Fraud, forfeitures, and fines

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Upon conviction for ‘fraud over $5000’ (a designated offence, as defined in the Criminal Code of Canada), the Criminal Code of Canada provides for the forfeiture of the proceeds of crime. The Criminal Code also allows for a fine instead of an order of forfeiture. This would occur where a court is satisfied that a forfeiture order should be made but the proceeds of crime cannot be made subject to such an order.

Where a fine is ordered under Part Xii.2 of the Code, the court must impose a jail term where the accused defaults on payment of the fine. The length of the jail term will depend on the amount of the fine. Guidelines for jail time in default of payment of the fine are set out in the Criminal Code.

Though such a fine is considered to be part of the sentence, its specific purpose is to take the place of the proceeds of crime. Its objective is to essentially deprive the offender from the proceeds of the crime that she has been convicted of. Another intended effect is to deter other potential offenders.

Before such a fine can be ordered, the court must first be satisfied that an order of forfeiture should be made. For such an order to be made, the court must be satisfied that the property in question is proceeds of crime and that it became so as a result of the commission of the designated offence, for which the offender has been convicted. The Court of Appeal for Ontario has recently ruled (in the case of R. v. Dwyer, [2013] O.J. No. 277) that the sentencing court must also be satisfied (i.e. the Crown must prove on a balance of probabilities) that the offender has or must have had possession of the property at some point.

Once these prerequisites have been met, the sentencing court has only a limited discretion to decline to order a fine in the place of forfeiture. Also, in determining the amount of such a fine, the court must not take into account the offender’s ability to pay (see Supreme Court of Canada decision in R. v. Lavigne, 2006 SCC 10). The offender’s ability to pay is a factor that only goes to how much time the court should grant to the offender to pay the fine.



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