Canadian Fraud Law

Canadian Fraud Law

Commentary, News and Updates

Supreme Court of Canada Shifts the Risks of Cheque Fraud

Ahmed Shafey Posted in Fraud Prevention, Fraud Recovery

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

Documents Prove Fraud in Summary Judgment Decision

Brendan O'Grady Posted in Fraud Prevention, Fraud Recovery

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 Bans Facilitation Payments Under Foreign Anti-Corruption Law

Peter MacKayChristopher Burkett Posted in Investigations & Compliance

Canada has formally repealed its exception for “facilitation payments” under its foreign anti-corruption legislation (the Corruption of Foreign Public Officials Act).

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

Fraud by Omission: Ontario Case Law Updates

Brendan O'Grady Posted in Investment Fraud

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.

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When should a fraudulent conveyance action be brought?

Ahmed Shafey Posted in Fraud Recovery

Squares threeIn 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 a defendant had the requisite intent to defeat creditors or others.  Continue Reading