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FRAUD

Overview of Fraud

Fraud is an offence which is comparable to theft; however it requires an element of deceit or a false representation such as attempting to defraud the public, or any person, of their property, money, or any valuable service (Criminal Code of Canada, s. 380(1)).

The varying levels within the category of fraud offences are similar to that of theft, in that the severity is determined by the value out of what the victim (or potential victim(s)) are being defrauded.

Thus, fraud can be divided into two different levels: fraud where the value exceeds five thousand dollars and is typically considered an indictable offence, or fraud where the subject matter is less than five thousand dollars and is punishable on summary conviction (Criminal Code of Canada, s. 380(a), (b)). Within both categories, aggravating circumstances include whether or not the public is being targeted, and the magnitude of harm.

Fraud under $5,000

A fraud under five thousand dollars offence is typically of a lower scale and can range in sophistication. Fraud under five thousand dollars usually proceeds under summary conviction (Criminal Code, s. 380(b)(ii)) and dependent on the circumstances of the offence, may or may not carry with it a sentence which includes imprisonment. Fraud can take place where a shop owner misrepresents a product to one of their customers by overstating its value or deceiving them as to its purpose. Consider a landscaping company that is contracted to build a deck, and instead of using new lumber uses old or previously used supplies in order to save money and thus defraud their client. Aside from the potential tax implications which may have taken place, the misrepresentation of value of the goods or services could constitute fraud.

Many of those charged with low level fraud are first time offenders who likely operate legitimate businesses, and because of this may have a lot to lose if their charge is not handled properly. Seeking proper counsel is imperative in this situation in order to achieve the best result possible and to control the damage it may cause to your future. For those who have had prior interactions with the legal system for theft or fraud, imprisonment may be contemplated by the Crown. Therefore it is very important to obtain counsel.

 

Handling the charge

Being convicted of fraud (whether over or under $5,000) could be damaging both in terms of reputation and incarceration. A strategically sound course of action when dealing with a fraud charge could mean the difference between a sentence of imprisonment or something much less severe. In most cases, the accused’s intentions at the relevant time will be central to whether a defence exists; however it is dependent on the circumstances and variety of potentially aggravating factors.

Fraud over $5,000

Fraud over five thousand dollars, although perhaps not as common as its less serious “under $5,000” counterpart, nonetheless does commonly take place in a variety of different ways. Fraud over five thousand dollars carries with it a maximum penalty of fourteen years imprisonment, and beneath that the likely sentence is escalated by the value of what is being defrauded, among other factors (Criminal Code, s. 380.1). Although a fraud offence where the value of the property or services is considered to exceed five thousand dollars carries with it a considerably lengthy maximum sentence, the prosecution may move to proceed under summary conviction.

Aggravating and non-mitigating factors for sentencing those indicted on fraud charged are set out in section 380.1 of the Criminal Code:

  1. the magnitude, complexity, duration and degree of planning;
  2. whether the offence affected the Canadian economy or the financial market;
  3. it affected a large number of victims (and also given the victims circumstances e.g. their age, health and financial situation);
  4. the offender exploited their high regard or reputation within the community;
  5. they did not comply with regulations or professional standards
  6. the offender concealed or destroyed records related to the fraud or to the disbursement of the proceeds of the offence

(Criminal Code of Canada s. 380.1, ss (a-f))

It should be noted that the court shall not consider as a mitigating circumstance that the offender was exceptional at their job, or their status or reputation in the community if the aforementioned factors played a part in the fraud (Criminal Code, s. 380.1(2)). Conditional sentencing is a possibility with fraud over five thousand charges, however where the aforementioned aggravating factors begin to mount, imprisonment may be the likely outcome as prosecution will likely seek a more punitive sentence. It is very important to have an experienced defence lawyer at your side to work with you to achieve the best outcome possible.