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FRAUD - Coggle Diagram
FRAUD
Fraud by false representation
ACTUS REUS
FALSE REPRESENTATION
Express or implied representation
Express:
Direct statements.
Implied:
Through words or conduct.
R v King:
Car dealer said mileage “may not be correct” → implied he wasn’t sure, but he knew it was false.
DPP v Ray:
Entering restaurant and eating implied ability/intention to pay.
Idrees v DPP
- D arranged for someone to impersonate him in a driving theory test. Representation by conduct (pretending to be Idrees) is false representation.
T v Twaite:
pure silence, without an accompanying action cannot amount to a representation.
Representation as to fact, law or state of mind
Fact or Law: Straightforward (e.g., mileage on a car).
State of Mind: Includes beliefs or intentions.
Edgington v Fitzmaurice (1885): Misrepresentation of intention = misstatement of fact.
Smith v Land and House Property Corp (1884): Opinion can imply factual basis if one party knows more.
DPP v Ray [1974]: Implied intention to pay = false when D decided not to pay.
Representation untrue or misleading
Representation must be untrue or misleading.
“Misleading” adds ambiguity—likely covers statements that create a false impression even if not strictly untrue.
Ultimately, a question of fact for the jury.
Overcharging and fraud
General Principle:
English law allows traders to set prices freely; customers decide if the price is fair.
Exception:
Criminal liability can arise where there is an implied false representation that the charge is fair, especially in relationships of trust.
R v Silverman
Facts:
Facts: Builder repeatedly overcharged two elderly sisters who trusted him completely.
Held:
Court implied a representation that charges were fair.
Principle:
In circumstances of mutual trust, taking dishonest advantage by charging excessively can amount to fraud.
R v Jones
Facts:
Milkman overcharged a shopkeeper for years; shopkeeper trusted him as a friend.
Held:
Liability arose because victim’s trust created an implied representation of fairness.
Principle:
Vulnerability need not mean lack of intelligence; trust and reliance can suffice.
Deceiving a machine
A representation is considered made if it (or anything implying it) is submitted to any system or device designed to receive, convey, or respond to communications—with or without human intervention.
This covers using stolen or cloned credit/debit cards and pins at ATMs or online payment systems. Other examples include fraudulent input into ticket machines, vending machines, or self-checkout systems.
MENS REA
1. Dishonesty
Ivey v Genting Casinos [2017] UKSC 67
(i) What was D’s actual knowledge and belief as to the facts? (subjective)
(ii) Given that knowledge and belief, was D dishonest by the standards of ordinary decent people? (objective)
R v Clarke
Dishonesty must be assessed separately from the act of lying; belief in ability to do the job may negate dishonesty.
2. Mens rea for the false statement
The defendant must know or be aware that the representation is untrue or misleading
Subjective awareness of possibility that statement is false is enough.
R v Staines
Recklessness with regard to a false statement requires more than mere carelessness or negligence. There must be an indifference to, or disregard of, whether a statement is true or false. If D gives a clear caveat (“I’m not sure”), it’s not false.
3. Intention to make a gain or cause a loss
The defendant intended to make a gain, even if no gain arose. Includes:
- intends to mak a gain for themselve;
- intends to make a gain for someone else;
- intends to cause a loss to another; or
- exposes someone to a risk of loss.
R v Dziruni [2008]:
False representation to get a job = intention to make a gain (salary).
Fraud by abuse of position
ACTUS REUS
Position of trust
The position must be one requiring the defendant to look after the victim's financial wellbeing. One where D is expected to safeguard or not act against another’s financial interests. It will be easy to prove where there is a professional, fiduciary or long term business relationship.
Example:
Professional roles (trustee-beneficiary, director-company, employee-employer).
Fiduciary or contractual relationships.
Informal contexts (family, voluntary work) if financial responsibility is assumed.
Employee handling company funds.
Financial adviser managing client investments.
Carer managing vulnerable person’s finances.
R v Marshall
Manager of residential home controlled residents’ bank accounts.
Withdrew money for personal use → convicted under s 4.
Principle: Direct control over victim’s finances = position under s 4.
R v Valujevs
Gang masters deducted wages and charged inflated rents.
Court of Appeal: s 4 applies beyond fiduciary duties if obligation is akin to fiduciary duty.
Crucial factor: Defendants assumed responsibility for collecting workers’ wages.
Limits: s 4 does not apply to general commercial competition; expectation must arise from relationship, not market forces.
Abuse of position
Once the prosecution has shown that the defendant occupied a position requiring D to safeguard the position of the victim of the fraud, they must prove that the position has been abused. It must be proven that:
The defendant occupied a position requiring them to safeguard the victim’s financial interests.
The defendant abused that position.
R v Pennock
Defendants befriended elderly relative (Mr Spann), who moved to UK and lived with them.
His savings placed in joint accounts with Mr Pennock.
£100,000 transferred from joint account to buy a house in Pennocks’ names, later transferred to their daughter.
Charged with two counts of fraud by abuse of position.
Abuse of position my omission
Offence can be committed by omission as well as act.
Example:
An employee who has a duty to collect payment on behalf of their employer fails to do so.
MENS REA
Dishonesty abuses that position
Ivey v Genting Casinos [2017] UKSC 67
(i) What was D’s actual knowledge and belief as to the facts? (subjective)
(ii) Given that knowledge and belief, was D dishonest by the standards of ordinary decent people? (objective)
Intention to make a gain or cause a loss
The defendant intended to make a gain, even if no gain arose. Includes:
- intends to mak a gain for themselve;
- intends to make a gain for someone else;
- intends to cause a loss to another; or
- exposes someone to a risk of loss.
Oblique intention?
Where an employee fails to collect sums owed to their employer, due to laziness (rather than assisting the person who should be paying or punishing their employer), there would be an oblique intention to make a gain for another and cause a loss to their employer. Applying the test in
R v Woolin,
it would be virtually certain that such a gain and loss would be caused and the defendant would appreciate this to be the case.
Definition of Gain and Loss (Fraud Act 2006, s.5)
Applies
to money or property (real or personal, including intangible).
Includes
temporary or permanent gain/loss.
Gain:
Keeping what one has or getting what one does not have.
Loss:
Not getting what one might get or parting with what - one has.
Fraud by failure to disclose
ACTUS REUS
Existence of a legal duty
Statute (e.g., benefit regulations).
Contracts of utmost good faith (e.g., insurance).
Express/implied contract terms.
Custom in trade/market.
Fiduciary relationships.
R v Razoq:
Doctor failed to disclose disciplinary proceedings (contractual duty).
R v Mashta:
Failure to disclose employment while claiming benefits.
Failure to disclose
Once the existence of a legal duty has been established, the prosecution must prove that the defendant failed to disclose the information to another.
This is a matter of fact. and in most instances will be easy to prove.
MENS REA
Dishonesty
Ivey v Genting Casinos [2017] UKSC 67
(i) What was D’s actual knowledge and belief as to the facts? (subjective)
(ii) Given that knowledge and belief, was D dishonest by the standards of ordinary decent people? (objective)
Intention to make a gain or cause a loss
The defendant intended to make a gain, even if no gain arose. Includes:
- intends to mak a gain for themselve;
- intends to make a gain for someone else;
- intends to cause a loss to another; or
- exposes someone to a risk of loss.
R v Dziruni [2008]:
False representation to get a job = intention to make a gain (salary).