Chapter 21 Fraud

Fraud by false representation

1.​ Provision: s.2 Fraud Act 2006

2.​ Actus reus

-​ Make a representation which is false
Types of Representation (s.2(4)):
1.​ Express 明确的: Clearly stated, either in written, spoken, or digital form.
-​ R v Hamilton (2008)
-​ The defendant and his brother called at the victim's house, claiming that they had
come to collect payment for the panels. In fact, the victim's son had already paid
for them in full. The defendant said once that sum was paid they would arrange for
replacement panels to be delivered. The victim paid them £60. This was clearly an
express representation that the panels had not been paid for when they had.
-​ ‘Phishing’ on the internet
-​ An example would be where a person sends out an email to a large number of people
falsely representing that the email has been sent by a legitimate bank. The email asks
the receiver to provide information such as credit card and bank numbers so that the
'phisher' can gain access to others' assets.
2.​ Implied 暗示性: Conveyed indirectly through conduct or context.
-​ No specific definition
-​ An example would be standing on a street corner with a collecting box labelled 'Guide Dogs for
the Blind'. This is implying that the defendant is collecting on behalf of the charity. If the
defendant intends to pocket the money, he is guilty under s 2 of the Fraud Act 2006.

No Limit on Form of representation

-​ Can be made in any form and still qualify as false.
-​ Some Forms of Representation s.2(2)-(5)
1.​ Identity or Situation
-​ Claiming to have a specific qualification or authority.
2.​ State of Mind
-​ Claiming you will pay for something when you have no intention of doing so.
-​ s.2(5) The representation can be made through any medium, such as
1.​ Person-to-Person: Spoken or written directly.
2.​ Technology: Via machines or automated systems, including websites and
ATMs.
-​ Examples: Using Technology
-​ Entering false information into an ATM or online system.
-​ Misusing credit card details to pay for goods online.

Irrelevance of Consequence.
-​ Need not to have caused any actual harm or loss to be considered fraudulent.
-​ The existence of consequences will have an effect on the sentence

A False Representation is
-​ Untrue or Misleading - factually incorrect / gives a false impression.
-​ Knowledge of Falsity - The defendant is aware that the representation is /might be
untrue.
3.​ Mens rea
-​ Dishonestly
-​ Tested as in theft - R v Barton and Booth (2020)
-​ Knowing that the representation was/ might be untrue/ misleading
-​ Actual knowledge of untrue representation
-​ Merely an awareness of a risk that might be untrue representation - cannot
fulfil
-​ Intend to make a gain for himself or another, to cause loss to another or to expose
another to risk of loss
-​ Definition of ‘gain’ & ‘loss’ - s.34 of the Theft Act 1968
-​ "Gain" and "loss" are to be construed as extending only to gain or loss
in money or other property, but as extending to any such gain or loss
whether temporary or permanent; and -
(i) "gain" includes a gain by keeping what one has, as well as a gain
by getting what one has not; and
(ii) "loss" includes a loss by not getting what one might get, as well as
a loss by parting with what one has
-​ Kapitene (2010)
-​ The defendant, an illegal immigrant, applied for a job at a cleaning company. He
signed a declaration stating that he was legally entitled to remain in the UK, and
showed his employers a Congolese passport containing his details, his photograph
and an immigration stamp indicating that he had indefinite leave to remain in the UK.
He began work as a cleaner.
-​ His gain was the wages he was paid by the company.
-​ The victim's "loss" was the wages paid out.

4.​ Categories of offences and Sentencing

-​ Triable either way – maximum 10 years’ imprisonment
Fraud by failing to disclose information
1.​ Provision - s.3 Fraud Act 2006

2.​ Actus reus

-​ Fail to disclose information where a legal duty to do so exists
-​ R v D (2019)
-​ The defendant was charged with dishonestly failing to disclose her
residence to the council so that council tax could be levied. The
defendant was found not guilty, as at the time there was no legal
duty to disclose the information.
-​ Irrelevance of consequences (offences under ss 2, 3 and 4)
-​ Need no consequences to the offending.
-​ The existence and extent of consequences will have an effect on the
sentence

