Sentencing Fraud: Difference between revisions

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Fraud

Overview

See also: Fraud (Offence)

Offence Wording

Fraud
380. (1) 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,

(a) 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
(b) is guilty
(i) of an indictable offence and is liable to imprisonment for a term not exceeding two years, or
(ii) of an offence punishable on summary conviction,

where the value of the subject-matter of the offence does not exceed five thousand dollars.
Minimum punishment
(1.1) When a person is prosecuted on indictment and convicted of one or more offences referred to in subsection (1), the court that imposes the sentence shall impose a minimum punishment of imprisonment for a term of two years if the total value of the subject-matter of the offences exceeds one million dollars.
...
R.S., 1985, c. C-46, s. 380; R.S., 1985, c. 27 (1st Supp.), s. 54; 1994, c. 44, s. 25; 1997, c. 18, s. 26; 2004, c. 3, s. 2; 2011, c. 6, s. 2.


– CCC

General Principles

See also: Purpose and Principles of Sentencing, Sentencing Factors Relating to the Offender, and Sentencing Factors Relating to the Offence

Maximum Penalties

Offence(s) Crown
Election		 Maximum Penalty
s. 380(1)(a) [greater than $5,000 and testamentary instrument]
From September 15, 2004		 N/A 14 years custody
s. 380(1)(b) Summary Election 2 years less a day jail and/or a $5,000 fine (from Sept 19, 2019)
s. 380(1)(b) Indictable Election 2 years custody
s. 380(1)(a) [greater than $5,000 or testamentary instrument]
Until September 14, 2004		 N/A 10 years custody

Offences under s. 380 [greater than $5,000 or testamentary instrument] are straight indictable. The maximum penalty is 14 years incarceration.

Offences under s. 380 [no greater than $5,000 are hybrid. If prosecuted by indictment, the maximum penalty is 2 years incarceration. If prosecuted by summary conviction, the maximum penalty is 2 years less a day jail and/or a $5,000 fine (from Sept 19, 2019).

Minimum Penalties
These offences have no mandatory minimum penalties.

Available Dispositions

Offence(s) Crown
Election		 Discharge
s. 730		 Suspended
Sentence
s. 731(1)(a)		 Stand-alone
Fine
s. 731(1)(b)		 Custody
s. 718.3, 787		 Custody and
Probation
s. 731(1)(b)		 Custody and
Fine
s. 734		 Conditional
Sentence (CSO)
s. 742.1
s. 380 [no greater than $5,000 and no testamentary instrument] any
s. 380 [over $5,000 or testamentary instrument]
Nov. 20, 2012 onward		 N/A
s. 380 [over $5,000 or testamentary instrument]
September 15, 2004 to Nov. 20, 2012		 N/A
s. 380 [over $5,000 or testamentary instrument]
Until September 14, 2004		 N/A

Consecutive Sentences
There are no statutory requirements that the sentences be consecutive.

Conditional Sentences

Conditional sentences are available for offences of fraud under $5,000.

Conditional sentences are available for offences of fraud over $5,000 where the offence was committed prior to the amendment to s. 742.1 on November 20, 2012.[1]

Unless prohibited by law, the court should be considered a conditional sentence in all circumstances where incarceration is contemplated.[2]

Custodial sentences are considered preferable "[w]here punitive objectives such as denunciation and deterrence are particularly pressing, such as in cases in which there are aggravating circumstances".[3]

For most courts, the amount defrauded will be sufficient to determine if incarceration is required.[4]

In major frauds involving breach of trust, denunciation and deterrence are to be emphasized and will usually result in jail sentences.[5]

Certain courts have stated that conditional sentence orders should not be granted where there is a breach of trust.[6] However, others suggest that it is not a full prohibition. Rather is it rate where it is a large scale fraud.[7]

Incarceration is often ordered where there is no remorse.[8] Also where there is no acceptance of responsibility.[9]

