What Is Theft By Deception: Examples, Types, and How to Prevent It

Theft by deception is a crime that relies on manipulation and deceit. Theft by deception depends on the perpetrator’s ability to mislead or manipulate their victim into giving up their possession willingly. Being informed about the various tactics used in theft by deception can help individuals recognize fraudulent schemes, such asinvestment scamandphishing attacks, enabling them to take proactive measures to protect their personal information and financial assets.

What Is Theft By Deception?

What does theft by deception mean? Theft by deception is a criminal act where an individual intentionally misleads and deceives another to obtain money, property, or services. Often referred to as "conning," theft by deception involves using lies and false representation to take someone's property. It is tricking someone into giving up their belongings.

Theft by deception is a serious crime and has significant legal consequences. Depending on the value of the stolen property, the method used, and the impact on the victims, theft by deception can have grievous penalties. The consequences include misdemeanor charges for lesser thefts, with penalties limited to fines, probation, and community services. For felony charges involving greater sums and valuable properties, the penalties are fines and jail time.

How It Differs from Other Types of Theft

Theft by deception, larceny, fraud, andembezzlementare theft crimes. However, while they all involve the unlawful taking of property, they differ in the following ways:

• Method of Acquisition:From the theft by deception definition, the perpetrator obtains the property or service through deceit or fraudulent means.Larcenyinvolves direct physical taking without consent, while fraud involves misrepresentation or concealment of facts to deceive. Embezzlement is the misappropriation of property entrusted to the perpetrator
• Nature of the Crime:Theft by deception focuses on deceiving to gain property or services. Larceny is centered on the unlawful taking and carrying away of tangible property. Fraud centers on deceit and false representations to cause the loss, while embezzlement focuses on breach of trust and conversion of property
• Relationship to the Victim: For theft by deception, the victim is deceived into parting with their property or services. In larceny, the victim's property is taken without their knowledge or consent. The victim is tricked into making a disastrous decision based on false information for fraud. In embezzlement, the victim entrusts the property to the perpetrator, who misappropriated it.

Types of Theft By Deception 

Theft by deception involves various methods of deceit to obtain money, property, or services illegally. The main types of theft by deception are as follows:

False Pretenses

False pretense is obtaining someone else’s property by intentionally misrepresenting a material fact. The perpetrator makes false representations or promises to the victim to make them voluntarily part with their property or money. Examples of pretenses include falsifying credentials for employment.

Fraudulent Schemes

Fraudulent schemes are deliberate plans to deceive individuals or entities through false statements or misrepresentation to obtain financial, property, or other benefits. Fraudulent schemes include Ponzi schemes, where investors are enticed with high returns and minimal risks.

Identity Theft

Identity theft is a form of theft by deception where someone illegally obtains and uses another person’s identity for financial gain. The perpetrator impersonates the victim, using their personal or financial information without permission to open new accounts, make health insurance claims, or file tax returns.

Check Fraud

Check fraud is theft by deception using bad checks to obtain financial, goods, or services. It is the falsifying or manipulating information on a check for unlawful gains. Checking fraud impacts victims negatively, resulting in monetary loss, emotional distress, and negative credit scores.

Examples of Theft By Deception

Awareness of the various deceptive practices and tactics used in theft by deception, along with understandingidentity theft prevention, can help protect oneself from falling prey. Theft by deception examples include selling a non-existent product, misrepresenting property conditions, falsifying credentials for employment, pyramid schemes, investment scams, insurance fraud, real estate fraud, telemarketing fraud, phishing scams, mail theft, and pretexting.

Case Studies

The following theft-by-deception examples illustrate different methods of fraud theft in everyday life:

• Selling a non-existent Product:Refers to when a person advertises and sells a product online that does not exist
• Falsifying Credentials for Employment:Applying for a job with false information about their qualification or work experience
• Insurance Frauds:A person stages a car accident to collect insurance claims
• Investment scams: A company convinces people to invest in a fake startup promising high returns
• Identity theft:A thief uses a stolen credit card to buy expensive items online

High-Profile Cases

Here are some high-profile cases of theft by deception:

The Bernie Madoff Ponzi Scheme

An investment fraud centered on high and consistent returns to investors. He used new investors' funds to pay returns to older investors, creating a semblance of a profitable business. Bernie Madoff is responsible for the largestPonzi schemein history, extending over 20 years and defrauding investors of up to $65 billion. Bernie Madoff was sentenced to 150 years in prison.

