Mr. Speaker, I appreciate the opportunity to finish off what I had started because this is such an excellent bill. I think it deserves the due attention that it is going to receive.
Where I had left off was in relation to the six measures that this particular bill contains, and I had outlined at least three of them. The first was in relation to minimum mandatory sentences; the second being the additional aggravating factors that would be added to section 380.(1) of the Criminal Code; and the third being that the judge or justice state on the record those aggravating or other factors that determined his or her sentencing in relation to the alleged accused as a result of being convicted.
The fourth is a new sentencing tool. I really think this is a good factor in relation to this particular bill because it would give the courts a brand new sentencing tool for fraud offenders, aimed at preventing the commission of further frauds and victimizations. Indeed, often these particular individuals who commit these types of crimes will continue to do so because this is the only mode in which they earn a living.
The court, in this case, would be able to order as part of the sentence that the offender actually be prohibited from having work for remuneration or in a volunteer capacity, often these types of cases involve some sort of volunteer non-profit organization, and that involves having any authority whatsoever over another person's money, over another person's valuable securities, or over any real property that a person would have.
The order is discretionary and available for any period of time. What I like the best is that it can actually be ordered for life and in some circumstances, it certainly should be, especially where we see that particular person continuing to behave in that same manner and continuing to travel around the country.
I, myself, had a case in which this actually took place. That person defrauded a curling club in one location in the province and then moved some 400 or 500 miles to a new location and then defrauded a particular service organization of upwards of $50,000, in that particular case. It could have been prevented if this type of order would have been in place. In fact, the gentleman's credentials were such that, in the first case, he received a two years less a day conditional sentence, which means it was provincial time and he, in this case, would not have to serve that time in jail. He actually served that time at his house and as a result of that, he moved, went to a different location, got a job as a manager of a restaurant, and then defrauded that person of up to $50,000.
So, this is a really good addition to the Criminal Code and I think it will be used by justices and judges according to need.
The two final measures are actually aimed at improving the responsiveness of the justice system and the sentencing process to the needs of victims.
As members know, we in this Conservative government stand up for the rights of victims and we ensure that Canadians and Canadian families continue to enjoy the freedoms they have and, at the same time, do not have to succumb to criminals and criminal activity.
Data from 2006-07 showed that approximately 20% of fraud convictions resulted in a restitution order. I was somewhat shocked at that. However, in order to encourage greater use of these orders, first, sentencing courts would be required to ask the crown prosecutor in the case whether reasonable efforts were made to give victims a chance to indicate whether they want restitution. I cannot imagine many cases where a victim that has been defrauded would not want restitution. That is usually not the case. As a result of that, courts would also be required to consider restitution in all fraud cases and to provide reasons if restitution is not ordered. That would set this as a new precedent, another proof that we in this Conservative government will stand up for victims of crime.
I just want to digress for a moment and speak about a particular part of my practice that I found very refreshing from the federal government. It was approximately 11 to 12 years ago. It was in relation to child support guidelines.
As a practitioner in northern Alberta, I would see cases, especially because we had justices from all over the province of Alberta come up to Fort McMurray at that time, with the same circumstances where court orders would be double the amount for children or even half the amount for children in other cases. So, the child support guidelines giving clear indications to judges and justices across the country as far as what people made, as far as income and what they should pay in child support is very similar to this.
I think we will find this to be a very welcome approach, not just for crown prosecutors but also for justices so they know the starting point, the absolute minimum and what those aggravating factors should be once case law is established, and what people should receive based upon what kind of offence they committed.
Three points of caution are needed. First, no criminal law reform can change the bottom line, namely, that if the offender does not have any adequate assets there cannot be restitution. Indeed, it cannot help. Our hearts go out to that, which is why we are looking at other regulations and doing consultations across the country to stop this before it actually happens, and to put in place regulations so that fraud of this nature cannot continue to happen.
It should also be kept in mind that the crown prosecutor is responsible for making the sentencing submissions and victims will not have standing to advance their restitution requests. They need to work with the crown prosecutor and ensure they fully disclose how much this has hurt them and their family through a victim impact statement. They also need to disclose how much was taken by providing proper accounting records in order to prove the case and then the crown prosecutor can put that forward to the justice.
The last measure in the bill would specifically acknowledge that courts may consider a statement prepared by a representative of a community or definable group for consideration at sentencing for fraud cases. This is new but this is a great application to allow all those victims who have been taken advantage of by a particular criminal or criminal organization to put forward exactly what this has done.