3.​ Mens rea

-​ Dishonestly
-​ Intend to make a gain for himself or another, to cause loss to another or to expose
another to risk of loss
-​ R v Blight and Ingham (2019)
-​ Two wreck divers were convicted of fraud through a dishonest failure to
disclose the information that they had taken possession of a wreck, as
required by the Merchant Shipping Act 1995. The items taken by the
defendants came from shipwrecks of commercial vessels which had been lost
at sea or from naval warships lost during the First World War. They sold items
taken from the wrecks and kept the proceeds.
-​ It is no defence that the defendant did not know of the existence of the
duty. 他们不可能不知道需要通报
-​ The only likely defence is an absence of dishonesty. 但是他们没有不诚实

4.​ Categories of offence and Sentence

-​ Triable either way – maximum 10 years’ imprisonment
Fraud by abuse of position
1.​ Provision - s.4 Fraud Act 2006

2.​ Actus reus

-​ In a position in which he is expected to safeguard, or not to act against, the
financial interests of another person
-​ Abused that position
-​ Legal fiduciary duty - not essential, but in most cases there is.
-​ R v Valujevs (2014)
-​ The question was whether a s 4 offence applied to an unlicensed
gangmaster (someone who provides labourers for farmers).
-​ The court stated that the actions fell within the scope of the offence,
and he was convicted.
-​ The offence does not require a "fiduciary duty in the strict legal
sense, but it does require an obligation that is akin' to one.
-​ The court clarified that this offence wouldn’t apply to those who just
provide accommodation (rent house), goods, services, or labour, even
if they hold a stronger bargaining position.
-​ R v Marshall (2009)
-​ The defendant was the joint manager of a residential care home
where the victim was a resident who had severe learning difficulties.
She had a bank account over which she could not exercise any proper
control. The defendant made several withdrawals and used the money
for her own benefit.
-​ She was convicted under s 4.
-​ R v Gayle (2008) - using his work authority to facilitate a criminal offence
-​ The defendant was a transport manager for one of DHL's divisions at
Heathrow airport. He used that position to send a large crate from
Heathrow to New York. He certified the crate as 'known cargo
containing empty plastic pots. It was passed through without the
usual X-ray screening. In fact, the crate contained 500 kilos of khat,
a drug that was not illegal in England but was illegal in the USA.
-​ Irrelevance of consequences (offences under ss 2, 3 and 4)
-​ Need no consequences to the offending.
-​ The existence and extent of consequences will have an effect on the
sentence

3.​ Mens rea

-​ Dishonestly
-​ Intended by that abuse to make a gain or cause a loss

4.​ Categories of offence and Sentence

-​ Triable either way – maximum 10 years’ imprisonment
Obtaining services dishonestly

1.​ Provision: s.11 of the Fraud Act 2006

2.​ Actus reus

-​ An act (cannot be by omission)
-​ services are actually obtained
-​ Obtains
-​ Services
-​ Payment not made or not made in full

3.​ Mens rea

-​ Dishonesty
-​ It is not necessary to show that they have deceived anyone.
-​ Knowledge that the services are, or might be, being made available on the
basis that payment has been/ will be made for them
-​ Intention not to pay or not to pay in full
-​ If the defendant thought that someone else had already paid - not
guilty.

4.​ Categories of offence and Sentence

-​ Triable either way – maximum 5 years’ imprisonment
The Fraud Act 2006 is complex and lengthy, even though it purports to set out one offence
- fraud. Terms used in the Act are quite specific and yet are not defined. For example,
there is no definition of what is meant by 'implied false representation by conduct' in
the Fraud Act, although the explanatory notes to the Act give an example. This gives
plenty of scope for legal argument and judicial legal development.

Many fraud cases also include a charge of then. overlap is potentially confusing to
prosecution and defendant alike. Examples of overlap can be seen in R v Barton and
Booth (2020).

There is an argument that the provisions of the Act are too general, and have the potential
to extend criminal liability too far, criminalising lying and ignoring moral subtleties. Trivial
disputes may be elevated into criminal matters. Who are to be the gatekeepers?

The s 2 offence seems likely to be capable of the most widespread use when charging,
precisely because it is the broadest. For example, under s 2(5), a representation can arise
before it is released from the defendant's control. This would occur when a defendant has
typed a false representation into a computer, intending to send it later. They will still have an
intention to gain,eventually, and so would be guilty

Under s 2(2), a statement will be considered false if it is untrue or misleading and the person
making it knows that it is, or might be, untrue or misleading. An auction house selling a
painting as an original, which later turns out to be a forgery, may have genuinely believed
that its attribution was correct, but was nevertheless aware that there is always a risk of
error in such situations.

