A fraud offence is committed where a person:
- makes a representation to another person knowing that the representation is, or might be, untrue or misleading; and
- intends, by making that representation, to make a gain or to cause a loss.
A representation is any statement or account made to influence opinion or action. The representation may be oral or written (e.g. a statement in a contract claim, letter, e-mail, invoice, meeting etc.). The gain or loss may be financial or non-financial, and may be for the benefit of the person making the representation or for another person.
- A concrete supplier knowingly supplies a client with concrete which is of a cheaper and inferior specification than is contractually required, but invoices the client for concrete of the contractually required specification. The invoice therefore contains a false representation that the concrete supplied was of the required specification. The fraudulent gain is the difference between the amount wrongly charged for concrete of contract quality and the amount which should have been charged for the cheaper concrete which was supplied.
- An earth-works sub-contractor accidentally invoices a client for 30% more earth moved than was actually moved. The sub-contractor discovers the mistake but does not issue a corrected invoice and accepts payment based on the incorrect invoice. Although the sub-contractor did not deliberately issue a false invoice, it subsequently, by failing to correct the invoice, knowingly represented that the invoice was correct so as to make a fraudulent financial gain.
- In order to obtain employment, an applicant for the post of contract manager states in a job application that she has previously worked as a contract manager when in fact she has never held such a position.
- In making a claim from his employer for reimbursement for business travel by car, an employee exaggerates the distance travelled so as to receive a higher payment.
To be liable for fraud, you will normally need to have known that your representation was false, or to have known that it might be false. You are unlikely to be liable if you honestly believed that the representation was true.
Therefore, never make any oral or written representation in connection with your work unless you know or honestly believe it is true. If you make a representation and are not sure whether it is true, then you should explain this. If you make a representation and later discover that you have made a mistake, inform the other party as soon as possible of the mistake.
If you know or suspect that an activity involves fraud, then avoid or withdraw from the activity and do not assist it in any way.