In most cases, as I have mentioned, the victims are primarily seniors and retirees, but curling clubs, not for profit groups, hockey clubs, figure skating clubs and even arts clubs have also been victims. It seems that criminals will stop at nothing to take money and to personally enhance their own lives. Especially bad is defrauding church groups, flying clubs and, therefore, taxpayers and the government because, ultimately, we, the people of Canada, the taxpayers, must pay that. When they defraud the Government of Canada, it is we, the taxpayers of Canada, who ultimately pay because they are actually stealing from us.
This is an excellent bill but I would like to go over some of the case law. There have been some suggestions by the Liberals and even the Bloc that this is not the case, indeed when is there a two year or less sentence for these people who steal that kind of money. As a result, some investigation was done and a review of case law does suggest that the average sentence for large frauds is around four years, although some people do receive much longer sentences and some shorter. When people receive lesser sentences, it usually is in a case where there is a joint submission by a crown prosecutor and a defence lawyer. They come together and negotiate a plea based upon a certain amount of time being spent in jail and then present that to a judge based on usually good evidence. Sometimes they negotiate it for other reasons, primarily as a result of getting an early guilty plea so victims do not have to deal with it. Now we have a two year minimum and it needs to be over that.
I would like to talk a bit about some cases that have come forward. In one particular case, the Queen v. Cioffi in 2009, where the accused was convicted of fraud, more than $4 million were taken and the scheme lasted four years. It was quite a complicated scheme. It required some form of planning and a large number of fraudulent transactions. However, in this particular case, the accused had no criminal record and did not personally benefit. Someone else benefited. The individual who stole this money received two years less a day, which means provincial time. It is not even under federal jurisdiction. Two years less a day means that the individual is eligible for house arrest, which, quite frankly, I do not think should be allowed in these particular circumstances. Now people will not be allowed because this government has that two year plus mandatory timeframe.
In another case, R. v. McCarthy, a 2008 case, two loans were involved totalling in excess of $3 million, aggravating factors included, obviously the breach of trust, a considerable number of victims and there was no criminal record in this case either. The individual in that case received a conditional sentence of two years less a day as well, followed by a year of probation. So, $3 million and two years less a day in jail.
In the 2008 case of R. v. Wilson out of Nova Scotia, $1.8 million were defrauded in a one month period and, unbelievably, the $1.8 million fraud resulted in 26 months in jail.
In the case of R. v. Lafleur, it was 28 counts of fraud spanning four years and totalling over $1.5 million. The individual received 42 months of jail time and a restitution order. In this particular case, there was a guilty plea and other mitigating factors were taken into account, such as age and the lack of a criminal record.
In the 2006 case of R. v. Coffin, the individual received 18 months in jail for 15 counts of fraud totalling $1.5 million. Eighteen months does not seem like much time, especially given some of the circumstances and facts that I will be mentioning at the end of my speech today.
In the case of R. v. Nottingham, the individual received a conditional sentence of two years less a day to be served in the community. The individual was allowed to stay at home for the entire length of the sentence and do normal activities for the most part. Aside from some semblance of house arrest, the person still had the big screen TV and all the rest of the amenities. More than $1.1 million in that particular case was defrauded.
The last case I will refer to is R. v. Toman. This was another case of two years less a day for defrauding $2.5 million over a six month period. That might sound like lot of time to some Canadians, but I want those Canadians to recognize that two years in jail does not mean two years in jail.
Two years in jail usually means maybe 15 months in jail, at the top, or two-thirds of the time. However, more often than not, the person will do half time as a result of credit or whatever else, which means 12 months in jail. As we heard earlier from some of our colleagues across the way, some people often only spend one-sixth or one-third of their time in jail, even up to less than eight months.
It seems like a fairly good rate of return when one can steal a couple million dollars and do six months behind bars. This government is about to change that particular circumstance. We have made many changes in relation to protecting victims, but those were some of the cases that I think Canadians were not aware of.
Quite frankly, two years is not enough for those people who are prepared to steal from seniors and non-profit groups. They should do more time and this government will ensure that if people do the crime, they will do the time.
Madam Speaker, I am pleased to speak to Bill today and I am also pleased that the government has introduced the bill. The NDP caucus will be supporting the bill at second reading to get it to committee where we can perhaps make some improvements to the bill as it is written now.
The bill provides a mandatory minimum sentence of imprisonment for a term of two years for fraud with a value that exceeds $1 million. I questioned the government this morning about how it determined the $1 million because it seems to me that fraud is a serious issue no matter how big it is. In law it is certainly something that lawyers thrive on. I am sure that we will find lawyers trying to argue whether or not fraud was $1 million or whether it was under $1 million, and there will be huge arguments about that.
Perhaps the threshold should be a lot lower than $1 million. I am just not sure about that issue. I asked the government that question and I did not really get a good response. I know one of the government members asked that very question as well and I do not recall whether the member received a satisfactory answer either.
