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The simple answer is, it depends! Fraud can be considered both a criminal offense and a civil tort in New South Wales and Australia more broadly. In a criminal fraud case, the state’s attorney is responsible for prosecuting the case, aiming to hold the accused accountable. On the other hand, in a civil fraud case the defrauded individual brings forth a tort claim seeking legal remedies.
What is Fraud?
According to the Attorney General and his office, Fraud can be defined as the ‘dishonestly obtaining a benefit, or causing a loss, by deception or other means.’ Further specifics on the language can be seen in paragraph viii of the Fraud Control Policy
In New South Wales specifically, section 192E of the Crimes Act 1900 makes it an offence to dishonestly:
Obtain property belonging to another;
Obtain a financial advantage or cause a financial disadvantage.
Fraud as we know it can embody many forms. Some examples can be seen below :
False representation: Making false statements or misrepresenting material facts, such as property condition or financial information.
Forgery: Creating or altering documents, signatures, or records with the intent to deceive.
White collar crime: An example of which can be a Ponzi Scheme, which is an operating investment scheme that uses new investors’ funds to pay earlier investors, leading to collapse.
Insider Trading: Illegally trading securities based on non-public information, which could also be seen as an individual guilty of committing tax fraud.
Identity Theft: Assuming another person’s identity without consent as part of wider fraudulent activities
Bank Fraud: Deceptive practices to unlawfully obtain funds or assets from financial institutions.
Tax Fraud: Intentional evasion or falsification of information to avoid paying rightful taxes.
False Accounting: Misrepresenting financial records to unlawfully acquire property or assets.
Criminal Fraud
In a criminal case, alleged criminal fraud charges are addressed differently from those of civil fraud. The criminal justice system in Australia treats fraud as a serious offence, as it undermines the integrity of financial transactions and can have significant economic implications. As such, criminal proceedings are taken extremely seriously. Law enforcement agencies, such as state police forces and federal investigative bodies like the Australian Federal Police (AFP), actively investigate and prosecute cases of criminal fraud.
To establish criminal fraud, the burden of proof rests with the prosecution. They must demonstrate beyond a reasonable doubt that the accused intentionally engaged in deceptive conduct, with the knowledge of its fraudulent nature and the intention to deceive or defraud another person or entity. Convictions for criminal fraud can result in substantial penalties, including fines, imprisonment, or a combination of both. As noted by the Commonwealth Director of Public Prosecutions, violation can result in 10 years imprisonment.
However, several legal elements must also be proven by the prosecution. These include the accused’s dishonest conduct with the intention to gain a financial advantage or cause financial loss, engaging in deceptive behaviour, demonstrating specific intent to deceive or defraud, involvement in obtaining a financial advantage or causing financial loss, and establishing a causal connection between the accused’s actions and the resulting financial consequences. These elements collectively form the basis for establishing the offence of criminal fraud.
Civil Fraud
Civil fraud law in Australia encompasses legal principles and regulations that address fraudulent conduct in civil matters. It provides a framework for individuals or businesses who have been defrauded to seek remedies and recover their losses through civil litigation. Under civil fraud law, fraudulent conduct refers to intentional misrepresentation, deceit, or other dishonest acts that cause harm or financial loss to another party.
Establishing a Civil Claim
To establish a claim of civil fraud in Australia, the plaintiff (the defrauded party) typically needs to prove several elements. It is important to note that a civil claim is brought by a private party and not the public prosecution service. These elements include demonstrating that the defendant made false statements or engaged in deceptive conduct, that the false statements were material and relied upon by the plaintiff, and that the plaintiff suffered harm or financial loss as a direct result of the fraudulent conduct.
Once a claim of civil fraud is established, the court may provide various remedies to the defrauded party. These remedies may include compensatory damages, which aim to restore the plaintiff to the position they would have been in had the fraud not occurred. The damages awarded may cover direct losses, consequential damages, and potentially punitive damages in cases of particularly egregious conduct.
Civil Jurisdiction
Civil cases in Australia are typically pursued in magistrates court or a crown court state or federal courts, depending on the jurisdiction and the nature of the fraud. The legal proceedings involve presenting evidence, witness testimonies, and legal arguments to support the plaintiff’s claim of fraud. It is essential for the plaintiff to be able to demonstrate, on the balance of probabilities, that the defendant committed the fraudulent act.
The civil fraud law in Australia serves to protect the rights of individuals and businesses, deter fraudulent activities, and provide a mechanism for redress when fraud occurs. It ensures that those who engage in fraudulent conduct are held accountable for their actions and that victims of fraud have a legal avenue to seek justice and compensation.
Burden of Proof in Civil and Criminal Fraud
Burden and Standard of Proof in Criminal Law System
In the realm of criminal law, the standard of proof revolves around the concept of “reasonable doubt.” The prosecution bears the burden of proving the guilt of the accused beyond a reasonable doubt, leaving no reasonable uncertainty in the mind of an impartial person. This standard of proof is intentionally set high, considering that criminal cases often entail severe penalties.
