On May 11, 2016, the Ontario Superior Court of Justice (the “Court”) released its decision in R v Mamoon, in which it found that Nuzhat Mamoon (the “Accused”) was guilty of committing fraud after hearing testimony from eight individuals, some of whom had approached the Accused believing that she was a wealthy, religious businessperson who ran a charitable organization. She received money from these individuals with respect to non-existent business operations and never reimbursed the investments she guaranteed.
In May 2012, the Accused claims to have started a not-for-profit organization called “Umme Rabab”. The Court, however, found that she used the organization to meet and interact with financially vulnerable individuals, holding herself out as a successful businessperson. Although the Accused plead not guilty and testified that she did not profit from the organization, eight Crown witnesses testified that she obtained amounts varying from $1,000 to $38,000 from them, promising profits of at least 100% within 30 days. Justice Edwards found the Crown witness testimony credible but did not find the Accused’s evidence to be either believable or consistent.
As a result of the evidence against the Accused, the Court found that all of the elements of the offence of fraud, pursuant to s. 380(1)(a) of the Criminal Code of Canada (the “Code”), had been met beyond a reasonable doubt. Specifically, the Accused (1) deprived the public of something of value; (2) that the Accused’s deceit, falsehood or other fraudulent means caused the deprivation; (3) the Accused intended to defraud the public; and (4) the value of the property exceeded $5,000.
In this case, the Accused was found guilty of one count of fraud and may be sentenced to up to 14 years pursuant to the Code. The case stands as a stark reminder of the importance of charitable registration and establishing charities and not-for-profit organizations for bona fide purposes. Fraudulent abuse of such vehicles will result in harsh criminal sanctions.