Tag: Fraud

10 Jun

Just how common is elder abuse?

Nick Esterbauer Elder Law, General Interest Tags: , , , , , , , 0 Comments

Our readers will all be familiar of the issue of elder abuse, and the various forms that it can take.  It is also well-known that elder abuse if underreported, giving rise to challenges in determining just how common it is and how incidence rates may be fluctuating within the context of our aging population.

A new study by Comparitech explores the issue of the underreporting of elder abuse and extrapolates reported incidents and studies regarding underreporting to gain an appreciation of how commonly it is actually occurring in the United States.  Comparitech estimates that at least 5 million cases of financial elder abuse occur every year in the United States alone.  While damages of $1.17 billion are reported, it is believed that the actual losses to seniors total $27.4 billion.

Technology also appears to be playing a role in increasing rates of elder abuse.  Comparitech found that 1 in 10 seniors were victims of elder abuse and that the use of debit cards have become the most common tool in defrauding them of their funds.  With phone and email scams on the rise in recent years, underreporting is anticipated to become a growing problem while incidence rates continue to increase without any way to determine exactly how many seniors are affected.

Thank you for reading.

Nick Esterbauer

 

Other blog posts that you may enjoy reading:

15 Jan

Fraud by False Paternity Claims?

Sayuri Kagami Uncategorized Tags: , , 0 Comments

Last week, Stuart Clark blogged on what happens when unexpected DNA results lead to a person finding out that they aren’t, in fact, biologically related to a parent who dies intestate or leave a class gift to “my children” in their Will. Today, I’ll be looking at recent case in BC reported on by CBC with a similar problem. In a case now moving through the BC courts, the Deceased, who had immigrated to Canada from Sweden in the 1950s, named his only child as the sole beneficiary of his estate and of an alter ego trust. Suspicious of the son’s paternity claims, relatives of the Deceased sought and obtained a paternity test that proved that the purported son was actually not biologically related to the Deceased.

Because the “son” was named in the Deceased’s Will (and in prior Wills), there is no need for either the son or the Deceased’s relatives to seek declarations regarding the son’s parentage. Instead, the relatives of the Deceased are now fighting the son’s entitlement to any interest in the Estate on the basis that the son and his mother committed fraud and deceit against the Deceased for over 50 years in order to induce the Deceased into naming the son as the sole beneficiary of his estate.

Although he moved to Canada in the 1950s, the Deceased continued to return home to Sweden during his lifetime and had a romantic relationship with the son’s mother in Sweden. According to the Swedish relatives, the Deceased wrote to the mother in 1964 and informed her of his success in Vancouver, following which she wrote to him and informed him that her son, born in 1961, was also his son. The Deceased began including the mother and son in his testamentary documents in 1966.

While the Swedish relatives claim that the son and mother perpetrated a longstanding fraud on the Deceased so as to benefit the son, the son claims that he was only informed (by the Deceased) that the Deceased was his father in 2002, that he requested paternity tests on two occasions and that the Deceased declined to do so, knowing that there was a chance that the son was not biologically related to him.

It is early days yet in the litigation of this matter with the parties having just received judgment on  an (unsuccessful) motion seeking to have the Swedish relatives post security for costs. If this matter doesn’t settle, it will be interesting to see whether a Court will find that a 50 year fraud was committed on the Deceased such that the bequests provided to the son are invalid.

Thanks for reading!

Sayuri Kagami

05 Dec

Fraud against seniors – can it happen in your family?

Suzana Popovic-Montag Elder Law, Estate & Trust, Estate Planning Tags: , , 0 Comments

By now, many of you have had a phone call from the “Canada Revenue Agency” informing you that you owe money, or that a lawsuit or collection process has begun. It’s a scam that’s obvious to most of us – and we hang up and don’t give it a second thought.

But in a small minority of cases, the scam works, and Canadians have lost thousands of dollars in the process. It’s not just seniors – many middle-aged adults have been victims as well.

Which brings me to a key point: if brazen scams can work on those in the prime of life, how vulnerable are seniors who may be suffering from both physical and mental frailties?

Know what’s out there

The Canadian government’s Anti-Fraud Centre has a website that outlines four common fraud schemes that target seniors, and steps to protect them. 

