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Defend Fraud Charges

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Our Experience

In jurisdictions across Canada, fraud charges are quite common. An individual may be arrested and charged with fraud for many different reasons. This could include virtually any situation where an item or something of value is taken using fraudulent means. To prove a fraud conviction, the Crown must prove that the accused person intentionally took an item or something else of value, using deceit for falsehood, and that there was a risk of real loss to another person. For example, if an individual attempted to cash a cheque that does not belong to them, they are guilty of fraud even where the cheque is not successfully cashed. This is because there was a real risk of depravation had the cheque in fact been cashed. Whether or not the accused actually profited from the fraud will factor into the sentence handed down upon conviction, but only to a small degree.

Donich Law represented an individual in a case of this nature in R. v. R.A. [2022]. In that case, the accused, a second time offender, had attempted to cash a fraudulent $40,000 money order at a cheque cashing store. The individual working at the store became suspicious of the accused’s ID card, which turned out to be fraudulent as well. The employee indicated to the accused that the cheque would take a day to clear and asked for her to return the following day, then called police. Police attended the following day and met the accused at the store, placing her under arrest. She was charged with fraud over $5,000, possession, sale, etc., of identity documents, utter forged documents, and identity theft. The Firm completed a significant amount of upfront work, resolving the matter with three of the most serious offences being withdrawn, and avoiding the jail sentence the Crown wanted.

Donich Law also has over a decade of experience defending individuals charged in large, complex fraud schemes. Where there is a sophisticated and planned out scheme in place to commit fraud, the court will typically order harsher penalties. This is because planning out a fraudulent scheme ahead of time is seen as more morally blameworthy than a situation where an individual makes a one-time poor decision.

In 2020, the Firm successfully represented a client accused of developing a complex plan to defraud the company he was working for in the case of R. v. S.G. [2020]. The accused, the Director of the company, created false shell corporations as well as fake invoices to shift money out of the company into his accounts. After some time, the accused began to feel guilty about his actions and confessed to the company. Believing he would be forgiven, the accused provided details of the fraud to the employer. He was subsequently reported to police and arrested for fraud over $5,000. The Firm negotiated with both the employer and the Crown to secure a deal, resolving the matter without a criminal record.

Fraud offences are often complex and can have wide-ranging and severe impacts on the lives of victims. No one is completely immune to deception and trickery. Crime mapping data provided by the Guelph Police Service shows 165 reported incidents of fraud in 2023 as of May 24th.

There were 124 reported frauds in the same period of 2022, leading to 337 occurrences over the entire year of. The annual report produced by the GPS from 2021 indicates that there were 634 reports of fraud in that year. There is no data or reason available from the GPS to account for such a steep decline in fraud, but as with most municipal and regional police forces, they do provide the residents of Guelph with some resources to help identify and protect themselves against fraud.

Punishments for Fraud Depend on the Value of the Property

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In 2015, the Firm represented an individual accused of concocting a scheme to defraud retail stores, mainly Home Sense stores, out of over $60,000 in R. v. S.C. [2015]. The Crown and law enforcement alleged in the case that the accused individual, who was an employee at Home Sense, had been working with a family member as well as another employee at the store to commit fraud. The individual who pretended to scan large quantities of items and leave the store without paying. Eventually, loss prevention staff at the store caught on to the scheme and reported it to law enforcement. The Firm represented the accused throughout the process, the Firm successfully resolved the matter.

In 2013, the Firm represented an individual accused of defrauding the Royal Bank of Canada in R. v. A.N. [2013]. The client was an individual from a small town who was alleged to have deposited a fraudulent bank draft worth $56,000 into her account. The transaction was flagged at the bank due to the high value of the draft as well as the fact that it came from a large, publicly traded company. Upon further investigation by bank staff, it was discovered that the draft was not legitimate. The bank subsequently froze the accused’s bank accounts and assets and reported her to law enforcement. The Firm secured the withdrawal of all fraud, utter forged documents, and possession of property obtained by crime charges. The Firm also recovered the accused’s frozen bank accounts and assets.

How to Defend Fraud Under $5000

In 2014, the Firm worked with a client accused of participating in a TTC and Metropass fraud scheme targeting public transportation in Toronto in R. v. I.B. [2014]. The accused was a university student in Toronto who had purchased a TTC pass from a friend she trusted. Completely unaware the pass was fraudulently obtained, she continued to use it for some time before being arrested. The Firm presented evidence to the Crown to show that the accused was an innocent party who had paid for the pass and genuinely believed it to be legitimate. The Firm successfully shifted blame on to the guilty party, leading to the Crown withdrawing the charges against the client for lack of reasonable prospect of conviction.

