Only a fraction of fraud cases make it through Ontario's justice system — and it's getting worse

Ontario: yours to defraud?

In recent years, CBC Toronto has reported on a slew of alleged frauds that have upended the lives of countless victims in Ontario. The stories have covered everything from Ponzi schemes, to romance scams and fraudsters selling people's houses out from under them.

These seemingly surging scams begged questions about how Ontario's enforcement systems are handling fraud cases and whether they're helping victims.

CBC Toronto went looking for answers for this investigative series, The Cost of Fraud, and discovered an overloaded justice system that is reluctant to prosecute fraud, failing to deter fraudsters and putting the onus on victims to recover their own losses if offenders refuse to pay them back as ordered.

Over the last decade, Ontario has seen fraud reports skyrocket, with just a sliver of annual reports leading to criminal charges, and nearly half of those already scant charges dropped each year. And it's not just happening in this province — a similar drop off after the initial report can be seen in Canada-wide statistics.

"Ideally, criminality should be investigated and prosecuted and we're simply not doing that in Canada these days with respect to the great majority of fraud," said Peter German, president of the International Centre for Criminal Law Reform and former deputy commissioner of the RCMP.

"There are many $1,000,000 plus frauds that are simply not being investigated because of the resource issues."

German, along with other police, legal and academic experts interviewed for this series, attributed issues with fraud enforcement to the nature of the resource-heavy investigations and prosecutions, a lack of specialized expertise, and prioritizing violent crime given limited capacity within a justice system facing significant backlogs.

"There's a lack of political and institutional will to deal with financial crimes in a systematic and sustained way," said Vanessa Iafolla, a fraud victim consultant and financial crime professor at Wilfrid Laurier University.

"If it bleeds it leads," she said, noting that with fraud, "people only bleed money."

Last year Canadians reported losing about $416 million to fraud, a 55 per cent jump from the previous record-high of nearly $269 million across the country in 2021, according to the Canadian Anti-Fraud Centre. More than half of the losses in 2022 came from Ontario.

Those figures are especially stark considering police estimate only five to 10 per cent of frauds are ever reported. 

"The statistics are pretty alarming," said Dorian Dwyer, a retired Ontario Provincial Police fraud detective. "It's one of the most underreported crimes, but it's also one of the most voluminous criminal offences occurring, and it's forever increasing."

Annual fraud reports to police in Ontario are on the rise according to data from Statistics Canada. There were 31,407 cases reported to police in 2010. By 2021, that number had increased by 20,000 to 51,429.