Here’s an overview of the four types:

  • Prize winner: Canadian seniors receive notice (mail, phone, or email) that they’re the winner of a large lottery or sweepstake. A request is made for money to cover costs in securing the winnings.
  • Family emergencies: Seniors receive a call from someone claiming to be a family member or a close friend. They describe an urgent situation that requires money.
  • Service scams: There are many types, but one of the most common involves a phone call from someone claiming to be from Microsoft or Windows who has detected a virus in the victim’s computer, with money needed to make repairs.
  • Friendship/romance: Scammers can spend months grooming a victim into a friend or romantic relationship, either online or in person. Eventually, a request for money is made.

The bottom line is that scams come in many forms. While seniors can most definitely learn to protect themselves, this becomes much harder if there’s been a decline in mental abilities. The best way to protect elderly parents or other seniors is to check in with them every few days to probe for any unusual actions. You can also ask the individual to follow one simple rule: check with me first (or with another son or daughter) before committing money to anything. It’s a great delay tactic that will often stop a scam in its tracks.

Savvy senior? Take the quiz

This short 10-question quiz is designed to test a senior’s ability to spot online scams, but it’s a great test for anyone to take. See how you do, then try it out with a senior in your life.

Thanks for reading … Enjoy your day,
Suzana Popovic-Montag

30 Jul

Should advanced age be a factor considered during criminal sentencing?

Nick Esterbauer Elder Law, Ethical Issues, Health / Medical Tags: , , , , , , , , , , 0 Comments

The Supreme Court of Canada recently refused leave to appeal a decision of the Quebec Court of Appeal that raises the issue of whether old age should be considered as a factor during sentencing.

The appellant had been convicted of fraud, conspiracy to commit fraud, and laundering the proceeds of crime at the direction of or in association with a criminal organization.  A prior appeal regarding the conviction itself had been dismissed by the Quebec Court of Appeal.

The Lower Court recognized the role of the appellant as a directing mind of a criminal organization and the losses suffered by the government as a result of his fraudulent acts.  The Court had stated that age, even if it could be taken into account, was “only one factor among many”, which “cannot have a determinative impact because of the great number of aggravating factors”.

The appellant subsequently sought leave to appeal his four-year prison sentence.  The appellant asserted that, at 81 years of age and in a poor state of health, his sentence ought to be replaced with a conditional sentence to be served in the community or otherwise limited in duration to allow him the prospect of life after prison.

The Quebec Court of Appeal summarized the law as it relates to the consideration of age during sentencing as follows (at paras 38, 39, 42, 43):

The advanced age of an accused must be taken into account when determining a sentence, as Chief Justice Lamer indicated in R. v. M. (C.A.)

The age factor must, however, be considered in light of the health of the offender as it relates to his life expectancy. Consequently, the mere fact that an accused is elderly is not, in and of itself, a mitigating factor in determining a prison sentence, unless the evidence reveals that he has little chance of serving the sentence before passing away. This is increasingly true with the general aging of the Canadian population and the raised probability of longer life expectancies.

As a result, if at the time a sentence is imposed, the offender’s state of health does not suggest that he is unlikely to complete the sentence before his demise, the judge then has the necessary discretion to impose an appropriate sentence in light of all the usual factors and criteria…

It is possible that an offender’s state of health deteriorates following sentencing. This possibility increases with the age of the offender. The sentencing judge may not, however, speculate on this subject and must determine the sentence in accordance with the evidence before him when it is rendered…

The Court nevertheless considered the prison sentence to be appropriate, notwithstanding the expectation of the appellant that he may not survive it.  The Supreme Court agreed with the reasons of the Quebec Court of Appeal.

With Canada’s aging population, cases like this, in which an individual convicted of a crime is elderly and/or in a poor state of health, can be expected to increase in frequency.  The Supreme Court has confirmed that (for the time being at least), while age is a factor to be considered during sentencing, it is merely one to be assessed among others, rather than being determinative of the issue.

Thank you for reading.

Nick Esterbauer

27 Jul

Legal Fees as a Settlement Consideration

Nick Esterbauer In the News, Litigation Tags: , , , , , , , , , , , 0 Comments

This weekend marks the end of the 105th Tour de France.  This year’s race has been full of controversies, first as a result of allegations of doping by pre-race favourite and four-time winner Chris Froome (and a related threatened cyclist strike) and subsequently ranging from disqualification of one cyclist for punching another to the inadvertent tear-gassing of cyclists by French police.

This spring, news surfaced regarding a settlement negotiated in respect of the claims against controversial cycling figure Lance Armstrong.  Armstrong’s former teammate, Floyd Landis, had commenced proceedings against him in 2010 under the False Claims Act.  The United States government became involved in the fraud proceedings in 2013 after Armstrong admitted to using performance-enhancing drugs after years of public denial.

