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Creditors' Rights Litigation in State and Federal Courts
Fraud Litigation
Fraud Litigation
Unsuspecting creditors can often lose substantial sums of money in fraudulent investment schemes. In a typical fact pattern, a fraud artist will offer unsuspecting parties a “once in a lifetime” investment opportunity, promising a substantial guaranteed return.
Only after the creditor invests money and the time for repayment passes, does the creditor learn that the “once in a lifetime” investment opportunity was a fraudulent scheme all along.
At that point, the creditor often needs to assert legal action in an attempt to obtain a judgment against the debtor arising from this fact pattern.
The Elements of a Fraud Claim
In order to prove a fraud claim, the creditor must first demonstrate that the debtor made a false representation to the creditor. In the case of a fraudulent investment scheme, this element is met where the debtor promises the creditor a guaranteed return on its investment.
The creditor must also prove that the debtor acted with knowledge of the falsity of his assertions as well as intent to defraud. For these purposes, knowledge and intent are often proven by the same circumstantial evidence and inferences.
These elements can be proven from a debtor’s hasty repudiation of a promise or from the debtor’s repeated assurances that payments are coming after it has become clear that payments will never be made.
The creditor must prove furthermore, that the creditor actually and reasonably relied on the debtor’s promises. To establish actual reliance, the creditor must demonstrate that the debtor’s promises caused the debtor to surrender money. To establish justifiable reliance, the creditor must demonstrate that the creditor acted reasonably in providing the money in question to the debtor.
The creditor often makes such a demonstration where the debtor provided the creditor with purported proof that the investment in question was valid. Finally, a creditor must prove that the creditor suffered damages as a result of the debtor’s conduct.
A creditor establishes as much by showing that the creditor relinquished and lost money due to the debtor’s statements. Where the creditor is able to prove all of these elements, the creditor may be able to obtain a judgment against the debtor as a result of the debtor’s fraud.
Punitive Damages
When a creditor asserts a fraud claim against a debtor, the creditor may be entitled to punitive damages. Punitive damages are available where the debtor defendant has acted with fraud oppression or malice. When a creditor obtains punitive damages, the creditor may be awarded more than its actual losses in connection with its claims.
If the Debtor Defaults the Creditor Can Obtain a Default Judgment
If the debtor defendant ignores a fraud lawsuit or any other lawsuit, a default judgment may be entered against the debtor defendant. In other words, if the debtor defendant ignores a lawsuit, the creditor may be able to prevail in the lawsuit by means of a relatively straightforward uncontested process whereby the creditor plaintiff can obtain a default judgment against the debtor defendant.
After the creditor plaintiff obtains a default judgment against a debtor defendant, the creditor plaintiff may utilize all of the remedies available to a judgment creditor to collect on a default judgment.
Kluewer Law P.C. has successfully obtained judgments on behalf of creditor plaintiffs who have lost money in fraudulent investment schemes
Kluewer Law P.C.
Fraud Litigation Attorney
Los Angeles, California, San Francisco, California, Phoenix, Arizona
Kluewer Law P.C. has successfully obtained substantial judgments on behalf of plaintiff creditors in fraud litigations.
Kluewer Law P.C. represents plaintiff creditors from all over the country and the world in fraud litigations in California and Arizona.
Kluewer Law P.C. is headquartered in Los Angeles, California and has locations in San Francisco, California and Phoenix, Arizona.