Is it a crime, or just a deal that went badly? That is usually the real question in a fraud case. A contractor takes a deposit and never finishes the job. A bookkeeper moves money between accounts to cover a short month. A small business owner tells a lender that sales are better than they really are. Each of these can be a civil dispute, a criminal charge, or both, and the outcome depends on evidence that is often far less obvious than the people involved assume.
Fraud is set out in section 380 of the Criminal Code. It is a broad offence that captures all kinds of conduct, from a single false insurance claim to a long-running investment scheme. Because Brampton has so many owner-operated trucking firms, construction companies, retail shops and real estate transactions, these charges often land on people who have never been inside a courtroom and who see themselves as honest business people.
This article is general information only and is not legal advice. If you have been charged, or the police have asked to speak with you about money, you should get advice on your own facts.
The Basic Structure of the Offence
Section 380(1) makes it an offence to defraud the public or any person of any property, money, valuable security or service by deceit, falsehood or other fraudulent means. The Supreme Court of Canada has broken that down in cases such as R. v. Olan and R. v. Théroux. The Crown must prove two things about the conduct and two things about the accused’s state of mind.
| What must be shown | In plain language |
|---|---|
| A dishonest act | A lie, a deceptive act, or other conduct a reasonable person would see as dishonest |
| Deprivation | Someone lost something, or their financial interests were put at risk |
| Knowledge of the act | The accused knew they were doing the thing that was dishonest |
| Knowledge of the risk | The accused knew it could put another person’s money or property at risk |
Every part has to be proven beyond a reasonable doubt. The Crown’s burden does not shift because the paperwork looks bad.
The Dishonest Act: Three Routes
“Deceit” and “falsehood” are the familiar ones. Telling a lender that you have a job you lost two months ago, or sending a customer a forged inspection report, is an obvious example. A falsehood can also arise from leaving things out when the silence creates a false impression, such as hiding a lien while selling property.
“Other fraudulent means” is the catch-all. Courts ask whether a reasonable person would regard the conduct as dishonest. In R. v. Zlatic, the Supreme Court said this can include using other people’s money for unauthorized purposes, even where nobody told a specific lie. A business owner who accepts funds for one stated purpose and spends them on something else could end up with this kind of allegation.
The test is objective. Telling a court, “I did not think it was dishonest,” does not settle the matter if a reasonable person would disagree. Negligence is not enough, though. Sloppy books, poor management and over-optimism are not dishonest acts in themselves.
Deprivation Does Not Require a Final Loss
Many people assume there can be no fraud if the money was eventually paid back. That is a costly misunderstanding. Deprivation includes actual loss, but it also includes putting someone’s financial interests at risk. A person can be convicted even if the victim was repaid, if the victim was never really out of pocket, or if the accused made no profit personally.
Repayment still matters. It can affect how the Crown views the case, and it is very often important at sentencing. It just does not undo the offence, and offering it in the wrong way, such as directly to a complainant while under a no-contact condition, can create fresh problems.
Do not approach anyone to pay them back or to work things out until you have spoken to a lawyer. An apology text may be read later as an admission.
The Mental Element Is Often the Real Battleground
Fraud is an intentional offence, but “intent” here does not mean what most people think. Under Théroux, the Crown must show that the accused knew they were carrying out the dishonest conduct and knew it could cause deprivation. Being reckless about that consequence can also be sufficient. The Crown does not have to prove that the accused wanted anyone to get hurt, or that they believed what they were doing was morally wrong. Someone who hopes everything will work out in the end, and that nobody will lose a cent, can still have the necessary state of mind if they knowingly put others at risk.
Where, then, is the defence? It often lies in what the person truly knew and believed about the facts. A sincere belief in a fact that would have made the conduct honest can raise a reasonable doubt. If a director really believed the company’s accountant had reported the funds correctly, that is different from someone who knew the figures were invented. Likewise, a person who signed a document prepared by a broker may not have known its contents were false. The evidence needed to show this is usually contemporaneous: emails, drafts, bank records and notes made at the time.
