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NIE Volume 2 > Fraud > Flashcards

Fraud Flashcards

1
Q

Fraud
Section 1 Fraud Act 2006

A

Offences
A person is guilty of fraud - if they are in breach of either:
* Section 2 - Fraud by false representations.
* Section 3 - Fraud by failing to disclose information.
* Section 4 - Fraud by abuse of position.

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2
Q

Common Points
All 3 offences
2 steps

A

Step 1 — Actus Reus
The defendant carried out the
actus reus of the offence…
(NB the actus reus element
will differ for each offence).

step 2 - Mens Rea
.intending to either:
* Make a gain for themselves or another
person;
* Cause loss to another person; or
* Expose another person to a risk of loss.

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3
Q

When Are The
Offences Complete?

A

Intent Offences
The offences are complete
once the intent is formed
accompanied by
the actus reus

Is The Result Of Gain Or Loss
Required?
No
-there is no need
for the result
of gain or loss to occur.

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4
Q

Definition Of A Gain
Section 5(3) Fraud Act 2006

A

Definition Of A Gain
A gain will include either:
* Keeping what you already have; or
* Getting what you do not already have.

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5
Q

Definition Of A Loss
Section 5(4) Fraud Act 2006

A

Definition Of A Loss
A loss includes either:
* Parting with what you have already got; or
* Not getting what you haven’t already got but
you might get in the future.

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6
Q

What Must The Gain
Or Loss Relate To?
Section 5(2) Fraud Act 2006
2 categories

A

Category 1
Money

Category 2
Other property that is either:
. Real;
. personal;
*Things in action; or
* Intangible property

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7
Q

Duration Of The Gain
Or Loss?

A

Duration?
The duration can be either:
*Permanent; or
*Temporary.

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8
Q

Fraud By False
Representations
Section 2(1) Fraud Act 2006
2 steps

A

Step 1 — Actus Reus
It is an offence to
dishonestly
make a
false representation.

Step 2 — Mens Rea
.and intend
by making the representation
-to cause any of the
3 consequences.

The 3 Intended Consequences
Intending to either:
* Make a gain for themselves or another
person;
* Cause loss to another person; or
* Expose another person to a risk of loss.

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9
Q

Definition Of
Dishonestly

A

Definition
Same
as the definition
in the context of theft.

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10
Q

Definition Of A
Representation

A

Representation 1
Representation
as to fact.

Representation 2
Representation
as to law.

Representation 3
Representation
as to the state of mind
- of either:
* The person making the representation; or
* Any other person.

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11
Q

How May The
Representation Be
Made?
2 means…

A

Means 1
Express
Representations.

Means 1
Implied
representations.
(e.g. by handing over a stolen
credit card to a cashier you
are implying authority to use
the card)

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12
Q

How May The
Representation Be
Communicated?
2 means…

A

Means 1
Words.

Means 2
Conduct.

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13
Q

Can A Representation
Be Proved By Inference
Without Direct
Evidence Of
Misrepresentation?

A

Yes

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14
Q

When Is A
Representation
False?
2 steps
A representation is false if both..

A

Step 1
The representation is either:
*Untrue; or
*Misleading…

step 2
.and the person making the representation -
knows that it:
*Is; or
* Might be;
. -either:
* Untrue; or
* Misleading.

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15
Q

What If The Defendant Honestly
Believed That The Untrue Or
Misleading Representation Was
The Truth?

A

No offence

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16
Q

When Is The Offence
Complete?

A

Intent Offences
The offence is complete
once the intent is formed
accompanied by
the actus reus
(i.e. dishonestly
making a
false representation).

Is The Result Of Gain Or Loss
Required?
No
-there is no need
for the result
of gain or loss to occur.

Does The False Representation
Need To Be Heard, Received Or
Responded To?
No
The offence is complete as soon as
the false representation
is dishonestly made
accompanied by the requisite intent.

Posted Emailed False
Representation?
Offence will be complete at the
point of posting / sending with
the intent.
No need to be opened or read.

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17
Q

You Can Deceive A
Machine
Section 2(5) Fraud Act 2006

A

A representation will be
made where either:
* A representation; or
* Anything implying to be
a representation
…is submitted in any
form - to any:
* System; or
* Device..
. -designed to either:
* Receive;
* Convey; or
* Respond
. .to communications
either with or without
human intervention.

Example
Entering a PIN into a card payment machine

18
Q

DEFINITION OF DISHONESTY

A

THE DEFINITION OF DISHONESTY HAS BEEN UPDATED FOR FRAUD OFFENCES ALSO
Please note that the updated test for dishonesty as per the case of Ivey which is covered in the Theft & Related Offences module also applies to the definition of dishonesty in Fraud offences.
Please apply the revised test which is outlined below.

