Workplace Theft and Breach of Trust

Stealing from one’s employer is a very serious matter which can result in severe consequences for those who are caught and convicted. Those who are caught stealing from their place of employment will almost certainly be terminated. In addition, their employer may report them to the police and to the relevant professional regulatory body if the employee was a regulated professional. Theft from one’s employer is seen as particularly aggravating due to the position of trust employees hold. Click here for more information on the punishments for stealing from work.

In 2021, the Firm successfully defended an individual charged with theft over $5,000 and falsifying employee records in R. v. K.S. [2021]. The accused was charged after allegedly committing time theft by falsifying time records for close to $15,000.00. Police traced the IP address used to make changes to the time records and linked it to the accused. The case was further complicated by the fact that the accused was in the process of becoming a Canadian citizen. The Firm was ultimately able to secure a withdrawal of the charges after presenting evidence that the accused had in fact been completing work from home and by raising concerns with evidence presented by another staff member with a previous conviction for fraud.

The Firm has extensive experience defending employees charged with sophisticated internal financial crimes. In the Firm’s R. v. E.K. [2020], it secured a withdrawal of a $30,000.00 internal theft related to merchandise being allegedly stolen from a factory. The scheme was conducted by a manager and junior employee, including the family members of staff who were allegedly helping move the product. In 2018, the Firm stayed nine (9) charges of money laundering foreign proceeds of crime from the United States in an estimated $1,000,000.00 internal Gold Bullion fraud. Cash was allegedly being stolen from senior citizens and converted to Gold in its R. v. Z.U. [2018]. In the Firm’s S. G. [2020], it resolved a $53,423.00 USD internal fraud allegation from Roots Canada without a criminal record. The employee was allegedly creating forged documents to divert company money to fake companies. In July 2017, the Firm resolved an $18,500.00 cash theft from a CIBC bank employee on the job without a record, in its R. v. D.D. [2017]. In April, 2019, the Firm resolved a $170,000.00 combined civil and criminal internal employee fraud allegation without a criminal record in its R. v. O.I. [2019]. The employee was allegedly refunding false transactions to credit cards.

The Firm has also increasingly represented concerned employees during an internal theft investigation. Employees have contacted the Firm where they suspect they will soon be investigated to best prepare themselves and safeguard their legal interests. Unlike law enforcement, an employee actually has much less legal protection and rights with an internal loss prevention investigator. Anything said to corporate security will be documented and ultimately provided to police, should criminal charges be pursued. If an employee makes self-incriminating statements, signs any admissions or provide any evidence to their employer, it significantly decreases the ability of the defence lawyer to later combat criminal charges. Resigning, attempting to “get ahead” of things or running away also have negative implications because an adverse inference may be drawn.

In the Firm’s File No. 38****2, it discreetly defended an employee in 2020 under investigation for missing company property close to $10,000 in value. The Firm did not reveal itself to the employer and was able to guide the employee through the internal investigation with international corporate security without any criminal charges, including saving their employment.

In the Firm’s File No. 28****2 it assisted an employee at the Rogers Centre with an internal theft investigation related to missing merchandise. The company was conducting an audit and reviewing video surveillance. The employee was not arrested and maintained his employment.

In the Firm’s File No. 58****1 it discreetly assisted a long standing employee related to a complex kick back scheme. The employee was interviewed multiple times, the company attempted to seize property and the investigation was ultimately resolved without any criminal charges.

In February 2021, the Firm defended a Canada Post employee alleged to have defrauded Sun Life $8000.00 in its Case No. 03****2. The matter was referred to Ottawa Police by Sun Life and the accused contacted for investigation. The Firm prepared the employee for interrogation over on three separate occasions. The Firm was able to challenge the alleged false claims and ultimately saved the accused’s employment after negotiations with national legal counsel, including avoiding criminal charges.

