Fraud

7 Key excerpts on "Fraud"

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  Fraud 101

  Techniques and Strategies for Understanding Fraud

  • Stephen Pedneault(Author)
  • 2010(Publication Date)
  • Wiley

    (Publisher)

  Therefore, before we can get into discussions and cases relating to Fraud, it would be a good idea to make sure we are all talking about the same thing—Fraud. One of the best resources for an objective, defendable definition of Fraud is Black’s Law Dictionary. According to Black’s Law Dictionary, Fraud is defined as “a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment.” 1 As mentioned earlier, to further define and understand Fraud, it has to be discussed within a specific context. Fraud can be further broken down into subcategories of Fraud, along with various methods used to commit each type of Fraud. Unfortu- nately, Fraud has become prevalent within virtually every aspect of our lives, is accepted by many as the status quo, and acts as a constant reminder of the sad state of society in which we live. Personal characteristics that were likely found within individu- als living a socially responsible life, things like ethics, morals, and pride, have been replaced by greed, self-promotion, and the “what’s in it for me” mentality. The Many Types of Fraud Names like WorldCom, Enron, and Arthur Andersen have become more than commonplace in discussions regarding Fraud. 2 The World of Fraud Their names and others—such as Martha Stewart, who was found guilty of lying to authorities about possible insider trad- ing, and Richard Hatch, a Survivor winner who failed to pay the taxes due on his winnings, can and often are used in analogies of what can go wrong. Instances of Fraud occur every day and either go undetected or are deemed not worthy of attention. Only cases involving overwhelming amounts of money or some other news-grabbing aspect make the headlines. Traditionally, only one in nine Fraud cases ever appears in the media, which means that for every Fraud you read or hear about, eight more will never appear in the public eye.

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  Fraud Auditing and Forensic Accounting

  • Tommie W. Singleton, Aaron J. Singleton(Authors)
  • 2010(Publication Date)
  • Wiley

    (Publisher)

  Fraud means different things to different people under different circumstances. For instance, Fraud can be perceived as deception. One might say that Fraud in the form of intentional deception (including lying and cheating) is the opposite of truth, justice, fairness, and equity. Although deception can be intended to coerce people to act against their own self-interest, deception can also be used for one’s own defense or survival. Despite that rationale for deception, deception by current standards of behavior is generally considered mean and culpable, but deception can be intended for a benevolent purpose, too. Benevolent deceivers in society are not looked on as harshly as are those whose intentions and motives are impure. Those who act out of greed, jealousy, spite, and revenge are not so quickly excused or forgiven.

  Fraud can also be associated with injury. One person can injure another either by force or through Fraud. The use of force to cause bodily injury is frowned on by most organized societies; using Fraud to cause financial injury to another does not always carry the same degree of stigma or punishment.

  Fraud is a word that has many definitions. Some of the more notable ones are:

  • Fraud as a crime. Fraud is a generic term, and embraces all the multifarious means that human ingenuity can devise, which are resorted to by one individual, to get an advantage by false means or representations. No definite and invariable rule can be laid down as a general proposition in defining Fraud, as it includes surprise, trick, cunning, and unfair ways by which another is cheated. The only boundaries defining it are those that limit human knavery.1
  • Corporate Fraud. Corporate Fraud is any Fraud perpetrated by, for, or against a business corporation.
  • Management Fraud. Management Fraud is the intentional misrepresentation of corporate or unit performance levels perpetrated by employees serving in management roles who seek to benefit from such Frauds in terms of promotions, bonuses or other economic incentives, and status symbols.
  • Layperson’s definition of Fraud. Fraud. as it is commonly understood today, means dishonesty in the form of an intentional deception or a willful misrepresentation of a material fact. Lying, the willful telling of an untruth, and cheating, the gaining of an unfair or unjust advantage over another, could be used to further define the word Fraud

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  International Handbook of Criminology

  • Shlomo Giora Shoham, Paul Knepper, Martin Kett(Authors)
  • 2010(Publication Date)
  • Routledge

    (Publisher)

