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Limitations of Mareva injunctions

Region: Ontario Answer # 1545

Payments to fraudster for lifestyle and legal costs

The purpose of an injunction is to protect a victim’s assets so that they can be recovered through a court judgment, not to force a fraudster to settle because he or she does not have the money to pay for the necessities of life. Therefore, a court order may allow the fraudster to make withdrawals from the frozen accounts to cover lifestyle and legal expenses.

Lifestyle expense

Funds withdrawn from frozen accounts for lifestyle expenses are often controversial. This is because the fraudster is usually allowed to withdraw an amount that reflects their style of living before the fraud was discovered. This presents ethical problems as the fraudster was usually living a lifestyle that was funded by fraudulent activity. If the fraudster was able live an extravagant life because of the money they stole, should the withdrawal amount be large enough to reflect this?

The Court will likely require the fraudster to provide proof of their lifestyle costs, and also provide their income from legitimate sources. The victim’s lawyer will argue that fraudsters should not be allowed to withdraw funds to afford a lifestyle that they could never have afforded on their legitimate income.

Legal expense

Legal expense withdrawals are also often controversial. Fraudsters are usually allowed to pay for their criminal defence fees from any money they currently possess, even if it can be connected to funds which were obtained fraudulently. The Courts will generally require the fraudsters to declare all their assets and first spend the funds that are not connected to the fraud.

If all of the fraudster’s legitimate assets have been spent, the Courts will often grant access to funds in the possession of the fraudster even if the funds are under dispute (because they are said to have been obtained by the fraud).

If you discover you are a victim of fraud, it is a good idea to contact a fraud recovery expert for advice.

If you a have a criminal record due to fraud-related charges (or for any other criminal offence), and wish to erase your record, call toll-free 1-877-219-1644 or learn more at Federal Pardon Waiver Services. It’s easier than you think.


Federal Pardon Waiver – Fraud ONFederal Pardon Waiver – Fraud ON



								

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