Internet Scam and Online Fraud Charges

The short answer

Canada has no separate offence for internet fraud, so online scams are charged as fraud under s. 380 of the Criminal Code. The same law applies whether the alleged dishonesty happened in person, by phone or through a website or app. Many online fraud cases turn on a single question: can the Crown prove who was actually behind the account, device or bank transfer? The answer often depends on technical records that need careful, independent review.

Common online fraud situations

Police lay online fraud charges in a wide range of situations, including:

• Marketplace sales where the buyer pays but the item never arrives.
• E-transfer scams, where money is requested under false pretences.
• Romance scams, where a person builds a relationship online to obtain money.
• Investment or cryptocurrency schemes that promise unrealistic returns.
• Fake rental listings that collect deposits for units that are not available.
• Money mule activity, where someone moves money through their own bank account.
• Phishing schemes that trick people into sharing bank or card details.

What the Crown must prove

How police build online fraud cases

Online fraud investigations usually depend on records held by private companies. To obtain those records, police often apply for court orders called production orders, which can require companies to hand over bank and e-transfer records, account information from marketplaces, apps and social media, internet provider records linked to IP addresses, phone company records and cryptocurrency exchange records.

Police may also search phones and computers under a warrant. Each of these steps has legal limits, and if police went beyond what the order or warrant allowed, the evidence may be excluded under the Charter.

Why identity is often the key issue

An account, email address or phone number is not the same as a person. Accounts can be shared, hacked, borrowed or opened in someone else's name, and an IP address may point to a home network that many people use or be hidden behind a VPN. The Crown must connect the dishonest act to you personally, not simply to an account that is linked to your name.

Money mule cases

Some people are charged because money passed through their bank account, even though they did not create the scam. In these cases, knowledge is usually the central issue, and the Crown must prove that you knew about the fraud or deliberately avoided finding out.

For example, someone who answered a "work from home" ad and was told to forward deposits may have a very different case from someone who was paid a share of each transfer with no explanation. Money mule cases can also lead to related charges, such as possession of property obtained by crime (s. 354) or laundering the proceeds of crime (s. 462.31), which carries up to 10 years by indictment.

Penalties

Fraud over $5,000 can only be prosecuted by indictment and carries up to 14 years in jail. Fraud of $5,000 or less carries up to 2 years by indictment, or it can be prosecuted by summary conviction. When the total value is over $1 million and the Crown proceeds by indictment, there is a minimum sentence of 2 years. Courts often order restitution to victims as part of the sentence. See fraud sentences in Canada.

Bank accounts and release conditions

After a charge is laid, your bank may freeze or close your account. Your release conditions may also limit your online activity, and common conditions include not having bank cards or accounts in anyone else's name, not having other people's identity documents and not using certain apps or platforms. You must follow these conditions exactly, but if they make work or daily life very difficult, a lawyer can ask the Crown to change them.

Defences

• Identity: The account, device or IP address was shared, hacked or spoofed, and the evidence does not point to you.
• No dishonesty: A sale or deal that went wrong is not automatically fraud.
• No knowledge: You did not know about the fraud, which is often the key issue in money mule cases.
• Charter issues: Police may have exceeded their authority when searching phones, computers or accounts.

Effects beyond the sentence

Because fraud over $5,000 carries a maximum of 14 years, a conviction can make a permanent resident inadmissible for serious criminality. Fraud is also treated as a dishonesty offence, so banks, financial employers and licensed professions often screen for it, and a conviction can lead to being refused entry to the United States.

What to do now

• Do not delete messages, accounts or files, because that can look like an attempt to hide evidence.
• Do not contact the complainant or anyone involved in the transactions.
• Save login alerts, bank notices and anything that shows your account was hacked or misused.
• Do not give a statement to police before you receive legal advice.

What happens after you are charged

1. Release: Most people charged with online fraud are released by police with an undertaking or a court date, often with conditions about contact, devices or finances.
2. Disclosure: The Crown provides its evidence, which in fraud cases is often large and can take several months to complete.
3. Crown pre-trial: Your lawyer meets with the Crown to discuss the strength of the case, repayment and possible resolutions.
4. Resolution or trial: If the case does not resolve, it is set for trial, and the Crown must prove every element beyond a reasonable doubt.

How we can help

We can review the account and device evidence, test whether the Crown can prove identity and knowledge, and look at repayment options where appropriate. Call (647) 223-1980 for a free consultation. We accept Legal Aid Ontario certificates.

Frequently asked questions