Fraud is a criminal offence under the Criminal Code that can be described as an economic crime. It consists in incurring the loss of the public or any other person of a good, service, money or value by deception, a deception which involves the substitution of a forgery for the genuine, falsehood or any other fraudulent means.
To prove the offence of fraud, the prosecution will have to prove beyond a reasonable doubt the elements of the offence : the actus reus (material element) and the mens rea (mental element).
In the Théroux decision, the Supreme Court of Canada set out the elements of the offence of fraud that the prosecution will have to prove.
News reus
First of all, there is the presence of a dishonest act. This act must constitute fraudulent behaviour such as deceit or lying. It is also possible that certain fraudulent acts are considered “dishonest” even if they do not involve deception or lies, such as concealing important facts, exploiting the weakness of others, unauthorized embezzlement or illegal usurpation.
It was in the Zlatic decision that the Supreme Court defined dishonesty as “the unlawful use of a thing to which a person has a right, in such a way that the right of another person is extinguished or compromised”. It is not enough to be negligent, one must have taken advantage of an opportunity at the expense of others, and that one’s conduct be unscrupulous.
Second, there is the presence of deprivation caused by this dishonest act. Deprivation is economic harm or a risk of economic harm suffered by the victim. It is therefore not necessary for the victim to suffer an actual loss, only the risk of loss is sufficient. In addition, the person who is guilty of the fraud will be found guilty regardless of whether or not he has benefited from this deprivation.
Mens rea
The prosecution will have to prove that the accused:
- Knew that he was committing a dishonest and prohibited act.
- Knew that this dishonest act would result in harm or risk of harm to the victim. It is not necessary that the accused had malicious intent, or to harm the victim, but rather that he or she could have considered the consequences of his or her act.
For example, in the Robitaille case, the accused was convicted of fraud for assigning his rights to purchase a property without informing the victim that the seller was incapacitated, and therefore unable to sell his home. Although the accused had added a clause in the contract stating the seller’s refusal to assign and the victim had been negligent in not reading it, the Court of Québec concluded that his silence was dishonest, and that the accused was fully aware of the fact that it would result in deprivation for the victim. His efforts to conceal the incapacity showed a “fraudulent means”, a fraudulent act.
Sentences
The penalty will depend on the monetary value of the harm caused to the victim.
- If the value of the property, service, money or value that is the subject of fraud is less than $5,000, the maximum prison sentence will be 2 years.
- If, on the other hand, the value exceeds $5,000, or the object of the fraud is a will, the maximum term of imprisonment will be 14 years. For frauds over $5,000, conditional sentences or discharges are not available.
The court will consider several factors in sentencing, such as:
- The complexity, scale or level of planning of the fraud committed;
- The impact of the offence on Canadian economic stability;
- The number of victims and the impact of the fraud on them;
- The fact that the accused took advantage of his reputation for integrity in the community;
- Concealment or destruction of records relating to fraud.