In the United States, common law recognizes nine elements constituting fraud: [7][8]

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1 ) Fraud A false representatin f a matter f fact whether by wrds r by cnduct, by false r misleading allegatins, r by cncealment f what shuld have been disclsed that deceives and is intended t deceive anther s that the individual will act upn it t her r his legal injury. Fraud is cmmnly understd as dishnesty calculated fr advantage. A persn wh is dishnest may be called a fraud. In the U.S. legal system, fraud is a specific ffense with certain features. Fraud must be prved by shwing that the defendant's actins invlved five separate elements: (1) a false statement f a material fact,(2) knwledge n the part f the defendant that the statement is untrue, (3) intent n the part f the defendant t deceive the alleged victim, (4) justifiable reliance by the alleged victim n the statement, and (5) injury t the alleged victim as a result. These elements cntain nuances that are nt all easily prved. First, nt all false statements are fraudulent. T be fraudulent, a false statement must relate t a material fact. It shuld als substantially affect a persn's decisin t enter int a cntract r pursue a certain curse f actin. A false statement f fact that des nt bear n the disputed transactin will nt be cnsidered fraudulent. Fraud resembles theft in that bth invlve sme frm f illegal taking, but the tw shuld nt be cnfused. Fraud requires an additinal element f False Pretenses created t induce a victim t turn ver prperty, services, r mney. Theft, by cntrast, requires nly the unauthrized taking f anther's prperty with the intent t permanently deprive the ther f the prperty. Because fraud invlves mre planning than des theft, it is punished mre severely. In the United States, cmmn law recgnizes nine elements cnstituting fraud: [7][8] 1. a representatin f an existing fact; 2. its materiality; 3. its falsity; 4. the speaker's knwledge f its falsity; 5. the speaker's intent that it shall be acted upn by the plaintiff; 6. the plaintiff's ignrance f its falsity; 7. the plaintiff's reliance n the truth f the representatin; 8. the plaintiff's right t rely upn it; and 9. cnsequent damages suffered by the plaintiff. T establish a claim f fraud, mst jurisdictins in the United States require that each element be pled with particularity and be prved with clear, cgent, and cnvincing evidence (very prbable

2 evidence). The measure f damages in fraud cases is cmputed using the "benefit f bargain" rule, which is the difference between the value f the prperty had it been as represented and its actual value. Special damages may be allwed if shwn prximately caused by defendant's fraud and the damage amunts are prved with specificity. Financial crimes are crimes against prperty, invlving the unlawful cnversin f the wnership f prperty (belnging t ne persn) t ne's wn persnal use and benefit. Financial crimes may invlve fraud (cheque fraud, credit card fraud, mrtgage fraud, medical fraud, crprate fraud, securities fraud (including insider trading), bank fraud, payment (pint f sale) fraud, health care fraud); theft; scams r cnfidence tricks; tax evasin; bribery; embezzlement; identity theft; mney laundering; and frgery and cunterfeiting, including the prductin f Cunterfeit mney and cnsumer gds. Financial crimes may invlve additinal criminal acts, such as cmputer crime, elder abuse, burglary, armed rbbery, and even vilent crime such as rbbery r murder. Financial crimes may be carried ut by individuals, crpratins, r by rganized crime grups. Victims may include individuals, crpratins, gvernments, and entire ecnmies Skimming (fraud) Frm Wikipedia, the free encyclpedia Jump t: navigatin, search This article is abut cash skimming. Fr credit card skimming, see Credit card fraud#skimming. Fr ther uses, see Skimming. A frm f white-cllar crime, skimming is a slang term [1] that refers t taking cash "ff the tp" f the daily receipts f a business (r frm any cash transactin invlving a third interested party) and fficially reprting a lwer ttal; the frmal legal term is defalcatin. Examples[edit] A skimming crime may be simple tax evasin: the wner f a business may fail t "ring up" a transactin and pcket the cash, thus cnverting a custmer's payment directly t the wner's persnal use withut accunting fr the prfit, thereby the wner avids paying either business r persnal incme taxes n it. A famus example f this crime ccurred at Studi 54 disctheque, [2] which was frced t clse as a result. Skimming may additinally be the direct theft f the cash; in additin t hiding it frm tax authrities, the perpetratr hides the taking frm an emplyer, business partners, r sharehlders. A large scale such allegatin has been leveled at Satyam Cmputer Services cncerning the billin dllars missing frm the cmpany's cffers. [3]