The bill provides additional aggravating factors for sentencing. It creates a discretionary prohibition order for offenders convicted of fraud to prevent them from having authority over the money or real property of others. It requires consideration of restitution for victims of fraud and it clarifies that the sentencing court may consider community impact statements from a community that has been harmed by the fraud.
I want to go back to the issue of restitution for victims of fraud. This is a provision of the bill which on the surface sounds good. I certainly hope that victims see some restitution as a result of this particular provision, but I would not want people to get their hopes up very high on this particular issue. Over the years my experience has been that there are probably very little restitution possibilities when dealing with these fraudsters.
The whole argument about schemes, frauds and Ponzi schemes really boils down to issues of people who are less than honest, bilking people of hard-earned savings and monies, and then in fact spiriting the money away into tax havens. While the economy is good, these schemes tend to thrive because if the stock market is going up and as the economy is expanding, it is easy for them to cover their tracks and hide the fact that they are engaging in a fraudulent activity.
It is when the economy goes down as it has right now that we see these schemes start to collapse because they cannot pay out the returns that they have promised people.
I would suspect there are many more of these beneath the surface. If the recession were to deepen, get worse or to last a longer period of time, we would see more of these schemes exposed. At the end of the day, after all the litigation and investigation, there is really going to be nothing there for the victims.
Therefore, why make these promises that victims are going to get their money back when we know that it is not going to happen. Having said that, I still think that it is a good provision in the bill. It is something that we should put in the bill just in case there is some money left over for restitution.
However, there are many difficulties with this whole area and I think the parliamentary secretary alluded to it in the last part of his speech in which he said that bringing in a bill such as this only provides for part of the problem.
This bill deals with the problem after it becomes a problem. What we want to do as a Parliament, as a government, as a society, is to deal with these issues before they become a problem. We want to be able to catch the Bernie Madoffs before they embark on their programs of bilking people out of money.
I want to use Bernie Madoff as an example, where Harry Markopolos was able to uncover Bernie Madoff 10 years ago. Ten years ago Harry Markopolos, who was working at the time for Rampart Investment Management in Boston, was asked if he could duplicate Madoff's strategy. It makes sense that if people are competing in a market and can offer 30% returns on 90-day certificates that they will have a lot of customers, but in addition to having a lot of customers, there are going to be a lot of people who want to duplicate their system and compete with them because they are obviously making a lot of money.
When Harry was asked to do that, he immediately became suspicious because Madoff never reported losing money in any month. In a country of 300 million people and a securities commission that is supposedly a watchdog, why was no one questioning the fact that Bernie Madoff had never reported losing money in any month?
He said that he knew it was a fraud in about five minutes. He took his information to the Securities and Exchange Commission. When he went to the Securities and Exchange Commission, he was rebuffed because Bernie Madoff had been a big, known figure at the time, had been involved in the industry, and had a good reputation. In fact, I believe one of Bernie Madoff's sons-in-law was actually working for the securities commission as an investigator. So we can see it is one little happy family down there at the securities commission.
When Harry Markopolos came forward and presented the entire case 10 years ago, 1999, to the securities commission, he was told to get lost, essentially. He went back several times, and in fact at a certain point he was concerned and was checking his car for bombs and so on. I think his comment was that Madoff had something like 65 billion reasons to wish him out of the way.
Once again, that is a great example of the system not working. So what did we learn from that? We learned that we have to have proper regulatory bodies that are not populated by people from the industry, that it should not be taking people from the mutual fund industry, the securities industry, out of a company that they have worked for, for 20, 30 years, and they know all the players, and pop them in, sort of like a retirement package, the securities commission that is watching the same company that they have been working for all these years.
It is just one happy little group that parties together, socializes together and who know each other. How can we possibly expect that they are going to be doing a proper due diligence and investigating one another? We need more police-type forces here. We need investigative forces.
That was the weakness of the securities exchange in the United States. Now some changes have been made. There are some tough people in there, effective in January, and hopefully they are going to right the ship.
It seems that all of these bodies tend to drift over time and until something happens everybody is reasonably happy. Then something blows up and we realize that, well, no, these were the wrong people running the ship.
Let us take a look at our own securities commission in Ontario. One of the big arguments we have had in the House, and I know my Bloc colleague understands it well, is the whole idea of the national securities regulator. Being from Manitoba I know that over the last few years we have been opposed to that. I see the arguments for having a national regulator. The other G7 countries have it and it is probably a good idea, but what the government is missing in its analysis is not what it is called, whether it is a national regulator or 10 provincial regulators, it is who do we have running the regulators? Who is running the national regulation system?