In 2017, the Firm represented a client who had sold fake concert tickets on Kijiji in the case of R. v. A.L. [2017]. More than a year after the alleged offence occurred, the accused was contacted by law enforcement who indicated they were investigating the possible fraud of concert tickets. The young complainants who had purchased the fraudulent tickets from the accused had reported the matter to police who investigated the matter until they gained enough evidence to lay charges. The accused, who had since turned his life around, was surprised by the arrest, given the amount of time that had passed since the alleged incident occurred. The Firm cast doubt on the Crown’s case by challenging various pieces of evidence and ultimately resolved the matter with all charges being withdrawn.

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Frequently Asked Questions

Does the Value of the Fraud Matter?

Yes, the value of fraud is important to criminal cases. Section 380(1) of the Criminal Code sets out two different categories of fraud offences. If the value of the fraud exceeds $5,000, a person accused of fraud may be guilty of an indictable offence and liable to a prison term of up to 14 years. If the fraud is valued at or above $1 million, s. 380(1.1) of the Code imposes a minimum punishment of two years imprisonment.

A fraud valued under $5,000 could subject an accused to conviction for either an indictable offence and a two-year prison term, or a summary offence which carries a penalty of a two year less a day prison term and/or a $5,000 fine. The value of the fraud can also be relevant to the sentence in the context of the victim. Section 380.1(1) establishes aggravating factors that can increase sentence an offender faces in certain cases.

For example, one factor accounts for the significance of the impact that the fraud has on the victim’s life when looking at, among other things, their age, health, or financial situation. In some cases, if a fraud is lower in value, but it has a major negative impact on a specific victim, that may factor into an increased punishment for the offender.

What are the Common Defences to Fraud in Guelph?

There are two common defences an accused person can use when faced with a fraud charge. The first is a lack of intent to commit fraud. Fraud requires a person to knowingly trick or deceive another person into giving them money or other valuable goods. If a person did not knowingly deceive another person, they cannot have committed an offence.

For example, person A buys designer clothes from person B in Guelph, who claims they are authentic, but knows they are not. Person A genuinely believes this to be the truth and then sells some of the same clothes to person C. After buying them, person C discovers the clothes are knockoffs and reports the incident to the police. In this scenario, Person A would be innocent of fraud due to a lack of intent because of their genuine belief that the clothes were genuine.

The second common defence to fraud is no risk of loss. To be found guilty of fraud, the Crown must either prove that the victim suffered a loss caused by the fraud, or there was a risk that they would suffer loss. If neither of these criteria can be proven, the accused has not committed a fraud offence.

Can Fraud Charges be Dropped?

It is possible for fraud charges to be dropped, but for that to happen it depends greatly on the type of fraud offence a person has been charged with. If a person is charged with fraud valued over $5,000, dropping the charges is more unlikely because of the severity of the offence. It may be possible for the charges to be stayed if there is a breach of a person’s right to be tried within a reasonable time. The timeline for that is 18 months in matters before the Ontario Court of Justice and 30 months before the Ontario Superior Court of Justice. Stays will only be granted by a judge where the accused has not contributed to the length of the delay and the Crown cannot prove that the case was overly complex or that the delay was unavoidable.

Charges may also be withdrawn if there is a serious issue with the Crown’s case and there is no reasonable prospect of conviction. This may be because there is a lack of evidence or there is a real possibility that the accused will successfully use one of the defences discussed above. In cases of fraud under $5,000 a discharge is possible. Discharges are sentencing options where a court will find a person guilty of an offence, but not give them a permanent criminal record. Discharges can either be absolute or conditional. If conditional, the accused must obey all the conditions imposed by a judge to have the charge removed from their record. If a discharge is absolute, the charge will disappear from their record after one year.

What if the Victim of Fraud is the Accused’s Employer?

If the victim of a fraud is the offender’s employer, it can lead to severe consequences. The employer-employee relationship is one of trust. The law seeks to protect these types of relationships because they are vital to how our society functions. As such, the criminal justice system can view any abuses of this trust very harshly. An example of this is the Supreme Court of Nova Scotia case of R. v. Tibbo, 2022 NSSC 321 (CanLII).

