Fraud over $5000 is a serious charge that carries significant consequences upon conviction. A person charged with fraud over $5000 faces up to 14 years imprisonment, with a mandatory minimum of two years imprisonment in some cases. Learn about the factors that increase the seriousness of the charge, possible defences, and the importance of hiring an experienced criminal defence lawyer.
How Canadian Law Defines Fraud Over $5000
Section 380 (1) of the Criminal Code of Canada
According to s. 380(1) of the Criminal Code of Canada, fraud occurs when a person, by deceit, falsehood or other fraudulent means, defrauds the public or any person of any property, money, valuable security or service.
This section distinguishes between two types of fraud. Section 380(1)(a) deals with fraud where the subject-matter of the offence is a testamentary instrument (such as a will or trust), or where the value of the subject-matter of the offence exceeds 5000 dollars. Section 380(1)(b) deals with fraud where the value of the subject-matter does not exceed 5000 dollars.
The Significance of the $5000 Threshold
If the fraud exceeds $5000 (whether it be $5001 or $1 000 000), the possible consequences upon conviction increase dramatically.
The maximum punishment for fraud not exceeding $5000 dollars is two years imprisonment. Section 380(1)(b) states that the Crown may choose to proceed summarily or by indictment on charges of fraud not exceeding $5000. Summary offences are less serious and carry a maximum sentence of two years less a day in prison. Even if the Crown chooses to proceed by indictment on a charge of fraud not exceeding $5000, s. 380(1)(b)(i) states that the maximum sentence upon conviction is two years’ imprisonment.
By contrast, s. 380(1)(a) states that fraud over $5000 is a strictly indictable offence with a maximum sentence of 14 years imprisonment.
Types of Fraud Over $5000 Allegations
Workplace Fraud and Breach of Trust
Workplace fraud is a broad term for fraud that occurs in the workplace setting. Examples include corruption, financial statement fraud, and misappropriation of assets.
In R v McEachern, the Ontario Court of Appeal held that an employee counts as a ‘position of trust’ for the purpose of s. 718.2(a)(iii) of the Criminal Code of Canada. This section states that if the offender, in committing the offence, abused a position of trust or authority in relation to the victim, courts should consider this to be an aggravating factor. An aggravating factor increases the seriousness of the charge and often leads to a harsher sentence.
Therefore, if someone commits fraud in the course of their employment, they are likely to face a more serious sentence because they abused a position of trust. Generally, the more trust placed in the employee (such as a manager vs a weekend cashier), the more aggravating the factor.
Wills, Estates, and Testamentary Instruments
Section 380(1)(a) states that, like fraud over $5000, fraud involving a testamentary instrument (such as a will, estate, or trust) is a strictly indictable offence, punishable by a maximum of 14 years in prison.
Penalties and Sentencing for Fraud Over $5000
Indictable Offences and Maximum Sentences
As stated above, s. 380(1)(a) of the Criminal Code states that fraud over $5000 is a strictly indictable offence. Indictable offences are more serious offences. Usually, a person charged with an indictable offence will have the ability to choose the format of their trial. According to s. 536 of the Criminal Code, these options are:
- Trial in provincial court (Ontario Court of Justice) in front of a judge alone
- Trial in the Superior Court of Justice in front of a judge alone
- Trial in the Superior Court of Justice in front of a judge and jury
The maximum sentence for a conviction of fraud over $5000 is 14 years in prison. Furthermore, if the total value of the subject matter of the offences is over one million dollars, s. 380(1.1) of the Criminal Code imposes a minimum sentence of two years in prison.
Aggravating Factors: Sophistication and Vulnerable Victims
Sophistication
One factor that increases the seriousness of fraud over $5000 is the sophistication of the offence. Section 380.1(1)(a) of the Criminal Code states that if the magnitude, complexity, duration or degree of planning of the fraud committed was significant, this is considered to be an aggravating factor in sentencing. A highly sophisticated scheme will likely increase the moral culpability of the accused person in the eyes of the court, because it suggests that the person had the time and ability to think through what they were doing and understand the harmful outcomes.
Vulnerable Victims
Another aggravating factor is the vulnerability of the victim of the fraud. Section 718.04 of the Criminal Code states that “when a court imposes a sentence for an offence that involved the abuse of a person who is vulnerable because of personal circumstances… the court shall give primary consideration to the objectives of denunciation and deterrence of the conduct that forms the basis of the offence”.
