Fraud by abuse of position is where person A:

• occupies a position in which person A is expected to safeguard the financial interests of person B, and
• dishonestly abuses that position, and
• intends, by means of the abuse of that position, to make a gain or cause loss.

A person may be regarded as having abused the position by way of act or omission.

Some legal systems create a specific criminal offence which covers this type of fraud (e.g. abuse of office, abuse of power, or misconduct in public office).

Examples

Examples of abuse of position in the context of infrastructure procurement are as follows:

• A public official or procurement manager acts in one or more of the following ways:
  • improperly enables a contract award or payment decision to be made in favour of a contractor or supplier in which the official or manager has a secret ownership interest
  • improperly favours friends or relatives for appointments, employment or contracts (sometimes called nepotism or cronyism)
  • victimises or intimidates staff so that they make decisions which enable the manager to benefit personally from a contract.