Understanding the Differences Between Criminal and Civil Fraud

Fraud is deliberately falsifying information or using other unethical means to benefit oneself or an institution. There are two types of fraud, criminal and civil, each distinguished by the person filing the lawsuit. Regardless of the type, fraud causes damage to a victim. 

Elements of Fraud

Here are some general characteristics of acts of fraud:

  • A victim suffers (or could have suffered) from the action of fraud
  • Falsifying or withholding certain information
  • Misinterpretation of information
  • Misinterpreting information with full knowledge of one’s actions

Criminal Fraud

Criminal fraud involves acts of deception toward an individual or organization to solicit funds from them. It could be done by misrepresenting facts or results and intentionally lying about particular aspects leading to eventual harm. However, it is essential to note that fraud does not involve erroneous information presented by the accused. 

Federal, local, or state prosecutors file criminal fraud cases. During the hearing, they must prove that the accused intentionally provided misleading information to benefit from it. A  criminal fraud case will still be heard in court whether it was successful or not. 

Here are some examples of criminal fraud:

  • Identity theft
  • Mortgage fraud
  • Credit/debit fraud
  • Perjury
  • Forgery
  • Embezzlement
  • Counterfeiting 

Civil Fraud

Just like criminal fraud cases, civil fraud cases are filed based on the misrepresentation of information. Here, the victim files the lawsuit in a court of law. Similarly, they must prove the damages caused by the deception. 

Despite the fraud claims filed by the plaintiff, if no damages were incurred, there is no relief available during a civil case. Compensation is only offered when the defendant is proven guilty.

Differences Between Criminal and Civil Fraud

The main difference between civil and criminal fraud is the person pursuing the case. In criminal fraud cases, prosecutors file the lawsuit and work towards proving their guilt. On the other hand, civil fraud cases are pursued by the victim. 

Another contrast between the two types of fraud cases is the penalty for each crime. In criminal cases, the defendant will face charges for criminal justice while they may not be required to repay the plaintiff in civil cases. 

Moreover, as mentioned before, criminal cases require proof that the defendant is indeed liable for the damages caused. In civil cases, there is no need for a conviction; however, the plaintiff’s lawyer works toward getting compensation for the client.

The punishment for criminal fraud ultimately depends on the jurisdiction, the severity of the damages caused by the scam, and the victim of the fraud. Hence, it is essential to obtain the services of a criminal defense lawyer to present a strong defense during a criminal trial. This might include lack of intent to commit a crime, entrapment, and non-fraudulent statements. 

Finally, the burden of proof is also used to differentiate the two types of fraud cases. In civil fraud cases, the plaintiff proves that the defendant caused them harm through deception. Criminal fraud cases, on the contrary, have the prosecutors prove that the person undoubtedly committed a crime and therefore caused harm. 

Simply put, civil cases determine liability, while criminal cases determine guilt. Therefore, the accused only pays compensation for the damages without further penalties in civil fraud cases but gets additional punishments in criminal fraud cases. 

Final Thoughts

Regardless of their nature, fraud cases involve proving acts of deception geared towards personal gain and often resulting in damages. Civil cases end in settlement negotiations, while criminal cases challenge the stated charges or enter plea bargains. If you are accused of fraud, ensure you hire a lawyer to defend you in court.