QUICK TAKEAWAY
Fraud: If you use “deceit, falsehood or other fraudulent means” to gain money or property, you can be charged with fraud. With basic fraud, the penalties increase substantially for amounts above $5,000, with 14-year prison sentences possible. If you are accused of fraud, defences include that you were unaware of the illegality of your actions or that the other party’s loss cannot be proven.
Table of Contents:
What is Fraud in Canada?
Section 380 of the Code states that anyone who uses "deceit, falsehood or other fraudulent means" to defraud the public or a person of money or property can be charged with fraud. There are numerous types of fraud charges listed in the Criminal Code, with the common ones and their penalties detailed below.
Fraud Over $5,000
Section 380 of the Code states that if you are found guilty of fraud over $5,000 it will be treated as an indictable offenceIndictable offences are more-serious criminal offences with a maximum penalty of 14 years in prison. If the court determines you intended to influence the market price of stocks, shares or anything that is offered for sale to the public, that is treated as an indictable offence with a maximum sentence of 14 years.
Fraud Under $5,000
If the alleged fraud is valued at less than $5,000, the Crown has the option of treating it as a summary convictionUsed for lesser offences with a less severe penalty imposed.
In determining a sentence for fraud, the court will consider these aggravating circumstances:
- the magnitude, complexity, duration or degree of planning that was involved;
- the number of victims and if the fraud significantly affected their health and finances;
- if you took advantage of the "high regard" you were held in by others in the community;
- If you concealed or destroyed records related to the fraud.
Using the Mail to Defraud
Section 381 of the Code makes it illegal for you to use the mail to deliver letters aimed at deceiving or defrauding the public or to obtain money under false pretences. If found guilty of this charge as an indictable offence, you face a maximum of two years imprisonment, with lesser sentences given for charges treated as summary convictions.
Fraudulent Manipulation of Stock Exchange Transactions
Section 382 of the Code makes it illegal for you to mislead the public about stocks and securities being publicly traded. If you are found guilty of an indictable offence the maximum penalty is 10 years in prison, with lesser sentences given for charges treated as summary convictions.
Prohibited Insider Trading
Section 382 of the Code makes it an offence for you to buy or sell a security using inside information (insider tradingThe buying or selling of a stock by someone who has inside knowledge). This law applies to shareholders, those involved in a company takeover or merger, those who work at the firm or anyone who obtained information from someone in those positions. If the Crown proceeds as an indictable offence you face a maximum of 10 years in prison, with lesser sentences given to those with a charge treated as a summary conviction.
Falsification of Books and Documents
Section 397 of the Code makes it an offence for you to destroy, alter or falsify any documentation related to a security or document. If you are found guilty of an indictable offence, the maximum penalty is five years in prison, with lesser sentences given for charges treated as summary convictions.
Identity Theft/Trafficking in Identity Information
Section 402 of the Code makes it an offence to obtain or possess another person's identification with the intention of using that to commit an indictable offence such as fraud. Identify information includes: a fingerprint, voice print, retina image, iris image, DNA profile, name, address, date of birth, written signature, electronic signature, digital signature, user name, credit card number, debit card number, financial institution account number, passport number, Social Insurance Number, health insurance number, driver's licence number or password.
A related charge is trafficking in Identity Information. You can be convicted of that if you are guilty of selling another person's information to allow others to commit an indictable offence such as fraud.
Both charges can be treated as indictable offences with a maximum sentence of five years in prison, with less severe sentences given if the charge is treated as a summary conviction.
Identity Fraud
Section 403 of the Code makes it an offence for you to impersonate someone else and use that person's identity information to:
- gain some advantage for your or someone else;
- obtain any property or an interest in any property;
- cause disadvantage to the person being personated or another person; or
- to avoid arrest or prosecution or to obstruct the course of justice.
If you are found guilty of an indictable offence the maximum penalty is 10 years in prison, with lesser sentences given for charges treated as summary convictions.
November 17, 2022
Update: Bill C-5: Mandatory Minimum Penalties Repealed.
What is Needed to Convict
For the court to find you guilty of fraud the Crown prosecutorLawyers who prosecutes charges on behalf of the Crown must demonstrate beyond a reasonable doubt that “by deceit, falsehood or other fraudulent means” you defrauded another person or a company. In many cases, the Crown’s evidence will be financial records and documents, which your defence lawyer can analyze for inconsistencies. The Crown must also prove that a financial loss occurred and that you purposefully committed some action to cause that to happen.
In many fraud cases, the Crown’s evidence will likely be financial records. An essential element of a fraud conviction is proving that the victim suffered a loss. If that loss cannot be shown, the Crown’s case is weakened.
Insights from a
Defence Lawyer
CCH VERIFIEDCéline Dostaler
Insights from Ottawa Lawyer, Céline Dostaler
Building a Defence Against Fraud Charges
The evidence used against you can significantly impact the outcome of your fraud case. I'll closely examine the process by which the police obtained any production orders and search warrants. If there were any errors made during this process, I would work to exclude any evidence that was unlawfully seized. I have successfully made many applications to exclude evidence in the past.
In many fraud cases, charges are laid even if the accused had 'no intent' to defraud. This can happen if a business deal or investment collapses for reasons that are unrelated to fraud. However, if the accused did not intend to defraud or were unaware of the risks involved in their actions, they have a defence against the charges.
With my close working relationship with both Specialized Prosecutions and General Prosecutions, I have a track record of successfully having my clients' fraud charges withdrawn or reduced before the stress and expense of a trial. In these cases, I can present defence evidence to the assigned Crown Prosecutor without prejudice. This means that any information or evidence discussed cannot be used against my client at trial.
Click to Call Celine Dostaler: (613) 863-8595
Glossary of Legal Terms
Crown prosecutor
Lawyers who act for the federal, provincial and territorial governments and prosecute people accused of crimes on behalf of the Crown.
Indictable offence
Indictable offences are the most serious offences under the Criminal Code and they come with more serious punishments, up to a maximum penalty of life in prison.
Insider trading
The buying or selling of a publicly traded company's stock by someone who has non-public, material information about that stock.
Summary conviction
Summary convictions are used for lesser offences with penalties, fines and short jail time. They reflect the majority of offences as defined in the Code.
