Fraud Attorney

Fraud Attorney

At Thomas Vogele & Associates, APC, our experienced business attorneys can help you safeguard your business's reputation and limit the fallout from disputes. We have successfully litigated and tried business and partnership disputes, shareholder disputes, trade secret disputes, and real estate disputes. In 2018, TVA obtained the largest verdict in the state in breach of contract, fraud, and breach of fiduciary duty.

TVA represents businesses of all sizes, from small startups to established publicly-traded corporations. TVA’s attorneys specialize in complex and high-stakes disputes. Time and time again, TVA has gone up against big-law-firm attorneys and won.

Fraud isn't confined to tax returns and expenses accounts. Probably the most widely reported case of fraud that occurred in 2019 was that of 'Desperate Housewives' actor Felicity Huffman, who paid an official to alter her daughter's SATs.

The crime of fraud, therefore, is a broad church. It covers many different kinds of offenses, in both professional and private life.

If you've been accused of fraud in the context of business, you'll want to hire a business fraud attorney rather than a general practitioner.

Read on as we dig a little deeper into the law around business fraud in California and explain what you should do if you're facing this charge.

What Are the Common Types of Business Fraud?

There are many different categories of business fraud. Some of these are specific to certain industries, while others describe a particular type of offense that could be seen in any business. 

We've taken a look at some of the most common types of business fraud here.

Tax Fraud

Every business has to pay tax, but there are many ways of reducing your tax burden. However, if you're found to be unlawfully exploiting tax exemptions, you'll be guilty of tax fraud.

Securities & Investment Fraud

This kind of business fraud is specific to those companies working in the investment space. When you sell, trade, or broker securities, there are many rules you have to follow.

A common example of a securities offense that many people are familiar with is that of insider trading. This describes a situation where someone with privileged knowledge about a stock or bond uses that knowledge to make a personal profit.

Charity Fraud

Online payment options have made it easier than ever to collect money for charitable causes. Unfortunately, they have also made it easier for fraudsters to exploit donors. 

Many scammers set up pages that collect money for a real cause but keep the funds for themselves. This is especially common in the wake of natural disasters.

Check Fraud

Check fraud is less common nowadays, as general check usage is in decline. However, it is still possible for fraudsters to pay for goods or services with a check, only for the payee to have this check bounce.

If you make payments by check regularly, make sure there is always enough money in your business checking account to cover outflows.

Non-Delivery of Merchandise

This type of fraud is easy to understand; you simply collect payment for goods that you then fail to deliver. The rapid increase in the amount of online business over the last number of years has made this type of business fraud much more common.

Of course, failure to deliver merchandise will not always be fraudulent. Many online businesses can fail to process orders due to a clerical error, or send out deliveries that get lost or damaged in transit.

Unfortunately, a lot of consumers can be less than understanding in these types of situations. A couple of innocent mistakes when it comes to order processing or delivery can attract the wrong kind of attention from fraud authorities quite quickly.

Re-Shipping Schemes

Dropshipping is quickly becoming a huge moneymaker for many online entrepreneurs. Third-party sellers, often individuals working from home, make money by arranging for the storage and redistribution of goods from larger online retailers such as Amazon.

As long as you're working with a reputable seller, this is a great business opportunity. Of course, not every seller fits this description.

A re-shipping scheme occurs when a seemingly legitimate online seller passes goods on to another business for redistribution or resale. Unbeknownst to the latter party, these goods may be stolen or bought with stolen or forged card details.

The original seller can use various tools to mask their own identity or disguise their involvement in the offense. This means that the dropshipper can find themselves accused of business fraud when the authorities discover the wrongdoing.

How Can Fraud Occur in a Business?

As outlined above, there are many different ways to commit fraud. Many businesses deliberately engage in illegal tactics to boost profitability or simply swindle customers and suppliers.

However, other cases of fraud are simply negligent, or completely accidental. Failure to exercise proper caution over business affairs can have disastrous results.

In the case of tax fraud, for example, it is easy for an oversight or misinterpretation of rules to result in an offense. If you pay less tax than you're supposed to, even by accident, you can face serious penalties.

What Are the Elements of Business Fraud?

Legally speaking, there are two different constituents to the crime of business fraud. For a judge to convict you of business fraud, he or she will have to deem that both of these elements are present.

Conversely, for a lawyer to secure an acquittal, they will only need to prove that one of these elements was absent. As long as your actions do not satisfy the standards below, they will not add up to a business fraud conviction.

An Unlawful Act

This is the basic standard for any crime. In order to be convicted of business fraud, you'll have to do something that either a state or federal statute expressly prohibits.

As mentioned, however, what does and does not constitute a crime changes frequently. To make sure your actions are lawful, you'll have to stay on top of the developments in the relevant regulatory area.

Intention or Negligence

For most crimes, it's not enough for a prosecutor to show that you committed a certain act. They must also prove to the court that you intended to commit a certain crime through the act, or at least that you were negligent about whether or not your act was criminal.

