What is White Collar Crime?

American criminologist Edwin Sutherland coined the term “white collar crime” in 1939 to mean “crime committed by a person of respectability and high social status in the course of their occupation.” Over 80 years later, the respect and social status aspects of the definition might have been somewhat displaced by education and a financial aspect to the offence, but such allegations remain tied to occupations, thus those involved in fields like banking, insurance, real estate, securities, accounting, business generally, and even law tend to be most vulnerable to allegations of white collar crime.

The reasons to particularly fear such allegations include that it might be alleged you’re part of a larger conspiracy even though you had no real knowledge that a crime was being committed, and that lengthy terms of imprisonment are increasingly imposed as punishments for white collar crime even on first offenders with no prior criminal records, together with apocalyptic fines and restitution orders, even though you may have never even seen any of the money the allegations relate to.

What is Tax Evasion?

Sometimes also called tax fraud, tax evasion is the usually regarded as the most serious of the revenue related offences in Canada. Many years of imprisonment can be imposed for a large enough quantum of evasion, and investigators could even choose to proceed with charges under the Criminal Code for public tax fraud that carries a 14 year maximum sentence of imprisonment, rather than the 5 years maximum available under the Income Tax Act.

Allegations of evasion of taxes can also arise under Part IX of the Excise Tax Act (HST/GST), the Customs Act (including evasion of duties or import/export restrictions), the Excise Act (tobacco and alcohol), and provincial legislation. Generally there has been an upward trend among Canadian courts of imposing varying lengths of imprisonment for these offences upon conviction, rather than imposing fines that might never be collectable. Thus one needs to be very proactive in avoiding charges where possible, negotiating resolutions to charges that avoid prison, and taking cases to trial and appeal where charges can’t be avoided and reasonable resolutions aren’t possible.

What is Financial Fraud?

Illegally obtaining money or something else of value from someone by way of deception sweeps a whole lot of conduct into the rubric of financial fraud. At its broadest, financial fraud could include:

• Corporate Fraud

• Securities Fraud

• Bank Fraud

• Insurance Fraud

• Mortgage Fraud

• Real Estate Fraud

• Financial Misstatement

• Insider Trading

• Corporate Misconduct

• Fraudulent Conveyance

• Customs & Trade Fraud

• Copyright & Trademark Offences

• Price Fixing & Bid Rigging

• Bribery

• Computer & Internet Fraud

• Employee Theft

• Forgery

While many of these offences could be prosecuted under the Criminal Code, some would be pursued under the Competition Act or provincial legislation like the Ontario Securities Act. Even under the not classically “criminal” statutes like the Competition Act (which is mostly a “regulatory” statute), penalties have recently been increased to up to 14 years imprisonment, generally making them as serious as those found in the Criminal Code.

How to Fight White Collar, Tax or Financial Allegations or Charges

1. Retain legal counsel at an early stage of an investigation to advise you on your rights. Although many believe a lawyer is only needed or helpful once charges are laid, involving a lawyer early once you learn an investigation is ongoing, or you fear you may later be accused of an impropriety (perhaps as one of many involved in a supposed conspiracy) will enable you to manage the flow of information, and make informed decisions on when to answer questions or not, including when you are legally obliged to talk, as many statutes in this realm have broad demand for information powers where a right to remain silent might not be able to be asserted.

2. Conduct a meticulous review of the documentation. Because these are largely “paper” cases (even if all the paper is digital), one needs to carefully review each piece of the financial puzzle in order to determine which puzzle pieces may be missing (so that additional information can be demanded), and whether those pieces truly fit together as claimed.

3. Develop a theory of the case early on. Because most of these offences require proof of “mens rea” meaning the intent that you knew what you were doing was unlawful, developing defence theories of negligence, honest mistake or being an unwitting participant in a conspiracy from an early stage - including searching out evidence like witnesses to support those theories - will be develop a strong defence if charges are ever laid, or a case makes it to trial. Waiting too long for a theory of the case to emerge only invites self-contradiction, confusion, and implausibility, regardless of how based on truth the theory might be.

Why Hire a Lawyer Focussed on Defending White Collar, Tax & Financial Fraud Cases?

Unfortunately white collar, tax and financial fraud cases are an odd criminal-civil hybrid, where many of the criminal defence lawyers who are excellent at dealing with blood, drugs, and firearms simply don’t pursue or have a background in paper cases, and the civil litigation lawyers who are excellent at dealing with paper don’t do criminal defence cases. In many ways these are civil cases litigated in criminal courtrooms, using criminal procedure and rules of evidence, but civil techniques of document analysis.

Our firm has decades of experience both prosecuting and defending precisely these kinds of cases. The firm’s senior barrister and managing lawyer Gordon Scott Campbell served for many years as a Federal Crown Prosecutor with the Department of Justice Canada, focussing on tax evasion, customs, trade, competition and Criminal Code fraud offences, litigating cases at trial and on appeal up to the level of the Supreme Court of Canada. He also served as counsel to the Canada Revenue Agency, Canada Border Services Agency, and RCMP. He is author of The Investigator’s Legal Handbook series of books (Carswell/Les Editions Yvon Blais).

William G. Stephenson assists as a junior barrister.

Nancy Hamelin is the firm’s lead criminal and regulatory trial and appeal law clerk.