The Theft Act 1968 created five offences of obtaining by deception, the most significant of which are obtaining property by deception (s.15) and obtaining a pecuniary advantage by deception (s.16) see Lambie [1982]. There is also an offence of making off without payment under the 1978 Act but it does not require deception.
Sections 15 and 16 of the Theft Act 1968 provide that:
“A person who by any deception dishonestly obtains property belonging to another with the intention of permanently depriving the other of it commits an arrestable offence”.
“A person who by any deception dishonestly obtains for himself or another any pecuniary advantage commits an arrestable offence”.
The deception offences do have some elements in common, they all require deception and there is a casual link between the obtaining, the deception and dishonesty (Ghosh [1982]), this link is crucial. A case which illustrates the lack of a casual link is Collis-Smith [1971]. The accused had petrol put into the tank of his car, he then falsely stated that his firm would pay. He was not guilty because the deception came after the obtaining and he did not obtain by deception. The decision in this case was followed in Coady [1996] Crim LR 518 (CA). The effect of these judgments is that the defendant is not guilty if the victim did not rely on the deception or if the deception was not operative on his/her mind. Deception can be expressed or implied, for example wearing a police uniform R v. Nabina [2000]; it is therefore arguable that the decisions in Collis-Smith and Coady are incorrect due to the fact that there is an implied representation that the petrol taken by a person will be paid for when he puts it into his tank. (R v. Laverty [1970]) However, the Courts recognise that a persons actions ‘tells’ the victim they are authorised thus it is a lie.
Deception can only be operative on the human mind as you cannot ‘deceive’ a machine; this is illustrated by the case of Davies v. Flackett [1973] where the defendant drove out of a car park without paying while a stranger held up the barrier. The Theft Acts in 1968 and 1978 did not take account of technology and things to come, for example credit cards, cheques or the internet. MPC v. Charles [1977] AC 177
In the occurrence of obtaining by deception, the key question is whether representation was made and if so, whether it was made falsely, both these aspects are to be determined by the jury. See Adams [1993]. There is no liability for deception if it is too remote from the obtaining of property. See R v. Button [1990]
Although there are legal provisions under which fraud is prosecuted; no commonly accepted definition of fraud exists; many of the offences referred to as fraud are covered by the Theft Acts of 1968 and 1978. The term is used to describe such acts as deception, bribery, Money laundering, forgery, corruption, theft, conspiracy, embezzlement and false representation.
Money Laundering
The general and more simplistic meaning of money laundering would be the conversion of ‘dirty’ money into ‘clean’ money.
However, there are more explanatory and academic definitions, some of which include:
'Any act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources'. (Interpol General Secretariat Assembly in 1995)
'The conversion or transfer of property, knowing that such property is derived from serious crime, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in committing such an offence or offences to evade the legal consequences of his action, and the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from serious crime'.
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The key principle behind the laundering of money is to conceal its criminal origins because it is often the expenditure or general disposal of ill-gotten gains that leads to the discovery of the original crime as a substitute to being caught in the act.
Section 327 of the Proceeds of Crime Act 2002 creates a series of new money laundering offences, such as concealing, disguising, converting and transferring criminal property. The concept of criminal property which lies at the centre of money laundering is effectively defined in section 340 (2) and (3). Under section 330 of the Act, not only those who launder money commit an offence but also those who fail to disclose a case of money laundering. This is illustrated by the case of R v. Pitchley (1972)
Though there are laws against money laundering, the rate of which the offence is committed is exceptionally high and still fairly undetectable; therefore they must not be strict enough. However, from the 1st of March 2004, new rules came into force pulling a range of professions in the UK directly into the fight against money laundering. This means lawyers; accountants, casino bosses and estate agents could all now face prison if they fail to report suspected fraud. It comes under an extension to the Proceeds of Crime Act 2002, which previously only applied to banks, to further clamp down on money laundering. Under the act, anyone with suspicions is obliged to contact the National Criminal Intelligence Service (NCIS).
How money is laundered
Money laundering has a diverse and often complex process, in its progression there are three stages, that of placement, layering and integration. The model below may be used in analysis of the methods.
(Source from www.ex.ac.uk)
The first stage of placement is the movement of cash from its original source. The aims of this stage are to remove the money from the location of acquisition so as to avoid detection from the authorities and the attention of other criminals. This may be done by depositing money into the financial system, the retail economy or smuggling it out of the country to avoid suspicion. Payments are regularly mixed with ‘legitimate’ funds and invested in tangible assets and luxury items such as cars, jewellery, property etc.
Once this is done, layering is the attempt to disassociate the funds from the criminal conduct of which it came from by deliberately creating a complex web of financial transactions aimed at concealing any audit trail as well as the source and ownership of funds.
The final stage is the process of integration. This is done by making it look as if the money was earned legally to deter probing officials.
