Degrees of victim of fraud

At first the answer to this question seems easy but in the real world, the answer is complex. It is a matter of degree. In addition to the innocent investor, many people can be victimized by their association with the fraudulent transactions. Sometimes even the promoters are victims.

Victims by Degree

If you read about fraud in the newspaper, you often come away with the impression that there are two types of people: innocent victims and scam artists. The truth is much more complicated. This chart is an attempt to distinguish culpability of victims. Reality usually makes this and oversimplification but nevertheless useful tool. If you knew about the fraud or "turned a blind eye" to the fraud, you are not a victim.

Description	Degree of Victim
Totally innocent individual with no reason to suspect the fraud	First Degree Fraud Victim
Using 20-20 hindsight this victim should have been more cautious.	Second Degree Fraud Victim
Was or became a friend of person aiding the fraud and could have learned more but did not.	Third Degree Fraud Victim
Introduced others into the scheme not knowing it was a fraud.	Fourth Degree Fraud Victim
Received fees for referrals and could have learned the truth but did not.	Fifth Degree Fraud Victim
Investment professionals who did not know of the fraud (stock broker)	Sixth Degree Fraud Victim
Officers, directors and other agents of the company who attended several meetings, lent their names and reputations to the transaction but did not know of the fraud	Seventh Degree Fraud Victim
A professional who worked for the fraudulent company but did not learn of the fraud (e.g. accountant, lawyer, consultant, and analyst.)	Eighth Degree Fraud Victim

Fraud Law Resources for Oregon and Washington

WHO ARE THE "VICTIMS" OF FRAUD?

Victims by Degree