asien hat sich Ole Scheeren einen Namen gemacht. Erstmals bringt der Architekt seine Ideen nach Deutschland - mit einem Umbau in Frankfurt. Aus einem Betonklotz für Büros soll ein Wohnturm aus Glas werden.
    • Untitled
    • Nürnberg springt auf Platz zwei
      24.09.17 15:26 | Der 1.FC Nürnberg hat sich in der 2.Li- ga mit einem 3:1 bei Greuther Fürth auf Platz 2 verbessert. Nach den Toren von Ishak (9.) und Teuchert (58.) schien der Club einem sicheren Sieg entgegenzusteueren, doch nach Gjasulas Elfmetertor (79.) wurde es nochmal spannend. Behrens erzielte den Endstand (90.+4). Die Nürnberger profitierten auch vo […]
    • Bundeskanzlerin Merkel wählt - und schweigt
      24.09.17 15:20 | Bundeskanzlerin Angela Merkel (CDU) ist zusammen mit ihrem Mann Joachim Sauer zur Stimmabgabe bei der Bundestagswahl gegangen. In einem orangeroten Blazer und mit silberner Halskette gab Merkel unter großer Medienbeteiligung am Sonntagmittag im Wahllokal der Humboldt-Universität in Berlin-Mitte ihre Stimme ab - und schwieg. Sie gab kein Stat […]
    • Menschenrechtspreis für die Dokumentation syrischer Gefängnisfolter
      24.09.17 14:55 | Eine Gruppe um einen früheren syrischen Militärfotografen mit dem Decknamen "Caesar" ist mit dem Internationalen Nürnberger Menschenrechtspreis ausgezeichnet worden. Die Initiative hatte unzählige Fotos von in syrischen Gefängnissen zu Tode gefolterten Menschen veröffentlicht. Laudator Stephen Rapp, ehemaliger Chefankläger am Inter […]
    • Union Evangelischer Kirchen feiert 200-jähriges Bestehen
      24.09.17 14:25 | Mit einem Festgottesdienst im Berliner Dom hat die Union Evangelischer Kirchen (UEK) ihr 200-jähriges Bestehen gefeiert. In seiner Predigt betonte der Vorsitzende der UEK-Vollkonferenz, Christian Schad, die Bedeutung der Ökumene: "Es ist uns geschenkt, das 500-jährige Reformationsjubiläum gemeinsam, evangelisch-katholisch und mit Geschw […]
    • Rad-WM: Sagan vor Titelhattrick
      24.09.17 14:20 | Die deutschen Fahrer sind nur Außenseiter, Doppel-Weltmeister Peter Sagan könnte Historisches gelingen. Das Profi-Straßenrennen über fast 280 km dürfte heute (15.05 Uhr live auf zdfsport .de) krönender Abschluss einer stimmungsvollen WM in Bergen werden. Alleskönner Sagan soll zuletzt erkältet gewesen sein. An seinem Sonderstatus ändert das […]
    • Highlight
      Meist trocken, oft sonnig, bis 22 Grad

What is a Fraud ?

Posted by 7starsdubai on January 17, 2009


http://en.wikipedia.org/wiki/Fraud

Definition Fraud

In criminal law, fraud is the crime or offense of deliberately deceiving another in order to damage them – usually, to obtain property or services unjustly. [1] Fraud can be accomplished through the aid of forged objects. In the criminal law of common law jurisdictions it may be called “theft by deception,” “larceny by trick,” “larceny by fraud and deception,” or something similar.

Fraud for profit involves industry professionals. There are generally multiple loan transactions with several financial institutions involved. These frauds include numerous gross misrepresentations including: income is overstated, assets are overstated, collateral is overstated, the length of employment is overstated or fictitious employment is reported, and employment is backstopped by conspirators. The borrower’s debts are not fully disclosed, nor is the borrower’s credit history, which is often altered. Often, the borrower assumes the identity of another person (straw buyer). The borrower states he intends to use the property for occupancy when he/she intends to use the property for rental income, or is purchasing the property for another party (nominee). Appraisals almost always list the property as owner-occupied. Down payments do not exist or are borrowed and disguised with a fraudulent gift letter. The property value is inflated (faulty appraisal) to increase the sales value to make up for no down payment and to generate cash proceeds in fraud for profit.

