Fraud under Article 159 Part 4 of the Criminal Code

Introduction

Fraud is one of the most common types of crime in the modern world.
Various deceptive methods have become especially widespread recently with the development of the Internet. Information technologies have provided scammers with a huge range of services, using which ordinary citizens can instantly lose certain material values. Fraud is the theft and taking of someone else's property, or obtaining certain rights to certain material resources through deceptive techniques or abuse of trust.

This definition is approved in Article 159 of the Criminal Code of the Russian Federation, and all illegal acts that qualify as fraudulent transactions are considered on the basis of this standard. However, it must be remembered that all acts committed through deception or breach of trust are punished very severely.

Initially, Article 159 of the Criminal Code of the Russian Federation contained a number of provisions establishing certain penalties for fraudulent transactions. All of them were generalized, and the only qualifying criterion was the amount of illegal benefit received by the criminal. In 2012, some changes were made to the actual rules, due to which the qualification of the crime became more extensive.

Previously, the legislator combined all categories in Article 159 of the Criminal Code of the Russian Federation, without dividing them according to the objects of criminal acts. Thus, individuals, legal entities, state-owned companies and government agencies could act as fraudsters. Over time, it was necessary to make adjustments to the current regulations, as fraudsters began to use new methods of deception, including transactions with bank cards, deceiving users through information systems, and much more.

In addition, significant adjustments have also been made to qualifying criteria, in particular those related to establishing the amount of fraud. Thus, previously the large amount of fraud was 250 thousand rubles; with the amendments made, this value increased to 1 million rubles. As for the particularly large size, the changes here became more extensive and increased from 1 million rubles to 6 million rubles. The changes affected penalties. Thus, previously a convicted person was deprived of income for a period of up to one year, but now the time period when income is considered illegal can increase to 3 years.

Regardless of the forms and methods of fraudulent influence, the crime implies an attempt to establish trusting contact with the victim. Taking advantage of the user’s trust, the fraudster tries to take possession of his material and financial resources, thereby receiving unjustified benefits for himself and causing damage to the victim.

Restriction from theft

Fraud has a number of differences from this crime, although it can also involve deception. However, during theft, it acts as a means by which an attacker enters a room, home and secretly steals property. Deception in this case acts as a condition that facilitates the subsequent seizure of material assets. In this regard, in case of theft, it does not condition the transfer of property into the possession of the criminal. In fraud, deception is the main sign of the transfer of material assets to the subject who turns them into his own benefit. Theft is characterized by the secret theft of property. Fraud looks like a voluntary transfer of valuables to a criminal. In addition, an important feature is the receipt of property or title ownership. Selfish taking of an item without vesting a person with the appropriate powers will act as theft, but not as fraud.

Types of fraud

At their core, all illegal acts of violators that are carried out against ordinary citizens are theft. However, the basis of the criminal act is still deception, because citizens transfer their valuables to the criminal, so they were misled about his intentions.

In any case, those who committed fraud are held accountable, regardless of the outcome of the crime.

Fraud dates back to ancient times. One of the first types of fraudulent operations can be considered playing “thimbles”, card games and other gambling activities. However, with the development of mankind, criminals have found new ways of deception, due to which citizens suffer not only material damage, but also often moral harm, as well as damage to health.

Also read: What is fraud according to Article 159 of the Criminal Code of the Russian Federation

Today, the Criminal Code of the Russian Federation designates three groups of fraud:

1. Traditional types of fraud. These include all types of gambling, in which the stakes are certain financial (material) benefits, fortune telling and false healing, begging, various political and religious demagogy, the use of unconventional practices associated with human superpowers (magic, extrasensory perception, etc.). The result will be the appropriation of someone else's property in favor of the perpetrator.
2. Complex fraudulent transactions. This group was given this name due to the fact that scammers implement various “complex” schemes of fraudulent activities. They are often associated with large-scale advertising and marketing companies, the introduction of non-traditional methods of treating various diseases, trade operations, real estate transactions and various material resources.
3. Modern fraudulent transactions. This group appeared relatively recently and was immediately included in Article 159.4 of the Criminal Code of the Russian Federation. In 2012, the state revised its policy regarding fraudsters and included in legislative regulations a certain classification of modern fraudulent schemes. These include various transactions on bank cards and accounts, attempts to cash out funds under preferential programs (matkapital, etc.), contractual relations in the business environment, fraud with plastic and credit cards, fraud affecting the insurance industry, the use of computer technology and information for the purpose of deceiving users. Note that in the case of using payment cards, Article 159 will establish aggravating circumstances, since damage is also caused to the banking organization and its business reputation.

