If a vendor defrauds your New Brunswick business, you should report the crime to the local police or RCMP, but also file an urgent civil lawsuit at the Court of King’s Bench to get your money back. Freezing the vendor’s bank accounts quickly is crucial to recovering stolen funds.
Trust is the foundation of any commercial relationship, but occasionally, a supplier or vendor will exploit that trust. Business-to-business fraud can cripple a company’s cash flow. Whether a vendor has sent forged invoices, failed to deliver goods after accepting massive deposits, or engaged in kickback schemes with one of your employees, corporate fraud requires immediate, aggressive action. 🚨
In New Brunswick, dealing with a fraudulent vendor involves navigating two entirely different legal systems: the criminal justice system and the civil litigation system. A criminal conviction might put the fraudster behind bars, but it rarely guarantees you will get your money back. Whether you operate in Edmundston, Dieppe, or Fredericton, you must take parallel steps to protect your assets and pursue the funds.
Step-by-Step Process in New Brunswick
Time is your worst enemy in a fraud case. The longer you wait, the more likely it is that the stolen funds will be moved offshore or spent. Here is the strategy to lock down the situation. 📍
Step 1: Secure the Business and Gather Evidence
Before confronting the vendor, secure all your records. Back up emails, preserve original contracts, and isolate any forged cheques or banking wire details. Do not tip off the fraudulent vendor immediately, as they may destroy evidence. You may need to hire an independent forensic accountant to trace the exact flow of money and document the true scale of the financial damage.
Step 2: Seek an Urgent Freezing Order (Mareva Injunction)
Your top priority is stopping the vendor from hiding the money. 💰 Your commercial litigation lawyer can apply to the Court of King’s Bench for an urgent, temporary freeze on the vendor’s assets, known legally as a Mareva Injunction. This order legally forces banks in New Brunswick (and across Canada) to freeze the vendor’s accounts so the funds remain intact while the lawsuit proceeds.
Step 3: File a Civil Lawsuit
You cannot rely on the police to refund you. You must file a formal Statement of Claim against the vendor. Your civil lawsuit will accuse the vendor of civil fraud, breach of contract, and unjust enrichment. Through the civil process, your lawyer can force the vendor’s directors to answer questions under oath and ultimately secure a judgment to seize their corporate assets to repay your losses.
Step 4: Report to Law Enforcement
Corporate fraud is an indictable offence under the Criminal Code of Canada. 👮 Once your civil strategy is in motion and your assets are somewhat secured, you should report the crime to the local municipal police force or the RCMP. Provide the assigned detective with a neat, organized binder of the forensic evidence you gathered. This makes it much easier for Crown prosecutors to lay criminal charges.
How Much Does it Cost in New Brunswick?
Pursuing a fraudster is an investment, and you must weigh the legal costs against the amount of money stolen. 💰
- Forensic Experts: Retaining a forensic accountant to trace complex financial fraud can cost between $5,000 and $15,000 CAD, depending on the volume of documents.
- Court Filing Fees: Filing a Statement of Claim at the New Brunswick Court of King’s Bench generally costs around $100 CAD.
- Lawyer Retainers: Litigating fraud, especially if you need an urgent freezing injunction, is highly intensive. Expect to pay a law firm an initial retainer of $10,000 to $25,000 CAD to handle the initial emergency motions.
How Long Does the Process Take?
The pace of justice differs vastly between your civil recovery efforts and the criminal investigation. ⌚
| Legal Action | Estimated Timeline in NB |
|---|---|
| Securing an Emergency Freezing Order | A few days to 2 weeks |
| Civil Lawsuit to Judgment | 1 to 3 years, if it goes to a full trial |
| Criminal Police Investigation | Often 1 to 2+ years before any charges are laid |
Frequently Asked Questions (FAQ)
What if the vendor is a corporation with no money left?
If the vendor emptied the corporate bank accounts, your lawyer may attempt to “pierce the corporate veil.” This is a legal move asking the judge to hold the individual directors and owners personally liable for the fraud, allowing you to go after their personal homes and savings.
Will the police get my money back?
Usually, no. The police focus on punishing the offender through fines or jail time. While a criminal court judge can sometimes order “restitution,” it is rarely the most effective way to recover funds. A civil lawsuit is the proper tool for debt recovery.
Can I contact the vendor’s other clients to warn them?
You must be very careful. If you publicly accuse a vendor of fraud before a court has proven it, they could sue your business for defamation or interference with contractual relations. Always speak to your lawyer before going public.
Is it an indictable offence or a summary conviction?
Fraud over $5,000 CAD is generally prosecuted as an indictable offence in Canada, which carries much heavier penalties, including up to 14 years in prison. Fraud under $5,000 can be treated as a lesser summary conviction.
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