Can You Bring a Lawsuit for Business Fraud in Illinois?
Fraud can have a serious impact on your business and its bottom line. It can cause owners and investors to lose millions, injure the reputation of the company, and devalue the business. Whether the fraud was carried out by another business, a vendor, a business partner, or another party, the ramifications can be long-lasting and substantial. Certain types of fraud might not only be charged as a crime — you may also be able to bring a civil lawsuit for the harm the wrongful actor caused you or the company to suffer.
What Constitutes Business Fraud?
There are many different types of fraud that can arise in business that may lead to legal disputes. Fraud may involve knowingly making false statements, misrepresenting facts, or engaging in a complex scheme to defraud. The misrepresented facts may relate to projections concerning financial investments, the condition of a property being sold, or a party’s intention to pay for goods or services.
Fraud in business can also come in the form of the following:
If you suspect that you or your company has been the victim of business fraud — or if you have been accused of fraudulent conduct — it’s essential to have a diligent attorney by your side to protect your rights and financial interests. Contact the experienced Illinois business law attorneys at Litico Law Group.
- Deceptive trade practices
- Breach of contract
- Breach of warranty
- Fraud in the sale of a business
- Investment fraud
- Conversion
- Misappropriation of funds
- Wire fraud
- Forgery
- False representations
- Real estate or mortgage fraud
It’s important to understand that fraud doesn’t always arise as the result of an overt statement. In Illinois, an intentional omission is treated in the same manner as a knowingly false statement. However, silence itself isn’t enough to constitute an omission that gives rise to fraud. There must have been a duty to speak or some deceptive conduct surrounding the omission.
There is a five-year statute of limitations to commence a claim for common law fraud in Illinois. To prevail in a lawsuit, the fraud must be proven by clear and convincing evidence.
How Is Business Fraud Proven?
To establish that fraud occurred, a plaintiff must plead and prove several elements. Specifically, they must show the following: 1) a false statement of material fact was made; 2) the defendant had knowledge that the statement was false; 3) the defendant had the intent to induce the plaintiff to act; 4) the plaintiff reasonably and justifiably relied on the false statement; 5) the plaintiff suffered damages because of their reliance on the defendant’s statement.
Pursuant to Illinois law, a material misrepresentation must typically be a statement of current or pre-existing facts. A claim for fraud cannot be based on conduct that may occur in the future. However, when a statement relating to an intention to perform certain actions in the future is part of an overall fraudulent scheme, a claim may be raised. In addition, a plaintiff alleging fraud must demonstrate made an affirmatively false statement which contained the misrepresentation — a perceived false implication or inference is not sufficient.
A misrepresentation is considered “material” if the plaintiff would have acted in a different manner if they knew the statement was false. A misrepresentation may also be deemed “material” if the defendant knew the statement was likely to induce the plaintiff into engaging in the conduct, or it contained information a plaintiff would rely upon when deciding whether to act.
Fraudulent concealment is another category of fraud recognized under Illinois law. A defendant has a duty to disclose material facts when they have a fiduciary relationship with the plaintiff — failure to do so can result in their being held liable for fraudulent concealment. A plaintiff may also assert a claim for fraudulent concealment when a defendant failed to disclose a material fact and engaged in deceptive conduct, even when they do not have a duty to disclose.
What Are the Legal Remedies for Business Fraud in Illinois?
The remedies available to a plaintiff for business fraud in Illinois vary, based on the facts and circumstances of the case. For instance, if the fraud involved a contract, a plaintiff may be entitled to rescission of the contract or obtain their damages in connection with the fraud. There are several types of damages a plaintiff who prevails in a claim for fraud may be able to obtain, including compensatory and punitive damages.
Compensatory damages can come in the form of restitution, which is meant to compensate a plaintiff for their out-of-pocket expenses. A plaintiff might also be awarded the difference between what they would have received, absent the fraud, and the value that was actually received when the parties completed the transaction. Punitive damages may also be available in limited cases, including those involving gross fraud, a breach of trust, or malice.
Contact an Experienced Illinois Business Law Attorney
If you suspect that you or your company has been the victim of business fraud — or you’ve been accused of fraudulent conduct — it’s essential to have a diligent business attorney by your side to protect your rights and financial interests. Located in Rolling Meadows, Litico Law Group is dedicated to serving the legal needs of entrepreneurs and small business owners in Illinois. We welcome you to contact us at (847) 307-5942 to schedule a consultation to learn how we can assist you.