In this case the offender was charged with fraud and theft over $5,000. The offender was an employee of the victim, who was an illiterate sole-owner of a small business who had placed their complete trust in the offender to take care of the business’s bookkeeping duties. Over two and a half years, the offender cleared out the victim’s bank account for their own benefit in the amount of almost $100,000. The vulnerability of the victim and the severe breach of trust in this case led to the offender being sentenced to six months imprisonment and a year of probation. The offender was also prohibited from being employed or occupying a volunteer position where they had any authority over the money or property of another person during the length of their probation. Finally, a restitution order was issued, where the court mandated that the offender should repay the victim the value of the fraud.

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Recent Cases

R. v. Nowack, 2019 ONSC 5344

The Ontario Superior Court of Justice case of R. v. Nowack is an example of where the minimum punishment for frauds valuing over $1 million could be enacted. The offender was convicted of 12 counts of fraud over $5,000 and sentenced to nine years imprisonment, was prohibited for life from ever holding authority over another person’s money or property, and ordered to pay a restitution order to the victims that was part of an even larger fine in lieu of forfeiture of the proceeds of the crime totaling $15,679,087.59. If the offender does not repay that amount in three years after being released from prison, they face an additional prison term of seven years.

The facts that led to this sentence were that the offender held himself out as a successful currency trader to investors. They demonstrated their skills on practice accounts where no real money was gained or lost to encourage investment. Having no such skill, the offender lost most if not all the money and used some of it for his own personal benefit. The judge described the overall scheme as, “Mr. Nowack perpetrated a scam designed to part people from their money.  It was not a legitimate business where he simply cooked the books or tried to hide losses from investors.  The currency trading was a fig leaf for the real business of fraud.  Mr. Nowack may have hoped to make money from trading currency. Indeed, he likely did hope to make money, but he never intended to distribute any profits to his victims.  His intent was to reap any benefits for himself.  Any money he did distribute came from other investors – and was only distributed in response to threats and pressure.  He never once distributed profits to the investors.  Funds from FXCM went to his bank account and were used for his personal expenses. Mr. Nowack constantly and consistently lied to his investors about the state of the accounts and the amount of his profits.” [at para 88]

R. v. Scribnock, 2017 CanLII 13988

The Ontario Superior Court of Justice case of R. v. Scribnock is similar in nature to the case discussed above. Here, the offender was convicted of 19 counts of fraud over $5,000 and sentenced to 7 years imprisonment and ordered to pay restitution as part of a larger forfeiture order in the amount of $2,871,963.30. The offender’s failure to repay that amount in 10 years would result in five more years of imprisonment. An order was also made prohibiting the offender from having any authority over other people’s money.

What distinguishes this case from the above is that the offender had been a financial advisor for several decades and held a position of high regard in their community. Additionally, the victims of the fraud were all friends of the offender who placed a great deal of trust in him. These are legislated aggravating factors that increase the severity of a sentence, as noted by the judge, “This was an egregious fraud where friendships of many years were taken advantage of, where a position of high trust was abused to the financial devastation of several honest hard-working citizens who earned the right to a comfortable decent retirement.” [at para 18]

R. v. Jamo, 2020 BCPC 301

The Provincial Court of British Columbia case of R. v. Jamo concerns an incident of fraud for property rather than money. The offer was convicted of one count of fraud under $5,000 for a fraud scheme involving a driver’s licence and the Insurance Corporation of British Columbia as the victim. The act of fraud occurred when the offender knowingly gave a test taker verbal and visual cues to aid in passing the test while the offender was acting as an Arabic interpreter. Evidence suggested that almost all the would-be drivers passed the test because of the actions the offender acting as interpreter when they had failed the test before and failed the test again after having their licences revoked when the fraud was discovered.

A main issue in this case was whether the issuing of drivers’ licences to unqualified drivers that received aid from the offender amounted to a loss, which is a required element of a fraud offence. The judge found here that the loss suffered by the victim was not actual, but instead, “it is reasonable to infer that Mr. Jamo, like the reasonable average person, would know that his conduct would place at risk the safety of those drivers and others who came into contact with him, which in turn would increase ICBC’s risk for insuring all B.C. drivers.” [at para 90] Therefore, in this case there was a sufficient risk of loss found in the form of potentially higher insurance costs.

About the Author

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Jordan Donich

Jordan Donich has been a Lawyer for over 10 years and is a trusted legal analyst by Canadian Media. He is as a leader in Canada’s tech sector for lawyers and developer of Law Newbie. Jordan is a Black Belt with the Japan Karate Association and trained in Krav Maga. He won a Gold Medal at 2004 Canadian National Championships and was published in the National Newspaper Awards.

Jordan has been featured in Forbes and is a member of DMZ Angels in Toronto.