Fraud is defined as a misrepresentation (more on this in a second), which is either known to be not true or which the person making the statement has no reason to believe it is true, to another party, with the intent that the receiving party rely on that statement to its detriment, and that the receiving party suffers damage. Barron's Legal Dictionary defines "fraud" as "intentional deception resulting in the injury to another."
Fraud takes two basic forms - either the misrepresentation is done intentionally - the person knows it is not true, but makes the representation anyway; or, the person has no idea whether it is true or not, but makes the representation anyway. A misrepresentation can be either an affirmative statement of fact or it can be the affirmative omission of a fact. For instance, in the real estate arena, if a seller fails to disclose known defective conditions to a house at the time of sale, the seller has misrepresented known facts.
Normally, a party misrepresents a factual circumstance with the intent to induce another party to rely on such factual misrepresentation. In the example above, the seller hopes that the buyer will purchase the property for the price agreed upon. If the fact were truly represented, the buyer would likely not pay that price or not purchase the home.
For fraud to be actionable (that is, a defrauded party gets monetary damages in a civil court), the defrauded party must be injured. Thus, in the example above, if the defective condition was a hole in the roof, but the buyer had the intent to buy the house and replace the roof, then the buyer would not have sustained any damage (unless he later discovered water damage/etc. resultant from the hole in the roof).
In the sports' world we just learned that the Ohio State University football coach knew of NCAA violations of some of his players prior to the start of the 2010 season, but that he failed to disclose what he knew in a Certificate of NCAA Compliance to the school on September 13, 2010. Why did he fail to disclose this information? Because it would have had a severe result - the loss of several players for the entire 2010 season. Nevertheless, he kept this information to himself until at least early February 2011 (after the season had ended). OSU learned of the matter from the US Attorney's office, and subsequently fined the coach and suspended him for the first two games of 2011. But, should the punishment have been harsher?
Interestingly, in Mr. Tressel's media conference statement a couple of days ago, he basically said he had no idea to whom he needed to report this information - really? What is Mr. Tressel's understanding as to what the Certificate of NCAA Compliance is? In any other employment scenario, irrespective of the qualifications, experience, or success of the employee, Mr. Tressel's conduct would be subject to immediate expulsion.
That OSU has not taken this issue seriously - a 2 game suspension of non-conference games and a $250,000 fine - should be a cue for the NCAA to seriously sanction OSU for the coach's and his players' conduct. If the NCAA is serious about keeping itself untarnished, it must be forceful in this case.
Fraud - if done intentionally - is subject to an award of punitive damages to those injured. The NCAA has been seriously injured. Do what is right, NCAA (and OSU)!
What are your thoughts?
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