Therefore, if the fraud involved a vulnerable victim, such as an elderly person or a person with a disability, the sentencing court is required to focus on denouncing the offence in question and deterring others from committing the same crime. A focus on denunciation and deterrence will generally lead to a harsher sentence.
The Court Process and What to Expect
First Appearance and Disclosure
If you have been charged with fraud over $5000 in Ontario, your first court appearance (outside of bail court) will be in case management court, often before a Justice of the Peace. No pleas or preliminary inquiries take place in case management court. Rather, the first appearance addresses administrative issues such as disclosure.
Disclosure is the information that the Crown has in the case against you, such as police reports, witness statements, bank records, and the initial sentencing position. Disclosure may not be fully available for the first court appearance. Getting disclosure is an ongoing process, and the Crown must share information as it becomes available.
Proceeding to Trial vs. Negotiation
Once you have received disclosure from the Crown, you will have a better understanding of the case against you. An experienced criminal defence lawyer can assess the strength of the Crown’s case and provide valuable insight as to whether it is better to proceed to trial or to negotiate a plea deal with the Crown.
In cases where a plea deal is the better option, a skilled defence lawyer can negotiate with the Crown to secure the best possible resolution. A guilty plea is considered a mitigating factor for the purpose of sentencing, meaning that it will contribute towards a lighter sentence.
While a guilty plea is a mitigating factor, you always have a right to a trial and exercising that right is not an aggravating factor. Therefore, while proceeding to trial may not contribute towards a lighter sentence upon conviction, it will never lead to a harsher sentence. If the case does proceed to trial, an experienced defence lawyer will skillfully cross-examine the Crown’s witnesses, identify the weaknesses in the Crown’s evidence, and raise defences to undermine the case against you.
Possible Defences to Fraud Charges
Lack of Intent
One possible defence to a fraud charge is a lack of intent. The fact that the accused person intended to commit fraud must be proven beyond a reasonable doubt in order for the Crown to secure a conviction. Intention is a state of mind that may be inferred from other proven facts of the case in the absence of direct evidence. However, if the defence can raise a reasonable doubt about that intention, the accused person must be acquitted. In the case of R v Hastings, the accused person was acquitted because there was no direct evidence of intent to commit the fraud, and other facts of the case, such as the accused’s character, conduct, and background, gave the court no reason to infer that intent.
Honest Mistake
Another possible defence to fraud charges is the defence of an ‘honest mistake’. An honest mistake does not mean that the accused person didn’t realize that their actions constituted a crime or that they honestly believed that their actions were moral. It means that the accused person honestly believed in a fact which, if true, would negate the offence. The court in R v Theroux stated that examples of honest mistakes may be evidence that the accused person believed their deceit was part of an innocent prank, or evidence of circumstances which led the accused person to believe that no one would act on their lie or dishonest act.
Long-Term Consequences of a Conviction
Impact on Employment, Travel, and Immigration
A conviction for fraud over $5000 can have lasting consequences beyond those stated in the Criminal Code or imposed by a judge. For example, a criminal record can have a significant impact on your employment opportunities. Many industries, such as law, healthcare and financial industries, require their employees to have a clean record. Furthermore, many countries, such as the United States, have strict travel bans for individuals with a criminal record.
Having a criminal record can also impact your ability to immigrate to Canada, and non-citizens, including permanent residents, may face deportation from Canada if they become inadmissible on grounds of serious criminality. Section 36 (1) of the Immigration and Refugee Protection Act states that a permanent resident or a foreign national is inadmissible on grounds of serious criminality for having been convicted in Canada of an offence under an Act of Parliament punishable by a maximum term of imprisonment of at least 10 years. Since fraud over $5000 has a maximum sentence of 14 years in prison, a conviction may result in inadmissibility, regardless of the actual length of your sentence.
Legal Representation and Next Steps
The Importance of Experienced Counsel
Fraud over $5000 is a serious charge that may result in significant consequences upon a conviction. An experienced criminal defence lawyer can help you through the process by securing your release on bail, negotiating the best possible outcome with Crown lawyers, and undermining the Crown’s case at trial.
