Fraud (Advanced Flashcards)
Fraud Act 2006
What is one general offence of fraud which can be committed in three different ways?
(I) By false representation
(II) By failing to disclose information
(III) By abuse of position
Section 1 Of the Fraud Act 2006 Provides:
A person is guilty of fraud if he is In breach of any of the sections listed in subsection (2)
(Which provide for different ways of committing the offences)
Section 1 of the Fraud Act 2006 provides as follows:
A person is guilty of fraud if he is in breach of any of the sections listed in subsection (2) (which provide for different ways of committing the offence).
Subsection (2)
(a) Section 2: Fraud by false representation
(b) Section 3: Fraud by failing to disclose information
(c) Section 4 Fraud by abuse of position
The first Flashcard represents the subsection (2) of the fraud act
See this card has a sense of repetition
A vital point of Section 1 Of The Fraud Act 2006 Subsection (2)
Fraud offences are all conduct offences and will be committed upon completion of the Defendant’s fraudulent conduct.
It is not necessary for the purposes of the offences that anyone actually be defrauded
Brief example
Colourblind person wants a blue car
Owner has a green car but lies and states it’s “Blue”
(False representation already established)
Colourblind person isn’t really blind and has failed to be defrauded
No need to establish that the buyer was defrauded
Section 2 Of The Fraud Act 2006
2.1 Fraud By False Representation
A person is in breach of this section if he:
(a) Dishonesty 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 a risk of loss
Section 2 Of The Fraud Act 2006
2.1 Fraud By False Representation
Actus Reus (FLASHCARD NO.1)
(KEY PART)
Making a False Representation
Section 2 (3) Provides that the Acts Reus of the offence covers:
“Any representation as to fact or law, including a representation at to the state of mind of—
(a) the person making the representation, or
(b) Any other person
How can a representation be done?
(Example when flipped: Car example)
Directly verbally communicating it
Person 1: “I have a blue car”
Confirming someone else’s assumptions of the colour indirectly
Person 1: “You have a lovely blue coloured car”
Person 2: “Thank you”
Through a silent physical action
Person 1: “If you have a blue car please stand on the left hand side of the room”
Person 2: Moves to the left
By doing nothing
Person 1 to Person 3: “Person 2 Has a lovely blue car”
Person 2: Does not react
Section 2 (4) Of The Fraud Act
Using the example how would you phrase a representation in legal terms?
HINT: Expressed and Implied
(Underlined parts + Bold parts are extremely important)
Section 2 (4) Of the Act set out that a representation may be expressed or implied
Expressed Representation
Doing (Through a silent physical action)
Saying something (Directly Verbally Communicating)
Implied Representation
Acting in a way that implies that things are a certain way (Thank you implies confirmation and acceptance)
Staying silent in those circumstances (Implies acquiescence to what is being said)
Section 2 (4) Of the Act set out that a representation may be…..?
(These are the only parts you need to know, the Flashcard behind used the car example to better your understanding)
Expressed Or Implied
2.1 Fraud by False Representation Case Law
2.1.1 Actus Reus Within the Case Law
MetroPolitan Police Commissioner V Charles (1977)
The defendant had been told by his bank manager that he was not to cash more than one cheque a day and was only authorised to write cheques for amounts up to the value of £30.
The defendant, ignoring this, went out and wrote a number of cheques to casinos which subsequently bounced.
The House of Lords held that by handing over these cheques he was impliedly representing that he had an account with the bank named on the cheque and that he had their authority to make out the cheques.
As this was not the case his representation was held to be false.
Deception created fraud
The D Obtained A Pecuniary Advantage By Deception
2.1 Fraud By False Representation
2.1.1 Actus Reus
In this case, the defendant Mr Rai applied to the council social services for a sum of money to enable him to undertake necessary adaptations in his home in order that he could care for his elderly mother there.
The council agreed to provide assistance amounting to £9,500 and later that year they began works in Mr Rai’s home.
At the time the council had started works, however, Mr Rai’s mother had passed away and Mr Rai did not inform the council of the change in circumstance as he wished to keep the grant regardless.
The Court considered Mr Rai’s conduct as a whole and held that it had amounted to a continuing representation that his mother was alive and that the works were undertaken for her benefit.
As she had died already this was no longer the case and Mr Rai held a new intention that the works would be carried out for his own benefit. By doing nothing and allowing the works to be undertaken in his house Rai was continuing the representation.
This case demonstrates how a representation will be held to have been made where the defendant has deliberately omitted to change a perception that another person holds.
2.1 Fraud By False Representation (STILL ON)
2.1.2 Men’s Rea (MAIN TOPIC OF FC)
Dishonestly;
Knowing the representation is untrue or misleading, and;
Intending to make a gain, cause a loss, or cause a risk of loss
2.1 Fraud by false presentation (STILL ON)
2.1.2 Men’s Rea
Dishonestly
Is a subjective concept
Assessed using application of common law test set out in R V Ghosh
According to the ordinary standards of reasonable and honest People were the defendants actions dishonest?