Where there are exceptional or extreme personal mitigating circumstances, general deterrence can be satisfied by a conditional sentence.[10]

Restitution and community service work are not sufficient to amount to exceptional circumstances to warrant a conditional sentence.[11]

Where the aggravating factors overwhelm the mitigating factors, a sentence of imprisonment is mandated.[12]

The “ruin and humiliation” brought upon the accused and his family due to the offence and professional loss coupled with a conditional sentence can be sufficient to satisfy denunciation and deterrence.[13]

  1. ↑ List of Criminal Code Amendments
  2. ↑ R v Moulton, (2001) 160 CCC (3d) 407, 2001 SKCA 121 (CanLII)
  3. ↑ R v Proulx, 2000 SCC 5 (CanLII) at 114
  4. ↑ R v Bogart [2002] OJ No. 3039 2002 CanLII 41073 (ON CA) at para 34
    R v Evans 2003 NBQB 54 (CanLII)
    R v Williams, 2003 CanLII 9650 (ON CA), [2003] OJ No. 2202 (CA)
    R v Kuriya 2002 NBQB 306 (CanLII) aff’d at 2003 NBCA 63
    R v Black [2003] NSJ No 168, 2003 NSSC 99 (CanLII)
  5. ↑ R v MacEachern, [1978] O.J. No. 987(*no CanLII links) at para 8, 9 (ONCA)
    R v Tucker, [1988] NSJ No. 33(*no CanLII links) at page 18 (NSCA)
    R v Hill, [1997] NSJ No. 97, 1997 CanLII 9832 (NSSC) at paras 13-15 (N.S.S.C.)
    R v Toews, [2007] A.J. No. 944, 2007 ABPC 235 (CanLII) at para 36, 37 (ABPC)
    R v McKinnon, [2005] A.J. No. 12, 2005 ABCA 8 (CanLII) at paras 60-63, (ABCA)
    R v Reid, [2004] Y.J. No. 3, 2004 YKCA 4 (CanLII) at para 13 (YTCA)
    R v Steeves, 2005 NBCA 85 (CanLII), [2005] N.B. J. No. 351, at para 10 (NBCA)
    R v Cremer, [2007] A.J. No. 989, 2007 ABQB 544 (CanLII) at para 26 (ABQB)
    R v Miller, [2010] A.J. No. 174, 2010 ABPC 37 (CanLII) at para 62
    R v Inglis, 2002 BCPC 242 (CanLII) at para 5 (“the law has made it clear that unless there are exceptional and unusual circumstances, people who find themselves before the court on offences that involve a breach of trust should expect that a period of incarceration is the likely consequence.”)
    R v Howe, 2002 ABCA 277 (CanLII), [2002] AJ No 1443 at para 3 - concerned tax fraud
    c.f. R v Matchett, [1997] NBJ No 176 (CA), 1997 CanLII 9511 (NB CA) at 5
  6. ↑ R v Pierce, 1997 CanLII 3020 (ON CA), (1997), 114 CCC (3d) 23 (C.A.)
  7. ↑ R v Williams, 2007 CanLII 13949 (ON SC), [2007] O.J. 1604 at paras 26-28 per Hill J ("The sentencing option of a conditional sentence is not excluded from consideration in breach of trust fraud cases")
  8. ↑ R v Mastromonaco [2002] OJ No 4612(*no CanLII links) at 28
  9. ↑ R v Bradbury supra ta 28 to 30 and Desormeau at 20
  10. ↑ R v Bunn 2000 SCC 9 (CanLII)
    R v Kratky, 1997 CanLII 936 (BC SC)
    R v Anderson-Davis, [2000] BCJ No. 88, 2000 BCSC 42 (CanLII)
  11. ↑ R v McEachern (1978), 42 CCC (2d) 189 (Ont.C.A.)(*no CanLII links) at 191
  12. ↑ R v Bodnarchuk, 2008 BCCA 39 (CanLII) at 20
    R v Mohebtash, 2007 BCCA 427 (CanLII) at para 10
  13. ↑ R v Bunn 2000 SCC 9 (CanLII) per McLaughlin CJ. at para 23

