Canadian Criminal Law/Offences/Fraud

Generally

 * 1) &#9840; identity of accused
 * 2) &#9840; date and time of incident
 * 3) &#9840; jurisdiction (incl. region and province)
 * 4) &#9840; that the complainant owned something of value (property, money, valuable security, or a service)
 * 5) &#9840; that the accused deprived the complainant of something of value or was put at risk of losing something of value
 * 6) Any false representations made
 * 7) money or property of value paid to the accused
 * 8) reason money was paid to the accused
 * 9) &#9840; the ownership, value and continuity of the property, money, or service, including whether it is over $5,000 (for 380(a)) or under $5,000 (for 380(b)) -- call witness or file documents in accordance with s. 491.2 and s. 657.1).
 * 10) &#9840; that the deprivation must have been caused by deceit, falsehood, or other fraudulent means; (see Canadian Criminal Law/Causation)
 * 11) &#9840; the accused intended to defraud the complainant or had knowledge that the conduct could result in deprivation

Where documents are involved

 * 1) &#9840; date and time of any false documents
 * 2) &#9840; jurisdiction (incl. region and province) where documents were signed
 * 3) &#9840; identity of person who signed the documents
 * 4) &#9840; whether any documents were made "in the ordinary course of business" pursuant to the Canada Evidence Act

The essential elements are those found in bold.

Actus Reus
Fraud is not definitely defined in the Criminal Code. The basic definition requires elements of "dishonesty" and "deprivation".

The actus reus for the offence is made out where:
 * 1) there was a prohibited act of deceit, a falsehood or some other fraudulent means; and
 * 2) there was a deprivation caused by the prohibited act. Either an actual loss or a pecuniary interest at risk.

Mens Rea
The mens rea is the subjective awareness of undertaking the prohibited act and awareness of the risk of depriving another of property. The personal feelings of the “morality or honesty” of the act is not relevant.

The awareness of the risk of deprivation include recklessness.

Making use of funds which the accused was wilful blindness as to it source is considered dishonest.

A mistaken belief that the victim owes the accused money cannot justify collecting debt by deceit.

That the accused simply "hoped the deprivation would not take place" is not a defence where the accused knew that he was undertaking a prohibited act that could cause deprivation.

In social assistance or welfare fraud, the accused does not need to know that the regulations prohibited false applications.

Deceit or Falsehood
"Deceit" is "an untrue statement made by a person who knows that it is untrue, or has reason to believe that it is untrue, but makes it despite that risk, to induce another person to act on it, as if it were true, to that other person’s detriment."

"Falsehood" is a "deliberate lie".

"Dishonesty" is determined on an objective standard determined by what a reasonable person would consider dishonest. Dishonesty can also include non-disclosure where a reasonable person would consider it dishonest.

A dealership was found guilty of fraud for misrepresenting their vehicles for sale as new when they were used demo models.

Other Fraudulent Means
"Other fraudulent means" is a "term that covers more ground than either deceit or falsehood. It includes any other means, which are not deceit or falsehood, properly regarded as dishonest according to the standards of reasonable people" but include all other means that are "stigmatized as dishonest". The question of whether conduct fits into "other fraudulent means" is a question of fact.

The issue of actus reus is determined objectively as to whether a reasonable person would consider the conduct to be "dishonest".

Types of conduct include:
 * 1) misuse of corporate assets
 * 2) breach of trusts
 * 3) non-disclosure of material facts
 * 4) unauthorized diversion of funds or property
 * 5) breach of contractual obligations

These classes of "other fraudulent means" can encompass many scenarios.

Misuse of Assets Fraud includes the use of company assets for personal purposes.

Directors who use assets for purposes which are not bona fides in the best interests of the company and not for a legitimate purpose then the directors may be liable for fraud.

A president and sole shareholder of a real estate company who redirected money from clients to him personally instead of the company was found guilty of fraud and theft.

See also: R v Black (1983) 5 CCC (3d) 313 (ONCA)

Material Non-Disclosure Where an accused who omitted to tell his investors, who are purchasing a building, that he bought it personally and was re-selling for a profit.

Where the Crown is relying on material non-disclosure, there must be a duty to disclose, typically arising from the relationship between the parties.

Prohibited Consequences
Deprivation or Risk of Deprivation The requirement of a deprivation "is satisfied on proof of detriment, prejudice, or risk of prejudice to economic interests of the victim. It is not essential that there be actual economic loss as the outcome of the fraud."

