CFFE Module II

Law Related to Fraud flashcards

Read the question, say the answer to yourself, then turn the card to check. The first 10 of 56 cards are free; the rest come with the subject.

Card 1 of 56

Jump to a card

Complete Flashcard Reference

Review every card in this deck. Open any card to reveal its answer. The first 10 are free; the other 46 come with the subject.

How do corruption, fraud and white collar crime differ in the legal sense?

Corruption: the abuse of entrusted power for private gain; in Kenyan law, conduct within ACECA's list of offences, plus bribery under the Bribery Act, 2016. Fraud: intentional deception causing loss to a victim or gain to the perpetrator, with no entrusted-power element needed. White collar crime: the umbrella, non-violent crime for financial gain by a person in a position of trust.

What five elements must be proven for fraudulent misrepresentation?

1. A false statement of a material fact. 2. Knowledge that it was false, or recklessness as to whether it was true. 3. Intent that the victim rely on it. 4. Actual reliance by the victim. 5. Resulting loss. An honest but mistaken statement fails the second element, so it is not fraud.

How do bribery, an illegal gratuity and economic extortion differ?

Bribery: an advantage offered, given, solicited or received, known or believed to be improper performance of a function. The offer alone is enough. Illegal gratuity: a reward given after the decision, with no prior corrupt agreement. Economic extortion: the person with the power demands payment as the price of doing a duty they already owed.

What is conspiracy, and why can it be charged even if the planned fraud fails?

An agreement between two or more persons to commit an unlawful act. The legal wrong is the dangerous agreement itself, not only a completed harm, so the law can intervene before any loss occurs. For corruption and economic crime, ACECA section 47A covers attempts, conspiracy and incitement.

What are the two forms of the conflict of interest offence under ACECA section 42?

Section 42(1): an agent with an undisclosed private interest in a decision of the principal votes or participates in it. Section 42(3): an agent of a public body knowingly acquires or holds a private interest in a contract, agreement or investment connected with that body. Disclosure is the pivot: an agent who discloses and is authorised to participate (section 42(2)) commits no offence.

What does abuse of office under ACECA section 46 require, and how does it differ from bribery?

Using one's office to improperly confer a benefit on oneself or anyone else. No payment, inducement or forged document is needed. An officer who steers a tender to a friend out of favouritism, receiving nothing, commits abuse of office but not bribery.

What are the three stages of money laundering?

Placement: introducing illicit cash into the financial system, such as a cash deposit. Layering: moving the funds through transfers, shell companies and cross-border movements to obscure the trail. Integration: returning the funds in a usable, apparently legitimate form, such as a property or business investment.

What is the difference between the EACC's role and the DPP's role in a corruption case?

EACC: investigates corruption and economic crime, refers the case to the DPP with a recommendation to prosecute, and can itself bring civil proceedings such as unexplained-assets forfeiture under ACECA section 55. DPP (article 157 of the Constitution): conducts the criminal prosecution. The EACC does not prosecute.

Beyond the bribery offence itself, what two duties does the Bribery Act, 2016 impose?

1. Every public or private entity must have procedures, appropriate to its size and operations, to prevent bribery; a director or senior officer who consents to or connives in a failure commits an offence. 2. Every state officer, public officer or other person in a public or private entity must report knowledge or suspicion of bribery to the EACC within 24 hours, or commit a separate offence.

How does the OECD Anti-Bribery Convention differ from UNCAC, and which is Kenya party to?

OECD Convention: targets the supply side, bribery of foreign public officials by companies and nationals of its member and adhering states. Kenya is not a party. UNCAC: comprehensive and near-universal, covering prevention, criminalisation, international cooperation and asset recovery. Kenya is a state party.

What is the reliable test for whether conduct is corruption rather than fraud in the strict sense?