Understanding the Link Between Lawsuits and White-Collar Prosecution
If you’re facing a civil lawsuit involving allegations of fraud, misrepresentation, or breach of fiduciary duty, you might think the worst-case scenario is a financial judgment. But there’s a question you can’t afford to ignore:
“Can this civil case lead to criminal charges?”
The answer—unfortunately—is yes. In California and across the U.S., civil litigation can open the door to business fraud investigations by prosecutors, regulatory agencies, or law enforcement. What begins as a business dispute or financial lawsuit can escalate into a white-collar criminal case, especially if the facts are misinterpreted or weaponized by opposing parties.
At Simmons & Wagner, we’ve seen this transition firsthand. As former Orange County District Attorneys, we now defend clients who suddenly find themselves on the wrong end of both a civil lawsuit and a criminal investigation. Here’s how that process works—and what to do to protect yourself.
What’s the Difference Between Civil and Criminal Fraud?
Civil fraud is when a private party (such as a customer, investor, or business partner) accuses you of deceit that caused financial harm. The remedy typically involves money damages or contract remedies.
Criminal fraud, on the other hand, is prosecuted by the government—often the District Attorney, Attorney General, or U.S. Attorney—and can lead to:
- Felony charges
- Prison time
- Fines and restitution
- Probation or parole
- Permanent damage to your reputation and career
While the burden of proof is higher in criminal court (“beyond a reasonable doubt” vs. “preponderance of the evidence”), the line between civil and criminal fraud can be surprisingly thin.
How a Civil Case Can Trigger Criminal Charges
1. The Civil Case Exposes Potentially Illegal Conduct
When a lawsuit involves financial records, internal communications, or allegations of deception, it can uncover evidence that prosecutors later use to build a criminal case.
For example:
- A shareholder lawsuit reveals falsified financial statements
- A former employee sues for wrongful termination and exposes kickbacks
- A partner in a failed venture accuses you of secretly moving funds
- A civil fraud complaint alleges forged signatures or misappropriation
These red flags can prompt referrals to law enforcement—especially when judges, regulators, or opposing attorneys suspect criminal activity.
2. The Plaintiff Reports You to Authorities
It’s not uncommon for plaintiffs in civil fraud lawsuits to also file complaints with:
- The Orange County District Attorney
- California Attorney General
- IRS Criminal Investigation Division
- FBI or U.S. Attorney’s Office (for federal issues)
- Industry licensing boards
Sometimes, this is a strategic move to gain leverage. In other cases, they genuinely believe a crime occurred. Either way, it raises the stakes for you.
3. Your Testimony or Documents Are Used in the Criminal Case
Here’s the most dangerous trap: what you say in your civil case can be used against you criminally.
If you:
- Testify under oath at a deposition
- Produce financial records
- Admit to procedural mistakes
- Respond emotionally to accusations
…that information could later be subpoenaed by prosecutors and used to support a criminal complaint—even if you had no intent to commit fraud.
Signs That a Civil Case May Turn Criminal
You should treat any of the following red flags as serious warnings:
- The civil complaint uses words like “intentional,” “fraudulent,” or “deceptive”
- You receive a subpoena from a government agency
- The opposing attorney mentions contacting the DA or law enforcement
- You’re asked to sit for an interview by a government investigator
- You’re notified that a parallel investigation is underway
If any of these occur, it’s time to contact a business fraud attorney in Orange County immediately.
How Simmons & Wagner Protects Clients Caught in Both Worlds
As former prosecutors, we understand the pipeline between civil court and criminal court—and how to intervene early to stop it.
We help clients by:
- Coordinating a unified defense strategy for both the civil and criminal matters
- Advising when and how to assert Fifth Amendment protections
- Communicating directly with prosecutors to clarify the narrative before charges are filed
- Responding to subpoenas and protecting privileged or damaging disclosures
- Exposing the non-criminal nature of disputed business actions
We also work with forensic accountants and civil counsel to ensure your rights are fully protected on all fronts.
Don’t Wait Until You’re Charged—Take Action Now
Many professionals don’t realize how quickly a civil fraud allegation can turn into a criminal fraud case. If you’re being sued—or fear you may be—don’t wait for the worst to happen.
At Simmons & Wagner, we help business owners, executives, and professionals navigate the high-risk intersection of civil litigation and criminal exposure. If your future is on the line, we’re ready to fight for it.
Call us today at (949) 439-5857 for a confidential consultation. You don’t just need a lawyer—you need a defense team that’s been on the other side.