If we had a national securities regulator and filled it with people who worked in the industry, then we would not have any better results than we have right now with the Ontario Securities Commission. It has a very sorry track record, a terrible record of imprisoning almost no one. It may have been lucky to catch three or four people in the last 10 years and this is even when the whole case was given to it. Even when the whole thing was put right in front of it, it still could not somehow take action.
In the United States, however, we see more activity in that area, but it comes from the judicial system in the United States. Let us take Conrad Black as an example. He did his crimes in Canada, as a matter of fact, I believe it had to do with non-competes that he was signing with CanWest when it was buying all those newspapers and there were $40 million worth of non-compete agreements in each one of these deals that he got, and his shareholders went after him when they realized that he was taking the $40 million when it should have belonged to Hollinger.
Conrad was a Canadian. I know he became a British citizen at some point, but he was a Canadian. He operated here his whole life. He had his companies here and yet surprise, he is doing time in a Florida jail. By all accounts I gather he is having a great time down there. It does not seem like a very tough jail he is in and he seems like he is happy enough that he might want to stay there a little longer based on the last transmissions we heard from him. But, my point is that the public must have confidence in its government to protect it. When we see people like Conrad Black and Madoff literally just walking away and when they do get caught, they do not spend much in the way of jail time, it is a problem. It breeds cynicism within the public.
That is why I was intrigued by another part of the Bloc's argument today that the sentences should be longer than one-sixth of the sentence. Mr. Vincent Lacroix, who is just one example of many, received an eight year sentence, but because people can get out of jail after serving only one-sixth of their sentence, this man was back on the streets in only two and a half years. So once again the public questioned this. If his sentence was eight years, then what is he doing knocking on my door after only two and a half years? What kind of a system is this that allows that?
Perhaps it is the Bloc's intention to introduce an amendment at committee to rectify this situation or to deal with it in some sense, but if we are going to give Mr. Lacroix two and a half years, then that is what the penalty should be. Do not have a judge say that he is supposed to spend eight years and then after only one-sixth of his sentence, how does he get out of that? I would like to know how the government is planning to deal with that issue because once again, I thought that was a very good argument the Bloc had.
I have to say at the outset that I am so impressed with the lawyers in this Parliament. I have never seen so many lawyers in one place outside of a legal convention. There are some extremely smart lawyers here, and the Bloc caucus is just one example that has several lawyers. The Liberal caucus and the NDP caucus have some, and I am sure there are a few really smart lawyers on the government side too. I have been listening to them very closely. However, their whole approach to the legal side of things has sort of been more along the lines of how it appears from a political point of view. That is the argument, I suppose, and they do not take the view of the legal family represented in the other parties in opposition. They simply go along with the government line that somehow, if they could showcase the bill as being tough on crime as opposed to smart on crime, that will pay off in getting votes back home.
All we have to do is look at the minimum sentence laws in the United States. That is the subject of another bill which we will be getting to fairly soon. In the 1980s California had Ronald Reagan's three strikes and you are out regime. His solution was to build a lot of prisons, and of course his buddies were building private prisons, so he could reward his friends as well. They built wall-to-wall prisons and put people in prison. I do not have the stats handy, but the United States stands alone in terms of the number per hundred thousand people who are incarcerated. The crime rate in the states has not gone down one bit. It is probably even higher than it has ever been. Just recently, because of budgetary problems, Governor Schwarzenegger, who would hardly be soft on crime, and who is a Republican, though hardly a George Bush Republican, has had to release thousands of people from prison because it has been found that the minimum sentence laws do not work.
I am just pointing out to the member of the government that there are all sorts of evidence and examples of crime approaches that work, and there are examples of those that do not work. I gave examples before about car theft in Winnipeg, about how putting immobilizers in cars and having teams of police investigators going after the limited number of car thieves who steal the maximum number of cars has produced results. That is something that works. That is what the government should be doing. The government is mandated by the public to be here to find solutions that work, and not just stuff that knocks an MP's rating up five points in the polls overnight. That is what Conservative members have been doing.
The other argument that the Bloc has made, which I find really important, is with regard to the issue of tax havens. We had a Liberal government for years and years before that had ample opportunity to deal with the whole issue of tax havens. We even had a Prime Minister who had a bunch of his boats registered in some foreign country. It might have been Panama.
Mr. Roger Pomerleau: It was Barbados.
Mr. Jim Maloway: It was Barbados, the member said.
The fact of the matter is that we should be trying to limit tax shelters and tax havens, because it is about time we stopped rich people from taking their money outside the country to avoid taxes. How can we have a good medical system and roads in this country if people are taking their money out of the country to avoid taxes? We have to put an end to these tax havens. What do these fraudsters do? They are not stupid. They get the money out of the country. As soon as they see things going downhill, the money is gone.
