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White Collar and Government

Investigations Attorneys

205-502-2000

White Collar and Government

Investigations Attorneys

205-502-2000

Mail/Wire Fraud Defense puffing

Another common defense is that the representations were mere “puffing,” not actual fraud. This defense will arise mostly in the context of consumer wire fraud or mail fraud. The defense will argue that the alleged misrepresentations amount to mere statements of opinion or expressions that merchandise is valuable or a bargain at the price, and therefore not material. The distinction often turns on the degree of difference between the represented value of the goods and the actual value of the goods. An exaggeration of the qualities of a good might only amount to puffing, while a representation that the good possesses qualities it does not have will be closer to outright fraud. In the consumer fraud context, the courts are looking for a statement that demonstrates a reckless indifference to the truth, and that goes to the value of the bargain. Statements have been held to be “per se” (categorically) material if they are directed at the quality, adequacy, or price of the goods, or if their independent value bears on the ultimate value of the goods. Again, the puffing/fraud distinction is one of degree. To say that a deposit is backed by the government might or might not be the same as saying it is government-insured. Generally, the courts find no duty of salesmen of securities to personally investigate the collateral behind such investments, absent some discordant factor that should alert them. However, when a salesman goes beyond the script and begins to make misrepresentations, often the line has been crossed into outright fraud. Then if you have the use of the mail or interstate wire, you can have mail or wire fraud. A good defense will show that if a misrepresentation was made, it was not calculated to deceive and an ordinary prudent person would have known it to be puffery rather than a material representation to be relied on.

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