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What is Internet Fraud Under Canadian Law, and How Does One Fight the Charges?

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According to the Canadian Anti-Fraud Centre’s (CAFC) latest report, Canadians were bilked out of $379 million in 2021, a record high in annual reported losses and a 130% increase over the $165 million in recorded losses in 2020. Sadly, the report notes that these figures are far below actual losses, as “only 5-10% of all fraud connected to Canadian victims is reported to the CAFC.” The report further notes that the Internet and digital technology have significantly enhanced fraudsters’ ability to conduct their crimes and estimates that about 75% of all recorded fraud reports in 2021 were “cyber-enabled.”

Canadian law defines fraud as theft by deceit, and Canada’s Criminal Code uses a broad-based description of fraudulent activity to allow prosecution of the numerous different types of fraud. While terms used to reference most types of fraud—such as “medical,” “credit card,” “insurance,” etc. — generally describe the target, the term “Internet fraud” describes the vehicle used to conduct the fraud. As such, most other forms of fraud can also be classified as Internet fraud.

Note that “cybercrime” is a broad-based term covering any criminal activity conducted over the Internet using computers or other digital devices. Along with Internet fraud, cybercrime includes accessing or distributing child pornography, cyber harassment, mischief (destroying or otherwise interfering with computer data), and Internet gambling.

Because the Internet is a vast virtual world with data that can be manipulated or misinterpreted, innocent people are sometimes mistakenly accused of committing Internet fraud. Fraud cases are usually highly complex, especially when they involve financial transactions. As such, anyone charged with fraud should always consult with an experienced fraud lawyer. With more than three decades of successfully defending clients from fraud charges, the lawyers of Mass Tsang are your go-to team for Internet fraud defence.

Internet Fraud According to the Criminal Code

In general, most cases of Internet fraud are charged under Section 380(1) of the Criminal Code. However, due to the Internet and computer use, charges can be laid under other Criminal Code sections. For example, if Internet fraud involves identity theft, Section 403 might come into play, or charges under Section 342 might apply if the fraud involves credit cards and/or unauthorized use of a computer.

The penalties for a Section 380 fraud conviction are linked to the monetary value of the property involved. If the fraud involves property values greater than $5,000, a conviction carries a maximum prison term of up to 14 years if charged as an indictable offence. It carries a maximum two-year prison term or a $5,000 fine as a summary conviction offence. Fraud involving property valued at less than $5,000 can result in a maximum two-year prison sentence or a $5,000 fine. Fraud involving property value exceeding $1 million carry a minimum sentence of two years imprisonment. Penalties for Internet-related fraud convictions covered by other sections of the Code generally range from two-to-10 years imprisonment.

In determining penalties, the Code encourages judges to consider several aggravating factors, including the number of victims, impact on victims, complexity of the fraudulent planning, impacts to the economy, and whether the defendant took advantage of being in a position of trust. The Code also allows judges to consider mitigating factors, such as remorse, attempts at restitution, and lack of a criminal record.

Strategizing a Criminal Defence Against Internet Fraud Charges.

Because Internet-related fraud charges tend to be especially complex, securing the expertise of an experienced fraud lawyer provides the best option for ensuring a favourable outcome in court. A skilled fraud lawyer can help navigate your case through the legal procedures and strategize an effective defence against the charges. Every fraud case is distinctly different, and your lawyer has a variety of defence options that may prove successful depending on the circumstances of your case. Let’s examine a few critical defence strategies lawyers use against Internet fraud charges.

Defence of Innocence Strategy

In Canadian criminal cases, a defendant does not have to prove their innocence but merely needs to raise doubts about the evidence the Crown uses to prove guilt and intent. To secure a conviction, the Crown must meet two thresholds. The first of these thresholds is succinctly described in Latin as “actus reus,” which requires the Crown to prove “beyond a reasonable doubt” that the defendant committed the criminal act,

To use this defence, lawyers try to raise doubts about the Crown’s evidence at every opportunity. They do this by pointing out every potential evidentiary flaw and inconsistency that may arise in the Crown’s narrative about how the crime was committed. They also present evidence or testimony supporting your innocence to further raise doubt about the Crown’s evidence. This strategy is designed to weaken the Crown’s case to the point that a conviction is impossible.

Lack of Fraudulent Intent Strategy

The other threshold the Crown must meet to secure a conviction is known in Latin as “mens rea,” which requires proof beyond a reasonable doubt that the defendant committed the crime with intent and knowledge. With this defence strategy, your lawyer argues that you were unaware that your actions were fraudulent or otherwise made mistakes in judgment and action that resulted in the fraud. With “mens rea,” the Crown has to prove willful intent, while the defence must prove its absence or at least cast enough doubt to suggest that the actions may have been accidental.

Mistaken Identity Defence

Along with making it easier to engage in fraud, the Internet makes it easier for criminals to steal identification and impersonate people. In some cases of Internet fraud, criminals commit fraud in other people’s names or create digital evidence that may lead police to the wrong suspects. If the charges appear to be based on mistaken identity, your lawyer will likely seek exculpatory evidence and try to prove that you have an alibi that suggests you could not have committed the fraud.

Charter Rights Defences

Skilled criminal defence fraud lawyers fully understand the Canadian Charter of Rights and Freedoms and the procedures police and prosecutors must follow when investigating crimes and making arrests. Your lawyer will undoubtedly review the details of your case to uncover potential procedural mistakes and Charter Rights violations. If found, such mistakes and violations can be used to encourage the judge to negate related evidence and can otherwise help weaken the Crown’s case.

Other Strategies for Securing a Favourable Outcome

Absent enough evidence to mount an effective defence, your fraud lawyer may recommend a negotiated settlement that might lead to reduced charges, lowered penalties, conditional discharge, or other outcomes that mitigates the potential consequences of the conviction. In some cases, involving small sums of money, limited damage to the victim(s), and representing a first-time offence, your lawyer may even be able to get the charges dropped. Successful negotiations with this strategy are highly dependent upon the defendant’s willingness to pay the victim’s back, offer other restitution, and conduct actions that display the defendant’s remorse.

Consult with the Criminal Defence Experts at Mass Tsang

If you or a loved one is facing Internet fraud charges in the Greater Toronto Area, don’t risk a conviction by trying to mount your own defence. Contact the expert fraud lawyers at Mass Tsang to optimize an effective defence strategy.

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