The Enron Scandal

Executives in Enron Corporation used accounting loopholes and poor financial reporting to hide that the company was deeply in debt from failed deals and projects, deceiving shareholders and employees about their financial health.

The Anna Sorokin (Anna Delvey) Fraudulent Representation

Anna Sorokin passed herself off as a wealthy German heiress, infiltrating New York City's socialites under the name Anna Delvey. She created an illusion of wealth using forged financial documents and fraudulent checks. She deceived banks, realtors, and acquaintances into granting her loans or paying off bills. She was arrested and sentenced.

How to Prevent Theft By Deception

Preventing theft by deception requires a proactive and informed approach to reduce the risk of falling victim to deceptive theft. The following are several strategies to protect oneself from various types of deception-based theft:

Awareness and Education

Being informed about common scams and fraud tactics used by scammers. Understand safe online practices, such as usingstrong passwordsor recognizing secure websites. Educate employees and consumers on identifying and avoiding fraudulent invoices or fake advertising.

Protecting Personal Information

Create strong and complex passwords and enabletwo-factor authenticationwhere possible. Enter personal information only on websites with secure connections. Avoid clicking links or downloading attachments from unfamiliar senders or unsolicited emails.

Verifying Authenticity

Confirm the authenticity of all offers and investment opportunities. Use search engines, business directories, and social media to research the company. Contact the company directly using their official phone numbers to verify offers.

Reporting Suspicious Activity

Report all theft by deception activities to your local police. Victims may also report potential theft by deception to the Federal Trade Commission(FTC), Securities and Exchange Commission(SEC), Internet Crime Complaint Center(IC3), Bank or Credit Union, Credit Bureaus, Better Business Bureau(BBB), and U.S. Postal Inspection Service.

What Are the Possible Penalties You Can Face for Theft by Deception?

The gravity of the crime, the state involved, and the specifics of the case determine the severity of the penalties for theft by deception offenders. However, there are defenses available to contest theft by deception charges, including:

• Lack of intent to defraud
• The property owner knowingly consented to the transfer of property
• Mistake of fact, where the accused genuinely thought the information was accurate
• Insufficient evidence
• Entrapment by law enforcement to commit the crime

Generally, the penalties for theft by deception include fines, restitution, community service, probation, and incarceration. A conviction for theft by deception offense also results in having a criminal record.

Legal Recourse for Victims

Victims of theft by deception may seek justice for their losses through legal means through criminal prosecution, civil litigation, restitution orders, and consumer protection agencies.  Generally, victims of theft by deception have multiple avenues to seek legal recourse, including reporting to law enforcement, reporting to consumer protection agencies, and utilizing credit protection and identity theft services.

Steps to Take if You're a Victim

Victims of theft by deception must take immediate action to prevent future damage, recover losses, and bring the culprit to justice. Commence by ceasing communications with the perpetrator. Secure your accounts by changing passwords, enabling two-factor authentication, and freezing your credits. Report the crime to law enforcement and other relevant authorities. Inform your financial institution about the theft and seek legal advice to know your rights to pursue compensation.

Seeking Legal Help

It is essential for victims of theft by deception to seek legal assistance to navigate the legal system and recover properties or monies extorted from them. Resources available to victims include local bar associations, legal aid societies,  victim advocacy groups, and consumer protection agencies.

Compensation and Restitution

Victims of theft by deception may recover their losses through compensation and restitution. Victims can file civil lawsuits to seek compensation for damages for the value of the property stolen. Compensation is also possible through consumer protection agencies, regulatory enforcement, and insurance claims. The courts may also order restitution to the victim as part of the sentencing or punitive damages. Victims may submit a victim impact system detailing the financial and emotional effects of the crime.

Theft by deception is a serious crime that has a significant financial and emotional impact on victims. It is essential to educate oneself on the prevalent fraud practices and seek legal recourse and restitution through the courts where possible. Prevention is the first line of defense. Therefore, being vigilant and proactive helps prevent theft by deception. Also, by utilizing legal resources, individuals can protect their assets and maintain financial security.