Fraud has been around since mankind first appeared on the face of the earth. Adam and Eve is a classic story, where Eve told Adam that nothing would happen to him if he just touched the fruit of the Tree of Knowledge, only then to induce him to eat from that fruit, bringing ultimate death to Adam. Although Eve had a much deeper good intention in her actions, dishonest people in generations after Eve have used fraud to cause people to do things that they otherwise would never do, such as part with money, give something away, or agree to do something.
If proven at trial, fraud is a serious allegation–the person or company committing fraud will have to pay both actual damages and punitive damages. Punitive damages can be many times actual damages, depending on the decision–and outrage–of the jury or judge.
A person commits fraud when he tells a lie–or fails to disclose important information–that another person needs to know to make an informed decision. For example, A tells B that there have never been any problems with the house that A has for sale, and based on that representation, B buys the house. Three months later, serious cracking develops in one of the walls of the upstairs bedroom. B then hires a specialist who discovers that the cracked wall was re-plastered and painted over about a month before B came to his first open house, and that the cause of the cracks is a damaged house foundation that is endangering the structural integrity of the entire house. And the worst part of it all–it will cost $200,000 to redo the foundation.
Fraud occurs, unfortunately, in hundreds of different situations, such as: auctions (including Ebay), contracts, matchmaking, nursing home resident agreements, assisted living resident agreements, precious stones and diamonds, investments, yachts, buildings, appraisals, high end collector automobiles, services and more.
Fraud is usually proven by showing that there was no reasonable basis for the person to make the untrue statements (or no reasonable basis for failing to say what he should have). It’s pretty much a smell test with certain legal requirements, and the trier of fact, whether jury or judge, is generally good at ferreting out when fraud has been committed.
Sometimes, proving fraud is as simple as adding two plus two. Other times, extensive discovery must be conducted in a case, including the plaintiff’s lawyer taking multiple depositions and demanding production of hundreds of documents. Some of the most intricate and extensive fraud occurs in complicated commercial transactions.
And even though it may be hard to believe, some of the biggest corporations and companies in the world commit some of the worst fraud–fraud is not just committed by individuals. For example, a company may represent to the public that its product is completely safe, yet knows full well, from private testing, that the product can cause serious bodily injury if used in even a slightly different way than the instructions call for. Examples of product sold despite knowledge of safety issues include automobiles, medications, exercise equipment, hair products, and baby products, just to name a few. If fraud is proven, and serious bodily injury or death resulted from the fraud, massive jury verdicts are probable.
If the plaintiff’s trial lawyer conveys to the jury the magnitude and details of the fraud, along with the moral wrong of the defendant in committing the fraud, the jury is likely to side with the plaintiff in its verdict and penalize the defendant with a large judgment in favor of plaintiff.
James A. Vickman, Esq. for LawyerandClient.com, the Resource Desk of Vickman & Associates. firstname.lastname@example.org, 310-553-0567
Vickman & Associates is a law firm located in Beverly Hills, California, representing individuals and companies in litigation, trials and transactions.