By FindLaw Staff | Legally reviewed by John Mascolo, Esq. | Last reviewed November 04, 2023
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Fraud and financial crimes represent a form of criminal activity with the ultimate aim of theft. These crimes involve deceit and false statements. Fraud crimes may include a one-time abuse of trust or a large-scale scam. Unlike common theft or robbery, they do not occur in the open.
In today's complex economy, fraud and financial crimes can take many forms. The reliance on computers and the internet provides fertile ground for new fraud schemes. Read on to learn about the more common forms of financial crimes, including credit card fraud, forgery, identity theft, embezzlement, and more.
Almost every American household has at least one credit/debit card. More and more people pay with plastic rather than cash. As a result, credit/debit card fraud remains high. Consumers need to use caution and review their bills for any unusual charges.
Credit and debit card fraud occurs when a criminal has the intent and the means to fraudulently obtain money, goods, or services by using the credit/debit card of someone who has not authorized its use. It can also involve someone using their own credit or debit card, knowing that it has been revoked or expired.
One common defrauding tool of the credit/debit card thief is the credit card skimmer. These devices sometimes appear as a false shell placed over a true credit/debit card scanner. They are common at gas stations, ATMs, and other checkouts. Credit card skimmers steal information from the magnetic stripe on the card.
Before you swipe or insert your card, take a good look at the scanner to make sure nothing seems off about it. Look at the next one over to see if it looks the same. Using a contactless payment option is another good option.
The crime of forgery occurs when intending to defraud, a person executes, alters, or publishes a writing without the owner's knowledge or consent. Forgery can also happen when a person creates a document or other writing and holds it out to be the work of someone else for financial gain. A "writing" can include credit cards, checks, bank drafts, stock certificates, bonds, wills, and deeds. When someone forges money, it becomes the federal crime of counterfeiting.
In most circumstances, forgery is a felony offense. If convicted, an offender may face a prison sentence. Some states authorize a separate crime for forging identification cards. In Ohio, that offense is a first-degree misdemeanor.
Today, many financial fraud crimes begin with identity theft. It may start when someone hacks data at your credit card company or financial institution. Maybe someone rifled through your trash for bank statements or tax information. A thief looks for key identifying information such as your date of birth, Social Security number, driver's license number, or credit card numbers.
Once a criminal has your identity, they pretend to be you. They purchase expensive items on your credit. They take out new credit cards in your name. In some cases, they try to access your bank accounts. Identity theft, like most financial offenses, is a crime under both federal and state law.
The crime of wire fraud occurs when someone voluntarily and intentionally uses an interstate communications device (such as a smartphone or the internet) as a part of any scheme to defraud another of property or anything else of value.
For example, Bart concocts a scheme to sell real estate he does not own to Ralph. Bart communicates with Ralph all the details of this "great offer" by sending emails via his smartphone. Whether or not Bart succeeds in scamming Ralph out of his money, he likely committed wire fraud. Wire fraud is a federal crime that can result in substantial time in federal prison.
Wire fraud draws the interest of federal investigators because it uses tools of interstate commerce to complete the crime. Other types of fraud also operate in this way. For example, mail fraud uses the postal service. It also becomes a crime that affects interstate commerce. As a result, the criminal investigation into these offenses may start with the Federal Bureau of Investigation (FBI) or the Federal Trade Commission (FTC).
Insurance fraud is stealing. Simply put, insurance fraud equates to lying to get more money from an insurance company. Insurance fraud can occur with auto insurance, home insurance, or any other kind of insurance.
There are two types of insurance fraud: soft and hard fraud. An example of soft fraud is getting into a motorcycle accident and claiming your injuries are worse than they are for financial gain. An example of hard fraud would be setting a fire at your pizza shop so that you can claim the insurance money. Both are crimes.
The most common example of embezzlement that most people recall is when an employee commits a theft from their employer. More broadly, embezzlement is a theft crime where the offender holds a position of trust. They may have access to company funds for legitimate reasons. The offender uses their trusted status to commit the crime for financial or other gain. Most crimes of this nature occur in the private sector. Yet, an offense can occur against a financial institution or a government entity as well.
If an offender's criminal acts stray into bank fraud or financial transactions, the investigation may bring together several law enforcement agencies, both state and federal.
Being charged with fraud or a financial crime is a serious situation. If you believe that law enforcement officials suspect you of such crimes, you will want to seek out legal advice. An experienced criminal defense attorney can review your situation and identify a defense strategy that can lead to a fair result.
Get tailored advice and ask your legal questions. Many attorneys offer free consultations.