What Happens When Someone Is Accused of Fraud?

Fraud is one of the few criminal charges that can be built entirely out of paperwork. That’s part of what makes fraud accusations so unsettling for the people facing them: the entire case often lives inside spreadsheets, emails, and financial records rather than anything a person can point to and immediately understand.

Unlike theft, fraud doesn’t require anyone to physically take anything. It’s built on deception, and proving deception, rather than proving possession, is where these cases get complicated fast. Here’s what the law actually requires prosecutors to prove, and why the evidence behind a fraud case matters just as much as the allegation itself.

What the Law Actually Says

Fraud is defined under section 380 of the Criminal Code, and the language is broader than most people expect. The offence covers anyone who, by deceit, falsehood, or other fraudulent means, defrauds the public or any person of property, money, a valuable security, or a service. That phrase “other fraudulent means” isn’t a loophole; it’s deliberate. Courts have consistently declined to draw a rigid boundary around what counts, giving prosecutors room to pursue conduct that doesn’t fit a tidy definition of lying or stealing but still amounts to dishonest dealing.

The charge also splits based on dollar value. Fraud over $5,000 is treated as a serious indictable offence carrying a maximum penalty of fourteen years imprisonment, while fraud under $5,000 carries a maximum of two years. Where the total value of the fraud exceeds one million dollars, a conviction on indictment triggers a mandatory minimum sentence of two years. The gap between those outcomes is enormous, which is part of why how a case gets valued and prosecuted matters as much as the underlying facts.

The Two Things Prosecutors Must Prove

Fraud has a specific legal structure, shaped heavily by a landmark 1993 Supreme Court of Canada decision, R. v. Théroux, that still governs how these cases are analyzed today.

First, a dishonest act. The Supreme Court set out that the offence has two elements: a dishonest act and a resulting deprivation, with the dishonest act established through proof of deceit, falsehood, or other fraudulent means. This is judged objectively: courts ask what a reasonable person would consider dishonest, not just what the accused personally believed was fair.

Second, deprivation, or the risk of it. The Crown doesn’t need to prove that anyone actually lost money to secure a conviction; it’s enough to show that the accused’s conduct created a risk of financial loss. A misrepresentation on a loan application, for instance, can constitute fraud the moment it’s submitted, regardless of whether every payment is later made on time.

On the mental state required, the standard is subjective, not accidental. The Crown must establish that the accused had subjective knowledge of the prohibited act and subjective knowledge that this act could result in someone’s deprivation.

This requirement of intentional fraudulent action specifically excludes mere negligent misrepresentation, along with sharp or improvident business conduct that takes advantage of an opportunity without crossing into genuine dishonesty. In other words, a bad business decision or an overly optimistic sales pitch isn’t automatically fraud; the law is trying to separate dishonesty from ordinary risk-taking, even when both end the same way for the person on the other side of the deal.

Why the Evidence Carries So Much Weight

Because fraud so rarely involves eyewitnesses or physical evidence, the entire case tends to rest on documentation: bank records, contracts, correspondence, digital trails, and financial statements that either support or undercut the Crown’s theory of dishonesty. That evidentiary weight cuts both ways; it can make a case look airtight on paper, but it also means the defence has real opportunities to challenge how records were interpreted, whether intent can actually be inferred from the paper trail, and whether the deprivation element has genuinely been made out.

Fraud has become one of the fastest-growing categories of reported crime in the country. Canada’s police-reported fraud rate reached roughly 500 incidents per 100,000 population in 2024, nearly double the rate recorded in 2010.

That volume has practical consequences in the courts. In Ontario, 58% of fraud cases in the 2023–24 fiscal year ended with charges stayed or withdrawn, up from 46% a decade earlier: a trend linked to case backlogs and the sheer complexity many of these files involve. It’s a reminder that a fraud charge, however serious it looks at the outset, is not the same thing as a conviction, and the strength of the underlying evidence often determines which direction a case ultimately goes.

A fraud allegation can look devastating on paper long before anyone has established that a crime actually took place, and that gap between accusation and proof is exactly where a strong defence does its work.

That’s where Rashidy & Associates steps in. Serving clients across the Greater Toronto Area, our fraud defence team brings a strategic, client-focused approach to complex financial and white-collar allegations, working to challenge weak evidence and protect clients’ rights at every stage of the process.

We approach fraud cases with the same rigor and attention to detail clients expect across all criminal matters, including representation available in English, Arabic, and French for those who prefer to navigate a difficult legal process in their own language.

Get clarity on the specific evidence and defences that could apply to your case; contact us today.