Fraud and Mental Illness

It is sometimes suggested that fraud is a crime that is underpinned by psychiatric and psychological issues. However, the link between fraud and mental illness is under-researched. It is difficult to know the proportion of fraud offenders who suffer from some form of psychopathology as only a small minority of these offenders is ever psychiatrically or psychologically assessed. The ways in which it has been suggested that mental illness may play a part in fraud offending are summarised below.

What is fraud?

Fraud is a broad term that covered many offences characterised by deception, including theft, conspiracy, embezzlement, misappropriation, collusion and false representation. It is an act that leads to personal gain and loss to another party. The theoretical literature surrounding fraud conceptualises the ‘fraud triangle’ consisting of motivation, opportunity, and rationalisation. Motivation may be a need for material gain because of debt, a gambling problem or a desire for more money. It may also be non-material in nature, such as a ‘high’ achieved by deceiving others. Opportunity is related to having access to objects; it may be opportunistic or planned. Rationalisation refers to the way fraudsters justify their actions through a process of ‘neutralisation’ which places psychological distance between the offender and the victim. The offender may tell themselves things like ‘I deserve this more than them.’

Fraud and mental illness

It is difficult to assess how strong the connection between fraud and mental illness is as very few fraud offenders undergo psychiatric or psychological assessments. There are however some cases documented which establish a link between fraud and mental illness. Psychiatric motivators for fraud have been broadly generalised as falling into two categories: financial strain and ego enhancement.

Personality disorders have long been associated with fraud and theft offences, particularly Anti-Social Personality Disorder and Narcissistic Personality Disorder. Fraud offences can also be associated with pathological lying, which can be a symptom of an underlying disorder and can also be a disorder in itself. Pathological liars often lie where there is no obvious benefit to be derived from the lie. Fraud may also be linked to ‘impulse control disorders’ such as compulsive gambling and kleptomania.

Malingering and diagnosis evasion

There have been documented cases of fraud offenders ‘malingering.’ That is, faking the symptoms of a mental illness in an attempt to avoid being brought to justice.

Conversely, it is well known among mental health professionals that high functioning individuals who show all the signs of having a personality disorder often succeed in avoiding diagnosis and treatment. This makes it very hard for such offenders to receive the psychiatric treatment that may benefit from.

Mental illness as a defence

Whilst insanity can be run as a defence to most criminal offences, the mental disorders most commonly associated with fraud are generally not sufficient to negate criminal responsibility.  For the defence of mental impairment to succeed, the court must be convinced that the accused:

• Did not know the nature and quality of their conduct; and/or
• Did not know their conduct was wrong or could be perceived as wrong by a reasonable person

The law recognises that an accused should not be held criminally responsible if at the time of the offence they lacked the capacity to form a criminal intent. Defendants who come before courts are presumed not to be suffering from a mental impairment, but mental impairment can be raised by prosecution or defence during the course of a trial.

Fraud offenders who have been diagnosed with a personality disorder such as Narcissistic Personality Disorder have sought unsuccessfully to defend charges on the basis of insanity. Personality disorders, which are described as persistent maladaptive patterns of thinking, acting and being, are generally not sufficiently serious impairments to fulfill the legal test for mental impairment. Consequently, such offenders are dealt with through the criminal justice system and are generally given sentences that are not structured to address their mental health issues.

The relationship between fraud and mental illness is under-researched. Academics have pointed out the importance of more research being done into this relationship as greater knowledge would assist courts to better understand the root causes of this sort of offending and to structure sentences that address any underlying psychiatric issues driving the offending behaviour.

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