It is further required in order to prove "dishonest deprivation" that the victim would not have otherwise allowed the deprivation to happen if they had known the true state of affairs.

Actual loss is not necessary, it is sufficient to show a risk of loss. "Deprivation" includes the risk of deprivation. . It may also include risk of prejudice to economic interests.

The accused does not have to obtain any property to complete the offence. Thus, if the accused is deprived of property due to it going to someone else is enough.

Causation The Crown must also prove that the dishonest means used did in fact result in the fraud.

Jurisdiction
Generally, jurisdiction of the offence includes the place where a false representation was made, the false document was prepared or signed, or where deprivation took place.

In order to attract the jurisdiction of the court, there needs to be a significant portion of the activities making up the offence occur within the court's jurisdiction.

Proof of Property

 * Proof of Ownership

Admission of Documents

 * See also: Business Records and Financial Institution Records

The Canada Evidence Act provides short-cuts to admit certain documents.

Under s. 30(1), "where oral evidence in respect of a matter would be admissible in a legal proceeding, a record made in the usual and ordinary course of business that contains information in respect of that matter is admissible in evidence under this section in the legal proceeding on production of the record."

Under s. 30(7), the applicant must give "at least seven days notice" of intention to produce records under this section "unless the court orders otherwise" and must produce it for inspection within 5 days of getting notice from the other side.

Charter Issues Documents that were obtained from the accused by compulsion by a person in authority, such as the Department of Community Services agent, is not a violation of the right against self-incrimination since the documents were not confessional and exist outside of state compulsion.

Other Issues
It is not necessary that the accused have any knowledge of the identity of the victim(s) of the fraudulent act.

Parties In a setting where there were multiple parties involved with the act that amounted to fraud, criminal liability will be applicable where the parties contribution is beyond a de minimus range.

Merely following directions of a superior or employer is not generally a defence.

Attempts Under s. 660, where an completed fraud has not been made out the court must consider, as a matter of law, an alternative conviction for attempted fraud regardless of whether it is sought by the crown.

Attempted fraud may apply where the victim discovers the deceitful conduct before being deprived of property or money.

Case Digests

 * R v Parkes, 2012 SKQB 164 -- guilty; detailed review of law
 * R. v. Adeyokunnu, 2011 ONSC 6380 --Fraud over 100,000 -- guilty

History
In the 1892 Criminal Code s. 394 created the offence of "conspiracy to defraud".(S.C. 1892, c. 29) This was the only fraud-related offence until 1948.

In 1948, the offence of "conspiracy to defraud" was amended to remove the conspiracy requirement to the offence. (SC 1948 c 39, s. 444)

Amendments were also made in 1954 and 1997.

In 1985, the subject-matter of fraud was increased from $200 to $1,000.

In 1988, s. 492.1 and 657.1 were added to create shortcuts to proof. In particular simplifying the proof of ownership, value and continuity.

In 1995, the subject-matter of fraud was increased from $1,000 to $5,000.

In 1997, fraud was amended to include "services".

In 2004, s. 380(1)(a) was amended to increase the maximum penalty from 10 to 14 years. Also s. 380.1 was added.

In November 2011, s.380(1.1) was added to include a mandatory minimum sentence for offences over $1 million. Also, s. 380.1 was amended to change the aggravating factors. As well, s. 380.2, 380.3 and 380.4 was added.

Related Fraud Offences
There are a number of lesser considered fraud based offences:
 * Frauds on the Government (s. 121)
 * Breach of Trust by Public Officer (s. 122)
 * Fraudulent concealment (s. 341)
 * Using mail to defraud (s. 381)
 * Fraudulent manipulation of stock exchange transactions (s. 382)
 * Insider trading (s. 382.1)
 * Gaming in stocks or merchandise (s. 383)
 * Broker reducing stock by selling for his own account (s. 384)
 * Fraudulent concealment of title documents (s. 385)
 * Fraudulent registration of title (s. 386)
 * Fraudulent sale of real property (s. 387)
 * misleading receipt (s. 388)
 * fraudulent disposal of goods on which money advanced (s. 389)
 * Fraudulent receipts under the Bank Act (s. 390)
 * Disposal of property to defraud creditors (s. 392)
 * Fraud in relation to Fares (s. 393)
 * Fraud in relation to valuable minerals (s. 394)
 * Possession of stolen or fraudulently obtained valuable minerals (s. 394.1)