What is fraud?
If you have ever cashed a cheque belonging to another person, stolen from your employer or knowingly overcharged a customer for a product or service, you have committed fraud. In legal terms, fraud is intentionally deceiving a person or organization for an unlawful gain, and usually involves a breach of trust.
Being convicted of fraud is a serious matter. The courts don’t look favourably on those who are found guilty, often imposing stiff penalties, including jail sentences and restitution orders. It’s important to seek legal counsel early with a lawyer who has experience defending fraud charges.
What drives people to commit fraud?
Fraud is on the rise in Canada. According to the latest numbers from Statistics Canada, the rate of fraud jumped 46 per cent from 2008 to 2018. There were more than 129,400 incidents of fraud reported to police in 2018, the agency states.
Psychologists maintain that some people who commit fraud have antisocial and narcissistic tendencies that drive their behaviour, but others are often influenced by a combination of pressure, opportunity and rationalization –– known as the Fraud Triangle.
Sometimes people act unethically in a way that isn’t a big deal, and no one notices, so they get away with it, according to psychology professor Dr. Thomas Plante, at Stanford and Santa Clara University, quoted in a Forbes article.
“They do it again and perhaps try a larger or more significant scam. Before you know it, they're caught in a big scam, and people finally notice,” he says.
Last year, a retired accountant was sentenced to a two-year prison term for stealing from an Ottawa church and was ordered to pay $1,000 a month for the rest of his life as part of a $490,000 order.
Over five years, the volunteer treasurer funnelled more than $600,000 of the church’s money into his bank accounts, the court heard.
In his decision, the judge said that the prison term and restitution would be a hardship for the 73-year old, but was necessary to deter others, noting that most major breach of trust cases involve well-educated people with previously unblemished characters.
“The congregation felt blessed to have such a talented man stewarding their assets, and it was only as a direct result of the completeness of this trust that he was able to continue his behaviour for more than four years,” the judge said.
The fraud cases I have handled involve individuals accused of cashing another person’s cheque, intentionally overcharging for a service, elder fraud and stealing from an employer, either by taking products that don’t belong to them or by directing funds that belong to the employer into their personal accounts.
In my experience of defending those accused of fraud, I have found that the majority of people are driven by either extreme financial distress or addiction issues. In the throes of substance abuse, sometimes people become so desperate to satisfy their intense cravings and avoid withdrawal that they steal money, credit cards, or even someone’s identity to fund their habit, according to Addiction Campuses.
Experience counts when defending fraud charges
It’s important to seek out an experienced criminal lawyer when facing fraud charges. A skilled lawyer can help you navigate the complex justice system, negotiate with the Crown to potentially take jail time off the table or convince a judge that it isn’t in the best interests of an accused person or the public.
I have successfully defended clients facing many different types of fraud charges. Each case is unique, and the best defence for your fraud charges depends on the circumstances of the offence and the evidence the Crown Prosecutor has against you.
In almost every case I have worked on, my clients have expressed remorse and felt embarrassed about what they’ve done. Their main priority is avoiding a criminal record and a jail sentence. To determine how I will defend a client, I need to understand the specific circumstances of their case and what has gone on in their life to cause them to commit fraud. Once I have a clear picture of the background, I work with them to decide the best support, such as counselling or rehabilitation.
Mitigating circumstances such as whether the accused has addiction issues or a family member in financial distress doesn’t exonerate a person but can sometimes result in reduced penalties.
Chronology of a fraud investigation
A fraud investigation typically begins when someone reports a suspected incident to the police. Depending on the circumstances, it can take months for the police to conduct their investigation before laying charges. For example, if a person has been accused of falsifying accounting records, the police will need time to produce appropriate evidence and rule out the fact that it was an accident or an accounting error.
Once they believe they have proof a fraud has occurred, an officer will call the accused person into the station and charge them. In most cases, the person is released from custody with charges and court dates in place. At this point, I begin to build a defence of the matter, considering all the relevant information such as the accused’s version of events and the Crown’s evidence against them.
Remorse, restitution best steps for an accused person
Two factors, in particular, have a critical impact on whether charges can be discharged or reduced: remorse and restitution. In all cases, the judge will want the accused to not only express remorse for what a person has done, but also to demonstrate that they are taking action to prevent it from happening again.
Whenever possible, I encourage clients to make restitution to the victim as soon as they can –– ideally in advance of the case going before a judge –– by selling their car and other personal possessions, remortgaging their homes or borrowing the money. That shows the judge their remorse is real and will be necessary for a person who wants to avoid jail time, although it is no guarantee.