Consider a hypothetical. A renovator in Brampton takes three deposits in a month and then cannot finish the jobs because a major supplier fails. If the evidence shows honest attempts to do the work, materials ordered, and truthful communication, that looks like a breach of contract. If the evidence shows no materials ordered, deposits immediately moved to personal accounts, false excuses, and a pattern of the same conduct, the picture is quite different. The same headline facts can point in two directions.
What the Amount Means for Penalties
The value involved determines how the charge is structured:
- Over $5,000, or a testamentary instrument (such as a will): Indictable only, with a maximum of 14 years.
- $5,000 or less: The Crown can proceed by indictment, with a two-year maximum, or summarily.
- Over $1 million in total, on indictment: A mandatory minimum of two years in prison applies.
The Code also lists aggravating factors specific to fraud. These include the size, complexity, duration and planning of the fraud, a large number of victims, particularly vulnerable victims, a damaging effect on the Canadian economy, concealing or destroying records, and failing to comply with licensing or professional requirements. Breach of trust, such as an employee stealing from an employer or an agent from a client, is commonly treated as serious.
A few other consequences deserve attention. On conviction or a conditional discharge, a court may prohibit a person from any job or volunteer role that gives them authority over another person’s money, real property or securities. Courts can also order restitution, and it is a common request in fraud sentencing. An unpaid restitution order may be enforceable as a civil judgment. Because fraud over $5,000 carries a 14-year maximum, a discharge is unavailable for that version of the offence, and a conviction may have immigration consequences for non-citizens.
How Fraud Files Get Built
Unlike a bar fight, a fraud allegation may be investigated for months before anyone knows. Peel Regional Police or another agency might use production orders for bank records and phone records, or a search warrant for an office. By the time charges are laid, the Crown may already have thousands of pages.
Disclosure in these cases can be heavy, often consisting of spreadsheets and bank statements, emails and investigators’ summaries. A forensic accountant may be needed, on one or both sides. Be wary of summaries prepared by the complainant, since a company or a person who feels cheated will naturally describe events in a particular way. A defence review goes back to the source documents.
Offences That Often Travel With Fraud
Charges rarely arrive alone. Depending on the facts, someone accused of fraud may also see:
- Theft, when funds entrusted to the person were taken
- False pretences, about a false statement of a present or past fact, used to obtain something
- Forgery and uttering forged documents, for fake invoices, letters of employment or signatures
- Identity fraud, when someone else’s personal information was used
- Possession of property obtained by crime, when proceeds are held or moved
Each has its own elements and its own weak points. A lawyer can check whether the allegations are overlapping or whether some are simply duplicates of the main charge.
Civil and Criminal: Two Tracks at the Same Time
A complainant can sue and press a criminal complaint at the same time. The two are separate. The civil standard of proof is a balance of probabilities, and the criminal standard is proof beyond a reasonable doubt. A person can win one and lose the other.
This creates real hazards. Evidence you give at a civil examination may have protections, but it can still be useful to someone preparing against you, and a sworn statement in one proceeding can shape the other. If a dispute over a contract has turned into talk of police involvement, the two tracks need to be managed together. It is also generally improper for a lawyer to threaten a criminal complaint to gain leverage in a civil dispute, so demands that mix the two warrant some caution.
First Steps if You Are Under Suspicion
Do not ignore a call or a letter from an investigator, and do not attend an interview unprepared. You have the right to silence, and a detective who says you only need to “clear up a few things” is still gathering evidence.
Keep your documents. Do not delete emails, shred papers, change bookkeeping entries or empty a cloud account, however innocent your reason. Destruction of records can look like consciousness of guilt, and it can be an aggravating factor. Do not talk about the file with employees, partners or customers more than you must. Those people may become witnesses.
Finally, write a private timeline for your lawyer and collect the documents that show what you understood at the time. Tell your lawyer if you have professional licences, such as those for mortgage, real estate or accounting work, because a charge may carry reporting requirements with a regulator. To start that conversation, consider speaking to a criminal lawyer before you respond to anyone.
An accusation of fraud can feel like an attack on your name as much as your freedom. Remember that the Crown has to prove every element. Careful work with the documents, done early, gives you the clearest view of where the case really stands.