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Different Forms of Fraud – Do You Know the Legal Definition?

A comprehensive overview of fraud as defined under the Criminal Code




With over 20 years of experience in criminal law and having defended 1600 people, Susan Karpa, a criminal lawyer in Calgary, knows the law and delivers a comprehensive overview of fraud as defined under the Criminal Code. What is the definition of fraud? Fraud involves “defrauding” a person or the public “through deceit, falsehood, or other fraudulent means? Of any “property, money or valuable security or any service.” Some common validations of fraud include:

· Credit card fraud

· Identity theft

· Tax fraud

· Insurance fraud

· Investment fraud

· Construction fraud

· Mass marketing fraud, such as telemarketing


Each carries severe implications for victims and can severely undermine trust in economic and social systems.


The Distinction Between Fraud and Theft

Let’s distinguish the difference between fraud and theft. While both are criminal acts involving the unlawful taking of something from another, there are distinct differences between the two.


Fraud requires an element of deception. Fraud always involves deceit or the creation of a misleading situation that places someone at risk of a loss, even if no money or property is immediately stolen. On the other hand, theft involves directly taking someone's property without their consent and can be as overt as declaring the intent to steal in front of the victim.  


Noteworthy examples of Fraud

Medical Fraud

Reflecting on recent events, the case of Dr. Shabeena Fazhulla, who is accused of billing $2.2 million for unperformed services, starkly highlights the impact of medical fraud. Such cases strain health service finances and betray patients' trust in their healthcare providers. 

  

Immigration Fraud

Other sectors, in addition to healthcare, are not immune to fraudulent activities. For instance, Calgary Police have reported immigration scams in which individuals are deceived and threatened into paying money under the false pretense of securing their immigration status. 


Firearms License Scams

Similarly, firearms license fraud involves deceitful tactics to misuse personal information for potentially illegal activities.


The Persistent Threat of the CRA Scam

The CRA scam, targeting individuals with aggressive demands for fictitious debts, exemplifies how fraudsters can manipulate fears and legal ignorance to extract money. These scammers employ a variety of tactics, including threats of jail and deportation, leveraging the authority of the Canada Revenue Agency to exploit victims.


Upholding the Rights of the Accused in Fraud Cases

As we discuss the impact of fraud on society and the measures needed to combat it, it's essential to remember the legal principle of "innocent until proven guilty." In the realm of fraud, where accusations can stem from misunderstandings or erroneous evidence, the rights of the accused must be diligently protected to ensure justice is fairly administered.


Importance of Legal Representation

Legal experts put emphasis on the critical role of skilled representation in defending people accused of performing fraud. A competent lawyer, such as Susan Karpa, can dissect the nuances of the case, challenge weak evidence, and ensure that the prosecutorial zeal does not overshadow the accused's rights. This is paramount because the consequences of a fraud conviction can be devastating, ranging from substantial financial penalties and restitution to incarceration and loss of professional licenses.


Cases of Accusation and Acquittal

Several high-profile cases underscore the importance of maintaining legal integrity and the presumption of innocence:


1.     Senator Mike Duffy—Mike Duffy, a former Canadian Senator, was embroiled in a high-profile fraud and breach of trust case involving claims he had improperly expensed the Senate for personal and living expenses. In 2016, Duffy was acquitted on all 31 charges. The judge ruled that Duffy's actions were within the rules and that any ambiguities in the rules should not be held against him. This case highlighted issues regarding the clarity of governmental expense rules and the presumption of innocence in complex, politically charged cases.

2.     Nortel Executives—In one of Canada's largest corporate fraud cases, three former executives of Nortel Networks Corporation, including ex-CEO Frank Dunn, were charged with fraud affecting the public market, falsifying documents, and misleading financial statements to qualify for bonuses. In 2013, they were acquitted of all charges. The judge found that the prosecution failed to meet the burden of proof, showing that the financial statements were misrepresented.

3.     Brian Mulroney—Former Prime Minister Brian Mulroney was implicated in the Airbus affair, a scandal involving allegations of accepting kickbacks for airplane contracts between Airbus and Air Canada. After extensive public inquiry and legal examinations, no charges were laid against Mulroney. The case was significant for its impact on public perceptions of corruption and integrity in Canadian politics.

4.     Schreiber Affair—Karlheinz Schreiber, a German-Canadian businessman, was accused of fraud, bribery, and failure to pay taxes. His case was notably linked with Brian Mulroney over the Airbus scandal. Although Schreiber faced charges in Germany, the Canadian part of his legal battle focused more on extradition than fraud itself. He was eventually extradited to Germany, where he faced charges, but the Canadian accusations highlighted the international complexity of legal proceedings in fraud cases.


Ethical Considerations and Public Perception

Handling fraud cases requires balancing the public interest in preventing and punishing fraud against protecting the rights of those accused. Initial accusations can often sway public perception, leading to "trial by media," where individuals are deemed guilty before having their day in court. This underscores the need for responsible media reporting and public discourse that respects the legal process.


Education and Vigilance

To protect against fraud while respecting the rights of the accused, continuous public education about the nature of fraud and the legal rights of individuals is essential. Education can empower people to detect and report potential fraud while being cautious not to jump to conclusions about guilt.


A Balanced Approach

Fraud has become more sophisticated as technology continues to evolve. In accordance, so must our systems for preventing and adjudicating it. Maintaining a balance that vigorously prosecutes fraud while rigorously defending the rights of the accused ensures that our legal system remains just and our societal resources are protected. This balance is a cornerstone of our legal system and a crucial aspect of upholding the moral integrity that forms the foundation of a just society.

 

 

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