Fraud

TEAM: 38
Amisha K.C
Poornika Khadka
Ankita Gelal
Table of Content

1. Introduction
2. Causes of Fraud
3. Types of Fraud
4. Elements of Fraud - Poornika
5. Banking offences
6. Nepalese law- Ankita
7. National case laws
8. International case law- Amisha

FRAUD

Meaning
Fraud means dishonestly making a false (untrue or misleading)
representation with a view to gain or with intention to cause
loss. Although fraud is sometimes a crime in itself, more often
it is an element of crimes such as obtaining money by false
pretense or by impersonation.
Definition
.

Fraud is defined as “A knowing misrepresentation of the truth or

concealment of a material fact to induce another to act to his or her
detriment.” (Black’s Law Dictionary)

Nepal Standards on Auditing (NSA) 240 defines a fraud as an

intentional act by one or more individuals among management,
those charged with governance, employees, or third parties,
involving the use of deception to obtain an unjust or illegal
advantage.
 Legally, fraud is the deliberate misrepresentation of fact for the
purpose of depriving someone of a valuable possession.
Donald Cressey, a sociologist and criminologist was one of the first
persons to explain the cause of fraud.
.
Based on his Fraud Triangle Theory, he stated:
“Trusted persons become trust violators when they conceive of themselves as
having a financial problem which is non-shareable, are aware this problem can
be secretly resolved by violation of the position of financial trust, and are able
to apply to their own conduct in that situation verbalizations which enable
them to adjust their conceptions of themselves as trusted persons with their
conceptions of themselves as users of the entrusted funds or property.”
From this very statement cause of fraud are:
1. Perceived pressure
2. Opportunity
3. Rationalization
TYPES OF FRAUD
.
In general, the courts classify fraud under two major types: civil and criminal.

a) Civil fraud

Civil fraud is when the fraud is an intentional misrepresentation of facts.

For example: lying on your income taxes is a type of civil fraud. Civil fraud
is punishable by fines or restitution, which involves paying the victim back..

b) Criminal fraud

Criminal fraud is when theft is involved in the fraud.

An example of criminal fraud is that of identity theft. Identity theft, as the

 name implies, involves theft. Penalties can be jail time, probation and fine.
ELEMENTS OF FRAUD
Whether criminal or civil, fraud generally has the following elements :

.
1. Misrepresentation of a material fact.
2. Knowledge on the part of the accused that they were
misrepresenting the fact.
3. The misrepresentation was made purposefully, with the intent of
fooling the victim.
4. The victim believed the misrepresentation and relied upon it. 5.
The victim suffered damages as a result of the misrepresentation.
Banking Offence and Punishment Act, 2064

Section 12
Not to make a loss by making alteration in the account or ledger or by
committing forgery or fraud: No one shall, with a motive of self-benefit or
to cause loss or benefit to any other person, commit any forgery by an
action like tempering any matter written in Bank or Financial Institution's
any document or account or ledger whether by removing or by rewriting
the same to mean different sense or with a motive to loss other, commit
fraud by misleading others representing the untrue or non-existent facts to
be true or existent or by getting a document signed with an alteration in
the date, number or particular.
Cybercrime law
 Chapter -9 Offence Relating To Computer
Section 52
To commit computer fraud: If any person, with an intention to commit
any fraud or any other illegal act, creates, publishes or otherwise provides
a digital signature certificate or acquires benefit from the payment of any
bill, the balance amount of anyone’s account, any inventory or ATM card
in connivance of or otherwise by committing any fraud, amount of the
financial benefit so acquired shall be recovered from the offender and be
given to the person concerned and such an offender shall be liable to the
punishment with a fine not exceeding one hundred thousand rupees or
with imprisonment not exceeding two years or with both.
Section 279 of Muluki Criminal Code 2074
Prohibition of committing fraud:
(1) No person shall commit, or cause to be committed, fraud.
(2) For the purposes of sub-section (1), a person who, with intent to disentitle any one,
expire the statute of limitation or appointed date for presence of, or cause, in any
manner, loss, damage, injury or benefit to, any one, knowingly does an act stating that
any thing has happened or been done which has not happened or been done in fact or
makes or signs a document containing a false date, figure or content or causes another
person to sign such document or showing that he or she has entitlement in any thing in
which he or she has no such entitlement in fact, which does not constitute the offence
of forgery, shall be considered to commit the offence of fraud.
(3) A person who commits, or causes to be committed, the offence
referred to in sub-section (1) shall be liable to a sentence of
imprisonment for a term not exceeding three years or a fine not
exceeding thirty thousand rupees or both the sentences.

