Fraud

Article 451 of the Federal Law No. 31/ 2021 On the Issuance of the Crimes and Penalties Law states as under.

Any person who unlawfully appropriates for himself or another person movable property, or who obtains a benefit or document or a signature on the said document, or revocation or alteration of the document, by seeking fraudulent method or by false pretense or capacity to deceive the victim and induce him to surrender such document, shall be liable to a jail sentence or a fine. The same penalty shall be imposed against any person who disposes of a real estate or movable property, knowing that he is neither the owner nor has the right to dispose of the same, or that he has previously disposed of the same or concluded a contract on the same, and which may inflict damage to a third party.

If the subject matter of the crime is money or bond for the State or any of the entities mentioned in Article 5, such matter shall be considered an aggravating circumstance. Any attempt to commit the crime shall be punishable by a jail sentence for a period not exceeding two (2) years or a fine not exceeding AED twenty thousand (20,000).

Upon any conviction against a recidivist with a jail sentence for one (1) year or more, the court may order surveillance measures for a period not exceeding two (2) years and not exceeding the term of the sentence.

Definition of Fraud

Fraud is defined as taking or gaining from another property, money, vouchers or anything of value by deception or lying or trickery which is supported by verbal means or written documents, causing the victim to rely on the same to willingly hand over something of value from himself to the person committing the fraud.

If the subject matter of the crime is money or bond for public officers of the country, this will be treated as an aggravating circumstance.

If a person who is convicted of fraud and has served his sentence commits a crime again, he or she can be put under investigation and surveillance for up to two years or up to the term of his previous imprisonment.

Attempted fraud

The maximum imprisonment for attempted fraud is two years or a fine not exceeding AED twenty thousand (20,000).

Difference between lying and fraud

Merely lying does not amount to fraud. The element of support has to be present. Therefore, ordinary lies are not considered fraud, as the law does not punish mere lies.

Difference between fraud and theft

The willingness to surrender is what differentiates fraud from theft. In fraud, the victim willingly surrenders the object of value. In a theft, the victim is not

willing to hand over his object of value and it must be forcefully taken from him.

Difference between fraud and breach of trust

In fraud, the intent to defraud, and bad faith have to be present from the onset. Whereas in Breach of Trust, the intent changes during the process. The presence of bad faith and intent from the onset can be proven by evidentiary support.

Deceptive methods

Deceptive methods fulfilling the requirements of fraud include general documents, written or verbal expressions, circumstances or appearance, or the use of other persons to deceive the victim that induces the victim to rely on such supporting documents, persons or verbal expressions to hand over an object of value. Lying, unsupported by any such acts, does not constitute fraud.

Circumstances Comprising Fraud

The general circumstance required to comprise a fraud can be by coincidence or engineered by the party himself or herself. In both cases, it shall satisfy the requirement for fraud.

Fraud is based on actions or circumstances that convince the victim into handing over his property. Such acts or circumstances could be made or taken advantage of by accident as well.

The Dubai Court of Cassation in its hearing on 10/11/2001 noted that circumstances of fraud can include: "[A person or people] taking on the appearance of rich people and appearing like them and driving their cars to invite people to one's house and convincing them to hand over their money, after which he disappears, or claiming he has connections with people holding high rank in the government or that he does business management or opened a branch or an office of a fake company or claiming he can cure people, or double their money or do whatever they want by using black magic".

Exception to the rule:

Lying shall constitute the crime of fraud if committed by an individual employed by the government and he takes advantage of his job or his position to deceive another. In all such cases, lying shall equate to fraud.

Third party involvement:

If the lie is supported by a third party, it is considered a fraud on the condition that the third party was moved by the fraudulent party to support the lie. The third party shall be considered the main wrongdoer of the crime if he had an agreement with the fraudulent party to deceive the victim, before committing the crime or provided support to the deceptive party and vice versa. That includes any documents written by the third party and issued to the party committing the crime. The only scenario in which the third party shall be considered a victim is in case he acted in good faith and was unaware of the deceit.

A third party is considered a partner to the fraud if he supports the fraudulent party.

Purpose of the Deceit:

Under UAE law, the purpose of the deceit is not relevant. Any action is taken, regardless of the purpose, if done to take another's money or property, is considered fraud.

As stated by the court in Abu Dhabi Appeal No. 173/79, Criminal Appeal, in its hearing dated 5/8/1979:

"The deceiving party is the one who must take the action that leads to the interference of the other party supporting him – whether that party had bad intentions or was deceived as well with the deceived party".

Doctrines for victim's protection under the law:

The Person

The criteria are applied on a case-by-case basis and the merits of each case. So a court will assess the IQ of the victim, among other things to assess whether the deceit was an obvious one or not. This ensures that the person committing fraud does not evade the law or the punishment. This is most often used by the court to protect victims of fraud.

The Standard of an Average Person

It is considered fraud if the court determines that an average person of average intelligence would have succumbed to the deception. If so, then the crime is fraud. However, this is a loophole most likely to be used by those committing fraud since they intentionally target people of below-average intelligence or means.

The Intentions of the Deceiver

The law shall protect the victim if the deceiver intended to deceive, and the means used by him to deceive were successful in deceiving the victim. However, if the deceiver was not successful in deceiving the victim, it shall be considered attempted fraud. The disadvantage of this condition is that it merges the elements of the crime: the intent and the actions.

Using a false name or identity

False name:

A person is said to be committing fraud if he takes a false name, in part, or in full. It is, however, not considered fraud if a person uses his commonly known name which is different to his name, or if he shares the same name with another person. However, if he convinces the victim of his false identity, it shall come under fraud.

