What is fraud under $5000? When it comes to criminal activity, one way to distinguish one type of crime from another is through “class.” This measuring system is applied to acts with a strong financial nature; they don’t necessarily involve violence or theft in the traditional sense and are often referred to as “white collar crimes.” These crimes are usually committed through more subtle means, and often strictly for profit, as opposed to violent crimes like assault or murder that are often “crimes of passion” motivated by strong emotions rather than a calculated attempt to make money in some illegal way.

We’re going to look at one particular type of white collar crime known as fraud under $5000. While it’s easy to guess what the exact nature of this crime is, you should read on for a more in-depth analysis of what it involves. After all, fraud can be both a criminal offence and a civil one. And if it’s a criminal offence, what makes it different from theft?

Fraud Vs. Theft

There’s actually a big difference between fraud under $5000 and theft under $5000. Regarding consequences, both of them are similar. They usually end with someone who is now missing $5000 in some way, shape or form. However, it is the method that differentiates whether something is considered fraud or theft of the same amount.

Theft usually involves force or stealth to acquire the goods. It’s theft under $5000 if, for example, someone left four $1000 bills on a coffee table in their home, and someone broke the window, climbed in, and took that money. Or, if someone had an expensive piece of equipment with a lock, where the lock was broken, and the equipment was taken and sold. That would also be theft.

Fraud, on the other hand, usually involves trickery. So that the victim usually volunteers the money or isn’t aware that a seemingly authorized financial transaction is redirecting funds somewhere that it isn’t where they intended it to go.

In other words, theft involves taking someone’s money, whereas fraud usually consists of tricking them somehow into giving it to you.

Civil & Criminal Fraud

Fraud under $5000 can be looked at in two ways under the eyes of the law. Fraud can either be considered a criminal act, or a civil one, though both types of actions will still need to be resolved in a Canadian court of law with a jury as the deciding factor. As with most civil court cases, there is no prosecutor in a civil court case, there is instead a plaintiff, who is the person and lawyer that is suing for damages. The defendant, however, remains the same whether it is a criminal or a civil case, though the big difference now is whether the defendant will be found guilty or will merely be held financially responsible.

Civil cases of fraud mean that the wronged party, known as the plaintiff, is suing the defendant for money. In cases of civil fraud, if the court finds in favour of the plaintiff, then the defendant is expected to pay “damages,” which is the amount being sued for–here, it’s $5000 plus any warranted fees in hardship.

However, in criminal cases, the stakes are considerably more severe. Now, the defendant is in a traditional trial to be found guilty or not guilty by a jury. Should the defendant be found guilty of fraud, there are legal ramifications, such as a paying a fine as issued by the court and possibly even jail time. And of course, if someone is found guilty of criminal fraud under $5000, that also means that in addition to fines and a jail sentence, there is going to be an entry on that person’s record as having a criminal conviction.

Types of Fraud

Just as there are many ways to steal goods or money, there are many ways for fraud under $5000 to occur. Fraud, after all, usually involves deception, and that can take many different forms, such as:

Insurance fraud: This is a relatively common type of fraud, especially when it comes to automobile insurance, where someone may exaggerate the amount of damage a car sustained to receive more money from the insurance company than what is actually required. Similar insurance fraud acts take place for property damage such as arson where a home or business is burned down to collect fire insurance.

Asset Misappropriation: This frequently occurs in businesses. One of the most widespread forms of asset misappropriation comes from travel expenses. Some unscrupulous employees may either add personal purchases and costs to their business trip’s budget in an attempt to get the company to pay for it. Another trick is to deliberately create false expenses to put into a report to receive “free money.” It means creating business expenses that never actually took place when compensation for costs is allocated at the end of the trip.
Identity Fraud: this is an increasingly common form of fraud in the digital age. Carelessness or focused intent may be involved, but if crucial data, such as a person’s bank account, credit card number, and e-mail data is stolen, it can be abused. Now purchases can be made to online shops in the name of that person until a call to the bank occurs to freeze the credit card or bank account and stop any further transactions.
Advance Fee Fraud: This is another product of our digital world, though it has had plenty of real-world incidents as well. This fraud is when someone is offered either goods or services that appear desirable, but an advance fee is required before the product or service can be provided. Once the payment is made, no product or service is actually given.
Services Fraud: A type of fraud that takes advantage of the lack of knowledge people may have when it comes to contracting the services of an expert. For example, a fraudulent plumber may be called to someone’s home to fix a simple leaky faucet, then falsely reports other problems with the plumbing that require more attention and services to fix. Or the plumber may claim that certain expensive parts are required to complete a job, but then use cheaper parts instead, pocketing the difference, while charging the customer for the expensive parts.
Securities Fraud: This fraud generally involves higher amounts of money, although fraud under $5000 is still certainly possible in these cases. Securities fraud consists of providing false information to investors in order to secure dishonest buying or selling of stock. This act usually also results in a violation of other securities laws.
Racketeering: This is when illegal services are charged to people and are paid for. “Protection money” is a common form of racketeering where gangs or other groups of organized crime collect a fee in exchange for protection from harm. Loan sharking, where a group lends out money at extremely high interest rates, is another common form of racketeering.

