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Lies: When Do They Amount to Fraud?

August 17, 2017, on White Collar Crimes & Fraud |

A New York City federal criminal defense attorney can provide representation to clients who have been accused of fraud. Fraud offenses are often serious and can result in a harsh prison sentence if a defendant is convicted of a serious fraud crime. Because of the severity of fraud charges, it is important to have a full understanding of exactly what constitutes fraud.

The New York Times recently took an in-depth look at this question, focusing on two recent cases: one in which a man was convicted of defrauding investors and another in which a contractor and his company had a fraud conviction overturned because their actions did not cause any harm.  The question that the New York Times considered was when deception can prove that fraud occurred.

When Does Deception or a Lie Constitute Criminal Fraud?

While deception is a key component of fraud and lies are told by those who perpetrate fraud, not every deception results in a conviction for criminal fraud.

In one of the two cases the New York Times considered a contractor and his company that provided structural steel for the construction of the World Trade Center and the PATH Transportation Hub.  The contracts for the steel were worth $580 million, and the work met all of the specifications for the contract. However, the contractor was accused of misleading the Port Authority about whether it was a minority/woman owned business and was found guilty.

However, a federal district court judge reversed convictions for the contractor and his company because there was insufficient evidence to show that the misrepresentations the contractor made were an essential element of the contract and there was insufficient evidence to conclude that the Port Authority had suffered any economic harm. 

The analysis that led the federal district court judge to reverse the conviction was based on the premise that when the contracting party got the benefit of the bargain (in this case, the steel), then deceptions about other contract terms is not sufficient to prove a scheme to defraud.  Similar results have also been seen in past cases.

However, in a different case when a man was tried for misleading investors, he was convicted of securities fraud, even though his investors didn't actually suffer any losses. He was convicted because he misled investors about what he was doing with their money. The threat of the economic harm and the potential the investors could have lost their funds meant that a crime had been committed, even though in this case it happened that everything ended up working out for the investors.

A determination of whether a lie or deception can constitute criminal fraud will need to be made on a case-by-case basis.  A skilled New York City federal criminal defense attorney can help those who have been accused of criminal fraud to argue that their conduct was not a violation of the law. To find out more about how an attorney can help you to fight fraud charges, contact The Law Office of James E. Tyner, PLLC today to find out more.

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