USA Law and Practice Contributed by: Steven Molo, Robert Kry, Megan Cunniff Church and Walter Hawes, MoloLamken LLP
MoloLamken LLP 430 Park Avenue
New York NY 10022 USA
Tel: +1 212 607 8160 Fax: +1 212 607 8161 Web: www.mololamken.com
1. Fraud Claims 1.1 General Characteristics of Fraud Claims In the United States, fraud claims can be brought under federal or state law, by federal or state pros - ecutors when criminal in nature, or by private litigants when civil in nature. Although there are similarities between federal and state law, there is no uniform law governing fraud claims, and no single entity is responsible for enforcement. Generally, both federal and state law allow a private litigant to pursue fraud claims when one party deliberately deceives another party for some financial advantage or benefit, causing harm to the other party in the process. Elements of Fraud Generally, a civil fraud claim brought pursuant to US federal or state law must allege: • a false statement or omission of material fact; • the intent to deceive; • justifiable reliance by the victim on the false state - ment or omission; and • harm or injury to the victim as a result. The specific elements of a fraud claim may vary by jurisdiction and by the specific type of fraud alleged. In general, fraud claims are subject to a heightened pleading standard, meaning that the specific allega - tions of fraud – who, what, where and when – must be described “with particularity” in the civil complaint that initiates a private lawsuit.
Who May Bring a Fraud Claim Criminal
Federal prosecutors with the US Department of Jus - tice (DOJ) and state and local prosecutors bring crimi - nal charges against defendants who engage in fraud. Federal prosecutors commonly charge defendants in a variety of financial fraud schemes, including bank fraud, government contracting fraud, healthcare fraud, mortgage fraud, tax fraud, embezzlement and misap - propriation, bribery, and corrupt payments to foreign officials. Private litigants cannot directly prosecute criminal charges but may help initiate criminal investigations by reporting fraud to law enforcement. Private litigants who act as whistle-blowers and bring certain informa - tion regarding fraud and corruption to the attention of law enforcement may, in some circumstances, recover a percentage of any settlement or financial penalty resulting from the investigation or prosecution. Civil Federal prosecutors in the DOJ are also responsi - ble for investigating and litigating civil fraud claims brought on behalf of the federal government. State and local prosecutors also pursue civil fraud claims on behalf of their local governments and citizens. Private litigants may also bring civil fraud claims in lawsuits filed in federal or state court, depending on the circumstances, and allege fraud based on federal or state law. Some of the specific types of fraud claims are addressed more fully below.
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