Let’s say that you invest a cool hundred thousand or so into a real estate project and the developer who takes your check deposits that check into his or her personal bank account. The money is not spent to develop anything – but rather to buy a new boat or pay the developer’s mortgage or car payment. Is that fraud? Survey says – maybe. This is more common than you might imagine and I had this call just last week. Did the developer have a duty to tell the investors that the money was going into his or her pockets, and not to build the condos in question? In Idaho and most states, a false statement made to induce a person into taking action – investing money – may be the basis for criminal charges of fraud and a civil fraud case. Every set of circumstances is different, and the answer probably lies in the writings of the parties, but if you have been the victim of this type of scheme, check out your possibilities. Fraud is a crime – as in the "go directly to prison" type – and fraud can also be the basis for a civil remedy.
The Idaho Department of Finance has most recently sued a company that sold investors in Idaho on the development of the Juan Dolio Resort in the Dominican Republic. Forty Idahoans fell for the "investment" which promised fixed rate return on their money, but of course that return and their money went into someone’s pockets. If you invest money into the building of a condo shouldn’t you be able to expect – or insist – that the money actually is used to construct the condo? Absolutely! Anything less – like your money going into the pockets of the developer – is fraud.
In my practice I have clients in criminal and civil cases who are alleged to have committed fraud, and I have clients who are suing other persons in civil cases for fraud. In the criminal setting, fraud is tough to distinguish from other failed business ventures. The cases usually turn on the question of what the person intended.
If you have a civil case alleging fraud you may be able to recover your losses. So if that stock broker did not tell you the truth about the investment, or the real estate developer lied about where that money you invested was going, you may have a case. Give us a call to discuss the facts.