Fraud

By: Jeffrey M. Haber Financial exploitation of seniors and vulnerable adults is a significant problem.¹ It is considered by many to be an insidious non-violent form of elder abuse in the United States. While a landmark MetLife study initially estimated that older Americans lose roughly $2.6 to $2.9 billion each year to financial exploitation, more recent research suggests that the cost may be materially higher, potentially exceeding $36 billion annually . These numbers, whet

By: Jeffrey M. Haber As readers of this Blog know, affinity fraud and Ponzi schemes often intersect because each reinforces the weaknesses of the other, creating a powerful and deceptive form of financial exploitation.¹ Affinity fraud is a form of financial deception that exploits the trust and social cohesion within a close‑knit group. These groups may be defined by shared religious beliefs, cultural or ethnic identity, professional affiliations, or community networks. The f

By:  Jeffrey M. Haber Liability for aiding and abetting a fraud is distinct from liability for committing the underlying fraud itself. This theory of liability recognizes that a defendant may substantially contribute to fraudulent misconduct without personally making any misrepresentation/omission or directly deceiving the plaintiff. Thus, instead of requiring proof that the defendant was the maker of a false statement or omission, an aiding‑and‑abetting theory turns on wheth

By:  Jeffrey M. Haber In BH 336 Partners LLC v. Sentinel Real Estate Corp. , 2026 N.Y. Slip Op. 00305 (1st Dept. Jan. 22, 2026), the Appellate Division, First Department, modified an order denying in part a motion to dismiss a complaint containing fraud and fraudulent‑inducement claims arising from Plaintiffs’ purchases of five Manhattan buildings. Plaintiffs alleged that Defendants orchestrated an illegal deregulation scheme that inflated property values through fraudulent i

By:  Jeffrey M. Haber Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b‑5 promulgated thereunder prohibit trading securities on the basis of material nonpublic information through any deceptive device, scheme, or act. Insider trading liability arises under either the classical theory, where corporate insiders owe duties to shareholders, or the misappropriation theory, where those entrusted with confidential information owe duties to the in

By:  Jeffrey M. Haber This Blog has written about Ponzi schemes on numerous occasions. A Ponzi scheme is a type of investment fraud where returns to earlier investors are paid using investment capital from new or existing investors, rather than from legitimate profits earned through the enterprise’s business activities. Ponzi schemes persist by exploiting trust, promising high returns with little risk, and using money from new or existing investors to pay “profits” to earlie

By:  Jeffrey M. Haber It is well settled that a “valid release constitutes a complete bar to an action on a claim which is the subject of the release.” “ release that, by its terms, extinguishes liability on any and all claims arising in connection with specified matters is deemed to encompass claims of fraud relating to those matters, even if the release does not specifically refer to fraud and was not granted in settlement of an actually asserted fraud claim.” A party may

By:  Jeffrey M. Haber In today’s Fraud Notes, we examine two cases involving different issues impacting a fraud claim. In RSD857, LLC v. Wright , 2025 N.Y. Slip Op. 06833 (1st Dept. Dec. 09, 2025), we examine the actionability of appraisals. In Olshan Frome Wolosky, LLP v. Kestenbaum , 2025 N.Y. Slip Op. 06816 (Dec. 09, 2025), we examine the duplication doctrine. RSD857 involved allegations that one of the defendants orchestrated a foreclosure rescue scheme to acquire anothe

By:  Jeffrey M. Haber In Brearly v. Weis Mkts., Inc. , 2025 N.Y. Slip Op. 34485(U) (Sup. Ct., Broome County Oct. 31, 2025), the motion court was asked to consider the viability of claims for violations of General Business Law (“GBL”) §§ 349 and 350, which prohibit false advertising and deceptive acts or practices in the conduct of any business, trade, or commerce. As discussed below, the motion court held that plaintiff failed to satisfy the elements of the claims asserted.

