FIRST OFFENDER CHARGED WITH FRAUD? 416-DEFENCE.

Fraud is often associated with white collar crime which may include Antitrust Violations, Bribery, Credit Card Fraud, Counterfeiting, Extortion, Forgery, Illegal Insider Trading and Misappropriation of Trust Funds. We handle situations where individuals facing these allegations are law abiding citizens with no criminal history. Many times these individuals weren’t even aware the alleged conduct was fraudulent, including allegations of Employer and Insurance Fraud. We have successfully defended numerous allegations of fraud by employees from the Bank of Montreal, Royal Bank of Canada, HomeSense, Investors Group, TTC, KPMG, University of Toronto and many other white collar professional facing allegations of financial crime.

The Firm has resolved a number of complex fraud allegations. In June 2020, it was able to resolve a $52,423.00 USD sophisticated employee fraud without a criminal record in its R. v. S.G. [2020]. It was alleged a Director of the corporation was secretly diverting corporate money to a false shell company. The investigation was complex and involved several fraud charges, including offences related to uttering forged documents to facilitate the crime. The Director was alleged to have created false invoices for payment to the shell companies in question. The result took nearly 2 years to achieve. The same month in its R. v. M.K. [2020], the Firm also resolved a $5000.00 Home Depot Fraud ring without a criminal record. The accused had 13 fraud related charges and was attending multiple locations allegedly stealing and returning stolen merchandise.

The Firm secured a withdrawal of a $170,000.00 combined civil and criminal internal employer fraud allegation without a criminal record in its R. v. O.I [2019]. Company assets were allegedly being diverted surreptitiously by an internal employee. In June 2018, the Firm secured a withdrawal of Fraud where the offender was accused of selling fake concert tickets on Kijiji, in its R. v. A.B. [2018]. This result was achieved based on how the Firm handled the interrogation with the accused, given law enforcement had obtained production orders to trace the money years later.

In 2022, the Firm represented an individual charged with fraud over $5,000, identity fraud, possession, sale, etc., of identity documents and utter forged documents in R. v. R.A. [2022]. The accused was charged after using fake ID to attempt to cash a fraudulent money order valued at over $40,000. The accused had previously been arrested for a similar offence, further complicating the matter and the file was initially screened for a jail sentence. After one year of negotiations, the Firm secured the withdrawal of the three most serious offences, avoiding jail time for the accused.

We have defended complex internal Fraud rings, such as sophisticated Fraudulent TTC Metropass and Token schemes in its R. v. I.B. [2014] where all charges of Fraud, Uttering Forged Documents and Possession of Property Obtained By Crime were withdrawn. These police stings often involve elaborate searches and seizure of office computers, mobile devices and files. The Firm secured a withdrawal of eight (8) charges of Fraud related charges, attempt Fraud and Conspiracy Charges in its R. v. K.L. [2015], where the accused was allegedly involved in a Staples and Target commercial Theft Ring.

In May 2018, the Firm stayed nine (9) Fraud charges, including money laundering foreign proceeds of crime from the United States in an approximate $1 Million international Gold Bullion investigation, in its R. v. Z.U. [2018]. Money was alleged to have been stolen from U.S. senior citizens and converted to Gold for transport and sale cross-border. The investigation involved both Canadian and U.S. Law Enforcement.

In the Firm’s R. v. S.D. [2017], the accused was offered a full time position with the TTC and allegedly fabricated a fake Toronto Police Vulnerable Sector check to pass employment requirements and ultimately conceal his prior record. After extensive litigation, the Firm secured a withdrawal of all charges.

In January 2017, the Firm resolved a complex Fraud banking scheme without a criminal record. The accused, a postal worker, was alleged to have defrauded the Bank of Nova Scotia over $50,000.00 in its R. v. S.A. [2017]. The offence allegedly involved stolen social insurance numbers, false identification and bank records. The offender was apprehended fleeing the bank after a bank teller secretly flagged the transaction.

The Firm also secured a withdrawal of a $56,000.00 Royal Bank of Canada fraud in its R. v. A.N. [2013]. The accused from a small town in Ontario was alleged to have deposited a fraudulent bank draft issues by a publicly traded Canadian corporation. The accused’s bank account was frozen by law enforcement and assets seized. The Firm was able to establish that even though the accused temporarily had possession of the money, he was unaware the funds were stolen. All counts of fraud, uttering forged documents and possession of property obtained by crime were withdrawn. The Firm also recovered all frozen financial assets.