Then we get into banking regulations. The Speaker has indicated I am running out of time, and I have a lot more issues to discuss here, but we have to deal with tougher banking regulations to make certain that banks report suspicious activities, more so than they are doing right now. I know they are required to report deposits in cash of over $10,000. We can make further requirements of the banks that will help solve this problem. We should be regulating the industry. We should require more bonding. We should require that the people who are involved in these businesses have proper regulatory authorities so that they can be watched, and so that they have to report.
Real estate brokers and agents have to report every year. They have to keep their funds in trust—
Madam Speaker, I am very pleased to speak to Bill . We hope this bill will tackle white collar crime.
Recently when the introduced the bill, he said that fraud can have a devastating impact on the lives of its victims, including feelings of humiliation for having been deceived into voluntarily handing over their life savings. All too often this type of despicable act happens where people take advantage and prey on those who are vulnerable. Often they should know better, but unfortunately they are taken advantage of.
Bill contains six measures, all of which are designed in some way to enhance the sentencing process for offenders who are convicted of such fraud. The first element is the mandatory prison sentence where Canadians are most concerned about large-scale frauds that wipe out people's life savings and demonstrate extreme greed and indifference to others.
To address this concern, the bill includes a mandatory prison sentence of two years for any fraud or combined frauds which have a value of over $1 million. The mandatory prison sentence would act as a floor, for a variety of aggravating factors would also be applied to raise the actual sentence well above the two year range in many cases. We all know that more than two years is clearly justified in many of these cases.
There are currently four statutory aggravating factors for fraud in section 380.1 of the Criminal Code. This bill will add new aggravating factors to that list to set out additional characteristics of fraud which are particularly troubling. The new factors will focus on: one, the impact of the fraud on its victim; two, the complexity and magnitude of the fraud; three, failure of the offender to comply with applicable rules and regulations; and four, any attempt by the offender to conceal or destroy records relevant to the fraud.
Another measure will require the sentencing court to state on the record which aggravating and mitigating factors it has applied. This is to ensure transparency in sentencing and to ensure that the statutory rules in section 380.1, which sets out aggravating factors and factors that are prohibited from having a mitigating impact, are effectively applied.
The bill also gives the courts a new sentencing tool aimed at preventing the commission of further frauds and victimization. The court will be able to order as part of a sentence that the offender be prohibited from having work or remuneration, or volunteering in a capacity that involves having authority over another person's money, valuable securities or real property. The order is discretionary and is available for any period up to life.
The two final measures are aimed at improving the responsiveness of the justice system and the sentencing process to the needs of the victims. We really are here to stand up for the victims. We have to put these mandatory prison sentences into place. I know that some members on the opposition benches often do not support mandatory prison sentences and mandatory penalties as a deterrent but I can say that we do on this side of the House. I am glad to see that other parties are actually supporting this legislation. We do support these mandatory penalties and mandatory prison sentences to act as a deterrent.
I had a bill before the House in the 39th Parliament that proposed a mandatory prison sentence. That bill in fact got through second reading, so I was happy to see that members of the House in that Parliament did support these types of penalties and prison sentences as a deterrent.
Getting back to Bill , three points of caution are needed. No criminal law reform can change the bottom line, namely, that if the offender does not have any or adequate assets, restitution may be a hollow remedy.
It should also be kept in mind that the crown is responsible for making the sentencing submissions. Victims will not have standing to advance their restitution request.
Finally, we cannot establish a collection mechanism for restitution ordered as part of the sentence as this would require extensive provincial co-operation and tracking. The cost would be prohibitive.
Another measure in the bill will specifically acknowledge the courts may consider a statement prepared by a representative of a community or definable group for consideration at sentencing for fraud cases.
Courts are already somewhat receptive to considering community impact statements describing the impact of a crime on a community as a whole in some cases. In fraud cases, for example, a large-scale fraud which has many identifiable victims in a small town could have an economic impact on that whole town. We have seen these types of cases in many communities throughout Canada.
We talk about the mandatory prison sentence and as I have said before, I strongly support these types of penalties to act as a deterrent. Earlier today a member from the Bloc Québécois asked if there were any cases where a person who has committed fraud over $1 million has been given a sentence that was under the two years that is being proposed in the bill. The truth is that there are. I would like to speak about some of those cases that were before the courts.
There was one case where the accused authorized loans to fictitious people, was charged with fraud over $5,000, and the fraud amounted to more than $4 million and lasted four years. The scheme was set up by another person and the accused merely implemented it. The aggravating factors were abuse of trust and that large numbers of fraudulent transactions were made over a period of time. The mitigating factors were the accused had no criminal record, he did not personally benefit and was also a victim of fraud. In that particular case there were two years less a day and the party to the offence received a sentence of four years. That case was not reported.