3 Skimming may be necessitated by a third crime; fr example, an therwise hnest businessman wh pays taxes and des nt cheat his partners might still be frced t skim sme cash frm the business and use it t give t an extrtinist in the frm f a bribe, kickbacks, r payment t a prtectin racket r lan shark r even a blackmailer. Other related usages can include things such as crrupt gvernment fficials "skimming" cash received as freign aid. [4] Embezzlement is the act f dishnestly withhlding assets fr the purpse f cnversin (theft) f such assets by ne r mre individuals t whm such assets have been entrusted, t be held and/r used fr ther purpses. [1] Embezzlement is a kind f financial fraud. Fr instance, a lawyer culd embezzle funds frm clients' trust accunts, a financial advisr culd embezzle funds frm investrs, r a persn culd embezzle funds frm his r her spuse. Embezzlement may range frm the very minr in nature, invlving nly small amunts, t the immense, invlving large sums and sphisticated schemes. Mre ften than nt [citatin needed], embezzlement is perfrmed in a manner that is premeditated, systematic and/r methdical, with the explicit intent t cnceal the activities frm ther individuals, usually because it is being dne (by the perpetratr) withut the ther individuals' knwledge r cnsent. Often it invlves the trusted individual embezzling nly a small prprtin r fractin f the ttal f the funds r resurces he/she receives r cntrls; in an attempt t minimize the risk f the detectin f the misallcatin f the funds r resurces. When successful, embezzlements cntinue fr years (r even decades) withut detectin. It is ften nly when a relatively large prprtin f the funds are needed at ne time; r they are called upn fr anther use; r, when a majr institutinal rerganizatin (the clsing r mving f a plant r business ffice, r a merger/acquisitin f a firm) requires the cmplete and independent accunting f all real and liquid assets; prir t, r cncurrent with, the rerganizatin, that the victims realize the funds, savings, assets r ther resurces, are missing and that they have been duped by the embezzler. In America, embezzlement is a statutry ffense s the definitin f the crime varies frm statute t statute. Typical elements are (1) the fraudulent (2) cnversin (3) f the prperty (4) f anther (5) by a persn wh has lawful pssessin f the prperty. [2] Fraudulent: The requirement that the cnversin be fraudulent means simply that the defendant wilfully and withut claim f right r mistake cnverted the prperty t his r her wn use. Cnversin: Embezzlement is a crime against wnership; that is, the wner's right t cntrl the dispsitin and use f the prperty. [3] The cnversin element requires a substantial interference with the true wner's prperty rights (unlike larceny, where the slightest mvement f the prperty when accmpanied by the intent t deprive ne f the pssessin f the prperty permanently is sufficient). [4] Prperty: Embezzlement statutes d nt limit the scpe f the crime t cnversins f persnal prperty. Statutes generally include cnversin f tangible persnal prperty,

