- Is fraud a crime?
- What is fraudulent intent?
For
the most part, there is no single crime called "fraud."
However, fraud is an intrinsic part of a number of offenses, most
notably those in the theft category. The early theft crime of larceny
required a taking of property from the possession of another;
therefore using deceit to take the property of another that had been
entrusted to the offender was not punishable because it was not
larceny. The crime of embezzlement was created to plug this loophole
in theft law. Embezzlement is committed when the offender
fraudulently converts the property of another, which is already in the
offender's possession. Fraudulent conversion occurs when
the offender seriously interferes with the victim's rights over the
property by using it up, giving it away, unreasonably withholding
possession from the victim, or seriously damaging the property with
the intent to benefit himself and deprive the victim. Fraudulent
intent requires a finding that the offender had the specific intent to
deceive the victim, and mere negligence in the handling of the
property will not sustain a conviction.
Fraud is also at the heart of the crime of false pretenses,
which is committed when the offender knowingly makes a false
representation of fact with the intent to cause the victim to pass
title to his or her property to the offender. False pretenses requires
a false representation; making misleading statements or merely
remaining silent does not satisfy the requirement of a false
misrepresentation. Neither are opinions enough to make a false
representation; "In my opinion, your property is worthless,"
is not a false representation for the purposes of the crime. The false
representation must be about an important fact. A false statement
about an unimportant fact generally will have little impact on the
victim's decision to complete the transaction, and therefore will not
support a charge of false pretenses.
Fraud is an important part of the federal mail and wire fraud
statutes. The scope of fraud under those statutes is broader than
under embezzlement and false pretenses since it includes using tricks,
schemes, or devices to defraud; therefore an unimportant misstatement
can serve as one element of a scheme to defraud. In addition, the
federal crimes can be charged when the offender secures a service
through fraud, not just takes property. Other federal crimes that
prohibit fraud protect the banking industry and stock market
transactions. Statutes prohibit the use of fraud in obtaining
government goods or services and the filing of fraudulent tax returns
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