In any legal case, it’s important to know what the possible outcomes could be. If you’re facing a criminal charge of fraud, for example, it’s helpful to understand the possible consequences of a conviction. What exactly happens after you’re convicted of fraud? Here, we’ll take a look at some of the potential penalties you may face. Keep in mind that these are just general guidelines; every case is different and the specific penalties you may face will depend on the facts surrounding your particular circumstances. If you’re facing fraud charges, it’s important to consult with an experienced criminal defence lawyer who can give you specific advice based on your unique circumstances.
What is Fraud?
First off, what is fraud? The definition of the offence of fraud is found at section 380 (1) of the Canadian Criminal Code. Fraud is fundamentally stealing, but with the added element that it is committed with deception or trickery to obtain money, goods, or services of value.
In Canada the offence of fraud consists of two distinct elements. First, the dishonest act of deceit, deception or lies. Second, the loss of property, money or service.
It is commonly considered a white-collar crime and is very common in banking, business and financial interactions. There is usually no violence or force associated with fraud and more lying and trickery to get people to give you their money under fraudulent means.
Categories of Fraud
Many of the sentencing considerations and possible penalties for a fraud conviction are determined by the value of the goods or services stolen. The criminal code differentiates between frauds when the losses are either under $5000 or over $5000.
For fraud conviction under $5000, it is considered a less severe offence. It can sometimes be tried as a summary conviction. The charges are straightforward with a summary conviction and are tried by a provincial court judge without a jury in the Ontario Court of Justice. The maximum jail sentence, in this case, is two years imprisonment and a fine of up to $5000.
For fraud over $5000 it is a very serious charge and is considered an indictable offence. It is possible that a judge and jury could hear the case in the Superior Court of Justice. If convicted, you can face a maximum of 14 years in jail. The penalties are even more severe for fraud over $1 million, with a mandatory minimum sentence of 2 years in jail.
See more about sentencing ranges for fraud convictions below.
Common Forms of Frauds
There are numerous types of fraud, and new forms and schemes being developed daily, some of the most common forms are:
- Tax Fraud
- Identity Theft
- Wire Fraud
- Insurance Fraud
- Credit Card Fraud
- Banking Fraud
Aggravating and Mitigating Consideration in Fraud Cases
When determining the appropriate sentence, or sentencing ranges, the Crown Attorney, the Judge and defence counsel all consider the aggravating and mitigation factors of the case. There are many factors that can be considered aggravating in fraud cases beyond just the value of the loss or the nature of the victim.
When examining the allegations and facts of a case the Crown Attorney prosecuting the matter will pay attention to the underlying aggravating features of the case to determine what they believe is the appropriate sentencing range.
They will usually start by examining the actual fraud, the amount of the loss and how sophisticated the scheme was. Some of the factors that they will examine and consider as aggravating are:
- The amount and scope of the fraud
- Was the fraud for food or other essentials
- Was the loss minor for the victim
- Was there a substantial loss?
- The degree of sophistication
- Was the fraud scheme planned and complex?
- Was the fraud a matter of passing opportunity
- Complex schemes with other parties and forged documents
- The duration and number of fraudulent transactions
- How long did the fraud last?
- How many times was the fraud committed?
After an examination of the allegations and facts for the aggravating feature the Crown will usually examine the issues surrounding the victim and the accused person. Some potential aggravating features will involve:
- The character of the victim or victims
- Was the victim particularly vulnerable
- Was it a bank, small business or charity?
- Was the victim’s loss a product of their own greed?
- Breach of Trust
- Was the fraud committed by a person in position of trust
- Because of their employment, such as police officer or bank teller
- Was it an elected position where public confidence was hurt?
- Prior Criminal Record
- Previous fraud convictions and sentences
- Other criminal entries for crimes of dishonest
There are a large number of mitigating circumstances that a judge may consider when it comes to sentencing in a fraud case, but some of the most relevant to frauds include:
- Pleading guilty and taking responsibility – this saves court resources and relieves the pressure from victims from testifying
- Restitution – paying back the losses before sentencing or plead guilty
- No prior criminal record
- The fraud was not for greed but for an honest motive, medical condition,
- Addiction issues
- General good character
- Prospects for Rehabilitation
The aggravating and mitigating factors help establish some of the sentencing considerations, what might be the appropriate jail sentence and what ancillary orders may be required to address the circumstances of the offender. While these factors while more commonly are considered for sentencing purposes they can have profound and lasting impact after sentencing in terms of how probation orders are structured, how restitution orders are drafted and what ancillary orders may be imposed.
Criminal Conviction – Criminal Record
Whether your fraud conviction is under or over $5000, it is still a criminal offence and will go on your criminal record. A criminal record means that information on your fraud conviction will appear in the Canadian Police Information Computer (CPIC) database. This database is searched as part of regular background checks and police investigations.
Also, CPIC is accessed by both Canadian and American border and customs agents. When crossing over the border agents will be able to view past convictions.
A criminal record can have a long-term effect on your life and impact future travel, employment and even volunteering or adoption.
