Dubbed the ‘Magic Lady’ by the media for perpetrating a $100 million Ponzi scheme, Rashida Samji faced administrative proceeding brought by the BC Securities Commission (“Commission”) as well as criminal charges. The Commission found in 2014 that she perpetrated a fraud, imposing a disgorgement order of almost $11 million and a $33 million administrative monetary penalty (“AMP”) to serve as “a specific deterrent to [Samji] and as a general deterrent to others who would engage in similar fraudulent schemes.” On December 1, 2017, the British Columbia Court of Appeal affirmed the lower court decision refusing to stay the criminal charges against Rashida Samji on the basis that the AMP was a “true penal consequence.” After refusing to stay the charges, the trial judge found her guilty of theft and fraud under the Criminal Code. Continue Reading
In a narrow 5-4 decision, the Supreme Court of Canada has laid out a new formulation of the “fictitious or non-existing payee” defence under section 20(5) of the Bills of Exchange Act (BEA). The underlying dispute involved an employee who took advantage of weak internal compliance mechanisms to draft a number of fraudulent cheques. The employee made the cheques payable to entities the employer dealt with, as well as two non-existent entities with names similar to those of real suppliers. The cheques were then deposited into a number of bank accounts, set up by the employee in the names of these entities. The fraud was not discovered until after the employee had deposited $5,483,249 into the various accounts. The employer ultimately sued the banks in conversion in an attempt to recover the stolen funds. Continue Reading
Summary judgment of an action may only be granted when there is no genuine issue requiring a trial and this can be difficult to prove in fraud cases where credibility is often an important factor. In the recent Ontario Superior Court decision in MacNamara v. 2087850 Ontario Ltd. (Strathcona Construction), 2017 ONSC 499, Justice Akbarali granted summary judgment finding both fraud and grounds to pierce the corporate veil of a corporate defendant. This case demonstrates how liability for even the most serious causes of action can be established by way of summary judgment where a full evidentiary record allows the Court to find the necessary facts, apply the law, and determine that there is no genuine issue for trial. Continue Reading
Canada’s anti-bribery law prohibits anyone from giving or offering a loan, reward, advantage or benefit of any kind — directly or through intermediaries — to a foreign public official as consideration for an act or omission by the latter to obtain or retain a business advantage. Continue Reading
Two recent decisions of the Ontario Superior Court demonstrate the willingness of Canadian judges to find fraud on the basis of material omissions in both civil and criminal cases. In Midland Resources Holding Limited v. Shtaif 2017 ONCA 320, 135 O.R. (3d) 481 and R. v. Fontana 2016 ONSC 707, omissions by the defendants were found to constitute fraudulent conduct.
Civil Fraud: Midland Resources Holding Limited v. Shtaif
In Midland Resources Holding Limited v. Shtaif, the Ontario Court of Appeal confirmed that the tort of deceit or fraudulent misrepresentation may:
involve not only an overt statement of fact, but also certain kinds of silence: the half-truth or representation that is practically false, not because of what is said, but because of what is left unsaid.