  Financial Crimes in Comparative Context 311 of current and potential offenders to deFraud, (2) the skills and organization of offenders anywhere in the world , and (3) the informal and formal con-trols engaged in by victims, potential victims, third-party guardians, and the criminal justice system [Levi, 2007a , 2008a, 2008b]. The main focus of the criminal law is upon well-defined actions of individuals: stealing from and/or physically injuring or threatening other people or damaging property. Fraud is mainly about getting goods, money, or services by “dishonestly” deceiving other people or institutions who would not supply them if they knew the truth about the intentions and financial circumstances of the deceiver; but it can also involve causing loss without any obvious benefit to self (other than keeping a job or getting a performance bonus that would otherwise not be given). It is often assumed that this is an economically rational process, but the ego satisfaction of being in control of others or impressing them is a significant driver of white-collar crimes as well as of violent “crimes of masculinity” [Levi, 1994]. Where rogue traders falsify financial records to avoid their superiors’ realizing that they have lost money and dismissing them, or where traders continue to obtain credit when they cannot afford to repay their debts, in order “to keep the company going,” claims of apparent disinterest are sometimes made to investigators and indeed in criminal trials, as if doing so negates any question of dishonesty. Causing harm wrongfully implies both that the conduct is regarded as harmful, whether to individuals, business, or general social interests, and that we believe that there has been some level of mental awareness on the part of suspects that makes them blameworthy.

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  Tackling Insurance Fraud

  Law and Practice

  • Lynne Skajaa, Dexter Morse(Authors)
  • 2020(Publication Date)
  • Informa Law from Routledge

    (Publisher)

  CHAPTER 4

  Fraud IN INSURANCE LAW GENERALLY

  DEFINING Fraud

  The criminal law aspects of insurance Fraud are considered in Chapter 1 .

  Objectives of the civil law

  Clearly Fraud cannot, and should not, be condoned and it appears to be generally accepted that the civil law should seek to discourage policyholders from acting Fraudulently when bringing claims under contracts of insurance. Judicial support for this proposition can be readily found. In Direct Line v Khan Arden LJ clearly regarded deterring and discouraging false claims as a proper objective of the civil law in this context, explaining that the civil sanction of a financial remedy may well be more effective than a criminal or other sanction.1 Both Arden LJ2 and Mance LJ3 appear to have endorsed Millett LJ’s observation in Galloway v Guardian Royal Exchange (UK) Limited4 that since the making of dishonest claims has become too common, the Fraudulent claim rule should be better known by the public in a bid to counter the view that deFrauding insurance companies is “not morally reprehensible”.

  Fraud in a civil context

  The effect of Fraud on the rights and obligations of parties to an insurance contract can usefully be considered in the context of dishonest conduct at the time of making the contract and post-formation dishonesty, in particular, when making a claim under the contract.

  The relationship between an insured and an underwriter is one based on speculation whereby it is usually only the insured who knows the special facts on which the risk is calculated. For this reason it is generally accepted that the insurer is entitled to the benefit of full and honest disclosure of all relevant facts.5

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  Unlocking Criminal Law

  • Tony Storey, Natalie Wortley, Jacqueline Martin(Authors)
  • 2022(Publication Date)
  • Routledge

    (Publisher)

  The Fraud Act 2006 repealed ss 15, 15A, 15B, 16 and 20(2) of the Theft Act 1968 and also ss 1 and 2 of the Theft Act 1978. Section 1 of the Fraud Act 2006 creates a single offence of Fraud, which can be committed in one of three ways:

  • Fraud by false representation (s 2);
  • Fraud by failing to disclose information (s 3);
  • Fraud by abuse of position (s 4).

  In addition, the 2006 Act creates other offences related to Fraud, including:

  • obtaining services dishonestly (s 11);
  • possession etc. of articles for use in Frauds (s 6);
  • making or supplying articles for use in Frauds (s 7).

  Figure 11.1 Types of Fraud

  11.4 Fraud by false representation

  Under s 2 of the Fraud Act 2006, D commits Fraud by false representation if D:

  SECTION

  • ‘2(1)
  • (a) dishonestly makes a false representation, and
  • (b) intends, by making the representation –
    • (i) to make a gain for himself or another, or
    • (ii) to cause loss to another or to expose another to the risk of loss.’

