Backgrounder: White Collar Crime

Standing Up for Victims of White-Collar Crime

Fraud can include securities-related frauds such as Ponzi schemes, insider trading, and accounting frauds that overstate the value of securities. It also includes mass marketing fraud, mortgage and real estate fraud, and many other deceptive practices. There are always two elements that characterize fraud - deception or some other form of dishonest conduct, and depriving another person of their property or putting their property at risk.
Fraud can have a devastating impact on the lives of its victims, including loss of life savings and feelings of humiliation for having been deceived into voluntarily handing over their property. The Government of Canada is proposing to amend the fraud provisions of the Criminal Code by providing tougher sentences for those who victimize honest citizens.

Sentencing

Sentencing-related measures have been proposed to better ensure that sentencing for large-scale fraud reflects the serious nature of the crime. These measures are aimed directly at shaping the sentence that can be imposed on the offender.  These include:

• mandatory jail time of at least two years for fraud over $1 million regardless of the number of victims involved; 
• additional statutory aggravating factors that can be applied to sentencing in fraud cases such as:
  • the financial and psychological impact of the fraud on the victim, given the victim’s particular circumstances, including their age, health and financial situation;
  • the offender concealing or destroying records relating to the fraud or the disbursement of proceeds of the fraud;
  • the offender failing to comply with applicable licensing rules or professional standards; and,
  • the magnitude, complexity, and duration of the fraud and the degree of planning that went into it.
• requiring the court to indicate which statutory aggravating and non-mitigating factors it considered in determining the sentence, and;
• allowing the court to impose a prohibition order to prevent the offender from having employment or working in a volunteer capacity that involves having authority over other people’s money.

Restitution

Additional proposed measures are aimed at improving the responsiveness of the justice system to the needs of victims of fraud through restitution and community impact statements. These amendments are intended to increase the use of restitution orders in fraud cases by:

• requiring judges to consider restitution from the offender in all cases of fraud involving an identified victim with ascertainable losses. Judges would also be required to provide reasons if restitution is not ordered.
• requiring the Crown to advise the court what steps have been taken to allow victims to set out their readily ascertainable and quantified losses to the court so that restitution can be considered. This would ensure that sentencing does not proceed without any consideration of restitution or without any opportunity for victims to indicate to the Crown that they wish to seek restitution.
• developing a standard form for victims to indicate that they want the Crown to seek restitution from the offender and to set out their ascertainable losses. 

Community Impact Statements

A final measure proposed is with respect to Community Impact Statements. Currently, the Criminal Code requires the court to consider a Victim Impact Statement of an individual.  This is a written statement made by the victim of a crime that describes the harm done to the victim and, more generally, the effect that the crime has had on his or her life. The statement is considered by the judge who is sentencing the offender.

In some fraud cases however, where a group of people have been targeted for fraud, direct victims and even others not financially affected may still suffer other impacts.  The proposed amendments will include a provision to permit the court to receive a Community Impact Statement that would describe the losses suffered as a result of the fraud perpetrated against a particular community, such as a neighbourhood, an association or a seniors’ group.

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Department of Justice Canada
May 2010