Let us note that fraud initially involves the deliberate deception of users, the use of their trusting attitude for the purpose of illegal enrichment. In turn, deception is also usually classified into 2 types (Article 159, Part 4 of the Criminal Code of the Russian Federation):

1. Active. The criminal intentionally provides the user with false information and misleads the user in order to embezzle material wealth. Thus, the user may be provided with fake documents, or other actions may be taken against him that encourage deception of the user.
2. Passive. The attacker does not provide the user with a number of important information and does not warn him about possible negative consequences. Thus, information is concealed, which is why the user does not have a complete picture of the event in which he is getting involved and is not aware of his possible losses.

In turn, the legislator has identified several methods of deception, manifested in certain parameters:

1. Intent on receiving payment for a service (product) that the fraudster does not intend to provide to the customer in the first place.
2. In the circumstances. In order to make money, the criminal undertakes obviously dangerous activities, in particular, he forges documents and provides initially false information.
3. In the face. The criminal assumes the identity of another person who has an excellent reputation and inspires trust from potential clients. Thus, the violator falsifies personal documents and also provides a service (product) to which he has no rights.
4. In the subject. This option is the most common, and almost every person has encountered it. The attacker voices incorrect technical characteristics of the product (service) and provides misleading information regarding the appearance of the item.

Types of modern fraudulent schemes

The development of information technologies and their active implementation in almost all spheres of human life have provided fraudsters with wide space for the implementation of evil intentions associated with deceiving citizens and appropriating their material wealth.
Modern methods of fraud are considered the most dangerous, since they are characterized not only by the presence of individual sources, but also by specific features of interaction with potential consumers.

The provisions of the general part of the Criminal Code establish that fraud using the following sources is most widespread:

1. Financial sector

Also read: Criminal prosecution under Article 159 of the Criminal Code of the Russian Federation

Attackers advertise various financial pyramids and actively spread misinformation regarding their capabilities and potential. After the user agrees to invest his funds at high interest rates, the attacker disappears along with the money.

1. Lending

Here, the most common methods of fraud are obtaining a loan through a front person. Criminals provide citizens with fake documents, and they get the opportunity to apply for a loan from a bank. In addition, there are often situations where loans are issued to non-existent people, or citizens whose documents were stolen.

1. Real estate

This category is considered one of the most profitable, so it is not difficult to encounter fraud here. Among the most striking examples are the sale of one apartment to several citizens, the alienation of housing without notifying the owners, and the illegal eviction of incapacitated groups of the population.

1. Internet

This is where the largest number of frauds are carried out, and it will be almost impossible to solve the case, since the fraudster does not meet with the victim, and calculating his whereabouts becomes problematic. Therefore, there may not be a preliminary investigation under the criminal code.

Deception

Its specifics are explained in the resolution of the Plenum of the Supreme Court. Deception may consist of knowingly communicating false information, suppressing true facts, or deliberate actions. The latter, for example, include the provision of counterfeit products or other subject of the transaction, the use of deceptive methods in the process of payment for services/goods, imitation of payment, etc. Deception in any case is aimed at misleading the victim. However, false information that is reported during fraud or withheld may relate to various circumstances. For example, they may relate to legal events and facts, the value of property, its quality, the identity, powers, and intentions of the criminal.

Qualifying characteristics of a criminal act

All cases related to fraud have practically common characteristics, regardless of the specifics of the process. Thus, the object of the crime will be relations of a certain form of ownership. But the subject of a criminal act is someone else’s property or rights to it.

The subject of the crime is a person who has reached the age of 16 and is aware that his actions are illegal and cause harm to other users. Also, a group of persons who entered into a preliminary conspiracy to obtain unjustified benefits can be considered as a subject. There is a small nuance regarding the subject of the crime. A person accused of a crime must be fully and clearly aware of his criminal intentions, be legally competent and not have any restrictions in his actions.

The subjective side of a crime involves the presence of malicious intent. This means that the criminal is aware that his actions entail negative consequences for the deceived victim, as well as the very fact of committing an illegal offense.

An important function here is played by the presence of selfish motives and goals, through which the criminal intends to increase his status, financial well-being, etc.

