Learn something new every day More Info... by email
Fraud is the intentional deception of a third party that causes some form of harm to the victim. There are many forms of fraud, including mail, wire, securities, real estate, and credit card fraud. The statute of limitations for fraud depends on the crime, the region, and sometimes when the crime was discovered.
A statute of limitations for any crime is a common law measure that prevents the prosecution of certain crimes after a specific period of time. This helps ensure that plaintiffs do not bring a claim simply out of spite or other motives, even though they have lived with the offense for many years. Additionally, it protects evidence from loss, contamination, or decay that could materially influence the outcome of a trial. Some legal experts also claim that, for minor crimes, punishing a person for what he or she did 20 years ago may be a meaningless use of the justice system.
The statute of limitations for fraud varies by region, and sometimes by the type of crime. In most US states, fraud proceedings are limited to between one and five years after the crime occurred, and limits are similar in other common law countries. Fraud may be charged at the regional or national level, depending on the type of crime. Mail fraud, for instance, is considered a federal crime in the United States and is prosecuted in the federal court system.
One issue that may alter the statute of limitations is the application of the discovery rule. This is a special rule that allows for the possibility that a crime might not be discovered at the same time that it is committed. If, for instance, a person was a victim of a fraudulent accountant but did not realize the fraud had occurred until four years later, he or she might not be able to make a legal complaint if the statute of limitations had run out. The discovery rule allows the statute of limitations to begin at the moment of discovery, rather than the moment of the crime.
There are some exceptions to the discovery rule that prevent gross negligence on the part of the plaintiff from permitting prosecution. Some legal systems have an upper limit for the statute of limitations for fraud, even with the discovery rule applied. Securities fraud in the United States, for example, has a statute of limitations of two years, or up to five years if the discovery rule is applied. If the crime is discovered after five years, it would no longer be prosecutable.