Problem Question: Criminal Law, No.7

Problem Question

Adam, a banker, receives a £1,000,000 cash bonus from his employer. Concerned about heavy taxation, Adam devises a plan with his friend Bernard. Adam leaves the briefcase containing the money unattended in a busy café, where Bernard takes it. Adam reports the theft to the police, intending to use the report to evade tax. Bernard agrees to return the money in two weeks. In the meantime, Bernard places the £1,000,000 on a horse racing bet, thinking that Adam can afford the loss. Analyse the criminal implications of their actions in terms of fraud and theft.

Analysis

Adam’s Criminal Liability

1. Fraud by Evasion of Tax

Adam’s actions can be scrutinised under the offence of fraud by evasion of tax. This offence requires:

• False Representation: Adam intentionally misrepresents the situation to the police, falsely claiming the briefcase was stolen to evade tax.

• Intention to Make a Gain: Adam’s primary intention is to avoid the tax liability on his £1,000,000 bonus by creating a false narrative of theft.

Adam's conduct satisfies these elements, as his false report is intended to reduce his tax liability unfairly. Thus, he is likely guilty of fraud by evasion of tax.

2. False Representation to the Police

By reporting the theft of a briefcase that he arranged to be taken, Adam is engaging in a criminal false representation. This act misleads the police and constitutes an offence under laws concerning false reports. Adam’s intention to mislead is evident from his agreement with Bernard and his plan to avoid taxation.

Bernard’s Criminal Liability

1. Theft

Bernard's actions can be analysed in terms of theft:

• Assumption of Ownership: Bernard took the briefcase with the intent of returning it later. The act of taking the briefcase without permission constitutes theft.

• Dishonesty: Bernard’s belief that Adam would not miss the money or that Adam’s financial status justified the act does not negate the dishonesty element. Dishonesty is judged objectively, and Bernard’s conduct aligns with a reasonable person’s understanding of dishonesty in theft.

Therefore, Bernard is likely to be found guilty of theft, as he assumed a right of ownership over the briefcase and acted dishonestly.

2. Fraudulent Abuse of Position

Although Bernard’s primary offence is theft, his actions might also be examined for any fraudulent abuse of position if relevant details emerged. For instance, if Bernard held any position of trust related to Adam’s financial affairs, there could be implications under fraud laws for abusing that position. However, based on the facts provided, this does not seem to be a primary concern.

Conclusion

Adam and Bernard’s actions are both criminally liable under different legal frameworks. Adam is likely guilty of fraud by evasion of tax and false representation to the police due to his deliberate misrepresentation and intent to avoid tax. Bernard is primarily liable for theft due to his unauthorised taking of the briefcase and his dishonest behaviour. Each individual’s actions meet the requisite elements of their respective offences, highlighting the complex interplay of criminal liability in this scenario.