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LSDefine
Simple English definitions for legal terms
long-firm fraud
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A quick definition of long-firm fraud:
Long-firm fraud is when someone tricks another person or company into doing business with them, but they never intend to pay for the goods or services they receive. They keep doing this over a long period of time, making it seem like they are a legitimate customer or business partner, but in reality, they are just stealing from others. This is a type of fraud that can be both a civil offense (resulting in monetary penalties) and a criminal offense (resulting in jail time).A more thorough explanation:
Definition: Long-firm fraud is a type of fraud where a person or a group of people set up a business with the intention of gaining the trust of suppliers and customers, and then disappearing with the goods or money without paying for them. It is a form of deliberate deception that causes financial harm to others.
Example: A group of people set up a company that sells electronic goods. They gain the trust of suppliers and customers by making regular payments and delivering goods on time. However, after a few months, they disappear with all the goods and money without paying anyone. This is an example of long-firm fraud.
This type of fraud is often difficult to detect because the fraudsters appear to be legitimate business people. They may even have a history of successful business ventures, which makes it easier for them to gain the trust of others. However, once they have gained the trust, they use it to their advantage and disappear with the goods or money.