Fraud by false representation is where a person dishonestly makes a false representation with the intention of making a gain or causing loss.

The gain can be for the person making the representation, or for another party.

The loss can be to the person receiving the representation, or to another party.

A representation is false if it is untrue or misleading.

For the false representation to be a criminal act, rather than an innocent act, the person making it must know that it is, or might be, untrue or misleading.

The representation can be:

• as to fact or law
• express or implied
• oral or written.

Examples:

The main examples of fraud by false representation during the procurement phase of an infrastructure project concern a bidder providing incorrect information in its bid document.  For example, the bidder deliberately or recklessly falsifies or exaggerates one or more of the following:

• Experience of the relevant work:  The bidder states that it has undertaken five previous projects of the same nature as the bid work, but it has only undertaken one such project.
• Experience of its managers: The bidder states that its proposed project manager has ten years’ experience of project management, but the manager has only two years’ experience.
• Available equipment:  The bidder states that it has the necessary equipment available for immediate start on the project, but in fact the equipment is engaged on another project and would not be immediately available.
• Financial results:  The bidder provides accounts which exaggerate its asset value or available cash resources.
• References from clients for previous work:  The bidder provides a fake reference from a client purporting to show that the bidder had undertaken a first-class job on a similar project to that being bid for.  In fact, the bidder has not undertaken that work for that client, or the client does not exist, or the client never gave such a positive reference.
• Bid security documents:  The bidder provides fake bid security documents, either because it is unable to obtain genuine ones, or to save the cost of providing genuine ones.