Criminal law
Fraud charges in NSW
Fraud is built on two contested elements, deception and dishonesty, and not on loss. A transaction where money moved and someone ended up worse off is not fraud unless both are proved. That is why these matters are frequently defensible, and why the investigation stage, before any charge exists, is where most of them are decided.
Alicia Catron 0407 171 626 or Michelle Simmons 0407 534 594. Our lawyers include former prosecutors. We appear in Local Courts across New South Wales and in the District Court.
On this page
What fraud is Related offences Stealing from an employer Centrelink and tax Which court Defences Sentencing Common questions
What the prosecution has to prove
The general fraud offence carries a maximum of ten years. A person commits it if, by any deception, they dishonestly obtain property belonging to another, or obtain a financial advantage, or cause a financial disadvantage.
- Deception. Intentionally or recklessly misleading someone, by words, conduct or silence, about a fact or about the law. It includes deceiving a machine or a computer system
- Dishonesty. Dishonest by the standards of ordinary people, and known by you to be dishonest by those standards. This is a separate element. Proving deception does not prove it
- The outcome. Property obtained, a financial advantage obtained, or a financial disadvantage caused. It can be temporary, and it can be caused to someone other than the person deceived
Two features that widen this offence considerably. Obtaining property can be dishonest even if you were willing to pay for it. And where money went missing over a long period in many small amounts, the prosecution can charge the whole deficiency as one offence rather than proving each transaction, which is how most long-running employee and accounting matters are run.
Fraud and larceny are alternative verdicts to each other. A jury unable to convict on one can convict on the other, so a charge laid as fraud does not necessarily stay that way. More on larceny.
The related offences
Fraud sits within a group of offences that are frequently charged alongside it, particularly where records were altered or an identity was used.
| Offence | What it involves | Maximum penalty |
|---|---|---|
| Fraud | Obtaining property, or a financial advantage, or causing a financial disadvantage, by deception and dishonestly | 10 years |
| Destroying or concealing accounting records | Dishonestly destroying or concealing records, intending to obtain a financial advantage or cause a disadvantage. The outcome does not have to occur | 5 years |
| False or misleading statements | Dishonestly making or publishing a statement that is false or misleading in a material particular, with the same intention | 5 years |
| False statements by an officer of an organisation | An officer deceiving members or creditors about the organisation’s affairs | 7 years |
| Dealing with identification information | Dealing with another person’s identification information intending to commit an indictable offence | 10 years |
| Possessing identification information | Possessing it with that intention | 7 years |
| Possessing equipment to make identification documents | Holding the equipment with that intention | 3 years |
The identity offences are drafted around intention rather than outcome, which means a person can be charged before anything has been obtained at all. That makes what the material was actually for the central issue.
Stealing from an employer
Where the taking happens in the course of employment, two older offences apply and both carry ten years rather than the five that ordinary larceny carries.
Larceny by a clerk or servant
Stealing property that had already come into the employer’s possession. The stock room, the till at the end of the day, tools, materials, goods on the floor.
Embezzlement by a clerk or servant
Taking property received on the employer’s behalf, before it ever reaches them. A customer hands over cash and it goes into your pocket rather than the register.
The distinction turns on whether the money reached the till first. It rarely changes how serious the allegation is, but it does determine which charge is correct, and a charge that does not fit the facts is one worth challenging. Where deception was used rather than simple taking, false invoices, altered records, unauthorised transactions or inflated expense claims, the charge is usually fraud instead.
The internal investigation is where these matters are usually lost. Employers investigate first, then go to police. The employee is asked to attend a meeting, explain a discrepancy, or sign a statement, and whatever is produced goes straight into the police brief. The employment process and the criminal process pull in opposite directions: cooperating fully protects the job and can destroy the defence. Work out how to handle both before the meeting, not after it.
Repayment, where it can be made, matters more in these matters than in almost any other. It is also capable of being characterised as an admission if it is done without thought about how it will be presented.
Centrelink, tax and other Commonwealth matters
Not every fraud is a state offence. Centrelink overpayments, tax matters, Medicare and NDIS billing, and anything involving a Commonwealth department are prosecuted under Commonwealth legislation by the Commonwealth Director of Public Prosecutions, in the same Local Court but under a different sentencing regime.
- The commonly charged offence of obtaining a financial advantage from a Commonwealth entity carries twelve months
- Obtaining a financial advantage by deception carries ten years
- Commonwealth sentencing options differ from the state ones, and the non-conviction order available under Commonwealth law is not the same instrument as a state dismissal
- A debt raised by Centrelink is not a criminal charge. Many people repay a debt and hear nothing further. Some are charged much later
These matters commonly begin with a letter inviting you to an interview about a discrepancy. That interview is not compulsory in the way it is presented to be, and it is worth advice beforehand.
Which court, and what actually happens
Fraud can be dealt with in the Local Court, where the ceiling is two years and an $11,000 fine, or in the District Court on election, where the full ten years applies. The prosecution’s decision usually turns on the amount involved, the period over which it ran, whether a position of trust was abused, and whether records were falsified to conceal it.
The maximum is not the useful figure. In practice, the great majority of fraud matters are finalised in the Local Court, and of those, around half attract a non-custodial order and around a fifth a fine. Imprisonment and intensive correction orders together account for a minority of outcomes. What drives a matter into the custodial group is the amount, the duration, the breach of trust and the absence of repayment.
Where a matter is heading to the District Court, the brief is the battleground. Fraud briefs are large, documentary and slow. They frequently contain material that does not prove what the fact sheet asserts, and reconciling the alleged amount against the actual records is regularly where the figure comes down. That work is done before a plea, not after one.
