Fraud

Fraud means using dishonesty — lying, tricking, or other dishonest means — to cheat someone, or the public, out of money, property, valuable security, or services. It covers many different situations, from one person being deceived to schemes that affect a whole market.

"The Crown" is the prosecutor — the government lawyer who brings the charge. To convict you of fraud, the prosecutor must prove, beyond a reasonable doubtThe standard that must be exceeded to find someone guilty, that:

1. you used deceit, a falsehood, or some other dishonest means;
2. this caused someone to lose money, property, valuable security, or services, or put those things at risk; and
3. you did so on purpose.

Fraud usually involves financial loss or the risk of financial loss. The evidence often includes records, documents, communications, or banking information.

Canada deals with criminal charges in two main ways:

• Summary convictionUsed for lesser offences — the process used for less serious cases, with lower maximum penalties.
• Indictable — the process used for more serious cases, with higher maximum penalties.

For fraud, the process depends heavily on the value involved.

Fraud over $5,000 is indictable.

Fraud of $5,000 or less is hybrid, which means the prosecutor chooses whether to proceed by indictment or by summary conviction.

Fraud penalties depend on the value involved and how the prosecutor proceeds.

Fraud over $5,000, or fraud involving a testamentary instrument such as a will, is indictable and has a maximum penalty of 14 years in prison.

Fraud of $5,000 or less can proceed by indictment or by summary conviction. If it proceeds by indictment, the maximum penalty is 2 years in prison. Lower maximums apply if it proceeds by summary conviction.

Fraud over $1,000,000 prosecuted by indictment has a two-year mandatory minimum sentence under the Criminal Code. This minimum is still in force.

When a court sentences someone for fraud, the law lists certain things it must treat as making the offence more serious. In plain terms, these include:

• how big, complicated, long-running, or carefully planned the fraud was;
• whether it could have harmed Canada's economy, financial system, financial markets, or investor confidence;
• whether there were many victims;
• whether the victims were hit especially hard because of their age, health, finances, or personal situation;
• whether the person used a position of trust or respect in the community;
• whether the person ignored a licensing requirement or professional standard; and
• whether the person hid or destroyed records connected to the fraud or where the money went.

Fraud that is meant to affect the public price of stocks, shares, merchandise, or anything offered for sale to the public is also covered by the fraud section. It is treated as an indictable offenceA more serious type of Canadian criminal offence..

The Criminal Code does not set out a specific written defence to fraud. Whether a defence applies depends on the facts and the evidence.

Possible legal issues may include whether the prosecutor can prove identity, dishonesty, intent, loss or risk of loss, or other parts of the charge. Charter issues or other legal issues may also matter in some cases. These are not automatic defences.

A criminal defence lawyer can review the evidence, especially records, communications, and financial documents, for weaknesses in the prosecutor's case.

Several offences are often confused with fraud but are separate charges with their own rules and penalties. Examples include:

• using the mail to defraud;
• manipulating stock-exchange transactions;
• insider trading;
• falsifying books and documents;
• identity theft and traffickingInfluencing the movements of a person in order to exploit them in identity information; and
• identity fraud.

Those offences should be checked on their own pages.