When Should You Hire a Fraud Defense Attorney?

When Should You Hire a Fraud Defense Attorney?

If a client claims that you made an unjust gain or were negligent in performing your professional duties, you may face a fraud charge. An accusation of financial or corporate fraud is a serious matter.

In addition to facing civil or criminal charges, a fraud offense can lead you to financial hardships and being ostracized both in business and personally. Most professionals convicted of fraud also lose their licenses. With their careers destroyed, the overwhelming nature of these repercussions causes many to suffer from depression and feelings of hopelessness or despair.

Fraud allegations can be daunting to face considering the severe consequences. Therefore, you should hire a fraud defense attorney to help defend yourself against these claims as soon as possible.

When To Invest in Fraud Defense Attorney Services

In general, you should hire a fraud defense lawyer whenever you face accusations of fraud. An attorney with experience in fraud defense can assist you with your participation in any relevant investigation, whether from a civil lawsuit, law enforcement, or a professional association. They can also help you prepare a strong case for a potential trial.

However, there are certain situations where investing in the services of a fraud defense law firm is especially important.

Exaggerated Or False Claims Are Made

Many times, an innocent misstep or simple misunderstanding can lead to an accusation of fraud. There are also situations where a client will make an exaggerated allegation against a professional service provider.

In these circumstances, hiring a fraud defense lawyer is essential. They can help you pursue a day in court to defend yourself, especially if the claims against you are false. At trial, an experienced fraud defense attorney can employ a wide range of defenses to get your charges dismissed or minimized, depending on the case.

Facing Prison Time, Fines, Or Other Severe Penalties

Most states have enacted civil or criminal laws which penalize various fraudulent activities. Some examples of conduct that is often categorized as a fraud crime by states include:

  • Forgery
  • Check fraud
  • Credit card fraud

While in some states, fraud crimes are only classified as misdemeanors and result in small fines, other criminal charges are felonies. A felony is a serious offense that can lead to expensive fines and a prison sentence of many years (or possibly a life sentence without parole). 

The federal government also criminalizes certain forms of fraud. For example, the federal wire fraud statute makes it a criminal offense to engage in fraud using radio or television communication. These federal crimes carry severe penalties depending on the type of fraud committed, including fines and imprisonment.

When facing a state or federal fraud charge that carries a severe punishment like a significant fine or prison time, you should retain the services of an experienced criminal defense attorney. They can protect your rights and prepare a thorough defense for your case. 

Property Or Reputation Of Business Is At Stake

In addition to individuals, fraud accusations can also have collateral consequences for businesses. Allegations of fraud often occur against someone who is an employee or officer of a corporation. A company's business practices can also lead to accusations of fraudulent conduct.

Fraud claims have the potential to cause significant harm to your corporation. Many times, your business's reputation or assets could be at risk. 

Given the nature and complexity of these cases, you need to hire a business litigation lawyer when your company is involved in a fraud dispute. They have the experience to handle your case cost-effectively and can help your business defend against significant reputation or financial losses.

What Are the Most Common Types Of Fraud Charges?

Fraud is a broad term that encompasses many crimes. In general, a fraud crime involves using deceitful words or conduct to obtain an unlawful benefit.

While there are different types of fraud, the most common types of business fraud claims are: 

Corporate, Accounting, Or Financial Fraud

This type of fraud affects many individuals and businesses every year, often resulting in malpractice claims against professionals like lawyers and accountants. 

For accountants, accounting fraud is a form of accounting malpractice. An accountant commits accounting fraud when they unjustifiably alter corporate financial documents to change the company's profits or losses. The goal of accounting fraud is either personal or corporate enrichment.

In addition to accounting fraud, accounting malpractice includes many kinds of corporate or financial fraud. These fraud crimes are usually (but not always) committed by accountants and include:

  • Billing fraud: Invoicing an employer for personal expenses or false services performed.
  • Tax fraud/evasion: Willfully failing to file a corporate tax return or falsifying income to avoid tax liabilities.
  • Embezzlement: Taking control of or using entrusted corporate (or individual) assets for a different purpose.

