Fraud requires intent; it's a word that describes what happened, but also the motivations of the people involved. Incompetence doesn't assume any intent at all; it's merely a description of the (lack of) ability of the people involved.
Incompetent people can certainly commit fraud (perhaps to try to cover up their incompetence), but that's by no means required.
> ...insist they just made honest mistakes
If they're lying about that, it's fraud; they're either covering up their unrealized incompetence with fraud, or trying to cover up their intended fraud with protestations of mere incompetence. If they really did make honest mistakes, then it's just garden-variety incompetence. (Or just... mistakes. To me, incompetence is when someone consistently makes mistakes often. One-time or few-time mistakes are just things that happen to people, no matter how good the are at what they do.)
The legal phrase I like is "knew or should have known". If there is a situation where you should have known something was wrong, it's as bad as if you really knew it was wrong. To hold otherwise incentivizes willful blindness and plausible deniability.
I don't think the fact that the law (rightly, I will grant) unified two things when determining whether to punish means that we should always unify those things in our reasoning in other contexts.
People often use incompetence as an excuse for what were actually intentional bad decisions. Never attribute to malice that which is adequately explained by stupidity.
Maybe someone was incompetent but also knew they were cutting corners. Should they get a pass because they claim they didn't mean to do it? We should hold people accountable regardless of intent.
Fraud requires intent; it's a word that describes what happened, but also the motivations of the people involved. Incompetence doesn't assume any intent at all; it's merely a description of the (lack of) ability of the people involved.
Incompetent people can certainly commit fraud (perhaps to try to cover up their incompetence), but that's by no means required.
> ...insist they just made honest mistakes
If they're lying about that, it's fraud; they're either covering up their unrealized incompetence with fraud, or trying to cover up their intended fraud with protestations of mere incompetence. If they really did make honest mistakes, then it's just garden-variety incompetence. (Or just... mistakes. To me, incompetence is when someone consistently makes mistakes often. One-time or few-time mistakes are just things that happen to people, no matter how good the are at what they do.)