When we enter into a transactional relationship or partnership, we expect that the parties will conduct business honestly, fairly, and according to the terms of the agreement.
Unfortunately, partners, employees, customers, and other business entities can act unfairly. They can use manipulation and deceit for personal gain at the expense of your business.
Fraud can have far-reaching impacts on your business, such as lost profits, damaged reputation, bankruptcy, and lost customer base.
Phoenix business fraud attorneys can help take action against those who have committed fraud against your business, recover losses, and protect your interests.
Shields, Petitti & Zoldan’s experienced business fraud litigation lawyers are not afraid to pursue legal action to defend you or your business against unscrupulous individuals.
Our skilled attorneys can offer advice, conduct internal investigations, and represent your company in court if necessary.
What Is Business Fraud?
Business fraud can arise in nearly any type of business transaction. It can be a range of illegal or unethical activities by individuals or other entities to deceive or defraud a business for personal gain.
Typically, business-related fraud happens when one party to a contract or transaction makes a false material statement or knowingly provides false information relied on by another party.
Another basis for business fraud is if a party knowingly or intentionally omits information or facts or commits fraud to compel another party to take action.
Types of Business Fraud
Business fraud can take many forms. Some common types of business fraud include the following.
Embezzlement
In Arizona, embezzlement is a white-collar crime involving the fraudulent misappropriation or theft of funds or property entrusted to one party’s care.
Usually, the property or money is entrusted to an employee, trustee, or other fiduciary. Embezzlement occurs when the trusted party obtains the property lawfully but misuses or misappropriates it for personal gain.
A common type of business embezzlement is employee theft, where an employee secretly steals money from an employer’s account, diverts or skims funds, tampers with financial records, or misuses company credit cards for personal expenses.
Financial advisors and investment brokers also commit embezzlement by misappropriating client funds, performing unauthorized trading, engaging in Ponzi schemes, or misrepresenting investment opportunities.
The crime of embezzlement in Arizona is a serious offense that can result in fines, restitution, probation, and imprisonment. Depending on the facts of the case, the defendant’s criminal history, and the property’s value, the crime can be a simple misdemeanor or a felony offense.
Insider Trading
Insider trading is securities fraud prohibited by federal and Arizona law. It is the illegal use of non-public, material information about a company to impact its stock price or to make a profit from an investment. The laws against insider trading aim to ensure that everyone has the same opportunity to buy and sell stocks without fear of getting taken advantage of.
This illegal practice violates federal and state laws and can have serious consequences, including fines and jail time, for those who engage in it.
Tax Fraud
Tax fraud involves intentionally evading or manipulating tax laws or regulations to reduce tax liability. This can include underreporting income, inflating deductions, creating false documentation, or hiding assets in offshore accounts. Depending on the facts involved, tax fraud can also have state and federal criminal implications.
Payroll Fraud
Payroll fraud is the theft of funds from a business through its payroll processing system. Employees frequently commit this type of fraud, which can include falsified timesheets, unauthorized bonuses, or paying fictitious or terminated employees. Some companies also commit payroll fraud by intentionally misclassifying their employees in IRS reporting.
Fraudulent Misrepresentation
When a business partner or other entity enters into a business transaction, it may falsely represent information to make the other party take action. Allegations of fraudulent misrepresentation often arise when one party makes a false statement or omits information in the context of a contract or business agreement to seal the deal.
This is one of the most serious types of misrepresentation because it involves intent to trick the other person. The critical elements of misrepresentation include:
- A person or company made a false representation (in writing or orally);
- The representation was material to the transaction;
- The person making the representation knew it was false or did not have the knowledge to ensure it was true;
- The representation was made with the intention of causing the other party to act;
- The other party relied on that representation and took it to be true; and
- The other party incurred damages as a result of the misrepresentation.
It can be challenging to prove some of these elements, particularly the element of intent. To build a strong case, consult experienced business litigation attorneys. They can help assess your case, recover losses, and hold the other party accountable.
Shields, Petitti & Zoldan Are Your Phoenix Business Fraud Attorneys
Shields, Petitti & Zoldan’s Phoenix business fraud litigation lawyers understand the importance of protecting your company’s reputation and assets from unscrupulous fraudsters. As a business owner, you put your time, energy, and money into growing a successful business.
It should not be threatened by deceitful or manipulative behavior. Our attorneys will review the facts of your case and determine the best strategy to recover your losses and preserve your business’s reputation.
In addition to pursuing action against business fraud perpetrators, we offer business fraud defense. If you or your business have been accused of fraud, our team can identify the appropriate defense, such as lack of intent, mistake, lack of evidence, false allegations, or holes in the prosecution’s case.
Our firm has developed a reputation for excellence with over 50 years of combined experience representing workers and businesses. Our lawyers have received top-level recognition as Super Lawyers, Best Lawyers of America, Rising Stars, and AV-Preeminent ratings from Martindale-Hubbell.
We understand how to navigate the complexities of business fraud litigation and strive to protect your interests. Contact us today to learn how we can be your trusted business fraud litigation attorneys.