Rigging The Bid: Finding Fraud In A Regulated Setting

In the recent decision of R v Fedele,1 the Court of Québec has effectively adopted the approach set out by the Supreme Court of Canada in R v Riesberry2 regarding the interpretation of "other fraudulent means" under section 380(1) of the Criminal Code (i.e., the general offence of fraud). While not directly citing the Supreme Court, the holding in Fedele demonstrates a similar approach to finding fraud in the context of regulated settings, although this case regards bid rigging on construction contracts rather than horse racing. We contemplated this scenario in our previous commentary on Riesberry.3

In Fedele, an agent and three officers of a Québec corporation ("CIV-BEC"), including its president and director, were arrested by the Québec provincial police as part of a joint investigation conducted by the Competition Bureau and the UPAC task force, Québec's Permanent Anticorruption unit. Evidence revealed the existence of a collusion scheme set up by the agent and officers of CIV-BEC with other general contractors in the Saint-Jean-sur-Richelieu region to withdraw or not bid on public contracts from the local municipalities, thus allowing CIV-BEC to win the contracts at a higher margin. The arrested individuals and the corporation were subsequently charged with numerous counts of fraud, secret commissions and forgery before the Court of Québec. The accused were also charged with bid-rigging under the Competition Act under separate criminal proceedings, but these were eventually abandoned due to the applicable presumptive ceiling set out in R v Jordan4 being exceeded.

"Other Means of Fraud" from Riesberry

The actus reus of fraud consists of dishonest conduct that results in at least a risk of deprivation to the victim.5 Such dishonest conduct may come in the form of an act of deceit, a falsehood or "some other fraudulent means" as per section 380(1) of the Criminal Code. In Riesberry, the Supreme Court of Canada indicated that, in all cases of fraud, there must be a causal link between the fraudulent act and the victim's risk of deprivation. There is no need to prove, in all cases, that the victim relied on the fraudulent conduct or was induced by it, to their detriment.6 In that case, Riesberry's acts were found to be "other fraudulent means" since his conduct, consisting of injecting racehorses with performance enhancing drugs, is something which could be "properly be stigmatized as dishonest" given the highly regulated setting of horse...