Criminal vs. Civil Fraud: What Are the Differences?

The main difference between a criminal fraud case and a civil fraud case is the way each is handle.

In the case of criminal fraud, the person committing the act is prosecuted by the government. The guilty verdict or plea could result in probation, jail time, and/or restitution.

On the other hand, in a civil fraud case, the defendant has misrepresented a material fact to obtain action or forbearance from another person. The victim of the misrepresentation then brings a civil lawsuit against the accused to recover damages due to the fraud. In a civil fraud case, the recovery may be for economic or non-economic losses.

In this post, we will discuss the difference between criminal and civil fraud cases and how a lawyer in Brampton can help you overcome these lawsuits.

Criminal Fraud Cases vs. Civil Fraud Cases

According to section 380(1), fraud is consider a crime. But there are distinctions between criminal and civil fraud. The basic one lies in who is pursuing legal action.

An act of fraud can be prosecute as a criminal fraud by prosecutors and also as a civil action by the party who was the victim of the misrepresentation. Next, you will learn the standard elements for both criminal and civil fraud cases that distinguish them from one another.

What Is the Meaning of Criminal Fraud?

The legal definition of criminal fraud is located in section 380 of the Criminal Code of Canada. In summary, when a person is accused of criminal fraud, the case is brought by either local, provincial, or federal prosecutors.

Criminal fraud investigations require the gathering of extensive evidence because law enforcement must prove the defendant knew about the deception. They have to prove that the fraud was intentional and that the victims lost items of value, such as money, property, or any other valuable security. Common examples of criminal fraud cases include:

• Mail fraud
• Wire fraud
• Racketeering
• Identity theft
• Securities fraud
• Tax evasion
• Bank fraud
• Embezzlement
• Counterfeiting

Several factors can aggravate the severity of the charges. These include:

1. The length and complication of the fraudulent activity.
2. Whether or not the fraudulent activity had an impact on the Canadian economy.
3. Whether records were destroyed or obstruct.
4. The number of victims.
5. Any positions of power the defendant may have exploited to commit fraud.
6. Whether the defendant complied with licensing requirements regarding their profession.

What Is the Meaning of Civil Fraud?

In contrast to criminal fraud, a civil fraud case is brought to court by the victim who was defraud. That person needs to prove that the defendant caused economic or non-economic harm to the court. The victim needs to show that they suffered damage as a result of the misrepresentation. The following types of civil fraud are involve:

• Fraudulent investment schemes
• Ponzi schemes
• Predatory marriage
• False invoices
• Telephone scams
• Bank account fraud

In a civil fraud case, the burden of proof is on the victim, also known as the plaintiff. Four elements in a civil fraud case must be proven:

1. A false representation was made by the defendant.
2. The defendant had some knowledge of the false representation, through knowledge or recklessness.
3. The false representation caused the plaintiff to act.
4. The plaintiff’s action resulted in an injury or loss.

If a plaintiff prevails in a civil fraud case, the defendant will be require to pay restitution. In the case of economic damage, this includes loss of income, property or other financial assets. Non-economic damage includes pain and suffering. For example, if the plaintiff suffered significant stress after losing their life savings or property, that could be consider non-economic damage by the court.

The goal of pursuing both criminal and civil fraud cases is to get justice and punish the wrongdoer. To gather evidence, contact a criminal defence lawyer in Brampton. They will know what type of evidence to seek during the discovery phase and will ask the right questions during depositions and cross-examinations to help win your case.