Fraud under Canadian criminal law is classified according to the monetary value of the subject of the offence. A hybrid offence, fraud under $5,000 may be prosecuted as either a summary or indictable offence, with maximum penalties of two years in prison, respectively. A purely indictable offence, the maximum penalty for fraud over $5,000 is 14 years’ imprisonment. Penalties depend on the value of the subject of the offence, the sophistication of the act or scheme, the number and nature of the victims, and your offending history.

Fraud Definition

Fraud is the act of depriving someone of their property, money, or other valuable security or service, through deceit, falsehood or other fraudulent means. Classified according to the value of the subject matter of the offence, fraud under $5,000 is generally distinguished from that over $5,000.

What is Fraud?

You may be charged with fraud if you intentionally misrepresent or conceal the truth to deprive someone of money or something of value. While similar to theft, fraud involves the additional element of false pretense — by which the loss must take place.

A broad criminal offence, fraud includes altering price tags, forgery, tax evasion, identity theft, pyramid schemes, embezzlement, charity fraud, Internet fraud, insurance fraud, mortgage fraud, bank fraud, and perjury, all of which are felonies under the Criminal Code of Canada.

To yield a conviction of fraud, the Crown Prosecutor must prove beyond a reasonable doubt:

  • You deprived the complainant of money or something of value (or there was a risk of such a loss)
  • The complainant is the owner of the subject of the offence
  • The deprivation was intentional
  • The deprivation was caused by false pretense
  • You committed the fraudulent act wittingly, or you were willfully blind as to whether the act would cause deprivation
  • The value of the subject of the offence (and whether it’s over or under $5,000)

The Crown Prosecutor must also prove:

  • Your identity
  • The date and time of the offence
  • The location of the offence

Fraud Over $5,000

While the elements of fraud under $5,000 and fraud over $5,000 are the same, the consequences for fraud over $5,000 are notably more severe. Generally speaking, the value of the subject of the offence is positively correlated with the severity of the punishment upon conviction.

Fraud vs. Theft

Fraud is similar to theft in that both involve the deprivation of money or property, and both are classified according to the value of the subject of the offence (under or over $5,000). But while property is taken in theft, it’s offered in fraud. That is, victims of fraud willingly forfeit their property to fraudsters under false pretenses.

If you were to hotwire a car, drive it away and strip it for parts, that would be theft. If you instead gained access to this car by posing as a parking valet to whom the owner voluntarily gave their keys, that would be fraud. The deliberate act of deception — absent in theft — is what separates fraud from theft.

Fraud in the Criminal Code of Canada

Section 380 of the Criminal Code states that every one 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,

  1. is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or
  2. is guilty
    1. of an indictable offence and is liable to imprisonment for a term not exceeding two years, or
    2. of an offence punishable on summary conviction, where the value of the subject-matter of the offence does not exceed five thousand dollars.

Section 380.1 of the Criminal Code states that it shall consider the following as aggravating circumstances:

  1. the magnitude, complexity, duration or degree of planning of the fraud committed was significant;
  2. the offence adversely affected, or had the potential to adversely affect, the stability of the Canadian economy or financial system or any financial market in Canada or investor confidence in such a financial market;
  3. the offence involved a large number of victims; (C.1) the offence had a significant impact on the victims given their personal circumstances including their age, health and financial situation;
  4. in committing the offence, the offender took advantage of the high regard in which the offender was held in the community;
  5. the offender did not comply with a licensing requirement, or professional standard, that is normally applicable to the activity or conduct that forms the subject-matter of the offence; and
    the offender concealed or destroyed records related to the fraud or to the disbursement of the proceeds of the fraud.

Fraud Penalties

Penalties for fraud depend on the value of the subject of the offence, the sophistication of the act or scheme, the level of trust breached, the number and nature of the victims, and your offending history. In determining what sentence to seek, the Crown will assess the extent of the fraudulent behaviour and the circumstances from which it arose.

Committing an act of fraud against an employer and other breaches of trust are considered aggravating factors on sentencing and generally result in harsher sentences. Having an existing criminal record with fraud charges will also increase the severity of your sentence. For less severe offences of fraud under $5,000, you may alternately enter an alternative measures program.

Alternative Measures Programs

You may be considered for an alternative measures program on your first offence if the charges against you are minor and you admit to and take responsibility for your actions. Overseen by community probation offices, alternative measures programs divert your case from the court process. Alternative measures programs give you the opportunity to make amends through an agreed upon set of steps. If these steps are taken, your charges will be withdrawn and you will not receive a criminal record.

Alternative measures may include:

  • Compensation for the loss or damage
  • An apology
  • Community service work
  • Culturally-based practices for Indigenous people

Fraud Under $5,000 Penalties

  • Up to two years in prison
  • Possible referral to an alternative measures program
  • Supervised release
  • Restitution
  • Fines
  • Restrictive bail conditions
  • Criminal record
  • Possible revocation of immigration status
  • Travel restrictions to the United States
  • Reputational consequences

Fraud Over $5,000 Penalties

  • Up to 14 years in prison
  • Minimum two years in prison if the value of the subject of the offence exceeds one million dollars
  • Possible prohibitions against seeking, obtaining or continuing any employment that involves having authority over the real property, money or valuable security of another person
  • Possible prohibitions against volunteering in any capacity that involves having authority over the property, money or valuable security of another person
  • Supervised release
  • Restitution
  • Fines
  • Restrictive bail conditions
  • Criminal record
  • Possible revocation of immigration status
  • Travel restrictions to the United States
  • Reputational consequences
Share This