understanding fraud in canada
Frequently Asked Questions
Being charged with a criminal offence, including a fraud offence, can be a very stressful and unsettling situation. This is especially true for those who are unfamiliar with the Canadian justice system. Being convicted of a fraud offence in Canada has the potential to affect an individual’s life well into the future. This is due to the many ancillary consequences of having a criminal record in Canada including potential employment, immigration, and travel consequences. For example, an individual convicted of fraud in Canada may have difficulty entering the U.S. because fraud is considered a crime of moral turpitude. A fraud conviction is also likely to impact one’s ability to gain and maintain a job.
Can Someone Keep Their Fraud Charge Private?
Criminal court proceedings are open to public viewing in Canada and the decisions for many cases are made publicly available. However, there are certain things an offender can do to get some degree of privacy if they are charged with fraud. The accused individual may hire a lawyer and have a designation filed with the court that allows them to appear on the accused’s behalf. This limits the number of appearances an accused person will have to make in the courtroom. If the individual pleads guilty to the charged offence, or the case goes to trial, they must appear. Any sentencing hearings are also mandatory appearances.
Beyond hiring legal representation, defence counsel can also apply for a publication ban under s. 517 of the Criminal Code. Publication bans prevent any evidence, information on the matter, or reasons given by a judge to be published by the media or any other party until the accused is either discharged or the trial has ended.
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The Firm also has significant experience defending individuals accused of committing fraud in the context of an employment situation. Theft or fraud that occurs in the context of an employment situation is always seen as aggravating by the courts. This is due to the position of trust and authority an employee is placed in by their employer. Abusing such a position of trust or authority will typically factor into a hasher penalty on sentencing.
What Other Orders can a Judge Make when Sentencing an Offender for Fraud?
While sentencing an individual for fraud, a judge can make an additional order, known as an ancillary order. Specifically, the order for fraud is a prohibition order authorized by s. 380.2(1) of the Code. This order prohibits an offender convicted of fraud or discharged conditionally from, “seeking, obtaining or continuing any employment, or becoming or being a volunteer in any capacity, that involves having authority over the real property, money or valuable security of another person.”
The terms of such an order can be varied depending on the circumstances of each case. At most, the order can prevent an offender from holding such a position for life. An example of this type of order can be seen in the Ontario Superior Court of Justice case of R. v. Scribnock 2017 CanLII 13988 (ON SC). Here, the offender was a financial advisor who defrauded several of their friends and clients out of millions of dollars. The offender abused the trust of his friends and took advantage of his position in the community to commit the fraud. As such, the judge issued a lifetime prohibition order.
Punishments for Fraud Depend on the Value of the Property
In recent years, the internet has made it easier and easier to commit fraud offences. Common scams like phishing scams, selling fake products online, or pretending to be another person to request money are all common scams. In some cases, those who are charged with fraud have been tricked themselves into participating in the scheme. For the Crown to prove a fraud charge, they must prove that the accused was aware of, or willfully blind to the fact that they were committing fraud. An individual who was dupped into participating in a fraud scheme may have a viable defence if they can show that they had no knowledge of the scheme.
How do the Police Interrogate Someone Suspected of Fraud?
Fraud is a difficult offence to prove, as the Crown must prove that the accused knowingly deceived or tricked a victim into parting with their money or other valuable property. Proving a person’s knowledge and intention requires convincing evidence. When the police question a person suspected of fraud, it is not uncommon for the police to lead the accused to believe that they have evidence of the offence in their possession that does not actually exist. Police may use this tactic to compel the accused to confess to committing the offence to save time and resources that would otherwise be spent on investigation.
In Canada, any person has the right to counsel once they have been arrested for an offence according to s. 10(b) of the Canadian Charter of Rights and Freedoms. The police must allow the accused to contact a lawyer to receive legal advice prior to any questioning. Although, there is no right to have a lawyer present with the accused during questioning. If the right to counsel and other enshrined rights are respected, the police have a great degree of freedom to conduct questioning as they see fit.
How to Defend Fraud Under $5000
Donich Law has over a decade of experience representing individuals charged with various fraud offences across Ontario. We utilize risk management and litigation skills to obtain favourable results for our clients, in many cases resolving matters without a criminal record. When determining the appropriate sentence for an individual convicted of a fraud offence, the court will look at number of factors including the background of the accused and the nature and circumstances of the offence. Experienced legal counsel will be able to present the accused in the best light possible to ensure the best outcome in the case.
Will Someone Have to Repay the Value of a Fraud?
When an individual has committed a successful fraud offence, they will have to surrender the money or other property they have received from the scheme. The court can order the property associated with or the proceeds of a crime to be seized and disposed by the Crown according to the law. If the subject of the fraud is not recoverable or has been damaged, the offender may have to pay a fine in lieu of forfeiture instead.
Restitution orders can also be made which would require an offender to pay back the value of a fraud directly to a victim. However, restitution is not guaranteed. The Crown will often consult with the victim on whether they wish to seek restitution. If the victim wants such an order imposed, the court will generally grant the order.
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Our Experience
R. v. A.L. [2017]
In 2017, the Firm represented an individual charged with fraud under $5,000 in R. v. A.L. [2017]. The client was charged after police alleged that he had sold fake concert tickets to two young individual’s years prior. The incident was reported by the victims of the fraud. Police used forensic accounting to trace the Kijiji ad to the accused’s bank account, ultimately finding his contact information and address. Given that fraud is a hybrid offence, the Crown was able to prosecute the client even years after the alleged incident occurred by simply electing to proceed by indictment. The Firm uncovered deficiencies in the Crown’s case and exploited that to secure a withdrawal of all charges.