Marriage Fraud can take several forms and is the act of entering a marriage for personal gain rather than a genuine desire to enter into a sincere marital relationship. Marriage Fraud is usually associated with obtaining immigration benefits. In the United States, marriage fraud for immigration purposes is punishable under INA §204(c)(1) and the Immigration Marriage Fraud Amendments of 1986. Possible criminal penalties include $250,000 and 5 years in prison as well as deportation and a permanent bar against receiving future immigration status. Marriage Fraud can be either unilateral or bilateral Unity and Immigration Policy in the United States. In a unilateral marriage fraud, only one party is aware of the fraud and the fraud is against both the immigration service as well as the other party. The innocent party may file a lawsuit and/or annulment of the marriage. In a bilateral fraud, both parties are aware of it and both parties are subject to criminal penalties.

In academia and science, fraud can refer to academic fraud – the falsifying of research findings which is a form of scientific misconduct – and in common use intellectual fraud signifies falsification of a position taken or implied by an author or speaker, within a book, controversy or debate, or an idea deceptively presented to hide known logical weaknesses. Journalistic fraud implies a similar notion, the falsification of journalistic findings.

Fraud can be committed through many methods, including mail, wire, phone, and the internet (computer crime and internet fraud). The difficulty of checking identity and legitimacy online, the ease with which hackers can divert browsers to dishonest site and steal credit card details, the international dimensions of the web and ease with which users can hide their location, all contribute to making internet fraud the fastest growing area of fraud.

Acts which may constitute criminal fraud include:

Fraud, in addition to being a criminal act, is also a type of civil law violation known as a tort. A tort is a civil wrong for which the law provides a remedy. A civil fraud typically involves the act of intentionally making a false representation of a material fact, with the intent to deceive, which is reasonably relied upon by another person to that person’s detriment. A “false representation” can take many forms, such as:

  • A false statement of fact, known to be false at the time it was made;
  • A statement of fact with no reasonable basis to make that statement;
  • A promise of future performance made with an intent, at the time the promise was made, not to perform as promised;
  • A statement of opinion based on a false statement of fact;
  • A statement of opinion that the maker knows to be false; or
  • An expression of opinion that is false, made by one claiming or implying to have special knowledge of the subject matter of the opinion. “Special knowledge” in this case means knowledge or information superior to that possessed by the other party, and to which the other party did not have equal access.

Common law fraud has nine elements: (1) representation of an existing fact; (2) its materiality; (3) its falsity; (4) the speaker’s knowledge of its falsity; (5) the speaker’s intent that it shall be acted upon by the plaintiff; (6) plaintiff’s ignorance of its falsity; (7) plaintiff’s reliance on the truth of the representation; (8) plaintiff’s right to rely upon it; and (9) consequent damages suffered by plaintiff. Most jurisdictions in the United States require that each element be proved with clear, cogent, and convincing evidence (very probable evidence) to establish a claim of fraud. The measure of damages in fraud cases is to be computed by the “benefit of bargain” rule, which is the difference between the value of the property had it been as represented, and its actual value. Special damages may be allowed if shown proximately caused by defendant’s fraud and the damage amounts are proved with specificity.

In the UK a report concluded that the total costs of fraud and dealing with fraud in the year 2005-2006 was at least 13.9 Billion GBP

http://legal-dictionary.thefreedictionary.com/fraud

A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.

Fraud is commonly understood as dishonesty calculated for advantage. A person who is dishonest may be called a fraud. In the U.S. legal system, fraud is a specific offense with certain features.

Fraud is most common in the buying or selling of property, including real estate, Personal Property, and intangible property, such as stocks, bonds, and copyrights. State and federal statutes criminalize fraud, but not all cases rise to the level of criminality. Prosecutors have discretion in determining which cases to pursue. Victims may also seek redress in civil court.

Fraud must be proved by showing that the defendant’s actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result.