Sentencing Principles

See also: Property and Fraud Offences (Sentencing)

Major instances of fraud over $5,000 require emphasis on general deterrence and denunciation.[1] The same goes for cases involving breach of trust[2] and offences that involve a substantial amount of dishonesty.[3]

The purpose of the general deterrence is to assuage people from engaging in fraud which is often easy to commit and highly profitable. Without sufficient punishment, the temptation of taking the risk of a lesser punishment in exchange for a large sum of money would make it worthwhile.[4]

Denunciation should adequately reflect the public’s condemnation of this offence and the offender’s conduct.[5]

  1. ↑ R v Dobis, 2002 CanLII 32815 (ON CA) at 42
    R v Bogart, [2002] OJ No. 3039, 2002 CanLII 41073 (ON CA), per Laskin JA, at 29, 33-36
    R v Wismayer, 1997 CanLII 3294 (ON CA), (1997) 115 CCC (3d) 118 (ONCA) at 38
    R v Gray (L.V.) et al. 1995 CanLII 18 (ON CA), (1995), 76 O.A.C. 387 at 398-99
    R v Betram [1990] OJ No 2013(*no CanLII links) at 3 (CA)
  2. ↑ R v Howe, [2002] AJ No 1443, 2002 ABCA 277 (CanLII) at para 3
    R v Dobis, supra at 272
    Bogart, supra at 29
    R v Pierce, [1997] OJ No. 715, 1997 CanLII 3020 (ON CA), per Finlayson JA, at 11
  3. ↑   R v Drabinsky and Gottlieb, 2011 ONCA 582 (CanLII), per The Court, at paras 160
    R v Coffin 2006 QCCA 471 (CanLII) at paras 49, 70
  4. ↑ Pierce, supra at 5
  5. ↑ R v Howe, [2002] AJ No 1443, 2002 ABCA 277 (CanLII) at para 3
    Dobois, supra at 272

Social Assistance Fraud

It is suggested that the "paramount consideration" whether dealing with fraud against welfare authorities is deterrence.[1] It has also been said that the focus should be upon "protection of the public".[2]

Defrauding publicly funded programs "corrodes the public's attitude to such forms of assistance -- and hence so undermines them".[3]

  1. ↑ R v Thurrott (1971), 5 CCC (2d) 129, per Gale C.J.O. at p. 129 ("this Court is unanimously of the opinion that the paramount consideration in determining the sentence is the element of deterrence. Welfare authorities have enough difficulties without having to put up with persons who set out to defraud them.")
  2. ↑ R v Bates (1972), 9 CCC (2d) 74 (Ont.Co.Ct.), per Moore Co.Ct.J. at p. 74 ("The cardinal principle in the determination of a sentence is the protection of the public.")
  3. ↑ R v Wilton, (1991), 93 Sask. R. 184
    see also R v Durocher, (1992), 100 Sask. R. 108

Factors

Section 380.1 states aggravating factors relating to fraud:

Sentencing — aggravating circumstances
380.1 (1) Without limiting the generality of section 718.2, where a court imposes a sentence for an offence referred to in sections 380, 382, 382.1 and 400, it shall consider the following as aggravating circumstances:

(a) the value of the fraud committed exceeded one million dollars;
(b) 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;
(c) the offence involved a large number of victims; and
(d) in committing the offence, the offender took advantage of the high regard in which the offender was held in the community.

Aggravating circumstance — value of the fraud
(1.1) Without limiting the generality of section 718.2, when a court imposes a sentence for an offence referred to in section 382, 382.1 or 400, it shall also consider as an aggravating circumstance the fact that the value of the fraud committed exceeded one million dollars.
Non-mitigating factors
(2) The court shall not consider as mitigating circumstances the offender’s employment, employment skills or status or reputation in the community if those circumstances were relevant to, contributed to, or were used in the commission of the offence.
Record of proceedings
(3) The court shall cause to be stated in the record the aggravating and mitigating circumstances it took into account when determining the sentence. 2004, c. 3, s. 3; 2011, c. 6, s. 3.


