A client meeting with his lawyer about how civil fraud lawsuits turned into criminal fraud charges.

Civil Fraud Lawsuits Can Turn Into Criminal Fraud Charges

Fraud charges arise when someone uses deception to gain an unfair or unlawful advantage. Civil fraud lawsuits are filed by private individuals or entities who believe they have been harmed by another party’s fraudulent behavior. But, if the plaintiff in a civil fraud lawsuit wins, does that mean the defendant will also face criminal fraud charges? It’s possible, but not guaranteed. To better understand what may happen to you if you find yourself on the wrong end of a civil fraud lawsuit, let’s take a closer look at how these cases work.

Types of Civil Fraud

Civil fraud lawsuits will typically be filed by the person or entity that was harmed by the fraud. The most common cases of civil fraud are related to:

  • Consumer fraud – A person writes a bad check, knowing there is no money in the account to cover it.
  • Mortgage fraud – A person lies on a mortgage application in order to get a lower interest rate or bigger loan.
  • Insurance fraud – A person fakes an injury in order to collect insurance money.
  • Contract fraud – A person uses deception to get someone else to sign a contract.
  • Copyright infringement – A person uses copyrighted material without the owner’s permission.
  • Identity theft – A person steals another person’s personal information (like a social security number or credit card number) in order to open new accounts or make purchases.
  • Investment fraud – A person uses false information to convince someone to invest in a company or product.

Civil Fraud Lawsuits

When a person is accused of civil fraud, they’ve been accused of committing the following acts.  These acts can also result in criminal fraud charges:

  • Misrepresentation – Making false statements about something with the intention of getting someone else to rely on those statements. This could be about anything from the value of a product to the terms of a contract.
  • Nondisclosure – Intentionally withholding information that’s relevant to a decision someone else is about to make. An example of this would be if you were selling a house and failed to disclose that it had serious foundation problems.
  • Concealment – Hiding or destroying evidence used in a civil lawsuit. This might happen if, for instance, you were being sued for breach of contract and tried to hide the paperwork that proved you’d fulfilled your obligations.
  • Breach of contract – Violating the terms of a contract you’ve agreed to. This could be anything from failing to make a payment on time to not delivering the goods or services.

Types of Criminal Fraud Charges

While civil fraud lawsuits are brought by individuals or entities who’ve been harmed, criminal fraud charges are brought by the state or federal government. If you’re facing criminal fraud charges, it means the government believes you’ve committed one or more of the following acts:

  • Mail fraud – Using the U.S. Postal Service to commit fraud. This could be anything from sending false information in order to get someone’s money to using the mail to sell counterfeit goods.
  • Wire fraud – Using electronic communication (like the internet or a phone) to commit fraud. An example of this would be if you sent an email promising to pay someone back for a loan, but then never actually made the payment.
  • Bank fraud – Committing fraud against a financial institution. This could be anything from using false information to open an account to embezzling money from a bank you work for.
  • Securities fraud – Manipulating the stock market by giving false information about a company’s financial status.
  • Money laundering – Putting illegally-obtained money through a series of financial transactions to make it look legally earned.
  • Tax fraud – Intentionally underreporting your income or claiming false deductions in order to pay less in taxes.
  • Health care fraud – Committing fraud against a health care program like Medicare or Medicaid. This could be anything from billing for services that were never provided to using false information to get prescription drugs.

How Civil Fraud Lawsuits Quickly Become Criminal Fraud Charges

When involved in a civil fraud case, you must give a deposition. In a deposition, you will be asked questions about the case under oath by the attorney representing the other side. The questions will be specific to the facts of the case, and your answers will be recorded by a court reporter. Your deposition may be used as evidence in a trial, so it’s important that you tell the truth.

However, what often happens is defendants under deposition are not fully prepared to give testimony and may speak in a manner that implies admitting guilt or inadvertently giving information that may be used against them. Once those statements are on the record, they are often turned over to the prosecutor’s office. Then, they may be used to file criminal charges.

Before you sit down for a deposition or any other meeting with the attorney representing the other side in a civil fraud case, it’s important to consult with your own lawyer. Your lawyer can help you understand the process and prepare you for questions.

Hire an Experienced Defense Attorney

Having an experienced lawyer can mean the difference between a civil fraud lawsuit and a criminal fraud case. Their knowledge of the legal system can help you avoid making mistakes that could lead to criminal charges.

If accused of fraud, or if under investigation, contact one of the best and most experienced criminal lawyers right away. Contact Kenney Legal Defense for a free 30-minute phone consultation and case quote at 855-505-5588 today.


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