Electronic signatures are frequently used by businesses and
organizations to efficiently execute and exchange documents.
The increasingly ubiquitous nature of electronic signatures makes
them open to abuse, if not carefully monitored and policed.
Recently, the Ontario Superior Court of Justice considered this
issue in R.
v. Pusey1, where evidence on the use of an
electronic signature was central to the Court's decision to
convict the accused on charges of fraud.
The accused, Mr. Pusey, was a former staff director at the Fred
Victor Centre (the "Centre"), a charitable organization
in Toronto. He was also the principal of two companies (the
"Companies") that billed the Centre for thousands of
dollars of work that was in fact performed by other staff members
or subcontractors of the Centre, in violation of the Centre's
Code of Conduct relating to conflicts of interest.
The scheme was discovered when the Centre's staff questioned
a number of invoices for payments made to the Companies, pursuant
to cheque requisitions signed by the accused. As a result,
various payments totaling over $115,000 were paid out from the
Centre to the Companies over a 16-month period.
The accused testified that the arrangement had the approval of
the Centre's Executive Director. The purported scheme saw
the Companies bill the Centre for work done by subcontractors, who
were then paid cash by Mr. Pusey in order to obtain savings and tax
advantages for the Centre. The only documentary evidence
advanced by the accused were contracts purportedly signed by both
Mr. Pusey (on behalf of the Companies) and the Centre's
Use of Electronic Signature
The Centre's Executive Director testified that the contracts
were fake, and denied signing them. The Court considered
evidence that the accused's computer and thumb drive contained
electronic versions of the Executive Director's signature, and
also found that the accused would have had access to the
Rather clumsily, versions of the electronic signatures on the
accused's hard drive were created and modified on the same
date, which happened to correspond with the first date that one of
the Companies invoiced the Centre.
A report from the Centre of Forensic Sciences determined that
the e-signature and the "contract" signature
"originated from the same source signature within the limits
of practical certainty."2 Justice Goldstein
went further, finding that "the signature on the so-called
contract and the electronic signature found on Mr. Pusey's
computer...are identical."3 The Court
rejected Mr. Pusey's explanations and alternative theories in
convicting him of fraud.
This case highlights some of the evidentiary issues and security
concerns associated with electronic documents and signatures on
negotiable instruments. Most common law jurisdictions,
including Ontario, have for many years had legislation removing
barriers for the use of electronic signatures in legal
documents. As a result, with some exceptions (such as wills
and trusts), electronic signatures are permitted to be used, even
where such documents are otherwise required by law to be executed
However, most statutes governing the use of electronic
signatures do not impose any specific standard for reliability or
security. As a result, it remains up to the person relying or
adjudicating upon an electronic signature to determine its
reliability or effectiveness.
Efforts to fraudulently misrepresent or forge an electronic
signature may be easily uncovered where, as in this case, there is
competing objective evidence to reveal the fraud. Absent
specific statutory procedural or security requirements for
electronic signatures5, this case demonstrates that
organizations should consider whether their document management and
security systems are sophisticated enough to track the use (and
potential misuse) of electronic signatures for day-to-day
transactions and documents.
5 For example, see the Personal Information
Protection and Electronic Documents Act, SC 2000, c 5, and the
Secure Electronic Signature Regulations, SOR/2005-30, made
thereunder, which govern the use of electronic signatures on
documents and instruments contemplated by federal
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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