What is fraud? A person committing fraud uses deceptive means to obtain financial or personal gain. The Crimes Act 1900 contains information on fraud offences in New South Wales (NSW). Usually, fraud cases are reported to a bank or financial institution with the help of the Australian Federal Police or certified fraud examiners. The AFP has primary law enforcement responsibility for investigating serious or complex fraud against the Commonwealth. People commit fraud for a lot of reasons which may include:
- Pressure
- Crippling debts
- Addiction
- Unemployment
Some common examples of fraud are:
- Phishing scams
- Ponzi scheme
- Occupational fraud
- Identity theft (stealing someone’s personal details)
- Bank account fraud
- Intellectual property fraud
This article discusses matters pertaining to fraud.
Fraud in NSW
Section 192E of the Crimes Act provides that a person is guilty of fraud if they:
- Take or appropriate a property belonging to another,
- Make a financial advantage illegally over another person, and
- Such conduct intentionally causes a person to lose some financial advantage or property.
Important terms and definitions to take note of in relation to fraud:
Deception
Under Section 192B, deception means any deception, by words or other conduct, as to fact or as to law, including:
- a deception as to the intentions of the person using the deception or any other person, or
- conduct by a person that causes a computer, a machine or any electronic device to make a response that the person is not authorised to cause it to make.
One must note that the conduct will still amount to deception regardless of whether it was done recklessly or intentionally.
Dishonesty
Under Section 4B of the Crimes Act, dishonesty means being dishonest according to the standards of ordinary people and known by the defendant to be dishonest according to the standards of ordinary people.
The Section goes on to explain that in a prosecution for an offence, dishonesty is a matter for the trier of fact. Thus, it would be up to the jury to determine whether the act was dishonest according to standards of ordinary people.
Cause Financial Disadvantage
Under Section 192D, to “cause” a financial disadvantage means:
- cause a financial disadvantage to another person, or
- induce a third person to do something that results in another person suffering a financial disadvantage, whether the financial disadvantage is permanent or temporary.
Obtaining Property
Under Section 192C, a person obtains property if:
- the person obtains ownership, possession or control of the property for himself or herself or for another person,
- the person enables ownership, possession or control of the property to be retained by himself or herself or by another person, or
- the person induces a third person to do something that results in the person or another person obtaining or retaining ownership, possession or control of the property.
Property belongs to another if:
- the person has possession or control of the property, or
- the person has a proprietary right or interest in the property (not being an equitable interest arising only from an agreement to transfer or grant an interest or from a constructive trust).
Obtaining a Financial Advantage
Under Section 192D, to “obtain” a financial advantage includes:
- obtain a financial advantage for oneself or for another person,
- induce a third person to do something that results in oneself or another person obtaining a financial advantage, and
- keep a financial advantage that one has, whether the financial advantage is permanent or temporary.
Thus, fraud offences involve dishonesty and deception. These offences usually occur when there are large amounts of money involved or properties with high value.
Fraud Offences in NSW Under the Crimes Act 1900
The following are fraud offences in NSW as provided by the Crimes Act 1900:
- Intention to defraud by destroying or concealing accounting records (Section 192F)
- Intention to defraud by misleading or false statements (Section 192G)
- Intention to deceive members or creditors by false or misleading information of officer of organisation (Section 192H)
1. Intention to defraud by destroying or concealing accounting records
Under Section 192F of the Crimes Act, a person commits a criminal offence when they destroy or conceal accounting records dishonestly.
A person is guilty under Section 192F if the person dishonestly destroys or conceals any accounting record with the intention of:
- obtaining property belonging to another, or
- obtaining a financial advantage or causing a financial disadvantage.
The maximum penalty for this fraud committed is 5 years’ imprisonment. Furthermore, to “destroy” includes to obliterate.
2. Fraud by false or misleading statement
Under Section 192G of the Crimes Act, a person is guilty of a fraud offence if that person dishonestly makes or publishes, or concurs in making or publishing, any statement (whether or not in writing) that is false or misleading in a material particular with the intention of:
- obtaining property belonging to another, or
- obtaining a financial advantage or causing a financial disadvantage.
The maximum penalty for this offence is 5 years’ imprisonment.
3. Intention to deceive members or creditors by false or misleading statement of officer of organisation
Under Section 192H, a person, or an officer or other officials of an organisation will be guilty of fraud offence if they:
- deceive members or creditors about the affairs of the organisation,
- dishonestly make or publish deceitful statements, or
- concur to making or publishing such a statement.
In this offence, it is immaterial if the offender did not have full knowledge of the integrity of the matter. They will be guilty of the offence if they knew such statements could be false or misleading. The maximum penalty for this offence is 7 years’ imprisonment. Furthermore, a/an:
- “creditor” of an organisation includes a person who has entered into a security for the benefit of the organisation.
- “officer” of an organisation includes any member of the organisation who is concerned in its management and any person purporting to act as an officer of the organisation.
- “organisation” means any body corporate or unincorporated association.
Which Court Handles a Charge of Fraud?
Fraud cases are indictable offences which are handled in a District Court. However, if the parties decide to hear the matter in a Magistrate Court, it will be treated as a summary offence.
A factor in determining whether a fraud offence will be finalised in the Local or the District Court is the amount of money or the value of the property involved. Less severe cases of fraud are summary offences before a Magistrate.
Penalties of Fraud Cases
Fraud offences are considered serious offences, with penalties of imprisonment ranging from five to seven years. However, if aggravating circumstances are present (for instance, if the victim was over the age of 60 years old), the penalty imposed can even be higher than 7 years.
The Importance of Seeking Legal Advice for Suspected Fraud
If you are facing fraud charges or if you want to report fraud, we highly advise you to seek legal advice. JB Solicitors has a leading team of lawyers who can help with your case. We provide legal advice and can discuss possible defences with you. We also provide legal representation should the matter escalate to the Courts.
Do you want further information on fraud? Contact us today.