Action is often taken to stop this, but sometimes things may slip through the net, for
example:
[Link]/culture/2020/jun/14/christies-withdraws-allegedly-looted-greek-and-ro
man-treasures

S 11 is a result crime and it must be established that a service was in fact obtained
whereas for s 2 there is no need to actually achieve a gain or loss.

S 11 only relates to services that require payment, whereas s 2 could apply where the
fraud is used to acquire something of benefit that is free.
The Fraud Act 2006 is a significant piece of legislation aimed at addressing fraud, but its
broad scope and the lack of clear definitions for some key terms can create legal
complexities. Let's break down the main points, explain the key issues, and elaborate on the
examples provided:

1.​ The Structure of the Fraud Act 2006

-​ General Offence of Fraud:
-​ The Act defines a single offence of fraud, but it can be committed in different
ways, including by false representation, by failing to disclose information, and
by abuse of position.
-​ Complex Terminology:
-​ The Act uses terms like "implied false representation by conduct," but these
are not specifically defined within the legislation, leading to potential legal
debates. For example, if someone misleads another person through their
behaviour rather than explicit words, it may be unclear how this fits into the
law, leaving room for interpretation by courts.

2.​ Overlap with Other Offences

-​ Theft vs. Fraud: Many fraud cases also involve theft, creating confusion for both the
prosecution and the defendant. For instance, in *R v Barton and Booth (2020)*, the
overlap between these offences required careful legal navigation, as both charges
could potentially apply to similar conduct. This overlap complicates the legal process.

3.​ General Nature of the Act

-​ Broad Scope:
-​ The Act’s provisions are intentionally broad, which allows for flexibility in
prosecution but also raises concerns about potentially extending criminal
liability too far. For instance, simple lies could be criminalised, ignoring the
moral distinctions that might exist in everyday situations. This broad scope
risks turning minor disputes into criminal matters.
-​ Gatekeepers of the Law:
-​ Given the wide applicability of the Act, there is concern over who decides
which cases should be prosecuted and which should be dismissed. This
decision-making process is crucial in preventing trivial matters from being
elevated to criminal cases.

4.​ Section 2: False Representation

-​ Widespread Use:
-​ Section 2 of the Act, concerning false representation, is likely to be the most
commonly used. This is because it covers a wide range of behaviours,
making it easier to apply in various situations.
-​ Pre-Control Representations:
-​ Under Section 2(5), a false representation can be made even before it is
communicated. For example, if someone types a false statement into a
computer intending to send it later, they could be guilty of fraud because the
intention to deceive exists even before the action is completed.
-​ Definition of Falsehood:
 -​ Section 2(2) explains that a representation is false if it is untrue or misleading,
and the person making it knows or suspects this. For example, an auction
house selling a painting as an original may genuinely believe it is authentic,
but if they are aware of the risk of it being a forgery, they could still be guilty of
making a false representation.

5.​ Section 11: Obtaining Services Dishonestly

-​ Result Crime:
-​ Unlike Section 2, Section 11 requires that a service be actually obtained for
the offence to be complete. If a person lies to receive a service but doesn’t
actually get it, Section 11 would not apply, but Section 2 might.
-​ Services Requiring Payment:
-​ Section 11 only applies to services that require payment, whereas Section 2
can apply more broadly, including situations where the benefit obtained is
free.

6.​ Example of Real-World Application

-​ In the case of Christie’s withdrawing allegedly looted treasures, the issue highlights
the complexities of verifying authenticity. Even if there was no intent to deceive, the
auction house could face legal challenges if they sold items they should have known
were problematic.

Conclusion
The Fraud Act 2006 provides a robust framework for tackling fraud, but its broad language
and undefined terms can lead to legal uncertainties and overlapping charges. While this
flexibility allows for comprehensive prosecution, it also risks over-criminalizing certain
actions and complicating legal proceedings. The role of legal practitioners and the judiciary
in interpreting and applying these provisions is crucial to maintaining balance and fairness in
the criminal justice system.