The litigation commenced by Landis was settled earlier this year.  Terms of settlement were reported to involve a payment by Armstrong of $5 million (of the $100 million claimed against him), as well as a payment to Landis of $1.65 million in legal fees.  Accordingly, Landis’ one-quarter share in the settlement payment is less than what he will receive in legal fees.

It is not unusual in our work to see settlement terms involving the payment of one or more party’s legal fees as part of or in addition to a settlement payment.  Especially where litigation spans the better part of a decade, the legal fees incurred can rival or exceed the quantum of the settlement payment itself and may form an important part of negotiations.

Have a great weekend,

Nick Esterbauer

25 Jun

Who Can Set Aside a Transaction Under the Fraudulent Conveyances Act?

Kira Domratchev Estate & Trust Tags: , , 0 Comments

The Fraudulent Conveyances Act, RSO 1990, c F.29 (the “FCA”) is designed to prevent a debtor from hiding assets from creditors by fraudulently transferring the assets to a third party. If the FCA applies, the Court shall make the property that was fraudulently conveyed available for creditors of the transferor.

Based on the general description and purpose of the FCA, it would appear as though it is a means of redress for frustrated creditors, only. However, that is not the case.

In accordance with section 2 of the FCA, the Court is authorized to set aside transactions that are entered into with the intent to defeat an action (amongst other things), for the benefit of “creditors and others”. The specific wording of this section of the FCA is as follows:

“Every conveyance of real property or personal property and every bond, suit, judgment and execution heretofore or hereafter made with intent to defeat, hinder, delay or defraud creditors or others of their just and lawful action, suits, debts, accounts, damages, penalties or forfeitures are void as against such persons and their assigns.”

Although the FCA does not define what is meant by “others”, it is clear that the statute specifically delineates “others” to signify that it is a group of entities that could otherwise not be defined as “creditors”.

The Ontario Court of Appeal in Hopkinson v Westerman (1919) 45 OLR 208, 48 DLR 597 (ONCA) defined “others” as those persons who, though not judgment creditors, had pending actions in which they were sure to recover damages.

Since then, the definition of “others” has been used in many cases, including in the family law context, such that, a spouse could qualify as a person who is intended to be protected from conveyances of property made with the intent to defeat his or her interest.

The court in Robins v Robins Estate [2003] OTC 285, 121 ACWS (3d) 1104 (ONSC) held that a spouse who brought a claim against her husband’s Estate could not make a claim under the FCA.

The Court held that if the spouse was found to be a “creditor” it would have to be based on the Deceased’s obligation to support her as a spouse. The Court held that “[B]oth spouses have an obligation to support themselves and each other” and if the theory of the surviving spouse was accepted, spouses in a marriage would be in a “constant creditor-debtor relationship throughout cohabitation and marriage unable to alienate any property, the result of which may leave them unable to pay support at a later time.”

In deciding that the spouse in this matter was not a “creditor” the Court gave particular weight to the fact that the relationship was relatively short-term and that the spouse was able to support herself. In addition to that, the conveyance in question took place before the date of marriage, which reasonably made the surviving spouse’s argument that it was made with a fraudulent intent of defeating her support claim, all the more difficult.

In contrast, the Ontario Court of Appeal in Stone v Stone, 55 OR (3d) 491, [2001] OTC 412 (ONCA), in interpreting the same obligation of spouses to support themselves and each other, found, in the context of an election under section 6 of the Family Law Act, following the Deceased’s death, that the FCA did apply. Particular weight was placed on the fact that the Deceased did know that his wife would survive him and was aware that the value of her assets was less than the value of his and that she would not accept her legacy under the Will.

The Court in Robins v  Robins Estate found that the Stone v Stone decision was different because it addressed the claim of equalization of property rather than the issue of support under the Family Law Act. The Court further held that unlike the conveyance of property accumulated during a 24 year marriage in Stone v Stone, the case of Robins v Robins Estate addressed an asset owned by the Deceased before the cohabitation date and the marriage.

Of interest is the fact that the courts do not seem to significantly distinguish between the category of “creditors” and the category of “others”. Perhaps, if more of a difference is seen between the two, concerns regarding creating an overarching creditor-debtor relationship between spouses would not seem as significant.

