- Investment Fraud as Defined by Governments
- The Importance of Legal Representation
- Investment Fraud Defence Strategies
While the city of Brampton is not a hub of Ontario’s financial sector, fraud investigators in Canada frequently uncover financial crimes in the area. One of the most significant investment scams in Brampton fleeced 79 area victims out of $8 million in 2010. More recently, a Brampton man faces fraud accusations for bilking a customer out of $45,000 with a fake investment opportunity. Two other men face investment fraud charges for securing a $600,000 mortgage from a private lending company for a phony business.
To the best of our knowledge, one of Canada’s largest cryptocurrency fraud investigations has not yet focused on Brampton. However, some Brampton residents may have lost money in the $40- to $100-million dollar Ponzi scheme allegedly orchestrated by Ontario’s “Crypto King,” Aiden Pleterski. Some people might be inclined to believe that investment fraud in Ontario pays, given that the 25-year-old king has yet to face any charges and crypto recovery services have recovered little of the missing money. Of course, pyramid schemes typically take extensive time and resources to unravel, and this crypto scam investigation has been filled with numerous twists and turns.
Given the amounts of stolen money in these and other Brampton-area investment fraud examples, the Peel Regional Police Fraud Bureau periodically issues notices warning Brampton and Mississauga residents about investment scams. But what exactly is investment fraud, and how does the law differentiate it from other types of fraud?
Investment Fraud as Defined by Governments
Federal and provincial laws do not specifically define investment fraud. The Competition Bureau of Canada describes investment fraud as when “someone tries to get you to make an investment decision based on false or misleading information.” Commonly recognized investment fraud types sometimes entail various forms of market manipulation and include:
- Ponzi Schemes—using funds from new investors to pay returns to existing investors and artificially support the price of an investment that is not generating legitimate profits.
- Boiler Room Scams—encourage victims to purchase shares in a fake company purported to be soon listed on the stock exchange, with promises that the share price will rise dramatically when trading begins.
- Real Estate Swindles—with many variations, this typically involves getting victims to purchase land or provide loans on holdings the fraudster does not actually own.
- Dummy Securities—with numerous variations covering the range of securities (stocks, bonds, cryptocurrencies, etc.), the fraudster uses fake websites, reports, identities, or whatever is needed to convince victims that the security is valid and represents a good investment.
- Unauthorized trading—Buying or selling investments on behalf of an investor without their knowledge or consent.
- Pump and dump—Artificially boosting the price of an investment through false or misleading statements to sell it at an inflated price to unsuspecting investors.
- Misrepresentation—providing false or misleading information about an investment to influence its price or to secure a loan.
These types of investment fraud generally run afoul of Canada’s Criminal Code and the Ontario Securities Act. Section 380 (1) of the Criminal Code defines fraud as intentionally using “deceit, falsehood or other fraudulent means” to defraud the public or any person of any property, money, valuable security, or service. Fraud impacting property values exceeding $5,000 is an indictable offence with a maximum prison sentence of up to 14 years, with a minimum two-year sentence if the property value exceeds $1 million. Fraud involving less than $5,000 can be charged as either an indictable or summary conviction offence, both of which carry a maximum sentence of two years. No matter the value, if the fraud “affects the public market price of stocks, shares, merchandise or anything offered for sale to the public,” the offence is treated as an indictable offence with a maximum penalty of 14 years imprisonment.
Under Section 122 of Ontario’s Securities Act, it is illegal to intentionally transmit factual misrepresentations or omissions relating to any information about investment activities that must be documented according to the province’s securities law. The provincial offence carries a maximum penalty of a $5 million fine, five years imprisonment, or both. The Act also includes provisions that allow the court to order the offender to make restitution or pay compensation to the victim(s).
Canadian law also allows anyone victimized by investment fraud to seek damages through civil litigation. Our Criminal Fraud vs. Civil Fraud article details the distinct differences between the legal procedures involved with both. With expertise litigating civil and criminal cases, turn to the investment fraud lawyers at Vilkhov Law for your fraud defence.
The Importance of Legal Representation
If you’re facing criminal investment fraud charges or the challenge of related civil litigation, it’s critical to secure experience legal representation as soon as possible. Investment fraud cases tend to be highly complex, and Crown prosecutors often continue to develop their cases after the charges have been laid. By getting in the game early, your lawyer can assess the Crown’s evidence and narrative about how the fraud was committed to strategize a responsive defence to what’s currently known about the case and anything else the Crown might come up with. Your lawyer also provides legal protections by ensuring that the Crown’s investigations follow lawful standards and preserve your Charter Rights.
Investment Fraud Defence Strategies
To secure a conviction, the Crown needs clear-cut evidence that supports a narrative proving that you intentionally committed the investment fraud. The evidence and narrative must cross a “beyond a reasonable doubt” threshold in believability to support a conviction. Skilled criminal defence lawyers are adept at uncovering inconsistencies, misinformation, mistakes, and other problems with the Crown’s evidence, all of which raise the reasonable doubt spectre. They can raise additional reasonable doubts about any evidence pointing to your intent to commit the fraud or may be able to argue that you lacked knowledge about the fraudulent nature of your actions.
As such, your lawyer’s methodical collection and analysis of relevant evidence can be crucial and may even end the Crown’s case before trial. If your lawyer can confront the Crown with enough reasonable doubts about the evidence pre-trial, the prosecutor may be willing to negotiate a favourable settlement or even be forced to admit defeat by withdrawing the charges.
A conviction on criminal investment fraud charges carries significant penalties, while a similar loss in civil court can prove financially devastating. If you’re facing criminal investment fraud charges, the legal services provided by Vilkhov Law’s criminal lawyer in Brampton ensures the development of a robust defence they can effectively use in criminal and civil court cases. For your free consultation, contact Vilkhov Law today.
