A person commits fraud when using deceptive tactics or false premises to achieve a personal gain. The term fraud is the general word used to define a range of offenses involving dishonesty or misrepresentation of fact, falsified statement, or deceitful behavior. Fraud is committed in many settings and people are committing fraud more than ever. Depending on the nature of the fraudulent activity, you can be accused of fraud both civilly and criminally.

Civil v. Criminal

Civil and criminal fraud cases are almost identical. Both typically require proving that a defendant misrepresented a fact he knew or believed to be false, that the victim justifiably relied upon and suffered an injury as a result. The main distinction between the two is the fraudulent method used. If a statute says it is illegal, then the person has committed criminal fraud.

Without having to peruse statutes and law books, the quickest and easiest way to differentiate civil fraud and criminal fraud is to identify your accuser. When accused by the person who was defrauded, then you are being accused of civil fraud. If the state is accusing you of fraud, then you are being charged with criminal fraud.

Civil fraud cases require the plaintiff to have suffered some harm. That harm can occur through economic or non-economic means and must be shown to have been the proximate result of the defendant’s fraud. In other words, that if it were not for the defendant’s fraudulent action, the victim would not have suffered an injury. So, if the victim does not rely on the fraudulent behavior, or there is no actual connected injury, then the accusation will fail, and the defendant will prevail.

Contrastingly, a person who commits criminal fraud does not need to complete the action. Their victim does not need to have suffered any damages. Rather attempt is enough. Instead, in criminal fraud cases the prosecution must only prove that the person intended to defraud the victim. Depending on who the fraud is perpetrated against, as well as how much money is defrauded will also affect whether you have a civil or criminal fraud case. Civil fraud is most commonly a civilian defrauding another civilian. While criminal fraud is likely occurring if a banking institution, the government, or business is involved in some manner. Additionally, if multiple people are defrauded or large amounts of money are acquired through the fraud, then you likely will face a criminal fraud charge.

Lastly, like all criminal cases, the burden of proof and penalties in criminal fraud are much higher than civil. In a criminal case the prosecutor must prove beyond a reasonable doubt that the defendant had committed a fraud. Civilly, it only requires a preponderance of the evidence (at least 51% of being true). Penalties for civil cases are typically compensatory damages and in certain cases even punitive damages. For criminal fraud cases the penalties vary from fines and probation to prison sentences up to 15 years.

A. Check Fraud

Check fraud refers to any effort to obtain funds fraudulently by using a paper or digital check. This can include, but is not limited to, a person writing a check for funds they did not have on their own account (paperhanging), forging a check with someone else’s name, creating a completely fake check, or stealing and using someone else’s checkbook. The method the person used in perpetrating the fraud will determine which statute applies to that person’s case. For example, for the crime of paperhanging the applicable statute is A.R.S. § 13-1807. The statute states it is forbidden to issue or pass a check that a person knows does not have sufficient funds in or to deposit it with a financial institution for the payment in full of the check. Possible defenses for this sort of case include the check being postdated and on that later date the account having sufficient funds available for deposit. Or, if the insufficiency of funds came from an adjustment to the person’s account by the financial institution without notice to that person. Issuing a bad check results in a class 1 misdemeanor. However, if the check is in an amount of $5,000 or more, then the person may receive a class 6 felony unless the person pays the full amount of the check and any accruing interest within 60 days of receiving notice.

B. Credit Card Fraud

After check fraud, credit card fraud is the next most common way criminal fraud is committed. In Arizona and under A.R.S. § 13-2105, a person commits credit card fraud in two ways:

1. When a person intends to defraud and uses a credit card that he knows is forged, expired, cancelled, or revoked to obtain anything of value; or
2. Without consent of the cardholder, acts as if he is the true cardholder and attempts to obtain or actually obtains anything of value regardless of if the credit card is actually used.

The penalty for committing credit card fraud will depend on the value of what was attempted to be obtained. For anything less than $250, it is a class 1 misdemeanor. If the value were $250 or more but less than $1,000 in any consecutive six-month period, the person would receive a class 6 felony. When the value is $1,000 or more in any six-month period then the punishment becomes a class 5 felony with up to 2.5 years in prison.

C. Embezzlement

The term embezzlement probably makes you think of Wall Street, corporate espionage, and extravagant amounts of stolen money. However, in Arizona, embezzlement has a much broader application. Arizona law and A.R.S. § 13-1802 says any kind of property may be embezzled; so long as the person entrusted to monitor, manage, or protect that property, steals all or part of it for their own personal gain. An easy example that demonstrates this sort of behavior occurs with a bank teller or store cashier. If the employee takes the deposits or refunds for himself, then they have committed embezzlement. The potential penalty that the defendant may face depends on how much is embezzled. At the lowest penalty, when someone embezzles less than $1,000, the person can receive a class 1 misdemeanor. As the amount embezzled grows, so do the punishments. The punishment climaxes at a Class 2 felony, carrying up to 12.5 years in prison for when a person embezzles $25,000 or more.

Let Us Help

An accusal of criminal fraud can result in a very serious felony conviction that can carry a sentence of incarceration. Fighting a criminal fraud charge requires a team of highly experienced white-collar crime lawyers to ensure you receive the best results possible. Let Chandler Criminal Lawyer’s criminal lawyers and their knowledge of Arizona’s fraud law guide you through the process. The legal battle ahead will be led by strong representation and diligence.