What Counts as Fraud Under the Criminal Code?

The short answer

Fraud means using dishonesty to cause someone a loss, or to put their money or property at risk, and it is set out in s. 380 of the Criminal Code. Fraud does not require an outright lie, and no one actually has to lose money, because a risk of loss can be enough. However, a bad deal, a broken promise or an unpaid debt is not fraud on its own, and many complaints that reach police are really civil disputes. Understanding the legal definition is the first step in assessing whether a charge can actually be proven.

The legal definition of fraud

Section 380(1) covers defrauding the public or any person of property, money, a valuable security or a service. The dishonest conduct can take three forms:

• Deceit: For example, lying about an important fact to obtain money.
• Falsehood: For example, using a false document to support a claim.
• Other fraudulent means: This means conduct that a reasonable person would see as dishonest, even without a direct lie.

What the Crown must prove

Examples of "other fraudulent means"

Other fraudulent means can include using money for a purpose other than the one that was agreed, such as spending a customer's deposit on personal bills. It can also include hiding an important fact that the other person had a right to know, or taking advantage of a computer or payment error that you knew about. Whether conduct is dishonest is judged by what a reasonable person would think, not by your own personal standards.

Fraud over and under $5,000

Fraud over $5,000 can only be prosecuted by indictment and carries up to 14 years. Fraud of $5,000 or less carries up to 2 years by indictment, or it can be prosecuted by summary conviction. When the total is over $1 million, there is a 2-year minimum sentence (s. 380(1.1)). See fraud over vs under $5,000.

Fraud vs theft

Theft generally means taking property without the owner's consent. Fraud generally means obtaining property through dishonesty, often with the victim's apparent consent. For example, taking cash from a till is usually theft, while getting a customer to pay for work you never planned to do is fraud.

Fraud vs a civil dispute

Many fraud complaints begin as business or personal disputes. A contractor who did poor work, a friend who did not repay a loan, or a business deal that failed is usually a civil matter. It becomes fraud only if the Crown can prove dishonesty and knowledge, either from the beginning or at some point along the way. Police sometimes lay charges in cases that are really civil, and showing this to the Crown can lead to a withdrawal.

Common types of fraud charges

• Online scams and e-transfer fraud.
• Insurance fraud.
• Employee fraud and breach of trust.
• Identity theft and identity fraud.

The court process

Most people charged with fraud are released with conditions. The Crown then provides disclosure, which in fraud cases is often large and can include bank records, emails and accounting reports. Fraud over $5,000 is indictable only, so you choose your trial court and can ask for a preliminary inquiry, while fraud of $5,000 or less stays in the Ontario Court of Justice. Many cases resolve through repayment, while others go to trial on dishonesty, knowledge or the amount.

Possible defences

• No dishonesty: The conduct was not dishonest by the standard of a reasonable person.
• No deprivation: No one suffered a loss or was put at risk of one.
• No knowledge: You did not know the conduct could cause a loss.
• Identity: The evidence does not prove that you were the person responsible, which is common in online cases.

Repayment and restitution

Courts often order restitution, and early repayment can affect the outcome. For smaller amounts, repayment may support a request for diversion. However, get advice before offering money to the complainant, so that the payment is documented properly and is not treated as an admission.

Possible outcomes

What to do now

• Keep contracts, invoices, messages and bank records that show the deal from your side.
• Do not contact the complainant about the charge.
• Do not offer repayment before getting advice on how to document it.

Fraud through silence or omission

Fraud does not always involve saying something false. In some situations, staying silent about an important fact can amount to other fraudulent means, particularly when the other person was relying on you to disclose it and you knew they would suffer a loss if you did not. Whether silence crosses the line into fraud depends heavily on the relationship between the people involved and on what a reasonable person would have expected you to reveal.

Who investigates fraud

In Peel Region, most fraud complaints are investigated by local police, while larger or more complex cases are often assigned to dedicated fraud units. Banks, insurers and large employers frequently conduct their own internal investigations first and then pass their findings to police, which means that a significant part of the evidence may have been gathered by private investigators before any officer became involved.

How we can help

We can review the evidence of dishonesty and knowledge, and advise you on repayment. Call (647) 223-1980 for a free consultation.

Frequently asked questions