| | I think it's possible to say that something is fraud, but that it can't reasonably be prosecuted most of the time, because you can't prove that it was. Certainly if I offered you, for pay, stock advice and it turned out a flop, there's not much you can do about it. But if you found out later that I had shorted the stock as well, then you've got a pretty good case for fraud. I deceived you into thinking you had bought legitimate advise, when in fact I was planning to make money by ripping you off. I just heard a case about this happening with a company, advising people to buy a stock and then shorting it. They will probably get prosecuted. Is that wrong? Is that a thought crime? I'm afraid to ask, but how many people here think it would be perfectly moral to sell this bad advice?
Steven, this example isn't a case of a diamond in a box that's not really there. It can be just as much of a "internal lies to oneself" case, as you describe it. Is it fraud?
Fraud certainly is easiest to verify when we're talking about the purchase of a physical object with specified functions, and you can easily show that this wasn't what was handed over. But there's a range of services or other transactions where it can apply. In the general sense, fraud is when two people make a trade (for goods or services), and one of the parties doesn't actually provide their part of it. In the stock advise, the customer is buying the experts best estimate of what is a reasonable buy. If the expert lies, they are committing fraud. If there's no way to show he lied, there's no case. If there is proof, like that he shorted it himself or kept emails saying that he did or witnesses or whatever, then you can make the case.
Is it a thought-crime? Is he punished for not thinking the right thing? No. He's punished for not providing the service he offered. One could twist it into saying that he's punished for not believing what he told the client, and that's some kind of thought crime. But he's actually punished for the deception, and for not providing his part of the exchange.
The thought-crime idea is also a little more complicated, because criminal punishment does take into account a person's motive and whether the act was intentional. If you accidently shoot a gun that kills someone, that's different from hunting him down and shooting him. We don't really want a justice system that doesn't understand this key difference. So just because there's an element of what the person is thinking, doesn't negate it as a legitimate crime.
Fraud isn't simply an accidental non-delivery of a good or service. It's intentional. That's recognized. And if you could show that it wasn't intentional, you would either not be prosecuted, or be less severely punished. If I sell you the box with the diamond in it, but turns out it was not a real diamond, I could show it wasn't fraud on my case by the fact that I bought it from someone else who defrauded me. Turns out, even in that case the thought matters.
Does calling these kinds of cases "fraud" mean the government gets to read minds? No. They'd still have to have evidence. If there was no evidence, no prosecution would be possible. In all likelihood, even if this is a case of fraud, it's something that couldn't be proven. But that's a technical argument about the means of prosecuting. The deeper question is, was the exchange legitimate? Did both sides provide their half of the exchange? If not, then it was a case of fraud. This is true whether it is recognized by anyone, or whether there's a specific law against it, or whether it can be successfully prosecuted. None of that matters. The only thing that matters is, was the exchange legitimate?
Eric, you say that it was the return that raises the question of fraud. And that if it was the initial transaction, then it's:
coming close to judging motives, plans, ideas, and intentions. In objective law, only actions can be held as legal or illegal, not attitudes or thoughts.
As I said above, that last sentence is not true. The actions are not simply physical processes that are considered legal or illegal. Motive, plans, intentions, and ideas all come into play. Conspiracy to commit murder? Intentions and plans. Cold-blooded murder? Motives.
I think that deals with that argument, which opens back up the door for the first act to be the case of fraud. But even if it didn't, remember that fraud is not simply a particular law, but an objective relationship. If the transaction was not actually completed in full by one of the parties, but they took ownership of the other person's property anyway, then we have fraud. It is a violation of the property rights of the other party because you took their property without providing your full half of the exchange.
The return of the goods isn't fraud. They don't care why you're returning it. They don't care whether you have a good or bad reason for returning it. There are no conditions placed on it. You mention that if they asked whether you used the product you deceive them by saying no, then it is fraud. But my understanding of the scenario is that they don't ask that. They don't care. Even if you did use it, you can return it. So that act, in isolation, is not the fraud.
You dismiss the initial transaction because money was exchanged. But the question is whether there are more conditions for the transaction then simply the transfer of money. Under most transaction, a part of the deal is that it is a permanent transfer. Under some conditions, it is a temporary transfer. In both cases, this is another element of the transaction. The fact that money traded hands was not the only thing being traded.
In the case of the store selling the product, I think it's reasonable to say that the store is not just offering the product, but the right to return the product in a certain amount of time, assuming no damage to the product or possibly other restriction. And on the part of the buyer, it's not just money transferring. It's the condition that he's actually buying the product, not simply renting it. The store is only in the business of selling, so if the buyer purchases it, it actually is a purchase. Which means at least some possibility that he'll actually keep it. If he has no intention of keeping it, then he is not representing the transaction clearly to the store. He's giving them the impression that this is a real purchase that may or may not be returned, versus a secret renting with no intention.
The first act is where the deception is. The first act is where he has to hide his real intentions, because they wouldn't be willing to make the transaction based on the facts. And it's the first transaction where he doesn't provide what they consider an important part of the transaction, the reality of a purchase with only a possibility of being returned.
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