Fraud
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In the broadest sense, a fraud is a deception made for personal gain. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and is also a civil law violation. Many hoaxes are fraudulent, although those not made for personal gain are not technically frauds. Defrauding people of money is presumably the most common type of fraud, but there have also been many fraudulent "discoveries" in art, archaeology, and science. The John Cooke Fraud Report offers a three word fraud definition: "Gain Through Misrepresentation."
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[edit] Definition
In criminal law, fraud is the crime or offense of deliberately deceiving another in order to damage them – usually, to obtain property or services unjustly. [1] Fraud can be accomplished through the aid of forged objects. In the criminal law of common law jurisdictions it may be called "theft by deception," "larceny by trick," "larceny by fraud and deception" or something similar.
In academia and science, fraud can refer to academic fraud – the falsifying of research findings which is a form of scientific misconduct – and in common use intellectual fraud signifies falsification of a position taken or implied by an author or speaker, within a book, controversy or debate, or an idea deceptively presented to hide known logical weaknesses. Journalistic fraud implies a similar notion, the falsification of journalistic findings.
Fraud can be committed through many methods, including mail, wire, phone, and the internet (computer crime and internet fraud).
Acts which may constitute criminal fraud include:
- bait and switch
- confidence tricks such as the 419 fraud, Spanish Prisoner, and the shell game
- false advertising
- identity theft
- false billing
- forgery of documents or signatures
- taking money which is under your control, but not yours (embezzlement)
- health fraud, selling of products of spurious use, such as quack medicines
- creation of false companies or "long firms"
- false insurance claims
- bankruptcy fraud, is a US federal crime that can lead to criminal prosecution under the charge of theft of the goods or services
- investment frauds, such as Ponzi schemes
- securities frauds such as pump and dump
Fraud, in addition to being a criminal act, is also a type of civil law violation known as a tort. A tort is a civil wrong for which the law provides a remedy. A civil fraud typically involves the act of intentionally making a false representation of a material fact, with the intent to deceive, which is reasonably relied upon by another person to that person's detriment. A "false representation" can take many forms, such as:
- A false statement of fact, known to be false at the time it was made;
- A statement of fact with no reasonable basis to make that statement;
- A promise of future performance made with an intent, at the time the promise was made, not to perform as promised;
- A statement of opinion based on a false statement of fact;
- A statement of opinion that the maker knows to be false; or
- An expression of opinion that is false, made by one claiming or implying to have special knowledge of the subject matter of the opinion. "Special knowledge" in this case means knowledge or information superior to that possessed by the other party, and to which the other party did not have equal access.
[edit] Notable fraudsters
- Kenneth Lay, the American businessman who built energy company Enron. He was one of the highest paid CEOs in America until he was ousted as Chairman and was convicted of fraud and conspiracy.
- Alves Reis, a Portuguese fraudster who forged documents to print 100,000,000 PTE in official escudo banknotes (adjusted for inflation, it would be worth about 150 million USD today).
- Frank Abagnale Jr., US impostor who wrote bad checks and falsely represented himself as a qualified member of professions such as airline pilot, doctor, and attorney. The film Catch Me If You Can is based on his life.
- Cassie Chadwick, who pretended to be Andrew Carnegie's daughter to get loans.
- Richard Eaton, an English businessman who was business partners with mobster Paul Vario and Jimmy Burke and was involved in the Lufthansa heist.
- Shinichi Fujimura, Japanese archaeologist who announced on October 23, 2000 that he had discovered eight stoneware pieces, from a layer of earth, more than 600,000 years old in the Kamitakamori ruins in Tsukidate, Miyagi Prefecture, believed to be the nation's oldest. However, Fujimura confessed that he had buried the stones at the ruins in advance of the excavation.
- Benny Hinn, televangelist
- Konrad Kujau, German fraudster and forger responsible for the "Hitler Diaries".
- Nick Leeson, English trader whose unsupervised speculative trading caused the collapse of Barings Bank.
- Colleen McCabe, headmistress who stole £½ million from her school.
- Gregor MacGregor, Scottish conman who tried to attract investment and settlers for the non-existent country of Poyais.
- Gaston Means, professional con-man during U.S. President Warren G. Harding's administration.
- Michael Milken, "The Junk Bond King".
- Barry Minkow and the ZZZZ Best scam.
- Frederick Emerson Peters, US impersonator who wrote bad checks.
- Charles Ponzi and Ponzi scheme.
- Peter Popoff, televangelist
- Christopher Rocancourt, Rockefeller impersonator who defrauded Hollywood celebrities.
- John Spano, a struggling businessman who faked massive success in an attempt to buy out the New York Islanders of the NHL.
- John Stonehouse, the last Postmaster-General of the UK and MP who faked his death.
- Richard Whitney, who stole from the New York Stock Exchange Gratuity Fund in the 1930s.
[edit] See also
- Accounting scandals
- Advance fee fraud
- Affinity fraud
- Bank fraud
- Benefit fraud, falsely claiming money from the government.
- Benford's law
- Bribery
- Caper stories (such as The Sting)
- Charity fraud
- Click fraud
- Corporate abuse
- Corruption
- Creative accounting
- Credit card fraud
- E-mail fraud
- Electoral fraud
- Employment fraud or contract fraud
- False Claims Law
- Forex scam
- Fraud Squad
- Friendly Fraud, credit card industry term used to describe a consumer who makes an Internet purchase with his own credit card and then issues a chargeback
- Front running
- Great Stock Exchange Fraud of 1814
- Guinness share-trading fraud, famous British business scandal of the 1980s
- Hoax
- Impersonator
- Inspector General
- Internet fraud
- Journalistic Fraud
- Mail fraud
- Missing trader fraud, also called Missing Trader Intra-Community, MTIC, or carousel fraud; is the theft of Value added tax (VAT)
- Paternity fraud
- Phishing, attempt to fraudulently acquire sensitive information
- pious frauds, a form of fraud in religion motivated by sincere zeal
- Phone fraud
- Political corruption
- Ponzi scheme
- Quatloos.com
- Questioned document examination
- Real estate trends
- Securities fraud
- Spin
- Telemarketing fraud
- The National Council Against Health Fraud
- Tobashi scheme, concealing financial losses
- Tunneling (fraud)
- SAS 99
- Verisimilitude
- Visa fraud
- Welfare fraud
- Wine fraud
- Wire fraud
[edit] References
- Fred Cohen. Frauds, Spies, and Lies - and How to Defeat Them. ISBN 1-878109-36-7 (2006). ASP Press.
- Podgor, Ellen S. Criminal Fraud, (1999) Vol, 48, No. 4 American Law Review 1Review Fraud - Alex Copola
- ICS Certification in Bank forensic Accounting ICS
Categories: Crimes | Deception | Fraud