– CCC

Aggravating factors for major fraud include: [1]

  • breach of trust[2]
  • magnitude or size of the fraud[3]
  • degree of sophistication, planning and deception[4]
  • number of dishonest transactions undertaken in the offence[5]
  • Duration of the dishonesty[6]
  • number of victims[7]
  • vulnerability of the victims[8]
  • impact of the fraud upon the victims
  • nature and extent of the loss
  • efforts to conceal the fraud, including forging of documents
  • personal benefit[9]
  • the number of people involved and the role of the offender
  • greed as sole motivator[10]
  • termination of scheme by arrest or voluntarily
  • prior record[11]

Mitigating factors for major fraud include:[12]

  • “substantial recovery” of the proceeds of the dishonest conduct
  • voluntary repayment of restitution before sentencing[13]
  • honest motive, including a medical condition, addiction, or other motivating causes other than greed or financial gain
  • major personal impact from offence, such as loss of job[14]
  • no record[15]

No prior record is a limited factor since it is a common situation and, at least in relation to major fraud, the offender would have been less likely to have been in the position to commit the offence had the offender had a prior record. Further, the lack of record is usually trumped by the emphasis on general deterrence.[16]

Good Character
Good character is also of a limited factor as the good character will often help facilitate the offence. The person will often have a place in the community and a good reputation and without which they would not have been able to commit the offence itself.[17]

The good character of well-educated persons who commit offences of major fraud are not of great concern since they are the group that tends to commit these offences the most.[18]

The sentencing process for major fraud is "not really concerned with rehabilitation".[19]

Gambling Addiction
Factors such as the presence of gambling addictions cannot be considered mitigating however can have the effect of “[reducing] moral blameworthiness”[20]

Breach of Trust
Theft of money by persons entrusted with it in the course of his employment amounts to an abuse of trust within the meaning of s.718.2(a)(iii).[21]

"Large number of victims"
The reference to "large number of victims" under s. 380.1 (1)(c) of the code will include a group of more than 50 people.[22]

Groups a low as 13 people have been considered a "large group".[23]

However, numbers in the range of 4 people is not considered "large".[24]