In 2021, the Firm defended a retail manger under investigation for an internal theft of company property in its File No. 52****9. The employee contacted the Firm immediately and prior to meeting with their employer. The Firm worked behind the employee anonymously during the investigation where the matter was ultimately resolved without reporting to law enforcement or any factual finding of internal theft.

While there is no specific criminal offence for stealing from one’s employer, there are several different offences such an individual may be charged with. Those caught stealing from their employer may be charged with any of the following offences:

• Theft Over $5,000
• Theft Under $5,000
• Fraud Over $5,000
• Fraud Under $5,000
• Possession of Property Obtained by Crime

Consequences of Stealing from Work

Most commonly, those who are caught stealing from their employer will be charged with theft. The value of the items taken will determine whether the accused is charged with theft over $5,000 or theft under $5,000. Crown counsel will treat the employer-employee relationship as an aggravating factor in the case, due to the accused’s position of trust.

Theft is a hybrid offence meaning the Crown may elect to proceed summarily or by indictment depending on the nature and severity of the allegations. Where the allegations are serious, the Crown will often proceed by indictment. In all other cases, the Crown will proceed summarily. This election will determine, among other things, the maximum penalty that may be imposed on the accused should they be convicted. The maximum penalties for those who are convicted of theft range from two years less a day imprisonment to up to ten years’ imprisonment in the most serious cases.

Stealing from your employer is a very serious matter. Those who steal from their employer or from a client may be arrested and charged with theft or fraud. While there is no separate offence in the Criminal Code for stealing from or defrauding one’s employer, the court views this as an aggravating factor when determining sentence.

Those who are convicted of stealing from or defrauding their employer or a client will generally face increased penalties compared to offenders who stole from or defrauded someone unrelated to them.

This is because there is a breach of trust when stealing from one’s employer or client. The court views breaches of trust of this nature as aggravating, especially where an accused is alleged to have abused their position of authority within the company to commit the offence. This is illustrated in the following cases.

In the case of R. v. Mathur, 2017 ONCA 403, the Ontario Court of Appeal upheld a 12-month prison sentence imposed on an individual convicted of one count of fraud over $5,000.00. The offender, an accountant and real estate broker, was charged after his client’s discovered he had been using their social insurance numbers and birth dates, without consent, to generate false tax returns. In total the offender received $35,321.00 using his client’s information.

The Court of Appeal upheld the 12-month jail sentence despite the offender’s age (65) and the fact that he had no prior criminal history, highlighting the seriousness of the breach of trust. The court reasoned that with a breach of trust of this nature, the primary sentencing objective is specific deterrence (deterring the offender from re-offending in the future), with rehabilitation being a secondary factor. This means that the court is more likely to impose a period of incarceration to ensure the individual offender is deterred from committing a similar act in the future.

In the case of R. v. Mohenu, 2019 ONCA 291, the Ontario Court of Appeal upheld a custodial sentence for a young offender convicted of two counts of fraud over $5,000.00. The offender was charged after her employer, a large retail store, discovered she had taken more than $30,000.00 from the company while working at the customer service desk.

After being convicted at trial, the offender appealed, arguing that a custodial sentence was improper given her age and the fact that she was a first-time offender. The court reasoned that given that the offence was not violent in nature, the primary sentencing objectives should be specific deterrence (deterring the offender from re-offending in the future) and rehabilitation.

The Ontario Court of Appeal agreed that the trial judge had erred in failing to place specific deterrence and rehabilitation at the forefront of the sentencing objectives when arriving at the sentence. In taking these factors into consideration, the Court of Appeal granted the appeal, varying the sentence from nine months imprisonment to 90-days to be served intermittently (on the weekends). The offender was ordered to pay $28,000.00 in restitution to the retailer.

The court reasoned that despite the offender being a youth at the time of the offences and having no prior criminal history, the breach of trust associated with stealing from one’s employer is so aggravating that it warrants a term of incarceration.

