The difference between criminal and civil fraud in Queensland

Fraudulent behaviour goes beyond lying about a set of circumstances for gain or benefit. Fraud offences in Queensland are judged as anything deceptive, dishonest, corrupt or unethical. This broad definition covers instances in which an offender:

• Obtains or misuses property belonging to someone else.
• Disadvantages another person or benefits from another's inaccurate understanding of a situation.
• Influences a person or entity to perform illegal activities or prevent them from performing lawful actions.
• Forces someone to do any of the above to another person unknowingly.

These incidents encompass a broad range of white collar crime and cyber crime such as:

• Theft and embezzlement.
• Identify theft and personation.
• Tax evasion and bank fraud.
• Counterfeiting and money laundering.

Section 408C of the Criminal Code Act 1899 (Qld) expands on this criminal activity further – but what the legislation doesn't cover is the difference between criminal and civil fraud.

What is the difference between civil fraud and criminal fraud?

Criminal fraud

In criminal fraud, the charges are brought by the Director of Public Prosecution or the Police.

A recent news story in the Brisbane Times illustrates what this type of fraud looks like. In this case, a developer fronting a golf resort scheme near Ipswich allegedly took millions of dollars in deposits for unbuilt apartments – despite no longer owning the land. The Queensland Office of Fair Trading brought this to the state police fraud squad for further assessment, with the investigation still ongoing.

Prosecutors can still pursue a criminal fraud case even if the crime wasn't successful or if no one was harmed through the incident.

Civil fraud

In contrast, any person defrauded by the actions of another can initiate civil fraud proceedings. The plaintiff has to prove that the offending person knowingly committed fraudulent behaviour for their action to be successful. Additionally, plaintiffs also have to prove that they suffered damage through the act of manipulation or misrepresentation. This damage can be psychological, personal or financial.

Civil fraud is treated as another form of legal tort in Queensland, in which an offender, if found guilty, has to pay compensation to the victim.

An ongoing fraud case in Queensland involves a golf resort developer who allegedly defrauded property investors out of millions of dollars. 

What needs to happen for someone to be charged with fraud?

A civil or criminal fraud case can only be made if three crucial elements are present:

1. An offender is knowingly dishonest or immoral.
2. A victim believes in untrue or inaccurate circumstances because of this dishonesty or immorality.
3. The situation has a lack of control or safeguards to prevent fraud from occurring.

It must be proved that the person charged with fraud acted in a dishonest way clearly counter to the standards expected of an ordinary, honest and reasonable person.

Are there different penalties for civil fraud and criminal fraud charges?

Civil fraud

If facing a civil fraud case, offenders will generally face a compensation penalty offering damages to the victim(s) of dishonest behaviour. The Queensland Court will consider a range of factors when determining the penalty for those guilty of fraud. These include:

• The relationship between the offender(s) and victim(s).
• The value gained through deceitful behaviour.
• The length of time offences were committed for.

Criminal fraud

On the other hand, conviction for criminal fraud can result in court-ordered fines, restitution for victims of fraudulent behaviour and even imprisonment in extreme circumstances. The usual maximum penalty for any proven act of fraud is five years' in jail.

However, the Criminal Code Act 1899 (Qld) specifies certain factors that can increase this conviction term to 14 year in prison if:

• The offender is a director of a corporation, and the victim is the corporation.
• The victim of fraud employs the offender.
• The property, or the yield to the offender from any fraud, is worth more than $30,000 but less than $100,000

Further, state legislation carries even harsher penalties for those found guilty of committing fraud on an ongoing basis or with gains to the offender of more than $100,000. In these cases, imprisonment can be up to 20 years.

Company directors who defraud the business can face up to 20 years of imprisonment for offences worth more than $100,000.

What are my defences against fraud charges?

There are a number of defences a criminal lawyer can use when dissuading the court from convicting a defendant with an indictable offence. These include:

• Duress – Here defendants of fraud can claim they were forced to act in a deceitful manner under duress caused by another party or group.
• Mistakes – Offenders can claim that action later to be as fraudulent or immoral was an honest and reasonable mistake any ordinary person could have made. 
• Claim of right – If a person accused of fraud can prove they had an honest claim of right to property belonging to another individual, through a consenting transaction or lawful ownership, the criminal or civil charges could be dropped.

Determining your best defence strategy if you've been charged with criminal or civil fraud is easier and more effective if you seek legal help. A criminal law solicitor will fight your corner against conviction and help you achieve the most favourable outcome possible. To find the right person for your case, contact the team at Russo Lawyers today.