Who Is Held Responsible for Invoice Fraud?
Invoice fraud is a type of expense fraud that involves sending fake or inflated invoices to a business. Perpetrators may intentionally invoice for more than the correct amount, prompting companies to overpay, or they may invoice for goods or services the company never received. This crime may also involve double invoicing – sending duplicate invoices for the same products or services.
How Is Invoice Fraud Detected?
Various signs can tip companies off to invoice fraud, for example:
- No documents to support receipt of goods or services: If no purchase order or receiving report can be located to match the invoice, chances are that the products were never received, or the services were never performed, and the invoice is fake.
- Purchase orders and other paperwork: When the charges on an invoice are higher than the amount indicated on supporting paperwork, it may suggest an inflated invoice.
- More than one invoice for the same goods or services: Duplicate invoices with matching invoice numbers, purchase order numbers, dates, and amounts are a clear sign that an invoice was sent more than once.
What Charges Could a Person Be Facing for Invoice Fraud?
In California, a person commits fraud who uses deception or deceit to commit an act that causes harm or loss to another person and/or results in an undeserved or unfair benefit for the perpetrator. Like many fraud crimes, invoice fraud is driven by the motive of financial gain.
Some state fraud crimes are wobblers, meaning they can be charged as misdemeanors or felonies, at the discretion of the prosecution, depending on the defendant’s criminal history and the facts of the case. Others are automatic felonies. White collar fraud offenses may be punishable by jail or prison sentences and high fines. Other penalties may include suspension or revocation of a professional license and/or seizure of money or property involved in the fraudulent activity.
Who Is Most Often Accused of Invoice Fraud?
Generally, the person who commits invoice fraud is liable for his or her actions. However, if someone else ordered the fraudulent invoicing, that person may also be held criminally liable. In addition, due diligence is expected from companies. They risk legal consequences if they fail to ensure their employees are not sending out fraudulent invoices. Invoice fraud may be committed by:
- Hackers doing invoice re-direction: This involves sending fraudulent emails claiming to be from an existing supplier and advising of new account details for payment. When a legitimate invoice is received and payment is made, it goes to the new fraudulent account instead of the vendor.
- Vendors colluding with employees to get fake invoices through the accounts payable process
- Employees (usually in accounts payable) who divert payment to legitimate vendors to different bank accounts
What Are the Legal Defenses Against Accusations of Invoice Fraud?
If you are facing charges related to invoice fraud, it is in your best interests to speak with an experienced Los Angeles criminal defense lawyer as soon as possible. The defenses your attorney will raise will depend on the circumstances of your case. Common defenses against fraud charges include the following:
- Mistaken identity: It was not you who committed the criminal act.
- Entrapment: You were lured or coerced into committing a crime by the police.
- No fraudulent intent: If you did not intend to commit fraud, you are not guilty of committing fraud.
- Inadmissible evidence: If evidence against you was obtained illegally, it may be ruled inadmissible in court.
Call Werksman Jackson & Quinn LLP at (213) 688-0460 for skilled criminal defense against invoice fraud charges. Our legal team has an in-depth understanding of how prosecutors litigate white collar crime cases.