CRM 200 Lecture Notes - Lecture 2: Regulatory Offence, Fide, Combines Investigation Act
3 May 2018
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LECTURE 2 - White Collar Crime, Regulatory Offences, Cyber
Crime
White Collar Crime
Fraud:
• wrongful or criminal deception intended to result in financial or
personal gain.
• To defraud is to rob by deceit; (illegally obtain money from
(someone) by deception)
o To deceit
▪ to induce person to act to his/injury;
▪ bend the truth
▪ makes someone believe the false truth which
leads to fraud
o to deceive
▪ is by falsehood (misrepresentation) to induce
(persuade) state of mind,
▪ ake you eliee soethig that is’t true
▪ provide false info to persuade someone
▪ But if its just a person giving false information but
not trying to trick another person to do
something it would be deceive
o to defraud is by deceit to induce(persuade) course of
action:
▪ London & Globe Finance Corp Ltd (Re), Ch (1903)
• To defraud ordinarily means to deprive a person dishonestly of
o something which is his/hers or
o of something to which he/she is or
o would or might but for perpetration of fraud be entitled:
▪ Scott v Metropolitan Police Commissioner, HL
(1974)
• Examples of Fraud:
o Victim may be defrauded by being deprived of something,
▪ he/she may be deprived of something either by
being
• fraudulently induced to part with it or
• by having that to which he/she is entitled
fraudulently diverted or
• withheld:
o R v Renard, Ont.C.A. (1974)
o Aused’s ats i prourig third party to put hi i
position to take money to which complainant (victim) is
otherwise entitled constitutes fraud:
▪ R v Kribbs, Ont.C.A. (1968)
find more resources at oneclass.com
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o Charge of fraud is proper where principle shareholder
fraudulently depletes assets of his alter ego, a limited
company:
▪ R v Marquardt, B.C.C.A (1972)
Fraud, s.380
Eery oe ho, y deeit, falsehood, or other fraudulent means …
• If all directors of company were to join together to purchase
worthless asset with company funds to enrich themselves,
directors would have defrauded company, if not by deceit or
falsehood, then by other fraudulent means:
o Purchase that is not very valuable and only brought it to
satisfy own goods
o Dishonesty- define very broadly by the court
• R v Cox and Paton, SCC (1963)
R v Olan, Hudson,
Hartnett, SCC (1978)
• accused cause company (which they have control) to
divest(stripe) its holdings in blue chip securities,
o purchase shares in company whose major asset was debt
owed to company controlled by two of accused
• other fraudulet eas ilude ot oly eas hih are i
nature of falsehood or deceit, but all other means which can
properly be stigmatized as dishonest
• No exhaustive (complete) defiitio of defraud,
o but Crown must at least
• (1) prove dishonesty and
• (2) deprivation
• element of deprivation satisfied on proof of
detriment, prejudice or risk of prejudice to
economic interests of victims
• detriment – doesn’t mean you lost
something, but the risk/subject to a risk.
• Issue in case:
o hether use of iti’s assets as i furtherae of oa
fide business interest of victim or was it expended in
advancing personal interests of accused, and whether
victim suffered deprivation as a result
(1) Dishonesty:
• Dishonesty has to be proven for fraud. – its based on a reasonable
person
• Standard to be applied is that of reasonable person
o An deceitful design that actually or causes the risk, of
robbing others of what is theirs
o Dishonestly lies in wrongful use of something in which
another person has an interest, in such manner that
other’s iterest is extinguished (destroyed) or put at risk
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o Use is wrongful in sense that it constitutes conduct which
reasonable decent persons would consider dishonest and
unscrupulous:
▪ R v Zlatic, SCC (1993)
(2) Deprivation:
• No need to prove actual lost, just risk on lost.
o The person have done something that exposed others to
risk of lost is enough
• Economic loss does not have to be proven by Crown,
o fraud complete when money is paid for shares of company
to which accused has falsely ascribed certain attributes:
o R v Knelson and Baran, BCCA (1962)
• Economic loss need not occur, but there must be actual risk of
prejudice
o where victim merely acts as conduit in transaction and no
actual risk of prejudice to her economic interests, there is
no fraud:
o R v Campbell and Kotler, SCC (1986)
• dishonest deprivation occurs where victim induced to make loan
which it would not have made if they had known the true state of
affairs
o true borrower was officer of company which was
subsidiary of victim;
o deceit of accused placed accused in conflict of interest,
o iperilled iti’s eooi iterests ee though loa
secured and used for purpose for which it was advanced:
o R v Knowles, Ont.C.A. (1979)
Elements of Fraud
offence to be proven
beyond reason
doubt by Crown:
• Actus Reus (physical act)
o 1. prohibited act,
▪ be it act of deceit, falsehood or some other
fraudulent means, and
o 2. deprivation caused by the prohibited act,
▪ which may consist in actual loss or placing of
iti’s peuiary/ oetary/eooy iterests at
risk
• Mens Rea (mental requirement)
o 1. subjective knowledge of the prohibited act, and
o 2. subjective knowledge that the prohibited act could have
as a consequence the deprivation of another (which
depriatio ay osist i koledge that the iti’s
pecuniary interests are put at risk)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Lecture 2 - white collar crime, regulatory offences, cyber. Public welfare offences in this category: no need to prove mens rea. Just actus reus is enough doing the act: consider what reasonable person would do, defences, mistaken facts, due diligence/reasonable steps. Same (cid:862)regulatory (cid:373)is(cid:272)o(cid:374)du(cid:272)t(cid:863) subject to both criminal and civil penalties (p2-7): Criminal code until 1969, then transferred to combines. knowing it to be an unfair practice this statute repealed by consumer. Protection act: they took out the mens rea category (took out the words knowingly) and made it into a strict liability because they have to be given a chance to show due diligence. Internet has become ideal venue for both recreation and commerce online businesses have emerged since 1990s, eg. , Internet isp: controls network, can remove harmful content, contractual right to collect information about users, provide information to law enforcement to assist in investigation, government cooperation.
