Fraud Charges in Ontario

What Is Fraud Under Canadian Law?

Section 380 of the Criminal Code addresses fraud. In general, an allegation may arise where a person is accused of using deceit, falsehood or another fraudulent means to deprive someone of money, property, a valuable security or a service.

Actual financial loss is not required in every case. The Crown may rely on evidence that the complainant’s economic interests were placed at risk.

Fraud allegations may involve:

• False or misleading representations;
• Unauthorized financial transactions;
• Misuse of money or property;
• Concealment of important information;
• False invoices or financial records;
• Online transactions;
• Insurance claims;
• Employment-related conduct;
• Business or investment arrangements; or
• Use of another person’s identifying information.

A failed transaction, unpaid debt or broken promise is not automatically criminal fraud. The Crown must prove both the prohibited conduct and the required dishonest intent.

Fraud Over $5,000 and Fraud Not Exceeding $5,000

The Criminal Code distinguishes between fraud involving property or value exceeding $5,000 and fraud involving property or value not exceeding $5,000.

Fraud Over $5,000

Fraud over $5,000 is an indictable offence. It may involve allegations concerning substantial financial transactions, business funds, investments, real estate, insurance proceeds or a series of related transactions.

The amount alleged is important, but the Crown must still prove that fraud occurred and that the accused had the required state of mind.

Fraud Not Exceeding $5,000

Where the value allegedly involved does not exceed $5,000, the Crown may proceed by indictment or by summary conviction.

These cases may involve smaller financial transactions, individual purchases, benefit payments, refunds, workplace conduct or alleged misuse of a payment method.

A charge involving a lower amount can still have serious consequences, including a criminal record, restitution and effects on employment or immigration status.

Common Types of Fraud Allegations

Fraud investigations may arise in many different circumstances.

Business and Corporate Fraud

These cases may involve allegations concerning company funds, invoices, contracts, expense claims, financial statements or the authority to complete transactions.

The defence may need to examine corporate records, internal procedures, the division of responsibilities and what information was available to the accused at the relevant time.

Employment Fraud

An employee may be accused of submitting false expenses, redirecting payments, altering records, misusing company property or receiving unauthorized compensation.

The existence of an accounting discrepancy does not by itself establish who was responsible or whether the conduct was dishonest.

Credit Card and Payment Fraud

These allegations may involve the possession or use of credit-card information, unauthorized purchases, disputed transactions, chargebacks or access to payment accounts.

Evidence may include transaction records, device information, video, location data and communications between the people involved.

Insurance Fraud

An investigation may arise from allegations that a person submitted false information, exaggerated a loss, staged an event or participated in an improper claim.

The distinction between inaccurate information, misunderstanding and deliberate deception may be important.

Online and Marketplace Fraud

Online fraud allegations may involve social-media accounts, classified advertisements, electronic transfers, cryptocurrency, online marketplaces or false identities.

The person who controlled an account, device or transaction may become an important issue. Evidence that an account was registered in a person’s name does not always establish who used it at the relevant time.

Investment Fraud

These cases may involve allegations concerning investment representations, the use of investor funds, promised returns or undisclosed risks.

Not every unsuccessful investment is fraud. The evidence must be examined to determine what was represented, what the accused knew and how the money was used.

Government Benefit Fraud

An allegation may concern information submitted in connection with employment insurance, tax benefits, income support or another government program.

The defence may examine whether inaccurate information resulted from intentional dishonesty, misunderstanding, administrative error or reliance on another person.

What Must the Crown Prove?

The Crown must prove every essential element of the alleged offence beyond a reasonable doubt.

In a fraud case, the Crown will generally need to establish:

• The identity of the accused;
• The alleged deceit, falsehood or other fraudulent means;
• That the conduct was dishonest according to the applicable legal standard;
• That the conduct caused actual deprivation or placed another person’s economic interests at risk;
• That the accused knew of the dishonest conduct; and
• That the accused knew that deprivation could result.

The prosecution must prove the accused’s subjective knowledge. Negligence, poor business judgment or failure to recognize a risk does not automatically establish the criminal intent required for fraud.

The Crown must also prove the value involved where the amount determines the level of the charge.

Evidence in a Fraud Case

Fraud cases may involve substantial documentary and electronic evidence, including:

• Bank and credit-card records;
• Contracts and invoices;
• Accounting records;
• Emails and text messages;
• Social-media communications;
• Electronic-transfer records;
• Business records;
• Insurance documents;
• Government applications;
• Computer and cellphone data;
• Security video;
• Statements from clients, employees or business partners;
• Police surveillance or undercover evidence; and
• Statements allegedly made by the accused.

The records may cover a long period and involve several people. A careful chronology can help determine who made particular decisions, who controlled relevant accounts and what the accused knew at each stage.

Electronic and Financial Records

Electronic and financial records may provide information about:

• The origin and destination of funds;
• Who had access to an account;
• When documents were created or modified;
• Communications surrounding a transaction;
• Internet Protocol addresses and device activity;
• The authority given to employees or business partners; and
• Whether funds were used consistently with the parties’ agreement.

Records must be interpreted in context. The appearance of a person’s name on an account, transfer or document does not necessarily prove that the person knowingly participated in fraud.

The defence may examine the reliability, completeness and lawful collection of the records.

Possible Defences to a Fraud Charge

The available defence depends on the allegations, evidence and circumstances. Possible issues may include the following.

Lack of Dishonesty

A commercial disagreement, unpaid debt, accounting mistake or failure to complete a contract does not automatically amount to fraud.

The evidence may show that the accused acted openly, believed the transaction was legitimate or did not engage in deceit, falsehood or other dishonest conduct.

