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 Mexico, fraud is recognized both as a tort for civil litigation and as a criminal offense under various statutes. To succeed in a civil fraud claim in New Mexico, a plaintiff must demonstrate that the defendant made a false material representation, knew the representation was false or was recklessly indifferent to its truth, intended to induce the plaintiff to rely on the representation, and that the plaintiff did in fact rely on it to their detriment in a justifiable manner. This means the plaintiff must show actual reliance on the false statement and that such reliance was reasonable under the circumstances. If these elements are proven, the plaintiff may be awarded monetary damages. Criminal fraud, on the other hand, is prosecuted by the state and requires proof beyond a reasonable doubt of similar elements, potentially leading to penalties including fines and imprisonment. The specifics of fraud laws can be found in New Mexico's statutes as well as in judicial opinions that interpret and apply those laws.