These elements contain nuances that are not all easily proved. First, not all false statements are fraudulent. To be fraudulent, a false statement must relate to a material fact. It should also substantially affect a person’s decision to enter into a contract or pursue a certain course of action. A false statement of fact that does not bear on the disputed transaction will not be considered fraudulent.

Second, the defendant must know that the statement is untrue. A statement of fact that is simply mistaken is not fraudulent. To be fraudulent, a false statement must be made with intent to deceive the victim. This is perhaps the easiest element to prove, once falsity and materiality are proved, because most material false statements are designed to mislead.

Third, the false statement must be made with the intent to deprive the victim of some legal right.

Fourth, the victim’s reliance on the false statement must be reasonable. Reliance on a patently absurd false statement generally will not give rise to fraud; however, people who are especially gullible, superstitious, or ignorant or who are illiterate may recover damages for fraud if the defendant knew and took advantage of their condition.

Finally, the false statement must cause the victim some injury that leaves her or him in a worse position than she or he was in before the fraud.

A statement of belief is not a statement of fact and thus is not fraudulent. Puffing, or the expression of a glowing opinion by a seller, is likewise not fraudulent. For example, a car dealer may represent that a particular vehicle is “the finest in the lot.” Although the statement may not be true, it is not a statement of fact, and a reasonable buyer would not be justified in relying on it.

The relationship between parties can make a difference in determining whether a statement is fraudulent. A misleading statement is more likely to be fraudulent when one party has superior knowledge in a transaction, and knows that the other is relying on that knowledge, than when the two parties possess equal knowledge. For example, if the seller of a car with a bad engine tells the buyer the car is in excellent running condition, a court is more likely to find fraud if the seller is an auto mechanic as opposed to a sales trainee. Misleading statements are most likely to be fraudulent where one party exploits a position of trust and confidence, or a fiduciary relationship. Fiduciary relationships include those between attorneys and clients, physicians and patients, stockbrokers and clients, and the officers and partners of a corporation and its stockholders.

A statement need not be affirmative to be fraudulent. When a person has a duty to speak, silence may be treated as a false statement. This can arise if a party who has knowledge of a fact fails to disclose it to another party who is justified in assuming its nonexistence. For example, if a real estate agent fails to disclose that a home is built on a toxic waste dump, the omission may be regarded as a fraudulent statement. Even if the agent does not know of the dump, the omission may be considered fraudulent. This is constructive fraud, and it is usually inferred when a party is a fiduciary and has a duty to know of, and disclose, particular facts.

Fraud is an independent criminal offense, but it also appears in different contexts as the means used to gain a legal advantage or accomplish a specific crime. For example, it is fraud for a person to make a false statement on a license application in order to engage in the regulated activity. A person who did so would not be convicted of fraud. Rather, fraud would simply describe the method used to break the law or regulation requiring the license.

Fraud resembles theft in that both involve some form of illegal taking, but the two should not be confused. Fraud requires an additional element of False Pretenses created to induce a victim to turn over property, services, or money. Theft, by contrast, requires only the unauthorized taking of another’s property with the intent to permanently deprive the other of the property. Because fraud involves more planning than does theft, it is punished more severely.

Federal and state criminal statutes provide for the punishment of persons convicted of fraudulent activity. Interstate fraud and fraud on the federal government are singled out for federal prosecution. The most common federal fraud charges are for mail and wire fraud. Mail and wire fraud statutes criminalize the use of the mails or interstate wires to create or further a scheme to defraud (18 U.S.C.A. §§ 1341, 1342).

Tax fraud against the federal government consists of the willful attempt to evade or defeat the payment of taxes due and owing (I.R.C. §7201). Depending on the defendant’s intent, tax fraud results in either civil penalties or criminal punishment. Civil penalties can reach an amount equal to 75 percent of the underpayment. Criminal punishment includes fines and imprisonment. The degree of intent necessary to maintain criminal charges for tax fraud is determined on a case-by-case basis by the Internal Revenue Service and federal prosecutors.

There are other federal fraud laws. For example, the fraudulent registration of Aliens is punishable as a misdemeanor under federal law (8 U.S.C.A. § 1306). The “victim” in such a fraud is the U.S. government. Fraud violations of banking laws are also subject to federal prosecution (18 U.S.C.A. §§ 104 et seq.).