There was another case where the accused was charged with three counts of fraud over $5,000 relating to two loans totalling in excess of $3 million and the ongoing trading of shares. In that case there was a conditional sentence of two years less a day followed by a year of probation.
These are the cases which the Bloc Québécois wanted to know about.
There is another case where the accused pleaded guilty to fraud involving a GST remittance and payroll remittance over a five year period. In that case there was a 42-month penalty.
In another case the accused pleaded guilty to fraud over $5,000 for defrauding the Bank of Nova Scotia of $1.8 million in a one-month period. In that case the sentence was 26 months. I could go on and on. In another case the accused pleaded guilty to 28 counts of fraud spanning four years and totalling more than $1.5 million related to the sponsorship program. There was a restitution order.
There is another case where the accused was involved in the sponsorship scandal and pleaded guilty to 15 counts of fraud totalling $1.5 million. There was a sentence of only 18 months. In another case the accused was charged with fraud over $5,000 and defrauding the government in the amount of $1.1 million. The sentence was community service and what most would consider generally light penalties. In another case the accused operated a company that defrauded banks of over $2.5 million where the sentence was two years less a day plus a restitution order.
We see there is quite a number of cases where if a mandatory sentence were brought forward, there would have seen a much greater penalty for the accused. It is hoped that these additional mandatory prison sentences and penalties will once again act as a deterrent. I know that is what Canadians are looking for. They are hoping that many of these types of despicable acts are stopped.
Let me talk more about what the bill really can do. I keep talking about the important part of the bill being the introduction of the mandatory minimum prison sentence of two years. It will provide additional aggravating factors for sentencing for fraud and permit the court to receive community impact statements. The impact to victims and their families can be devastating.
We have heard about cases in the news recently. We heard the hon. member for talk about the Ponzi schemes. We all know about a case currently in Quebec. We also know about Bernie Madoff and the impact he had on many families in the United States.
That is why this type of legislation is so needed and demanded by Canadians. We as a government are taking action. Our brought the bill forward. I have sat through the debate today and heard members from all sides talk about how important this bill is for Canadians.
One of the questions is why the proposed measures deal only with fraud and not other white collar crime offences. The offence of fraud really is extremely broad and flexible and can be charges in a wide range of conduct. While there are many different offences in the Criminal Code that can apply to any given set of facts, it is the offence of fraud that gets charged far more often than other offences. It remains the primary offence for going after those who deceive honest Canadians.
As members of the House, we are here to stand up for honest, hard-working Canadians and ensure that their interests are protected and that they are protected from those who would attempt to take their hard-earned savings and money they have put away to make sure they are looked after in their retirement.
Prosecutors often tend to avoid more of the specific offences because the basic fraud offence can cover the same ground and it may be easier to prove.
This legislation would be applicable in many of the cases that we are seeing.
I keep talking about this, but having a mandatory prison sentence hopefully will act as a deterrent. Sometimes the perpetrators of these particular crimes see such light penalties and the time that they may or may not have to spend in prison, depending on the judge, not as a deterrent. Sometimes acts may be committed that otherwise might not have been committed had there been a deterrent.
In 2004 the maximum sentence was increased from 10 years to 14 years in prison. The maximum penalty for specific securities-related fraud offences was also increased. Fourteen years is the longest maximum penalty in our law for non-violent crimes and it is the highest maximum penalty for a property offence.
It is clear that fraud is a very serious criminal offence. I would hope that in these cases the judges would use prison sentences that far exceed the two years when it is applicable, but in this particular bill, the minimum would be two years.
Recent events, including the Earl Jones case in Montreal, continue to attract significant interest across the country. This is what I have been talking about. It is that significant interest across the country with respect to our existing criminal law regarding white collar crimes.
Canadians really are concerned about large scale frauds that wipe out people's life savings or retirement savings and really demonstrate extreme greed and indifference to others. These proposed reforms are designed to ensure that sentences imposed in these cases adequately reflect the severe impact they have on the lives of the victims. As I said before, that is what we are here as parliamentarians to stand up for.
I did talk about some of the cases that have been handed down by the courts which really demonstrate the need for this bill. I would like to talk a bit more, specifically, about the mandatory prison sentence and how large-scale frauds would be punished under the bill.
As I said before, the maximum penalty for fraud is 14 years. It is the highest penalty in our criminal law, short of life imprisonment.
In this bill, we are introducing that mandatory prison sentence for fraud when there is a value over $1 million. It is not necessary that any particular victim be defrauded of over $1 million as long as it is accumulative, that together the frauds, where the offender has been sentenced, exceed $1 million in total.
