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.

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.

In Lopez v. O’Sullivan, 2025 N.Y. Slip Op. 32178(U) (Sup. Ct., Suffolk County) (here), the court declined to dismiss fraud claims, among others, finding that plaintiff sufficiently stated a claim for such relief against the defendants. The court determined that plaintiff provided detailed allegations of misrepresentations made by defendants, which induced him to enter into transactions that ultimately deprived him of ownership of his property.

In One River Run Acquisition, LLC v. Milde, 2025 N.Y. Slip Op. 03653 (1st Dept. June 17, 2025) (here), the Appellate Division, First Department reinstated counterclaims for fraud and fraudulent transfers after they had been dismissed at the motion court level.

In Skyview Capital, LLC v. Conduent Business Servs., LLC, 2025 N.Y. Slip Op. 03291 (1st Dept. June 03, 2025), the Appellate Division, First Department addressed various issues concerning fraud causes of action with which readers of this Blog are familiar: the duplication doctrine, justifiable reliance and disclaimer clauses

In today’s Fraud Notes, we examine Yudkin v. Evergreen Terrace 888 Corp., 2025 NY Slip Op 03223 (2d Dept. May 28, 2025), and Lapin v. Verner, 2025 NY Slip Op 03184 (2d Dept. May 28, 2025). Yudkin involved the statute of limitations for fraud and the continuing wrong doctrine. Lapin involved the failure to plead the elements of a fraud claim.

Today, we examine an enforcement action brought by the SEC involving a Ponzi-like scheme that targeted retired senior citizens that the defendant met through his church community

A claim for fraud requires “a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages.” In First Trinity Life Ins. Co. v. Advance Funding LLC, 2025 N.Y. Slip Op. 03133 (1st Dept. May 22, 2025), discussed below, knowledge of falsity (i.e., scienter) and reliance were the elements at issue.

The allure of guaranteed profits from sophisticated crypto asset and foreign exchange trading served as the underlying predicate for the claims asserted by the Securities and Exchange Commission (“SEC”) against Ramil Palafox (“Defendant”), the founder of Praetorian Group International Corporation (“PGI Global”), a now-defunct entity he controlled, in S.E.C. v. Palafox, Case 1:25-cv-00681 (E.D. Va. 2025). The case marks the first crypto enforcement action under the new Chairma

A Ponzi scheme is intended to give investors the false impression that their investment is profitable. In a Ponzi scheme, the fraudster/promoter pays early investors with money that the investor believes is the return on his/her/its investment. In actuality, the money used to pay the investor comes from the investor’s own principal investment dollars or the pooled investment dollars of subsequent investors.

In Tiburcio v. Grant Ave. Bronx Realty Corp., 2025 N.Y. Slip Op. 02669 (1st Dept. May 01, 2025) (here), the Appellate Division, First Department was asked to decide whether the statute of limitations expired on all causes of action alleged by the plaintiff or whether the continuing wrong doctrine applied to toll the applicable limitations periods. As discussed below, the Court held that the continuing wrong doctrine to did not apply to save the complaint from dismissal.

By: Jeffrey M. Haber On July 8, 2019, this Blog wrote an article titled, “First Department Unanimously Affirms Denial of Motion to Compel Arbitration and Motion to Dismiss Fraud Claims” ( here ). The article examined the decision of the Appellate Division, First Department in BML Properties Ltd. v. China Construction America Inc. , 2019 N.Y. Slip Op. 05339 (1st Dept. July 2, 2019), in which the Court (as the title states) affirmed the denial of a motion to compel arbitration

By: Jeffrey M. Haber On April 3, 2025, the Appellate Division, First Department considered an appeal of the dismissal of a complaint involving the disputed authenticity of a painting (the “Work”) by the deceased artist Cy Twombly (“Twombly”). In Grosso v. Cy Twombly Found. , 2025 N.Y. Slip Op. 02007 (Apr. 03, 2025) ( here ), the Court unanimously affirmed the motion court’s dismissal of a complaint brought by the child of a parent who purchased works of art, including the Wor

By: Jeffrey M. Haber 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 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.” The claim must pleaded with particularity. Conclusory allegations will not suffice. Neither will allegations based on information and

By: Jeffrey M. Haber In Crawford v. Integrated Asset Mgt. Servs., LLC , 2025 N.Y. Slip Op. 01352 (2d Dept. Mar. 12, 2025) ( here ), the Appellate Division, Second Department reversed the denial of the defendants’ motion to dismiss the plaintiffs’ fraud-based claims, among others, involving a home improvement project in Brooklyn, N.Y., on the grounds of duplication with the plaintiff’s breach of contract claims. Crawford is notable because the Court held that the fraud damage

By: Jeffrey M. Haber In Imperium Blue Acquisition Partners, LLC v. Marathon Asset Mgt., L.P. , 2025 N.Y. Slip Op. 01317 (1st Dept. Mar. 11, 2025) ( here ), the Appellate Division, First Department was asked to consider whether, among other things, plaintiffs satisfied the justifiable reliance element of a fraud claim. As discussed below, the Court held that plaintiffs failed to do so. In Essential Home Remodeling, Inc. v. Rossin , 2025 N.Y. Slip Op. 01314 (1st Dept. Mar. 11,

By: Jeffrey M. Haber “The elements of a cause of action for fraud require a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by plaintiff and damages. A claim rooted in fraud must be pleaded with the requisite particularity under CPLR 3016(b).” The failure to satisfy each element will result in dismissal of the claim. As this Blog has noted in several articles, many cases involving an alleged fraud often rise

By: Jeffrey M. Haber Pre-IPO investing involves buying a stake in a company before the company makes its initial public offering of securities. Many stock promoters invite potential investors to invest in a pre-IPO offering by providing an opportunity to make high returns in a start-up enterprise on the ground floor. While investing at the pre-IPO stage can be rewarding, it involves risk for investors, including the risk of complete loss – i.e., that the investor can lose his

By: Jeffrey M. Haber As readers of this Blog know, to recover damages for fraud, a plaintiff must allege “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.” The element that most often spells failure for a plaintiff is reasonable reliance – that is, reliance on

By: Jeffrey M. Haber We have 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 rules