Unit 5 – Fraud

Question 1

3 ways to commit fraud…

Answer 1

a) fraud by making a false representation

b) Fraud by failing to disclose information

c) fraud by abuse of position

Question 2

A) Fraud by false representation

Answer 2

AR = Making false representation

MR = Knowledge the representation is or might be false, dishonesty, intention to make a gain for self or another or cause loss to another or expose another to risk of loss

Question 3

“Representation”

Answer 3

Can be by conduct. Express or implied.

Question 4

“dishonesty”

Answer 4

IVEY DISHONEST:

Subjective element:

1) What was D’s genuine and honest belief or knowledge as to the facts? (This may not be reasonable, but must be subjectively honest)

Objective element:

2) Would ordinary decent people objectively consider D’s behaviour dishonest, taking into account the facts as D honestly believed/knew them to be?

Question 5

“Knowledge / recklessness that representation is false”

Answer 5

D is aware or suspect there is a risk their representation is untrue / misleasing

Question 6

“cause loss to another or gain for one self or another”

Answer 6

• D must intend that the gain/loss is caused by their representation. There must be a causal link between the false representation and the intention to gain or cause loss.

Question 7

For fraud by false representation does it matter if anyone is actually misled?

Answer 7

The offence occurs as soon as the false representation, with the requisite mens rea, is made out. Explanatory note 13 makes it clear that it is immaterial whether anyone is actually misled.

Question 8

B) Fraud by failing to disclose information

Answer 8

AR = Failing to disclose information which D is under a legal duty to disclose

MR = Dishonesty & intention to make a gain for self or another or cause loss to anoher / expose another to a risk of loss.

Question 9

“duty to disclose”

Answer 9

can be by:

• statute
• transaction (e.g., insurance)
• terms of contract
• financial / fiduciary relationship

Question 10

C) Fraud by abuse of position

Answer 10

AR = occupting a position in which D is expected to safeguard, or not act against, the financial interests of another person, & abuse of that position by act or omission

MR = Dishonest & intention to make a gain for self / other cause loss to other / expose to risk of loss.

Question 11

Relevant posiitons:

Answer 11

trustee / beneficiary
director / company
professional person / client
agent/ princiapl
employee / employer