If it was dishonest by those standards, then did the defendant himself realise what he was doing was dishonest?
2.1 Fraud by False Representation
2.1.2 Men’s Rea
Knowing the representation is untrue or misleading
This element of the men’s Rea requires:
Requires a subjective understanding on the part of the defendant
Not sufficient for the defendant to simply say what they believed and for it to be accepted as a fact, their state of mind is a matter of fact (Jury)
Actual knowledge that the representation might be untrue and not simply a reckless awareness of a risk that it might be untrue
2.1 Fraud By False Representation
2.1.2 Men’s Rea
Intending to make a gain, cause a loss, or cause a risk of loss.
Section 5: How gain and Loss will be interpreted
(Section 5 (2) Flashcard)
Section 5 (2)
“Gain and loss extends to any gain or loss in money or property”
Property is interpreted widely:
Any property whether real or personal
Things in action
Intangible property such as shares or intellectual property rights.
General Point for 2.1.2 Men’s Rea
Is there a need for an intention to permanently deprive?
No (Broken down into bullet points)
There is no need for an intention to permanently deprive as the gain or loss includes any gain or loss whether it is temporary or permanent. (Main bullet point)
The gain must merely be a general gain and does not have to be a selfish gain.
An intention to make a gain for another person is sufficient for themens rea.
Section 5 (3)
Section 5 (4)
S.5(3)
“Gain Encompasses keeping what one has, as well as a gain by getting what one does not have”
S.5(4)
“loss includes a loss by not getting what one might get, as well as a loss by parting with what one has”
2.2 Fraud By Failing to Disclose Information
Section 3 of the Fraud Act 2006
“For the offence of fraud by failing to disclose information in situations where there exists a legal duty to disclose information in situations where there exists a legal duty”
2.2 Fraud By Failing to Disclose Information
How can a person breach Section 3 of the Fraud Act 2006?
(a) Dishonestly fails to disclose to another person information which he is under a legal duty to disclose, and
(b) Intends, by failing to disclose the information—
(i) To make a gain for himself or another, or
(ii) To cause loss to another or to expose another to a risk of loss
2.2 Fraud By Failing to Disclose Information
2.2.1 Actus Reus
Legal duty to disclose information is in existence; and
Failure to disclose the information
2.2 Fraud By Failing to Disclose Information
Legal duty to Disclose
When applying for insurance
When selling a house in relation to enquiries raised by the purchaser
Other examples
Under contract law
When claiming social security
From the custom of particular trades
During good faith transactions
Between professionals and their clients
Under the existence of a fiduciary relationship
2.2 Fraud By Failing to Disclose Information
2..2.1 Actus Reus
Legal duty to Disclose
Under the existence of afiduciary relationship
A relationship where a duty of good faith is owed and exists e.g:
A director and his company
2.2 Fraud By Failing to Disclose Information (S3)
Legal duty to Disclose
Reading over the last flashcards on this topic what do you realise?
HINT: “Legal”
The offence is only committed where there is a legal duty to disclose the information, if there is no legal duty, there is no offence under this section
2.2 Fraud By Failing to Disclose Information
2.2.1 Actus Reus
Failure to disclose the information
Omitting to provide the requisite information establishes the Actus Reus
no requirement that the failure to disclose relates to relevant information that is material to the matter and further, there is node minimisstandard in place.
E.g the defendant were to disclose 99% of the information legally required to him but failed to disclose a potentially unimportant remaining 1% this could still be sufficient to complete theactus reusof the offence.
2.2 Fraud by Failing to Disclose Information
2.2.2 Men’s Rea
Intending to make a gain, cause a loss or cause a risk of loss
Dishonestly; and
Intending to make a gain, cause a loss or cause a risk of loss
Dishonestly: Same principles apply it’s subjective using the Ghosh Test
2.2 Fraud by Failing to Disclose Information
2.2.2 Men’s Rea
Intending to make a gain, cause a loss or cause a risk of loss
s.5 provision of the Act is applied in order to assess what a qualifying gain or loss is and then coming to a conclusion as to whether the defendant subjectively intended to make such gain or cause or expose the victim to the loss.
2.3 Fraud By Abuse Of Position
Section 4 Of the Fraud Act 2006
“A person is in breach of this section if he…”?
(a) occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person,
(b) dishonestly abuses that position, and
(c) intends, by means of the abuse of that position—
(i) to make a gain for himself or another, or
(ii) to cause loss to another or to expose another to a risk of loss.
2.3 Fraud By Abuse Of Position
2.3.1 Actus Reus
What is the Actus Reus for Fraud by Abuse Of Position?
