Bulgarian criminal law provides for a number of different elements of the crime of “fraud.” In its classic form, it is committed by introducing and/or maintaining a misconception in someone (active fraud) or by exploiting someone’s existing misconception, inexperience, or ignorance (passive fraud).
The legislator has also provided for various specific types of “fraud” crimes, such as document, tax, computer, and insurance fraud, which are regulated in various provisions of the Penal Code and are subject to different penalties. There is also civil fraud, which is committed by inducing one party to a contract to conclude it through deliberate misrepresentation. In this case, protection is sought under civil law by requesting the annulment of the contract.
Today’s article will focus solely on ordinary fraud within the meaning of the Criminal Code. First, we will share some of the most interesting cases from practice on the subject, and then we will examine the essence of the crime and the defense against the charge of committing it.
Interesting cases from practice on charges of fraud
The first case from the practice of Sylvia Petkova Sole Proprietorship Law Firm concerns a charge related to introducing and maintaining deception regarding the sending of workers abroad.
Valentin* is accused of, as manager of a commercial company, introducing and maintaining a deception in eight people with the aim of obtaining financial gain for himself and the company, by telling them that he would send them to work in Germany and asking them for sums between €100 and €200. Some of the individuals stated that the money was requested to cover initial expenses for transport, food, and accommodation, while others claimed that Valentin had requested the money as a fee for issuing an A1 certificate.
During the criminal proceedings, it first became clear that the German employer had misled Valentin into believing that he would hire the workers he had sent. Second, that some of the candidates did not show up at the agreed place and time for departure to Germany. Third, that Valentin had indeed asked the candidates for the above-mentioned sums, but that these were for initial expenses for accommodation and transport. And fourth, once it became clear that the German employer with whom Valentin had a preliminary agreement would not hire them, the accused offered them another type of work in the same country and city, but they refused and returned to Bulgaria.
Hristo* has been charged with misleading the manager of a commercial company by claiming to be a representative of a specific bank and that, for a certain amount of money, he could arrange a corporate loan of several million. For this “service,” Hristo requested and received approximately BGN 150,000 from the manager. Since the amount received exceeds many times the 140 minimum wages for the country at the time of the offense, the charge is for fraud on a particularly large scale, constituting a particularly serious case.
Despite the serious charge and the finding that Hristo had indeed committed the act, he was given a suspended sentence of three years’ imprisonment, the execution of which was deferred for a period of five years.
* In order to preserve attorney-client privilege, names have been changed.
** Certificate A1 is a document on the basis of which the social security legislation applicable to a person posted to work in a Member State of the European Union is determined.
Active fraud – introducing or maintaining deception
According to Bulgarian criminal law, anyone who misleads or maintains such a belief in another person for the purpose of obtaining financial gain for themselves or someone else, and thereby causes financial damage to the deceived person, shall be punished with imprisonment of one to six years.
IMPORTANT! In this situation, a suspended sentence may be imposed if the court determines a punishment of no more than three years’ imprisonment and the perpetrator has a clean criminal record or if the punishment for a previous conviction was not imprisonment. For this crime, the law does not allow the imposed prison sentence to be replaced with probation, and it is not possible to be released from criminal liability by imposing an administrative penalty. In the presence of exceptional or numerous mitigating circumstances, it is possible for the sentence to be set at less than one year of imprisonment. When and whether such circumstances exist is assessed on a case-by-case basis.
The crime is punishable by a more severe penalty (imprisonment for one to eight years), i.e. there are aggravating circumstances in several cases (aggravated fraud).
First, a more severe punishment is imposed when the perpetrator has presented himself as an official, as well as when he has claimed to be acting on behalf of the authorities. Here, “authorities” refers to a state authority (e.g., a police officer, prosecutor, judge, etc.). The logic behind imposing a more severe punishment is that by committing fraud and posing as a public official or authority, the perpetrator undermines the trust of citizens in this category of entities.
Secondly, this penalty will be imposed even if the fraud was committed by two or a10> more persons who previously have agreed to its commission.
Thirdly, qualified fraud shall be committed and when the perpetrator actually is an official a10> person, by proxy in the circle of his office or power of attorney or by a person, which directly performs transactions with currency in cash.
The fourth case will be present when repeated fraud has been committed and the case is not minor. Repetition will be present when the fraud has been committed after the perpetrator has been convicted with a final sentence for another fraud. The logic of the more severe punishment stems from the fact that, having already been convicted for the same crime, the perpetrator has not reformed. On the other hand, the case will be minor when there are no negative consequences from the act or they are insignificant, as well as when, in view of the existence of mitigating circumstances, the act represents a lower degree of public danger than the usual cases of such a crime.
The last case of qualified fraud will be present, when the damage caused is of a large amount. Such will be present, when the monetary expression of the damage exceeds a20> the amount of 70 minimum working salaries for the country, determined at the time of the commission of the act.
In the last two cases, it is possible for the court to a6> confiscate up to one half of the property of the perpetrator.
IMPORTANT! If the defendant is found guilty of aggravated fraud, a suspended sentence may be imposed if the court determines a punishment of no more than three years’ imprisonment and the perpetrator has no previous convictions or if the punishment for their previous conviction was not imprisonment. For this crime, the law does not allow the sentence to be replaced with probation, and it is not possible to be released from criminal liability by imposing an administrative penalty. In the presence of exceptional or multiple mitigating circumstances, it is possible for the sentence to be set at less than one year of imprisonment. When and whether such circumstances exist is assessed on a case-by-case basis.