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

What is Fraud at Work?
What is Time Theft?
What is Possession of Proceeds Obtained by Crime at Work?
Is the Court Process Different if the Theft occurs in the Employer/Employee Context?
-Police Discretion to Lay Charges
-Crown Screening of Charges
-Resolution of Charges
What if I Stole from my Employer and I am a Regulated Professional?
Will a Conviction for Stealing from my Employer affect other Aspects of my Life?

Additional Resources

Sentencing Factors
Keeping Your Charges Private
Release from Police Custody
Resolving Shoplifting Charges
U.S. Waivers
Vulnerable Sector Screening
Consequences of a Criminal Record
Immigration Consequences
Elements of a Crime
Your Rights

What is Fraud at Work?

In some cases when an employee is caught stealing, they will be charged with fraud. This is generally the case where the employee has taken active steps to cover up their actions, including using deceit, falsehood or other fraudulent means. The value of the fraud will determine whether the employee is charged with fraud over $5,000 or fraud under $5,000.

Fraud is a hybrid offence meaning the Crown may elect to proceed summarily or by indictment depending on the nature and severity of the allegations. Where the allegations are serious, the Crown will often proceed by indictment. In all other cases, the Crown will proceed summarily. This election will determine, among other things, the maximum penalty that may be imposed on the accused should they be convicted. The maximum penalties for those convicted of fraud range from two years less a day imprisonment to up to fourteen years’ imprisonment in the most serious cases.

What is Time Theft?

Time theft occurs when an employee is paid for hours they did not work. Time theft may occur in many different ways. An employee may commit time theft by manually altering records at their place of employment to reflect additional hours that were not earned. In other circumstances, an employee may commit time theft by taking longer breaks than permitted or by completing personal tasks on company time. Time theft is primarily applicable to individuals who are paid on an hourly basis but can also apply to individuals paid a salary.

Time theft is a criminal offence in Canada and will result in termination of the employee in most cases. Those who are caught committing time theft may be arrested and charged with theft under section 322 of the Criminal Code. Where the value of the hours stolen exceeds $5,000 the employee may be charged with theft over $5,000. Where the value of the hours does not exceed $5,000, the employee may be charged with theft under $5,000. An employee caught committing time theft may also face charges of falsifying employment records if they have taken steps to alter documents in order to be paid for hours not worked.

Once charged, those convicted of theft or falsifying employment records could face a period of incarceration or probation upon conviction. The employee may also be ordered by the court to pay back the hours stolen through restitution payments. Where restitution is not ordered or the impugned employee is not charged, the employer may also sue the employee in civil court in an attempt to recover the stolen wages.

What is Possession of Proceeds Obtained by Crime at Work?

In some cases, an employee who is caught stealing will be charged with possession of proceeds obtained by crime in addition to theft or fraud. This charge may be laid where the police are able to recover the stolen items or proceeds from the stolen items in the employee’s possession.

Possession of property obtained by crime is a hybrid offence meaning the Crown may elect to proceed summarily or by indictment depending on the nature and severity of the allegations. Where the allegations are serious, the Crown will often proceed by indictment. In all other cases, the Crown will proceed summarily. This election will determine, among other things, the maximum penalty that may be imposed on the accused should they be convicted. The maximum penalties for those who are convicted of possession of proceeds obtained by crime range from two years less a day imprisonment to up to ten years’ imprisonment the most serious cases.

Is the Court Process Different when Theft occurs in the Employee/Employer context?

Generally, when an employee steals from their employer and the police are involved, the employee will be charged with a criminal offence. The fact that the theft occurred in an employer/employee context may affect the path of the case through the criminal justice system.

When Police Lay Charges

When police are called due to a possible crime, they have a significant amount of discretion regarding whether or not to lay charges, and which charges to lay. Once police are contacted, they will assess the situation to determine whether or not a crime has occurred. If they determine a crime has occurred, they will assess the facts to determine which charges to lay. Once charges are laid, the case will be sent to the Crown’s office for screening.