Mortgage Fraud

Mortgage fraud refers to any fraudulent activity committed during the mortgage lending process. It occurs when individuals or groups intentionally provide false or misleading information to obtain a mortgage or to influence the terms and conditions of a mortgage loan. The main goal of mortgage fraud is usually to secure a larger loan, a better interest rate, or to deceive the lender for personal gain.

There are various types of mortgage fraud, some of which include:

  • Income Fraud: Borrowers misrepresent their income, either inflating their earnings or providing false documentation to qualify for a larger loan amount.
  • Employment Fraud: Falsifying employment history or job position to appear more stable financially.
  • Appraisal Fraud: Manipulating the property's appraisal value to obtain a higher loan amount or to hide defects in the property.
  • Straw Buyer Fraud: Involves using a third party to pose as the buyer in order to get approved for a loan or secure better terms.
  • Identity Theft: Using stolen personal information to apply for a mortgage without the victim's knowledge or consent.
  • Property Flipping Fraud: Involves purchasing a property at a low price, falsely inflating its value through false appraisals, and then quickly selling it for a higher price, often to an unknowing buyer.
  • Silent Second Mortgage Fraud: Concealing a second mortgage from the primary lender, which can affect the borrower's ability to repay the loan.
  • Foreclosure Fraud: Exploiting homeowners facing foreclosure through various schemes to steal their equity or property.

Mortgage fraud is illegal and can have serious consequences. It not only harms lenders and financial institutions but can also lead to significant losses for homeowners and investors. Law enforcement agencies, as well as mortgage lenders, have measures in place to detect and prevent mortgage fraud.

Insurance fraud

Insurance fraud refers to any deceptive or illegal activity committed with the intent to obtain fraudulent benefits or financial gain from an insurance company. It involves making false or exaggerated claims, providing misleading information, or using other dishonest tactics to receive insurance payouts or benefits to which the fraudster is not entitled. Insurance fraud can occur in various types of insurance, including health insurance, auto insurance, property insurance, and more.

There are several common types of insurance fraud:

  • Health Insurance Fraud: This involves submitting false or inflated claims for medical services or treatments that were not provided or were unnecessary.
  • Auto Insurance Fraud: This includes staged accidents, fake injuries, or false damage claims to receive compensation from an auto insurance provider.
  • Property Insurance Fraud: In this type of fraud, individuals may intentionally damage their property or submit inflated claims for property damage to receive insurance money.
  • Life Insurance Fraud: This occurs when someone deliberately conceals important information on a life insurance application or fakes their death to collect life insurance benefits.
  • Workers' Compensation Fraud: This involves misrepresenting a work-related injury or disability to receive workers' compensation benefits.
  • Insurance Premium Fraud: Policyholders may provide false information to obtain a lower insurance premium or attempt to avoid paying the appropriate premium.
  • Arson for Insurance Fraud: Deliberately setting fire to property to claim insurance money for the resulting damages.

Insurance fraud is considered a serious criminal offense in Illinois. It not only leads to significant financial losses for insurance companies but also affects the premiums and costs for all policyholders. Insurance companies employ various methods to detect and prevent fraud, including investigation units, data analytics, and collaboration with law enforcement agencies. Penalties for insurance fraud can include fines, imprisonment, and restitution orders to repay the fraudulent gains.

Other Types of Fraud Charges

Along with the examples listed above, other types of fraud charges include mail fraud, bank fraud, credit card fraud, and wire fraud. Virtually all fraud offenses can lead to serious criminal charges and harsh penalties that can greatly impact your life and future. 

Facing a fraud allegation can be intimidating, especially when the consequences of a conviction are substantial. If you are accused of a federal crime involving fraud, you need an experienced attorney on your side to help you through the criminal justice system.

When searching for a Chicago civil fraud defense attorney, King & Jones is the firm you can trust with your legal defense. Our lawyers have decades of experience and can help determine the best strategy for you or your business. Contact us today for an initial consultation.