5 tips for handing a lawsuit for fraud as a new business owner

By Brooke Chaplan

Being sued is one of those potential risks that you take on as a business owner. While you may know that you do everything you can to run your business with integrity, it is still possible to be accused of fraud. This event could affect your reputation, company, and future opportunities. Being sued, especially for fraud, is naturally stressful, but you can use these tips to make sure that you come out on top. Here are five tips for handling a lawsuit for fraud as a new business owner.

Avoid direct contact with your accuser

Your first instinct may be to try to settle this on a personal level with your accuser. This is especially common when the person accusing you of fraud is someone you know such as another business owner. However, this can backfire if you make the wrong move. Take time to talk to your lawyer first and work through the proper channels. It’s better to move carefully and avoid getting caught up in the heat of the moment. Avoid direct contact with your accuser and remain calm and collected during the process. If you absolutely want to talk it out before the case is taken to court, do so through an intermediary.

Be careful what you say to others

Be circumspect and careful in what you let pass your lips regarding the situation. Business owners may also want to speak out to protect their reputation. Speaking to the news, your employees, and other parties can sometimes lead to your words being taken the wrong way. If possible, avoid speaking about the case to anyone but the people who are working to preserve your reputation. While you may initially resist this idea, worried that silence indicates guilt, it’s better to say nothing than to say the wrong thing. Be careful what you say to others and avoid perjuring yourself.

Stay out of jail

It is not uncommon for business owners to be arrested during a fraud charge. Going to jail is embarrassing, upsetting, and makes you look guilty. You also have little time available to work on your defense when you are in jail. If you’ve been arrested, explore your options for getting free so that you can begin working on proving your innocence. You can use this link to find a bail bond service, or you can get references from your local authorities.

Work with a legal professional

A competent attorney can prove that you did not do the things that someone accuses you of doing. They can work with you to identify exactly what the accusations are along with how your business has upheld the law. They can also walk you through what to expect in court and help you to maintain a trustworthy appearance if you have to go to trial.

Continue to uphold your morals

An accusation of fraud is an attack on your morals. As a business owner, all eyes will be on you to see if your personal or professional behavior reflects the accusations. Make sure to continue to hold your head high and act with integrity. This will pay off when you are able to get back to running your business with the same level of honesty that you believe in.

An accusation of fraud threatens your personal life as well as your business. Every step you make right now is under a microscope, and the last thing you need to do is make a mistake. Once you get out of jail, start working immediately on putting together a proper defense that helps you get the best outcome from the case.


Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most of her time hiking, biking, and gardening. For more information, contact Brooke via Facebook at facebook.com/brooke.chaplan or Twitter @BrookeChaplan.

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