Good Faith Defense

a complete defense to charges involving fraud since good faith on the part of the person is inconsistent with intent to defraud or willfulness which is an essential part of the charges. The burden of proof is not on the person to prove his good faith, of course, since he has no burden to prove anything. The Government must establish beyond a reasonable doubt that the person acted with specific intent to defraud as charged.

One who expresses an opinion honestly held by him, or a belief honestly entertained by him, is not chargeable with fraudulent intent even though his opinion is erroneous or his belief is mistaken; and, similarly, evidence which establishes only that a person made a mistake in judgment or an error in management, or was careless, does not establish fraudulent intent.

On the other hand, an honest belief on the part of the person that a particular business venture was sound and would ultimately succeed would not, in and of itself, constitute 'good faith' if, in carrying out that venture, the person knowingly made false or fraudulent representations to others with the specific intent to deceive them.