Frequently Asked Questions
What is Fraud?
Fraud is a criminal offence in Canada, dealt with under s. 380 of the Criminal Code. To commit fraud a person must knowingly trick or deceive another person into giving them money or other goods and services. For example, if Person A agrees to sell Person B a fully functioning car, but knows the car is missing several key parts and completes the sale anyway, that is an example of fraud. It is important to note that the law does not require the victim to realize that they are a victim of fraud for an offence to occur.
Another example of fraud can be found in the Ontario Court of Justice case of R. v. Reid, 2021 ONCJ 149. That case concerned an offender who took their son’s place as driver of a vehicle following a collision. The son had been driving without a license. In the aftermath of the collision, the offender successfully sued their insurance company for injuries they claimed to have received from the collision. Receiving money from the insurance company as part of the lawsuit even though the offender’s claim was deliberately false was the fraudulent act in this case.
What is the Difference Between Fraud and Theft?
Theft is an offence under s. 322 of the Code. Unlike fraud, the act of theft does not primarily focus on knowingly deceiving or tricking someone into giving away their money or property. Instead, the offence of theft occurs when someone takes something that they have no right to own. It is the physical act of taking the property that constitutes theft and a theft is done when someone has the intent to steal something and begins to move it or causes it to become movable. Furthermore, a theft does not have to be done in secret to be considered a theft.
A theft can involve a thief taking something as simple as another person’s shoes or taking them and then wearing them themselves. A theft can cover a wide range of results. The offence can be established so long as a person takes something that they have no right to have and they either: intend to keep it from the true owner, even temporarily; use the stolen goods to acquire something else; give it to someone else without being able to get it back; or take the goods to permanently damage or destroy them.
Does Someone Have to Return the Money or Goods Received from Fraud if They are Convicted?
A person convicted of fraud in Toronto may have to relinquish any goods received from the fraud. The Crown may ask a judge to issue a forfeiture order to force the offender to give up any money or property they received as proceeds of their crime. This can be accomplished with an application made according to s. 462.37 of the Code. The property would then be sold, and the proceeds given to the victim or any person that has a legal interest in the property.
For example, the bank that issued a mortgage on a piece of real estate. If some proceeds of the crime are unrecoverable because they have been sold or are no longer in the possession of the offender or someone with knowledge of the crime, a judge may order the offender to pay a fine equal to the value of the missing goods. If an offender fails to repay such a fine, they will face an additional period of imprisonment.
An example of a forfeiture order can be found in the Ontario Court of Justice case of R. v. Cady, 2021 ONCJ 722. After the offender defrauded her employer out of over $1,000,000 by altering cheques and electronic funds transfers, a judge ordered the forfeiture of the goods bought with that money. They included 7 vehicles and one piece of land. The property was given to the Crown, with the mortgagor intitled to an amount from the sale of the seized land that satisfied the terms of the loan. The same consideration was made for a financing company that held a lease on one of the vehicles.
What are Restitution Orders in Toronto?
It is also possible for a court to order the offender to pay the victim of a fraud back the amount they had been defrauded directly using a restitution order. A restitution order can be made on the Crown’s request after they have consulted with the victim. If the victim wants to be compensated, a judge will make the order.
If a restitution order is made, a criminal court will not enforce it. If the offender does not pay, it will be the victim’s responsibility to take the matter to a civil court. In some cases, the victim may get a ruling from a civil court to garnish a portion of the offender’s future wages until restitution is paid in full. The standard of proof in a civil court is lower than a criminal court, so getting a civil ruling based on a previous criminal conviction is straightforward. It is important to know that the amount a person is seeking in restitution in Toronto, and Ontario generally, restricts which civil courts are open to them. Amounts under $35,000 are dealt with in Small Claims Court, and any amount greater than that are the jurisdiction of the Superior Court of Justice.
What if Someone Did Not Receive Money from Their Fraudulent Actions?
Even if a person does not receive any money from an attempted fraud, they may still be convicted for fraud. The Crown can establish an offence when a person has the necessary intent to commit fraud and engages in behaviour that subjects the victim to a risk of loss. For example, if an offender acquires a cheque from a victim and attempts to cash it at a bank but is stopped by a teller, that is sufficient risk to establish that fraud has occurred.
The Saskatchewan Court of Queen’s Bench case of R. v. Baker, 1998 CanLII 13818 (SK KB) clearly establishes this requirement at paragraph 72, “In the end, as soon as a victim suffers a loss or some risk of loss or other prejudice to his/her economic interests by the fraudulent conduct of the accused, the offence of fraud is complete as long as the evidence establishes that the accused intentionally committed the conduct with an awareness of what he was doing and that a likely consequence of that would or could be deprivation.