How to Defend Fraud Charges?

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defending fraud charges

Frequently Asked Questions

Being charged with a criminal offence, particularly a fraud offence, can be a scary experience. This is especially true for first time offenders or individuals who have no experience with the criminal justice system. If you have been charged with a criminal offence including fraud, it is important to consult with legal counsel about your case as soon as possible. Seeking counsel early on will help protect your rights throughout the case and will ensure the best outcome.

What if the Victim did not Actually Lose Anything?

If a person attempts to defraud a victim out of money or a valuable good, but does not receive that money, they may still be guilty of fraud. The standard to prove an act of fraud occurred is if the conduct of the offender results in the victim suffering either an actual loss or there was significant risk of a loss in the circumstances of the case. An example of risk of loss can be seen where an offender attempts to deposit money from a victim’s account meant for a different account to their personal account under a fake name that doesn’t match the bank’s records. Noticing the discrepancy, the transaction is stopped by an observant teller.

Because the deposit was not completed, there was no actual loss in this case. However, the law allows the acts of the would-be fraudster to be punished even though their scheme was not successful. This is because there was a chance that the teller may not have discovered the fraudster’s deception, so there was a risk the deposit would have been completed. Therefore, the offender can still be convicted of fraud. The only element that changes in these types of cases, is that because no money was taken, there is no need for a court to issue a restitution order that forces the offender to repay the victim.

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Donich Law has extensive experience representing individuals charged with fraud offences throughout the GTA and Ontario. We regularly obtain favourable results for our clients by combining litigation and risk management strategies. The Firm has experience with a wide array of fraud clients including first time offenders, those who were unaware they were committing fraud, those who have organizing sophisticated fraud schemes and even those involved in international theft and fraud rings.

What if Someone is Unable to Pay Back the Value of a Fraud?

If someone is convicted of fraud and unable to pay a restitution order within the time ordered by a court, they may face additional consequences such as a term of imprisonment. However, a restitution order does not specify how it will be enforced. A criminal court will not take measures to ensure that a victim of fraud receives restitution, such as forcing a person convicted of fraud to sell their home to fund restitution.

Instead, victims will usually have to enforce restitution by suing the offender in civil court and obtaining a court order to pay the amount of the fraud. There are several civil remedies that can aid victims in receiving restitution. These remedies include garnishing a portion of an offenders future earnings, which is useful where an offender does not have enough assets in their possession to cover the amount of restitution. These alternatives are discussed in the Ontario Superior Court of Justice case of R. v. Watts, 2019 ONSC 7472 (CanLII). In this case, the judge believed the Crown could use the civil court system to obtain an order concerning funds stemming from fraud that the wife of an offender would not surrender to pay the existing criminal court order. [at para 22]

Punishments for Fraud Depend on the Value of the Property

If Someone Pays Back the Value of the Fraud, Will Their Charges Be Dropped?

An offender who pays their victim back the amount of a fraud on their own initiative will not have their charges dropped. Regardless of if the amount was paid back or not, a fraud offence was still committed. If the amount is paid back prior to the conclusion of a trial or before an accused individual pleads guilty, the Crown will likely use the payment as evidence that a fraud offence has occurred. Paying back the amount of a fraud is an admission that the funds did not belong to the offender in the first place.

However, if the offender pays back the amount after being convicted of fraud, but before they have been sentenced and a restitution order has been issued, the repayment may lessen the punishment they are about to receive. An example of this can be seen in the Provincial Court of Alberta case of R. v. Durant, 2021 ABPC 79 (CanLII). In that case the offender was convicted of fraud over $5,000 after using a debit card provided by their employer meant to purchase supplies for the business for their own personal benefit. As part of a broader effort to rehabilitate themselves, the offender repaid the value of the fraud. This led to the judge imposing a more lenient punishment, a nine-month conditional sentence and 12 months of probation.

How to Defend Fraud Under $5000

What Does, “Deceit, Falsehood or Other Fraudulent Means” Mean?

