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Fraud | Crime Against Property

Nowadays, the most common type of crime is a crime against property. A large variety of crimes against property attracts attention. Social danger of theft of somebody’s property lies in the fact that it contributes to the disorganization of the country’s economic life, creating opportunities for parasitic enrichment of some at the expense of others. The greatest damage is caused not by stealing other people’s property, although this type of crime quantitatively dominates by an array of property crimes, but white-collar economic crime: fraud, misappropriation and embezzlement, many of which are committed with the use of official position. One of the most common types of crime against property is a fraud. Fraud has penetrated into various areas of human activity. Methods of fraud vary and aim at extracting non-scheduled revenue, misappropriation of another’s property.

Fraud is a type of crime that has long been known throughout the world. Criminal laws of many countries today provide punishment for fraud as a crime against property that constitutes theft of another’s property or the acquisition of another’s property by deception or abuse of trust. The most widespread fraud has gained in the market economy and freedom of entrepreneurship. In recent years, new types of fraud have also become widespread: fraud on phone, media, online and in the insurance sector, and other (Pfitzenmaier, 2008).

There are a lot of types of criminal fraud: charlatanism; bankruptcy and benefit fraud; bait and switch; counterfeiting of money, documents or valuable other goods; false advertising, billing and insurance claims; confidence tricks; identity theft; tax fraud; Insurance or marriage or religious fraud; moving scam; creation of false companies or “long firms”; fraud upon the court; rigged gambling games; health and investment frauds; embezzlement; forgery of documents or signatures and many more (Consalvo, 2007).

Every law fraud has nine common elements:

  1. A representation of an existing fact;
  2. The materiality;
  3. The falsity;
  4. The speaker’s knowledge of its falsity;
  5. The speaker’s intent that it shall be acted upon by the plaintiff;
  6. Plaintiff’s ignorance of its falsity;
  7. Plaintiff’s reliance on the truth of the representation;
  8. Plaintiff’s right to rely upon it;
  9. Consequent damages suffered by plaintiff (Robison, 2011).

Here are some examples of common fraud nowadays:

1) Fraud in business

According to the ACFE, the average company loses about 6% of revenues due to misconduct of the staff, 90% of cases of corporate fraud are repeated throughout the world regardless of the legal environment and cultural characteristics (Jones, 2001). Fraud is the inevitable consequence of business. Identified losses are comparatively small, but this is the top of the iceberg. Most of frauds are detected by chance, rather than through a system of risk management. Research has shown that the bulk of corporate crimes are committed in the financial departments. Also higher risks of fraud have departments of supply and sales. And almost all the cases were not one-time, only 15% of cheaters made it the first time when they were caught. By the way, the corporate crime can be divided into two main types: the withdrawal of assets and manipulation of financial reporting.

Manipulation of financial reporting have led to scandals in the United States, in a result of what several large companies, such as energy giant Enron (income over the last year of existence was more than $ 20 billion), telecommunications company Global Crossing and Quest Communications, operator of cable television company Adelphia, Xerox, pharmaceutical giant Merck, WorldCom (the company’s assets were estimated at 92 billion dollars), accounting firm Arthur Anderssen and others went bankrupt (Brittan, 1997).

Frauds affect morale atmosphere, relationships with customers and the price of the company. After a series of scandals involving accounting sphere of the level of trust to large companies has fallen. According to surveys of CNN Channel, the newspaper USA Today and Gallup service in 2002, only 20% of Americans trust large companies. This is the lowest level of confidence since 1981. For comparison, in 2001 it was 28%, in 2000 – 29% in 1999 – 30%.

2) Fraud in the Internet

Now the Internet is full of various methods of fraud, scams and deceptions. World Wide Web has become a good tool for any kind of cheaters (Pfitzenmaier, 2008). Profile Magazine reviewed the different methods of fraud, siphoning off money from people. People can be cheated using Internet, mobile telephony, advertising and email system, and regular mail. We find a lot of letters from different companies advertising their products and offer their services in mailbox often. Here is one example of fraud: people get the message to their email box that they are the winners of some contest. After a proposal to take the prize in the amount of $ 1000 there is a small addition: “To get the prize pay a fee in amount of $ 50. Within 48 hours after payment to their e-mail will be sent an instruction how to get the money”. At the end of the message people see a bill with details of some companies that they should use to send the money. As it turns out, it is a fraud, and people get nothing, just lose money (Perri, 2011).

