Business Fraud

Business Fraud Litigation

What is Fraud?

Our experienced Virginia Business Fraud Lawyers can explain the legal complexities surrounding the doctrine of fraud. It is a common “F” word that is often thrown around in everyday life, but its technicalities are much harder to prove in the courtroom. Suffice it to say that not every misleading statement meets the legal criteria for fraud. Remember, that if proven, a fraud claim potentially carries punitive damages against the person who committed the fraud. Virginia law defines fraud as follows: (1) a false representation, (2) of a material fact, (3) made intentionally and knowingly, (4) with intent to mislead, (5) reliance by the party misled, and (6) resulting damage to him. see Van Deusen v. Snead, 247 Va. 324, 441 S.E.2d 207 (1994).

Standard of Proof: Fraud must be proven by clear and convincing evidence. see Mortarino v. Consultant Engineering Services, 251 Va. 289, 295, 467 S.E.2d 778, 782 (1996).

Va.  Code § 8.01-243(A) – Statute of Limitations and the Discovery Rule. Under Virginia law, claims for fraud are subject to a two year statute of limitations period, which is subject to the discovery rule – that is, the clock does not start ticking until the fraud is discovered or by the exercise of due diligence reasonably should have been discovered. According to STB Mktg. Corp. v. Zolfaghari, 240 Va. 140, 144 (1990):

The language “by the exercise of due diligence reasonable should have been discovered,” as used in Code § 8.01-249, means “such a measure of prudence, activity or assiduity, as is property to be expected from, and ordinarily exercised by, a reasonable and prudent man under the particular circumstances; not measured by any absolute standard, but depending on the relative facts of the special case.”

Types of Fraud:

  • Fraud in the inducement – this type of fraud generally occurs when one defrauds another to enter into a contract or undertake an obligation
  • Actual Fraud – this is fraud committed with the intent to deceive (i.e. scienter)
  • Constructive Fraud – “Constructive fraud differs from actual fraud in that the misrepresentation of material fact is not made with the intent to mislead, but is made innocently or negligently although resulting in damage to the one relying on it.” Evaluation Research Corp. v. Alequin, 247 Va. 143, 147, 439 S.E.2d 387, 390 (1994)

A Proven Track Record In Fraud Prosecution & Defense

At our firm, we believe our track record speaks for itself. Our attorneys have secured several positive resolutions for clients facing accusations of fraud, including:

  • Fraud Defense – Successfully defended title company president in complex multi-party suit seeking $250,000+ in damages for fraud and other actions. Settled case for less than $6,000 payable in the form of a four-year noninterest-bearing note. Secured client a full release for client.
  • Prosecuted Serial Fraudster Tenants Who Misrepresented Income, Credit and Employment Information, And Concealed Prior Rental History. Represented former landlord against professional tenants in a warrant in debt action. Obtained the full jurisdictional amount in damages ($25,000), attorney’s fees in the amount of $10,000, and costs in favor of client.
  • Fraud Action Dismissed. We represented the seller of real property who was sued by the buyer for fraud in the inducement and seeking $90,000 in damages for allegedly failing to disclose a septic system on the property. We had the fraud counts dismissed.  
  • Disgorgement of $30,000 from Property Management Company. Represented prominent lender in breach of contract and fraud lawsuit concerning unaccounted for management fees and monies related to portfolio of rental properties. Obtained disgorgement of all un-accounted monies from the property manager.
  • $5M+ Fraud, Breach of Contract and Business Conspiracy Lawsuit – Represented high net worth international buyer of prominent Virginia-based university in fraud, breach of contract, specific performance, and business conspiracy lawsuit. After several months of litigation, case was settled favorably.

View our other notable cases to learn more about our other victories in business litigation. Located in Fairfax, Virginia, we are the go-to law firm for high-stakes fraud litigation in Loudoun, Fairfax, Arlington, Prince William and Spotsylvania Counties, Alexandria City and Washington DC. Call our office at 703-652-5506 to learn more about our services, or reach out online to schedule your first consultation.

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