The question remains whether the FCA category of “others” could extend to a spouse in the context of a claim as against an Estate? That remains to be seen, however, based on the assessment made by the courts in the two cases discussed, it very well could – it just depends on the factual circumstances.

Thanks for reading.

Kira Domratchev

Find this blog interesting? Please consider these other related posts:

Fraudulent Conveyance and The Estate Planning Defence

When is a Transfer of Property a Fraudulent Conveyance?

Hull on Estates #342 – Estate Freeze Considered as Fraudulent Conveyance

05 Dec

Fraudulent Conveyance and The Estate Planning Defence

David M Smith Estate & Trust, Estate Planning, Executors and Trustees, General Interest, In the News, Litigation, Public Policy Tags: , , , , 0 Comments

We have previously blogged on Fraudulent Conveyance.  This cause of action can, on occasion, be met with a defence that the conveyance of property was in furtherance of an estate plan and, therefore, without fraudulent intent.  As with most cases, the specific facts of the case will determine whether the defence can succeed.

In Bank of Montreal v. Real Marleau, the Saskatchewan Court of Queen’s Bench was prepared to entertain the notion that the defendant’s assertion might actually be true, but nonetheless, determined that the conveyance ought to be aside.

The estate planning defence was considered and again rejected in Re Whetstone, 1984 CarswellOnt 157.  In this case, the estate planning defence relied on evidence from the family’s solicitor.  The court noted, at paragraph 28,

“In the circumstances, it is not material that the family’s solicitor recommended the conveyance based on general principles and not on actual knowledge of the company’s financial position; the intent we are concerned with is not that of the family’s solicitor, but of [the defendant].”

Lastly, in an unreported decision of the Ontario Superior Court of Justice, RBC v. Nicolau, the defence was considered but not accepted:

“In this case, Mr. Nicolau testified that the transfer was for estate planning purposes.  He submits that there was therefore no fraudulent intent.

RBC referred the Court to jurisprudence in which the estate planning defence was raised.  I agree with the submissions of RBC that this defence must fail.  While the transfer may have also satisfied Mr. Nicolau’s estate planning goals, this explanation is not, in my view, sufficient to displace the inference of fraudulent intent given the timing of this estate planning and the presence of the badges of fraud.  Accordingly, I find that the April 16, 2012 conveyance of 1 Lister Drive to Gabriel Nicolau was fraudulent, and the provisions of the Act are therefore applicable.”

Thanks for reading,

David Morgan Smith

27 Nov

Are personal support workers and caregivers fiduciaries?

Doreen So Elder Law, Estate & Trust, Ethical Issues, Executors and Trustees, General Interest, In the News, Litigation Tags: , , , , , , , , 0 Comments

In a recent decision of the Superior Court, Justice Mew found that,

“In appropriate circumstances, I conclude that the relationship between an elderly resident of a retirement home and a personal support worker can also be a fiduciary one”.

Hoyle (Estate) v. Gibson-Heath, 2017 ONSC 4481, is a civil proceeding that was commenced after Ms. Gibson-Heath, a personal support worker, was criminally convicted of stealing $229,000.00 from Clifford Hoyle, an elderly resident of the retirement home where Ms. Gibson-Heath worked.  Ms. Gibson-Heath was sentenced to 18 months of imprisonment and a restitution order was made for her to pay the shortfall between the full amount stolen and any amounts recovered by the Crown.

At the time of the proceeding before Justice Mew, Ms. Gibson-Heath was a discharged bankrupt and the Estate Trustees of the Estate of Clifford Hoyle were seeking an order that the restitution order survives Ms. Gibson-Heath’s bankruptcy and a civil judgment in the amount of the shortfall amongst other relief.  Justice Mew determined that the restitution order survives Ms. Gibson-Heath’s bankruptcy pursuant to section 178(1)(a) of the Bankruptcy and Insolvency Act but he also went further to consider whether section 178(1)(d) would also apply as it relates to  “any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others”.

Justice Mew’s analysis can be found at paragraphs 16 to 19 of his reasons.  Of note, his Honour commented as follows,

“Ms. Gibson-Heath’s role was to look after Mr. Hoyle.  To act in his best interests.  As an elderly gentleman, who was already in the early stages of dementia when he started to reside at Fairfield Manor East at the end of 2006, Mr. Hoyle was undoubtedly vulnerable to any abuse of the trust that he placed in those who cared for him.”

Ms. Gibson-Heath did not respond to this proceeding and Justice Mew also found that this was an appropriate case for substantial indemnity costs due to Ms. Gibson-Heath’s fraudulent conduct (click here for the costs decision).

