How to Prove Common Types of Business Fraud
Fraud can occur during many types of transactions in business. A person may try to exploit knowledge they have gained, the access they have to information, or they might misrepresent important facts to someone else. When someone loses money during a business transaction, they might claim that they have been defrauded. However, there is a very high legal standard to meet when proving these cases. Below, our Knoxville business torts attorney explains the most common types of fraud, and how to prove your case if it occurs.
What Types of Fraud are Common in Business?
There are many types of fraud that can happen in business transactions. Some of the most common of these include:
- Investment fraud: Pyramid schemes are very common types of investment fraud in business. In these schemes, people sell shares fraudulently while promising investors great returns. The perpetrator of the fraud then misappropriates the money invested and investors never see those returns.
- Payroll fraud: Payroll funds occur when funds are stolen during the payroll processing system. Timesheet fraud and ghost employees are two common types of payroll fraud. Small businesses are particularly vulnerable to payroll fraud.
- Healthcare fraud: Any person in the healthcare field can commit fraud including doctors, other healthcare providers, and pharmacies. These parties may submit invoices for services that were not provided, or inflate the prices of services rendered.
- Financial statement fraud: Investors rely on financial statements when determining whether or not to provide a business with funds. Businesses may falsify or misrepresent financial statements to make it seem as though the company is in a better position than it actually is.
- Fraud during acquisitions: When one company wishes to purchase another, the business being bought may not disclose important facts that may lessen the value of the business.
How to Prove Business Fraud
Regardless of the type of fraud you believe has been committed, proving it is never easy. People cannot accidentally commit fraud. There must be an actual intent to deceive and defraud others. This, along with the other elements you must prove in a business fraud case include:
- The defendant misrepresented a material, or important, fact,
- The defendant know the representation was not true or did not true if it was true,
- The defendant intended for the plaintiff to trust the misrepresentation,
- The plaintiff actually did trust the misrepresentation, and
- The plaintiff experienced a financial loss due to the misrepresentation.
If you or your business was the victim of fraud, it is important to speak to an attorney who can prove your case and help you claim the full damages you are entitled to.
Our Business Torts Attorney in Knoxville Can Prove Your Case
Fraud is a very serious offense and it can also be grounds for criminal charges. However, if you have been a victim you also have the right to pursue financial compensation. At Atkins Brezina, PLLC, our Knoxville business torts attorney can help you collect evidence to prove your case so you obtain the full damages you are entitled to. Call us now at 865-500-3121 or contact us online to schedule a free consultation and to get more information.
Source:
comptroller.tn.gov/office-functions/investigations/fraud-waste-and-abuse.html
