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A Brief Introduction to the Various Types of Fraud

Fraud is nothing new. One of the earliest documented cases dates back to 300 B.C. when a Greek merchant took out an insurance policy called a bottomry on a load of corn. The policy was essentially a loan that was to be paid back with interest after his cargo was delivered. In this case, the merchant planned to sink the boat that presumably carried his cargo, keep the loan for his “lost” cargo, and sell the corn, profiting twice from the deal. Unfortunately for the unscrupulous merchant, he drowned while attempting to escape his crew, who discovered his underhanded plan and wanted no part of it.

Fraud, by definition, occurs when someone deliberately deceives another in order to gain something of value. One of the most talked about types of fraud lately seems to be digital, which is growing much more sophisticated than simple catfishing, a scheme in which people use the photographs and personal information of other people to create fake personas to attract romantic partners online, even when those fake love interests scam money out of their online victims.

Digital fraud is often difficult to recognize because hackers can secretly spy on someone’s email activity, then create a fake email account to intercept financial transactions, costing businesses and individuals significant sums of money, usually getting away with their take long before the victims realize they’ve been scammed.

Fraud cases can be either civil or criminal, depending on how the victim was wronged by the act, but the types of fraudulent activities are growing along with technology, creating a myriad of opportunities for tricksters to steal from unsuspecting victims.

Types of Fraud

Since fraud has been happening for centuries, there are several ways it can be committed. For example, insurance fraud is still common; people with business debt will set fire to their establishment or fake a robbery, or people will fake an injury in order to lay the groundwork for a lawsuit. Some other common types of fraud include:

Charity fraud - People are generally willing to give to those in need, which opens the door to criminals soliciting donations to charities that don’t exist or more recently, creating GoFundMe pages for fraudulent illnesses or hardships. A Kentucky woman was recently arrested after raising $10,000 in donations for cancer she did not have.

Pyramid schemes - The premise sounds wonderful to those who are asked to invest a small amount of money for a line of products to sell while recruiting others to also sell. Not only will they make money from their own sales, but they’ll also make a percentage of money from those that they recruit. The fraud reveals itself when the scheme falls apart, usually because there are no more people left to recruit. There are various pyramid scheme types, some more sophisticated than others, but in all cases, it is only the people at the top who benefit.

Identity theft - Fraudsters find various ways to steal another’s identity, sometimes with only a few bits of personal information gathered online. They will then take out credit cards, open bank accounts, or drain existing accounts while impersonating another person.

Internet theft - Sites such as eBay are a hotbed for fraudsters who list products for sale with no intention of ever making good on their end of the bargain. Buyers will send money, in some cases receiving a photograph of the item they purchased, in other cases pocketing the money and disappearing from the website.

Do you need a criminal defense attorney?

If you’ve been charged with fraud in Florida, you will need an experienced criminal defense attorney such as Malcolm Anthony to help guide you through the criminal process. Call 904-285-4529 (4LAW) for more information.

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