Fraud involves using a lie, deception, falsehood, or dishonesty in an attempt to gain a benefit. The states and the federal governments have identified many types of fraud as criminal.

Fraud involves using a lie, deception, falsehood, or dishonesty in an attempt to gain a benefit. The states and the federal governments have identified some types of fraud as criminal—typical fraud crimes are explained below. Fraud can also be a civil wrong, which means that victims can bring a civil lawsuit for money damages, to compensate them for the losses they suffered as a result of the fraud. Civil fraud does not carry the possibility of jail time or fines, whereas criminal fraud can result in both. A particular instance of fraud can be both a criminal offense and the basis for a civil lawsuit.

There are numerous categories and types of fraud, and the types described below are not an exhaustive list.

Beware of COVID-19 Fraud In response to stay-at-home orders and social distancing requirements, Americans quickly shifted to conducting their daily activities online. Moving online allows us to work, go to school, and keep in touch with family and friends. But it also opened up opportunities for online hackers and scammers to exploit cybersecurity weaknesses and fears created by the pandemic. The Federal Bureau of Investigation (FBI) reports experiencing a significant increase in the number of complaints filed with its Internet Crime Complaint Center (ic3.gov) during the COVID-19 pandemic—from phishing scams and employment fraud schemes to online extortion and business email compromise. If you’ve been the victim of an Internet crime, you can file a complaint with your local police department or at ic3.gov. For more information on how to avoid COVID-19 scams, read How to Identify and Avoid Coronavirus Scams.

State and Federal Laws

Both the federal government and the individual states have numerous laws that criminalize various types of fraud. Depending on the circumstances of the case, fraudulent activity can be either a state or federal crime, or both. This means that person who commits an act of fraud could be in violation of both a federal and state law at the same time, and can be prosecuted for both.

Mail Fraud

Mail fraud is one of the most commonly charged federal crimes. It applies to any scheme to defraud that involves using the United States Postal Service or other interstate delivery services. For example, a con artist might send a letter to a victim in an attempt to convince the victim to hand over money. Even if the con artist is unsuccessful in his attempt, using the mail in an attempt to commit fraud violates the federal mail fraud law.

Wire Fraud

Wire fraud, like mail fraud, is a federal crime, and one that is also quite broad and applicable to numerous types of activity. Wire fraud occurs whenever a person uses a telephone, electronic communication device, or a computer with Internet access to commit an act of fraud. Like mail fraud, this law is incredibly broad and applies to numerous situations.

Computer and Internet Fraud

Computer fraud covers a broad range of criminal activity, including hacking into a computer or computer network intending to defraud someone. The act of defrauding could include altering or deleting records, accessing financial or other information, or obtaining something of value. Acts of Internet fraud sometimes overlap with computer fraud. Some common Internet fraud schemes include identity theft, phishing schemes, charitable contribution fraud, employment fraud, and investment fraud.

Counterfeiting

Anyone who produces counterfeit currency, documents, or goods also commits a type of fraud. Counterfeiting currency is a federal crime, but state laws can also apply if, for example, you forge false birth certificates, driver's licenses, or other documents. Manufacturing goods and selling them while claiming they are a name brand item, such as selling counterfeit shoes, is also considered an act of fraud.

Loan Fraud

Loan fraud occurs when a person or business knowingly makes a false, material statement to a bank, financial institution, mortgage lender, or federal agency in order to obtain a loan. It's a crime even if the lender doesn't lose any money. Making a false statement to influence or mislead the decision-making process is enough.

Credit Card Fraud

Another common form of fraud occurs when someone fraudulently obtains, uses, or forges a credit card. Credit card fraud can occur when, for example, a server obtains your credit card numbers when you pay for your restaurant bill and uses that information to make a purchase; or when a person finds your wallet and uses your cards. In more sophisticated operations, hackers might gain access to your credit card information when you purchase something online or by tricking you into updating your payment information on a fake website.

Penalties

Committing any type of fraud can lead to some significant criminal penalties. Depending on the state in which you live and the crime you're charged with, fraud can be either a felony or misdemeanor offense.

Incarceration. Fraud convictions bring with them the possibility of a jail or prison sentence. Though sentences differ widely, a misdemeanor conviction can lead to up to a year in a local jail, while a felony conviction can lead to multiple years in prison. Federal charges can lead to 10 years or more in federal prison.

Probation. A court can also impose a probation sentence if you're convicted of a fraud crime. Probation allows you to serve your sentence without having to go to jail or prison, but it is not a “get out of jail free” sentence either. Probation limits your freedom significantly. Probation typically lasts 12 months or more, and while on probation you must obey specific conditions the court imposes. These will often require you to report to a probation officer, take random drug tests, find or maintain a job, and of course, not commit more crimes.

Fines. Fines for fraud convictions are very common, and like incarceration sentences they can differ significantly depending on the circumstances of the case. Fines for misdemeanor violations can be a few thousand dollars or less, while felony convictions can bring fines of well over $10,000.

Restitution. A person convicted of fraud will have to pay money to victims, compensating them for any loss they suffered. Court orders for compensation are known as restitution. Restitution payments must be made in addition to any fines the court imposes.

Find an Attorney

While not all types of fraud are criminal, anyone suspected of or being investigated for fraud needs to speak to a criminal defense attorney as soon as possible. The different types of fraud crimes that exist make it possible for prosecutors to charge you with a wide number of crimes, some of which you may not even be aware of.

If you speak to investigators without legal advice you might unwittingly damage your case or provide the investigators with the evidence they need to charge you with a crime. Talking to a local defense lawyer who knows how to manage criminal investigations and how to defend your rights through the entire criminal justice process is the only way to ensure you are protected.