01 Dec 2010

New fraud, forgery and identity-related offences in New South Wales

by Tobin Meagher, Andrew Moore

A well-overdue modernisation and simplification of the fraud and forgery provisions in the Crimes Act 1900 (NSW) creates specific offences to address the growing problem of identify crime.

Advances in technology have unquestionably delivered many benefits to society. However, criminals relentlessly utilise many of these advances to devise new means of obtaining ill-gotten gains at the expense of individuals, businesses and governments.

The Australian Bureau of Statistics recently reported that, over a one year period, over 800,000 Australians were victims of at least one incident of personal fraud and 500,000 were victims of identity fraud.[1] According to KMPG's latest Fraud and Misconduct Survey, the average loss from fraud by each organisation surveyed which experienced at least one incident of fraud increased from $1.5 million in 2008 to $3 million in 2010. [2]

The ongoing battle against fraud has been given a boost in NSW by the passing of the Crimes Amendment (Fraud, Identity and Forgery Offences) Act 2009 (NSW). The Act came into force in February this year and significantly re-writes the fraud and forgery provisions in the Crimes Act 1900 (NSW).

Modernisation of offences

The aim of the Act was to modernise and simplify the existing fraud and forgery provisions in the Crimes Act 1900 (NSW) with a view to deleting a number of specific, and often archaic, offences (such as the offence of forging East India bonds) with a smaller number of new, broader, offences which conceptually fit in a modern Crimes Act.[3] The Act also creates new offences to address identity crime, involving the theft, then misuse, of personal identification information.

The new offences are technologically neutral to ensure that they remain relevant despite further technological advances. The Act also adopts a number of provisions, and more broadly the structure, of the national Model Criminal Code, thereby bringing the NSW offences more into line with the corresponding Commonwealth offences.

Part 4AA – Fraud and related offences

The new Part 4AA contains a general fraud offence plus three ancillary offences. These offences replace more than 30 specific offences under the old law, such as the well-known offence of directors cheating or defrauding (former section 176A).

Under the new general fraud offence (section 192E), a person who, by any deception, dishonestly obtains another's property or obtains any financial advantage or causes any financial disadvantage is guilty of the offence of fraud. This offence carries a maximum penalty of 10 years' imprisonment.

It is also an offence if a person dishonestly destroys or conceals accounting records (section 192F) or dishonestly makes or publishes any statement that is false or misleading (section 192G) with the intention of obtaining another's property or obtaining any financial advantage or causing any financial disadvantage.[4] An officer of an organisation who knowingly makes false or misleading statements with the intention of deceiving the members or creditors of that organisation about its affairs is also guilty of an offence (section 192H).[5]

The Act inserts, for the first time, a definition of "dishonesty" into the Crimes Act 1900 (NSW), as follows: "In this Act: dishonest means dishonest according to the standards of ordinary people and known by the defendant to be dishonest according to the standards of ordinary people".[6]

This two limb test is based on the test adopted by the English Court of Appeal in R v Ghosh[7] and underpins the new offences in Part 4AA. It involves both an objective test (namely, the standards of ordinary people) and a subjective test which depends on whether the accused knew the act in question was dishonest according to the standards of ordinary people.[8]

Although this test was criticised by the High Court in Peters v The Queen (1998) 192 CLR 493, it mirrors the definition of dishonesty used in the Criminal Code Act 1995 (Cth) (section 130.3) and in other Commonwealth statutes, including the Corporations Act 2001 (Cth).[9]

Part 4B – Identity offences

A new Part 4AB creates three new identity offences.

The first two offences prohibit any dealing in (section 192J)[10], or possession of (section 192K)[11], identification information with the intention of committing, or facilitating the commission of, an indictable offence. "Identification information" is defined to mean information relating to a person (alive or dead, real or fictitious, an individual or body corporate) that is capable of being used to identify or purportedly identify the person.