(4) A person who has already disposed of property which he or she

has obtained by committing fraud shall be liable to an additional fine
equal to the claimed amount, in addition to the sentence referred in
sub-section (3).
(5) Where a person obtains any property by committing fraud, the
person shall return such property to the concerned owner; and in
the event that such property has already been disposed of, the
 claimed amount of such property shall be caused to be recovered
to the owner from any other property of the offender.
American laws lynch

Bank Fraud (18 U.S.C. § 13442)

You can be prosecuted under federal law if you knowingly use or attempt to use a scheme:
To defraud a financial institution; or
To fraudulently obtain money, credit, securities or other property from a financial institution by false pretenses or misrepresentation.
If you are convicted of bank fraud, you face up to 40 years in federal prison, a fine of up to $1 million, or both.

Bankruptcy Fraud (18 U.S.C. § 1573)

You commit bankruptcy fraud if you devise, intend to devise, execute, conceal or attempt to execute or conceal a scheme to defraud (a
creditor, for example) by using bankruptcy court to carry out your crime, such as:
Filing a petition, including a fraudulent involuntary petition under Chapter 11 of the United States Code;
Filing a document in a proceeding under Chapter 11; or
Making a false or fraudulent representation, claim, or promise concerning a proceeding under Chapter 11. Bankruptcy fraud is a
felony, punishable by up to 5 years in federal prison, a fine of up to $250,000 ($500,000 for an organization), or both.

Computer Fraud (18 U.S.C. § 10305)

Computer fraud under federal law is defined as intentionally accessing a computer without authorization or in excess of your authorized
use to obtain any of the following:

Information contained in a financial record of a financial institution, or of a card issuer or contained in a file of a consumer reporting agency
on a consumer;
Information from any department or agency of the United States; or
Information from any protected computer;
Identity Theft Fraud (18 U.S.C. §§ 1028, 1028A7)

Federal Fraud - identity theft

Identity theft is a type of federal fraud
If you knowingly and without lawful authority produce, transfer, or possess with intent to
unlawfully use an identification document, authentication feature, or a false identification
document, you can be prosecuted under federal identity theft law. Examples of identity
include state-issued birth certificates and driver licenses, U.S. Social Security cards and
U.S. passports.

If you are convicted of identity theft fraud, you face up to 15 years in a federal prison, a fine
of up to $250,000 ($500,000 for an organization), or both.
Your face up to 20 years imprisonment if you commit identity theft while:
Facilitating a drug trafficking crime;
In connection with a crime of violence; or
After a prior conviction for identity theft;
You face a sentence of up to 40 years’ imprisonment if you commit identity theft to facilitate
an act of domestic or international terrorism.
Mass Marketing Fraud

Mass marketing fraud is the use of mass-media communications to contact, solicit,

and unlawfully obtain money from others. There are various mediums by which this
 crime is committed, including but not limited to:
Mail services;
Email;
Text (SMS) messaging;
Phone calls and faxes;
Websites;
Radio;
Television; and
Direct face-to-face.
Mass marketing schemes
Health Care Fraud (18 U.S.C. § 13476)

You can be prosecuted for committing health care fraud if you knowingly and willfully
execute, or attempt to execute, a scheme to defraud or obtain by means of false pretenses
money or property from any health care benefit program such as Medicare and Medicaid.
Examples include over-billing for healthcare services and charging a patient for performing
unnecessary medical procedures.
If a federal court convicts you of health care fraud, you can be sentenced to serve up to 10
years in prison, a $250,000 fine ($500,000 for an organization), or both. If the violation
results in serious bodily injury, your sentence can double up to 20 years imprisonment. If
death occurs as result of committing health care fraud, you face life imprisonment.
National Case laws
1. Ratna Devi k.c. etal VS. sambhu bahadur k.c. etal..

Decision no: 9936 NKP: 2075 vol. 1

2. Nawal kishwor Raya(राय) yadhav AKA dhuka raya yadhav VS. Mahendra Raya(राय) Yadhav

Decision no: 8112 dec date: 2065/12/16

3. Sarbagya muni Bajracharya etal. VS. krishna prasad shrestha etal.

Decision no: 2953 dec date: 2040/09/12

4. Decision no; 7480

5. Decision no: 2953
 1. Nigerian influencer pleads guilty to million dollars Fraud Ramos
Abbass AKA Hush Puppi
Fact: known as instagram influencer with 540 posts ,

2.5 million followers as presented himself as a Real estate Developer.

Ramos olorunwa abbas is 38 yrs old male known as a instagram influencer

with large sum of money without legal source of earning . he was arrested
from dubai by FBI. He was arrested and proven guilty for fraud and money
laundering offence.

He was accused in the multimillion dollar fraud scheme.

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