Thanks for reading!

Doreen So

#1429918

 

27 Mar

Mistake as a Basis for a Will Challenge

Ian Hull Estate & Trust, Estate Planning, General Interest, Litigation Tags: , , , , , , , 0 Comments

A testamentary document may be set aside if it is not accurately representative of a testator’s intentions, for reasons such as an innocent mistake on behalf of the testator or solicitor, or the fraud of another.

In the British Columbia Supreme Court case of Johnson v Pelkey (1997) 36 BCLR (3d) 40, the Court stated that “any will that does not express the real or true ‘intention’ of the testator will be set aside, even if the testator had testamentary capacity, and was not subject to undue influence.”

Additionally, in Coleman v Coleman Estate, 2008 NSSC 396 (CanLii), the Nova Scotia Supreme Court observed that even if testamentary capacity is found to exist, it is possible that a testator did not properly know or appreciate the contents of their will due to an innocent mistake or by the fraud of another. As established in Vout v Hay, [1995] 2 SCR 876, the Supreme Court of Canada held that the propounder of a will must demonstrate “that the testator knew and approved of the contents of the will.”

When drafting a will, there is a duty on the solicitor drafting the testamentary document to make necessary inquiries. This duty is required so that the solicitor can demonstrate, based on discussions with the testator, that the testator fully appreciated what he or she was doing when they made the will.

In Johnson v Pelkey, the British Columbia Supreme Court found that there were differences between the solicitor’s notes and what appeared in the executed will, there were errors in the will, a property lot was left out of the will entirely, and an intended gift was missing. The solicitor testified these omissions were his mistakes or that his instructions may have been changed between receiving them and the execution. It was reported that upon the solicitor’s review of the will with the testator, the testator did not notice any of the omissions, errors and ambiguities.

When considering whether the testator had the knowledge of his or her testamentary document as well as approval of the contents of his or her will, based on mistake, are matters of fact to be determined based on all of the evidence of the case.

Thank you for reading,

Ian M. Hull

Other Blogs You Might Be Interested In

Material Changes to the Equitable Doctrine of Rectification

Rectification of a Will Where Error Made by Will Drafting Lawyer

Simple Mistakes are Sometimes the Hardest to Avoid

 

15 Nov

Will Ontario Courts Impose Jail Time for Elder Abuse?

Nick Esterbauer Elder Law, In the News, Power of Attorney Tags: , , , , , , 0 Comments

A perpetrator of elder abuse has recently been sentenced to three years in prison by an Ontario Court.

The man from Markham, Ontario had obtained assistance from a friend, an employee of a major national bank, in creating a power of attorney, which he put forward as a document prepared for and executed by his mother, Royale.  Royale’s savings, which had been in the hundreds of thousands of dollars, were depleted to less than $15 and she was forced to live in a public nursing home.

Courts may punish for elder abuse.
“After she learned that her funds had been stolen, Royale reported her son’s actions to the police before her death.”

After she learned that her funds had been stolen, Royale reported her son’s actions to the police before her death.  In her videotaped police statement, Royale says, “It makes me very sad, but he has to pay the consequences.”  She was visibly upset by the idea of placing charges against her son, but nevertheless proceeded to do so.  In June of this year, Royale’s son was convicted of both theft and fraud over $5,000.

Unfortunately, situations like that involving Royale are all too common.  A recent study suggests that one in ten American seniors are affected by elder abuse.  Further, it is estimated that only one in ten victims of elder abuse actually report it.  Many seniors may be reluctant to report elder abuse due to fear of what the abuser may do to them and a belief that the police and/or social agencies will not be able to provide meaningful assistance.

Incidents of elder abuse highlight the importance in establishing incapacity plans and in appointing attorneys for property and personal care that can be trusted and who can protect the grantor’s rights if he or she is unable to do so.

Royale’s other surviving children now plan to commence civil proceedings against their brother and the financial institution whose employee was involved in the creation and use of the fraudulent power of attorney.

This recent sentence sends a strong message about the seriousness of elder abuse and the lengths to which the justice system will go in order to punish those who take advantage of members of our aging population.

Thank you for reading.

Nick Esterbauer

SUBSCRIBE TO OUR BLOG

Enter your email address to subscribe to this blog and receive notifications of new posts by email.
 

CONNECT WITH US

CATEGORIES

ARCHIVES

TWITTER WIDGET