Fraud

===North America===

====Canada====
Section 380(1) of the [[Criminal Code (Canada)|Criminal Code]] provides the general definition for fraud in Canada:

{{blockquote|
'''380'''. (1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,

:(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or
:(b) is guilty
::(i) of an indictable offence and is liable to imprisonment for a term not exceeding two years, or
::(ii) of an offence punishable on summary conviction, where the value of the subject-matter of the offence does not exceed five thousand dollars.<ref>{{cite web |url=http://laws-lois.justice.gc.ca/eng/acts/C-46/page-177.html#h-105 |title=Criminal Code, Section 380 |publisher=Laws-lois.justice.gc.ca |access-date=2013-12-05 |archive-date=7 October 2015 |archive-url=https://web.archive.org/web/20151007033324/http://laws-lois.justice.gc.ca/eng/acts/C-46/page-177.html#h-105 |url-status=live }}</ref>
|}}

In addition to the penalties outlined above, the court can also issue a prohibition order under s. 380.2 (preventing a person from "seeking, obtaining or continuing any employment, or becoming or being a volunteer in any capacity, that involves having authority over the real property, money or valuable security of another person"). It can also make a restitution order under s. 380.3.<ref>{{cite web |url=http://laws-lois.justice.gc.ca/eng/acts/C-46/page-178.html |title=Criminal Code, Sections 380.2 - 380.3 |publisher=Laws-lois.justice.gc.ca |access-date=5 December 2013 |archive-date=17 January 2014 |archive-url=https://web.archive.org/web/20140117000913/http://laws-lois.justice.gc.ca/eng/acts/c-46/page-178.html |url-status=live }}</ref>

The Canadian courts have held that the offence consists of two distinct elements:

:* A prohibited act of deceit, falsehood or other fraudulent means. In the absence of deceit or falsehood, the courts will look objectively for a "dishonest act"; and
:* The deprivation must be caused by the prohibited act, and deprivation must relate to property, money, valuable security, or any service.<ref>{{cite web|title = The Law of Fraud and White Collar Crime in Canada|url = http://www.blakes.com/pdf/Calgary/white_collar/Tab_4The_Law_of_Fraud_and_White_Collar_Crime_in_Canada.pdf|author = Tony Wong|publisher = [[Blake, Cassels & Graydon LLP]]|access-date = 22 April 2012|archive-url = https://web.archive.org/web/20120813020142/http://www.blakes.com/pdf/Calgary/white_collar/Tab_4The_Law_of_Fraud_and_White_Collar_Crime_in_Canada.pdf|archive-date = 13 August 2012|url-status = dead}}</ref>

The [[Supreme Court of Canada]] has held that deprivation is satisfied on proof of detriment, prejudice or risk of prejudice; it is not essential that there be actual loss.<ref>''R. v. Olan et al.'', [1978] 2 S.C.R. 1175. {{lexum-scc2|1978|2|1175}}</ref> Deprivation of [[confidential information]], in the nature of a [[trade secret]] or copyrighted material that has commercial value, has also been held to fall within the scope of the offence.<ref>''R. v. Stewart'', [1988] 1 S.C.R. 963. {{lexum-scc2|1988|1|963}}</ref>

====United States====
{{See also|United States free speech exceptions}}

=====Criminal fraud=====
The proof requirements for criminal fraud charges in the United States are essentially the same as the requirements for other crimes: guilt must be proved beyond a [[reasonable doubt]]. Throughout the United States fraud charges can be misdemeanours or felonies depending on the amount of loss involved. High value fraud can also trigger additional penalties. For example, in California, losses of $500,000 or more will result in an extra two, three, or five years in prison in addition to the regular penalty for the fraud.<ref>{{cite web |url=http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PEN&sectionNum=186.11 |title=California Code, Penal Code - PEN § 186.11 |author=<!--Not stated--> |website=California Legislative Information |publisher=California State Legislature |access-date=9 August 2017 |quote=If the pattern of related felony conduct involves the taking of, or results in the loss by another person or entity of, more than five hundred thousand dollars ($500,000), the additional term of punishment shall be two, three, or five years in the state prison. |archive-date=10 August 2017 |archive-url=https://web.archive.org/web/20170810013423/http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PEN&sectionNum=186.11 |url-status=live }}</ref>

The U.S. government's 2006 fraud review concluded that fraud is a significantly under-reported crime, and while various agencies and organizations were attempting to tackle the issue, greater co-operation was needed to achieve a real impact in the public sector.<ref>{{cite web|title=Financial Crimes Report 2006|url=https://www.fbi.gov/stats-services/publications/fcs_report2006|publisher=Federal Bureau of Investigation|access-date=6 September 2017|archive-date=10 July 2017|archive-url=https://web.archive.org/web/20170710160145/https://www.fbi.gov/stats-services/publications/fcs_report2006|url-status=live}}</ref> The scale of the problem pointed to the need for a small but high-powered body to bring together the numerous counter-fraud initiatives that existed.

