What is a fraud offence?

There are three main offences set out in the Fraud Act 2006

1. Fraud by false representation

Dishonestly presenting something as what it is not, for improper gain.

• Fraud by abuse of position

Dishonestly using the powers afforded by a position, for improper gain.

• Fraud by failing to disclose

Failing to comply with a duty to disclose some piece of information, leading to an improper gain.

There are other types of criminal fraud, such as false accounting. These are not covered by the Fraud Act.

What is fraud by false representation?

Fraud by false representation is an offence under the Fraud Act 2006. A person commits fraud by false representation if they:

• Dishonestly make a false representation and
• Intend, by making that representation
• To make a gain for himself or another or
• To cause loss to another or to expose another to a risk of loss

We can split these into two halves. The ‘practical element’ (known as ‘actus reus’) and ‘guilty mind’ element (known as ‘mens rea’). We will use a fictional letting-agent & tenant scenario to illustrate three ways in which a false representation can be made. These are a positive verbal false representation, a non-verbal false representation and a false representation by silence. In our scenario, the letting agent knows the flat is infested with mice.

It is important to note that a false representation must be dishonest to trigger an offence. In our experience, many people make incorrect statements about items or services mistake. This does not always attract criminal liability. If an individual makes a statement which they ultimately believe to be true, the fraud is harder to identify. This is, however, subject to legal boundaries.

What are some common types of fraud by false representation?

Other common examples of fraud by false representation:

• Using an identification document which belongs to someone else;
• Selling shares to investors by saying they will get a better return than the seller thinks is possible;
• Dishonestly exaggerating the quality of an item.

Fraud by false representation is an either-way offence, as some instances of fraud are more serious than others. This means a defendant may be tried in either the magistrates’ court or the Crown Court accordingly.  

Corporate offences – Can a business commit fraud by false representation?

As well as individuals, corporations can be liable for fraud by false representation.

 A corporate can be liable in three ways.

• Firstly, if the act or omission is made a specific offence by Parliament, such as Bribery or Corporate Manslaughter.
• Secondly, if employees of a corporate commit a criminal act in the ambit of their work, the corporate may be held ‘vicariously’ liable.
• Finally, where a corporate and an individual are so close as to be indistinguishable (in the context), the corporate can attract liability under the ‘identification doctrine’. The person must be the ‘directing mind and will’, meaning at the helm, usually.

Should a salesman in a used car chain fraudulently misrepresent the cars they sell, the company will thus be vicariously liable. Should the company policy direct this fraudulent misrepresentation, the company and in some cases its directors will be liable.

What sentence will I get for fraud by false representation?

The possible sentence for any fraud under the Fraud Act 2006 is linked to three primary factors, amongst others:

• The individual’s role in the fraud;
• The amount of money either intended to be gained or eventually gained;
• The harm caused to the victim;
• Statutory and other aggravating factors;
• Mitigating factors;
• Whether the money lost has been returned to the victim.

Proceeds of Crime – Recovery?

In addition, the individual’s ‘financial benefit’ from the fraud may be confiscated by the court. The court will ‘confiscate’ a sum of money, which is then to be paid to the court.

Confiscation proceedings carry with them the additional threat of prison ‘in default’ should the individual not pay the confiscated sum. Importantly, serving the prison sentence ‘in default’ does not erase the outstanding sum. The money owed stays as a debt until settled.

The maximum penalty for crimes under the Fraud Act is 10 years in custody for one single offence and the minimum is a ‘discharge’. A discharge is still a conviction but does not entail a punishment.

What will happen if I am arrested for fraud? 

If you are arrested for this offence, you will be taken to a police station for the purpose of being interviewed under caution. Among other rights you have the right to be represented at this interview by a solicitor free of charge. This is usually a duty solicitor nominated by the police. You also have however the right to nominate a solicitor of your choice. The solicitor will be able to obtain some information from the investigators about why you have been arrested and will be able to discuss this with you and provide you with advice prior to the interview.

ABV Solicitors have expert fraud solicitors who can attend the police station on short notice nationwide.

What should I do if I receive a letter from a crime enforcement agency such as the police, HMRC, FCA or SFO requesting me to contact them to arrange a voluntary interview? 

Upon receipt of such a letter it is critical that you seek the assistance of a solicitor immediately. ABV Solicitors will allocate a specialist false accounting solicitor for you and make arrangements on your behalf to liaise with the investigators and facilitate an interview at your convenience.

This will allow sufficient time for you to arrange a face-to-face meeting with a specialist solicitor in advance of any interview so you can be advised, and fully prepared on what to expect.

We are here to fully support you and those concerned during this difficult time. Obtaining immediate legal advice can make all the difference to the outcome of the investigation.

What if I am released under investigation or released on bail for fraud and need a solicitor or wish for a second opinion?

This can be an extremely stressful time for you, your family and your business.

You may have already been interviewed and released on bail or released under investigation. You may have not used a solicitor at all during your interview or are not confident with the solicitor who represented you and require a specialist solicitor with experience in this area.

Whatever the situation, ABV Solicitors have a dedicated team of experts who are experienced in this field and who can provide you with sound advice and assistance.

What if I am charged with an offence of fraud?

If you have been charged with fraud you must seek the assistance of a defence specialist immediately. ABV Solicitors have a dedicated Fraud and Financial Crime department consisting of experienced solicitors who are specialist in this field.

ABV Solicitors can provide immediate advice and assistance and assist you and your business during this stressful time.

Restraint Orders and Account Freezing Orders 

Law enforcement agencies such as the police, HMRC, FCA or SFO often use ancillary powers in addition to making arrests and search warrants. These include applying for Restraint Orders or Account Freezing Orders under the Proceeds of Crime Act 2002.

The purpose of this is to prevent those under suspicion to dissipate assets which may have been acquired through the commission of committing offences.

These Orders are draconian and can cause severe disruption to the lives of individuals and those connected to them including their businesses.

ABV Solicitors have a dedicated team of experts within their Fraud and Financial Crime Department who specialise in tackling these Orders.

If any of the above circumstances apply to you or someone you know contact ABV Solicitors Fraud and Financial Crime Department immediately on 0344 587 9996 or visit our website at www.abvsolicitors.co.uk

ABV Solicitors are available 24/7 and offer their professional expertise and assistance nationwide.