Crown Screening

Once the Crown’s office receives a file, they will review it and conduct a “screening” of the charges. This screening will determine whether the Crown will proceed with the charges, whether they will elect to proceed summarily or by indictment when dealing with hybrid offences, and what their position on sentencing will be. All of this information will be recorded in what is known as an “Adult Screening Form” which will generally accompany initial disclosure.

When determining which election to make and what sentence is appropriate, the Crown will consider all the aggravating and mitigating factors in the case including the value of the items or money taken. Where a significant amount of money or goods was taken or where the allegations are particularly shocking, the Crown will proceed by indictment, which significantly lengthens the possible maximum penalties for those convicted. In all other cases, the Crown will proceed summarily.

Resolution of Criminal Charges

The fact that a theft occurred in an employee/employer relationship will also affect how the case is resolved. In some cases involving minor thefts, the Crown may approve an accused for a diversion program. Diversion programs allow those accused who minor offences to complete a period of probation and/or any other conditions imposed by the Direct Accountability Office after which their charges will be withdrawn. This allows the Court to impose a sentence on an accused without giving them a criminal record.

It is not uncommon for those charged with low level theft offences to be granted diversion. However, those accused of stealing from their employer may not be eligible for diversion as a result of the position of trust they held with the individual they stole from. Since Crowns have considerable discretion regarding their position on any given case, such an aggravating factor may cause the Crown assigned to the case to disregard diversion.

If an accused is convicted of fraud or theft in an employee/employer relationship, the Court will also view the relationship as an aggravating factor, which may result in a more severe sentence.

What if I Stole from my Employer and I am a Regulated Professional?

Regulated professionals such as doctors, lawyers, nurses and accountants are held to a high ethical standard due to their position of authority and relationship of trust with the public. When a regulated professional is caught stealing from their employer there is the added complication of the governing regulatory body.

In most cases, when a regulated professional is caught stealing from their employer they will be terminated, criminally charged and reported to the appropriate regulating body. The regulatory body will then open an investigation into the matter. If they determine that the individual’s behaviour rises to the level misconduct the regulating body may punish the offending professional. In almost all cases, regulatory bodies can suspend, place limits or conditions on, or remove the professional’s license and their ability to practice in their chosen field.

Will a Conviction for Stealing from my Employer Affect other Aspects of my Life?

Yes. Those who are convicted of theft or fraud in an employment context will face consequences in other aspects of their life in addition to any criminal sanctions or professional consequences for regulated professionals. Those who are convicted of a criminal offence, including fraud or theft, will often face consequences in various aspects of their lives including:

• Employment
• Travel
• Immigration

Individuals who are charged with stealing from their employer will almost always be terminated from their position of employment upon being caught. Those who are convicted will often have difficulty finding employment in the future. The majority of employers now require a criminal background check be run prior to hiring a new employee. In many cases, employers will not hire an individual with a criminal record. This can make it difficult for those convicted of theft or fraud to attain gainful employment in the future. Such a conviction may also limit such an individual’s ability to work or volunteer with certain vulnerable populations.

Those convicted of stealing from their employer may also face difficulty traveling outside of Canada. Many countries throughout the world refuse entry to those with a criminal history. This is especially true of the United States, who regularly turns away travelers with even minor criminal records.

Being convicted of a criminal offence, even a minor criminal offence, can also impact an individual’s immigration status. Citizenship, Immigration and Refugee Canada may delay or deny citizenship applications for those who have been convicted of a criminal offence.

If you have been charged with stealing from your employer, or suspect that you might be charged, it is important to protect your rights. Donich Law has experience defending a wide array of individuals charged with various theft, fraud and possession of proceeds obtained by crime offences and regularly obtains positive results for our clients. We have experience negotiating directly with employers as well as with the Crown and combine risk management and litigation to ensure the best outcome for our clients.