The Firm has extensive experience defending internal employee fraud allegations. In its R. v. S.C. [2015], the Firm resolved a $60,000.00 HomeSense fraud ring without a criminal record. The Firm defended two family members who were co-accused in the allegation. They were allegedly attending the cash register where another employee would pretend to scan several thousand dollars of merchandise without collecting payment.

The Firm defended two 19 year old students charged with 10 Fraud Related Offences in its its R. v. N.B. [2015] and R. v. B.L. [2015]. Both students were employed at Target Canada and allegedly altering prices of merchandise for personal profit. In 2015, the Firm defended a Bank of Montreal teller accused of stealing cash on the job in its R. v. G.G. [2015]. The employee’s code was used to make the withdrawal which ultimately justified the charges. With the use of affidavit evidence and video surveillance, the Firm was able to prove the accused was not the person who stole the money and that her code was used by someone else.

Depending on the value of the defrauded property, a charge of fraud will be for either under or over $5,000. When approached by clients charged with an allegation of fraud, we critically analyze the extensive disclosure which frequently accompanies these charges.

Having a complete understanding of the Elements of the Criminal Offence, Your Rights and the Consequences associated with a Criminal Record is necessary before any legal decisions are made.

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Frequently Asked Questions

FRAUD LAW IN CANADA
What is Fraud?
Does the Value of the Alleged Fraudlent Activity Matter?
What Does the Crown Need to Secure a Conviction?
Aggravating Factors
At What Point are Aggravating Factors Important?
Are Aggravating Factors Part of the Court Record?
Mitigating Factors
At What Point are Mitigating Factors Important?

FIRST OFFENDERS
What’s a First Offender?
If you Have been Arrested and taken into Custody, What Happens Next?
What is a Form 9 – Appearance Notice?
What is a Form 10 – Promise to Appear?
Are Theft and Fraud the Same?
What are the Consequences of Having a Criminal Record?

Fraud Law in Canada

What is Fraud?

According to section 380(1) of the Criminal Code, a person commits fraud when they use deceit, falsehood or other fraudulent means to defraud any individual or the public of money, property, belonging, service or security. In order to constitute fraud, the accused must have acted intentionally.  Fraud can occur in numerous contexts and our office has experience handling a variety of fraud related charges.

Does the Monetary Value of the Alleged Fraudulent Activity Matter?

Yes, the value of the fraudulent activity matters. As per the Criminal Code, fraud is prosecuted differently if the value of the fraud is above or below $5,000. The onus is on the Crown to prove the monetary value of the alleged fraud in order to determine the tier of the offence that will be prosecuted.

Where the fraud amounts to less than $5,000, the accused will be charged with a summary conviction offence which carries a maximum penalty of either two years less a day imprisonment, a $5,000 fine or both. In cases of fraud exceeding $5,000, the Crown commonly proceeds with an indictment which carries a maximum penalty of fourteen years of imprisonment. This also applies where the subject matter of the fraud was a testamentary instrument.

The Criminal Code also states that in cases where the fraud exceeds one million dollars, the mandatory minimum punishment is two years in prison upon conviction. Aggravating and mitigating factors will be considered in all cases (discussed in more detail below).

What Does the Crown Need to Secure a Conviction?

To obtain a conviction for any crime, the Crown must prove that the accused both committed a prohibited act in the Criminal Code and that the individual had the necessary “guilty mind”.

For fraud, the Crown is required to prove that a person committed a prohibited act of deceit, falsehood or other fraudulent act that resulted in some kind of deprivation. The deprivation in question can be either a tangible loss or an economic interest being endangered. The Crown must prove that the accused was aware of the fraudulent act that they committed and may also prove that the accused was aware of the risk associated with their actions and proceeded anyways.

What are Aggravating Factors?

Aggravating factors are considered by the Crown and the judge in determining the appropriate punishment for the crime and the offender. Section 380.1(1) of the Criminal Code lists aggravating factors related to the offence of fraud as set out below.

