You likely never anticipate that your business dealings could potentially leave you facing charges of fraud or some other federal crime. Yet should your transactions with a particular partner or client not yield the anticipated results (and end up leaving them facing a financial loss or hardship), that could potentially happen?
How is it that your actions could come under scrutiny in this manner? The issue may be due to a discrepancy between your client or partner’s expectations and the actual circumstances of the situation. Proving this (in defense of accusations of fraud) requires analyzing your intent.
According to the U.S. Department of Justice’s Criminal Resource Manual, proof of fraudulent may have less to do with the direct evidence related to your case than it does the totality of the circumstances. This can serve to both bolster or weaken your defense of your conduct. For example, the net effect of a business transaction being a significant financial loss for your partner or client (but not necessarily for you) may seemingly imply fraud. Yet you presenting evidence of the ever-present potential for such a loss may counter such an implication (while simultaneously showing you operated in good faith).
It is important to remember that the burden of proving that you committed fraud falls to the parties prosecuting your case. Thus, the mere accusation is not sufficient to assign guilt. Indeed, the DOJ’s documentation shows in order for a charge of fraud to merit a conviction, the prosecution must prove that you both operated in deceit and contemplated actual financial harm befalling your business partner or client. Unless your conduct (coupled with the outcome of your business transactions) demonstrates both elements, it may be difficult to support any allegations made against you.