A Guide to Understanding the Various Types of Fraud

Fraud charges are serious, and in this blog entry we examine various types of fraud charges that exist. There are numerous definitions out there describing fraud in general, but they all have one central theme: deliberately tricking or deceiving someone, as well as being dishonest for the purpose of one’s own gain.

Fraud is a criminal offense and is typically considered a felony throughout the US. Depending on the type and extent of the fraud, it can carry criminal penalties of short-term or long-term jail time, probation, major fines, and forced restitution. However, fraud is also considered a civil offense and could cost an offender even more money if a fraud victim chooses to sue the perpetrator.

Fraud is an umbrella term that covers a wide array of offenses. Below we’ve outlined five common forms of fraud. If you are facing fraud charges, please get in touch with us immediately.

Medicare Fraud

Medicare provides millions of Americans with healthcare services. In the United States, Medicare is based on an honor system of billing, which leaves it particularly vulnerable to fraud. A common example would be a healthcare provider billing Medicare for services they never performed on a patient, or services which were not medically necessary. Regardless of the billing scheme, all Medicare fraud has the goal of collecting illegitimate money from the Medicare program.

Securities Fraud

Securities fraud refers to an extremely broad range of fraud that involves illegally taking advantage of stock and commodities markets, or unwitting investors. This could include “pump and dump” schemes, where the price of a stock is artificially inflated by unscrupulous “brokers,” who then sell their shares after the unwitting investors have purchased theirs, or insider trading, where a corporate officer with confidential knowledge of something which will cause the stock price to rise buys shares before the information becomes public. Securities fraud accounts for billions of dollars worth of fraud in the US every year.

Tax Fraud

If you falsify your tax returns in order to pay less in taxes, you’ve committed tax fraud. This is one of the most common forms of fraud. Whether the perpetrator lies, misrepresents, or simply does not file taxes, he or she is committing fraud.

Mail and Wire Fraud

This classification refers more to the manner in which the fraud was actually committed than the fraudulent act itself. What it means is, if you attempt to defraud someone and as part of the scheme something is mailed, or wired through a fax machine or the internet, it is a mail or wire fraud. For example, if you used e-mail to send a fraudulent contract in furtherance of a fraudulent scheme, you could be charged with wire fraud.

Mortgage Fraud

Mortgage fraud is on the rise, and can take several forms. The most common involves the act of lying or misrepresenting your income or assets to a mortgage lender in order to receive a loan. Think you can bend the truth a bit to get a higher loan to buy your dream home? Your new home could end up being a federal prison!

This is by no means an exhaustive list of possible types of fraud. In general, to avoid fraud charges, do your best to be honest and never purposefully trick or deceive for your own personal gain. However, if you do find yourself facing fraud charges or any other white-collar criminal charges, call me to discuss your options.

Written by Law Offices of Barry M. Wax

Law Offices of Barry M. Wax

For 34 years, I have provided both State- and Federal-Level representation for those facing charges ranging from wire fraud, mortgage fraud, and healthcare fraud to identity theft, drug trafficking, money laundering, murder, DUI, domestic violence and numerous other criminal charges. In every case, it is my commitment to one-on-one service and support that has separated the Law Offices of Barry M. Wax from other criminal defense firms. When it comes to your future, you need a strong defense and the ability to make the right choices and regain control of your life.