Aggravating Circumstance – Value of the Fraud

(1.1) When a court imposes a sentence for a fraud related offence in section 382, 382.1 or 400, the fact that the value of the fraud exceeds one million dollars is considered an aggravating factor (without limiting the generality of section 718.2).

Non-Mitigating Factors

(2) When a court is imposing a sentence for an offence in section 380, 382, 382.1 or 400, the accused’s employment, employment skills or reputation will not be considered as mitigating factors.

The Criminal Code also sets out a list of additional aggravating factors that must be considered by a judge in determining the appropriate sentence for an offender. These aggravating factors are relevant for all criminal offences and are listed in section 718.2. Some relevant factors include:

• Evidence that the offence was motivated by bias, prejudice or hate based on race, antional or ethnic origin, language, colour, religion, sex, age, mental or physical disability, sexual orientation, or any other similar factor;
• Evidence that the offender abused a person under the age of 18;
• Evidence that the offencer abused a position of trust or authority;
• Evidence that the offence had a significant impact on the victim;
• Evidence that the offence was committed for the benefit or in association with a criminal organization;
• Evidence the offence was terrorism related

Additional aggravating factors have been recognized at common law including:

• Prior criminal record;
• Violence or use of a weapon;
• Cruelty or brutality;
• Significant injuries to the victim;
• Offence committed while on release from custody;
• Multiple victims or incidents stemming from the incident;
• Gang activity;
• Economic loss of the victim or others;
• Planning and organization of the crime prior to committing the act;
• Victim vulnerability (age, disability, minority, etc);
• Deliberate risk taking

If any of these factors apply to you, it is extremely important that you discuss them with your lawyer as they can affect the outcome of your case.

At What Point are Aggravating Factors Important?

Aggravating factors are highly relevant and important at various stages of trial. At the outset, the Crown will assess and balance aggravating factors against mitigating factors in order to determine the appropriate remedy or punishment. Aggravating factors may be used to determine whether or not an accused will be offered a plea deal. Aggravating factors can also be relevant to the Crown’s determination of whether they will offer alternative forms of justice such as a conditional discharge.

Aggravating factors also play an important role in sentencing. Once convicted, both the Crown and your lawyer will have the opportunity to make submissions on what sentence is most appropriate. Importantly, section 718.2(a) of the Criminal Code  states that judges must consider both aggravating and mitigating factors before a decision is made on sentencing. Generally, aggravating and mitigating factors are relevant in two key aspects of sentencing:

1. The gravity of the offence (on the basis of the offender’s culpability and the harm cause)
2. The ways in which the character and conduct of the accused relate to sentencing objectives

Any factors or circumstances that might affect how the court views the gravity of the offence or the character and conduct of the offender should be brought to the attention of your counsel as soon as possible.

Are Aggravating Factors Part of the Court Record?

Anything brought up or discussed during trial will become part of the court record because it will have been recorded in the transcripts of the trial. In addition, because aggravating factors are often part of the offence itself, they will end up in the court record.

Aggravating factors can also become part of the court record through the discovery process. The discovery process occurs before trial and entails each side collecting, disclosing and exchanging evidence that is relevant to the case.

It is important to bear in mind that the Crown must prove aggravating factors beyond a reasonable doubt if they are to be used during the sentencing of the accused.

Mitigating Factors

There are certain mitigating factors that the court will take into consideration including:

• “Substantial recovery” of the proceeds that were obtained through the dishonest conduct
• Voluntary repayment of restitution before sentencing
• Honest motive, including a medical condition, addiction, or other motivating cause other than greed or financial gain
• Major personal impact from offence, such as loss of job
• Strong ties to the community
• Being a first-time offender
• Youthfulness of the offender

In addition to the factors listed above, your lawyer can draw attention to facts about your background and character. This may help in convincing the Crown to pursue a more lenient sentence from the judge. The contextual circumstances before an accused committed criminal acts along with their general character will be considered when determining the most appropriate remedy.

Mitigating factors are used to determine the remedy sought as well as to advocate for a more lenient sentence.

At What Point are Mitigating Factors Important?

