Penny extracted from villain's fraud (4)
I believe the answer is:
scam
'fraud' is the definition.
(scam is a kind of fraud)
'penny extracted from villain's' is the wordplay.
'penny' becomes 'p'.
'extracted from' is a deletion indicator.
'villain' becomes 'scamp' (I've seen this before).
'scamp' with 'p' taken out is 'SCAM'.
(Other definitions for scam that I've seen before include "Dubious operation" , "Racket" , "Fraudulent scheme, swindle" , "Rip-off" , "Swindle, fraud (colloq.)" .)