Proceeds of Crime

Proceeds of Crime

Sections 462.37 and 462.38 of the Criminal Code contain provisions relating for the forfeiture of any property that is deemed to be “proceeds of crime”.

Section 462.37(1) of the Code indicates that where an individual is discharged or convicted of a designated offence, the court shall order that the offender forfeit any property which the court believes, on a balance of probabilities, was obtained through the commission of the designated offence.

Section 462.37(2) of the Code stipulates that the court must also make a forfeiture order where an offender is discharged or convicted of an offence that is not a designated offence, where the court is satisfied beyond a reasonable doubt that the property is proceeds of crime.

Section 462.38(1) of the Code stipulates that where a charge has been laid for a designated offence, the Attorney General may make an application to a judge requesting a forfeiture order under section 462.38(2) of the Code.

The judge may grant the order if they are satisfied that the property is proceeds of crime that was earned from the commission of a designated offence, and that the accused charged with the offence has absconded or died and cannot be convicted of the offence as a result. This allows the court to make a forfeiture order even where the accused has not been convicted of the offence.

What is a Forfeiture Order?

There are three different categories of forfeiture orders:

This article will focus on forfeiture orders related to proceeds of crime.

A forfeiture order related to proceeds of crime is an order made by a sentencing court, forcing the offender to forfeit certain property that has been deemed proceeds of crime. Proceeds of crime is defined as any property, benefit, or advantage, within or outside of Canada, obtained or derived directly as a result of the commission of a designated offence, whether or not that offence occurred inside Canada. This could include virtually any type of property, or a partial interest in property.

A forfeiture order must be ordered by a sentencing court when an offender is convicted of a certain designated offence. One of the most common types of property ordered to be forfeited as a proceed of crime is cash earned from engaging in criminal activity like drug trafficking or human trafficking. Property purchased with illegally acquired money can also be ordered forfeited as proceeds of crime.

What are Designated Offences?

Section 462.37(2.02) of the Code provides a list of designated offences that trigger a mandatory forfeiture order upon conviction. The offences include:

  • A criminal organization offence with a maximum prison sentence of five years or more.
  • Offences related to the Controlled Drugs and Substances Act that are prosecuted by indictment.
  • Offences under the Cannabis Act that are prosecuted by indictment.
  • Trafficking in persons offences under sections 279.01 to 279.03 of the Criminal Code.

Example

Person A is charged and convicted with human trafficking after forcing person B to work in the sex industry without pay. At sentencing, the court must order that person A forfeit any money earned by person B or any other human trafficking victim.

What Types of Property can be named in a Forfeiture Order?

Virtually any type of property can be named in a forfeiture order. Anything from a house or building, to cash, to clothing, jewellery, or art.

What is the Property was not Proceeds of Crime?

Section 462.37(2.03) of the Code indicates that the court must not make a forfeiture order where the offender can establish on a balance of probabilities that the property was not proceeds of crime.

What is the Purpose of Ordering the Forfeiture of Proceeds of Crime?

The legislative intent behind these sections of the Code was to divest criminal organizations from the profits associated with committing crimes. The legislature’s goal was to ensure that those who commit crimes to make money will not only be punished with incarceration but will also have their profits taken.

What happens to Property that is Forfeited?

Where the property was seized as proceeds of crime, section 462.41 of the Criminal Code stipulates that the Crown must provide notice to anyone who may have a legitimate legal interest in the property to allow them to come before the court and claim the property.

An individual who does have a legitimate legal interest in the property, may make an application to the court, proving their interest. If the court is satisfied, they will return the property to the rightful owner.

If no rightful third party claims the property, the property will become the property of the Crown and will be disposed of by the Attorney General or in accordance with some other law. In some cases, the property will be auctioned off.

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