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6 Common Types of Fraud

Fraud is intentional deceit that benefits the perpetrator or denies the victim of some right. Fraud can occur in all facets of life. The crime can also trigger both criminal and civil cases. Below are some common examples of fraud.

1. Identity Fraud

Identify theft includes all crimes in which a person wrongfully acquires another person's personal data and fraudulently uses the data. Fraudsters typically target economic gain. Identity fraud comes in different variations. Here are some examples:

  • Credit card fraud - someone steals credit card information and uses it to shop

  • Welfare fraud - someone steals personal data, such as a social security number, and uses it to claim government benefits

  • Medical insurance fraud - someone steals medical insurance data and uses it to get medical treatment

Identity fraud comes in numerous varieties. The number of crimes someone can commit with personal data is almost limitless.

2. Insurance Fraud

Insurance fraud arises when someone uses false information to get money from their insurance company. Insurance fraud comes in two forms.

Soft Insurance Fraud

In this case, an insured person exaggerates their claim or tells little lies to inflate their claim. An example is a person who suffers car damage worth $500 but sends their insurance company an inflated bill of $1,000.

Hard Insurance Fraud

For hard insurance fraud, an insured person fakes a loss so that they can get compensation money from the insurance company. For example, someone might abandon their car and send a theft claim to their auto insurer.

3. Mail Fraud

Mail fraud is common since it arises every time someone mails something associated with fraud. For example, people commit mail fraud if:

  • They mail forged identity cards

  • They mail false business contracts

  • They send fraudulent insurance claims by mail

  • They mail false receipts

Thus, other forms of fraud can also be mail fraud if they use the mail.

4. Securities Fraud

Securities fraud arises when a person makes a false statement about a company and others use the information to make financial decisions. Below are some common examples of securities fraud:

  • A company director publishes inflated profits to encourage people to buy the company's stocks

  • A person buys cheap stocks, spreads false information that hypes the company's value, and sells the stock at high prices

  • Someone with insider information of a company's financial position leaks the information before the company makes it public

The above are just a few examples of securities fraud - other variations exist.

5. Tax Evasion

Tax evasion is if anyone with a tax obligation fails to meet that obligation. For example, a person with a tax obligation commits tax evasion if:

  • They don't pay taxes

  • They pay partial taxes

  • They underreport their income

  • They inflate their expenses

For example, a merchant is guilty of tax evasion if they accept both cash and card but fail to report the cash revenue to the government. Note that tax evasion only applies to intentional conduct. An honest mistake doesn't constitute tax evasion as long as there is evidence of the mistake.

6. Bankruptcy Fraud

Bankruptcy fraud arises if someone intentionally submits false information during a bankruptcy application. For example, a bankruptcy applicant commits fraud if:

  • They hide some of their assets during the application

  • They destroy financial records that are material to the application

  • They lie during the creditors meeting

Again, bankruptcy fraud exists in various forms. Any intentional lie that affects the bankruptcy process is fraudulent.

Fraud is a serious crime that attracts various fines, such as jail time and monetary fines. Get an experienced defense lawyer if you face charges of fraud. Kalasnik Law Office LLC has all the qualities you need in a criminal defense attorney, such as skill and experience. Contact us today so that we can defend you against fraud or any other criminal charge.

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