An introduction to fraud

By Catsup and Mustard
woman with a wad of cash

Fraud has become one of the most commonly committed crimes in the UK in recent years, therefore, it is important to understand the legal definition to ensure that people do not fall foul of the crime. A fraud solicitor will define the crime as a wrongful deception of others by a perpetrator who has the intention to cause financial loss to the victim and to make a personal gain themselves.

Fraud is a broad term that covers a number of crimes and this includes bribery, corruption, tax evasion, benefit fraud, money laundering, investment fraud, banking fraud and online fraud.

What is money laundering?

man using his pc to commit fraud

In recent years money laundering has become one of the most increasingly committed frauds in the UK. The UK is the most targeted country by perpetrators across the world. National statistics have shown that money laundering and organised crime combined costs the UK economy approximately £37 billion a year.

The legal definition of money laundering is the procedure that perpetrators utilise to turn dirty money into lawful, legal funds. The process of money laundering effectively legitimises proceeds of crime and enables perpetrators to benefit from their criminal activities.

How does money get laundered in the UK?

In the UK perpetrators often try to launder proceeds of crime into the economy through purchasing property. The property market in the UK is highly lucrative and therefore is considered a safe purchase and a way that perpetrators can clean their money. Consequently the rules for purchasing a property in the UK have become stricter and there are now more hoops to jump through before lawyers will enable someone to purchase a property. The government is toughening up on money laundering and making the laws more stringent and therefore before purchasing a house potential buyers are required to provide their ID and show adequate source of funds before they can be considered legitimate buyers. Source of funds means the buyer needs to be able to show that the funds have all come from legitimate means

and must be able to show a paper trail of how the funds have been accumulated. This is to stop perpetrators from depositing large sums of money into their accounts and utilising their criminal proceeds in the economy.

Sentencing for money laundering

Perpetrators should understand the repercussions for being found guilty of money laundering in the UK. The law is governed by the Proceeds of Crime Act 2002 which states that the court must consider both culpability and harm in determining the level of sentencing to hand down to the perpetrator. Culpability is assessed by looking at the level and degree of involvement that the perpetrator had in the money laundering and harm is assessed by looking at the value of the money that has been laundered.

The maximum sentence that the court can hand down to a perpetrator who is found guilty of committing money laundering is 14 years of imprisonment. The term of imprisonment is determined by the degree of harm and culpability committed by the perpetrator and therefore the court will need to assess this on a case by case basis.

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