Broward Plaintiff’s Lawyer: What is Fraud?
Fraud is a term that people use to describe deception, but what does it mean when a Fort Lauderdale personal injury attorney uses the term? The issue is at the forefront of a Palm Beach County pyramid scheme that collapsed in August. From his office in Lake Worth, George Theodule allegedly defrauded thousands of local Haitian-Americans. The Miami office of the Securities and Exchange Commission is investigating the situation, but no criminal charges have been filed by the U.S. Attorney at this time.
According to the lawsuit filed in federal court by the plaintiffs and their injury attorneys, Theodule took money from investors, promising that he would double it in a short period of time. The SEC has said that Theodule lost $18 million just in 2007 and that he merely repaid earlier investors with the new money coming from more current investors in the scheme – none of the money was actually ever traded or otherwise generating profits. Initially, he did repay the investors. One Haitian-American man apparently invested $25,000 initially and was so delighted with the $50,000 check he received three months later that he sent Theodule another $100,000. The man has never been repaid.
A class action suit is pending against Theodule, who has relocated to Georgia. The complaint paints a dark picture of the man who seems to have run a fraudulent pyramid scheme based on false trust, saying, “Theodule used his Haitian background, his self-proclaimed status as a 'man of God,' and his purported interest in helping to build wealth for his fellow Haitians to solicit funds from members of the Haitian community.” Theodule appears to have used the millions generated to indulge in extravagant personal expenditures, such as expensive cars, cash, and to misappropriate nearly $4 million into his own bank accounts. Fort Lauderdale personal injury lawyers Alitowski and Moore condemn preying upon local citizens in order to defraud them.
Fraud is considered an economic tort, meaning that the recovery is due for the financial loss. Specifically, fraud is defined as deception intended to achieve a personal gain or to hurt another person. Most commonly, fraud takes its form similar to the Theodule case: Person A is tricked into giving her money to Person B because A is told it is being used differently than it actually is. For instance, if B pocketed the money but had told A it was to invest for A’s benefit or to give to charity, B would have engaged in a fraudulent transaction. A would be able to file a civil suit to recover the money she lost to B.
Similarly, if the allegations contained in the lawsuit against Theodule are accurate, he will be liable to his investors. If there is sufficient evidence, the court will find him liable for the losses of his “investors” because he engaged in fraud, deceiving his Haitian-American backers into believing that the was investing their funds in a project with a return. The transaction would not have been fraudulent (although it would have been misrepresentation) if he had just lied, but the fact that he apparently pocketed substantial sums of money for his personal use makes his actions more serious.
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