Legal Definitions - criminal fraud

Criminal fraud refers to the act of intentionally deceiving another person or entity to achieve an unlawful gain, typically financial or material, at the victim's expense. It involves a deliberate misrepresentation of facts, which the victim relies upon, leading to their detriment and the perpetrator's illicit benefit. Because it involves a clear intent to mislead and results in harm, it is treated as a serious crime under the law.

• Example 1: Investment Scam

  A person establishes a fictitious company, creating a professional-looking website and brochures that promise exceptionally high, guaranteed returns on investments. They convince several individuals to invest their savings, claiming the money will be used for a groundbreaking new technology. In reality, the perpetrator never develops any technology and instead uses the invested funds for personal luxury purchases, leaving the investors with significant financial losses.

  How this illustrates criminal fraud: The perpetrator intentionally deceived investors by misrepresenting the existence and purpose of the company and the safety of the investment. The investors relied on this deception when handing over their money. The perpetrator gained financially from this deception, while the investors suffered a financial loss, fulfilling the elements of criminal fraud.

• Example 2: Insurance Claim Fraud

  An individual intentionally damages their own vehicle in a secluded area and then reports it as a hit-and-run accident to their insurance company. They file a claim for extensive repairs, knowing that the damage was self-inflicted and not the result of an actual accident. Their goal is to receive a payout from the insurance company to cover the cost of repairs, which they would otherwise have to pay themselves.

  How this illustrates criminal fraud: The individual deliberately misrepresented the cause of the damage to their insurance company. The insurance company, relying on this false information, would potentially pay out a claim. The individual's intent was to gain financially (avoiding repair costs) through this deception, causing a financial loss to the insurance company, which constitutes criminal fraud.

• Example 3: Identity Theft for Credit

  A person obtains another individual's personal identifying information, such as their Social Security number and date of birth, without their knowledge or consent. Using this stolen information, they apply for and successfully open several credit card accounts and secure a personal loan in the victim's name. They then make large purchases and withdraw cash, never intending to repay the debts, leaving the victim with a ruined credit score and substantial financial liabilities.

  How this illustrates criminal fraud: The perpetrator intentionally deceived financial institutions by impersonating the victim and misrepresenting their identity. The financial institutions relied on the false identity to extend credit. The perpetrator gained financially by acquiring goods and cash, while the victim suffered significant financial harm and damage to their credit, clearly demonstrating criminal fraud.