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What Does a Fraud Lawyer Do?

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  • Written By: John Kinsellagh
  • Edited By: Michelle Arevalo
  • Last Modified Date: 01 September 2014
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Common law fraud consists of a misrepresentation of a material fact intentionally made by one party to induce another party to act to his detriment. A fraud lawyer is an attorney who either prosecutes or defends cases in which a defendant is accused of engaging in fraudulent activity that has caused economic harm to others. The underlying deceit that forms the basis of the legal action can either be common law fraud, or fraudulent conduct that is prohibited by a particular state or federal statute.

In the United States, a lawyer can represent either plaintiffs or defendants in civil fraud cases, or, if the fraudulent conduct of the defendant is a violation of a statute that carries criminal penalties, he can work in the office of a federal or state prosecutor. The scope of cases on which a fraud lawyer works can range from actions for fraud in connection with the purchase or sale of securities, to unfair and deceptive trade practices committed by businesses that violate state consumer protection statutes. Such a lawyer may also handle cases in which a defendant fraudulently conceals the true financial condition of a business by publishing misleading and inaccurate accounting statements in order to induce individuals to invest in the business. A civil fraud lawyer must prove his case by a preponderance of the evidence.

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Since the rules of civil procedure require that the circumstances surrounding the fraud be specifically and thoroughly described, a lawyer must carefully examine the facts of the underlying case. As part of preparing the case for trial, he must also interview witnesses and review relevant documents associated with the matter, to determine the likelihood of proving the requisite elements of fraud. Additionally, a lawyer must examine the nature of the alleged statements made by the defendant — as well as the context in which they were made — in order to ascertain if the plaintiff's alleged misrepresentations were made by the defendant with the intent to deceive. Often a lawyer must demonstrate that the defendant personally profited from the misstatement in order to prove such a claim. In order to prevail on the case, the fraud lawyer must provide clear evidence that documents the economic losses sustained by the plaintiff as a result of the fraud.

A fraud lawyer must demonstrate not only that a plaintiff relied on the misrepresentation to his detriment, but also, that his reliance was reasonable. What constitutes reasonable reliance will depend on the facts and circumstances of each case, as well as the nature or status of the individuals to whom the fraudulent representations were made. Meeting the evidentiary burden in a case involving the average consumer will typically differ from the degree of proof required to demonstrate fraud, and reasonable reliance, in a commercial transaction.

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