Fraud covers a very wide range of conduct in Canadian criminal law, from a relatively small misrepresentation to elaborate, large-scale schemes affecting many victims. Unlike theft, which involves simply taking property, fraud is built on deceit, falsehood, or other dishonest conduct used to obtain a financial benefit or cause a loss. This guide explains how fraud is defined under section 380 of the Criminal Code, how it is classified, the potential penalties, and what generally happens after this kind of charge in Ontario. It is general legal information, not legal advice about a specific case.
What Is Fraud?
Section 380 of the Criminal Code makes it an offence to defraud the public or any person of property, money, valuable security, or any service, through deceit, falsehood, or other fraudulent means, whether or not that conduct amounts to a false pretence. Unlike theft, fraud does not require that the accused directly take property; it can involve inducing someone else to hand over money or property, or to provide a service, based on a false or misleading representation. The Crown must prove both a dishonest act and that the act caused, or risked causing, deprivation to the victim, whether that deprivation is an actual financial loss or simply the risk of prejudice to the victim's economic interests.
Why the $5,000 Threshold Matters
As with theft, the Criminal Code draws an important distinction based on the value involved. Fraud affecting property, money, or a service valued at $5,000 or less is treated differently from fraud affecting a greater value, both in terms of classification and maximum penalty. In fraud cases, the relevant value is generally the total amount taken or put at risk, which in more complex schemes can require detailed financial evidence to establish.
Classification and Penalties
Fraud under $5,000 is a hybrid offence, while fraud over $5,000 is punishable by a much higher maximum penalty on indictment.
Fraud (Section 380) at a Glance
- Classification – $5,000 or under
- Hybrid offence (Crown elects summary conviction or indictment)
- Maximum penalty – $5,000 or under
- Up to 2 years on indictment; a lesser maximum on summary conviction
- Classification – over $5,000
- Indictable offence, maximum 14 years imprisonment
- Mandatory minimum – value over $1 million
- 2 years imprisonment, where prosecuted by indictment
- Mandatory minimum – other fraud charges
- None
These figures reflect the Criminal Code as of this page's last update. Actual sentences depend heavily on the amount involved, the number of victims, whether the person abused a position of trust, and their record. A criminal lawyer can confirm the current state of the law for a specific case.
The Mandatory Minimum for Fraud Over $1 Million
Since 2011, section 380(1.1) of the Criminal Code has imposed a mandatory minimum sentence of 2 years imprisonment for a person convicted on indictment of one or more fraud offences where the total value of the property, money, or services involved exceeds $1 million. This provision was introduced as part of a broader legislative response to large-scale financial fraud. The Criminal Code also directs courts to treat certain factors as aggravating in fraud sentencing generally, including where the fraud exceeded $1 million, affected a large number of victims, or involved the offender taking advantage of the trust or high regard afforded to them in their community.
Common Forms of Fraud
Fraud charges arise in an enormous range of contexts, including:
- Credit card and identity fraud, involving the unauthorized use of another person's financial information or identity
- Investment fraud, including schemes that promise unrealistic returns or misrepresent how funds will be used
- Employment-related fraud, such as falsifying expense claims or misappropriating employer funds
- Real estate and mortgage fraud, including misrepresentations made to lenders
- Insurance fraud, including inflated or fabricated claims
- Investment or affinity fraud targeting a specific community, workplace, or social network, where the accused's personal relationships with victims are often part of how the scheme operated
Where property obtained through a fraud is later found in someone else's possession, a separate possession of stolen property charge may also apply to that person.
Fraud investigations often take significantly longer than other criminal investigations because they frequently involve tracing financial transactions across multiple accounts or institutions. It is common for a person to be aware of a fraud investigation for an extended period before any charge is formally laid.
How This Relates to Other Charges
Fraud is sometimes charged alongside other financial or property offences depending on the specific conduct, including possession of property obtained by crime and, in cases involving forged documents, offences related to forgery. Where deceit is used to gain entry to a location, rather than to obtain money directly, a break and enter charge may apply instead. Fraud is distinct from theft, discussed on our theft charges page, because it centres on deceit rather than simply taking something without permission.
Fraud allegations connected to a workplace or a family business often carry an added layer of personal complexity, since the accused and the alleged victim may have an ongoing relationship or shared financial history. These cases benefit from an early, careful review of the specific records at issue.
Possible Defences
Fraud cases often turn on whether the Crown can prove dishonest conduct, as opposed to a business transaction that went badly, a genuine misunderstanding, or a legitimate but failed venture. Whether the person had the necessary knowledge that their conduct was dishonest, and whether their actions actually caused or risked causing deprivation to another person, are frequently contested issues. Given the often extensive financial records involved in fraud cases, a careful and detailed review of the disclosure by a criminal lawyer, sometimes with the assistance of a forensic accountant, is often necessary before assessing possible defences.
What Happens After This Charge
Bail conditions in fraud cases can include restrictions on financial activity, such as prohibitions on holding certain positions of trust or accessing specific accounts, in addition to more general conditions. See our page on bail conditions for more. Fraud cases, particularly those involving substantial amounts or many victims, often involve lengthy disclosure processes given the volume of financial records typically involved, before the matter proceeds toward a resolution or a trial. A conviction results in a criminal record; see our criminal records overview for more.
Because fraud sentencing takes into account factors such as the number of victims, whether the offence affected the stability of the financial system, and whether the offender abused a position of trust, the range of outcomes for fraud convictions is unusually wide, spanning from a discharge or fine for a small, isolated incident to lengthy custodial sentences for large, organized, or long-running schemes. Restitution to victims, where feasible, can also factor into how a sentence is structured. See our sentencing overview for the general principles Ontario courts apply.
Frequently Asked Questions
Is fraud the same as theft?
No. Theft involves taking property without the owner's consent, while fraud involves using deceit, falsehood, or other dishonest conduct to obtain property, money, or a service, or to cause a loss to someone else.
Does fraud require that the victim actually lose money?
Not necessarily. The Crown can establish fraud by showing that the dishonest conduct caused a risk of prejudice to the victim's economic interests, even if no loss ultimately occurred.
What is the mandatory minimum sentence for fraud?
There is no mandatory minimum for most fraud charges. A mandatory minimum of 2 years imprisonment applies specifically where a person is convicted on indictment of fraud involving more than $1 million.
Can a failed business deal lead to a fraud charge?
A business arrangement that simply fails, without dishonest conduct, is not fraud. Fraud requires proof of deceit, falsehood, or other dishonest conduct, not merely a poor financial outcome.
Are fraud investigations typically long?
Many are, particularly where the alleged conduct involves multiple transactions, accounts, or victims. It is common for fraud investigations to take considerably longer than investigations into other types of offences.