What Are the Penalties for Fraud Charges in Canada

Section 380(1) of the Criminal Code of Canada sets out the offence of fraud:

“Everyone 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 offence of fraud is further categorized into two general offence categories: fraud under $5,000 and fraud over $,5000. Fraud charges are very common and can include a vast spectrum of different types of fraud.  If you are convicted of any fraud, it is treated similarly to the charge of theft and is considered to be a crime of dishonesty. 

Most Common Types of Fraud in Canada

Example of different types of fraud in Canada are:

• Tax fraud
• Credit and debit card fraud
• Bank fraud
• Identity theft
• Medical fraud
• Insurance fraud
• Breach of trust against an employer
• Stock market fraud
• Grandparent scams
• Embezzlement
• Contract fraud
• Cheque fraud
• Internet fraud
• Ponzi schemes
• Construction fraud
• Misrepresentation of legal documents

The Penalties for Fraud in Canada

The penalties for the offence of fraud in Canada vary depending on the amount of property stolen and will range from a non-custodial sentence, such a discharge or a conviction, including a suspended sentence, probation, fine, restitution and/or imprisonment. Several factors are to be considered to determine an appropriate sentence . 

Aggravating factors include:

• Number of victims
• Vulnerable victims
• Impact on the victim(s)
• Previous criminal record or related criminal record
• Motivated by personal gain or benefit
• Position of trust (employer-employee relationship)
• Degree of planning or sophistication
• Destruction of records related to the fraudulent activity or attempts to cover up
• Impact on the Canadian economy
• whether the perpetrator abused their position in the community.

Mitigating factors include:

• Guilty plea and acceptance of responsibility
• Expressions of remorse
• No criminal record or no related criminal record
• Restitution
• Not for personal gain or benefit
• Previous good character
• Immigration consequences
• Lack of planning or sophistication
• Physical or mental health issues, including addiction

A charge of fraud charges under $5,000 may seem minor at first glance, but it is still a serious criminal offence. The Crown can elect to proceed summarily or by indictment. If convicted by indictment, a guilty conviction can lead to a prison term of up to 2 years. In the case of a summary conviction, you may be able to avoid imprisonment, especially if you have no prior criminal record. Farjoud Law is often able to negotiate with the Crown for a diversion and withdrawal of the charges for minor or less aggravated fraud charges. 

Fraud charges over $5,000 is a straight indictable offence and carries a maximum sentence of 14 years in prison. It is a very serious criminal charge, and in many cases, a conviction will lead to a lengthy prison term.

There is a third type for particularly severe fraud cases when the property values exceed $1 million. In cases like this, it will be considered an aggravating circumstance and will generally lead to a sentence of 2 or more years in prison.

It is critical to remember that even a conviction of fraud under $5,000 may lead to a criminal conviction (criminal record) that can negatively impact your job, immigration status, etc.

Examples of Penalties for Fraud Charges

1) Non-custodial sentences

In R v Kovtanuka, 2017 ONCJ 843, the accused was a first offender found guilty of attempted fraud under $5,000.

Mitigating factors: guilty plea, first offender status, genuine remorse, conduct was out of character, accused suffered professional and personal ramifications from offence, accused was 32-year-old mother raising young daughter with limited resources, performed 100 hours of community service and gave presentations on importance of honesty in profession to paralegal students

Aggravating factors: acted in capacity of paralegal, breach of public trust, cost of investigation was over $100,000 and insurance fraud costs public

Sentence: Conditional discharge, 12 months’ probation and restitution order of $1,000 and $100 victim surcharge imposed.

In R v Kulasingam, 2016 ONSC 1201, the accused was a first offender and convicted of fraud under $5,000 for installing a skimming device on a bank machine. A suspended sentence was imposed and the accused appealed sentence arguing that he should have received discharge. A fair reading of the reasons for the sentence showed the trial judge directed himself to why discharge was not in public interest, including the accused’s background and the nature of the offence.

2) Custodial sentences

i) Conditional sentence orders

In R v Fontana, 2017 ONSC 2964, the accused was convicted of fraud over $5,000 and theft by conversion after borrowing $150,000 from an elderly friend for the purposes of opening a restaurant. The accused used the loan for personal purposes and gambling, and only $12,000 was repaid.

She was sentenced to a two-year conditional sentence order, restitution of $150,000 and a fine in lieu of forfeiture of the $150,000 imposed. There were few mitigating factors, but one significant aggravating factor in the breach of the accused’s friendship with the victim, while it did not amount to a legal breach of trust. A conditional sentence was available given that two years less one day was not an inappropriate term and there was no evidence that a conditional sentence would endanger the safety of the community. For the first nine months of the sentence, the accused was to be subject to house arrest. By the completion of this period, the accused was to have repaid the full amount of the restitution order, failing which, she faced the possibility of serving the remainder of the sentence in jail. The amount of the fine imposed was to be reduced on a dollar-for-dollar basis as restitution was made, and if the fine was not paid by completion of accused’s sentence, she faced further period of incarceration.

ii) Under two years

In R v Caporiccio, 2017 ONCA 742, 2017 CarswellOnt 15270, the accused was convicted of fraud over (x2). The frauds were related to illegally obtained small business loans. A 90-day intermittent sentence was imposed on one count, and a 12-month consecutive conditional sentence was imposed on the second count. The judge also imposed a probation order and restitution order of $31,500.

iii) Two years and over

In R v Boghossian, 2017 ONCA 870, the accused lawyer was convicted of fraud over $5,000. He defrauded a bank of approximately $1.9 million and acted with others to present a fraudulent bank draft in order to acquire gold. A three-and-a-half years prison sentence was imposed. As the accused used his status as a lawyer in the commission of the offence, he received an additional six months over the co-accused.

Speaking With a Fraud Lawyer

Farjoud Law has an outstanding track record defending clients charged with criminal fraud and other fraud related offences. We are dedicated to professionalism, client services and passionate advocacy. 

If you or a loved one have been charged with fraud or fraud related offences, do not hesitate to call Farjoud Law at 647-606-6776 to speak directly to a criminal defence lawyer who personally answers all calls 24 hours/day – 7 days/week or fill out our convenient online form. We offer free and confidential, no-obligation consultations to answer your questions and point out potential defence strategies based on the facts of your case.