5 Types of Fraud and What to Do If Charged

Have you been accused of fraud, or implicated in fraudulent activity? Regardless of innocence or guilt, an accusation of fraud can have serious implications. At the least, it results in a damaged reputation and at the worst, a heavy fine and prison sentence. 

Fraud needs to be defended against carefully, or it needs to be meticulously removed from your record. Below, we discuss the types of fraud, the sentencing, and some possible defenses. 

1. Bribery Types of Fraud

Bribery is defined as giving, receiving, offering, or soliciting anything of value in order to influence the performance of or failure to perform a task given to an official. In layman’s terms, the accused has offered or threatened an individual for the sole purpose of influencing their decisions. It is a crime under federal and state law. 

Bribery often involves the influence on business and political decisions for personal gain. Bribers may defraud organizations, political entities, or take away the right of due services from people under the victim’s employment. 

Commercial bribery is specifically concerned with the giving, receiving, offering, or soliciting of anything of value to influence business decisions. This is often without a victim or business entity’s knowledge or consent. 

Illegal Gratuity is very similar to the act of bribery, though they differ due to intent. Though they are both concerned with giving, offering, or promising to give anything of value to influence official acts, bribery requires proof of an exchange of money for an act. Illegal gratuity is about a gift of money because of an official act. 

Of the two offenses, bribery is more serious. It can result in up to 15 years in prison and a fine of $250,000. Illegal Gratuity carries a maximum penalty of 2 years in prison. The best defenses will be fact-specific, but may often involve entrapment and duress. 

2. Mail and Wire Fraud

Wire and mail fraud occurs when the postal service, telegrams, or telephone are used as a medium to discuss, send or receive any documents or communications that facilitate various kinds of fraud. While these systems may seem outdated, it also covers any information sent in similar manners using a modem, so also covers digital aspects.

Mail reimbursement claims, bid announcements, exchanging correspondence with other conspirators or using the service to submit or make contract amendments using the postal system in the pursuit of fraud, fall under this. Online fraud crimes that operate in the same manner, like email scams, will also come under this category. 

Again, defenses will depend upon the situation. One of the most common is to take the defense that the accused had no intent to defraud anyone, or that misrepresentations involved were not material. 

Mail fraud can result in prison sentences of up to 20 years depending upon the severity. It will also incur heavy fines, depending on the depth and scale of the criminal operation. 

3. Conflict of Interest

When an organization or person acts on the behalf of another and has a hidden interest or bias in the activity, it is a conflict of interest. This bias or self-interest must be either unknown to the organization represented, or in opposition to their interests. As soon as these factors result in financial or economic loss to the accusing party, then it becomes fraud. 

A maximum civil penalty of $25,000 may apply if a person gets found and charged with a conflict of interest. Orders may get issued in which damages to the afflicted parties must be paid.

4. Credit Card Fraud

Credit or debit card use without the permission of the owner, or using the details of a card without the owner’s knowledge, for financial gain, is credit card fraud. Knowingly using a canceled card or expired card for financial gain also counts as credit card fraud. 

Recently, credit card fraud has adopted new methods and these are also covered under this umbrella. Taking over the account of another person or creating one for financial gain is covered under this, though it can also fall under identity theft. In addition, using the number and expiry date of a card to make a purchase without the owner’s consent is card fraud. 

Credit card fraud typically has a sentence of 1 to 5 years in jail. If it falls under the umbrella of identity theft, then it can result in a sentence of 10 to 20 years. If the accused harbors specialist equipment to facilitate credit card fraud, like computer equipment or skimming devices, then sentences are often longer. 

5. Embezzlement

The theft or larceny of money or property by a person who has been put in a position of trust over them is known as embezzlement. This may be the taking or stealing of assets, including money, from and employers when you have been entrusted with managing or safeguarding them. 

Two typical schemes used in embezzlement are kilting or lapping schemes. A kilting scheme is when checks get deposited, for nonexistent bank account balances or money in transit. Lapping is when received funds become a cover for the loss of money from theft, covering the tracks of the perpetrator. 

Penalties for embezzlement vary, depending on the method and severity of the crime committed. For example, the embezzlement of public money, property, and records generally has a more severe sentence. Penalties and fines for this can reach $100,000 with an added prison sentence. 

Find a Great Defense

In summary, any types of fraud are a serious matter for the accused and need to be dealt with appropriately. This requires finding the best legal team possible, that have a wealth of experience in fraud defense cases. 

Christopher T Gore is an attorney at law who knows how to defend your rights. In any fraud case, we can mount an exceptional defense that will get you the best result. Contact us today to discuss your case, get a quote, and work toward clearing your name.