4 intangible persnal prperty and chses in actin. Real prperty is nt typically included. Of anther: A persn cannt embezzle his wn prperty. Lawful pssessin: The critical element is that the defendant must have been in lawful pssessin f the prperty at the time f the fraudulent cnversin and nt have mere custdy f the prperty. If the defendant had lawful pssessin the crime is embezzlement. If the defendant merely had custdy, the crime is larceny. [5] Determining whether a particular persn had lawful pssessin r mere custdy is smetimes extremely difficult. Cntents [hide] A recent KPMG Fraud Survey fund that rganizatins are reprting mre experiences f fraud than in prir years and that three ut f fur rganizatins have uncvered fraud. The NYS Office f Mental Health's Bureau f Audit has prvided the fllwing list f internal cntrls t assist yu in preventing and detecting fraud at yur agency. 1. Use a system f checks and balances t ensure n ne persn has cntrl ver all parts f a financial transactin. Require purchases, payrll, and disbursements t be authrized by a designated persn. Separate handling (receipt and depsit) functins frm recrd keeping functins (recrding transactins and recnciling accunts). Separate purchasing functins frm payables functins. Ensure that the same persn isn t authrized t write and sign a check. When pening mail, endrse r stamp checks Fr Depsit Only and list checks n a lg befre turning them ver t the persn respnsible fr depsiting receipts. Peridically recncile the incming check lg against depsits. Require supervisrs t apprve emplyees time sheets befre payrll is prepared. Require paychecks t be distributed by a persn ther than the ne authrizing r recrding payrll transactins r preparing payrll checks. If the agency is s small that yu can t separate duties, require an independent check f wrk being dne, fr example, by a bard member. Require accunting department emplyees t take vacatins. 2. Recncile agency bank accunts every mnth. Require the recnciliatin t be cmpleted by an independent persn wh desn t have bkkeeping respnsibilities r check signing respnsibilities r require supervisry review f the recnciliatin. Examine canceled checks t make sure vendrs are recgnized, expenditures are related t agency business, signatures are by authrized signers, and endrsements are apprpriate.

5 Examine bank statements and cancelled checks t make sure checks are nt issued ut f sequence. Initial and date the bank statements r recnciliatin reprt t dcument that a review and recnciliatin was perfrmed and file the bank statements and recnciliatins. 3. Restrict use f agency credit cards and verify all charges made t credit cards r accunts t ensure they were business-related. Limit the number f agency credit cards and users. Establish a plicy that credit cards are fr business use nly; prhibit use f cards fr persnal purpses with subsequent reimbursement. Set accunt limits with credit card cmpanies r vendrs. Infrm emplyees f apprpriate use f the cards and purchases that are nt allwed. Require emplyees t submit itemized, riginal receipts fr all purchases. Examine credit card statements and crrespnding receipts each mnth, independently, t determine whether charges are apprpriate and related t agency business. 4. Prvide Bard f Directrs versight f agency peratins and management. Mnitr the agency's financial activity n a regular basis, cmparing actual t budgeted revenues and expenses. Require an explanatin f any significant variatins frm budgeted amunts. Peridically review the check register r general ledger t determine whether payrll taxes are paid prmptly. Dcument apprval f financial prcedures and plicies and majr expenditures in the bard meeting minutes. Require independent auditrs t present and explain the annual financial statements t the Bard f Directrs and t prvide management letters t the Bard. Evaluate the Executive Directr's perfrmance annually against a written jb descriptin. Participate in the hiring/apprval t hire cnsultants including the independent auditrs. 5. Prepare all fiscal plicies and prcedures in writing and btain Bard f Directrs apprval. Include plicies and/r prcedures fr the fllwing: cash disbursements attendance and leave expense and travel reimbursements use f agency assets purchasing guidelines petty cash cnflicts f interest 6. Ensure that agency assets such as vehicles, cell phnes, equipment, and ther agency resurces are used nly fr fficial business.