Lack of Fraudulent Intent

The Crown must prove the required state of mind. A person may have acted carelessly, misunderstood an arrangement or relied on inaccurate information without knowingly participating in fraud.

The defence may examine whether the accused understood the transaction and knew that another person’s economic interests could be placed at risk.

Honest Mistake

An error in an application, invoice, payment or financial record may result from misunderstanding, poor recordkeeping or incorrect information provided by someone else.

An honest mistake may raise a reasonable doubt about dishonest intent.

Authority or Honest Belief in Authority

The accused may have been authorized, or may have honestly believed they were authorized, to access funds, make a transaction, use property or submit particular information.

The scope of the person’s role and the instructions they received may be important.

No Deprivation or Risk of Deprivation

Fraud generally requires proof of actual deprivation or a risk of prejudice to another person’s economic interests.

The defence may examine whether the alleged conduct created the type of deprivation required by law.

Identity

Fraud investigations sometimes begin with a name attached to an account, telephone number, device or transaction. The Crown must still prove that the accused was the person responsible for the alleged conduct.

Account sharing, identity theft, compromised devices and participation by other individuals may require examination.

Unwitting Participation

A person may be used by others to receive, transfer or deliver money without understanding the fraudulent scheme.

The fact that a person handled funds or communicated with another participant does not by itself prove knowing involvement.

Unreliable or Incomplete Records

Financial and electronic evidence may be missing, incorrectly interpreted or presented without necessary context.

The defence may examine whether the records are complete, authentic and capable of supporting the conclusions alleged by police or the Crown.

Charter Violations

Fraud investigations may involve searches of homes, offices, computers, cellphones and financial accounts. Police must comply with the Canadian Charter of Rights and Freedoms when detaining or arresting a person and when obtaining evidence.

Depending on the circumstances, issues may arise concerning search warrants, production orders, access to counsel or statements obtained by police.

Not every defence applies to every case. The disclosure and individual circumstances must be reviewed before a defence strategy can be determined.

What Happens After a Fraud Charge?

A fraud investigation may begin before the accused is aware that police are involved. Police may request an interview, execute a search warrant, seize electronic devices or obtain financial records through judicial authorization.

Following an arrest, the accused may be released with conditions or held for a bail hearing.

The case will normally proceed through several stages:

• Arrest and release or bail;
• First court appearance;
• Receipt and review of Crown disclosure;
• Collection and organization of financial records;
• Crown pre-trial discussions;
• Judicial pre-trial, where appropriate;
• Applications concerning evidence or Charter issues;
• Resolution discussions; and
• Trial, if the matter is not otherwise resolved.

Complex fraud cases may involve large volumes of disclosure and require detailed review before the evidence can be properly assessed.

Should You Provide an Explanation to Police?

A person who is arrested or detained has the right to remain silent and the right to retain and instruct counsel without delay.

A person may believe that providing an immediate explanation will resolve a financial misunderstanding. However, statements made during an interview may later be used as evidence.

Obtaining legal advice before deciding whether to speak with police may help the person understand the allegations, the right to silence and the possible consequences of providing a statement.

Will a Fraud Charge Result in Jail?

The possible outcome depends on factors including:

• The amount allegedly involved;
• The degree of planning and complexity;
• The duration of the conduct;
• The number of complainants;
• The accused’s role;
• Whether the accused abused a position of trust or authority;
• The effect on the complainants;
• Whether records were concealed or destroyed;
• Restitution or repayment; and
• The accused’s criminal record.

Potential outcomes may include withdrawal of the charge, diversion where available, a discharge, probation, restitution, a fine, a conditional sentence or imprisonment.

No particular result can be predicted without reviewing the evidence and individual circumstances.

Restitution and Repayment

A court may consider restitution in a case involving financial loss. Restitution is an order requiring an offender to pay for certain losses resulting from the offence.

Repayment does not automatically cause a criminal charge to be withdrawn and does not by itself provide a defence. However, the circumstances of repayment may become relevant to resolution discussions or sentencing.

A person should obtain legal advice before making admissions or entering an agreement relating to repayment.

Fraud Charges and Immigration Status

A fraud charge or conviction may create immigration consequences for a permanent resident, foreign national or other person who is not a Canadian citizen.

The potential effect depends on the offence, the prosecution method, the sentence and the person’s immigration status. The legal maximum penalty attached to an offence may also be relevant under immigration law.

Coordinated advice from criminal and immigration counsel should be considered before decisions are made concerning a plea or resolution.

Professional and Employment Consequences

A fraud allegation may affect employment, professional licensing, business relationships and positions involving money or trust.

Regulatory or disciplinary proceedings may be separate from the criminal case. Statements or documents provided in one proceeding could affect another proceeding.

Where professional or employment consequences may arise, legal advice should be obtained before responding to an employer, regulator or other organization.

Why Experience With Police Investigations Matters

Before becoming a criminal defence lawyer, Jake Shen served as a Toronto police officer. This experience provides practical insight into how police conduct interviews, obtain financial and electronic records, execute search warrants and prepare criminal cases.

As defence counsel, Jake reviews the investigation from the perspective of the accused and examines whether the evidence establishes knowing participation, whether records have been interpreted accurately and whether the accused’s legal rights were respected.

Speak With a Toronto Criminal Defence Lawyer

If you have been charged with fraud in Toronto, Markham or elsewhere in Ontario, obtaining legal advice early may help you understand the allegations, the financial evidence and the court process.

Contact Jake Shen to discuss the charge, the evidence and the next steps in the criminal court process.

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