Fraud is the general term used to define a range of offenses involving dishonesty or misrepresentation of fact, a falsified statement, or deceitful behavior (“fraudulent acts”). Somebody commits fraud when they intentionally deceive another person to make personal gain or to damage that person. People commit fraud in many settings, and people are committing more fraud on the internet than ever before. Depending on the nature of the fraudulent activity, fraud can be charged at the federal or state level. Fraud crimes charged at the federal level include counterfeiting and crimes that cross state lines.

General Categories of Fraud

Crimes that involve fraud encompass a wide variety of actions that can range from white-collar crimes to grand theft. Because of this wide range of crimes, fraud charges are divided into three general categories: consumer fraud, employee fraud, and fraud committed against a governmental institution or entity.
Consumer fraud  includes instances where individual consumers are defrauded. Examples of this include identity theft, telephone scams, securities fraud, credit card fraud, check fraud, and Ponzi schemes.
Employee fraud covers instances when an employee violates his or her fiduciary duty to the company or its clients by embezzling funds, accepting bribes, or selling trade secrets.
Fraud committed against the government or businesses includes tax fraud, insurance fraud, tax evasion, healthcare fraud, counterfeiting, welfare fraud, bankruptcy fraud, and Medicare and Social Security fraud.

Types of Fraud

Some of the most common types of fraud include the following offenses: tax fraud (i.e. tax evasion), insurance fraud, credit card fraud, identity theft, securities fraud, mail fraud, bankruptcy fraud, bank fraud, bribery, counterfeiting, embezzlement, government fraud, political corruption, pyramid schemes, wire fraud, and unemployment fraud. As seen, there are many different types of fraud but some of the most common are identity theft, bank fraud, bankruptcy fraud, computer fraud, and tax evasion.

Identity Theft

In Arizona, identity theft is governed by A.R.S. § 13-2008, and has three main elements that the State must prove beyond a reasonable doubt before a guilty verdict can be secured. These elements are:

1. The person has knowingly taken, purchased, manufactured, recorded, possessed or used any personal identifying information of another person;
2. Without the consent of that person; and
3. With the intent to obtain, use, sell or transfer the other person's identity for any unlawful purpose, to obtain employment, or to cause loss to a person, regardless of whether the person actually suffered a loss.

The crux to any identity theft case is the State’s ability to prove beyond a reasonable doubt that you acted knowingly and with intent for an unlawful purpose or to obtain employment. An effective defense is to raise doubt as to any of these elements, especially the element of intent. If you are unable to raise any doubt to the State’s evidence and you receive a conviction, the consequences may be fierce. A conviction under A.R.S. § 13-2008 results in a class 4 felony and carries a max 3-year sentence if you are a first-time offender. To avoid these fierce consequences, it is important that you have an experienced attorney who can raise some doubt about the evidence presented against you.

Bank Fraud

Generally, the crime of bank fraud occurs anytime a person uses fraudulent means to obtain something of value from a financial institution or users of that institution. Bank fraud is extremely broad, covering numerous forms of fraudulent behavior. Because bank fraud is so broad, often times the crimes overlap with each other. For example, if a person produced a fake passport they have committed forgery. If that person then attempts to use that passport, they may also have just committed identity theft. The most common forms of bank fraud include forgery, check fraud, credit card fraud, embezzlement, wire fraud, and mortgage fraud.

Forgery is the crime of making or altering a document falsely and fraudulently. The most common example of forgery is when a person without another person’s consent, impersonates that other person’s signature on a document. Arizona revised statute § 13-2002 states a person commits forgery if they intend to defraud and that person:

• Falsely makes, completes or alters a written instrument;
• Knowingly possesses a forged instrument; or
• Offers or presents, whether accepted or not, a forged instrument or one that contains false information.

Check fraud has some overlap with forgery. It refers to any efforts to obtain funds fraudulently by using a paper or digital check. This can include but is not limited to a person writing a check for funds they did not have on their own account (paperhanging), forging a check with someone else’s name, creating a completely fake check, or stealing and using someone else’s checkbook.

Credit card fraud is the next most common way bank fraud is committed. In Arizona and under A.R.S. § 13-2105, a person commits credit card fraud in two ways:

1. When a person intends to defraud and uses a credit card that he knows is forged, expired, cancelled, or revoked to obtain anything of value; or
2. Without consent of the cardholder, acts as if he is the true cardholder and attempts to obtain or actually obtains anything of value regardless of if the credit card is actually used.

In Arizona, embezzlement has a broad application. Arizona law and A.R.S. § 13-1802 says any kind of property may be embezzled; so long as the person entrusted to monitor, manage, or protect that property, steals all or part of it for their own personal gain.

Bankruptcy Fraud

Bankruptcy fraud, known as fraud in insolvency under Arizona Statute § 13-2206, occurs after an individual has already started bankruptcy proceedings. During bankruptcy proceedings, the filing individual must disclose and describe all assets, whether it be cash, bank accounts, property, or other assets, that he or she possesses. Bankruptcy fraud can take various forms but will generally be classified as one of the following:

1. Hiding, transferring, or destroying an owned asset to avoid giving it up or to reduce its worth;
2. Purposefully filing false or incomplete forms required during bankruptcy;
3. Filing bankruptcy forms, with false or real information, in several states to take advantage of exemptions; or
4. Bribing the bankruptcy trustee in order to keep or withhold property.

Computer Fraud

The Arizona statute that describes the crime and penalties of computer fraud is found in A.R.S. § 13-2316 and punishes any unauthorized or improper access into another computer, computer system, or network. This generally occurs when someone hacks into another computer or deletes, changes, or downloads any file they did not have permission to do so.

Tax Evasion

Tax evasion and fraud is a common violation that is punished through the taxation title under Arizona Statute § 42-1127 and will be classified in one or more of the following ways:

1. Failing to file a tax return or failing to pay any administered taxes;
2. Using any false or fraudulent information or failing to disclose required information;
3. Preparing or presenting any false or fraudulent document when filing; or
4. Fraudulently signing or executing any license or required document when filing.

Fraud Scheme

When the state charges an individual with any type of fraud, it is also common to charge the individual with fraud scheme. Fraud schemes, found under Arizona Statute § 13-2310, is a broad charge that requires three things: (1) knowingly obtaining any benefit (2) by false or fraudulent pretenses, promises, or material omissions (3) pursuant to a scheme or artifice to defraud. A “scheme or artifice” is defined as some plan, device, or trick to perpetrate a fraud. So, when an individual plans or prepares a way to defraud a person or system by false or incorrect information and receives any benefit, whether financial, physical, or any other kind, they will be charged with fraud scheme.

Let Us Help

A conviction for any type of fraud can result, depending on the type, can result in a serious felony conviction that can carry a sentence of incarceration. Fighting any fraud charge requires a team of highly experienced, white-collar lawyers to ensure you receive the best results possible. Let Gilbert Criminal Lawyer’s criminal law team, which includes former prosecutors, and their knowledge of Arizona’s fraud guide you through the process. The legal battle ahead will be led by strong representation and diligence.