Having considered this offence, it is submitted that there are significant social costs and risks associated with money laundering. It drives up the cost of government due to the need for increased law enforcement and health care expenditures to combat the serious consequences that result.
Among its other negative socio-economic effects, money laundering transfers economic power from the market, government, and citizens to criminals. In extreme cases, it can lead to the virtual take-over of legitimate government, which permits the criminals to have a political impact upon the country ().
Corruption
Corruption is the abuse of public power for private benefit, and that private benefit is most often in the form of illicit money or in-kind payment from a client to the agent, i.e. a bribe. Corruption may be defined by common law or under statute. It is “The abuse of public power for private benefit” (Tanzi 1998).
At common law, “[a] man accepting an office of trust concerning the public is answerable criminally to the king misbehaving in his office…by whomever and in whatever way the officer is appointed” Bembridge (1783) 3 Doug 327 per Lord Mansfield.
Corruption is committed by the person giving the offer and the person accepting it. The principal legislations dealing with corruption can be found in two Acts: Public Bodies Corrupt Practices Act 1889 (deals with corruption in public bodies) and the Prevention of Corruption Act 1906 (Deals with corruption in the private sector). Both Acts are supplemented by the Prevention of Corruption Act 1916
For the purposes f the Public Bodies Corrupt Practices Act 1889 the term ‘corruptly’ means “purposely doing an act which the law forbids as tending to corrupt, Weller (1979).A person who uses his position or ‘power’ to gain a benefit for himself or another person is also corrupt. See Parker (1986) 82 Cr App R 69. In the case of Whitaker [1914], it was stated that “it is also corruption to bribe the holder of office and it is an offence for him to accept it” this was also the subject matter in the case of Smith [1960].
The corruption of agents is dealt with by the Prevention of Corruption Act 1906 chapter 34 under section1. The meaning of agents is very wide and applies both to the public and private or commercial field. See Morgan v. DPP [1970] 3 ALL ER 1053.
Having looked at this offence, the key question is whether bribery and corruption are any different from each other; it is difficult to distinguish between the two. There is however a need to put in place constitutional and judicial safeguards that are replete with punitive provisions and are backed by enforcement. More importantly, there should be some form of ethical revolution through which the virtues of hard work and honest reward and the dignity of labour would be fixed in continental awareness.
Conclusion
As the law presently stands, fraud covers a number of offences, some offences are probably not yet known about however, due to the growth of monetary crimes, it is suggested that replacing a number of offences of fraud and deception with a single, general offence of fraud, would simplify the law whilst retaining the same scope of severity.
BIBLIOGRAPHY
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Punch M (1996) Dirty Business Exploring Corporate Misconduct, Analysis & Cases, Sage Publications
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Griew E, (1990) Theft Acts 1968 and 1978, 6th Edition, Sweet & Maxwell
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Slapper G & Tombs S,(1999) Corporate Crime, Longman
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Biggs S, Farrell S, Padfield N, (2002) The Proceeds of Crime Act 2002, Butterworths
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Ashe M, Reid P, (2000) Money Laundering, Risks and liabilities, Sweet & Maxwell
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Wells C, (1993) Corporations and Criminal Responsibility, Oxford, Clarendon Press
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Jason-Lloyd L, (1997) The Law on Money Laundering, Statutes and Commentary, London-Portland, Frank Cass
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The Royal Commission on Criminal Justice (1993) The Investigation, Prosecution, and Trial of Serious Fraud, HMSO Publications.
The term "white collar crime" was coined in the early 1940's by Yale sociologist Edwin Sutherland to refer to corporate wrong-doing.
Whenever a person appropriates another's property or obtains a pecuniary advantage through the use of any sort of self-reliance trick or deception, a fraud has occurred. / If an unwarranted loss occurs due to the dishonest actions of another, a fraud has been committed
Section 15 of the Theft Act 1968 defines obtaining. (R v. King [1979] Crim LR 122)
The definition of pecuniary advantage derived from s.16 (2) (b + c)
It is very debatable as to how long the process of money laundering has been occurring for. In his book ‘Lords of the Rim’, historian Sterling Seagrave describes how, more than 3,000 years ago, merchants in China hid their wealth for fear that rulers would take the profits and assets they had accumulated through trade-().
(3) Property is criminal if- (a) it constitute a person’s benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and (b) the alleged offender knows or suspects that it constitutes or represents such a benefit.
S.340 (2) – “Criminal conduct is conduct which 9a) constitutes an offence in any pert of the United Kingdom, or (b) would constitute an offence in any part of the United Kingdom if it occurred there.
This may be done by buying shares, property, luxury goods, investment policies, setting up business etc.
Law enforcement experts set the amount of laundered money around the UK at as much as £50bn every year.
Public bodies include local and public authorities of all descriptions. See also s.7 of the Public bodies corrupt practices Act 1889.
Corruption committed abroad is dealt with in s.109 of the Anti Terrorism, Crime & Security Act 2001.
