Fraud Attorney

Fraud Attorney

At Thomas Vogele & Associates, APC, our experienced business attorneys can help safeguard your business's reputation and limit the fallout from disputes among owners and officers, as well as with vendors and business partners. 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, and defended that judgment through appeal and bankruptcy.

TVA represents businesses of all sizes, from small startups to established publicly-traded corporations. TVA’s attorneys specialize in complex and high-stakes disputes in all forums, including mediation, arbitration, state and federal litigation, appeal, and bankruptcy. 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. But a simple loan may also involve fraud if the borrower never intended to pay back the loan. 

The tort of fraud is quite broad. It covers many different kinds of offenses, in both professional and private life.

If you've been the victim of fraud or accused of fraud in the context of business, you'll want to hire a business fraud attorney who is experienced in proving the various types of fraud.

Read on as we dig a little deeper into the law around business fraud in California and explain what you should do if you’ve been defrauded or accused of fraud.

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. In addition to criminal liability, tax fraud may create exposure to civil fraud and breach of fiduciary duty claims. 

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 applicable rules that must be followed.

A common example of a familiar securities offense 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. In addition to potential criminal sanctions, insider trading can give rise to civil fraud and breach of fiduciary duty claims. 

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 becoming less common, as general check usage is in decline. But 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 in recent 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. To establish fraud, a plaintiff must prove the defendant had a fraudulent intent. 

Unfortunately, some consumers may be less than understanding, and might allege fraud. When this happens, it will be important to establish a strong track record of conducting business dealings honestly and professionally.

Non-Payment of Loans

Typically, when a borrower fails to repay a loan, the borrower sues on a simple claim for breach of contract. In some cases, however, the borrower’s non-payment might be a case of fraud. This could occur when the borrower never intended to repay the loan. When this happens, the borrower made a false promise in order to obtain the loan. This is a form of fraud, and carries severe civil penalties. 

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 sometimes are 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 dropshippers can find themselves accused of business fraud when the authorities discover the wrongdoing. In addition to exposure to criminal liability, businesses could find themselves exposed to civil liability. 

How Can Fraud Occur in a Business?

As outlined above, there are many different kinds of fraud, and many ways even innocent businesses may be exposed to fraud claims. While too many businesses deliberately engage in illegal tactics to boost profitability or simply swindle customers and suppliers, a business, or its owner or manager, could risk exposure to fraud of breach of fiduciary duty claims based on misunderstanding, mistake, negligent or unscrupulous employees or agents, or other incautious business practices. 

In other words, many cases of fraud may simply involve negligent, or completely accidental acts. Failure to exercise proper caution over business affairs can have disastrous results.

What Are the Elements of Business Fraud?

Legally speaking, there are two different constituents to the tort of business fraud. For a judge or jury to find a business fraud has occurred, the judge 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.

A False Representation

At the core of a fraud claim is a false statement. The statement must be material, which means the statement must relate to something important or fundamental to the overall transaction. 

Silence may also constitute a fraud if it amounts to a material omission. When the circumstances suggest a fact ought to have been disclosed and it was not disclosed, that omission may be the basis for fraud. 

For example, a seller’s statement that a piece of business equipment is new, when in fact it is used, is a false representation. 

Knowledge of the Statement’s Falsity

Fraud requires not only that a defendant made a false statement, but that the defendant was aware the statement was false. If the defendant was innocently mistaken, there is no fraud. 

In the example of the sale of used business equipment that had been described as new, to establish fraud the plaintiff must prove the defendant knew the equipment was in fact used. 

Intent to Deceive

The person making the false statement or material omission must intend that the plaintiff rely on it. For example, when the buyer of business equipment tells the seller that he is not interested in used equipment, the seller obviously intended the buyer to rely on the seller’s representation the equipment was new. 

Justifiable Reliance

Next, a fraud requires proof that the plaintiff relied on the false statement, and that this reliance was justified. For example, if the seller of business equipment represented to be new gives the buyer an opportunity to inspect the equipment, and where that inspection would have revealed signs of previous ownership, the buyer will have difficulty proving it was justified in continuing to believe on the seller’s false representations that the equipment was new. 


Even if a plaintiff proves a fraud was committed, the courts will not intervene unless it caused legal damage to the plaintiff. In the example of the sale of used business equipment that had been represented to be new, if the used equipment has performed as well as new equipment would have, the buyer may have a difficult time proving damages. 

business fraud attorney digital screen

What Is a Business Fraud Attorney?

A business fraud attorney is someone who specializes in the law around business fraud. 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 and prevention. This is why it's a good idea to hire a business fraud attorney before engaging in important transactions.

TVA’s attorneys have obtained some of the largest business fraud verdicts in the state. 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.

But prevention is always better than cure. 

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 the suit is unsuccessful, the process is time-consuming and potentially exhausting, particularly for a small business.

Small business owners should attempt to resolve business disputes 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 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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