Occupation of a position where an expectation to safeguard or not to act against the financial internet of another exists, and;
Abuse of that position
2.3 Fraud By Abuse Of Position
2.3.1 Actus Reus
Occupation of a position where an expectation to safeguard or not to act against the financial interests of another exists
Any relationship that is classified as fiduciary will suffice
Need not be a fiduciary relationship, this will be a question of law for the judge upon which if necessary a direction must be given to the jury
Financial interest
Not defined in the act
Only contains and uses its ordinary meaning
2.3 Fraud By Abuse Of Position
2.3.1 Actus Reus
Abuse of that position
Abuse is not defined in the act so:
It uses its ordinary dictionary meaning which is:
“Using something for a bad effect or for bad purpose or more simply a misuse of something”
Applying the meaning of “abuse” to the offence
Abuse of the position will occur where the position is used to do something that it is not intended for
KEY POINT
2.3 Fraud By Abuse of Position
2.3.1 Actus Reus
Occupation of a position
(where an expectation to safeguard or not to act against the financial interests of another exists)
Occupation of a position
Present context
“D must occupy the position at the time in question”
“D no longer occupies the position at the point at which abuse occurs, no offence established”
2.3 Fraud By Abuse of Position
2.3.1 Actus Reus
What does Section 4(2) of the act further provide?
“A person may be regarded as having abused his position even though his conduct consisted of an omission rather than an act”
So no positive act is required from the D to fulfil the Actus Reus as the abuse can be committed by either:
An act
Or omission
2.3 Fraud by Abuse Of Position
2.3.2 Men’s rea
Dishonestly, and;
Intention to make a gain, cause loss or a risk of loss
Carry the same meaning for other fraud offences
2.4 Charging and Sentencing
What does Section 1 (3) Of the Fraud Act 200 State about the sentencing?
(a) on summary conviction, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum (or to both);
(b) on conviction on indictment, to imprisonment for a term not exceeding 10 years or to a fine (or to both).
Indictable
10 Years or less
Fine
Summary
Exceeding 12 months
Fine Exceeding statutory maximum
3.0 Obtaining Services Dishonestly
What does section 11 of the Fraud Act state? (Advanced card)
A person is guilty of an offence under this section if he obtains services for himself or another-
(a) by a dishonest act, and
(b) in breach of subsection (2)
.
(2) A person obtains services in breach of this subsection if—
(a) they are made available on the basis that payment has been, is being or will be made for or in respect of them,
(b) he obtains them without any payment having been made for or in respect of them or without payment having been made in full, and
(c) when he obtains them, he knows—
(i) that they are being made available on the basis described in paragraph (a), or
(ii) that they might be, but intends that payment will not be made, or will not be made in full.
3.0 Obtaining Services Dishonestly
3.1 Actus Reus
What are the Actus Reus Elements for “Obtaining Services Dishonesty”?
Obtaining services
Payment required but not made
Dishonestly caused the services to be obtained
3.0 Obtaining Services Dishonestly
3.1 Actus Reus
Obtaining services
How is this satisfied?
Satisfied upon the successful obtainment of any service
Neither obtain or service are defined in the act so:
They must be taken by their ordinary and natural meaning
3.0 Obtaining Services Dishonestly
3.1 Actus Reus
Payment required but not made
What does this mean?
Services must be given in return for an expected, legally required payment which is not provided by the D
3.0 Obtaining Services Dishonestly
3.1 Actus Reus
Dishonestly caused the services to be obtained
Causation element of the Actus Reus
Offence of obtaining services dishonestly is a result crime
Such service must be obtained as a result of dishonesty
Factual causation
But for the D’s dishonesty would the services have been obtained?
Legal causation
Ensures that the D’s dishonesty was more than “A slight or trifling factor of the decision to provide services”
3.0 Obtaining Services Dishonestly
3.2 Men’s Rea
What are the Men’s Rea elements for “Obtaining services Dishonestly”?
Dishonestly
(Again, use the Ghosh Test)
Knowing that payment was required
(Requires a subjective understanding from the part of the D that payment was expected I’m return for the service rendered to them)
Intending to avoid payment in whole or in part
3.0 Obtaining Services Dishonestly
3.2 Men’s Rea
Intending to avoid payment in whole or in a part
Establishes that the offence cannot merely be committed by the:
“Omission of not knowing” as the D must commit the positive act of knowing the payment was required when he obtained the service and then not providing it
D must intend to avoid the payment in order to establish the positive act of taking steps to avoid it or failing to provide it
3.0 Obtaining Services Dishonestly
3.3 Charging and Sentencing
What does Section 11(3) state in terms of sentencing?
(a) on summary conviction, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum (or to both);
(b)on conviction on indictment, to imprisonment for a term not exceeding 5 years or to a fine (or to both).
Disclaimer
Please do forgive me if any grammatical errors are within the cards just inform me and I’ll attempt to fix them