Taking on a False Quality:

The above is defined as an image an individual acquires due to his position or reputation in the society or due to his affinity with another person of importance. Such quality could be due to the individual's profession, job, status etc. It is considered fraud to assume the personality of another person to deceive someone out of their property.

Requirements

The requirements for the above are timing and exaggeration. Accordingly, claiming a characteristic, such as being a court judge (if you are not) is still a fraud. Additionally, if a person exaggerates his position to deceive another, it is a fraud. Accordingly, any elevation of a person's profile to a higher position to lure the victim is enough for fraud.

If the fraud is successful on account of using a false name or characteristic, proof in the form of documentation or a third party may not be needed.

Conditions to prove fraud by using false identity or characteristic

Three conditions have to be met to prove fraud by assuming another's name or characteristic:

Firstly, the name or characteristic assumed should lead the victim into handing over his property. What will be considered to have 'led' the victim to hand over the property, is at the judge's discretion.
Secondly, there must be a positive action from the deceiver to convince the victim of the false characteristic, to be considered fraud. Therefore, staying silent will not be considered fraud even if it misleads the victim into assuming the other's identity.
Thirdly, the characteristic undertaken by the one committing fraud should not be inconsistent. It should be such that an ordinary person does not immediately suspect a wrongful act.

If the above three conditions are met, it shall be considered fraud under Article 451 of the Penal Code. If any of the above is in writing, it may be treated as an additional crime of falsification which carries a higher punishment. In such cases, Article 88 of the Penal Code will apply, which states that if a person is guilty of two crimes, he shall be punished for the crime having a greater penalty. As a result, in such a situation, the perpetrator may be found guilty and punished for falsification.

Immovable and moveable property

Under Article 451, any action taken on immovable property such as land, which does not belong to a person, is also considered fraud. This is to protect all immovable property. This kind of fraud has two conditions:

Firstly, an action must be taken on the immovable property and this action must be that of rights in rem or 'real rights, and no rights in personam i.e. personal rights. An example of such an action would be selling a property fraudulently that does not belong to the person. Renting a property that does not belong to a person shall not be a fraud since it's not a right in rem. Such an action can be oral or written. Evidence Law requires that any contact or action, whose value exceeds AED 5000 shall be in writing.
Secondly, the action taken on the property must not come from the owner of the property. An owner in such instances could be the owner himself, or any person who has been authorized by a contract, for example, through a power of attorney, or an order of the court, such as, in the case of minors. If the rightful owner has taken any action on his rightfully owned property, it cannot be a fraud. If a minor takes any action, it's not a fraud, but could be categorized as another crime. The same will apply if a son, for example, takes an action on his father's property. This will be deemed as fraud.

However, it should be noted that in cases of immovable property, if the owner of the property has entered into an agreement with Party 'A' but has yet to transfer ownership, and sells to Party 'B' instead, this shall be considered fraud. Following the same path, if 'A' sells to 'B' without transferring ownership and then sells the same property to 'C', this too shall be a fraud. These rules shall apply regardless of the knowledge of the victim of the true owner of the property.

The result of the Crime of Fraud

The conditions on the property or money: The property must be movable. So it could be money, vouchers or contact etc. In case the property is real estate and the agreement is fraudulent, it will be sufficient to qualify as a fraud since an agreement is a movable property. Another condition is that the property must have a material value and not just an emotional value to the owner. This condition differentiates it from theft. In fraud, a person must 'take' something of value, for example, if a person deceivingly identifies himself to be a policeman to avoid paying the metro ticket, it shall not be a fraud. However, if he does the same to 'take' discounted or free tickets it shall be a fraud. Accordingly, it is important for the person to 'take' something to satisfy this condition.

Taking of the property: This crime of fraud must result in the taking of the property of the victim. To be liable for fraud, the deception has to happen before the property is taken. The action leading to the handover of the property must be performed by the victim. It is immaterial whether the person committing the fraud has benefitted from the property or the crime or not. Even if he donates the property taken, it will still be considered a fraud. Additionally, if the victim hands over the money under a fraudulent pretext for an illegal purpose, that will not absolve the fraudulent party of liability.

To establish fraud, the deception must drive the victim to hand over the property which the deceiver intends to take. Therefore the deception must take place before handing over the property.

Damage:

Article 451 of the Penal Code states that there must be damage to the victim to successfully prove fraud. Two conditions should be satisfied:

Firstly, deceit should transpire before the property is wrongfully obtained by the deceiver.
Secondly, the handover of the property by the victim under the deceit should be the result of the deception. A situation where the victim becomes aware of the deceit and continues handing over the property, for whatever reason (including a situation where the victim attempts to complete the crime to attain evidence of the fraud), shall not be considered fraud. It can only be a crime of fraud if the victim is truly deceived into handing over his property.

It is the judge's discretion whether causation has occurred or not or whether the link between the deceit and the damage is established.

Moral Requirement: Intention

Two conditions must exist together to fulfil the 'intention' requirement for the crime of fraud. Firstly, there must be a general intention for a party to deceive another party. Secondly, there must be an intention to gain the other's property by this deception. The motive of intention is immaterial in this matter. The evidence and proof of intent and what qualifies as evidence is also a discretion available to the judge.

Punishment

The punishment for fraud is imprisonment or a fine. A person convicted of fraud could face anywhere from 1 month to up to 3 years of imprisonment.

For attempted fraud, the maximum imprisonment is 2 years and the maximum fine is AED 20,000.

Fraud

Related Links

Comments

Leave a Comment