The Consequences

Fraud under $5000 is, if convicted, obviously not as severe as fraud over $5000 this amount. In some cases of fraud, especially if it is a criminal case, the final consequences may be mitigated if the defendant is willing to pay back the money that was fraudulently acquired, though there is no 100% guarantee this will happen.

In the event of criminal charges being laid for fraud over $5000 against a defendant, this is usually regarded as an indictable offence, which is more serious. Indictable offences mean that a person has been arrested, charged, and the crime is severe enough that a trial must take place with a lawyer representing the defendant. In some less severe cases, the charge may be treated as a summary offence, where the person charged is not necessarily required to attend a court trial and can have an attorney act as his or her representative in court.

In the event that a conviction for fraud over $5000 is secured, a jail sentence of up to two years may be given. The sentence will also now be entered into the Canadian Police Information Centre database, which is publicly accessible to anyone willing to pay the fee, or to any law enforcement agency, local, provincial, national or international, that wishes to conduct a background check.

Long-Term Problems

Despite not involving any violent acts, fraud under $5000 is still considered a criminal conviction and is treated as such. Because it is now publicly accessible, this means that any job for which a background check is a standard company procedure will automatically “flag” the criminal charge. If a person is attempting to work in a corporate job, particularly one with finances involved, a fraud under $5000 conviction is likely to have a negative impact on employment prospects.

Beyond that, there is also the issue of travel. Fraud is one of the criminal charges listed under the American “moral turpitude” convention established with Canada. This means that if someone with a conviction for fraud under $5000 has a background check conducted by the Customs & Border Patrol at either the Canada/USA border, or at an international airport for a flight to the USA, that conviction will again be flagged, and the enforcement officers can bar entry of that person into the USA, permanently.

A conviction may even pose a problem in more personal, everyday activities. Landlords, for example, may wish to conduct background checks, and a criminal conviction, especially for something like fraud under $5000, may cause that landlord to reject an offer to rent any space. Even activities like adopting children will often need a background check to ensure the children are going to a wholesome, law-abiding family and a criminal conviction, especially for financial crimes, might be a significant obstacle. While there are plenty of laws to protect people from discrimination based on race, religion and sexual orientation, people with criminal records are exempt from such protections. And in the case of employment, it is illegal to hire certain people with certain criminal offences in their record.

Fraud Under $5000: Fixing The Problem

Rather than living with a major blemish on the permanent record that will deny opportunities, one of the best ways to deal with a criminal conviction is to meet the requirements for a record suspension. This process was once known as a pardon, but despite the name change, the final result is still the same. If, for example, a person has a conviction for fraud under $5000, then all that is required is that all their fines are paid, all sentences served, and, after a period of waiting with no additional convictions, an application may be put in for a record suspension.

If the application for the record suspension is approved, then the conviction, arrest, and all other evidence of the sentence are sealed. From that point forward, anyone that contacts the CPIC database will draw a “blank,” which is the same result that would happen for someone who had committed no crimes.

If a person has already been denied entry to the USA due to the presence of a conviction, then, in this case, an entry waiver will be required. This form is a specially issued by the Department of Homeland Security to the RCMP and is a joint document that is legally recognized by both law enforcement agencies to grant people with convictions special permission to enter the USA. However, unlike a record suspension, this is not permanent and will require periodic renewal.

We Can Assist You

If you find yourself with a conviction for fraud under $5000 or any other criminal charges, we can help if you’re interested in getting a record suspension, or an entry waiver. Applying for a waiver is neither a quick nor easy process, and there are many documents, forms, certifications and other requirements that need to be met in order to be approved.

The best chance for success of this application comes from meeting all the requirements and understanding the process. Pardons Canada is thoroughly familiar with all procedures and can maximize the chances of success so that Canadians with criminal convictions can enjoy many more opportunities once again.

Pardons Canada undertakes all necessary steps and procedures for removing your criminal record, including: Pardons/Record Suspensions, Purges, Photograph & Fingerprint Destruction, and U.S. Entry Waivers.

Author: Sven Drumev