Canadian Fraud Law

Canadian Fraud Law

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Fraud Recovery

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When should a fraudulent conveyance action be brought?

Posted in Fraud Recovery
In 2014, we reported on the Ontario Superior Court of Justice’s decision in Indcondo Building Corporation v. Sloan (“Indcondo“), which strengthened the position of plaintiffs seeking to set aside fraudulent conveyances in Ontario. In the Indcondo case, Mr. Justice Penny analyzed the substantive test for establishing fraudulent conveyance and in particular the demonstration of whether… Continue Reading

Court’s contempt power not to be used to coerce payment

Posted in Fraud Recovery
In a recent 2016 decision in Greenberg v. Nowack, Justice Perell of the Ontario Superior Court of Justice dismissed a contempt motion against a stubborn and non-compliant debtor in a judgment debtor examination gone awry. Although sympathetic to the Plaintiffs’ frustration at being unable to recover monies on their  judgement, the Court ruled that imprisoning… Continue Reading

Using the tort of civil conspiracy

Posted in Fraud Prevention, Fraud Recovery
Ponzi schemes and other fraudulent arrangements that operate on a large scale often involve complex networks of activities, actors, and funds transfers. Given the number of players that may be required to bring about such a scheme, the tort of civil conspiracy provides a potential means for recovery for fraud victims. The elements of civil… Continue Reading

Disgorgement Remedy: Recent Developments in the Province of Ontario

Posted in Fraud Recovery
On May 5, 2014, Ontario’s Divisional Court dismissed the appeal of Otto Spork, Konstantinos Ekonomidis, and Natalie Spork from the decision of the Ontario Securities Commission (“OSC”) that they had breached Ontario’s securities law and engaged in conduct contrary to the public interest. Otto Spork, Konstantinos Ekonomidis, and Natalie Spork were  ordered to disgorge $6.75… Continue Reading

The evolution of fraudulent conveyance – Indcondo v. Sloan

Posted in Fraud Recovery
On July 31, 2014, the Honourable Mr. Justice Penny of the Ontario Superior Court of Justice ruled in favour of the plaintiff in Indcondo Building Corporation v. Sloan (S.C.J.). For the plaintiff, Indcondo Building Corp (“Indcondo“), the ruling represents the culmination of more than two decades of litigation, which witnessed an intervening bankruptcy and subsequent… Continue Reading

Imprisonment for Ponzi Schemes: How long is long enough?

Posted in Fraud Prevention, Fraud Recovery
Under section 380.1(1) and (1.1) of the Criminal Code, courts are required to consider the following non-exhaustive list of factors as being aggravating circumstances in the context of fraud: significant magnitude, complexity, duration or degree of planning of the fraud; an actual or potential adverse effect on the Canadian economy or financial system, or on… Continue Reading

Sino-Forest OSC hearing opens

Posted in Fraud Recovery, Investment Fraud
On September 2, 2014, the Ontario Securities Commission commenced its high-profile hearing in the case of the Sino-Forest Corporation (“SFC“). SFC is alleged to have engaged in widespread fraud relating to its public financial disclosure. The specific allegations involve the fabrication or overestimation of revenue and assets, falsified evidence of ownership, backdated contracts, and undisclosed… Continue Reading

The OSC’s introduction of no-contest settlement proceedings

Posted in Fraud Recovery
In October 2011, the Ontario Securities Commission (“OSC“) raised the concept of offering no-contest settlements of the sort commonly employed by the US Securities and Exchange Commission (“SEC“). On March 11th of this year, after receiving some sharply divided feedback in months of public hearings, the OSC announced that it was moving forward with the introduction… Continue Reading

Fidelity insurance remains a useful tool for employee-related fraud

Posted in Employment Related Fraud, Fraud Recovery
On March 19, 2014, Toronto police arrested 3 York University employees in connection with an alleged fraudulent billing scheme. The alleged fraud is reported to have cost York University close to $2 million over a 7 year period. The University became aware of the matter through a whistleblower, and immediately engaged an external accounting firm to conduct a… Continue Reading

Commercial List fraud trial ends with $10.3 million win for HSBC

Posted in Fraud Recovery
Our litigation team recently secured a $10.3 million judgment in fraud.  On the strength of accounts receivable and appraised assets, HSBC extended loans exceeding $10 million dollars to a trucking company called Turbo Logistics Canada Inc., operated by defendants, George Perlin and Alex Ber.  The trial judge, Justice Mesbur, found that unbeknownst to HSBC, there… Continue Reading

Investment manager gets two-year prison term for fraud

Posted in Fraud Recovery, Investment Fraud
The Globe and Mail reported on the sentencing of investment manager Terrence Bedford who received a sentence of two years in prison after he was found guilty of running a fraudulent trading scheme that cost investors millions. Mr. Bedford ran Hamilton-based Greyhawk Equity Partners LP, and was accused of telling investors he was operating a highly… Continue Reading

Attempt to thwart a previous judgment through a related corporate entity found to be preference under the Assignment and Preferences Act

Posted in Fraud and Insolvency Law, Fraud Recovery
In Wolf v Anstett, 2012 ONSC 3220, a creditor used section 5 of the Assignment and Preferences Act (the Ontario provincial legislation which may be applied to set aside transactions made by an insolvent person or a “person in contemplation of insolvency”, with an intent to give an unjust preference to a creditor) and Rule… Continue Reading

When would silence or non-disclosure of material facts amount to fraudulent misrepresentation?

Posted in Fraud Recovery, Investment Fraud
In Canada Mortgage and Housing Corp v. Gray (Canada Mortgage and Housing Corp v. Gray, 2013 ONSC 1986), the Canada Mortgage and Housing Corporation (“CMHC”), the insurer of mortgages, attempted to block the release of a mortgage debt from a bankrupted individual who was a victim of a fraudulent scheme, but in CMCH’s view, was… Continue Reading

How should a Court divide a shortfall of money among victims of a Ponzi Scheme

Posted in Fraud and Insolvency Law, Fraud Recovery, Investment Fraud
Dividing up a shortfall from a Ponzi scheme was first posed before the United States Supreme Court in 1924. The infamous case of Cunningham v. Brown dealt with the original Ponzi scheme of Charles Ponzi and distributing remaining funds back to victims when his investment scheme was finally unravelled, but left victims with only a fraction… Continue Reading