Failure to meet this high threshold results in the acquittal of the accused. However, the notion of “reasonable doubt” itself can be subjective, varying with the circumstances at hand. The jury, in each specific case, determines what doubts are reasonable within the context. Hence, seeking guidance from a legal professional is crucial, as they can provide insights tailored to your particular circumstances. Reach out to one of our experienced criminal lawyers at Jameson Law for a complimentary consultation.
Burden and Standard of Proof in Civil Law System
In the civil law system of Australia, the burden of proof lies with the plaintiff or claimant. However, the standard of proof differs from that in criminal cases. In civil law, the plaintiff must establish their case on the balance of probabilities, meaning it is more likely than not that their claim is true. This standard is lower compared to the “beyond a reasonable doubt” standard required in criminal proceedings. The burden of proof rests on the party making the claim in civil cases, who must present evidence supporting their case. Failure to meet this burden may result in the dismissal of their claim.
Frequently Asked Questions
Who deals with Fraud Offences in Australia?
It is important to note that the Australian legal system has provisions and legislation in place to investigate, prosecute, and penalize individuals or entities involved in these fraudulent activities.
Authorities such as the Australian Securities and Investments Commission (ASIC), the Australian Federal Police (AFP), and the ATO work diligently to detect and address instances of fraud throughout the nation. Through public prosecution, court-ordered fines and other mechanisms, these organisations help protect the integrity of our nation's systems and their people, while ensuring compliance with the law.
Is there a difference in the burden of proof in civil fraud and criminal fraud matters?
Yes, there is a difference in the burden of proof between civil fraud and criminal fraud matters. In civil fraud cases, the burden of proof rests on the plaintiff to establish their case on the balance of probabilities. In criminal fraud cases, the burden of proof lies with the prosecution, who must prove the defendant's guilt beyond a reasonable doubt.
Can a civil and criminal fraud case run concurrently?
Yes, it is possible for criminal and civil fraud cases to run concurrently in Australia. The civil and criminal justice systems operate independently, and the legal proceedings for each case are distinct. While the burden and standard of proof differ in civil and criminal cases, the same underlying facts and circumstances can give rise to both civil and criminal claims related to fraud. Therefore, it is possible for parallel civil and criminal proceedings to take place simultaneously, addressing the legal aspects and consequences of the alleged fraud from different perspectives. This means that you might be entitled to two legal avenues to seek remedies. Contact our legal professionals at Jameson Law today.
What sanctions can be imposed on a defendant, and what compensation can be won?
In Australia, the sanctions imposed on an individual for fraud can vary depending on the specific offence committed, the severity of the fraud, and other relevant factors. Some of the sanctions that can be imposed on individuals convicted of fraud in Australia include:
Imprisonment: Individuals found guilty of fraud can face imprisonment as a penalty. Serious cases of fraud, such as large-scale financial fraud or corporate fraud, can result in lengthy prison terms - up to 10 years in Australian federal prison.
Fines: The court can impose fines on individuals convicted of fraud. The amount of the fine may depend on factors such as the financial loss caused by the fraud, the offender's financial situation, and the severity of the offence. The fines can range from moderate to substantial amounts. Not including the amount defrauded, $150,000.
Restitution or Compensation: In cases where the fraud has caused financial harm to victims, the court may order the offender to pay restitution or compensate the victims for their losses. This aims to restore the victims to their pre-fraud financial position and provide them with some form of redress.
Forfeiture of Assets: In certain cases, the court may order the forfeiture of assets acquired through fraudulent means. This can include seizing and confiscating property, funds, or other assets obtained as a result of the fraud.
It is important to note that the specific sanctions imposed for fraud can vary based on the circumstances of each case and the discretion of the sentencing judge. The severity of the offence, the individual's criminal history, and other relevant factors can influence the outcome and the extent of the penalties imposed. Consulting with a legal professional experienced in criminal fraud law, such as our experts at Jameson, can provide further guidance on the potential sanctions for specific fraud offences in Australia.
I am a victim of fraud - should I report the matter to the police or pursue the defendant through the civil courts or both?
If you are a victim of fraud in Australia, it is recommended to report the matter to the police and pursue legal action through civil courts. Reporting to the police enables them to investigate the crime and potentially hold the perpetrator criminally accountable. Pursuing the defendant through civil courts allows you to seek compensation for your losses and obtain remedies such as restitution or damages. Both avenues can be pursued concurrently as they serve different purposes, but consulting with a legal professional is important to assess your specific circumstances and receive tailored advice on the best course of action.
Is fraud civil or criminal NSW?
Fraud in New South Wales (NSW) can be both a civil and criminal offence. It depends on the circumstances and the nature of the fraud committed. In some cases, fraud may be pursued as a criminal matter, where the state prosecutes the offender, and if convicted, the offender may face penalties such as imprisonment or fines.
On the other hand, fraud can also be addressed through civil proceedings, where the victim of the fraud pursues legal action against the offender to seek compensation for their losses. The determination of whether fraud is treated as a civil or criminal matter in NSW will depend on the specific facts and evidence presented in each case.