I guess the best way to describe it is that a fraud of this size can only be described as large scale and would have been the result of a great deal of time, energy and planning and a significant amount of deception to have defrauded one or more people of over $1 million, all of which demonstrate a high degree of moral culpability. Such frauds demonstrate a tremendous amount of contempt and disregard for law-abiding Canadian citizens who fall victim to them.
The law should be clear that any fraud of that scope must be met with a minimum term of imprisonment. This is why we talk about this mandatory prison sentence of two years. Once again, I cannot say it enough that we need to put that type of penalty in place to act as some sort of deterrent.
We are seeing that this mandatory prison sentence of two years is lower than some of the sentences that the courts are currently handing down. Some sentences, we hear, are in the four to seven year range for these large scale frauds, which would be much more than $1 million, but there is no minimum sentences set out explicitly in the Criminal Code.
Currently, the court can take into account some of the mitigating circumstances in individual cases and end up with a sentence that is lower than two years. Therefore, it is appropriate for this Parliament to give guidance to the courts and to Canadians by clearly stating that the mandatory sentence be laid out clearly in these cases, and the mandatory minimum would serve as a starting point for a sentence calculation. A variety of aggravating factors, which are often applicable to a fraud of this size, such as its complexity, its duration, its large number of victims and the fact that the fraud involved a breach of trust, would also be applied to raise the actual sentence. I hope the judges do in fact hand down sentences that are well above the two year range.
The frauds that are of great concern to Canadians today are for these amounts that are well above $1 million, sometimes 100 times more than that amount and often above. Clearly, sentences for these types of frauds would be well above the starting point of two years, which is set for frauds of just the $1 million that we have been talking about. This measure would send a clear message to all that serious consequences await anyone who is thinking of getting wealthy by scamming Canadians.
We are seeing right now that there are some aggravating factors that are currently being considered by sentencing courts. There are already several mandatory aggravating factors for fraud offences in the Criminal Code. For instance, if the fraud involved a large number of victims or if, in committing the offence, the offender took advantage of the high regard in which he was held in the community, as well as under section 718.2 of the Criminal Code, there are generally applicable aggravating factors that could be applied.
In the context of fraud, the factor that arises most frequently is if the offender abused a position of trust or authority in committing the offence. We see that all too often.
In conclusion, I am happy to see, having sat through this debate here in the House and having heard from members from both sides of the House today, that they want to get this bill to committee and are open to bringing forward additional potential amendments to see the support in this Parliament to get this bill through so that the fraudsters and those who would take advantage of vulnerable Canadians will be punished accordingly.
Madam Speaker, I am pleased to take part in the debate on Bill .
I believe this is something that has unfortunately affected too many victims in recent years. We have every right to expect the government to amend legislation to reflect this situation, which is not new. However, in the context of the deregulation of financial markets and changes in technology that now make possible operations previously impossible to hide or to carry out, it is clear that the government must modernize our laws in this regard.
Unfortunately, the bill the government has introduced is way off the mark. In fact, it appears more like a public relations operation to show that the government is doing something. It looks more like a public relations move in keeping with the ideological battle the Conservatives are waging to introduce into Canada a sort of justice based on the American model, which is currently being challenged by the harsh economic reality.
In California, for example, more is spent on the prison system than on universities, because the laws have been tightened over the years automatically and without thought. The problem is a serious one. California, on the brink of bankruptcy, has had to release 40,000 prisoners because it could no longer feed them.
In order to avoid the extremes a number of American states had to face, it seems to me there should be a much more vigorous and broad public debate on the type of justice we want, rather than what the Conservatives are offering us. They in fact are offering us measures piecemeal that aim to establish a justice system that has nothing to do with the values of Quebeckers and Canadians, I am convinced, with no public debate and no real examination of all the aspects.
This bill is therefore off the mark, as it will not contribute in any way to fighting white collar crime. On the contrary, it includes a whole series of neo republican Conservative themes, on minimum sentences, for example. I will come back to this.
There should be a debate on the way to modernize our laws, in matters of justice, in particular, but it applies to everything to do with the regulation of the financial sector. It is very clear that we cannot continue in the environment engendered by the 1990s. There must be new regulations for the financial sector worldwide and within individual countries. The debate must get underway. It is in this context that the Bloc Québécois has decided to vote in favour of this bill, even if it does not meet the target it claims it wants to meet, so that it may be studied in committee. At that point we can introduce measures that might bring real solutions to white collar crime.
Very clearly, this kind of debate cannot be held piecemeal, as the Conservatives are trying to do with nearly half of the bills before us amending the Criminal Code or dealing with the justice system. We have to have a genuine debate where all of the principles on which a justice system should be based are front and centre in the public discussion. Obviously, the members of this House must be participants, but Canadian and Quebec society as a whole must also take part. The bill will be considered in committee and a number of proposals will be made that seem to us to be much more promising than what we see in the bill. Once again, the bill does not reach all the targets it says it wishes to reach.