R. v. A.N. [2013]
In 2013, the Firm represented an individual who was dupped into attempting to cash a fraudulent bank draft from a publicly traded company in R. v. A.N. [2013]. The individual was charged with several counts of fraud, possession of property obtained by crime, and uttering forged documents. The individual was contacted by police and arrested after he attended the Royal Bank of Canada and attempted to cash a $56,000 bank draft. Fraud detection employees at the bank flagged the transaction after it raised concern. The Firm analysed the evidence provided by the Crown and gathered evidence of its own to show that the accused was completely unaware that the funds were stolen. Unable to prove the necessary intent in light of the new evidence presented, the Crown withdrew the fraud, uttering forged documents, and possession of property obtained by crime charges.
R. v. S.C. [2015]
In 2015, the Firm successfully defended a client accused of committing large scale fraud against her employer in R. v. S.C. [2015]. The prosecutor in this case alleged that the accused and two other individuals had defrauded Home Sense out of more than $60,000 over a period of time. The accused, an employee at the store, allegedly developed a scheme with another employee to pretend to scan items for a customer who was also in on the scheme, and then allow the customer to leave the store without paying for the items. Loss prevention staff at the store obtained the license plate number of the alleged customer and used it discover the identity of the customer. A search warrant was then executed on the customer’s residence, uncovering some of the stolen merchandise. The Firm collected evidence to show that the client was only minimally involved in the scheme, successfully shifting blame on to the other guilty parties. The Firm successfully resolved the case without a criminal record for the accused, which is rare in a case involving this level of fraud in an employment context.
R. v. R.A. [2022]
In 2022, the Firm represented a second time offender charged with fraud over $5,000, identity theft, utter forged documents, and possession, sale, etc., of identity documents in R. v. R.A. [2022]. The client was charged after attempting to cash a fraudulent $40,000 money order using a fake ID. The police were contacted after the transactions raised concerns and it was determined that the ID card and money order were both fraudulent. Given the high value of the fraud and the fact that the client was a second time offender, the Crown took a harsh stance on sentencing and pushed for a jail sentence. The Firm avoided a jail sentence and secured the withdrawal of the three most serious offences.
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Recent Cases
R. v. Watts, 2019 ONSC 7472
The Ontario Superior Court of Justice case of R. v. Watts concerns an offender who was convicted of fraud over $5,000 for preparing 241 false tax returns and ordered to pay a fine in lieu of forfeiture in the amount of $149,129.11 in 2016. The offender had until 2019 to pay the fine and did not do so. The fine was meant to be paid with the proceeds of the sale of a home bought with the proceeds of the crime. However, the offender’s wife refused to allow it despite being fully aware of the order.
The offender applied to have the timeline to pay the fine extended, but the judge determined that there was no authority to do that. Instead, it may have been true that the offender had a reasonable excuse in the circumstances to not pay the fine. However, the judge found that the Crown had the option to use the civil court system to enforce and collect the amount of the fine. [at para 22]
R. v. Deveau, 2020 BCPC 44
The Provincial Court of British Columbia case of R. v. Deveau dealt with an offender that was convicted of fraud over $5,000 and sentenced to one year imprisonment and 18 months of probation. The judge also ordered over $200,000 be paid to the victim as restitution for the fraud. The circumstances of the offence were that the offender was the bookkeeper for the victim’s small plumbing business. They had access to all the company’s funds and finances and defrauded the company out of thousands of dollars over several years. The offender also cashed three more fraudulent cheques after the scheme was discovered and their employment was terminated.
The judge outlined several key factors that justified the sentence imposed in this case, “It is a lot of coming and going from the workplace, taking that money, knowing that money was not yours, facing those people every single day, and acting as if nothing was wrong and that you were simply doing your job and taking your pay for that job. So the length and degree of the fraudulent activity is an aggravating circumstance in this case. As well, pursuant to s. (c.1) this is an offence that has had, I find, a significant impact on the victims given their personal circumstances including, in the case of Mr. Wade Sr., his age, his health, and the financial situation of the company. This fraud involved a lot of money. Aside from these aggravating circumstances, there is the breach of trust in this case. All of the cases before me indicate this too is an aggravating circumstance on a sentence for this offence.” [at paras 21-22] This quote demonstrates that the specifics of a scheme and the direct impact on the victims are factors that play directly into sentencing decisions.
R. v. Barker, 2019 NSPC 24
The Provincial Court of Nova Scotia case of R. v. Barker was a case of defrauding the elderly. The offenders were a husband and wife convicted of two counts each of fraud over $5,000. The victim was the wife’s mother, an 83-year-old woman with dementia and was in need of constant care. The offenders had the victim sign several contracts for financial services even though she did not have the mental capacity to enter them. The offenders then claimed all the profits from those contracts.
The judge sentenced the offenders to three years probation with strict conditions, including an initial six-month conditional sentence. The most relevant factor to punishment in this case was the abuse of an elder who was in a position of trust with the offenders. Canadian law often issues strict penalties in cases such as this to highlight the need to protect society’s most vulnerable people. “And so, no, the Barkers did not employ violence. Nor did they exploit children, nor plunder cultural property, nor act on behest of a criminal organization. But they did abuse the trust of an elderly and vulnerable family member who was dependent upon them for her care; they exploited her to their gain and to her great financial detriment. That is serious enough. [at paras 14-15]
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About the Author
Jordan Donich
Jordan Donich has been a Lawyer for over 10 years and is a trusted legal analyst by Canadian Media. He is as a leader in Canada’s tech sector for lawyers and developer of Law Newbie. Jordan is a Black Belt with the Japan Karate Association and trained in Krav Maga. He won a Gold Medal at 2004 Canadian National Championships and was published in the National Newspaper Awards.
Jordan has been featured in Forbes and is a member of DMZ Angels in Toronto.