We have been swamped with requests to write an article about business situations that cross the line from civil suits to potential criminal acts. Taking a party to civil court can be daunting, as the courts are understaffed and a case can take years if appealed. In contrast, criminal proceedings are fast-tracked and can be determined in months. The maximum time to adjudicate a matter, with the accused in pre-trial detention, is nine months, providing a form of speedy justice. Furthermore, a criminal prosecution can hinder the accused in business dealings, especially if there is a conviction. Another drawback to civil actions is that counterparties may not have the funds to pay following a judgment. While using a criminal lawyer is not free, it can be more cost-effective, since criminal lawyers generally do not participate in the process but work to provide evidence.
The one drawback of bringing a criminal action to court is that once a prosecutor starts working on a case, it is generally not possible to withdraw a complaint. Notably, unlike in many Western jurisdictions, threatening to bring a criminal action is not a crime.
Contracts & Fraud
Fraud standards in Georgia are quite relaxed compared to many jurisdictions. If a contracting party makes a false statement to entice the signing of a contract, this could constitute fraud. Even if the defrauded party has the opportunity to verify the statements, a false statement could still constitute fraud. For example, if an apartment owner represents that they are the sole owner of a flat but are not, and the buyer can easily verify this, it could still potentially be considered criminal fraud.
Real Estate Transactions
Late delivery of an apartment in a development project is not generally considered fraud; it is typically a civil breach of contract at most. However, it is also not a crime for the investor to threaten to go to the press about delayed delivery in exchange for a refund.
Personal Effects in an Apartment
When a tenant leaves an apartment or commercial space, personal effects should be given to the old tenant. Items that are generally immovable, like tenant-installed kitchens and air conditioners, are usually items that the landlord is permitted to keep, depending on what is written in the lease contract.
Campaign to Evict a Tenant
Generally, if the landlord cuts off electricity and water, it does not constitute a crime. Changing locks might be questionable.
Other Types of Real Estate Misrepresentations
If the landlord makes false statements, such as claiming they received all necessary approvals for interior/exterior works, or denying a flood occurred, this could also constitute criminal fraud.
Many buyers/renters of real estate or businesspersons, who can claim to be victims, believe it unworthy of their time, money or energy to take someone to court. However, in certain situations, an apparent breach may be considered criminal fraud. Just because a plaintiff brings a civil action, it does not preclude criminal proceedings. Generally, non-fulfillment of an agreement cannot be considered criminal. Likewise, if a criminal fraud action is initiated, this does not preclude a party from bringing a parallel or post-conviction proceeding in the civil courts.
Please note that, in general, the statute of limitations for a civil proceeding is three years from the time the initiating party knew or reasonably should have known that a civil fraud had occurred. The statute of limitations for a criminal offense is 3 to 15 years, depending on the severity of the crime.
