The Watkins Firm represents clients in San Diego and California business fraud litigation.  This includes any action such as unfair business practices that include an allegation of  fraud and purposeful deception.

Key Takeaways About Business Fraud:

1. Business Fraud in California usually involves some form of misrepresentation, nondisclosure, known false statements or documents, intent to create reliance and this reliance compelled a harmful action resulting in damages to another party.
2. Business fraud is often alleged in cases involving misrepresentation, concealment, promissory fraud, inducement or breach of fiduciary duty.
3. Fraud cases in California open the door to punitive damages including an award of attorneys fees.

Fraud is a type of business dispute which goes far beyond a normal breach of contract or failure to perform issue.  Business fraud cases involve a transaction or relationship where there have been material false statements presented or purposeful deceit or omissions of material facts by one side which the other party relied upon in order to enter into the transaction or relationship.  Promises may have been made with no intention or ability to fulfill.  Misrepresentation(s) or outright false or misleading information may have been employed to deceive or induce a party to take an action or make a business investment.

These cases must be brought within a “reasonable timeframe” from when the fraudulent activity “should have been discovered” by any reasonable person.

A Few Examples of Business Fraud

What are a few examples of business-related fraud that can lead to California business fraud litigation?  Theft and misappropriation are two of the most common forms of business fraud.  Misappropriation is generally the misuse of company assets or funds for personal gain. This can include theft of inventory or cash theft.  Payroll issues including falsified timesheets and establishing fake employees are another common example of business fraud.  Misstatements on financial statements such as manipulation of the value of assets to secure a loan.  The remedy for business fraud is usually in the form of financial damages but it can also involve a criminal component.

Fraud Is Challenging to Prove – This is Why You Need Experienced, Proven Attorneys

Fraud is a much more difficult legal standard to prove.  The experienced business litigation attorneys at the Watkins Firm bring more than 40 years of experience and proven track record of success in disputes, mediations, arbitration and trials relating to business disputes involving allegations of fraud here in San Diego and throughout California.  We will thoroughly investigate and analyze your case and when necessary, work with forensic accountants and other experts to uncover, document and prove our case.  Fraud exposes the defendant to extensive financial damages as well as punitive damages resulting in substantial verdicts or settlements in these cases.

San Diego Business Litigation for Fraud or Deception

There are too many potential ways for business fraud to occur to document here.  The common element between all of these cases and the establishment of fraud itself is dishonest action or lying which has led to “harm” for another party to the transaction or relationship.  Fraud can unfortunately be found in San Diego real estate business dealings, mergers and acquisitions, business partnerships including LLCs and corporations, as well as investment schemes and purported “business” opportunities.

Pro-Tip: “you should understand that the first thing you need to think about or ask, if you think that business fraud has occurred in your business or in your dealings, is have you lost money? Or have you lost the opportunity to earn or make money? And those things are not simple questions. Something may feel wrong, something may seem wrong, or you just may know it’s a gut instinct before you’ll go right to the law, go right to your damages. And in business fraud, we have a saying, if it’s off a penny, it’s off a million. If it doesn’t add up to the penny, there’s a reason.

And either it’s somebody added it up wrong or somebody’s ripping you off. And you should look into that and then listen to the rest of our podcast episode 32 – Business Fraud, and you’ll see all the laws that we think about when I think of business fraud. And before we dive into the specifics, this isn’t an issue. You want to investigate yourself, right? This is something you want someone from the outside taking a look at. First, you want to look right away at your own accounting, your business records as soon as you can. And then if you sense there’s anything wrong, then you know you have damages, you should reach out because many times those damages aren’t even close to what you think.

So, what is business fraud? 

This might be business to business fraud, unfair competition, false advertising practices, and just general common law fraud between businesses. Business to business fraud is a big topic. It happens. You’re in the marketplace, you are doing great, and all of a sudden no one’s coming to you anymore. And then you find out that the number one competitor has taken some of the elements of your website are saying bad things about you, or they’re doing a lost leader advertising bait and switch on the price. And they’re grabbing all your customers, but you have the best product and the best service. They are defrauding you out of your rightful profits. And you should, I’ll say it again, if for unknown reasons, all of a sudden you’re not making the money you used to, you might be the victim of fraud and don’t know it. Go see a lawyer who knows this stuff. We’ll spot it.

Business partner fraud. This never happens until you make money. When there’s no money. I rarely, in fact, I don’t know if I’ve ever heard of a case with business partner fraud until the business starts doing well. And then it’s so common. It’s crazy. People with all the greatest virtues you’ve ever seen in your life, you’ve known your whole life. All of a sudden your company expanding, doing well and money disappears. It’s just so tempting. It’s like gold fever. So that’s also includes shareholder fraud, officer fraud, director fraud, usurpation. That’s a fancy word for taking the company or corporate assets without any fair compensation or in secret.

Then there is sale of business fraud. We do a lot of that. We sell hundreds of millions of dollars in companies each year. We merge them, we create partnership agreements for them. And we see the hardest part is when you buy a business, you want to know you’re getting what you paid for. And when you sell a business, you want to make sure you get the money, the price you agreed to, because these things are complicated. And you also don’t want to get sued later for inaccurate disclosures, some contingent liability.” – Dan Watkins, Founding Partner

If you are concerned about what appear to be the fraudulent, deceitful or dishonest business or investment dealings of an individual or company we invite you to review our podcast Episode 32 – Business Fraud as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today. Learn about our unique approach to litigation and our proven success at trial and in cases involving California business fraud litigation.  We will work to hold the other party accountable and recover the financial and punitive damages in San Diego and California business litigation for fraud and deceit.