1

I saw video where there is evidence beyond any doubt (reasonable or not) that a company is committing fraud

https://www.youtube.com/watch?v=-avpx8UTakI

How would US laws handles this?

Is it legal to document or record people against their consent? Is the owner sent to jail because of this video? What happens next?

2

It will depend on the actual state.

But generally, if you know someone is about to commit a crime, you can record them (even if you're in a two party/all party recording state).

In any case, the video doesn't prove that the owner committed fraud, only that his employees committed fraud. You could throw those people in jail, but since the business seems to have the money, you could just give the business a very large fine.

  • Is this actually a crime in US? Does biz actually do this? – Sharen Eayrs Aug 19 '18 at 15:39
  • Yes, fraud is a crime in the US. – Stephan Branczyk Aug 19 '18 at 17:04
2

How would US laws handles this?

It depends on each state's legislature, as the other answer mentions. In Michigan, one of the applicable statutes (or perhaps the only applicable statute) is MCL 445.903. The fraud reported in the video would fit items including [but not limited to]:

(j) Representing that a part, replacement, or repair service is needed when it is not.

(q) Representing or implying that the subject of a consumer transaction will be provided promptly, or at a specified time, or within a reasonable time, if the merchant knows or has reason to know it will not be so provided.

(bb) Making a representation of fact or statement of fact material to the transaction such that a person reasonably believes the represented or suggested state of affairs to be other than it actually is.

MCL 445.911 states that when such deceptive practices occur, a person "may bring an action to recover actual damages [...] together with reasonable attorneys' fees".

Other legislatures seem more up-to-speed (at least in appearance) regarding fraud. For instance, New Jersey's Consumer Fraud Act entitles a plaintiff to the award of treble damages, and 'the court shall also award reasonable attorneys' fees, filing fees and reasonable costs of suit". See Bosland v. Warnock Dodge, Inc., 964 A.2d 741, 747-748 (2009) (citing N.J.S.A. 56:8-19).

Because of the doctrine of respondeat superior, the business owner might be responsible for the damages. That is especially true if preponderance of the evidence indicates that he instructed his staff to engage in those fraudulent practices.

  • So, it's not a crime to do so. The owners won't go to jail for it? – Sharen Eayrs Aug 19 '18 at 15:38
  • So the case would be civil. If most people do not bother suing, then the biz is off the hook? – Sharen Eayrs Aug 19 '18 at 15:41
  • @SharenEayrs Not necessarily. The Bosland opinion (also at 747) reflects that initially only the Attorney General was allowed bring action against a company that violates the CFA. In 1971, the CFA was amended to allow private parties to bring action. The Bosland opinion in paragraph "There are distinctions [...]" underlines that a private party --unlike the Attorney General-- must prove that (1) he suffered an ascertainable loss, and (2) that it "is attributable to the conduct that the CFA seeks to punish". See also item (2) of MCL 445.903 (making reference to the attorney general). – Iñaki Viggers Aug 19 '18 at 18:43
  • @SharenEayrs It is a combination of one or more of the following: (1) The subject reported in the video is in Canada (that is, outside the jurisdiction of any court of the USA); (2) consumers might neglect or hesitate to bring up to the Attorney General's attention any instances of similar fraud by U.S. businesses; (3) the A.G. might be prioritizing prosecution of worse offenses; (4) judicial proceedings against fraudulent entities might be taking place and we just don't know; (5) fraudulent entities might enjoy the favor of corrupt judges (as there is so much judicial corruption in the U.S.). – Iñaki Viggers Aug 23 '18 at 10:47
  • Can this be happening in USA? – Sharen Eayrs Aug 23 '18 at 10:59

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