Jail Time or a Custodial Sentence
Sentencing for fraud is highly individualized and Judges consider an array of factors. Jail sentences range for frauds depend greatly on the circumstances of the offence and the various aggravating and mitigating features. The Judge will also consider the unique circumstances of the offender and their prospects for rehabilitation and the losses suffered.
For Fraud Under $5000 that are unsophisticated, not much loss, or restitution already made, there is certainly the possibility of Absolute or Conditional Discharges. Short and sharp jail sentences under 6 months are also very common and with the sentencing range, but can be as long as 2 years. Also, Conditional Sentence Orders (CSO) are possible sentences.
For Fraud Over $5000 the Ontario Court of Appeal has set that three to six years in jail is within the range for a major fraud. But when the fraud is for social services rarely will that sentence be more that 12 months. The courts recognize that the person will likely be denied these services in the future and that will cause hardship, also, that often this type of fraud is committed by those in need.
Tax Fraud and Embezzlement can often see sentences in the 3-to-6-year range. There are Ontario Superior Court judgements that have imposed sentences of 10 years or more for frauds in excess of $10 million.
In the highly publicized wire fraud trial of Elizabeth Holmes in the United States. She is facing a maximum sentence of 20 years in prison for the various frauds committed around her failed blood testing fraud scheme.
If the Crown proceeds by indictment, as is required with Fraud Over $5000, while there is still a wide range of sentencing options, no longer a discharges available.
What does a Life Sentence in Canada really meaning? This article explains that what Life Sentence is and what it means for people that have received this sentence.
A Probation Order will almost certainly be imposed if the sentence is less than two years. When crafting a probation order the judge must balance the rehabilitation prospects of the offender and their reintegration into the community against the safety and protection of the public. Probation Orders are not meant to further or unnecessarily punish the offender, that’s what the sentence is for. They are intended to encourage their good conduct in the community, but some conditions may have the effect of a punishment.
Some conditions may include:
- Report to a Probation Officer as required
- Attend for counsel or treatment as directed for additions or mental health
- No contact with the victims, not to attend where they are
- Keep the peace and be of good behaviour
- Attend court as required
- Complete community service hours
- Conditions not to possess financial instruments not in your name
- Restitution as part of the probation order
- Limit the use the internet if that’s how the offences were committed
Failing to comply with a term of the probation order can lead to additional criminal charges. It is important to note that restitution can be made part of the probation order. Generally speaking, rarely is this done for large amounts and usually only ever when there is a realistic possibility that the amount can be paid during the term of the probation order.
Restitution and Forfeiture Orders
Restitution and forfeiture orders are common in fraud matters. The court once satisfied that the accused committed the offence will consider imposing a restitution order, or if money was seized as part of the police investigation will grant a forfeiture order.
The restitution order will require the offender to compensate the victim for their loss. It can be made as a stand-alone order where there is no time limit for repayment but can be later registered as a civil judgment by the victims. Or a restitution can be ordered as part of a probation order to be paid during the term of the probation.
Restitution is intended to assist the offender in their rehabilitation by making them responsible for the victim’s loss. It is also to ensure that the offender does not benefit from their crimes. Also assists the victims as a means of recovering their losses.
A judge imposing a restitution order should consider the offender ability to pay the amount at the time of sentencing or in the near future. There should be a realistic possibility of the offender being able to pay amount ordered. An order should only be given when the amount of the loss is clear and established and not vague and a range of possible or potential losses. Also, restitution orders should never be imposed it untangle commercial or private business transactions.
The victim of a loss at anytime within two years can commence a civil action to recovery their loss. A conviction or finding of guilt will greatly assist them in their civil recovery efforts, however, just being charge with a fraud after a police investigation is sufficient for them to commence the civil process. Civil litigation is an expensive process and rarely will it be commenced unless there is possibility to recovery the loss without incurring extraordinary legal expenses. Sometimes the cost of litigation is just not worth it. But if the funds are there, if there is real property available, then often civil litigation will be used.
In major frauds, often involving financial institutions such as banks and credit card companies, Mareva Injunctions are used to freeze the assets of the accused person. This is often the first step in the civil action. The victims of the loss want to ensure that the money, property or other assets are not converted and moved. They will freeze the assets to ensure that there is something to compensate them at the end of the civil action.
Ability to Travel
A conviction for a fraud will certainly limit the offender’s ability to travel, at least to the United States. The United States considers fraud to be a crime of moral turpitude and offenders will be prevented from entering the U.S. Crimes of moral turpitude, while has no precise legal definition in the United States, are considered crimes that are general dishonest and against the good morals of the community.
The ability to travel to the United States may impeded until either a Pardon is granted, and the criminal record is suspended, or an Inadmissibility Waiver is obtained. Many people with criminal records are permitted to travel to the U.S. with a Criminal Waiver for professional and employment grounds.
Law firms such as Cumming & Partners in Toronto assist clients with criminal convictions in crossing the border.
