In a general sense, the crime type of swindling and fraud comprises the act of illegally depriving another person or entity of money, property or legal rights. The perpetrator deliberately deceives the victim about facts. This deception results in an error on the part of the person who has been deceived, which in turn causes the victim, for instance, to hand over money, surrender things or provide services. This causes the deceived person or a third person to suffer financial loss and, at the same time, leads to an unlawful enrichment of the perpetrator or another person.
Swindling and fraud come in many shapes and forms, such as investment fraud, insurance fraud, benefit fraud, tax and excise fraud or consumer fraud. Since these crimes usually combine high profits and low risks, they are popular with organised crime groups (OCGs). The perpetrators often operate across borders, benefitting from differences in national legislations and adding complexity to the investigations required to uncover these criminal acts. Moreover, recent years have seen a rapid growth in fraud committed on the internet, with criminals taking advantage of huge numbers of unsuspecting users.
To guarantee effective prosecution of swindling and fraud, international judicial cooperation is paramount.
Types of fraud
Some of the most common types of fraud include:
tax fraud: the illegal evasion of taxes by individuals or entities, ranging from knowingly underreporting taxable income or overestimating business deductions to sophisticated international VAT carousel frauds;
excise fraud: a variation of tax fraud in which import duties or taxes are evaded by smuggling or illegally importing excise goods, illegally manufacturing excise goods or diverting excise goods, for example alcohol, cigarettes or fuel;
counterfeiting: fraudulently imitating or copying items with the intent to deceive, for instance consumer products, food, pharmaceuticals, technical products such as parts for aircraft or automobiles, artworks, money or documents (forgery);
investment fraud: luring investors to make purchase or sale decisions based on false information, often in variations of boiler room schemes, Ponzi schemes or pyramid schemes, resulting in high losses of the victims, and
benefit fraud: illegally claiming benefits a person is not entitled to, for instance unemployment benefits, grants, pensions or compensations, by providing false information or not reporting changes in the circumstances determining the eligibility for receiving such benefits.