THE HISTORIC PRINCIPLES OF R v GHOSH
If the criteria of section 2 does not assist in determining dishonesty (i.e. none of the 3 beliefs are present) – historically the judge used to apply the 2 stage test derived from the case of R v Ghosh [1982] QB 1053:

STEP 1 - OBJECTIVE LIMB
Whether what was done was dishonest according to the ordinary standards of reasonable and honest people?
If the jury decide no – the jury must acquit.
If the jury decide yes – the jury will proceed to step 2.

STEP 2 - SUBJECTIVE LIMB
Whether the defendant realised by the standards of a reasonable and honest person - that what they were doing was dishonest?
If the jury decide no – the test would fail at the second hurdle and the jury must acquit.
If the answer is yes - then the defendant will have behaved dishonestly.

LEGAL UPDATE - THE SECOND STEP OF R v GHOSH HAS NOW BEEN REMOVED
Ivey (Appellant) v Genting Casinos (UK) Ltd t/a Crockfords (Respondent) [2017] UKSC 67 On appeal from [2016] EWCA Civ 1093
The Supreme Court in Ivey has updated the test in R v Ghosh – and has removed the second step of the test – to bring the test in line with that used in civil cases.
The Supreme Court held that the second leg of the rule adopted in R v Ghosh had serious problems, as the less a defendant’s standards conform to society’s expectations, the less likely they are to be held criminally responsible for their
behaviour.
The law should not excuse those who make a mistake about contemporary standards of honesty, a purpose of the criminal law is to set acceptable standards of behaviour.
The test is now that used in civil actions – i.e. just step 1 (above).
The fact-finding tribunal must ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts and then determine whether their conduct was honest or dishonest by the (objective) standards of ordinary decent people.
There is no longer a requirement to prove that the defendant must appreciate that what they have done is, by those standards, dishonest.

19
Q

Fraud By Failing To
Disclose Information
Section 3 Fraud Act 2006
2 steps

A

Step 1 — Actus Reus
An offence will be committed
when a person dishonestly
fails to disclose
to another person
information that they are
under a legal duty to disclose..

step 2 - Mens Rea
.and intend
by failing to disclose
the information
-to cause any of the
3 consequences.

The 3 Intended Consequences
Intending to either:
* Make a gain for themselves or another
person;
* Cause loss to another person; or
* Expose another person to a risk of loss.

20
Q

The Basis Of The
Legal Duty To
Disclose Information

A
  • Statute.
  • A transaction in good faith.
  • Express contractual terms.
  • Implied contractual terms.
  • Trade customs.
  • The existence of a fiduciary relationship.
21
Q

Awareness Of The
Legal Duty

A

Awareness Is Required
It is necessary to prove
that the defendant knew
that they were under a legal duty
to disclose the information.

22
Q

When Is The Offence
Complete?

A

Intent Offences
The offence is complete
once the intent is formed
accompanied by
the actus reus
(i.e. dishonestly
failing to disclose to another person
information that they are
under a legal duty to disclose).

Is The Result Of Gain Or Loss
Required?
No
-there is no need
for the result
of gain or loss to occur.

Example 1
Failing to disclose to an insurance company:
* A relevant medical condition when applying for life
Insurance cover; or
* Motoring convictions when applying for motor
insurance.

Example 2
Failing to disclose income
when claiming
means tested benefits
from the welfare system.

23
Q

Fraud By Abuse Of A
Position
Section 4(1) Fraud Act 2006

Who Can Commit
The Offence?

A

Offender?
Any person who occupies a position in which
they are expected to either:
* Safeguard the financial interests of another
person; or
* Not act against the financial interests of
another person.

24
Q

Relationships That
Generate Positions

A
  • Family relationships.
  • Work relationships.
  • Trustees and beneficiaries.
  • Client relationships.
  • Voluntary sector relationships
25
Q

How Will A Person In
A Position Commit
The Offence?
2 steps

A

Step 1 — Actus Reus
An offence will be committed
if they dishonestly
abuse their position
(via an act or omission). ..

step 2 - Mens Rea
and intend
by means of the
abuse of their position
- to cause any of the
3 consequences.

The 3 Intended Consequences
Intending to either:
* Make a gain for themselves or another
person;
* Cause loss to another person; or
* Expose another person to a risk of loss.

26
Q

The Dishonest Abuse
Of Position Can
Emanate From An
Act Or Omission

A

Example Of A Positive Act
An estate agent
deliberately undervaluing a
property
(i.e. a positive act)
with the intent to enable
their relative to purchase
the property at a cut price.