Everyone understands that a criminal conviction will limit employment opportunities for some people. There are many jobs and some professional careers that require people to have clean criminal records and no convictions. Then there are other professions, such as being a lawyer, that require a person to be of ‘good character’ where a criminal record for certain convictions would not be an obstacle. But, convictions for fraud are considered crimes of dishonest and are treated differently by employers and some professional regulatory bodies.
A criminal record with a fraud conviction can also make it difficult to find employment in financial sectors, management or any business that involves financial transactions. A person with a fraud conviction is simply not bond-able and likely will never be able to work in certain environments that handle financial transactions or funds.
Criminal convictions can have far-reaching consequences for non-citizens in Canada, including deportation. Even a minor offence can lead to removal from the country. If you are convicted of a criminal offence, it is important to speak with both a criminal lawyer and with an immigration lawyer to learn about your options and understand the potential implications.
Since the early 1990s, Canada has been implementing a program that deports immigrants convicted of criminal offences. Originally, this applied to those who had been sentenced to at least two years in prison. However, as of December 2018, the government announced that it would be applying this rule to all non-citizens, regardless of their sentence. While some argue that this measure is necessary for public safety, others maintain that it is punitive and unjust.
Permanent Residence (PR)
For offenders that are not Canadian citizens there are also concerns about the impacts of convictions for fraud offences. For those that are Permanent Residents, PR Status, there some very serious consequences when the allegations are serious and its more than a minor fraud. If the possible sentence is more than six months, then there is a real possibility that there may be immigration consequences.
When convicted and sentenced to jail under six months there are immigration concerns, but there are always appeals and avenues to remain in Canada. But, when the sentence is over six months, there are concerns that a removal order will be issued and they may be difficult to appeal.
Student, Visitor and Worker Visas
For offenders in Canada on Study Permits, Work Permits, or who have Visitor Status there are serious and immediate consequences for just being convicted of a criminal offence. Upon conviction for any criminal offence a removal order can be issued and there are very few options or paths to appeal. Those on student or worker permits find themselves in a difficult position. Often, once charged they are not able to leave and must remain in the country until their matters are resolved. A criminal conviction will have them removed and not able to return or apply for PR status.
Those convicted of crimes while in Canada as a refugee have a different set of circumstance or considerations. Often refugees are unable to return to their home countries and if ordered removed from Canada can remain in jail for many years awaiting deportation or their appeals to be finalized.
If you are a non-citizen and have been charged with a criminal offence, it is important to seek legal advice right away. You will need representation in both the criminal court system and in immigration proceedings. It is critical to have an experienced lawyer who understands both systems and can advocate for your best interests.
Criminal convictions for those that have PR status, even if not ordered removed, could impact the ability to sponsor family members in the future. There are circumstances that a person with PR status can be convicted of a crime not serious enough to warrant an order to be removed from Canada, but still serious enough to prohibit them from being able to sponsoring people to migrate to Canada.
If you are facing criminal charges, in addition to an experienced criminal lawyer you should consult with an experienced immigration lawyer. An immigration lawyer that comes highly recommended in Toronto is Aminder Kaur Mangat.
Pardons – Criminal Record Suspensions
With every criminal conviction there is a criminal record. There is no record when there is only a finding of guilt and no conviction, as with Absolute Discharges and Conditional Discharges. There are several important considerations if you are planning to apply for a record suspension, or more commonly referred to as a pardon, after being convicted for fraud.
The Parole Board of Canada administers the Record Suspension program and they provide a complete guide on who is eligible for a record suspension.
If you have been convicted of a summary offence the waiting period to apply for a pardon is 5 years and 10 years if the offence is prosecuted by indictment. It is important to note that the waiting period starts running once you have completed your sentences and all fines and services charges are paid, and that restitution orders are satisfied. Many people are disappointed when they learn that the waiting period only starts after the sentence is completed and not on the date they were sentences and their matter concluded.
Pardons have no impact and on driving prohibition or weapon prohibition orders. You can certainly apply for a record suspension while these orders are in effect, but the orders will always remain visible on your record. They are never removed. A pardon only removes the criminal convictions and not any of the ancillary orders that may be imposed at sentencing.
The implications are that these orders will always be visible on a person’s criminal record. That means that future employers will know that there was a conviction and subsequent pardon. That US Customs Officers will know that a person has been convicted of an offence serious enough to warrant one of these ancillary orders. That police officers many years after you have received a pardon will know that you’ve been convicted in the past.
Finally, very important after your conviction to note the date, courthouse, courtroom and Judge. This is information that you will require when applying for a pardon and requesting the required documents from the court.
What are your options if you’ve been charged with fraud?
If you are facing fraud charges, get the expertise of an experienced criminal defence lawyer and fraud lawyer. A lawyer can help you navigate through the charges and trial process. They may also help you apply for a record suspension or pardon, which would seal the fraud conviction from their record if the charges are low-level and the first offence.
William Jaksa is a criminal defence lawyer with over a decade of experience fighting fraud convictions in Toronto. Call him today to get eh best result for your case.