By legal definition, fraud is any intentional act of misrepresenting a fact for the purpose of denying someone something of value or of legal right. There are different types of fraud, with money laundering and insurance fraud being the two most common. It’s hard to know these things without legal advice from a solicitor specialising in money laundering or insurance fraud.
In money laundering, the perpetrator takes stolen money through different financial transactions to hide the real source of the money.
There are three main elements in money laundering:
1. Illegal income source – Money laundering requires an illegal source of income. Usually, illegal gambling organizations, black market deals, and drug trades engage in this crime.
2. Deliberate attempt to conceal the source of the money – The accused qualifies for money laundering if the money is withdrawn and deposited in many transactions. Some fraud criminals withdraw a large amount of money, split it into small amounts and deposit it in multiple accounts.
3. Profit from these illegal transactions
Money laundering is different from embezzlement, as any solicitor experienced in money laundering cases knows. Both cases seem similar as they are deceitful in nature but they have differences. In embezzlement, the culprit is part of the organisation or group with a position given trust and confidence to authorize certain transactions. An embezzler should also take a property or valuable and convert it to a form wherein there is personal gain, taking the right of the owner of the item to benefit from it.
Insurance fraud happens when someone fakes an incident to gain money from an insurer. Usually, the culprit files a false insurance claim involving an incident that is either staged for the purpose of the fraud or never happened. Each year, the insurance industry loses millions because of this crime.
Fraud happens in all types of insurance. Fraudsters plan a collision and show it as an accident when it comes to cars. In travel, some fake a disease and connive with a physician to acquire benefits. Those who have health insurance, at times, complain about false aches and pains that are hard to diagnose, resulting in continued coverage in a disability insurance plan. Some even fake deaths to get benefits from a life insurance company.
Thousands of fraud incidents are filed every year. As fraud can be complicated, victims are highly advised to consult a lawyer to make sure that the case goes well.