If my client is struggling with addiction, I advise them to complete counselling and/or a rehabilitation program before going to trial. It’s one thing to pay the money back, but if addiction is causing a person to take illegal actions, the judge will want to see they’re doing everything in their capacity to get treatment for their illness.
In cases where the person is unable to pay back the money right away, the court will impose a restitution order requiring the offender to pay the victim for the financial losses the victim suffered. Restitution can only be ordered for losses up to the time the offender is sentenced. It is part of an offender’s sentence and can be a stand-alone order or part of a probation order or conditional sentence.
Fraud charges and penalties
If you’re convicted of fraud, you will likely face a jail sentence, and your criminal record will appear in the Canadian Police Information Centre database. That means that even years later if a potential employer or other organization conducts a background check, they will see your criminal conviction and sentence. A conviction will also hinder your ability to travel, especially to the United States.
Fraud Under $5,000: This charge will be laid when the value of the fraud is less than $5,000. If the Crown proceeds by indictment, the maximum penalty is two years in a federal prison followed by three years of probation. If the Crown continues by summary conviction, the maximum penalty is two years less a day in a provincial jail and a $5,000 fine.
Fraud over $5,000: If the amount involved is more than $5000, it is automatically considered an indictable offence. The maximum sentence, in this case, is 14 years. In the case of a fraud over $5000 first offence, the penalty could still involve jail time. In both fraud under and fraud over charges, the Criminal Code identifies certain condition as aggravating when it comes to sentencing, including:
- the magnitude, complexity, duration or degree of planning involved in the fraud
- the extent to which the fraud impacted the stability of the economy or financial markets
- the number of victims affected and their personal circumstances, including age, health and financial situation
- whether the accused took advantage of their reputation in the community
- the accused non-compliance with a licensing requirement or professional standard that is normally applicable to the activity or conduct that forms the subject-matter of the offence
- the accused concealed or destroyed records related to the fraud or to the disbursement of its proceeds
- the value of the fraud exceeded one million dollars.
Client case studies
The following case studies detail real cases from my files and demonstrate the advantages of working with a knowledgeable criminal lawyer who has the experience and a solid track record in defending fraud charges.
Absolute discharge for $30,000 fraud
My client was charged with fraud over $5,000 after his employer tracked a $30,000 shortfall in deposits back to him. He had been struggling with a gambling addiction, and the people he owed money to were threatening to hurt him and his family members if the debt wasn’t paid back. After he was caught, he began counselling for his gambling addiction, sold his vehicle and repaid all the money to his employer. For those reasons, coupled with the fact he had huge support from the community to show his actions were completely out of character, I was able to convince the judge that an absolute discharge was in his best interests and not against the public interest.
Discharge with conditions for $7,000 of retail fraud
In another case, my young client was arrested for stealing products from his employer’s retail store and selling them on eBay. He was caught after a buyer figured out the goods were stolen and reported it to the police. He was charged with fraud over $5,000, but I was able to negotiate a plea deal with the Crown to reduce the charges to fraud under $5,000 after my client made restitution to his employer for the stolen goods. He avoided jail time and received a discharge with conditions, including staying away from the employer’s store, complete restitution and counselling.
Reduced sentence enables client to continue working
My client and his associates were charged with fraud over $5,000 after it was discovered they had defrauded an elderly woman with dementia of more than $70,000 for unnecessary furnace repairs in her home. After he was arrested, the Crown argued for a 12-18-month jail sentence, but I was able to negotiate for him to serve his jail time on an intermittent basis over weekends, which allowed him to continue working and pay back his share of the restitution.
Client receives conditional discharge, no criminal record
My client was charged with fraud over $5,000 for stealing $13,000 worth of alcohol from his employer. He had been battling an addiction and using the money to buy drugs. Before his employer realized what happened, the man’s family members confronted him and convinced him to attend a rehabilitation program. After successfully completing rehab, he was arrested.
I negotiated with the Crown for a conditional discharge based on the fact my client’s actions stemmed from an addiction for which he had already undertaken a treatment program to address. He also made restitution to his employer and was able to avoid a criminal record.
Choose experienced legal counsel
Dealing with the police and the criminal justice system in cases involving fraud allegations is a serious matter that requires a skilled and experienced legal advocate. I have helped numerous clients avoid jail time stemming from fraud charges. If the police have called you for an interview or questioning, don’t give a statement. First, call me for a free consultation.