  1. ↑ R v Cunsolo, 2012 ONSC 114 (CanLII) at para 41
    see also R v Levesque, 1993 CanLII 4232 (QC CA), (1993) 59 QAC 307 CA
  2. ↑ Evans 2003 NBQB 54 (CanLII)
    see s. 718.2(a)(iii)
  3. ↑ R v Kuriya, 2002 NBQB 306 (CanLII), 2002 252 NBR (2d) 247
    R v Evans [2003] NBJ No 47 (QB), 2003 NBQB 54 (CanLII)
  4. ↑ R v Howe supra
  5. ↑ R v Bjellebo, [2000] OJ No 478 (SC)(*no CanLII links) aff'd 2003 CanLII 26907 (ON CA)
  6. ↑ R v Fehr, [2001] SJ No 147 (CA), 2001 SKCA 37 (CanLII)
  7. ↑ R v Wheeler, 2001 CanLII 37646 (NL SCTD) and 2001 CanLII 37651 (NL SCTD), [2001] NJ No 240
  8. ↑ R v Evans 2003 NBQB 54 (CanLII) at para 12 and R v Adler, 1999 CanLII 9438 (NB CA), [1999] NBJ No 100 (CA)
    R v Desormeau, 2001 CanLII 33851 (NL SCTD), [2001] NJ No 341
    R v Bradbury, 2002 CanLII 61687 (NL SCTD), (2002) 218 Nfld 33 -- institutional victims
  9. ↑ R v Bogart, 2002 CanLII 41073 (ON CA)
  10. ↑ R v Wisniewski (2002) 166 Man R (2d) 73, 2002 MBCA 93 (CA)
  11. ↑ R v Harding [2002] BJ No 2502 (CA)(*no CanLII links)
  12. ↑ R v Cunsolo, 2012 ONSC 114 (CanLII) at para 39
  13. ↑ R v Inglis, [2002] BCJ No 1551 (PC)(*no CanLII links)
    R v Bogart [2002] OJ No. 3039, 2002 CanLII 41073 (ON CA)
  14. ↑ R v Loewen, 2002 CanLII 37336 (MB PC)
  15. ↑ R v Bogart, supra
  16. ↑ R v Bogart, supra
    R v Bertram (1990), 40 OAC 317(*no CanLII links) at 319
  17. ↑ R v Foran, 1969 CanLII 209 (ON CA), [1970] 1 CCC 336 (ONCA) at 337 (“Any mitigation from [the accused position in the community] would seem to us to be more than offset by the fact that the very nature of this type of crime requires that it be committed by persons who have an established place in the community and are allegedly honourable gentlemen.”)
  18. ↑ R. v. Bertram and Wood (1990), 40 O.A.C. 317
  19. ↑ Bertram, supra
  20. ↑ R v Alakija, 2007 ABPC 234 (CanLII) at para 13
  21. ↑ Veno v R., 2012 NBCA 15 (CanLII) at para 13
    R v Chaulk, 2005 NBCA 86 (CanLII)
    R v McKinnon, 2005 ABCA 8 (CanLII), [2005] A.J. No. 12 -- embezzlement by a bookkeeper R v Holmes, 1999 ABCA 228 (CanLII) -- bank manager stealing from accounts
    R v Reid, 2004 YKCA 4 (CanLII) -- cashier stealing from employer R v Pierce, 1997 CanLII 3020 (ON CA), [1997] O.J. No. 715 (C.A.) -- comptroller sealing from employer
    R v Dobis, [2002] O.J. No. 646, 2002 CanLII 32815 (ON CA) -- fraud by accounting manager
    R v Clarke, 2004 CanLII 7246 (ON CA), [2004] O.J. No. 3438 (C.A.) -- bank telephone agent stealing from accounts R v Bowes (J.M.), (1994), 155 N.B.R. (2d) 321 (C.A.)(*no CanLII links) -- lawyer stealing trust funds
  22. ↑ R v Johnson, 2010 ABCA 392 (CanLII) at para 35 to 36
  23. ↑ R v Walker, 2016 ABQB 695 (CanLII) at para 65
    R v deKock, 2008 ABPC 279 (CanLII) (13 victims)
    R v Winter, [2008] NJ No 260 (15 victims)
    R v Banks, 2010 ONCJ 339 (CanLII), [2010] OJ No 3550 (18 victims)
    R v Penney, 2008 ABPC 339 (CanLII), [2008] AJ No 1353 (20 victims)
    R v Cruz, 2010 ONCJ 640 (CanLII), [2010] OJ No 5735 (29 victims)
    R v Dhanaswar, [2014] OJ No 6388, 2014 CarswellOnt 18873 (31 victims)
  24. ↑ e.g. R v Sanmugam, 2012 ONSC 6663 (CanLII), [2012] OJ No 5647

Ranges

See also: Fraud (Sentencing Cases)

Ontario cases have set the generally accepted range of sentence of major fraud at 3 to 6 years.[1]

"Large-scale" fraud will typically be penitentiary sentence. A conditional sentence will not be appropriate in these cases.[2]

  1. ↑ R v Dobis 2002 CanLII 32815 (ON CA) per MacPherson JA at p. 271 - stating 3 to 5 years
    R v Drakes, 2009 ONCA 560 (CanLII) at paras 24-6 (leave to appeal refused, [2009] S.C.C.A. No. 381)
    R v Bertram, [1990] O.J. No. 2013 (C.A.)(*no CanLII links) at p. 3
    R v Wilson, [2003] O.J. No. 1047, 2003 CanLII 48181 (ON CA) at para 5
  2. ↑ R v Cunsolo, 2014 ONCA 364 (CanLII) at para 53