Similar to aggravating factors, mitigating factors are relevant before trial commences because they might affect the Crown’s decision on how to proceed with the case. More specifically, mitigating factors are relevant in the Crown’s position on offering plea deals and whether they will consider alternative sanctions or remedies. Your lawyer should be diligent in presenting any mitigating factors to the Crown as soon as possible.

Mitigating factors are also important once an accused has been convicted. Upon conviction, a judge will consider aggravating and mitigating factors pertaining to both the crime and the accused in order to determine an appropriate sentence. Pursuant to section 718.2(a) of the Criminal Code, judges must increase or decrease sentencing accordingly based on the relevant factors raised by your lawyer and the Crown.

First Offenders

What’s a First Offender?

Being charged with a criminal offence can be a shocking and traumatic experience. Upon being charged, an accused will commonly be provided with documentation stating what they have been charged with and when they are required to appear in court. In addition, the documentation may outline conditions associated with ones release. These conditions can, for example, require an individual to remain in their residence during certain hours of the day, avoid seeing certain individuals or refrain from leaving the province. In the event that an accused fails to abide by these conditions, additional charges can be pursued or bail may be revoked.

Court documents can be complex and difficult to understand which is why it is important to seek out qualified legal counsel. Our firm will ensure that you understand the charges against you and their potential consequences so that you can make an informed decision in obtaining the most desirable outcome.

When police lay a charge against an accused, irrespective of whether or not they have a prior criminal record, it is important to know that the following things will occur:

• The charge being laid against the accused will be recorded in the police database, which is oftentimes shared with other law enforcement agencies.
• The police will make a record of the accused’s form of release as well as any relevant conditions associated with the release.
• The accused will be provided with a court date. Failing to appear in court may result in a warrant being issued for their arrest.
• A file containing any relevant background information in addition to any evidence that will be used against you will be created by the Crown Attorney’s office. This process is referred to as disclosure and your legal counsel will receive a copy.
• Court proceedings are public and transcripts will be created detailing the matters discussed in court. As a result, when an accused appears in court, the general public can observe the proceedings.
• In most cases, an accused will be required by law to provide the police with personal photographs and finger prints for law enforcement records.

Once records are created by the police, they often remain in the police databases for a considerable period of time after the criminal matter has been resolved. If an accused has been conditionally discharged or charges have been withdrawn, record of the arrest and the charges laid may remain on file due to backlogs in law enforcement systems. Hiring a lawyer may be useful in this case in order to ensure that records are expunged. However, if an individual is convicted, the criminal record will remain on file permanently.

If you Have been Arrested and taken into Custody, What Happens Next?

When an individual is arrested, they will normally be taken to the police station. At the police station, the police will collect personal information including but not limited to finger prints and photographs. For less serious crimes, the accused is often released the same day as their arrest, subject to a “Promise to Appear” and the requirement to post bail. An offender can sometimes post bail themselves, however, in some cases, the offender will require a surety to sign their bail.

If the crime in question is more serious or if police have deemed the accused to be a flight risk, a threat to themselves or the public, the individual may be kept in police custody without bail. If an accused is held in police custody without bail, they are entitled to a bail hearing. If bail is denied at the bail hearing, an accused may be required to remain in police custody for the duration of the case.

More commonly, when an accused is released the same day as their arrest, they will receive one  or both of the following two documents:

• Form 9 – Appearance Notice
• Form 10 – Promise to Appear

What is a Form 9 – Appearance Notice?

An Appearance Notice form states that an accused has been released from police custody and lays out the charges against them. Generally speaking, an Appearance Notice must include the following information: the accused’s name, address, what they have been charged with, details regarding their respective court date and details highlighting whether or not they will be required to provide fingerprints/photographs at a police station for records.

It is important to note that an Appearance Notice is a legally binding notice requiring an individual to appear in court on a particular date. Failing to appear in court may result in a warrant being issued for the accused’s arrest which is commonly perceived as an aggravating factor in court.

What is a Form 10 – Promise to Appear?

A Promise to Appear form will contain much of the same information from the above Appearance Notice form but will also include additional details such as any conditions associated with the accused’s release. If an individual refuses to sign the Promise to Appear form, they will not be released from police custody.

