Fraud is an offence under the Criminal Code - basically a fraud involves tricking someone out of something of value.
A fraud differs from a theft in the element of trickery - if I grab your wallet it is theft but if I trick you into handing me your wallet, say in return for a fake airline ticket, that is fraud.
Canadian courts have held that fraud consists of two distinct elements:
- A prohibited act of deceit, falsehood or other fraudulent means. In the absence of deceit or falsehood, the courts will look objectively for a "dishonest act"; and
- A deprivation caused by the prohibited act, relating to property, money, valuable security, or any service.
The concept of deceit, falsehood or other fraudulent means is complicated.
"Deceit" is an untrue statement made by a person who knows that it is untrue, or has reason to believe that it is untrue, to induce another person to act on it, as if it were true, to that other person's detriment.
"Falsehood" is a "deliberate lie".
"Dishonesty" is what a reasonable person would consider dishonest; that can include non-disclosure where a reasonable person would consider it dishonest. As the Yiddish proverb says "a half truth is a whole lie".
A deprivation can be an actual loss but it also includes a risk of loss. So if someone's financial interest is put at risk - even if no loss occurred - a deprivation has occurred.
The penalties for fraud are significant. Where the fraud is over $5,000 the maximum sentence is 14 years imprisonment.