Canada: Bill C-21, Standing Up For Victims Of White Collar Crime Act

Edited by Tyler Hodgson

THE SCOPE OF BILL C-21

On November 1, 2011, the much anticipated changes to the Criminal Code of Canada came into force, marking the culmination of the federal government's "get tough" policy in relation to white collar crime. Bill C-21 (Standing up for Victims of White Collar Crime Act ) was introduced in response to a number of high-profile fraud cases. The Act received Royal Assent in March 2011.

The Act targets five offences under the Criminal Code. These include: fraud simpliciter (or fraud upon the public or any person) (s. 380(1)); frauds that affect the public market (s. 380(2)); the fraudulent manipulation of stock exchange transactions (s. 382); criminal insider trading (s. 382.1); and the publication or circulation of a false prospectus (s. 400).

MANDATORY MINIMUM SENTENCE

One of the most important amendments is the creation of a mandatory minimum sentence for a conviction under s. 380(1) for fraud. Where the offence is prosecuted by way of indictment, and the total value of the subject-matter of the offences exceeds one million dollars, the court must impose a two year minimum sentence. Of significance, this means that convicted offenders for frauds over one million dollars will no longer be eligible to serve conditional sentences, a form of sentence which allows the offender to serve his or her term of imprisonment in the community under conditions of house arrest.

NEW AGGRAVATING CIRCUMSTANCES TO BE CONSIDERED ON SENTENCING

Furthermore, the Act makes important changes to the aggravating circumstances that are to be considered at sentencing.

  1. With respect to a conviction under the fraud provisions in s. 380 (1) and (2), the magnitude, complexity, duration or degree of planning of the fraud, are to be considered as aggravating factors upon the sentencing for all five offences (380(1), 380(2), 382, 382.1 and 400). The amendments state that the one million dollar threshold is to continue to act as an aggravating circumstance with respect to market manipulation (382), insider trading (382.1) and false prospectuses (400).
  2. The Act requires a judge is to consider whether "the offence had a significant impact on the victims given their personal circumstance including their age, health and financial situation."
  3. The Act makes it an aggravating circumstance if the offender did not comply with a licensing requirement or professional standard normally applicable to the activity that forms the subject matter of the offence.
  4. It is now an aggravating circumstance for the offender to conceal or destroy records relating to the fraud or to the disbursements of the proceeds of the fraud.

NEW SENTENCING TOOLS AT THE JUDGE'S DISPOSAL

The recent amendments create two new sentencing tools available to judges in cases where there has been a finding of guilt under s. 380(1) (fraud). Under the new amendments, the court may, in addition to any other punishment or condition that may be imposed for the offence, make an order "prohibiting the offender from seeking, obtaining or continuing any employment, or becoming or being a volunteer in any capacity that involves having authority over the real property, money or valuable security of another person." There is no temporal limit to this prohibition: it can be life long, effectively banning an offender from financial services on a permanent basis.

Second, the amendments require the court to consider making a restitution order where there is a finding of guilt under s. 380(1). Victims of the crime may indicate that they are seeking restitution by filling out a prescribed form. Moreover, on the application of the prosecutor, the court may adjourn the proceedings to facilitate the restitution process by allowing victims time to establish their losses.

Finally, in order to determine the sentence to be imposed on the offender, the court may consider a 'community impact statement.' This statement may be made by a person on the community's behalf and describes the "harm done to, or the losses suffered by, the community arising from the commission of the offence." Interestingly, on the face of the legislation these new sentencing tools do not apply to the offence of frauds affecting the market under s. 380(2).

CONCLUSION

It remains to be seen whether the amendments to the Criminal Code will result in harsher sentences than would ordinarily occur under the existing sentencing principles outlined in the Code. Furthermore, it will be interesting to watch whether the amendments that purport to encourage greater victim participation in the sentencing process will have the desired effect of increasing punishments for fraud related offences. It can be fairly stated that this was Parliament's intention in passing Bill C-21

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