The Elements of Fraud and the Basic Sanction
Fraud is the offence that holds the key to every prevention programme. Under the law, fraud is the appropriation of another person’s property or the acquisition of a property right by deception, with the aim of unlawful appropriation. This act is punishable by a fine or community service for a term of one hundred seventy to two hundred hours, or corrective labour for a term of up to two years, or house arrest for a term of one to two years, or imprisonment for a term of two to four years. Even simple fraud therefore entails serious liability, and for a business the practical lesson is that the moment of apparent trust — a convincing partner, an urgent request, a plausible story — is precisely the moment against which this norm is directed.
Qualified Offences and Their Sanctions
The law distinguishes several qualified offences. The same act committed by a group with prior conspiracy or causing significant damage is punishable by a fine or imprisonment for a term of four to seven years. The same act committed through abuse of official position, in large amount or more than once is punishable by a fine or imprisonment for a term of six to nine years. And the same act committed by an organised group or by a person convicted two or more times for unlawful appropriation of another’s property or for extortion is punishable by imprisonment for a term of seven to ten years. This ladder of sanctions shows that the more organised and repeated the conduct, the heavier the liability, and it gives a compliance programme its orientation: resources should flow first to the scenarios that carry the gravest qualifications.
Embezzlement and Commercial Bribery
Two further norms stand next to fraud. Embezzlement or dissipation means the unlawful appropriation or dissipation of another person’s property or property right where the property or right was in the lawful possession or administration of the offender — such an act is punishable by a fine or house arrest for a term of six months to two years, or imprisonment for a term of three to five years. Qualified forms — a group with prior conspiracy, more than once, significant damage, abuse of official position — raise the sanction to imprisonment for a term of four to seven years with deprivation of the right to hold office or carry out activity for up to three years, while an organised group, large amount or repeated convictions raise it to imprisonment for a term of seven to eleven years with the same deprivation for up to three years.
Commercial bribery concerns the corporate space directly: promising, offering, transferring or rendering to a person who directs, represents or exercises other special authority in an enterprise or other organisation, or who works in it, money, securities, other property, property services or any other unlawful advantage, in order that the person act or refrain from acting in breach of official duties, is punishable by a fine or house arrest for a term of six months to one year, or imprisonment for a term of up to three years, with deprivation of the right to hold office or carry out activity for up to three years or without it. Demanding or accepting such an advantage is likewise an offence, which means both sides of the corrupt exchange are within the reach of the criminal law.
Practical Directions of Prevention
Knowing the sanctions does not by itself solve prevention — what matters is building the mechanisms that make deception expensive. In practice this means verifying counterparties and documents before payments; distributing decisions so that the trust of a single person does not govern a financial process alone; recording every material transaction in writing; and showing personnel the scenarios that lead to the elements described in the law. A victim of fraud does not always perceive the risk in time — systematic control therefore compensates individual vigilance exactly where the human factor is weakest, and it also creates the evidence base that later supports both the criminal and the civil track.
Frequently Asked Questions on Fraud Prevention
What is the definition of fraud?
The appropriation of another person’s property or the acquisition of a property right by deception with the aim of unlawful appropriation. Even the basic offence reaches imprisonment for a term of two to four years.
How does embezzlement differ from fraud?
In embezzlement or dissipation the property or right is in the lawful possession or administration of the offender — the offence is committed through abuse of transferred trust rather than through obtaining by deception.
What does commercial bribery cover?
Promising, offering, transferring or rendering an unlawful advantage to a person holding special authority in an organisation in exchange for action in breach of official duties, as well as demanding or accepting such an advantage.
Which prevention steps are the most effective?
Verification of counterparties, distribution of decisions, written fixation of transactions and awareness of personnel. These mechanisms reduce the opportunity for deception where the human factor is weakest.
How We Help on Legal.ge
Fraud prevention combines legal and organisational measures. The Legal.ge team will assess the vulnerable points of your business processes, build rules of counterparty verification and document flow, and assist you, where damage has already occurred, in pursuing the case and the routes to compensation. Contact us — your enterprise will be protected on the flank on which fraudsters most often lay their hands.