As it applies to the offence of fraud set out in s. 380(1) of the Code, deceit and falsehood refers to any method an offender uses to knowingly lie to convince or otherwise trick a victim into parting with their money or other valuable goods. Deceit or falsehood could be something as simple as a person selling another person a car which they claim is in good working condition. However, they know the car is missing several key parts, but because of the lie, the victim agrees to purchase the car.

Other fraudulent means is described in the Court of Queen’s Bench of Alberta case of R. v. Iyer, 2013 ABQB 725 (CanLII). “‘other fraudulent means’ … include[s] means which are not in the nature of a falsehood or deceit; they encompass all other means which can properly be stigmatized as dishonest.” Fraud generally requires the establishment of two elements: dishonesty and deprivation.” [at para 30] Essentially, other fraudulent means is a blanket term that covers any additional method by which an offender knowingly and dishonestly takes money or property that does not belong to them and causes another person to suffer a loss. For an example of this, see the case of Durant, outlined above, which involved an offender using his employer’s debit card for his own personal gain.

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Our Experience

R. v. A.N. [2013]

In 2013, the Firm represented a client charged with numerous offences including possession of property obtained by crime, utter forged documents, and fraud in R. v. A.N. [2013]. The accused was from a small town and was alleged to have deposited a bank draft valued at $56,000 into her Royal Bank of Canada account. The transaction was flagged by the fraud department of the bank and the accused’s bank accounts were subsequently frozen pending investigation. It was determined that the bank draft, issued by a publicly traded company, was actually stolen funds. While the Crown had evidence to show that the accused had been in possession of the stolen money, the Firm was able to present evidence to show that he had been unaware that the funds were stolen. As a result of that evidence, the Crown agreed to withdrawal the charges of fraud, possession of property obtained by crime, and uttering forged documents.

R. v. S.C. [2015]

In 2015, the Firm defended an individual charged with fraud over $5,000 in the case of R. v. S.C. [2015]. The client was arrested and charged after it was alleged that she repeatedly committed fraud at her place of employment. Prosecutors alleged that the accused had one of her family members attend the Home Sense store she worked at on numerous occasions and that she had pretended to scan large quantities of items. She then let her family member leave the store without paying for the merchandise. By the time they were caught, they had defrauded the store out of roughly $60,000. The Firm engaged in lengthy Crown pre-trial negotiations, presenting evidence to show that the accused was less morally blameworthy due to some mental health issues. The Firm ultimately resolved the case without a criminal record.

R. v. Z.U. [2018]

In 2018, the Firm represented an individual charged with money laundering and numerous fraud over $5,000 charges in the case of R. v. Z.U. [2018]. The accused initially came to the attention of Canadian law enforcement after police in the U.S. contacted them about a Canadian citizen who was alleged to have been participating in a fraud ring involving individuals in the United States. Police in both countries uncovered evidence to show that the involved parties had been defrauding elderly people out of money in the U.S. and then using that money to purchase Gold Bullion. The gold was then shipped over the border into Canada where it was sold. Law enforcement alleged that the client was a large participant of the plot. The Firm utilized the rules of evidence to exclude important evidence against the accused, leading to the Crown staying nine of the charges.

R. v. K.L. [2015]

In 2015, the Firm represented a client charged with several attempted fraud, fraud, and conspiracy charges in the case of R. v. K.L. [2015]. The accused was arrested by police and charged after staff in the loss prevention department of Staples stores and Target stores uncovered an ongoing fraud ring targeting their stores. The accused and his accomplices were alleged to have been repeatedly attending the stores to steal merchandise, and then later returning to refund the items for cash. The Firm secured the withdrawal of eight of the charges after challenging various witnesses to be called by the Crown.

