What is the penalty for fraud?

What is the penalty for fraud?

There are many factors the court weighs when determining the penalty for fraud, the primary one being the amount of money involved.

If someone is charged with fraud under $5,000, the Crown has two choices. They can proceed by indictment and seek the maximum penalty of two years in federal prison followed by three years of probation. If the Crown instead decides to treat the fraud charge as a summary conviction, the maximum penalty is two years less a day in a provincial jail and a $5,000 fine.

If the amount involved is more than $5,000, it is automatically considered an indictable offence with a maximum sentence of 14 years.

In all fraud charges, the Criminal Code identifies certain aggravating conditions when determining the penalty. They include:

• the magnitude, complexity, duration and degree of planning;
• if there were a large number of victims;
• whether the offence had a significant impact on the victims given their age, health and financial situation;
• if the offender took advantage of their status in the community;
• if the person violated a licensing requirement or professional standard that is normally applicable to their line of work;
• if the offender concealed or destroyed records related to the fraud or to the disbursement of the proceeds of the fraud; and
• if the value of the fraud exceeded one million dollars.

Conditional jail sentence change

The Code states a conditional jail sentence of house arrest is not available for anyone who is sentenced to a crime that carries a jail term of 14 years or more. In 2020, an Ontario Court of Appeal decision struck down that provision in a case involving an indigenous woman who was arrested in a Toronto airport with a large amount of cocaine in her suitcase.

According to court documents, she had flown to Surinam and was bringing back the narcotics in order to earn $20,000 from her boyfriend, as she needed the money to avoid homelessness for herself and for her daughter.

The sentencing judge noted she was “an intergenerational survivor of the government’s residential school effort to eradicate the cultural heritage of her people.” However, he rejected her application for a conditional sentence and imposed a custodial sentence.

Her lawyer appealed, arguing the sections of the Code that make conditional sentences unavailable for indictable offences where the maximum penalty is 14 years or more are arbitrary and overbroad. The court agreed and gave her a conditional sentence to be served at home.

The court’s decision to strike down those provisions from the Code is applicable to other charges, including fraud, and I will be seeking conditional sentences for clients when it is appropriate.

Personal costs of a fraud conviction

Though fraud does not involve violence or injury like other forms of theft, it is still considered a serious crime by courts and police. If convicted, your name will be added to the Canadian Police Information Centre database and you will have a criminal record. That means anyone who does a background check on you will see the criminal conviction and sentence and may question if you can be trusted, especially in a position that involves money.

A conviction may limit your ability to find a place to live. If a prospective landlord conducts a background check and sees you have been found guilty of fraud, your application for tenancy will likely be rejected.

Those looking to adopt children are also carefully prescreened and a conviction for a financial crime may be a red flag for any adoption agency.

A crime of ‘moral turpitude’

Another consequence of a fraud conviction is that your ability to travel outside the country may be restricted. That is especially true if you attempt to cross the border into the United States, where fraud is considered a crime of moral turpitude

This term appeared in U.S. immigration law beginning in the 19th century and is referenced by the U.S. Department of Justice in a document as being one of the grounds for deportation, even though there is no statutory definition of what it constitutes.

The Merriam Webster dictionary defines it as “an act or behavior that gravely violates the sentiment or accepted standard of the community.”

According to a book about U.S. immigration decisions, in one case an American immigration appeal board stated that “moral turpitude refers generally to conduct that shocks the public conscience as being inherently base, vile or depraved, contrary to the rules of morality and the duties owed between man and man, either one’s fellow man or society in general. Moral turpitude has been defined as an act which is per se morally reprehensible and intrinsically wrong … so it is the nature of the act itself and not the statutory prohibition of it which renders a crime one of moral turpitude.”

It is sufficient to say that if you are convicted of fraud, your ability to travel to the United States will be in question. If you are facing this charge, seek legal counsel who can work on your behalf to find a legal remedy that doesn’t involve a criminal record.

Addiction often leads to fraud

When someone steals money from an employer or a corporation, these frauds are often easy to spot, as these examples show.

According to a news story, a former golf pro in British Columbia bilked clients of more than $40,000 to fund a gambling habit. He was sentenced to18 months of house arrest after he pleaded guilty to a dozen fraud charges.

The Crown described his fraud as “unsophisticated” as he would offer memberships or golf clubs for sale then pocket the cash, rather than give it to his corporation that owned the golf course. The man blamed his crimes on a sports gambling addiction.

The story notes a provincial judge agreed to a joint submission for an 18-month conditional sentence order with house arrest while repaying $40,664 as restitution to the corporation. The golf course had previously refunded the money people had lost and the parties involved agreed the former pro was a good man who deserved a second chance.

“You stole some money from some very forgiving people,” the judge said, according to the story. “You made it very difficult for them. But this corporation … repaid that money to all those customers. Now it’s your responsibility to pay that back to them.”

Skimming the payroll

A former payroll manager at a B.C. sawmill was found guilty of fraud over $5,000 after inflating co-worker paycheques and then depositing those funds into her own bank account, according to a story.

Nearly 40 fraudulent transactions were unearthed over two years, with the woman skimming money from the paycheques of 14 employees. The story states the affected employees faced increased tax liabilities while her employer was saddled with an additional $38,700 in benefits-related expenses.

None of the money was paid back, the story states, with a pre-sentence report with a psychiatric component ordered to shed more light on her actions.

Using children in a fraud

In Ontario, a husband and wife face numerous charges after defrauding members of a church of more than $650,000. According to a news story, the couple are guardians of two children and they convinced congregants that the kids were suffering from serious diseases including cancer.

The couple went so far as to dress one child in a hospital gown and attach a fake intravenous connection to his arm to convince people of the severity of the apparent illness, the story states. Church members gave the family more than $650,000 in cash, rent money, groceries, the purchase of a motor vehicle and other financial support in a two-year span before reporting them to police.

They are both charged with three counts of fraud over $5,000, the story adds, with the investigation continuing.

How can I help you?

Facing fraud allegations can seriously affect your job, reputation, and personal freedom. Before speaking with the police, contact me for a free consultation. As an Ottawa-based fraud lawyer, I'm ready to strategize your defence, clarify plea implications, and address your charges' details. Leveraging credible circumstances, I aim to have your charges dismissed. Should a trial proceed, I'll fight tirelessly daily on your behalf. Reach me at 613.863.8595 for a free consultation.