Say, for instance, you pick up someone else's cell phone at a party believing it to be your own. If you can show that you had an identical phone that was lying nearby, it would be obvious that you didn't intend to commit theft.

Similarly, some business fraud crimes will not stand unless you clearly intend to commit them, or are careless as to whether you do. You should note, however, that this depends on the crime in question.

Some offenses (known as crimes of strict liability) do not require intention or negligence. Merely committing them will be enough to get you a criminal conviction. Some tax offenses fall under this classification.

What Is a Business Fraud Attorney?

A business fraud attorney is someone who specializes in the law around business fraud offenses. If you find yourself in court facing a charge of business fraud, a business fraud attorney is the person you want fighting your case.

However, there's more to the job than just the courtroom. A good business fraud attorney should be able to advise you on all matters relating to business fraud, including compliance. This is why it's a good idea to hire a business fraud attorney before you get into trouble with the law, rather than after.

A good business fraud attorney will have a lot of experience in this area of the law. The rules in this area are complex, ever-changing, and highly specific. This means that a general practitioner often won't cut it, especially for larger firms.

If you enlist the help of TVA Law, an experienced business fraud service is exactly what you'll be getting. Our attorneys have extensive exposure to this area of the law, having worked with business fraud clients for many years.

When Do I Need a Business Fraud Attorney?

Many people think of an attorney as someone you hire when you need them for a specific service. They might wait until they need a contract drawn up or an official document seen to, or until they run into trouble with the law.

While this approach can work, it's not the best way to do it. As doctors will tell you, prevention is always better than cure; the same is true of hiring an attorney.

If your business operates in an area where accusations of fraud are common, or where rules and regulations are complicated or strict, it's a good idea to hire a business attorney in an advisory capacity. A service like ours can show you likely regulatory pitfalls before you get on the wrong side of them.

Small Business & Fraud

Fraud is not only the domain of huge multinationals. Small businesses are often accused and convicted of fraud offenses. Such a conviction can be crippling for a small enterprise, in terms of both their finances and their reputation.

Even if you don't run into criminal trouble due to small business fraud, you can still end up in civil court. If an individual or business feels that you have cheated them, they are entitled to sue you.

Lawsuits like this can be incredibly stressful. If the plaintiff (the party alleging the fraud) succeeds in their claim, the defendant will have to pay a sum determined by the court to compensate for their loss, as well as the legal expenses they incurred bringing you to court.

Even if their suit is unsuccessful, the process is time-consuming and potentially exhausting, particularly for a sole trader.

If you find yourself in this position as a small business owner, you need to hire a business disputes lawyer as quickly as possible. Putting the case in the hands of a professional gives you the best chance of success. It also means that you're free to concentrate on your business.

How to Avoid Business Fraud

There are many steps every business owner should be taking to ensure that they don't run into trouble when it comes to fraud. As we mentioned above, fraud can often be accidental, which means that vigilance is key to its avoidance.

Firstly, you need to know the rules and requirements that apply to your business. Some areas of operation have stringent and lengthy rules, so businesses in these areas need to know what's required of them and keep up with any changes.

If you receive negative feedback from clients, you need to act on it. Where a customer's shipment doesn't arrive, for example, you need to figure out why it didn't and ensure that the same fate doesn't befall another order at a later date.

Is Consumer Fraud Different From Business Fraud?

Consumer fraud is a specific type of business fraud. As the name suggests, it targets consumers specifically. This sets it apart from other types of business fraud, which aim to make gains by paying less tax or breaking legal rules.

The ultimate defining characteristic of consumer fraud is that a consumer suffers a personal, financial loss.

We've looked at a couple of the most common types of consumer fraud here.

Identity Theft

This occurs where someone's personal details are hijacked before used or sold. Card details are the most common target of identity theft; often, a scammer masquerading as a legitimate organization will pretend to take a payment before skimming your card details.

Fake Charities & Lotteries

These often target older consumers. Online or telephone scammers pretend to collect money for a lottery or charitable cause before deactivating their operation and quickly moving onto something else.

Business Fraud Statistics

Business fraud is unfortunately rampant in our society today. The online world has provided scammers with countless new ways to exploit people, and authorities are struggling to keep up in many areas.

Identity fraud, for example, affected a record number of people in 2017.

However, anti-fraud measures are developing just as quickly. The average spend on fraud detection and prevention by businesses rises every year.

Staying Within the Law on Business Fraud

Even honest businesspeople sometimes run afoul of various rules and regulations. There is much to keep up with, and the regulatory landscape is changing all the time.

However, the penalties for such slips can be very severe indeed. To make sure you don't face any of these, you need to have an expert business fraud attorney on your side.

To learn more about how we can help you stay out of trouble when it comes to business fraud, contact us today.

If you believe you have a fraud claim in California, reach out to TVA Law at 714-641-1232.

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