Ancillary Sentencing Orders

See also: Ancillary Orders

Offence-specific Orders

Order Conviction Description
DNA Orders s. 380(1)(a) or (2)
Stand-alone Restitution Order - Mandatory consideration under s. 380.3 s. 380
Section 380.2 - Fraud Prohibition Order (section 380.2) s. 380

General Sentencing Orders

Order Conviction Description
Non-communication order while offender in custody (s. 743.21) any The judge has the discretion to order that the offender be prohibited "from communicating...with any victim, witness or other person" while in custody except where the judge "considers [it] necessary" to communicate with them.
Restitution Orders (s. 738) any A discretionary Order is available for things such as the replacement value of the property; the pecuniary damages incurred from harm, expenses fleeing a domestic partner; or certain expenses arising from the commission of an offence under s.402.2 or 403.
Victim Fine Surcharge (s. 737) any A discretionary surcharge under s. 737 of 30% of any fine order imposed, $100 per summary conviction or $200 per indictable conviction. If the offence occurs on or after October 23, 2013, the order has smaller minimum amounts (15%, $50, or $100).

General Forfeiture Orders

Forfeiture Conviction Description
Forfeiture of Proceeds of Crime (s. 462.37(1) or (2.01)) any Where there is a finding of guilt for an indictable offence under the Code or the CDSA in which property is "proceeds of crime" and offence was "committed in relation to that property", the property shall be forfeited to His Majesty the King on application of the Crown. NB: does not apply to summary offences.
Fine in Lieu of Forfeiture (s. 462.37(3)) any Where a Court is satisfied an order for the forfeiture of proceeds of crime under s. 462.37(1) or (2.01) can be made, but that property cannot be "made subject to an order", then the Court "may" order a fine in "an amount equal to the value of the property". Failure to pay the fine will result in a default judgement imposing a period of incarceration.
Forfeiture of Weapons or Firearms (s. 491) any Where there is finding of guilt for an offence where a "weapon, an imitation firearm, a prohibited device, any ammunition, any prohibited ammunition or an explosive substance was used in the commission of [the] offence and that thing has been seized and detained", or "that a person has committed an offence that involves, or the subject-matter of which is, a firearm, a cross-bow, a prohibited weapon, a restricted weapon, a prohibited device, ammunition, prohibited ammunition or an explosive substance has been seized and detained, that the item be an enumerated weapon or related item be connected to the offence", then there will be a mandatory forfeiture order. However, under s. 491(2), if the lawful owner "was not a party to the offence" and the judge has "no reasonable grounds to believe that the thing would or might be used in the commission of an offence", then it should be returned to the lawful owner.
Forfeiture of Offence-related Property (s. 490.1) any Where there is a finding of guilt for an indictable offence, "any property is offence-related property" where (a) by means or in respect of which an indictable offence under this Act or the Corruption of Foreign Public Officials Act is committed, (b) that is used in any manner in connection with the commission of such an offence, or (c) that is intended to be used for committing such an offence". Such property is to be forfeited to Her Majesty in right of the province. NB: does not apply to summary offences.

History of the Offence

See Also

References

v • e
 
Property and Financial Offences
Offences / Sentencing
Fraud on the Government (121), Theft (322, 334), Motor Vehicle Theft (333.1), Breach of Trust (336), Unauthorized Use of Computer (342.1), Robbery (343, 344), Break and Enter (348), Unlawfully in a Dwelling (349), Possession of Break-in Instruments (351), Possession of Stolen Property (354, 355), Trafficking in Stolen Property (355.2, 355.4), Obtaining Property by False Pretences (362), Forgery (366, 367, 368), Fraud (380), Mischief (430), Arson (433, 434), Animal Cruelty (444, 445, 445.1 and 446), Counterfeiting (449, 450, 452)
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