Defences and arguments
No deception
Everything you said was true, or the other party knew the position, or nobody was actually misled. A failed venture, a bad deal or an unpaid debt is not a deception.
No dishonesty
The separate and often decisive element. Poor record keeping, disorganisation, a genuine belief you were entitled to the money, an arrangement you thought had been approved. Ordinary people do not regard incompetence as dishonesty.
Claim of right
An honest belief in a legal entitlement to the money or property. It does not have to be reasonable or correct. It arises constantly in disputes over commissions, expenses, loans between family members and partnership money.
The amount is wrong
Not a defence, but usually the most valuable work available. Alleged deficiencies are often calculated on assumptions rather than reconciliations, and reducing the figure changes the court, the range and the sentence.
It was not you
Shared logins, delegated access, systems used by several people, and identity material obtained by someone else. Attribution of a transaction to a person is an evidentiary question, not an assumption.
Duress and coercion
You acted under threat, or under the direction of someone in a position of power over you. This arises in family businesses and in coercive relationships more often than it is raised.
Where a mental health impairment, cognitive impairment or a gambling disorder is involved, that may be relevant both to how the matter is dealt with and to sentence, and in the Local Court it may open the way to a treatment plan rather than a conviction. It needs properly prepared expert evidence, obtained early.
Sentencing options in NSW
Get advice before pleading guilty to anything. The court can impose any of the following, and a well-prepared sentencing is what produces the best available outcome.
Dismissal without conviction
No conviction recorded and no further penalty. The matter is finalised as you leave court.
Conditional release order
A bond, available with or without a conviction, supervised or unsupervised. The standard conditions are to commit no further offence and to appear if called on, and further conditions can include rehabilitation, abstinence, curfews and non-association or place restriction orders.
Conviction with no other penalty
A conviction is recorded but nothing further is imposed.
Fine
Can be imposed alone or with a bond, and is a conviction. Usually payable within 28 days, though the registry can extend the time or arrange a plan. Non-payment leads to enforcement, which can include licence and registration suspension.
Community correction order
More serious than a conditional release order, for up to three years, supervised or unsupervised, with conditions that can include community service, curfews, abstinence and rehabilitation.
Intensive correction order
A sentence of imprisonment served in the community under strict supervision, which can include home detention, electronic monitoring and curfews. Breaches go to the State Parole Authority rather than the court and often result in serving the balance in custody.
Three things carry real weight in fraud sentencing and all three take time to assemble: repayment or a credible plan for it, evidence addressing why it happened rather than an assertion of remorse, and a demonstrated period of stability since. General deterrence weighs heavily in these matters, particularly where a position of trust was involved, so the subjective case has to be built properly rather than asserted from the bar table.
A word on written pleas of guilty. Police sometimes hand you a form allowing you to plead guilty in writing without attending. It looks convenient and it is usually a mistake. On a written plea the magistrate has only the police fact sheet and your record, and knows nothing about you or anything mitigating. It is also important that you agree with what the fact sheet says before it is tendered, because the court sentences on that document, and in fraud matters the fact sheet routinely overstates the amount.
Common questions
My employer has accused me and wants me to attend a meeting.
Whatever you say there, and anything you sign, will be handed to police and tendered. The employment process and the criminal process pull in different directions, and full cooperation with one can wreck the other. Get advice before the meeting rather than after it.
If I pay the money back, will the charge go away?
Not by itself. A complainant cannot withdraw a criminal charge and police are not obliged to discontinue because a debt has been repaid. Repayment does carry real weight at sentence, and it sometimes influences whether a charge is laid at all. How and when it is done matters, because repayment made without thought can be presented as an admission.
I did not think I was doing anything wrong. Is that a defence?
It can be the whole case. Dishonesty is a separate element and it is assessed by the standards of ordinary people, with the additional requirement that you knew ordinary people would see it that way. Believing you were entitled to the money, or that an arrangement had been approved, goes directly to that.
Centrelink says I owe a debt. Am I being prosecuted?
Not necessarily. A debt is a civil recovery and most are resolved without any charge. Prosecution is a separate decision made later, and it usually follows an interview about a discrepancy. If you have received an invitation to an interview rather than just a debt notice, get advice before attending.
Will I go to gaol for fraud?
Most fraud matters are finalised in the Local Court and most do not result in full-time custody. What moves a matter into that group is the amount, how long it ran, whether a position of trust was involved and whether anything has been repaid. Large, sustained frauds committed in a position of trust do attract custodial sentences, and it would be dishonest of us to suggest otherwise.
The amount they say I took is wrong.
Then that is the first thing to deal with, and it is often the most valuable work in the matter. Alleged deficiencies are frequently calculated from assumptions rather than reconciled records. The amount drives which court hears it and where the sentence lands, so it needs to be fixed before a plea, not after.
Police have asked me to come in for an interview.
You are not obliged to answer questions beyond providing your name and address. Fraud interviews are usually conducted after police have the documents and are looking for an explanation to lock in. Take advice on whether to participate and, if so, on what.
What should I bring to a first appointment?
Any court attendance notice, the police fact sheet, anything your employer or the complainant has sent you, and whatever records you have of the transactions in question. Bank statements, invoices, messages and employment documents all matter. If you have none of it, come anyway.
The work in a fraud matter happens early
By the time a fraud charge is laid, the documents have been gathered and an explanation has usually been given. If you have been asked to attend an interview, internal or with police, speak to us first.
Alicia Catron 0407 171 626 or Michelle Simmons 0407 534 594. Suite 3.13, 33 Lexington Drive, Bella Vista NSW 2153. We appear in Local Courts across New South Wales and in the District Court. Courts we appear in.