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  1. Fraud – Introduction
    • Unfortunately, instances of fraud are widespread, with many people not realising the seriousness of their actions. Fraud can be simply using a credit card they found or a complicated scheme of falsifying records and misleading a person to lend money by convincing them development approval had been received.
    • Fraud can be both criminal and civil, each having slightly different requirements and different standards of proof. Even in the criminal sphere, there are multiple potential charges, depending on the particular circumstances.
    • Below, we provide a brief outline of the basics of fraud.

 

  1. Civil Fraud
    • Civil or commercial fraud is the general terms given to a number of causes of action, with each cause of action having slightly different requirements. These causes of action include fraudulent misrepresentation in contract, the tort of deceit, the tort of conspiracy and breach of fiduciary duty.
    • Generally, these causes of action require that the defendant must knowingly have made a false representation of a material fact with the intention that the plaintiff would rely on it and the plaintiff suffered damage due to its reasonable reliance on the misrepresentation.
    • Deciding on which cause of action to pursue depends on the specific facts of each matter and available remedies.

 

  1. Criminal Fraud – Western Australia
    • Section 409 of the Criminal Code (WA) provides that if any person, with intent to defraud (by decaipt or other fraudulent means) obtains property, gains a benefit for any person, causes detriment to any person or induces any person to do or abstain form any act that the person is lawfully entitled to abstain or do (as the case may be).
    • It is essential that the accused acted with an intention to defraud, which is determined subjectively, meaning what the accused person actually intended.
    • The requirement of an intention to defraud also limits the offence to circumstances relating to a victim’s economic interests or public duty. Dishonestly inducing a person to do an act (or not to do an act) will not amount to fraud where that act affects only non-economic interests, such as social relationships.
    • Examples of fraud include using another person’s credit card or creating false invoices for work not performed or goods not provided with the intention that the recipient would rely on them being true and cause a payment to be made which would not otherwise have been made but for the deceit.
    • In the case of Wells v Hounslow [2021] WASC 99, the victim lost her bag containing her card one Friday evening and that night and the next morning the victim found that criminal had used her card (through the pay wave feature for purchases under $100) to purchase items at 10 businesses, including an IGA (purchases of $48.69 and $62.53), service station ($67.60) and a newsagency ($44.60). Ultimately, the criminal was sentenced to 9 months prison after an early guilty plea, though she did have a history of similar convictions only having fines imposed.
    • In the case of Nhi v The State of Western Australia [2021] WASCA 32, the criminals were convicted of falsifying documents such as payslips, a tax return and bank statements to create a misleadingly positive impression as to his financial position so that he could obtain a bank loan. He was convicted and sentenced to 24 months imprisonment on 4 counts of fraud.
    • The most common defences used by an accused are honest claim of right[1] and mistake of fact.[2]

 

  1. Fraud – Commonwealth
    • The Commonwealth Criminal Code creates various fraudulent conduct offences including:
  • Obtaining property by deception (10 years jail);[3]
  • Obtaining a financial advantage from a Commonwealth entity by deception (10 years jail);[4]
  • General Dishonesty – including dishonestly obtaining a gain from or a loss to a Commonwealth entity (5 years jail); [5]
  • Obtaining a financial advantage (12 months jail); [6] and
  • Conspiracy to defraud (10 years jail). [7]
    • The obvious key here is that the fraud was committed in relation to a Commonwealth entity, such as Centrelink or another government department.
    • For example, where a person submits false documents to Centrelink in order to qualify for a benefit which they would not have received otherwise would fall into these categories.

[1] Criminal Code section 22

[2] Criminal Code section 24

[3] Commonwealth Criminal Code section 134.1

[4] Commonwealth Criminal Code section 134.2

[5] Commonwealth Criminal Code section 135.1

[6] Commonwealth Criminal Code section 135.2

[7] Commonwealth Criminal Code section 135.4