The next type of fraud is connected with anti-virus programs. It happens this way: to the victim’s computer some viruses are loaded. Then a message that offers to treat the computer appears, and requires sending paid message from the phone. According to antivirus company Agnitum, there are currently more than 250 known fake antivirus programs, most of which are malicious. One of the big problems of fraud in Internet is spam. Last year the proportion of spam has increased from 11% to 18, 2%. Fraudsters also invent new ways of fraud and defrauding money from gullible Internet users (Stern, 2011).

3) Cheating in the field of telephone services. According to statistics, the world’s telephone operators lose from different types of fraud 2.6% of their total traffic, cellular operators are losing every year about 25 billion dollars.

Here are some of the ways of fraud, which is now the most common.

A). Call me. In Japan it is called wan-giri (“one call”). Alleged victim of cheating gets a short call that is quickly dumped, without waiting for an answer. Of course, many people, because of their curiosity, call back, not suspecting that the call is “paid.”

There is also some other was of fraud using phone. It is when clients get a call from the operator who proposes new services. For example, operator offers: “Call this number and get $ 3 to your account”.People call and sometimes really get the money they were promised, but the price of the call they made costs $ 5-10 (Guerrero, 2005).

Sometimes fraudsters even imitate the call-center operators, calling “their customers” agitating them to get more profitable rate. Cheaters tell people to send a paid message to a certain number, or buy a card payment to replenish your account. And although according to surveys, only 5% of people are conducted in such a ruse, yet the amount obtained by fraud is quite decent.

B). Call from a radio station.

So far in the province this kind of cheating is still popular. Usually a person gets a message to his phone with information that according to the radio station raffle, the listener won the phone, laptop or even a car. Sometimes information is reported by the joyful voice of a young girl-operator. Further the listener is proposed, as usual, to send message, or call for a certain number. So the aim of cheaters is money. Some radio stations had even tried to prevent the audience from this type of fraud.

The same thing happens in trading mobile content. There is extremely difficult to catch a crook. Although their ads throughout the Internet. Usually, for the money subscriber sent to get a picture or music file he gets nothing or may be questionable content to mp3-file downloaded for just somewhere on the Internet (Sawvel, 2007).

4) Fraud in the marriage field. Marriage fraudsters use a close relationship for the benefit, but we all know that to condemn the marriage swindler very difficult, because it is very difficult to prove that he had a selfish motive. After all, people tend to live together and the victim of a marriage swindler she voluntarily gives him money or other valuables. Therefore, opportunities to regain things that were captured by thief are very little. Also people should be careful with marriage agencies.

5) Cheating by healers. Healing is different. There is harmless healing, when healers-cheaters and wizards offer omens, lapels, damage to withdraw, the husband-wife back and stuff. We read in the newspaper and just smile. But these days fewer people believe in wizards.

It is known that healing can be also dangerous, even very dangerous. Because people have always believed that if there is disease, it can be cured. So healers-cheaters foraged on the last desperate hope. We can find a lot of ads – “cure from any disease quickly and cheaply”. Texts are short, but go straight to the people’s eye. These ads can be picked every morning. Useless charlatans earn money like this. The worst thing is that many people who lost hope really ask charlatans for a help. Charlatans earn money on someone else’s grief (Trevor, 2008).

There is a need to tell about some of the most famous frauds.

In May 1925, Victor Lustig, who arrived in Paris from the United States in search of adventure, read in a French newspaper that the Eiffel Tower was pretty dilapidated and in need of repair. He sent letters to six dealers secondary black metal, stating that the government decided to demolish the tower, selling scrap metal on the closed auction. “Right” for recycling the tower Lustig sold to Andre Poisson, and with a suitcase full of cash he ran away to Vienna. Realizing that bamboozled Poisson didn’t go to the police, Lustig returned to Paris and again sold the tower. But this time, deceived buyer told the police, and Lusztig had to run away to the United States. In 1935 he was tried for counterfeiting dollars, 12 years later he died in prison of pneumonia (Wells, 2007).

