Can you say more about this? I’ve been searching for a while about the differences between civil and criminal fraud, and my best guess (though I am really not sure) is that both have an intentional component. Here for example is an article on intent in the Texas Civil Law code:
[I’m not a lawyer and it’s been a long time since law school. Also apologies for length]
Sorry—I was unclear. All I meant was that civil cases don’t require *criminal intent.* You’re right that they’ll both usually have some intent component, which will vary by the claim and the jurisdiction (which makes it hard to give a simple answer).
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tl;dr: It’s complicated. Often reckless disregard for the truth r deliberate ignorance is enough to make a fraud case. Sometimes a “negligent misrepresentation” is enough for a civil suit. But overall both criminal and ccivil cases usually have some kind of intent/reckless in difference/deliberate ignorance requirement. Securities fraud in NY is an important exception.
Also I can’t emphasize enough that there are 50 versions in 50 states and also securities fraud, mail fraud, wire fraud, etc can all be defined differently in each state.
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After a quick Google., it looks to me like the criminal and civil standards are usually pretty similar.
It looks like criminal fraud typically (but not always) requires “fraudulent intent” or “knowledge that the fraudulent claim was false.” However, it seems “reckless indifference to the truth” is enough to satisfy this in many jurisdictions.[1]
New York is famous for the Martin Act, which outlaws both criminal and civil securities fraud without having any intent requirement at all.[2] (This is actually quite important because a high percentage of all securities transactions go through New York at some point, so NY gets to use this law to prosecute transactions that occur basically anywhere).
The action most equivalent to civil fraud is Misrepresentation of material facts/fraudulent misrepresentation. This seems a bit more likely than criminal law to accept “reckless indifference” as a substitute for actually knowing that the relevant claim was false.[3] For example, thee Federal False Claims Act makes you liable if you display “deliberate ignorance” or “reckless disregard of the truth” even if you don’t knowingly make a false claim.[4]
However, in at least some jurisdictions you can bring a civil claim for negligent misrepresentation of material facts, which seems to basically amount too fraud but with a negligence standard, not an intent standardd.[5]
P.S. Note that we seem to be discussing the aspect of “intent” pertaining to whether the defendant knew the relevant statement was false.There’s also often a required intent to deceive or harm in both the criminal and civil context (I’dd guess the requirement is a bit weaker in civil law.
[2] “In some instances, particularly those involving civil actions for fraud and securities cases, the intent requirement is met if the prosecution or plaintiff is able to show that the false statements were made recklessly—that is, with complete disregard for truth or falsity.”
[4] “Notably, in order to secure a conviction, the state is not required to prove scienter (except in connection with felonies) or an actual purchase or sale or damages resulting from the fraud.[2]
***
.In 1926, the New York Court of Appeals held in People v. Federated Radio Corp. that proof of fraudulent intent was unnecessary for prosecution under the Act.[8] In 1930, the court elaborated that the Act should “be liberally and sympathetically construed in order that its beneficial purpose may, so far as possible, be attained.”[9]
[5] “Although a misrepresentation fraud case may not be based on negligent or accidental misrepresentations, in some instances a civil action may be filed for negligent misrepresentation. This tort action is appropriate if a defendant suffered a loss because of the carelessness or negligence of another party upon which the defendant was entitled to rely. Examples would be negligent false statements to a prospective purchaser regarding the value of a closely held company’s stock or the accuracy of its financial statements.” https://www.acfe.com/uploadedFiles/Shared_Content/Products/Self-Study_CPE/Fraud-Trial-2011-Chapter-Excerpt.pdf
Note that criminal intent is *not* required for a civil fraud suit which could be brought simultaneously with or after a criminal proceeding.
Can you say more about this? I’ve been searching for a while about the differences between civil and criminal fraud, and my best guess (though I am really not sure) is that both have an intentional component. Here for example is an article on intent in the Texas Civil Law code:
https://www.dwlawtx.com/issue-intent-civil-litigation/
[I’m not a lawyer and it’s been a long time since law school. Also apologies for length]
Sorry—I was unclear. All I meant was that civil cases don’t require *criminal intent.* You’re right that they’ll both usually have some intent component, which will vary by the claim and the jurisdiction (which makes it hard to give a simple answer).
---
tl;dr: It’s complicated. Often reckless disregard for the truth r deliberate ignorance is enough to make a fraud case. Sometimes a “negligent misrepresentation” is enough for a civil suit. But overall both criminal and ccivil cases usually have some kind of intent/reckless in difference/deliberate ignorance requirement. Securities fraud in NY is an important exception.
Also I can’t emphasize enough that there are 50 versions in 50 states and also securities fraud, mail fraud, wire fraud, etc can all be defined differently in each state.
----
After a quick Google., it looks to me like the criminal and civil standards are usually pretty similar.
It looks like criminal fraud typically (but not always) requires “fraudulent intent” or “knowledge that the fraudulent claim was false.” However, it seems “reckless indifference to the truth” is enough to satisfy this in many jurisdictions.[1]
New York is famous for the Martin Act, which outlaws both criminal and civil securities fraud without having any intent requirement at all.[2] (This is actually quite important because a high percentage of all securities transactions go through New York at some point, so NY gets to use this law to prosecute transactions that occur basically anywhere).
The action most equivalent to civil fraud is Misrepresentation of material facts/fraudulent misrepresentation. This seems a bit more likely than criminal law to accept “reckless indifference” as a substitute for actually knowing that the relevant claim was false.[3] For example, thee Federal False Claims Act makes you liable if you display “deliberate ignorance” or “reckless disregard of the truth” even if you don’t knowingly make a false claim.[4]
However, in at least some jurisdictions you can bring a civil claim for negligent misrepresentation of material facts, which seems to basically amount too fraud but with a negligence standard, not an intent standardd.[5]
P.S. Note that we seem to be discussing the aspect of “intent” pertaining to whether the defendant knew the relevant statement was false.There’s also often a required intent to deceive or harm in both the criminal and civil context (I’dd guess the requirement is a bit weaker in civil law.
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[1] “Fraudulent intent is shown if a representation is made with reckless indifference to its truth or falsity.” https://www.justice.gov/jm/criminal-resource-manual-949-proof-fraudulent-intent
[2] “In some instances, particularly those involving civil actions for fraud and securities cases, the intent requirement is met if the prosecution or plaintiff is able to show that the false statements were made recklessly—that is, with complete disregard for truth or falsity.”
[3] https://en.wikipedia.org/wiki/False_Claims_Act#1986_changes
[4] “Notably, in order to secure a conviction, the state is not required to prove scienter (except in connection with felonies) or an actual purchase or sale or damages resulting from the fraud.[2]
***
.In 1926, the New York Court of Appeals held in People v. Federated Radio Corp. that proof of fraudulent intent was unnecessary for prosecution under the Act.[8] In 1930, the court elaborated that the Act should “be liberally and sympathetically construed in order that its beneficial purpose may, so far as possible, be attained.”[9]
https://en.wikipedia.org/wiki/Martin_Act#Investigative_Powers
[5] “Although a misrepresentation fraud case may not be based on negligent or accidental misrepresentations, in some instances a civil action may be filed for negligent misrepresentation. This tort action is appropriate if a defendant suffered a loss because of the carelessness or negligence of another party upon which the defendant was entitled to rely. Examples would be negligent false statements to a prospective purchaser regarding the value of a closely held company’s stock or the accuracy of its financial statements.” https://www.acfe.com/uploadedFiles/Shared_Content/Products/Self-Study_CPE/Fraud-Trial-2011-Chapter-Excerpt.pdf
Thank you, this was a good clarification and really helpful!