It is also an offence to possess any equipment capable of making a document or other thing containing identification information (eg. credit card skimmers) with the intention that the document or other thing will be used to commit, or facilitate the commission of, an indictable offence (section 192L).

In addition, the Act introduces a new procedure in the Local Court to enable a victim of identify crime to obtain a certificate from the Court that identifies the person as the victim of identity crime, in order to help them repair the damage done to their personal and business affairs.

Part 5 – Forgery offences

Lastly, a new Part 5 inserts six new forgery offences to replace about 25 offences under the old law.

The new offences prohibit the misuse or intended misuse of a "false document".[12] The key offence is making a false document with the intention that the person, or another, will use the false document to induce another person to accept the document as genuine and thereby: (i) obtain property belonging to another; or (ii) obtain any financial advantage or cause any financial disadvantage; or (iii) influence the exercise of a public duty (section 253). There are separate, but related offences, for knowingly using a false document (section 254) or knowingly possessing a false document (section 255), with the same intention.[13]

Three further offences relate to the making or possession of equipment designed or adapted for making false documents (section 256(1)-(3)).[14]

Conclusion

These new provisions represent a well-overdue modernisation and simplification of the fraud and forgery provisions in the Crimes Act 1900 (NSW), at the same time creating specific offences to address the growing problem of identify crime. They also bring NSW more into step with the national approach to fraud, forgery and identity crime. The new laws will hopefully also, as the Attorney-General said is his Second Reading Speech, assist law enforcement in actively combating these crimes in the modern age.

This article was first published in Transparency International, December 2010


[1] Australian Bureau of Statistics, Yearbook Chapter 2009-10, 1301.0. The victims were over 15 years of age and half of them incurred a financial loss. Total losses amounted to almost $1 billion. [Back]

[2] KPMG Forensic Fraud and Misconduct Survey 2010 Australia and New Zealand pp 4 & 5. Respondents reported 174,914 separate incidents of fraud for the survey period. The total value of the frauds reported increased from $301.1 million in the 2008 survey to $345.4 million 2010. [Back]

[3] See Discussion Paper on Crimes Amendment (Fraud and Forgery) Bill 2009. [Back]

[4] These offences carry a maximum penalty of 5 years' imprisonment. [Back]

[5] This offence carries a maximum penalty of 7 years' imprisonment. [Back]

[6] Section 4B(1). [Back]

[7] [1982] 3 WLR 110 at 118-119 per Lord Lane CJ. The test has its origins in R v Feely [1973] QB 530 at 537-8. [Back]

[8] See, for example, Bigmore v Anderson (2006) 202 FLR 468 at [21] per Crispin J, discussing the equivalent test in s 130.3 of the Criminal Code Act 1995 (Cth). [Back]

[9] See, for example, ss 1041F and 1041G. For further commentary regarding the arguments for and against the Ghosh test, see Model Criminal Code Officers Committee of the Standing Committee of Attorneys-General, Chapter 3, Theft, Fraud, Bribery and Related Offences Report (December 1995) pp 15, 17 & 19; E Griew, "Dishonesty: the Objections to Feely and Ghosh" [1985] Crim LR 331 at 344 & 5; Law Commission of England and Wales Consultation paper No 155, Legislating the Criminal Code: Fraud and Deception 1999 5.11 – 5.20; and A Steel, "The Appropriate Test for Dishonesty" [2000] 24 Crim LJ 46 at 48&9, 51-3. [Back]

[10] This offence carries a maximum penalty of 10 years' imprisonment. [Back]

[11] This offence carries a maximum penalty of 7 years' imprisonment. [Back]

[12] This term is defined in section 250. [Back]

[13] These offences carry a maximum penalty of 10 years' imprisonment. [Back]

[14] These offences carry a maximum penalty of either 3 years' imprisonment (s 256(2) and (3)) or 10 years' imprisonment (s. 256(1)). [Back]

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.