diff --git a/app/assets/javascripts/admin/api.js b/app/assets/javascripts/admin/api.js
index 63a043c60..f3a342e13 100644
--- a/app/assets/javascripts/admin/api.js
+++ b/app/assets/javascripts/admin/api.js
@@ -520,8 +520,8 @@ angular.module('api.bountysource',[]).
       });
     };
 
-    this.refund_bounty = function(id) {
-      return this.call("/admin/bounties/"+id+"/refund", 'POST', function(response) {
+    this.refund_bounty = function(id, is_fraud) {
+      return this.call("/admin/bounties/"+id+"/refund" + (is_fraud ? '?fraud=true' : ''), 'POST', function(response) {
         return response;
       });
     };
diff --git a/app/assets/javascripts/admin/bounties/show.html b/app/assets/javascripts/admin/bounties/show.html
index 689655a05..1546eecff 100644
--- a/app/assets/javascripts/admin/bounties/show.html
+++ b/app/assets/javascripts/admin/bounties/show.html
@@ -23,7 +23,9 @@ <h4>Options</h4>
 
 
         <h4>Actions</h4>
-        <button class="btn btn-success" ng-click="refund(bounty.id)" ng-show="bounty.status=='active'">Refund</button>
+        <button class="btn btn-success" ng-click="refund(bounty.id, false)" ng-show="bounty.status=='active'">Cancel (refund owner)</button>
+        &nbsp; &nbsp;
+        <button class="btn btn-success" ng-click="refund(bounty.id, true)" ng-show="bounty.status=='active'">Cancel (no refund)</button>
         &nbsp; &nbsp;
         <button class="btn btn-success" ng-click="set_featured(bounty.id, true)" ng-show="!bounty.featured">Feature</button>
         <button class="btn btn-success" ng-click="set_featured(bounty.id, false)" ng-show="bounty.featured">Unfeature</button>
diff --git a/app/assets/javascripts/admin/bounties/show.js b/app/assets/javascripts/admin/bounties/show.js
index d087ff0f7..617f66450 100644
--- a/app/assets/javascripts/admin/bounties/show.js
+++ b/app/assets/javascripts/admin/bounties/show.js
@@ -48,9 +48,9 @@ angular.module('app')
     return split.transaction.audited;
   };
 
-  $scope.refund = function(bounty_id) {
+  $scope.refund = function(bounty_id, is_fraud) {
     if (confirm("Are you sure?")) {
-      $api.refund_bounty(bounty_id).then(function(response) {
+      $api.refund_bounty(bounty_id, is_fraud).then(function(response) {
         if (response.meta.success) {
           $window.location.reload();
         } else {
diff --git a/app/assets/javascripts/admin/issues/controllers/show.js b/app/assets/javascripts/admin/issues/controllers/show.js
index 33bee5a0b..059706b7c 100644
--- a/app/assets/javascripts/admin/issues/controllers/show.js
+++ b/app/assets/javascripts/admin/issues/controllers/show.js
@@ -27,7 +27,7 @@ angular.module('app')
     if (confirm("Are you sure?")) {
       angular.forEach($scope.issue.bounties, function(bounty) {
         if (bounty.checked && (bounty.status==='active')) {
-          $api.refund_bounty(bounty.id).then(function(response) {
+          $api.refund_bounty(bounty.id, false).then(function(response) {
             if (response.meta.success) {
               angular.forEach($scope.issue.bounties, function(sub_bounty, $index) {
                 if (sub_bounty.id === bounty.id) {
diff --git a/app/controllers/api/v0/bounties_controller.rb b/app/controllers/api/v0/bounties_controller.rb
index 8f662f57d..2d6315715 100644
--- a/app/controllers/api/v0/bounties_controller.rb
+++ b/app/controllers/api/v0/bounties_controller.rb
@@ -33,7 +33,7 @@ def update
   end
 
   def refund
-    @bounty.refund!
+    @bounty.refund!(!!params[:fraud])
 
     if @bounty.errors.empty?
       render "api/v0/bounties/show"
diff --git a/app/models/bounty.rb b/app/models/bounty.rb
index d06df3d87..5aa98806e 100644
--- a/app/models/bounty.rb
+++ b/app/models/bounty.rb
@@ -227,13 +227,15 @@ def frontend_url
 
   # Refund bounty to the person who created it. The amount refundable is simply
   # the amount - (amount * bs fee)
-  def refund!
+  def refund!(is_fraud=false)
     if refundable?
       self.class.transaction do
         transaction = Transaction.build do |tr|
-          tr.description = "Refund Bounty(#{id}) - Bounty Amount: $#{amount} Refunded: $#{amount}"
+          tr.description = "Refund Bounty(#{id}) #{'FOR FRAUD ' if is_fraud}- Bounty Amount: $#{amount} Refunded: $#{amount}"
           tr.splits.create(amount: -amount, item: issue)
-          if owner_type == "Team"
+          if is_fraud
+            tr.splits.create(amount: +amount, account: Account::Liability.instance)
+          elsif owner_type == "Team"
             tr.splits.create(amount: +amount, item: owner)
           else
             tr.splits.create(amount: +amount, item: person)
@@ -246,7 +248,7 @@ def refund!
         update_attributes status: Status::REFUNDED or raise ActiveRecord::Rollback
 
         # email the backer
-        person.send_email :bounty_refunded, bounty: self, transaction: transaction
+        person.send_email :bounty_refunded, bounty: self, transaction: transaction unless is_fraud
       end
 
       # update displayed bounty total on issue