As for the objective side, it will be the most important parameter by which a specific qualifying characteristic of a crime is determined. The legislator considers the following objective signs of fraud, manifested in:

• seizure and taking possession of someone else's property by deception or abuse of trust, and transferring it under the control of other persons who do not have any rights to the property;
• illegality of an act entailing criminal prosecution;
• gratuitousness;
• causing damage (moral, material) to the owner of property assets that were transferred to someone else’s property fraudulently;
• criminal result.

In some cases, liability for fraud may be increased. The legislator approved several parameters that influence the aggravation of guilt and significantly increase the degree of punishment:

• repeated fraud;
• causing great material harm to the victim;
• use of official position and opportunities;
• machinations of a group of persons acting in conspiracy.

The end of the crime

There are several opinions on the issue of its definition in practice. The Resolution of the Plenum explains that fraud, which is committed through abuse of trust or deception, is considered completed from the moment the property enters the illegal use of the attacker or other persons. That is, these subjects received a real opportunity to dispose of the subject of encroachment at their own discretion. If a crime is committed in the form of reversal of property rights in favor of the offender, then it will be considered completed from the moment when the perpetrator has a legally enforceable opportunity to take possession or dispose of someone else’s material assets as their own. For example, this may be the end of the procedure for state registration of rights, the date of conclusion of the agreement, the day the court decision comes into effect, and so on.

Features and punishment

Article 159 of the Criminal Code of the Russian Federation is divided into several parts, each of which considers certain circumstances and signs of fraud. In addition, depending on the qualification characteristics, specific sanctions will be determined against attackers.

Part 4 of Article 159 of the Criminal Code of the Russian Federation is considered one of the most difficult. The fact is that we are talking about a particularly large-scale fraud, and also touches on the problem of fraud in the field of business activity. Here, establishing accurate evidence to establish guilt is incredibly difficult, since there are a huge number of ways to avoid responsibility. However, even in such situations it is almost impossible to avoid punishment, and the problem will be that the case may drag on for several years. In view of this, the statute of limitations here will be very long. In most situations, it is equal to 3 years, however, the statute of limitations under Part 4 of Article 159 can be increased to 10 years from the date of the fraudulent fraud.

Also read: What amount is considered a particularly large amount of fraud?

If guilt is established in court, and the evidence base does not raise any doubts about the fact of fraudulent actions, the offender will serve the sentence determined under the terms of Part 4 of Article 159 of the Criminal Code of the Russian Federation. Thus, the punishment may be deprivation of the convicted person’s income for a period of up to one year, or punishment by imprisonment for a term of up to two years. However, these measures are too lenient, since the specified part of the article contains more severe penalties.

The key feature of Part 4 of Article 159 of the Criminal Code of the Russian Federation is the very fact of the possibility of avoiding punishment or mitigating it. The law predetermines that such opportunities will be available to citizens who have returned property acquired as a result of fraudulent fraud. Those accused of committing a crime under Article 159 of the Criminal Code, who have disabled relatives as their dependents, can also count on mitigation.

If the offender has a minor child whom he is raising alone, the law allows for the possibility of deferring the actual serving of the sentence until the child reaches 14 years of age.

Comments to part 4 indicate that the legislator has some comments on fraud considered under this article. Thus, the legislator establishes the following features of the consideration of cases:

• significant damage will be determined if the amount of material losses of the victim exceeds 10 thousand rubles;
• an especially large amount is established in situations where the amount of damage exceeds 1 million rubles; a crime committed on a large scale is punished more severely;
• if the amount of fraudulent damage reaches 6 million rubles, the law establishes an especially large scale of fraud.

A similar decision is made regarding a crime committed under Article 159 of the Criminal Code by a group of persons by prior conspiracy.

When considering cases of fraud, courts will take into account not only the amount of damage, but also the financial status of the victims. As practice shows, the trial of fraud lasts quite a long time, and most often the final verdict is made 2-6 months after the consideration of the case.

Attackers face the following types of punishment under Part 4 of Article 159 of the Criminal Code of the Russian Federation:

• restriction of freedom for up to one and a half years (up to 10 for aggravating symptoms);
• corrective (compulsory) labor for 5-10 years;
• deprivation of income for a period of up to one year or mandatory compensation in the amount of 1 million rubles;
• deprivation of income for a certain period of time (from 1 to 3 years);
• a ban on certain types of activities for 3 years, an actual ban on any positions related to public administration.