6 Examine expense reprts, credit card charges, and telephne bills peridically t determine whether charges are apprpriate and related t agency business. Maintain vehicle lgs, listing the dates, times, mileage r dmeter readings, purpse f the trip, and name f the emplyee using the vehicle. Peridically review the lgs t determine whether usage is apprpriate and related t agency business. Maintain an equipment list and peridically cmplete an equipment inventry. 7. Prtect petty cash funds and ther cash funds. Limit access t petty cash funds. Keep funds in a lcked bx r drawer and restrict the number f emplyees wh have access t the key. Require receipts fr all petty cash disbursements with the date, amunt received, purpse r use fr the funds, and name f the emplyee receiving the funds listed n the receipt. Recncile the petty cash fund befre replenishing it. Limit the petty cash replenishment amunt t a ttal that will require replenishment at least mnthly. Keep patient funds separate frm petty cash funds. 8. Prtect checks against fraudulent use. Prhibit writing checks payable t cash. Deface and retain vided checks. Stre blank checks in a lcked drawer r cabinet, and limit access t the checks. Require that checks are t be signed nly when all required infrmatin is entered n them and the dcuments t supprt them (invices, apprval) are attached. Require tw signatures n checks abve a specified limit. Require bard member signature fr the secnd signature abve a higher specified limit. (Ensure that blank checks are nt pre-signed.) Mark invices Paid with the check number when checks are issued. Enable hidden flags r audit trails n accunting sftware. 9. Prtect cash and check cllectins. Ensure that all cash and checks received are prmptly recrded and depsited in the frm riginally received. Issue receipts fr cash, using a pre-numbered receipt bk. Cnduct unannunced cash cunts. Recncile cash receipts daily with apprpriate dcumentatin (cash reprts, receipt bks, mail tabulatins, etc.) Centralize cash receipts whenever pssible. 10. Avid r discurage related party transactins. Require that a written cnflict f interest and cde f ethics plicy is in place and that it is updated annually. Require that related party transactins be disclsed and be apprved by the Bard. Require cmpetitive bidding fr majr purchases and cntracts.

7 Discurage the hiring f relatives and business transactins with Bard members and emplyees. Are the cmputer and related prgrams lcated in a secure envirnment and lcked when nt in use? Are the cmputer prgrams relating t cash transfers accessible in any manner by unauthrized users (i.e., frm ther terminals in a netwrk envirnment, the Internet r the physical wrkstatin)? Are up-t-date lists maintained f users and their levels f access? Des apprpriate management adequately supervise the physical security f the cmputers which have access t prgrams related t cash transfers? Is it pssible that cmputer access passwrds and ther vital infrmatin have been leaked, whether intentinally r nt, t thers? Are passwrds and ther vital access infrmatin changed peridically? Hw is this dcumented? Are system recrds maintained t dcument lgn attempts/sessin paths, etc., and are they reviewed by apprpriate management? Des the system maintain lgn vilatin recrds? Is the specific cmputer r terminal validated and dcumented by the system upn an attempted lgn? Is input dcumentatin reviewed and apprved independently frm the cash transfer prcess? Hw many apprvals are required and hw are they dcumented? Are prspective emplyees wh will be invlved in the cash transfers prperly screened? Are they adequately bnded? D prcessing perids ever becme prlnged? Are emplyees leaving the cmputer during the transmissin prcess? Hw are cmputer hardware and sftware prblems dcumented related t the cash transfers? Wh is supervising cmpliance with internal cntrls relating t these matters? Internal cntrl ver prcessing EFT and ACH cash transfers: Is there a pre-apprved listing f vendr numbers and bank accunt numbers fr which designated cash transfers can be made t/frm? Which emplyees are permitted t perfrm what type(s) f cash transfers? Hw is this mnitred? Are there pre-apprved dllar limitatins? Is cash recnciled by an individual independent f having access t perfrm cash transfers? Is the cash recnciliatin r review cmpleted frm the Internet r cmputer-generated statements that culd have been easily manipulated prir t being reviewed? Des the cash recnciliatin prcess include a detailed review f vendrs, bank accunt numbers and ther references relating t the cash transfers? Is supprting dcumentatin reviewed? What is yur expsure t unauthrized transactins ccurring with yur authrized vendrs (e.g., an emplyee paying a persnal debt with an identical vendr)?

8 What is yur expsure t "inncent-lking" payrll tax depsits made via cash transfers that are crediting unauthrized amunts f federal incme tax t an emplyee's withhlding accunt? Are recurring cash transfers reviewed t determine the nging prpriety f the amunt and the authrizatin f the expenditure?