Backgrounder : White Collar Crime

Bill C-21 Standing Up for Victims of White-Collar Crime Act

The offence of fraud can include securities-related frauds such as Ponzi schemes 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. Bill C-21 Standing Up for Victims of White-Collar Crime Act amends the fraud provisions of the Criminal Code by providing tougher sentences for those who victimize honest citizens.

Sentencing

Sentencing-related measures in this bill will better ensure that sentencing for fraud, and in particular large-scale fraud, reflects the serious nature of the crime. These measures shape the sentence that can be imposed on the offender and 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:
  • if the offence had a significant impact on the victim, given the victim's particular circumstances, including his/her 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.
• 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 measures in Bill C-21 improve 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 are now also be required to provide reasons if restitution is not ordered when a victim has sought restitution;
• 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 ensures 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; and,
• 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 deals with Community Impact Statements. The Criminal Code requires the court to consider a victim impact statement. This is a written statement made by a victim of crime that describes the harm done to the victim and, more generally, the effect that the crime has had upon them. The statement is considered by the judge who is sentencing the offender.

In some fraud cases, however, the impact of the crime extends to other persons and not only to those who have suffered direct financial losses. The new provisions will permit the court to also receive and consider a Community Impact Statement that would describe the losses suffered by the community, such as a neighbourhood association, business association or seniors group, as a result of the fraud.

Note that the court will continue to receive victim impact statements and must consider such statements at the time of sentencing.

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Department of Justice Canada
March 2011