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Fraud

Fraud

Fraud offences in NSW have recently undergone reform. Until recently, there existed a large number of fraud offences. The recent changes have introduced a new general fraud offence under Section 192E of the Crimes Act 1900. That offence, in combination with the new offences in Sections 192F to 192H, represents a new legislative scheme covering fraud offences in NSW.

The changes in legislation also relate to the definitions of “dishonesty” as well as “obtaining property”.

Fraud offences

The Section 192E Fraud charge covers the majority of conduct falling under the general umbrella of “fraud”. The maximum penalty for this offence is 10 years imprisonment, which is a significant increase from the previous Section 178BA offence, maximum penalty of 5 years imprisonment. It would appear that the intention was to introduce a more general offence, covering a wider range of conduct, hence the maximum penalty increase. Although, the maximum penalty may also indicate an intention to have fraud related offences dealt with more seriously by the Courts.

The offence under Section 192E requires that a person commits an offence if that person, by any deception, dishonestly:

• obtains property belonging to another; or

• obtains any financial advantage or causes any financial advantage.

“Dishonesty” is defined in Section 4B of the Crimes Act 1900 and means:

“…dishonest according to the standards of ordinary people and known by the defendant to be dishonest according to the standards of ordinary people”.

“Obtaining property” is also defined in the Crimes Act 1900 under Section 192C and includes cases where:

• A person obtains ownership, possession or control of the property for themselves or for another person

• A person enables ownership, possession or control of the property to be retained by themselves or another person

• The person induces a third person to do something that results in the person or another person obtaining or retaining ownership, possession or control of the property

“Obtaining a financial advantage” is also defined in the Crimes Act 1900 under Section 192D.

“Deception” is not specifically defined in the Crimes Act 1900, however the concept of deception has been considered previously in the context of previous offence provisions. There must be some connection between the deception and the obtaining.

Penalties

The likely penalty following conviction will depend on the number of factors.

Section 192E is what is called a “Table 1” offence which means that it can be dealt with either in the Local Court or the District Court. If the charge is dealt with in the Local Court, the maximum penalty that can be imposed is 2 years imprisonment. The decision made by the prosecution whether to proceed in the District Court or Local Court will depend on a number of factors, including the quantum of property involved in the fraud.

When sentencing for fraud related offences, there are specific sentencing principles that often apply. Depending on the circumstances, these often fit under the general category of “white collar crime”.

Generally in relation to fraud offences, the Courts have said that general deterrence is of paramount importance, and because of that many cases will result in the imposition of custodial sentences.

However it should be noted that the appropriate sentence involves the consideration of a number of factors, and general deterrence, although an important consideration, is only one of those factors. Additionally, there is no general rule or principle stating that in relation to “white collar crime offences” a full-time prison sentence is inevitable. See R v Brown (Unerp), 1/8/94, NSWCCA.

In addition to the general factors to be taken into account on sentence, the following factors will often be particularly relevant:

• The amount of money involved

• The length of time of the fraud

• Whether the offender occupied a position of trust when the fraud was committed

• Whether there was any sophistication in the method employed to defraud

• The motive behind the offending

Again, the overall sentence will depend on a number of factors, including demonstration of remorse and contrition, the offender’s criminal history (if any), whether any reparation or payment has been made back to the victim of the Fraud, and whether there were any additional mitigating factors including dependence on drugs or alcohol or any mental health issues.