Piercing the corporate veil is very difficult even in a "mom and pop" business. Limiting liability is the purpose for which corporations are formed. I would think that you would have to show that there was some impropriety such as commingling of funds or that somehow the corporation was no more than an alter ego for the principal.

Fraud is not easy to prove. I read a bankruptcy case a while back in which the debtor had passed a bad check to one of its creditors in exchange for services. The debtor had issued the check in the hope of covering it with funds it had not yet received. The funds never arrived, and the check bounced. Fraud is a defense to a bankruptcy and a basis to object to the debtor's discharge. The creditor in this case did in fact object on that basis, and further argued that the bounced check was a criminal act. Surprisingly the bankruptcy court disagreed. It ruled that the debtor's honest belief that it was to receive the funds to cover the check did not constitute fraud...simply bad business judgment.

In Connecticut tortious fraud has a higher burden of proof that most other civil cases. The usual standard in civil cases is proof by a preponderance of the evidence. In fraud cases Connecticut requires proof by clear and convincing evidence.

I litigated a fraud case several years ago in which the buyer of real estate inspected the property, and saw that on the listing card the septic system was designated "unknown". He asked the real estate agent what "unknown " meant. The real estate agent said that it meant that it is working fine, but that its location was not known. He bought the property. A year later he decided to have the septic tank pumped. He was informed that he had no septic tank. Instead he had a cess pool in a small cave on the property. The property bordered on a lake. When the cess pool was filled the waste would overflow, and roll down the hill into the lake where neighbors swam and fished.

I took the realtor's deposition, and subpoenaed her records. In her file I found hand written notes in which the realtor had written "new pipes to the septic". She had done a search of the Town sanitarian's office, and could not determine the presence of a septic system. She should have made her findings more clear. I also found out that she was getting a full 6% fee on the sale without having to split it with another real estate agent. The house had also been on the market for a long time in a down market, and had been tough to sell.

In tortious fraud cases you can sometimes prove fraudulent intent in the same manner as in criminal cases. Motive and opportunity equal intent. We had the full fee as the motive. We had her selling efforts in a buyer's market as the opportunity. We had her representation of "Septic Unknown" on the listing. We had her notes indicating "New Pipes to the Septic" when in fact there was no septic tank. We had the testimony of the town sanitarian that there was no septic system and the realtor's testimony that she has consulted him. The court ruled that this was not proof by clear and convincing evidence, and that her conduct did not rise to the level of a fraud.

There may be other avenues to litigate other than piercing the corporate veil....examining to see if there was an agent for an undisclosed principal is very easy with the right fact pattern. Unfair trade practices (such as doing business under an unregistered trade name) is another possibility. Unfair trade practices is more liberal that tortious fraud in terms of the burden of proof. In Connecticut intent is not an element that needs to be proved. It also has a nice recovery...triple damages and attorney's fees.