Like form 9, the Promise to Appear form is legally binding and failing to comply with its requirements may lead to additional criminal charges. However, unlike an Appearance Notice, a Promise to Appear will likely include conditions set out in Form 11.1 Undertaking Given to a Police Officer or Officer in Charge. The conditions in this form are somewhat similar to bail conditions and are generally applicable until the legal proceedings have been resolved or the conditions are altered/removed. Failing to comply with any such conditions may result in additional criminal charges.

Police are given considerable authority and discretion in deciding what conditions are appropriate with respect to an individuals release. Some conditions that may be applicable include: prohibiting the consumption of alcohol, requiring the accused to reside at a particular address, informing the police in the event of an address change, keeping the peace, informing police in the event of a change in employment and the imposition of a curfew.

The conditions imposed on an accused upon release are generally specific to the criminal charge in question. In the context of fraud, a common condition requires the accused to avoid entering the establishment which they defrauded.

Remember: The documents given to you by police upon release are incredibly important and should not be misplaced. Any documents provided to you by the police should be brought to your lawyer as soon as possible.

Are Theft and Fraud the Same?

No, theft and fraud are not the same. Although both crimes include an intentional act of taking something that does not belong to the accused, fraud involves an additional component. Unlike theft, fraud also involves deceit where the individual is essentially seen as intending to conceal the unlawful act. As a result, fraud charges are often seen as more serious than theft and commonly include harsher penalties.

What are the Consequences of Having a Criminal Record?

(1) Community/Personal Life – The stigma associated with having a criminal record may damage an individuals reputation. It can also quite seriously affect an individuals personal relationships with friends and family.

(2) Employment – It is common for employers to require criminal background checks. Additionally, an individuals job skills and accomplishments may be tarnished or overlooked because of the fact that they have a criminal record. Generally speaking, the best practice is to be honest with potential employers about ones criminal record.

(3) Travel – A criminal record may also limit a persons ability to travel freely outside of Canada. Foreign jurisdictions such as the United States might refuse entry to an individual on the basis of their criminal record.  In the Unites States specifically, a waiver may be required to travel within the country for individuals with a criminal record.

(4) Immigration – Background checks are a standard procedure practiced by Citizenship and Immigration Canada before an individual can be admitted into Canada. As a result, if an individual has a criminal record, it may be substantially more difficult to apply for residency in Canada.

Quick Facts

What is the Punishment for Fraud Under $5000?

Depending on the nature of the fraud, the Crown can seek a jail sentence. The Crown will consider a number of factors, including the duration of the Fraud, the length of time over which it occurred and whether the accused was an employee. In certain cases where the mitigating factors are strong, the accused can avoid a criminal record.

How to Drop Fraud Charges?

There are a number of ways to defend fraud charges. In many cases the Crown will have video surveillance or a paper trail of the money. Sometimes this evidence is challenged by raising doubt over the identity of the fraudster in the chain of events. In other cases, the characteristics of the offender coupled with a strong defence can result in a withdrawal.

What happens if an Employee commits Fraud?

Employee frauds are prosecuted much more aggressively because there is a breach of trust. As a general rule, the court can impose a jail sentence or criminal record for these offences. In many cases, employees also make a series of admissions at work before they are fired, hoping they won't be charged. This creates a series of problems for their criminal defence, because they have already self-incriminated themselves.

What is Fraud?

A person commits fraud when they defraud an individual or corporation of money, property or services. In order to prove fraud, the Crown must establish the accused intended to commit the act in question. Video surveillance and a paper trial of money through bank records is often used to support a fraud conviction.

What if I got fooled into committing Fraud?

In many cases, frauds are done with multiple people. Sometimes, people will prey on vulnerable or unsophisticated individuals to help them engage in criminal acts. Sometimes the person caught committing the fraud was not the actual mastermind and was unaware of the scheme.

Can you Destroy Police Records for Fraud?

Depending on how your case is handled, you may be able to destroy fingerprints and photographs retained by local police. A person will need to avoid a criminal record first so its important to get legal advice early, as how your case is handled will ultimately dictate whether records can be destroyed.

Will people find out I am Charged with Fraud?

Being charged criminally is on the public record. However, in many cases a person can successfully contain whether their spouse, employer or family discover the allegations. It's important to get proper stewardship early to avoid any unwanted discovery by others and destroy criminal records as soon as possible.