What evidence can be used for / against me in a fraud trial?

Since financial fraud involves money transactions, paper and electronic records are the most common forms of evidence. Many fraud cases I’ve been involved in have required me to sift through financial statements and banking information, trying to find documentation that supports my clients. Any type of record that shows money being transferred can be used as evidence, as well as testimony from those who claim they were defrauded.

To successfully prove a fraud-related charge, the Crown must demonstrate beyond a reasonable doubt that the accused “by deceit, falsehood or other fraudulent means” defrauded a person or a company. In cases where an employer was defrauded, company files usually form the basis of the Crown’s case.

As a defence lawyer, my job is to analyze all documentation carefully, trying to find inconsistencies to raise doubt about the Crown’s evidence.

The core elements of fraud

In a 2014 judgment, the Supreme Court of Canada (SCC) stated there are two distinct elements that are present in any fraud:

  • A prohibited act of deceit or falsehood. If there is no deceit or falsehood, the courts look for a “dishonest act” or what a reasonable person would consider a dishonest act.
  • A deprivation caused by the action, related to property, money or any service.

A fraud conviction requires proof that the accused was aware that they were doing something wrong, the judgment adds, and that they knew these actions would cause another person to lose something.

In a 1993 case, Supreme Court provided guidance about what is a “dishonest act.” The court defined dishonesty as an “underhanded design which has the effect, or which engenders the risk, of depriving others of what is theirs … negligence does not suffice. Nor does taking advantage of an opportunity to someone else's detriment, where that taking has not been occasioned by unscrupulous conduct, regardless of whether such conduct was wilful or reckless. The dishonesty of ‘other fraudulent means’ has, at its heart, the wrongful use of something in which another person has an interest, in such a manner that this other's interest is extinguished or put at risk. A use is ‘wrongful’ in this context if it constitutes conduct which reasonable, decent persons would consider dishonest and unscrupulous.” 

What constitutes fraud?

Section 380(1) of the Criminal Code provides the general definition for fraud: “Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service.”

The tort of civil fraud (as opposed to criminal fraud) was reviewed by the SCC in 2014. That section of the judgment starts off by noting that the “classic statement of the elements of civil fraud stems from an 1889 decision of the House of Lords … where Lord Herschell conducted a thorough review of the history of the tort of deceit.”

The elements of fraud identified by Herschell in 1889 were: “First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false…. Thirdly, if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made.”

The false representation must “actually [induce the plaintiff] to act upon it,” Herschell notes, adding “but for the tortious conduct of the defendant, the plaintiff would not have sustained the injury complained of.

“Finally, this Court has recognized that proof of loss is also required. As … “fraud without damage gives … no cause of action.”

In a 2014 judgment, the Supreme Court expanded the essential elements of fraud to include:

  • a false representation made by the defendant;
  • some level of knowledge of the falsehood of the representation on the part of the defendant (whether through knowledge or recklessness);
  • the false representation caused the plaintiff to act; and
  • the plaintiff’s actions resulted in a loss.

Mounting a defence for fraud

A successful fraud defence is always case-dependent, built around whatever evidence the Crown has disclosed. I successfully handled a case where my client was accused of defrauding his employer after money went missing from a safe at the grocery store where he and his partner worked.

After calling him into a meeting with several managers, my client’s employer told him needed to admit to the crime or he and his partner would both lose their jobs at the store. Under duress, he signed a letter stating that he stole the money, with this letter provided to the police.

When I met with my client, he told me that he did not take the money, and that he only admitted he did so that his partner would be allowed to keep her job at the store. (As it turns out, both were fired)

His verbal admission in that meeting, as well as the letter he signed, were damning pieces of evidence against him. As his defence counsel, I asked the court to exclude this evidence, considering the strong-arm tactics his employer used to obtain them. The court agreed and my client was acquitted of the charges.

False confessions are common

According to a Department of Justice (DOJ) document, “Innocent individuals sometimes confess to crimes they have not committed. As noted by Justice Frank Iacobucci, on behalf of five other members of the Supreme Court of Canada, “it may seem counterintuitive that people would confess to a crime that they did not commit … however, this intuition is not always correct. A large body of literature has developed documenting hundreds of cases where confessions have been proven false by DNA evidence, subsequent confessions by the true perpetrator, and other such independent sources of evidence.”

The Innocence Project in New York City found that just over one-quarter of 130 post-conviction exonerations based on DNA evidence involved false confessions, the DOJ document states. “The problem may or may not be as extensive in Canada as it is in the United States; however, it is clear that the Canadian commissions of inquiry have focused on the issue and made recommendations concerning the taking of statements from suspects and witnesses.”

Charter defences can be mounted

Much of the evidence in a fraud case will consist of financial records, showing transfers and transactions. However, if in obtaining these records the police violated one or more of the rights guaranteed under the Canadian Charter of Rights and Freedoms, that action should be brought to the court’s attention.

For example, s. 8 of the Charter states “Everyone has the right to be secure against unreasonable search or seizure.” If the police used a defective warrant to seize evidence, I would make a Charter motion on my client’s behalf to exclude any evidence gathered in that illegal search. If that motion is successful and the evidence is thrown out, that could seriously damage the Crown’s case.

Lack of evidence leads to acquittal

In Newfoundland, a woman accused of using another woman’s credit card without authorization was acquitted on two counts of fraud because of the vague and contradictory testimony given during trial, a CBC story notes. In her decision, the judge referenced examples when dates, times and text messages were mixed up in testimony.

"They make one very uncomfortable believing these details. Which version should one accept as being truthful beyond reasonable doubt?" the judge asked, according to the story. “Based on those comments in relation to the frailty of this evidence, I am not satisfied that the elements of the offences have been proved beyond a reasonable doubt.”

Let me work on your behalf

Allegations of fraud are taken seriously by the police and courts. If you are convicted the criminal record may affect your work, your reputation, your family and your personal freedom.

I have helped numerous clients in these cases, securing the best outcome possible. If the police have called you for an interview or questioning, don’t give a statement. First, call me for a free consultation.

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