The 3 Elements of Fraud

Have you heard of the Fraud Element Triangle?

Also known as the theft act triangle, it’s a framework used to explain the essential elements of fraud. It includes three main components: the theft act, concealment, and conversion. These elements are necessary for fraud to occur and are important in fraud investigations.

The Theft Act refers to the intentional taking of someone else's property or money. The theft act can take many forms, such as embezzlement, larceny, or false pretenses. It is essential to demonstrate that the theft act occurred to prove fraud.

Concealment refers to the deliberate act of hiding the theft or the evidence of it. It is often done by altering financial records or creating false documents to cover up the theft. Concealment is critical in proving fraud because it shows the intent to deceive.

Conversion refers to the act of using the stolen property or money for personal gain. It can be anything from spending the money on personal expenses to investing it in the stock market. Conversion is an important element because it shows the intent to benefit from the theft.