Criminal Fraud VS Civil Fraud

Disclaimer: This article should not be treated as legal advice. It’s recommended that readers still consult legal counsel and contact a lawyer should they have any concerns regarding either criminal or civil fraud.

Fraud can be quite the confusing term if we don’t know how to use it properly. We may have heard it before spoken a lot in popular media, and we know it’s somehow connected to how money works, but if we truly want to understand how fraud works, we might have to rely on more than our usual case procedurals. Fraud, in fact, encompasses a lot of things in the law, and it’s more than just how popular media pictures this case. If you want to get a basic understanding of the difference between criminal fraud and civil fraud, then you’ve come to the right place.

Do take note however that the explanation below isn’t to be taken as the one and only interpretation of fraud. If you have a specific situation in mind, or if you have questions about the issue, it’s better that you ask your lawyer or a professional on the matter, as laws and rules change depending on where you are.

The Difference Counts

When we talk of “fraud,” we normally associate it with theft or stealing. They have their own similarities, but it’s important to be aware of the distinction of particular kinds of fraud, and how fraud is different from stealing.

An important distinction between theft and fraud is that the former generally have a person taking something through force or through stealth. The latter, or fraud, is misrepresenting a fact purposefully.

  • Fraud also has some elements that are not considering. A situation can be considered as a fraud if:
    • There is a material fact that is misrepresented, and that the accused has knowledge that they were misrepresenting the fact.
    • The case can be considered as fraud if the misrepresentation was also done with the intent to deceive the victim, and if the victim relief and believed the misrepresentation.
    • Fraud has also occurred if the victim has suffered damage due to this misrepresentation.
  • Meanwhile, the general difference between criminal fraud and civil fraud is the nature of who is pursuing the legal action in this particular case. Prosecutors can pursue the case as a criminal fraud, while the victims of the misrepresentation can pursue the case as a civil fraud.

Criminal Fraud

Federal prosecutors, state prosecutors, and local prosecutors are the ones that can bring the case to court as a criminal fraud. They have to prove that the people involved did intend to commit the fraud and gain from the misrepresentation. These officials can pursue the case even if the intended victims weren’t injured or harmed by the misrepresentation.

  • Common examples of criminal fraud include counterfeiting, bank fraud, embezzlement, bankruptcy fraud, tax evasion, identity theft, securities fraud, racketeering, wire fraud, and mail fraud.

Civil Fraud

Meanwhile, victims of misrepresentation can bring a case to court as a civil fraud, and they have to prove that the one they accuse has actually misrepresented the said fact. Other factors include knowing that the misrepresentation happened and that they have done it for the purpose of fooling the victim into believing and relying on the misrepresentation.

  • Victims of civil fraud also need to prove that they have suffered damages due to the misrepresentation.
  • While there’s a difference between criminal vs civil fraud, other people that pursue both cases tend to have different penalties if either instance wins.
  • The accused in a criminal fraud has the possibility of being brought to jail and having to pay fines.
  • The accused in a civil case is generally expected to compensate for the damages they have brought to the victim.

Understanding the difference between civil fraud and a criminal fraud can help you and your lawyer determine the different scenarios surrounding cases that could be considered either one of the two. This is important especially in all sorts of fields such as business or for personal reference, as knowing how fraud works can help you become more aware of your rights and responsibilities as a citizen.

FindLaw has other details about a fraud that might be of use as well, especially when trying to get more insight on fraud from a lawyer.

Conclusion

Fraud, especially when looked at from the perspective of criminal fraud and civil fraud, can be difficult to understand especially if we don’t have an anchor to base our understanding on. As you may have read from the above, it’s better to have a basic understanding of how fraud works and have our lawyers elaborate on specifics we need to know about. If we’re dealing with everyday situations that fall under fraud territory, then it’s better that we have a basic understanding of how it works and how we can avoid it.

Author Bio: Anne McGee has over 20 years of experience writing about law subjects where she hopes her knowledge can help the common reader understand law topics that may be of relevance to their daily lives. If she’s not reading a good book, then chances are Anne is jogging during her free time.