By:  Jeffrey M. Haber In Sire Spirits, LLC v. Beam Suntory, Inc. , 2025 N.Y. Slip Op. 06297 (1st Dept. Nov. 18, 2025), the Appellate Division, First Department affirmed the denial of a motion to amend a complaint seeking damages for “diminution of enterprise value” due to the alleged fraud. Under CPLR 3025(b), leave to amend is freely given unless the amendment is prejudicial or patently meritless. However, New York’s fraud damages rule limits recovery to out-of-pocket losses

By:  Jeffrey M. Haber In 2019, New York enacted the Uniform Voidable Transactions Act, which repealed and replaced certain provisions of the Debtor and Creditor Law (“DCL”) relating to fraudulent conveyances, which became effective April 4, 2020. Transfers made after April 4, 2020 are governed by the current version of the DCL. The DCL, as amended, permits creditors to void actual and constructive fraudulent transfers. A creditor may void a debtor’s constructive fraudulent t

By:  Jeffrey M. Haber As readers of this Blog know, a “cause of action to recover damages for fraudulent misrepresentation requires a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury.” When addressing the element of justifiable reliance, the “general rule” is th

By:  Jeffrey M. Haber In today’s Fraud Notes, we examine two cases involving principles familiar to readers of this Blog: the duplication doctrine and the requirement that plaintiffs plead sufficient facts to satisfy each element of a fraud claim. In Emissions Reduction Corp. v. mCloud Tech. (USA) Inc. , 2025 N.Y. Slip Op. 05457 (1st Dept. Oct. 7, 2025) ( here ),  the Appellate Division, First Department affirmed the dismissal of plaintiff’s fraud claim on the grounds of dupl

By:   Jeffrey M. Haber On September 25, 2025, the Securities and Exchange Commission (“SEC”) announced ( here ) that it charged the co-founders of Retail Ecommerce Ventures LLC (“REV”), and REV’s Chief Operating Officer (collectively, “Defendants”), with conducting a series of fraudulent securities offerings, misusing investor funds, and making Ponzi-like payments to investors. According to the SEC’s  complaint , REV’s primary business was purchasing distressed retail compani

By:  Jeffrey M. Haber As readers of this Blog know, we have written about many types of fraud over the years, such as affinity fraud, common law fraud, fraud in the inducement, fraudulent concealment, and securities fraud. Another type of fraud concerns fraud in the execution or fraud in the factum. Three years ago, we examined Paredes v. Vorhand , a case involving this legal principle ( here ). Since that time, we have not examined any cases involving fraud in the executio

By:  Jeffrey M. Haber In CJS Indus. Inc. v. Dolce , 2025 N.Y. Slip Op. 05037 (1st Dept. Sept. 23, 2025 ( here ), plaintiff sued RS Custom Woodworking and its representatives for fraud after winning an arbitration award. Plaintiff alleged that defendants conspired to avoid payment by incorporating a new entity with a similar name between the initial and final arbitration awards. Plaintiff claimed the incorporation was part of a deliberate scheme to mislead and evade enforcemen

By:  Jeffrey M. Haber In today’s fraud notes, we examine two cases: K.M. v. Ursuline School of New Rochelle , 2025 N.Y. Slip Op. 04643 (2d Dept. Aug. 13, 2025) ( here ), and Three C, LLC v. City Settlement Serv., Inc. , 2025 N.Y. Slip Op. 04678 (Aug. 13, 2025) ( here ). Ursuline involved the failure to satisfy the elements of a fraud claim. To state a claim for fraud, a plaintiff must allege “a misrepresentation or a material omission of fact which was false and known to be

By: Jeffrey M. Haber This Blog has written frequently about the substance and scope of general releases. In New York, “a valid release constitutes a complete bar to an action on a claim which is the subject of the release.” If “the language of a release is clear and unambiguous, the signing of a release is a ‘jural act’ binding on the parties.” For this reason, “ release should never be converted into a starting point for … litigation except under circumstances and under

By:  Jeffrey M. Haber In Wilburger v. Ava Labs, Inc. , 2025 N.Y. Slip Op. 51072(U) (Sup. Ct., N.Y. County July 3, 2025) ( here ), plaintiff sued defendant for breach of contract, unjust enrichment, and fraudulent inducement related to unpaid compensation for services rendered under an Independent Contractor Agreement. Plaintiff alleged that he worked over 2,300 hours between 2019 and 2023, including tasks beyond the scope of the agreement, and was promised payment in AVAX cry

By:   Jeffrey M. Haber Under New York law, an action based upon fraud must be commenced within six years of the date the cause of action accrued, or within two years of the time the plaintiff discovered or could have discovered the fraud with reasonable diligence, whichever is greater. The cause of action accrues when “every element of the claim, including injury, can truthfully be alleged”, “even though the injured party may be ignorant of the existence of the wrong or inj