What are common defenses for fraud charges?

Contents

1 Defenses for Fraud Charges
- 1.1 Lack of Intent
- 1.2 No Reliance
- 1.3 No Damages
- 1.4 Duress
- 1.5 Diminished Mental Capacity
- 1.6 Statute of Limitations
- 1.7 Improper Government Conduct
- 1.8 Constitutional Rights Violations
- 1.9 Puffery vs. Fraud
- 1.10 Lack of Authority
- 1.11 Bankruptcy Discharge
- 1.12 Necessity
- 1.13 Entrapment
- 1.14 Lack of Capability
- 1.15 Misidentification
- 1.16 Self-Defense
- 1.17 Consent
- 1.18 Free Speech
- 1.19 No Knowledge
- 1.20 No Duty

Fraud charges can lead to serious penalties like hefty fines and years in prison. That’s why having viable defenses against allegations of fraud is critical. While the specifics depend on your case, some potential defenses to explore include:

Lack of Intent

Most fraud statutes require prosecutors to prove you acted intentionally or “willfully” to deceive the victim. If you made an honest mistake or had a sincere misunderstanding rather than deliberately misleading someone, it may defeat charges. For example, accidentally using a friend’s insurance card you mistook for yours is not fraud.

No Reliance

The victim must have materially relied on your false statements or misrepresentations in order for fraud to have occurred. If you can show the victim didn’t actually depend on your statements to make decisions, it weakens the case. For instance, if they took actions against your advice.

No Damages

The victim must have suffered actual financial harm or losses as a result of the alleged fraud. If the prosecution can’t prove damages, there may be no crime. For example, if your company booked revenue improperly but investors didn’t lose money.

Duress

If you were forced or coerced into committing fraud by threats of violence or harm, it may be a defense. You have to reasonably believe you or a loved one were in serious danger if you didn’t comply. This applies in cases of domestic violence or criminal extortion.

Diminished Mental Capacity

Having a mental defect or disorder that prevented you from understanding the wrongfulness or consequences of your actions may be a defense. However, the impairment must be severe enough that you couldn’t comprehend what you were doing. This is difficult to prove.

Statute of Limitations

If too much time has passed between the alleged fraud and being charged, the statute of limitations may have expired. This time limit varies by state and the type of fraud, but is often 3-6 years. If so, the charges could be dismissed.

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Improper Government Conduct

If police coerced a confession or evidence was obtained illegally in violation of your rights, it may be excluded. This could prevent prosecutors from proving their case. An experienced lawyer can determine if there were procedural defects.

Constitutional Rights Violations

If your legitimate free speech, freedom of religion, or other constitutional rights were violated in the course of an investigation, the charges could potentially be challenged. For example, being charged for political statements protected by the First Amendment.

Puffery vs. Fraud

Some exaggerated sales claims and opinion statements don’t constitute fraud. Vague, puffery language is usually allowed as marketing optimism instead of deceit. For instance, saying a product is the “best” or will “change your life.”

Lack of Authority

Employees can sometimes be charged with fraud for actions on behalf of a company. However, if you can demonstrate you lacked decision-making authority or acted under orders from superiors who approved the conduct, it may defeat charges.

Bankruptcy Discharge

If fraud debts were discharged in a previous bankruptcy, the creditor can’t pursue criminal charges based on the discharged debt. The bankruptcy eliminates personal liability.

Necessity

Committing fraud out of necessity to prevent an imminent, greater harm may be justified in rare cases. For example, lying to access money to pay for emergency, life-saving medical care.

Entrapment

If police improperly induced or coerced you into committing fraud you otherwise wouldn’t have, it may constitute entrapment. This occurs when officers use excessive pressure and persuasion to trap you.

Lack of Capability

If you demonstrably lacked the physical capacity to commit the fraud, it defeats charges. For example, using a computer when you have no digital skills or literacy.

Misidentification

If you were mistakenly identified or impersonated by the real perpetrator, you aren’t criminally liable. Eyewitness misidentification leading to false charges happens more than people realize.

Self-Defense

In response to fraud by the victim against you, committing fraud to protect yourself may be justified in limited cases. The defense applies only to reasonable, proportional responses to harm you faced.

Consent

If the alleged victim consented to the transaction or activity the prosecutor claims is fraudulent, it may defeat charges. Consent should be provable through records, communications, etc.

Free Speech

The First Amendment protects some false speech like satire and parody that don’t cause direct harm. Charges based on your constitutionally protected speech could be challenged.

No Knowledge

If you had no actual knowledge the statements made were false, you didn’t likely commit intentional fraud. For instance, you relayed false information you reasonably believed was true.

No Duty

You can only commit fraud by breaching a legal duty you owed the victim. If no fiduciary or contractual duty existed between you, fraud charges may not apply.

The best defense depends on the unique circ*mstances of your case. Before deciding, your criminal defense attorney will carefully examine both the prosecution’s evidence and potential deficiencies in their case against you. With an experienced legal advocate, you can challenge fraudulent allegations.

What are common defenses for fraud charges? - 2024 - FEDERAL LAWYERS [2024] (2024)