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Crime Fraud Is Defined As Term Paper

Crime

Fraud is defined as using deception for personal gain. In a criminal context, fraud is a deliberate deceiving of another in order to cause damage to them. Typically, the damage that results is the taking of another's property or services unjustly. Fraud is often done trough forgery, theft, larceny by trick, embezzlement, false pretenses, robbery, extortion and malicious mischief.

In order to be found guilty of criminal fraud, the following elements must be satisfied:

An individual or an organization intentionally makes an untrue representation about an important fact or event;

The untrue representation is believed by the victim, or the person to whom the representation is being made to;

The victim relies upon and acts upon the untrue representation;

The victim suffers a loss of money and/or property as a result of relying upon and acting upon the untrue representation.

In 2005, WorldCom chief executive officer Bernard Ebbers was convicted of fraud for his involvement in the largest accounting scandal in United States history. Because of WorldCom's false financial reporting, investors suffered an $11 billion loss.

He was charged with felonies for conspiracy and security fraud, along with the filing of false statements with securities regulators. He is serving a twenty-five-year sentence for his conviction.

The reason Ebbers was found guilty of criminal fraud, despite being in a business, is because his actions met the above referenced elements of fraud. For example, his filing of false statement was an intentional act that contained an untrue representation of an important fact: WorldCom's accounting. Further, this untrue statement was believed by the company's investors, or in this case, the victims. Further, the investors relied upon Ebbers' statement as being true and thus acted on it in terms of their investment decisions. Finally, as a result of the investor's reliance and action upon Ebbers' false statements, they lost a significant amount of money. Thus, because Ebbers' actions satisfy the elements for criminal fraud, it does not matter whether or not he was acting within a business capacity.

Bibliography

Associated Press (2005): "Former WorldCom Chief Signs Agreement Over Fraud Charges."

Floyd, Nell Luter. (2006): "Ebbers Receives Prison Order." The Clarion-Ledger.

Moritz, Scott. (2003): "Judgment Day Coming Sooner for Ebbers." The Street. 27 Aug. 2003.

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