The Black’s Law Dictionary defines fraud as: Fraud consists of some deceitful practice or willful device, resorted to with intent to deprive another of his right, or in some manner to do him an injury. As distinguished from negligence, it is always positive, that is intentional. Many believe that misrepresentation and fraud are true synonyms. While all frauds are based on misrepresentation, not all instances of misrepresentation culminate in fraud. The probable dividing line is intent. Another aspect is personal knowledge. If you believe something to be true and it turns out not to be so, that is misrepresentation. If purported something to be true and know it isn’t that’s fraud.

Tort Civil Fraud

Fraud can be civil, criminal and in some cases both. In the United States, most civil fraud is tried as a tort. Tort is a civil wrong or wrongful act. Tort is a civil action with a separate award independent of the actual contract. It is a direct invasion of some legal right of the individual, the infraction of some public duty by which special damage accrues to the individual or the violation of some private obligation by which like damage accrues to the individual (Black’s Law Dictionary).

Criminal Fraud

Criminal fraud can take various forms, some referred in the general sense, others more specifically like: bank fraud, credit card fraud, insurance fraud or forgery.

True Cost of Fraud

What does fraud cost? First, it must be recognized that estimates are that fraud is by nature an underreported crime. Typically, are organizations, banks, manufacturing and government loss is about 5% of their annual revenue to fraud. The stats indicate the median loss is $160,000 and that committed by executives and owners far surpasses that committed by employees.

Types of Fraud

Did you know that document falsification, forgery and counterfeiting are types of fraud? Identity theft, social security number theft is fraud. Where the federal government enforces fraud is when communications like phone, mail, wire or internet are used to commit the fraud. Indeed, because of our digital communications fraud is large on the international scale.

Financial & Other Fraud Investigations

Fraud investigations bear more in general with ‘who done its’ of fiction than the majority of the homicide investigations. In most cases the investigator knows the ‘who’ the ‘why’ is obvious but the when and how are a bit more nebulous. Of all the crimes investigated fraud by its very nature is intangible, convoluted and obscured. Misrepresentation with intent to hide facts and circumstances are part and parcel of fraud. Some simple other are intricate and complex. Another obstacle is documenting the case of fraud for presentation in court. The prosecution needs to wrap their minds around the facts and events of the case for the court and perhaps a lay jury. Not all prosecutors can present fraud in court effectively. Many frauds also have an element of accounting involved either as the primary act or discovery of the crime, indeed the accounting department may have uncovered the fraud leading to further investigation. A loss may have been reported but it will take a forensic accountant to uncover the facts and circumstances or body of the crime.

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