Fraud

by

Mark Button, David Shepherd

• LAST REVIEWED: 11 January 2018
• LAST MODIFIED: 11 January 2018
• DOI: 10.1093/obo/9780195396607-0176

Introduction

Fraud is a crime that encompasses a wide range of behaviors. What unites most definitions is the act of deception to perpetrate the crime, or, as Wells 1997 (cited under General Overviews) argues, fraud is, “any crime which uses deception as its principal modus operandi” (p. 2). In most countries, the criminal act of fraud is covered by a variety of statutes. England and Wales are unique in seeking to codify the offense with the 2006 Fraud Act. Compared to many other volume crimes, fraud is also distinctive in that many victims of fraud, particularly organizations, pursue the fraudster in the civil courts. In many jurisdictions, such as the United States, Canada, Australia, England, and Wales, there is also a civil tort of fraud. Fraud is also often associated with “white-collar” crime. This is because the most high-profile fraudsters are professionals who perpetrate the offense from positions of power. There are, however, many frauds perpetrated by those not in positions of power, such as street criminals pursuing lower risk criminal careers in plastic card fraud, “boiler room” investment fraud, “scammers” sending out phishing e-mails, and “blue collar” workers fiddling at work. Fraud is also often associated with corruption and money laundering. There are overlaps between these crimes, but the focus of this entry is pure fraud. The crime of fraud is also increasingly perpetrated online, and this is stimulating a body of research in its own right. The constraints of space mean this type of fraud will only be briefly touched upon as cyber-fraud warrants its own entry.

General Overviews

There are a number of general overviews that provide a comprehensive introduction to fraud. These can be divided into criminological and practitioner texts. Doig 2006 and Smith, et al. 2010, and edited collections, such as Doig 2012 and Van Slyke, et al. 2016 explore the sociological aspects of the offense, the causes, the characteristics of offenders and social controls. Books that set out models and approaches for preventing fraud and responding to incidents include Wells 1997 and Button and Gee 2013. A very good introductory essay on the subject is Levi 2008. A useful repository of information is provided by the Centre for Counter Fraud Studies’ Fraud and Corruption Hub, which provides hundreds of links to articles, online resources, and books.

• Button, Mark, and Jim Gee. 2013. Countering fraud for competitive advantage: The professional approach to reducing the last great hidden cost. Chichester, UK: Wiley.

  This book sets out a new model for dealing with fraud, treating it as a business cost rather than a crime. It shows how measurement of fraud can be undertaken and how strategies in prevention, detection, investigation and sanctions, among others, can be used to reduce fraud losses and reap a competitive advantage for organizations.

• Doig, Alan. 2006. Fraud. Crime and Society Series. Cullompton, UK: Willan.

  A thorough introductory text for those interested in fraud, covering definitions, the nature of fraudsters and how organizations and governments deal with fraud.

• Doig, Alan, ed. 2012. Fraud: The counter fraud practitioner’s handbook. Farnham, UK: Gower.

  This edited collection provides a wide range of interesting essays covering a comprehensive range of issues in the fraud world. These include trends, types of fraud, policing strategies and sanctions.

• Levi, Michael. 2008. Organized frauds and organizing frauds: Unpacking research on networks and organization. Criminology and Criminal Justice 8.4 (November): 389–419.

  DOI: 10.1177/1748895808096470

  This article provides a detailed consideration of the wide diversity of fraud, bringing together a typology of fraud. It explores some of the evidence for the people actually undertaking such crimes and particularly focuses on organized groups and their involvement in fraud.

• Smith, Geoffrey, Mark Button, Les Johnston, and Kwabena Frimpong. 2010. Studying fraud as white collar crime. Basingstoke, UK: Palgrave Macmillan.

  This book provides a comprehensive overview of fraud, looking at the nature of the problem and how it is prevented, investigated, and prosecuted. The book also provides case studies of social security, insurance, healthcare and transnational fraud.

• Van Slyke, Shanna R., Michael L. Benson, and Francis T. Cullen. 2016. The Oxford Handbook of White-Collar Crime. New York: Oxford Univ. Press.

  The handbook provides a comprehensive overview of fraud and white-collar crime with contributions from a wide group of leading scholars. It includes in depth analyses of corporate and employee fraud, demographics, psychology, the financial impact, political dimensions, justice systems and criminological theories.

• Wells, Joseph T. 1997. Occupational fraud and abuse. Austin, TX: Obsidian.

  One of the many books written by former investigators of fraud; the author, a former FBI agent, provides a comprehensive review of different types of occupational frauds and how organizations can tackle them.