Fraud is a type of initiation of force. It is when a man lies as part of an exchange, cheating the other out of his property. It is a form of theft. Fraud is an exchange that one side has reneged on. By making a trade under false pretenses, only one side of the exchange has been made. The defrauder has gained value from someone, but hasn't provided his side of the exchange.

If a man walked into a store and said "I'll buy that newspaper", the clerk will hand him the newspaper and wait for the money. Although physically the newspaper has traded hands, the ownership is not transferred until the man gives his money. If the man then walked out of the store claiming the newspaper was his, the clerk would rightly have him arrested for theft.

Similarly, if a man sells a car stating that it is in working condition, when it is not, the money placed into his hands is not his. The ownership is passed on the condition that the car works. If it doesn't, the exchange is invalid, and the buyer would expect the money back.

Fraud is simply theft through trickery, but theft nonetheless. As such, it is a violation of the property rights of the victim.