Fraud by Abuse of Position
Being accused of any crime can be an unpleasant experience, but nobody appreciates being accused of betraying someone's trust or a position of duty, often where the complainant is a former client, employer, customer, or even family member. A good fraud by abuse solicitor will often seek to pursue a proactive defence case wherever possible. They will also show sensitivity to what the client is going through.
Most people accused of this offence have never been in trouble with the police. All are scared of the possibility of prison and are desperate to avoid it. It is a fraud by abuse of trust solicitor's job to help the client avoid either a conviction and/or a prison sentence where possible.
The Law - section 4 Fraud Act 2006
1. A person is in breach of this section if he/she:
a) occupies a position in which he/she is expected to safeguard, or not to act against, the financial interests of another person
b) dishonestly abuses that position, and intends, by means of the abuse of that position:
to make a gain for himself/herself or another, or
to cause loss to another or to expose another to a risk of loss
2. A person may be regarded as having abused their position even though their conduct consisted of an omission rather than an act.
In 2020 a long-standing legal test for establishing a person's dishonesty was changed. The test had previously contained a subjective element in so far as it asked whether a defendant appreciated their conduct was dishonest by the ordinary standards of reasonable people. Fraud by abuse solicitors will tell you that this gave rise to ways of defending a case that are simply no longer available. The new test is entirely objective and not reliant on whether the defendant believed what they were doing was right. The two limbs are set out as follows:
what was the defendant's actual state of knowledge or belief as to the facts; and
based on those facts, was his/her conduct dishonest by the standards of ordinary decent people?
Liability by omission
Your fraud by abuse of solicitors will advise you that the act encompasses both action and inaction with intent to cause gain or loss. For example, a company director who intends to get new business for himself personally rather than seeking to secure new business on behalf of his company might fall foul of this offence. What of the position of an employee who fails to pass on new business leads to the company that employs him, diverting them instead to his brother in law who is in a similar trade? Can this person be guilty of fraud by abuse of position? The simple answer is yes.
Who is in a position of trust?
Section 4 Fraud Act 2006 was clearly intended to prevent the dishonest abuse of positions by people who are in an established position of trust e.g. a trustee, company director, or executor of a will.
However, it is not limited to people in high positions. Employees who use their position to gain something for themselves even though they are not actually stealing property would be caught by this section. A clear example is where catering or bar staff buy in their own goods to sell to customers instead of those of the employers. What about the nurse who is looking after a patient or even a less formal carer? It will in all cases come down to a matter of fact and degree as to who is or is not in a position of trust.
As these cases are frequently before the courts it is clear that they are not limited to those established positions of trust discussed above. It is essential at the earliest possible stage to identify and instruct a specialist fraud by abuse solicitor so that a proactive approach might be adopted. It is entirely possible that with proper early intervention a prosecution can be avoided. In the event that it isn't having a head start and understanding what the real issues are in the case can make a fundamental difference to the outcome.
Sentencing powers are wide when it comes to this particular offence. Some defendants in lower level offences may receive a community type sentence, and the maximum sentence of ten years in custody would be applicable only to the most serious offences where a defendant had been convicted after a trial. The court will take many factors into account including your culpability, the loss caused - this can be actual or intended - and the impact on the victim. A good fraud by abuse solicitor will be able to advise on the right approach to mitigating any potential sentence should the case get to this ultimate stage.
The UK tax system places duty on alcohol at among the highest rates in the world. The origins of its duty system date back to the mid-1700s.
As long as UK businesses are required to act as tax collectors of VAT for the state, the system will be open to abuse. Usual estimates put the cost of MTIC fraud and carousel fraud at up to ten billion pounds each year.
Being caught up in an investigation for fraud by misrepresentation can feel stressful and confusing. The fraud act offences have a wide scope and can affect ordinary, law abiding people. That particularly applies to section 2.
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