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Investment Fraud

Investment Fraud, Wealth Enhancement Fraud and Fraudulent investment schemes are widely reported and often described in these terms: Fraudulent investment operations, Wealth Enhancement Fraud, Ponzi Schemes, “fresh money” schemes, promoted as “high yield” schemes, “high-yield investment” programs or offshore investments, “pyramid” and matrix schemes, “franchise” and distribution fraud schemes, and internet-based pyramid scams.


Through the engagement of qualified forensic accountants and investigators, including Certified Fraud Examiners, a simple review of documentation in a case may establish that the scheme or investment is likely fraudulent. In some cases the court does not require the assistance of an expert opinion to conclude on a balance of probabilities that the scheme of investment is fraudulent. Fraudsters may be using your lost investment / funds to defend a case against them. You require experienced, senior counsel in a civil action for recovery of monies in a case of investment fraud.


How Common is Investment Fraud? “Fraud and deceit abound in these days more than in former times.” Twyne’s Case (1602), 3 Co. 80. This was said more than four hundred years ago by English Lord Coke. However, given the number of prominent and recently reported cases of civil fraud in the courts of Canada and the frequency of reports in the media of those falling victim to civil fraud, it is easy to conclude that civil fraud and dishonesty has increased in British Columbia, or that more victims of fraud are coming forward to seek redress for their losses.


What is Investment Fraud? An often quoted English law textbook defines fraud this way: “All surprise, trick, cunning … and other unfair way that is used to cheat any one is considered as fraud. Fraud in all cases implies a willful act on the part of any one, whereby another is sought to be deprived, by illegal or inequitable means, of what he is entitled to.” Kerr on the Law of Fraud and Mistake, 7th ed. (London: Sweet and Maxwell, 1952) at p. 1.


The leading case on civil fraud in Canada is the Supreme Court of Canada decision in 2014 in Hryniak v. Mauldin, 2014 SCC 7, and in that case civil fraud is defined this way:“… the tort of civil fraud has four elements, which must be proven on a balance of probabilities: (1) a false representation by the defendant; (2) some level of knowledge of the falsehood of the representation on the part of the defendant (whether knowledge or recklessness); (3) the false representation caused the plaintiff to act; (4) the plaintiff’s actions resulted in a loss.”Hryniak v. Mauldin – Access to Justice in a Civil Fraud Case.


Remedies for Investment Fraud “Things gained through unjust fraud are never secure.” Sophocles.  We have lawyers experienced in civil fraud recovery actions and in the defence of fraudulent claims. Some of our lawyers have been counsel in cases for recovery for innocent victims of investment fraud, acting for employers in employment fraud cases and in cases defending insurers against fraudulent claims made against them.


Often claims by victims of fraud require experienced counsel to assist the victim in seeking from the court urgent equitable remedies such as civil freezing orders (Mareva injunctions), civil search and preservation of evidence from third parties (Norwich orders) and civil “search warrants” (Anton Piller orders). Asset tracing orders are used to obtain recovery in cases where fraud has been established and the victim’s assets have been converted into other property.

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