Fraud is a knowing, intentional misrepresentation or concealment of a material fact when the misrepresentation or concealment (omission) is done to induce another person or entity to act to their detriment—such as by paying money for a product or service or investing in a company, venture, or other proposition.

Fraud is usually a tort—a wrongful act for which a person or entity that is the victim of the fraud may file a civil (noncriminal) lawsuit and recover money damages. But fraud may also be a criminal offense (crime) prosecuted under various state and federal laws (usually statutes).

Laws vary from state to state, but to prevail on a civil fraud claim, a plaintiff generally must show:

• the defendant made a material representation that was false;

• the defendant knew the representation was false or made it recklessly as a positive assertion without any knowledge of its truth;

• the defendant intended to induce the plaintiff to act upon the representation; and

• the plaintiff actually and justifiably relied upon the representation and suffered injury as a result.

The fourth element has two requirements:

• the plaintiff must show that it actually relied on the defendant's representation; and

• such reliance was justifiable.

The law regarding civil fraud claims may be located in a state’s statutes or in its court opinions (common law or case law).

In New Jersey, fraud is recognized both as a tort for civil litigation and as a criminal offense under various statutes. For a civil fraud claim, the plaintiff must demonstrate that the defendant made a false material representation, knew of its falsity or was recklessly indifferent to its truth, intended to induce the plaintiff to rely on this representation, and that the plaintiff did indeed rely on it to their detriment. This reliance must have been both actual and justifiable, meaning the plaintiff truly believed the representation and it was reasonable to do so under the circumstances. If these elements are proven, the plaintiff may be awarded monetary damages. On the criminal side, fraud can be prosecuted under New Jersey's criminal statutes, which may include specific provisions for different types of fraud such as insurance fraud, credit card fraud, or identity theft. The penalties for criminal fraud can include fines, restitution, and imprisonment. The exact nature of the fraud and the severity of the offense will determine the specific charges and potential penalties.