New York Fraud Law

Fraud Law

In general, New York Fraud law is governed not only by the common law causes of action of fraudulent inducement and fraudulent concealment among others, but also by the New York Statute, the 'Deceptive Practices Act': http://codes.lp.findlaw.com/nycode/GBS/22-A/349. A large portion of our practice prosecutes businesses for violating this statute. The burden of proof for a plaintiff under this statute is less than that of proving a case under common law fraud. For example, there is no requirement, as there is with a fraud claim, to prove reliance on a misrepresentation. Importantly, a winning plaintiff can ask the Court for attorney's fees. As seen from the case history, deception can come from many different places, and from many different actors. From small transactions to large, a deceptive business practice can inflict significant money and credit damage to hosts of consumers and businesses who are victims.

Fraud can be generally thought of as a misrepresentation; a lie. At least in terms of the statute’s proof, in addition to no requirement of reliance, intent to defraud is not required. There is also a tort known as “negligent misrepresentation.” a/k/a non-intentional fraud. So, if alleged properly, a consumer litigant does not necessarily have to prove that the bad actor intentionally lied to the person to bilk them out of money.

District Attorneys can also prosecute “criminal fraud”: conduct which is even more egregious than civil fraud. Our firm concentrates on prosecuting cases in civil fraud in the hopes to recover money, and not jail time, for the bad guy.

Punitive damages are an opportunity in fraud cases. They are awarded by the Court or jury at trial or on motion, to punish and deter the wrongdoer from conducting such egregious fraud. But only proven serious frauds will support a finding of punitive damages.

At the outset of every litigation, the plaintiff must first allege the legal elements for his/her cause of action and then he/she has to prove them to a judge or jury. The two most specific common law fraud causes of action are by inducement and by concealment. For fraud in the inducement, a plaintiff must plead a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury caused as a result of that reliance (see Orchid Constr. Corp. v. Gottbetter, 89 AD3d 708 (2d Dept. 2011); Northeast Steel Prods., Inc. v. John Little Designs, Inc., 80 AD3d 585 (2d Dept. 2011); Hense v. Baxter, 79 AD3d 814 (2d Dept. 2010).

Fraudulent concealment can arise when one party deliberately hides information that is critical to the other’s decision to invest or not to invest. In addition to the traditional in elements of fraud i.e. intent to defraud and reasonable reliance, a plaintiff must also demonstrate that the defendant had a special, or trust relationship with the plaintiff that imposed upon the defendant a duty to disclose that material, yet secreted, information. Albion Alliance Mezzanine Fund, L.P. v. State Street Bank and Trust Co., 8 Misc. 3d 264, 269 (Sup. Ct., NY Co. 2003), aff’d 2 AD3d 162 (1st Dep’t 2003).

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