My Small Business Was Defrauded – Now What?

where-s-the-money-gone-1513359Fraud victims often feel embarrassed, humiliated and helpless once they realize that they have been victimized. Business, internet and other fraud schemes are so pervasive that the FBI has outlined and notified the public of  four categories of fraud schemes, each of which may target a business as well as an individual, as (1) Common Fraud Scams, (2) Investment Related Scams, (3) Internet Scams, (4) Senior Citizen Targeted Scams.

From a legal standpoint, a  fraud occurs in Florida when: (1) a person makes a false statement regarding a material fact; (2) that person knew or should have known that the representation was false; (3)  that person intended that the representation induce the other party to act on it; and (4) the other party suffered damages in justifiable reliance on the representation. Jackson v. Shakespeare Found, Inc., 108 So.3d 587, 595 (Fla. 2013).  Small businesses may be defrauded by vendors, suppliers, creditors, customers, employees and others.  One of the most common and devastating sources of small business fraud in Florida occurs between and among business partners.

If you or your business was a victim of fraud, there may be an opportunity to recover damages from the offending party.  In Florida, an injured party may recover the “out-of-pocket” loss or the “benefit of the bargain” loss in a fraud action. Minotty v. Baudo, 42 So.3d 824 (Fla. 4th DCA 2010).  Out-of-pocket costs relate to the amount of money lost by the plaintiff; benefit-of-the-bargain damages relate to the amount of money that the plaintiff would have received if the fraudulently promised goods or services had been delivered.  The recovery provided should be the one more likely to fully compensate the injured party. Morgan Stanley & Co. Inc. v. Coleman (Parent) Holdings, Inc., 955 So.2d 1124 (Fla 4th DCA 2007).

Furthermore, if you or your business is being repeatedly injured or is suffering ongoing loss of business, reputation or other damages  as a result of someone’s fraudulent misrepresentations, you may be able to obtain a court-ordered injunction to prevent the party from continuing to injure you.  Often times, it is the outcome of an initial temporary injunction hearing that is the most significant step in protecting the interests of a business.

We regularly pursue and defend business fraud cases in Central Florida.  If you or your business has been the victim of or accused of fraud, please contact Brick Business Law, P.A. for a consultation with an attorney regarding your legal rights.