Programming note: Money Stuff will be off tomorrow and next week, back in April.
The simplest form of fraud is that you lie to someone and they give you money. Perhaps you give them something in exchange for their money, but you lie about its attributes. (They pay you for magic beans, but the beans are not magic.) Or perhaps you lie about giving them something and give them nothing. (They pay you for the Brooklyn Bridge, but you do not give them the Brooklyn Bridge.) Fraud is often illegal, though exactly how it is illegal will depend on how you do the fraud, and to whom, and what you are lying about.