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
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
Furthermore, the Act makes important changes to the aggravating
circumstances that are to be considered at sentencing.
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).
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
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.
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).
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
In R v Villaroman, the Supreme Court of Canada recently dealt with the issue of circumstantial evidence and the inferences that can be reasonably drawn from that evidence in order to find an accused guilty beyond a reasonable doubt.
Canadian engineering and construction giant SNC-Lavalin has been charged by the RCMP with paying bribes of nearly $48 million to Libyan government officials and defrauding Libya of nearly $130 million.
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