Scotsman Arthur Ferguson went down in history for leasing the White House in Washington to a banker Texan for $ 2 million. He persuaded a banker that extremely burdened with maintenance costs of the presidential family U.S. government decided to hand over the White House to rent to at least partially offset those costs. Ferguson is also known for selling Buckingham Palace and the famous Big Ben in Great Britain, as well as the Statue of Liberty in the United States. After five years of prison, Arthur Fergusson died in 1938 without a penny in his pocket.

The most successful bank fraud in the U.S. was managed in 60-ies of the last century by Frank William Abagnale, Jr. With forged bank checks he stole about $ 5 million from the banks. Some time later, with forged diploma of Harvard University, he got a job in the office of the Attorney General of Louisiana. Within 5 years Abagnale changed about 8 professions, and deceived 26 banks in different countries of the world. His adventures lied in the basis of the script of the film “Catch Me If You Can”, where the main role was played by Leonardo DiCaprio (Coenen, 2008).

One more impostor became the protagonist of the book and film – American Ferdinand Demaree. During his life he repeatedly claimed to be a representative of different professions – from a monk to the warden. Despite the lack of education (Ferdinand did not even graduate from high school), he brilliantly coped with all those “roles”. In contrast to the already mentioned cons, Demaree did not still millions, he committed fraud solely for the sake of thrills – he was interested not in money but in the social status of those in whom he reincarnate. He died in freedom in 1982 at the age of 61 (Zhang, 2010).

To summarize, it is worth saying that one of the most common types of crime against property is a fraud. Fraud has penetrated into various areas of human activity. Methods of fraud vary and aim at extracting non-scheduled revenue, misappropriation of another’s property. Each person should be informed about the types of fraud by media, press and Internet. There is a lot of literature that tells about the most common methods of cheating: while the purchase and sale of housing, car; while money exchange; rental apartments; hiring and employment abroad; about the construction and builders of the “financial pyramids”; about virtual frauds; frauds with the credit cards; about medicines that do not cure; about impostor magicians, counterfeit miracles and much more. Fraud is penetrating into our lives deeper and deeper, into all spheres, so people should be attentive.


Works Cited:

Brittan, Dolly. Let’s Talk about Cheating. 1997. pp. 13-22. Print.
Coenen, Tracy. Essentials of corporate fraud. 2008. p. 101. Print.
Consalvo, Mia. Cheating: gaining advantage in videogames. 2007. pp. 126-135. Print.
Guerrero, Eddie., Krugman, Michael. Cheating Death, Stealing Life: The Eddie Guerrero Story. 2005, pp. 302-311. Print.
Jones, Derry. On Fact and Fraud: Cautionary Tales from the Front Lines of Science, by David Goodstein. Contemporary Physics, March 2011, Volume 52, Number 2, 178-179.
Perri, Frank S., Brody, Richard G. The Sallie Rohrbach story: lessons for auditors and fraud examiners. Journal of Financial Crime, 2011, Volume 18, Number 1, pp. 93-104.
Pfitzenmaier, Audrey. Cheating Fate‎. 2008. 203-213. Print.
Robison, H. David., Santore, Rudy. Managerial Incentives, Fraud, and Monitoring. The Financial Review, May 2011, Volume 46, Number 2, pp. 281-311.
Stern, Simon. Sentimental Frauds. Law & Social Inquiry, 2011, Volume 36, Number 1, pp. 83-113.
‎Sawvel, Patty Jo. Cheating. 2007. pp.46-58. Print.
Trevor, William. 2008, pp. 187-196. Print.
Wells, Joseph T. Corporate fraud handbook: prevention and detection. 2007. p. 350. Print.
Zhang, Haijun., Hu, Yefa., Zhou, Zude. Prevention of resource trading fraud in manufacturing grid: a signalling games approach. International Journal of Computer Integrated Manufacturing, May 2010, Volume 23, Number 5, pp. 391-401.