In Colorado, deceptive sales or business practices could lead to criminal charges. Deceptive sales activities could include false advertising, making false statements to generate business, or using fraudulent financing. Deceptive business practices could result in fraud or theft charges. Deceptive business practices could be charged as a misdemeanor or felony offenses, depending on the nature of the violation.
In this article, our Colorado criminal defense lawyers will address:
- 1. What are deceptive sales and business practices?
- 2. What are the penalties for deceptive sales?
- 3. What are the penalties for violating the Colorado Consumer Protection Act?
- 4. Civil liability for deceptive business practices
- 5. Related Offenses
Deceptive sales and business practices include fraud or misrepresentation in a business dealing. Deceptive sales practices could involve small exaggerations to help sell a product or it could involve a complex multi-million dollar pyramid scheme. Examples include:
- Misleading advertising
- False statements
- Misleading financing
- False statements about a competitor’s product or practices
- Misrepresenting a product’s ingredients
- Not disclosing information about a good or service
- Misrepresenting the quality or value of a product or service
- “Bait and switch” advertising
- Use of fake testimonials
Deceptive business practices could result in criminal charges for theft. Certain deceptive practices can also be a violation of the Colorado Consumer Protection Act (CCPA).1
The penalties for deceptive business practices may depend on
- the value of the property,
- the extent of the fraud,
- the specific victims involved,
- the defendant’s criminal history, and
- the type of fraud involved.
Deceptive sales and business practices can be charged under Colorado’s theft statute. Under C.R.S. 18-4-401, theft can be charged as a misdemeanor or felony, depending on the value of theft involved. Theft or fraud involving less than $2,000 is a misdemeanor. Theft or fraud of $2,000 or more is a felony.
|Value of Deceptive Business Fraud||Class of Criminal Offense||Penalties|
|$2,000 or more but less than $5,000||Class 6 Felony||12 to 18 months in prison and a fine of up to $100,000|
|$5,000 or more but less than $20,000||Class 5 Felony||1 to 3 years in prison and a fine of up to $100,000|
|$20,000 or more but less than $100,000||Class 4 Felony||2 to 6 years in prison and a fine of up to $500,000|
|$100,000 or more but less than $1 million||Class 3 Felony||4 to 12 years in prison and a fine of up to $750,000|
|$1 million or more||Class 2 Felony||8 to 24 years in prison and a fine of up to $1,000,000|
In addition to prison, there is also a mandatory parole period for felony theft offenses. Mandatory parole ranges from 1 to 5 years for felony theft. If an individual commits multiple fraud or theft offenses within a period of 6 months, the value of the thefts can be combined and charged as a single offense.2
If the victim of deceptive sales or business practices is considered an “at-risk” individual under Colorado law, the defendant may face sentencing enhancement. At-risk individuals include people with a disability and elders who are 70 or older. Deceptive sales fraud of $500 or more from an at-risk victim is a class 3 felony, with penalties including up to 12 years in prison and a fine of up to $750,000.3
Under the CCPA, a conviction for promoting a pyramid promotional scheme is a class 1 misdemeanor.4 A pyramid scheme is a fraudulent investment scheme where people are induced to giving money with a promise that they will make more money. However, the scheme is only funded by increasing the number of investors, where no products are sold and no investments are made. The penalties for promoting a pyramid scheme include up to 18 months in jail and a fine of up to $5,000.
In addition to criminal charges, deceptive business practices can expose an individual to civil liability. The use of deceptive advertising or other deceptive trade practices may be a violation of the Colorado Consumer Protection Act. CCPA violations provide for civil penalties.
“The attorney general or district attorney may bring a civil action on behalf of the state to seek the imposition of civil penalties.”5
Victims of consumer fraud may also be able to file a civil action to seek actual damages, triple the amount of damages if the deception was intentional, as well as the cost of reasonable attorney’s fees.
Deceptive business and sales practices may involve other related offenses. Most business transactions involve the use of a computer, including alleged deceptive business transactions. Fraud involving the use of a computer can result in computer crime charges. Deceptive business practices involving the sale of property, mortgages, or loans may constitute real estate fraud.
In Colorado, it is a criminal offense to use a computer for the purpose of devising or executing any scheme to defraud. Accessing a computer or computer system to commit theft may be charged as a misdemeanor or felony, depending on the damage or value of the theft. Penalties for computer crime as a class 3 felony include 4 to 12 years in prison and a fine of up to $750,000.
In Colorado, real estate fraud involves engaging in wrongful acts using the property for financial gain. Real estate fraud includes mortgage fraud, credit skimming, foreclosure fraud, credit fraud, deed forgery, and other forms of property fraud. Real estate fraud charges in Colorado may be charged as a misdemeanor or felony offenses, depending on the value of the fraud.
Call us for help…
If you have been accused of deceptive sales or fraud related to a business transaction, please contact us at Colorado Legal Defense Group.
- Colorado Consumer Protection Act (CCPA) 6-1-101
- C.R.S. 18-4-401(4)
- C.R.S. 18-6.5-102
- CCPA 6-1-114
- CCPA 6-1-112