  The actus reus of the offence is the making of a representation which is false. The mens rea has three parts to it. Section 2(1)(b) requires the representation to have been made dishonestly and with intent to make a gain or cause a loss. In addition, s 2 provides that the defendant must have known the representation was (or might be) false.

  11.4.1 False representation

  Section 2 of the Act defines ‘false representation.’

  SECTION

  • ‘2(2) A representation is false if –
    • (a) it is untrue or misleading, and
    • (b) the person making it knows that it is, or might be, untrue or misleading.
  • 2(3) ‘Representation’ means any representation as to fact or law, including a representation as to the state of mind of
    • (a) the person making the representation, or
    • (b) any other person.
  • 2(4) A representation may be express or implied.’

  ‘Representation’ is therefore defined very broadly. A representation as to fact would cover a person who used a false identity, or someone who stated they owned property which in fact belonged to someone else. A representation as to state of mind would encompass, for example, a customer promising to pay their bill when they had no intention of doing so.

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  Fraud Exposed

  What You Don't Know Could Cost Your Company Millions

  • Joseph W. Koletar(Author)
  • 2003(Publication Date)
  • Wiley

    (Publisher)

  False Pretenses/Swindle/Confidence Game; Credit Card/ATM Fraud; Imperson- ation; Welfare Fraud; Wire Fraud; Bribery; Counterfeiting/Forgery; Embezzlement; and Arson/Fraud. Milton Meltzer has defined white-collar crime as being “crime committed by a person in a position of trust, for his or her personal gain.” 28 In this regard he is somewhat close to the FBI’s definition, but we should note in the studies he cites he seems to be primarily interested in crimes committed by organizations, and not against organizations, especially crimes committed against them by insiders. Lal Balkaran, writing of the importance of internal audit functions in con- trolling corruption within organizations, notes that it: “generally entails misus- ing one’s position for private gain or an unauthorized end. It can involve finan- cial and nonmonetary benefit. Bribery, extortion, influence peddling, nepotism and Fraud are all acts associated with corruption.” 29 He goes on to note that cor- ruption can have a significant and corrosive effect on the organization, increas- ing business risk, eroding investor confidence, and stifling growth. 30 In offering this definition, Balkaran is somewhat close to Bologna, since he implies that both acts by the individual against the organization or acts by the individual against someone else on behalf of the organization meet the definition. The National Fraud Center, Inc., published a study in December 2000 on “The Growing Global Threat of Economic and Cyber Crime,” which utilized the fol- lowing definition of economic crime: as an illegal act generally committed by deception or misrepresentation (Fraud) by someone (or a group) who has special professional or technical skills for the purposes of personal or organizational financial gain (or attempt to gain) an unfair advantage over another individual or entity. 31 We should note again that this study utilizes a definition that makes sense from the perspective of its objectives.

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  Histories of Crime

  Britain 1600-2000

  • Anne-Marie Kilday, David Nash(Authors)
  • 2010(Publication Date)
  • Bloomsbury Academic

    (Publisher)

  This does itself descend directly from Sutherland’s description of Fraud as a species of ‘business crime’ associated with ‘asset values’. In English legal culture F RAUD AND W HITE -COLLAR C RIME 145 ‘Fraud’ has long been recognised as ‘a generic term for a type of offence, of which the ingredients are infinitely variable, but probably comprise the following: the dishonest non-violent obtaining of some economic advan-tage or causing some economic loss’. 21 While it is the case that Fraud can be found committed across the social and economic spectra of British society (with ‘benefit’ or ‘social security’ Fraud found alongside a number of business Frauds included under the rubric of ‘common types of Fraud’ 22 ), current policy discourses are most strongly focused upon those being committed ‘in the commercial sphere’. 23 This is mirrored in the attention being paid to Fraud by scholars, with both the academic literature and also policy discourses strongly aligning Fraud with the much alluded to ‘respectable offender’. 24 For scholars it is the ‘respectable offender’ who has traditionally best illustrated the discomfort white-collar crime is often believed to cause in societal consciousness, as captured in the assertion that ‘[t]he Jekyll-and-Hyde nature of crime com-mitted by the respectable raises questions unlike those posed by other types of criminal behaviour’.

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