The punishment is even more severe when the fraud is particularly large in scale and at the same time constitutes a particularly serious case (such as the case of Hristo described above). In such cases, the punishment is imprisonment for a term of three to ten years.
It is important to note that for such a crime to exist, it is necessary, first, that the monetary value of the damage caused exceeds the amount of 140 minimum wages for the country, determined at the time of the commission of the act. Second, the fraud must also constitute a particularly serious case. This will be the case when, in view of the harmful consequences and the aggravating circumstances, it can be concluded that both the act and the perpetrator pose an extremely high degree of danger to society.
IMPORTANT! In this situation, it is also possible to achieve a suspended sentence, if the court determines the punishment to be the minimum amount or less than a16> it. The latter possibility is available if the court considers that there are multiple or exceptional a24> there are multiple or exceptional mitigating circumstances liability.
The punishment is imprisonment for a term of three to ten years when the fraud is committed under the conditions of dangerous recidivism. This will be the case when several conditions are met.
First, for a dangerous recidivist to exist, the crime must have been committed after the perpetrator had been convicted of a serious intentional crime and had been sentenced to imprisonment for a term of not less than one year. A serious intentional crime is any crime for which the law provides for a sentence of more than five years’ imprisonment. Secondly, dangerous recidivism will also occur in cases where the crime was committed after the perpetrator had been convicted at least twice and sentenced to effective imprisonment for intentional crimes of a general nature.
What are the elements of the crime of “active fraud” that must be proven in order for the defendant to be found guilty?
First, it must be proven that the perpetrator has misled another person. In this case, the perpetrator is the one who has formed false, misleading ideas about reality in the victim.
Secondly, simultaneously or separately from the above element, the “maintenance” of the misconception must be proven. That is, in the usual case, the misconceptions are not formed by the perpetrator, but he only feeds them. In practice, there are also cases where the perpetrator is the one who forms these ideas and subsequently maintains them over time. An example of such an act is the case of Valentin described above.
Thirdly, this crime is committed with a specific purpose—the perpetrator must seek to obtain financial gain for themselves or for someone else, i.e., they must aim to enrich themselves or someone else.
The absence of which and whether it was from the first three element means absence of a crime and should be be pronounced acquittal verdict.
Finally, it is necessary that the victim has suffered financial damage, i.e. as a result of the introduction or maintenance of the deception, the defrauded person has disposed of their property, be it money, valuables, or real estate. This disposal must have been caused and motivated by the victim’s deception.
The absence of the last element does not necessarily mean that no crime has been committed. It is possible that the targeted person may ultimately not dispose of their property, but charges of attempted fraud may still be brought. An attempt is punishable by the penalty provided for the completed crime, and in determining the penalty, the stage reached by the attempt and the reasons for the harmful consequences not occurring should be taken into account.
Passive fraud – using deception, inexperience, or ignorance
According to Bulgarian criminal legislation, who with the aim of to obtain for himself or for others property benefit uses deception, inexperience or ignorance of someone and with this causes him or someone else financial damage, shall be punished with deprivation of liberty for up to five years.
The qualified elements of fraud described above in the section “active fraud” apply here as well.
Кои са елементите на престъплението “пасивна измама”, които трябва да бъдат доказани, за да бъде подсъдимият признат за виновен?
The only difference between active and passive fraud consists in the fact that in the case of active fraud, the perpetrator is the one who takes the action. a9> active perpetrator is the one who created the deception and/or maintained it, while in the case of passive fraud, he has nothing to do with introducing the deception. He only used already arisen such. This element of fraud will be present and when the perpetrator has exploited inexperience or unawareness of the victim.
The remaining elements are identical.
For a crime to exist, it is necessary to prove the specific purpose of the act, namely that the perpetrator intended to obtain financial gain for himself or for another person.
The absence of any of these elements means that there is no crime.
And finally, it is necessary for the burden of the injured party to be incurred property damage. This damage must be found in direct causal – consequential connection from the use of deception, inexperience or unawareness. The absence of this element, however, does not mean absence of a crime, but only that there is an attempt to commit it.
IMPORTANT! In cases of passive fraud, the law allows, upon finding the defendant guilty, the imposed prison sentence to be replaced with probation. This option will be available if the defense proves multiple or exceptional mitigating circumstances. It is also possible to impose a suspended sentence. However, it is not possible to exempt a person from criminal liability by imposing an administrative penalty.
IMPORTANT! Exemption from criminal liability with imposition of administrative penalty is possible only in cases where the fraud constitutes a minor case, i.e. in view of the absence or insignificance of the harmful consequences that have occurred, the act does not constitute a high degree of public danger.
In conclusion
The line of defense against each charge brought, including for the crime in question, can be constructed with regard to the specific case and its circumstances. The most common cases in practice in which acquittals are handed down are related to the lack of intent to introduce or maintain deception (as in the case of Valentin described above) and/or the lack of a specific purpose for the crime, namely, obtaining financial gain.
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Sole proprietorship law firm company “Silvia Petkova” provides qualified legal assistance from experienced lawyers in criminal law, in cases of brought charges for the crime of “fraud”. The law firm provides legal assistance to victims of fraud.
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