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Chapter 4

Fraud

Fraud is an intentional act involving the use of deception to obtain an
unjust or illegal advantage – essentially ‘theft by deception’.

Fraud can be carried out by management, employees or third parties.

Examples of fraud include:

 the theft of cash or other assets

 false accounting: this includes concealing or falsifying accounting
records with a view to personal gain or providing false information
that is misleading or deceptive

 crimes against consumers or clients, e.g. misrepresenting the
quality of goods; pyramid trading schemes; selling counterfeit
goods

 employee fraud against employers, e.g. payroll fraud; falsifying
expense claims; theft of cash

 crimes against investors, consumers and employees, e.g. financial
statement fraud

 crimes against financial institutions, e.g. using lost and stolen
credit cards; fraudulent insurance claims

 crimes against government, e.g. social security benefit claims
fraud; tax evasion

 crimes by professional criminals, e.g. money laundering; advance
fee fraud

 e-crime by people using computers, e.g. spamming; copyright
crimes; hacking.

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