===== Civil fraud =====

Although elements may vary by jurisdiction and the specific allegations made by a plaintiff who files a lawsuit that alleged fraud, typical elements of a fraud case in the United States are that:
# Somebody [[Misrepresentation|misrepresents]] a [[material fact]] in order to obtain action or forbearance by another person
# The other person relies upon the misrepresentation
# The other person suffers injury as a result of the act or forbearance taken in reliance upon the misrepresentation

To establish a civil claim of fraud, most jurisdictions in the United States require that each element of a fraud claim be pleaded with particularity and be proved by a [[preponderance of the evidence]],<ref>See, e.g., {{cite web|title=Halpert v. Rosenthal, 267 A. 2d 730 (R.I. 1970)|url=https://scholar.google.com/scholar_case?case=5527501886831013047|website=Google Scholar|access-date=6 September 2017}}</ref> meaning that it is more likely than not that the fraud occurred. Some jurisdictions impose a higher evidentiary standard, such as Washington State's requirement that the elements of fraud be proved with clear, cogent, and convincing evidence (very probable evidence),<ref>{{cite web|title=WPI 160.02 Fraud—Burden of Proof|url=https://govt.westlaw.com/wciji/Document/I2cd1eacde10d11dab058a118868d70a9?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default)|website=Washington Pattern Jury Instructions - Civil|publisher=West|access-date=24 May 2017|archive-date=6 August 2017|archive-url=https://web.archive.org/web/20170806221312/https://govt.westlaw.com/wciji/Document/I2cd1eacde10d11dab058a118868d70a9?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default)|url-status=live}}</ref> or Pennsylvania's requirement that common law fraud be proved by clear and convincing evidence.<ref>{{cite web|title=Boehm v. Riversource Life Insurance Co., 2015 PA Super 120, 117 A.3d 308 (Pa. Super. 2015)|url=https://scholar.google.com/scholar_case?case=17142924722317996914|website=Google Scholar|access-date=24 May 2017}}</ref>

The measure of damages in fraud cases is normally computed using one of two rules:<ref>{{cite news|last1=Chang|first1=Stanley Y.|title=The CPA Journal Online|url=http://archives.cpajournal.com/old/15410303.htm|access-date=6 September 2017|date=April 1994|archive-date=7 September 2017|archive-url=https://web.archive.org/web/20170907032921/http://archives.cpajournal.com/old/15410303.htm|url-status=live}}</ref>
* The "benefit of bargain" rule, which allows for recovery of damages in the amount of the difference between the value of the property had it been as represented and its actual value;
* Out-of-pocket loss, which allows for the recovery of damages in the amount of the difference between the value of what was given and the value of what was received.
[[Special damages]] may be allowed if shown to have been [[Proximate cause|proximately caused]] by defendant's fraud and the damage amounts are proved with [[Asset specificity|specificity]].

Some jurisdictions may permit a plaintiff in a fraud case to seek [[Punitive damages|punitive]] or exemplary damages.<ref>{{cite journal|last1=Koerner|first1=Theodore G.|title=Contracts: Damages: Punitive Damages Awarded for Breach Accompanied by Fraudulent Act|journal=Michigan Law Journal|date=January 1958|volume=56|issue=3|pages=448–450|jstor=1286082|doi=10.2307/1286082|url=https://repository.law.umich.edu/mlr/vol56/iss3/11|access-date=2 January 2021|archive-date=22 January 2021|archive-url=https://web.archive.org/web/20210122231931/https://repository.law.umich.edu/mlr/vol56/iss3/11/|url-status=live}}</ref>

=====Anti-fraud provisioning=====

Beyond legislation directed at preventing or punishing fraud, some governmental and non-governmental organizations engage in anti-fraud efforts.

Between 1911 and 1933, 47 states adopted the so-called [[Blue sky law|Blue Sky Laws]] status.<ref>{{cite journal |title=Speech by SEC Staff: remarks at the F. Hodge O'Neal Corporate and securities Law symposium |url=https://www.sec.gov/news/speech/spch022103smc.htm |website=sec.gov |date=21 February 2003 |access-date=28 August 2017 |archive-date=8 July 2017 |archive-url=https://web.archive.org/web/20170708091409/https://www.sec.gov/news/speech/spch022103smc.htm |url-status=live }}</ref>
These laws were enacted and enforced at the state level and regulated the offering and sale of [[security (finance)|securities]] to protect the public from fraud. Though the specific provisions of these laws varied among states, they all required the registration of all securities offerings and sales, as well as of every U.S. [[stockbroker]] and brokerage firm.<ref name="bluesky">{{cite web |url=http://www.seclaw.com/bluesky.htm |title=Blue Sky Laws |publisher=Seclaw.com |date=7 July 2007 |access-date=5 December 2013 |archive-date=9 December 2017 |archive-url=https://web.archive.org/web/20171209204422/http://www.seclaw.com/bluesky.htm |url-status=live }}</ref> However, these Blue Sky laws were generally found to be ineffective.

To increase public trust in the capital markets the [[President of the United States]], [[Franklin D. Roosevelt]], established the [[U.S. Securities and Exchange Commission]] (SEC).<ref>{{cite web|title=Franklin Delano Roosevelt (1882–1945)|url=http://www.gwu.edu/~erpapers/mep/displaydoc.cfm?docid=erpn-fdr|website=gwu.edu|access-date=8 November 2023|archive-date=14 May 2021|archive-url=https://web.archive.org/web/20210514045636/https://www2.gwu.edu/~erpapers/mep/displaydoc.cfm?docid=erpn-fdr|url-status=live}}</ref> The main reason for the creation of the SEC was to regulate the [[stock market]] and prevent [[corporate abuses]] relating to the offering and sale of securities and corporate reporting. The SEC was given the power to license and regulate stock exchanges, the companies whose securities traded on them, and the brokers and dealers who conducted the trading.<ref>{{cite web|title=Securities and Exchange Commission ("SEC")|url=http://learn.advfn.com/index.php?title=Stock_Market_Regulation|website=learn.advfn.com|access-date=8 November 2023|archive-date=4 June 2023|archive-url=https://web.archive.org/web/20230604013057/https://learn.advfn.com/index.php?title=Stock_Market_Regulation|url-status=live}}</ref>