The Federal Sentencing Guidelines recommend consideration of the intended victims of fraud in the sentencing of fraud defendants. The guidelines urge an upward departure from standard sentences if the intended victims are especially vulnerable. For example, if a defendant markets an ineffective cancer cure, that scheme, if found to be fraudulent, would warrant more punishment than a scheme that targets persons generally, and coincidentally happens to injure a vulnerable person. Federal courts may require persons convicted of fraud to give notice and an explanation of the conviction to the victims of the fraud (18 U.S.C.A. § 3555).

All states maintain a general criminal statute designed to punish fraud. In Arizona, the statute is called the fraudulent scheme and artifice statute. It reads, in pertinent part, that “[a]ny person who, pursuant to a scheme or artifice to defraud, knowingly obtains any benefit by means of false or fraudulent pretenses, representations, promises or material omissions” is guilty of a felony (Ariz. Rev. Stat. Ann. § 13-2310(A)).

States further criminalize fraud in a variety of settings, including trade and commerce, Securities, taxes, real estate, gambling, insurance, government benefits, and credit. In Hawaii, for example, fraud on a state tax return is a felony warranting a fine of up to $100,000 or three years of imprisonment, or both, and a fraudulent corporate tax return is punished with a fine of $500,000 (Haw. Rev. Stat. § 231-36). Other fraud felonies include fraud in the manufacture or distribution of a controlled substance (§ 329-42) and fraud in government elections (§ 19-4). Fraud in the application for and receipt of public assistance benefits is punished according to the illegal gain: fraud in obtaining over $20,000 in food coupons is a class B felony; fraud in obtaining over $300 in food coupons is a class C felony; and all other public assistance fraud is a misdemeanor (§ 346-34). Alteration of a measurement device is fraud and is punished as a misdemeanor (§ 486-136).

In civil court, the remedy for fraud can vary. In most states, a plaintiff may recover “the benefit of the bargain.” This is a measure of the difference between the represented value and the actual value of the transaction. In some states, a plaintiff may recover as actual damages only the value of the property lost in the fraudulent transaction. All states allow a plaintiff to seek Punitive Damages in addition to actual damages. This right is exercised most commonly in cases where the fraud is extremely dangerous or costly. Where the fraud is contractual, a plaintiff may choose to cancel, or rescind, the contract. A court order of Rescission returns all property and restores the parties to their precontract status.

Fraud is also penalized by administrative agencies and professional organizations that seek to regulate certain activities. Under state statutes, a professional may lose a license to work if the license was obtained with a false statement.

One particularly well publicized area of fraud is Corporate Fraud. Corporate fraud cases are largely governed by the Securities Exchange Act of 1934 (15 USCA §§ 78a et seq.), along with other rules and regulations propagated by the Securities and Exchange Commission. These laws were a response to the market turmoil during the 1930s and well-publicized corporate fraud cases.

The Securities Exchange Act and the SEC regulate anything having to do with the trading or selling of securities and stocks. They govern fraudulent behavior ranging from stock manipulation to insider trading. They also provide for civil and criminal penalties for corporate fraud.

Despite the act and the SEC, in the early part of the twenty-first century, corporate fraud began to seem endemic. Such well-known companies as energy trader Enron, Telecommunications company WorldCom, cable provider Adelphia, and other lesser-known firms went into Bankruptcy as a result of corporate fraud. In light of these events, Congress decided to tighten up corporate fraud requirements with the passages of the Sarbanes-Oxley Act of 2002 (U.S. PL 107-204).

Among other features, Sarbanes-Oxley required expanded and more frequent disclosure by public companies of their finances to prevent fraud. It created a Public Company Accounting Oversight Board to register and regulate accounting firms and accounting practices. It also enhanced the SEC’s power to monitor and investigate compliance with securities laws, adding stiff penalties for fraudulent behavior by corporations, their officers, and their accountants.

Advertisements

Sorry, the comment form is closed at this time.

 
%d bloggers like this: