Problems of fraud classification in lending

This article considers the issues of fraud classification in lending. Analyzing court practices the author identifies those characteristics of crime under Article 159.1 of the Criminal Code of the Russian Federation which cause most difficulties in enforcement. Among these features the subject of crime is very important. Only funds received in the lending process can act as a crime subject. In this case it is a mistake to believe that if the perpetrator enters into a loan agreement for the acquisition of property, s/he is the subject of fraud in lending, since the lending organization only provides the guilty person with money on the terms and conditions of the loan agreement, but not with property. Given that the elements of fraud in lending (as well as all other special types of fraud) are formulated as material, there is no unified approach to determine property damage in judicial practice. In particular, separate court decisions show that the amount of damage is determined directly from the amount of credit disbursed and interest accrued. The author comes to a conclusion that these practices cannot be considered valid as the case of theft includes only real property damage appropriate to the value of the seized property. Determination of a fraud method in lending causes many problems. Analyzing the legislative language of method from Article 159.1 of the Criminal Code of the Russian Federation and judicial practice, the author believes that the legislator's concepts of false and inaccurate information are essentially synonymous and shall mean "information which is not true". The establishment of a special entity - the borrower - is required for the application of Article 159.1 of the Criminal Code of the Russian Federation. In the author's opinion, the borrower is a person who is a party in credit relations. Accordingly, in case when a fraud becomes known to law enforcement authorities prior to the person's obtaining the status of the borrower (for example, at the time of examination of the submitted documents), the deed must be classified under Part 3 of Article 30, Part 1 of Article 159.1 of the Criminal Code of the Russian Federation. Most difficulties in the judicial practice are connected with the delineation of fraud in lending from related offences. For the application of Article 159.1 of the Criminal Code of the Russian Federation law enforcement authorities, taking into account all circumstances of the case, should establish that the individual obviously did not intend to fulfill their obligations.

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