Charges of fraud in North Carolina can carry stiff fines and a lengthy jail sentence, so a proper defense is crucial. One defense against fraud charges is the good faith defense. Since establishing an intention to defraud is an important part of many fraud cases, asserting a defense of acting in good faith without any desire to harm another party may make the difference. 

The Cornell Law School explains that good faith may take various forms depending on the situation. In general, good faith means to deal with others in an honest fashion. A person may perform duties without any effort to deceive others, observe rules and standards, and engage in activities with sincere purpose or belief. When applied to a defense against fraud charges, good faith means that there was no intention to deceive or injure in dealings with another party. 

Prosecutors will attempt to prove fraudulent intent in a number of ways. According to the U.S. Department of Justice website, courts may demonstrate intention to defraud by direct evidence or through the totality of the circumstances. Courts can scrutinize statements and conduct to find evidence that a party recklessly disregarded the truth when dealing with another person or organization even if actual fraud never took place. 

Another way courts may prove fraud is whether the operation itself was designed to injure another person or organization. Good faith might not be enough to counter an argument of fraud if a court shows that a business operation or scheme was created so that it could steal or otherwise injure another party. If someone suffered injury from the scheme, it could bolster the case for the prosecution. 

Even though good faith defenses may not always work, a good faith defense is still a valid one in a fraud case, though it will depend on the individual circumstances of the case. Discussion with an attorney may be necessary to understand how to utilize a good faith defense if it is applicable.