The primary difference in a civil fraud case compared to a criminal fraud case is the party seeking remedy for damages. In other words, if a private Canadian citizen is seeking to get compensation after being the victim of fraud, that would be a civil case. If the Canadian government itself is attempting to enact punitive measures against an individual who committed fraud, that is considered a criminal case.
There are standard elements for both criminal and civil fraud cases that will be discussed further on.
The legal definition of criminal fraud is located in section 380 of the Criminal Code of Canada. In summary, if a person uses deception by any means in order to further enrich themselves, they may be charged with an indictable offence.
Criminal fraud investigations require gathering extensive evidence because law enforcement must prove the defendant knew about the deception. They must also prove that the fraud was intentional and that victims lost items of value such as money, property, or any other valuable security.
There are a variety of aggravating factors that can worsen, or lessen, the severity of the charges. Some of those factors include the following:
- The length and complexity of the fraudulent activity.
- Whether the fraudulent activity affected the Canadian economy.
- The number of victims involved.
- Any positions of power the defendant may have exploited in order to commit fraud.
- Whether records were destroyed or obstructed
- Whether the defendant complied with licensing requirements regarding their profession.
Lastly, the punishment is greater for criminal fraud if the value of the items or money gained by the defendant is greater than $5,000. If it is below this threshold amount, the punishment will be less.
Types of Criminal Fraud
The Canadian interpretation of criminal fraud is vast and can cover a variety of situations. There are also additional types of charges for individuals who defraud the stock market, use mail to defraud victims, conceal documents, commit fraudulent real estate transactions, and more. The violation contained in S. 380 serves to cover fraudulent acts in general.
Some of those acts may involve running a business in which the owner is intentionally selling a faulty product but is advertising it as functional. In this circumstance, the owner is aware of the faulty item and is selling it to customers, thus depriving them of their money for an item that he knows will not work.
Other types of fraud include acts of embezzlement, identity theft, tax fraud, and more.
As previously mentioned, civil fraud charges take place between two individuals, as opposed to the Canadian government vs. an individual. In civil fraud cases, a victim must prove that the defendant caused economic or non-economic harm to a court.
In civil court, the burden of proof is on the victim, also known as the plaintiff, to prove to the court beyond a reasonable doubt that the fraud occurred. The difference compared to a criminal case is that the Canadian government must meet the burden of proof instead of the victim. There are four elements in a civil fraud case that must be proven:
- A false representation was made by the defendant.
- The defendant had some knowledge of the false representation, through recklessness or knowledge.
- The false representation caused the plaintiff to act.
- The plaintiff’s action resulted in an injury or loss.
These four elements were developed from an old supreme court case called Bruno Appliance and Furniture Inc. v Hyrniak, 2014 SCC 8.
If a plaintiff prevails in a civil fraud case, the defendant will be required to pay back restitution. This may come in the form of economic and non-economic damages. This means that the economic damages could cover things such as loss of income, loss of property, and other financial assets. Non-economic damages cover things such as pain and suffering; for example, if the plaintiff endured significant stress after losing their life savings or their property, this could be taken into consideration by the court.
Types of Civil Fraud
Civil fraud can take on various forms. It can involve investment schemes, Ponzi schemes, predatory marriage, false invoices, telephone scams, bank account fraud, and many other forms.
It is common for plaintiffs to claim the injury of civil fraud in most cases where they were the victim of deception. If they were the victim of deception and they acted based on what they believed, they may be able to pursue their case in civil court. One of the bigger challenges for plaintiffs in civil cases is proving that the defendant had knowledge of the false representation.
In order to gather this evidence, fraud lawyers will know what type of evidence to seek during the discovery phase. They will also ask the right questions during depositions and cross-examinations. More complex cases may warrant hiring a forensic analyst or accountant to review the evidence.
What Is The Difference Between Civil Fraud and Criminal Fraud?
The important difference in these cases is that conviction of a criminal case can result in probation, jail time, negative publicity, paying restitution and lifelong collateral consequences. Criminal cases are also brought forth by the Canadian government as an entity. In other words, the criminal fraud was damaging enough for a society that the Canadian government believes it must intervene in order to ensure justice is brought upon the defendant.
Civil cases are often quieter incidents with fewer witnesses and victims. These smaller cases are handled with less publicity, as well. The most important difference is that the incident may not be considered illegal, and the defendant will not face criminal consequences. Additionally, civil cases in which the plaintiff prevails will result in the defendant paying restitution for economic and non-economic damages.
Contact Vilkhov Law
If you are facing fraud charges, it is a good idea to contact an experienced fraud lawyer. The offices of Vilkhov Law have experience in litigating both civil and criminal cases, and we stand ready to provide you with a consultation to discuss your options.