Example Of An Omission
A person failing to act (omission) to win a contract
on behalf of another whose interests they are
expected to safeguard - in order to enable a
competitor to win the contract instead.

27
Q

When Is The Offence
Complete?

A

Intent Offences
The offence is complete
once the intent is formed
accompanied by
the actus reus
(i.e. the dishonest
abuse of their position).

Is The Result Of Gain Or Loss
Required?
No
-there is no need
for the result
of gain or loss to occur.

28
Q

Possession Or
Control Of Articles
For Use In Fraud
Section 6 Fraud Act 2006

A

Definition
A person commits an offence - If they have either:
* In their possession; or
* Under ther control
.any article

for use either:
* In the course of any future fraud; or
* In connection with any future fraud
..by either:
* Themselves; or
* Another person.

29
Q

Definition Of An
Article

A

Article?
Anything!

Articles Include Electronic Forms
* Program - (e.g. a computer program
that generates credit card numbers)
* Data - (e.g. a computer file that contains
personal data, card details, etc.)
…held in electronic form.

30
Q

Where Can The
Offence Be
Committed?

A

Anywhere
The offence can be committed both
at home or away from home.

31
Q

Possession Or
Control

A

Think Wide
The person can be
some distance away
from the article.

32
Q

Purpose Of Having The
Article In Their
Possession Or Control?

A

Future Use
They must have the article for the
purpose of committing frauds in
the future.
The offence does not apply to
articles in respect Of frauds that
have already been committed.

33
Q

For The Purpose Of
Whom Committing
An Offence Of Fraud
In The Future?

A

Whom?
They have the article
for the purpose of either
themselves or another person
committing frauds in the future.

34
Q

Making Or Supplying
Articles For Their
Use In A Fraud
Section 7 Fraud Act 2006

A

Actus Reus
A person commits an offence If they either:
* Make;
. Adapt;
* Supply; or
* Offer to supply
.any article with either of 2 mental elements.

Mens Rea 1
Knowing that it is either.
* Designed; or
* Adapted;
.for use either:
* In the course of a fraud; or
* In connection with fraud.

Mens Rea 2
Intending It to be used to either:
* Commit a fraud, or
* Assist In the commission of a fraud.

35
Q

Offers To Supply An
Article

A

Does The Person Making The Offer
To Supply The Article Need To Be In
Possession Of The Article At The
Time The Offer Is Made?
No

36
Q

Obtaining Services
Dishonestly
Section 11 Fraud Act 2006
5 steps

A

Step 1
They obtain services for:
* Themselves, or
* Another;
.by a dishonest act.

step 2
The services are made available on the basis that
payment either:
* Has been made;
* IS being made, or
* Will be made.

Step 3
The services are obtained without either:
* Any payment being made; or
* Payment being made in full.

Step 4
When they obtained the services,
they knew the basis upon which the
services were made available
-i.e. that they were
expected to pay, or they
might be expected to pay,

step 5
They intend either:
* Not to make any payment; or
* Not to make payment in full.

37
Q

When Is The Offence
Complete?

A

Result Offence
This is the one result offence
within the Fraud Act 2006.
The person
must actually obtain the services
for themselves or another
without payment in full.

38
Q

Can The Service
Obtained Be One
That Is Not Legally
Enforceable?

A

Yes
The service obtained
can be one that is
not legally enforceable
— e.g. prostitution

39
Q

The Service Obtained
Must Be One That Is
Charged For

A

Sneaking Into An Paid For Event?
Offence if you need to pay money and with a ticket

Sneaking Into An Paid For Event?
No offence if it’s free admission

Stowaway On A Freight Lorry?
No offence

40
Q

False Accounting
Section 17 Theft Act 1968

A

It is an offence to dishonestly either:
* WIth a view to gain for:
* Themselves; or
* Another
* With intent to cause loss to another…

.by either an:
* Act - (e.g. altering or making up a receipt); or
* Omission - (e.g. failing to make an accounting entry) —
carry out either of 2 activities.

Activity 1
Either:
* Destroy;
* Deface;
* Conceal; or
* Falsify
.any account, record or document required for any
accounting purpose.

Activity 2
In furnishing information for any purpose — produces
or makes use Of any account, record or document —
which to their knowledge, is or may be In a material
particular either:
* Misleading;
* False; or
* Deceptive.

How Can A Record Be
Generated?
A record can be generated by a
person or machine.

Loan Or Mortgage Applications Are
Documents Required For An
Accounting Purpose

NIE Volume 2 (29 decks)

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