Tying Restitution to Sentencing

I read an article in the Calgary Herald this week about Nicole Mann (Mann), who lost her appeal for a 2022 conviction for theft of $450,000 that was supposed to be for a children’s charity. She was convicted of two charges of theft over $5,000 and money laundering. Because of her actions, she was sentenced to 3.5 years and had to pay the victim restitution. What makes this case stand out to me is not the amount that was stolen, who the victims were, or even the charges; it was the sentencing.

Restitution means the fraudster must return some or all of the funds stolen to the victim. Although many fraud convictions include this clause, this was different because the judge added a conditional sentence to the damages. If Mann does not repay the money she stole from the Colliers Cares Foundation within five years, three years will be added to her prison sentence.

I was pleased to see a judge take this position. In my experience, recovery of the money is the victim’s responsibility. The courts order restitution as part of the sentence, but the fraudsters usually do not pay their victims back. According to a January 2, 2024 article by CBC, only $3.4 million of the $379 million reported fraud losses in 2021 were recovered. That is about 0.009%.

These statistics have not improved over time. The Canadian Anti-Fraud Centre reports that between 2021 and 2023, $6.69 million has been recovered. During that same period, Canadians reported $1,463 billion in fraud losses (2021:$379M; 2022:$530M; 2023:$554 M). Over the last three years, recovered funds have dropped to 0.004% of the reported losses!

We can all agree that the amount being recovered is relatively low compared to the steadily increasing fraud losses. As victims of crime, those who have been defrauded need the court’s assistance to recoup their losses. Criminals often do not pay the restitution as ordered because the Canadian courts do nothing to enforce the penalty.

As fraud grows, Canadian courts must take a page from Judge Bruce Fraser’s book and attach conditions to restitution. Unless there is a consequence for failing to repay the victims, the Crown may determine that pursuing the case is not in the public’s interest, sending the message that fraud is acceptable in Canada. Reducing fraud in Canada must include increasing our understanding of fraud, passing stronger laws, and having the courts enforce all the sentencing when there is a conviction for fraud.

Kathleen O’Donoghue, CFE