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 the 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 citizens. Bill C-21 came into force on November 1, 2011.

Sentencing

This legislation 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 the legislation improve the responsiveness of the justice system to meet the needs of victims of fraud through restitution and community impact statements. These amendments will 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 required to provide reasons in cases where a victims has sought restitution but it has not been ordered;
• requiring the Crown to advise the court if reasonable steps have been taken to provide victims with an opportunity to indicate whether they are seeking restitution for their readily ascertainable losses. This ensures that sentencing does not proceed without consideration of restitution or without an opportunity for victims to indicate to the Crown that they wish to seek restitution; and
• providing victims with an optional form to indicate that they want the Crown to seek restitution from the offender and to set out their ascertainable losses.

Community Impact Statements

The Criminal Code currently provides that in determining the sentence to be imposed on an offender, judges must consider victim impact statements that have been submitted to the court. A victim impact statement is a written statement by a victim of crime that describes the harm done to them and, more generally, the effect or impact that the crime has had on his or her life.

In some fraud cases, the impact of the crime can extend to other persons and not only to those who have suffered direct financial losses. Therefore, a final measure under this Act explicitly allows courts to also consider Community Impact Statements. A Community Impact Statement may describe the losses suffered by the community, such as a neighbourhood association, business association or seniors group, as a result of the fraud.

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Department of Justice Canada
November 2011