Fraud (noun)

First appeared 14th Century

1 a: DECEIT, TRICKERY; specifically: intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right

b: an act of deceiving or misrepresenting: TRICK

2 a: a person who is not what he or she pretends to

be: IMPOSTOR; also: one who defrauds: CHEAT

b: one that is not what it seems or is represented to be

Synonym see DECEPTION, IMPOSTURE

Fraud includes any intentional or deliberate act to deprive another of property or money by guile, deception or other unfair means. 

Fraud cannot be by accident or negligence. The following four elements are present in fraud, regardless of whether it is criminal or civil:

•  A material false statement

•  Knowledge of its falsity

•  Reliance on the false statement by the victim; and 

•  Damages suffered.

Enforcement strategies include two main theories:

Compliance and Deterrence.

Compliance hopes to achieve conformity to the law without having to detect, process, or penalize violators. Compliance systems provide economic incentives for voluntary compliance to the laws and use administrative efforts to control violations before they occur. 

As a strategy to control crime, deterrence is designed to detect law violations, determine who is responsible, and penalize offenders in order to deter future violations. Deterrence systems try to control the immediate behavior of individuals, not the long-term behaviors targeted by compliance systems.     

 Under our federal system, the prosecution of most white-collar crimes, such as embezzlement, larceny, and false pretenses, is left to the states. The criminal fraud statutes in the U.S. Code require a federal jurisdictional basis, such as an effect on interstate commerce or mail uses.              

Insurance Fraud:

Insurance fraud is any deliberate deception perpetrated against or by an insurance company or agent for the purpose of unwarranted financial gain.

It occurs during the process of buying, using, selling and underwriting insurance.