The incidence of fraud in business transactions has risen significantly in Ontario. Fraud in business transactions is when false representation is made knowingly. This type of fraud occurs when someone knows that the representation that they are making is not accurate, but they do so anyway.
For a Toronto fraud lawyer, the misrepresentation must lead to a victim acting in such a way that it is detrimental to them. Regardless of what the motive behind the misrepresentation is, it is illegal in Canada.
When someone intentionally misrepresents their financial information, or any other part of their business transactions knowingly and with the intent to get someone to make a detrimental choice, not only can they be held liable in civil court, they might also be charged criminally.
What is considered fraudulent misrepresentation?
Some elements must be included for someone to be found guilty of business transaction fraud. The elements of fraudulent misrepresentation are:
- That the defendant misrepresented a fact
- The defendant must have known that it was not truthful or they didn’t make sure that it was a fact
- The defendant specifically made the misrepresentation to persuade the victim to act
- The plaintiff must believe the validity of the representation
- The plaintiff must suffer damages due to the misrepresentation
What are the differences between the code of standards for the public and private corporations?
In Canada, private organizations are held to a lower degree of scrutiny than public organizations. Unless the company has a public offering, the Securities Act is not applicable to it. Unless investments are available to the public, the Ontario Securities Commission has no jurisdiction over private organizations.
With the shareholders’ consent, no audit of a company is legal if they so choose. Even if there is an audit commission, financial reporting is not necessarily required, which makes it more likely that cash transactions might be falsified or underreported. It also makes it more likely that private companies can be lax about their bookkeeping and their financial records.
Since both share ownership and financial statements are not required to be publicly disclosed, it is possible for private businesses to allow adverse events to evade the public eye entirely.
How are business transaction fraud charges investigated?
If someone believes that they have been a victim of business transaction fraud, they can contact local law enforcement either on the national or the provincial level.
The Royal Canadian Minister Police has an Integrated Market Enforcement Team that is responsible for addressing allegations of business fraud. They investigate and are responsible for bringing criminal charges against those businesses who are found guilty of fraudulent practices.
What are the various offenses that someone can be accused of?
According to the criminal code, you can be accused of the following:
- Theft
- Secret commissions
- Destroying documents of title
- Criminal breach of trust
- Uttering forged documents
- Forgery
- Disposal of property with the intent to defraud creditors
- Fraudulently manipulating stock exchange transactions
- Laundering proceeds of crime
- False prospectus
There are various regulatory statutes at both the federal and the provincial level that have administrative offenses relative to business practices. One such law is the Income Tax Act or the Competition Act.
To prove that someone is guilty of fraudulent business transactions, you have to prove they were aware that they were misrepresenting something as fact when they knew it was not. You have to show that they didn’t do so blindly and without knowledge, but that they had the intent to use the misrepresentation to get someone to act in a way that was detrimental.
It can’t be that someone was mistaken or that they made a reasonable mistake; to be found guilty of fraud business transaction, you have to act with malicious intent.
Organizations have an obligation to be truthful in their business practices. If they practice deception and someone is harmed due to that deception, then it is possible for them to be charged criminally, and also to be held financially responsible in civil proceedings.
If you believe that you are the victim of transaction fraud or that business has intentionally deceived you for their benefit, then contact law enforcement so that they can investigate the case and get you the compensation you deserve.