R. v. R.A. [2022]

In 2022, the Firm represented a client charged with fraud over $5,000, identity theft, possession, sale, etc., of identity documents and utter forged documents in the case of R. v. R.A. [2022]. The accused and a co-accused were arrested after the client used a fake citizenship card to attempt to cash a fraudulent money order issued in someone else’s name. When police confronted the suspect, she provided the fake ID and indicated she was the person on the card. Police later discovered this was untrue. Being a second time offender with a record for a similar offence, the Crown sought a custodial sentence on conviction. The Firm challenged the evidence, shifting blame to the co-accused who was significantly older than the client and had an extensive criminal history. The Crown ultimately agreed to withdrawal three of the most serious charges and resolve the matter without custody.

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Recent Cases

R. v. Varga, 2021 BCPC 286

The Provincial Court of British Columbia case of R. v. Varga demonstrates how seriously Canadian law views instances of fraud where the victim is part of a vulnerable group of people. The offender in this case was a caretaker at a community living home that was tasked with helping the victim, a disabled woman with the mental capacity of a child, with her daily needs. The offender was charged and convicted of fraud over $5,000 after they used the victim’s debit card to withdraw more than $12,000 from their account for the offender’s gain.

The judge noted two of the principles of sentencing criminal offences that applied here. Appropriate punishments must act as a statement against criminal behaviour, while also discouraging other people from behaving similarly. The relationship between the offender and the victim was a critical factor, as the abuse of vulnerable people is an aggravating factor that can increase the punishments offenders face. “Given the duty of trust placed in Ms. Varga as a caregiver and the vulnerability of the victim, I conclude that the aggravating features of this case require a custodial sentence and that a conditional sentence order would not adequately address the need for denunciation and deterrence.” [at para 44]. The resulting sentence for this offence was nine months imprisonment, two years of probation and the offender was ordered to pay a restitution in the amount of $14,000 to the victim.

R. v. Langis, 2018 ONSC 7534

The Ontario Superior Court of Justice case of R. v. Langis was another example of an abuse of a relationship of trust in the employment context. The facts established that the offender defrauded his employer out of around $80,000 over ten months by accessing accounting software as well as using a corporate credit card and falsified documents to purchase goods for their own benefits. This included a set of windows for their own home. This resulted in the offender being convicted of fraud over $5,000 and sentenced to 14 months imprisonment. The court also issued a $40,000 restitution order and prohibited the offender from ever again holding any employment or volunteer position that would involve them having authority over someone else’s money or property.

As in the case above, the abused relationship was an aggravating factor leading to the imposed sentence. As was the personal health and circumstances of the victim. “Mr. Langis breached his position of trust as the restaurant manager as well as the personal trust that his employer, Jim Edwards, had reposed in him. The timing of the offences is significant because they were committed at a time when Mr. Edwards had been diagnosed with stage four colon cancer and was unable to supervise or give attention to the day to day running of the restaurants. Mr. Edwards trusted that he could focus on his health issue and trusted that Mr. Langis would look after the businesses on his behalf.” [at para 40]

R. v. Theriault, 2022 NBQB 254

The New Brunswick Court of Queen’s Bench case of R. v. Theriault is an example of fraud committed via fraudulent means. The offender was convicted of fraud over $5,000 after it was found that the offender fraudulently claimed the maximum amount that their disabled son was entitled to under the province’s disability support program. To get the maximum funding over several years, the offender falsified documents and had friends and acquaintances sign blank forms that later claimed they provided services that they either had never given or exaggerated services they had.

While the fraud was proven, the judge noted the exceptional facts of this case and the reasons behind the crime. “The falsehoods she entered on these forms are inherently dishonest, despite any good intentions she may have regarding her son. When she obtained signatures on the billing forms, entered bogus hours, and signed off on the veracity of the information, she knew this was what would get her the money from the Province of New Brunswick the following month. It does not matter what her true intentions were or that in her mind she believed what she was doing was right or would result in no real financial loss to society.” [at para 55] Considering this, the offender was sentenced to 18 months of probation.

About the Author

Jordan Donich