Fraud and Counterfeit Money

Issue: Can you be guilty of fraud for unknowingly using counterfeit money?

Here’s a question from Sipho:

I’m saddened and a little embarrassed by my family’s situation, particularly my aunt. My sister’s traditional wedding took place a few months ago when her boyfriend’s family came for lobola negotiations. It was a wonderful ceremony that went off without a hitch, and the whole weekend was a festive success and a vibrant celebration of love.

The highlight, however, was the jaw-dropping moment when the groom’s family, in a grand gesture, handed over the entire lobola amount in cold, hard cash – a staggering R350,000. This was on top of all the alcohol they had brought with them. The whole village buzzed with admiration, and we were riding high, feeling like the stars of the town. Little did we know the euphoria would be short-lived.

About two weeks later, we received a call that one of my aunts had been arrested for using counterfeit currency at a local supermarket. It turns out that some of that lobola cash was counterfeit. We don’t know how much of it was real and how much of it was not, but it looks like it was a mixture of real and fake. This is why no other family members had been alerted to it in the two weeks they had been spending the cash.

Amidst the chaos, my sister’s now husband staunchly denies any wrongdoing, adamantly asserting that the cash they paid for lobola was all legitimate. It looks like the police believe him because he has not been arrested. I will not mention his nationality because I don’t want to make this about that. Meanwhile, my aunt is out on bail, dealing with fraud charges, and our family has become the hot topic in town for all the wrong reasons. It’s been a rollercoaster, going from celebration mode to this chaotic mess. Please advise.

From The Legal Desk:

Thank you for your message, Sipho. It does sound like quite a tumultuous situation your family is going through. I’m sorry to hear about the challenges. Based on what you’ve shared, your aunt might be more of a victim here. Let’s take a look at the legals…

Before starting with the legal side of things, let me begin with a quick note for readers unfamiliar with lobola. Lobola is a traditional African custom where the groom or his family pays money, cattle, or valuables to the bride’s family. It is a tradition that symbolises respect, an acknowledgement of the bride’s value, and gratitude for allowing the groom to marry their daughter. The lobola ceremony is a significant event that involves negotiations, family, and community elders. The specific customs, traditions, and items involved in the lobola ceremony can vary widely among different ethnic groups and regions on the continent.

Regarding the legal aspects of your aunt’s situation, when assessing criminal liability, we begin by examining whether the state can prove all the elements of the charged crime. For fraud, those elements are misrepresentation, prejudice (or potential prejudice), unlawfulness, and intention.

In the case Gardener v S,¹ the Supreme Court of Appeals (SCA) confirmed the definition of fraud as the unlawful and intentional making of a misrepresentation which causes actual prejudice, or which is potentially prejudicial to another. For your aunt, the state must prove her intention to cause the supermarket proprietary or non-proprietary prejudice unless they believe your brother-in-law deceived her.

A misrepresentation can be a positive act (commissio) or an omission. Presenting counterfeit currency constitutes a positive act, but for the misrepresentation element, one must be aware that their representation is false. From what you have described, it seems your aunt was unaware that the currency was counterfeit. The prosecution must prove she knew the money was fake or establish that she reasonably should have known it was.

Concerning prejudice, it can be either actual or potential. In the R v Dyonta² case, Wessels CJ noted that the law considers the deceiver’s intention, making actual or potential prejudice immaterial. While the prejudice element is important, I would focus on the intention element, as it is the core of the fraud offence. The state must prove your aunt’s intent to defraud the supermarket by showing she was aware the currency was counterfeit or that she acted recklessly or carelessly in determining its authenticity. This is known as dolus eventualis, where one foresees the possibility of a misrepresentation being false but decides to make it nonetheless.

From the information you shared with me, it does not seem your aunt intended to defraud the supermarket. In other words, she did not have an intention to induce the supermarket to embark on a course of action prejudicial to it as a result of the misrepresentation (counterfeit notes). It is this intention relating to both the misrepresentation and the prejudice that the prosecution must establish to convict your aunt of fraud. All the best.

Written by Theo Tembo