Fraud and Its Punishment

Fraud and Its Punishment

Fraud is defined as unlawfully obtaining another person’s property through deceptive acts and with malicious intent. Accordingly, the use of fraudulent methods and the victim’s deception are essential elements of the crime of fraud.

A person described as a fraudster must have engaged in deceptive conduct. In practice, the element of deceptive conduct often complicates the identification of fraud.

It is commonly assumed that anyone who takes another person’s property through a simple lie or an empty promise is considered a fraudster. However, a mere lie on its own does not constitute deceptive conduct under the law.

Fraud is categorized as a result-based offense, meaning that its realization depends on the occurrence of a specific outcome, namely the unlawful acquisition of another person’s property. The commission of fraud requires the fulfillment of the following two conditions:

• Financial loss incurred by the victim.
• Financial gain obtained by the fraudster or a third party designated by them.

Punishment for Fraud and the Manner of Its Determination by the Court

Constituent Elements of the Crime of Fraud

Like other criminal offenses, fraud requires three elements: the legal element, the material element, and the mental element.

The Legal Element of Fraud

The legal element of fraud is derived from Article 1 of the Law on Intensifying the Punishment of Perpetrators of Embezzlement, Bribery, and Fraud.

The Material Element of Fraud

Under the material element, the perpetrator must first resort to fraudulent means and engage in deceptive conduct. Examples include forging titles or documents, giving false hope regarding illusory matters, or intimidating individuals with unfounded threats. The second stage involves the victim being deceived and trusting the fraudulent individual. Finally, the fraudster must unlawfully obtain the victim’s property.

All three components must be present for the material element to be complete and for the crime of fraud to be established.

The Mental Element

The mental element of fraud consists of the intent to defraud. This intent is divided into general intent and specific intent. General intent refers to the perpetrator’s intention to commit the material acts constituting the offense. Specific intent refers to the intention to unlawfully obtain another person’s property. The existence of malicious intent must be proven by the complainant and the public prosecutor.

If they fail to establish the perpetrator’s intent, the accused will be acquitted of the charge of fraud.

Types of Fraud

Article 1 of the Law on Intensifying Punishments, together with its related notes, classifies fraud into two categories: simple fraud and aggravated fraud.

Aggravated fraud is established when the perpetrator falls under any of the following circumstances:

• The fraudster is a government employee or an employee of a public institution or municipality.
• The fraudster unlawfully presents themselves as officials or government employees.
• The fraudster deceives the public through mass or public advertising.

If none of these conditions apply, the offense is deemed simple fraud, which carries a different level of punishment.

Punishment for the Crime of Fraud

Pursuant to Article 1 of the Law on Intensifying Punishments, the penalty for simple fraud includes imprisonment from one to seven years, a monetary fine equivalent to the value of the property obtained, and restitution of the original property to its owner. In cases of aggravated fraud, the offender is subject to imprisonment for two to ten years, restitution of the property, a monetary fine equal to the amount defrauded, and permanent dismissal from public service.

In addition to these penalties, if the amount involved exceeds one hundred million tomans and does not constitute a disturbance to national security, the final conviction must be published in one of the local newspapers. If the amount involved is up to one hundred million tomans, the punishment consists of imprisonment of six months to three and a half years, along with a monetary fine equal to the amount defrauded. In aggravated fraud cases within this threshold, the punishment includes imprisonment from one to five years, permanent dismissal from public service, and a monetary fine equal to the unlawfully obtained property.

Does the Victim’s Forgiveness Affect the Punishment for Fraud?

If the amount involved in the fraud is up to one hundred million tomans, the offense is considered subject to private complaint, and prosecution, investigation, and enforcement of punishment will cease upon the victim’s forgiveness. However, if the amount exceeds one hundred million tomans, the offense is not subject to forgiveness, and the victim’s consent has no effect on the continuation of proceedings.

What Is Cyber Fraud?

Pursuant to Article 13 of the Law on Computer Crimes, if an individual unlawfully acquires property or non-property benefits for themselves or another person through telephone communication, social networks, the internet, text messages, or email, they commit the offense of cyber fraud. The prescribed punishment includes imprisonment for one to five years or a monetary fine of twenty million to one hundred million rials.

Frequently Asked Questions About Fraud and Its Punishment