When we look at it closely, as I will have an opportunity to do in a moment, we see there is a fly in the soup, as one of my friends used to say. That means there are some hitches, some measures are proposed that are essentially a smokescreen.
I will start right off with the question of minimum sentences. The Conservatives want to implement minimum sentences everywhere.
We are currently debating Bill , which proposes to eliminate conditional sentences in order to create two things at opposite ends of the spectrum. We will have either suspended sentences or minimum sentences of imprisonment for two years. That is going to be completely untenable for judges. We will have situations in which accused persons who should have been given a conditional sentence, for example, find themselves with suspended sentences or with no sentence at all, in order to avoid a minimum of imprisonment for two years. There will also be people who will be sentenced to two years for whom a different approach should have been taken, in terms of rehabilitation. What we are seeing in is a debate that has run through this entire Parliament, an obsession on the part of the Conservatives.
Minimum sentences serve no purpose. That is shown by every study, and I think the example of Americans, or of the USA, as my colleague from likes to say, demonstrates this clearly. That society has one of the highest incarceration rates in the world, and that incarceration rate in fact has a perverse effect, because it artificially lowers the unemployment rate. Every time the unemployment rate in Canada and Quebec is compared to the rate in the United States, we have to add 1 to 1.5 percentage points to it. There are so many people in prison, for all sorts of sometimes relatively minor offences that could be remedied by other kinds of interventions. As I said, the incarceration rate means that an entire segment of the population that could be in the labour force is artificially and temporarily eliminated from the statistics.
That does not have any dissuasive effect. The United States is not a society at peace with itself. People may feel safe, but they do not feel at peace. They close themselves off now in gated communities where they are isolated from society. This is not a well-integrated society at peace with itself. It is not even real safety, just the appearance of safety. This is what happens in a country that has increased the number of offences with minimum sentences. They have no dissuasive effect.
Fraud over $1 billion is pretty rare. Not only is it unusual, but when it happens, the sentences are for more than two years. A provision was included in Bill , but it is just for show, to say that the Conservatives will be tougher. The reality is that whenever there is fraud over $1 million, judges take all the circumstances into account and pass sentences of more than two years. The Conservatives are flogging a dead horse here, but no one is fooled. It is just an insidious ideological campaign conducted around justice and how justice is perceived.
When we asked the to give us an example of a case of fraud over $1 million in which the sentence was for less than two years, he was unable to provide one because these cases do not exist.
In cases of fraud of this magnitude, the sentences are about six or seven years.
The Conservatives created the impression they are passing tougher laws, but it is just a public relations exercise. This may also have been a bill that was quickly cobbled together by the Conservative government in view of the disgust expressed by much of the public and the victims of the various fraudsters. There were Vincent Lacroix and Earl Jones, of course, but also various other people in financial and business circles who have behaved badly over the last few years. I am thinking, for example, of the fiddling with the books at Nortel and at Enron in the United States. The government probably wanted to act in view of all the public pressure but did something that will not produce results. This bill is terribly makeshift.
They have also added aggravating circumstances. If you look at the court's decision in the Vincent Lacroix case, you will find that all the aggravating circumstances put in the bill by the government—for example, the psychological effects of fraud on the victims—were included in the reasons given by the judge, in the Vincent Lacroix case, to justify his sentence. If my memory serves me well, he was sentenced to 12 or 13 years.
Once again they are flogging a dead horse. They are trying to give the impression that they are making tougher laws to deal with economic crimes and white collar criminals. But in fact they are just codifying the existing decision-making process used by the courts.
Restitution orders are another example. It is quite logical to ask fraudsters to return the stolen money to victims when possible. However, these restitution orders already exist. They are expanded somewhat in the bill.
We can also question whether or not it would be feasible, in the case of Vincent Lacroix, Earl Jones and many others, to recover the money—given that nothing is being done about the means used by these fraudsters to make it disappear, either through financial schemes or tax havens. I will come back to that.
The prohibition restricting the activities of convicted offenders is interesting. But that, too, is an existing practice whose scope has been broadened.
When we take stock of what Bill has to offer, we find that there is nothing new in the bill and that the measures are often inferior to what we already have in our system.
I would like to mention the example of the minimum sentence of two years once again. If the current standard is six or seven years, are they giving judges and the courts a signal that sentences should be lower? That is exactly how this bill, if it is ever passed, could be interpreted by some judges.
So they missed the target. The Bloc is taking it to committee in order to broaden the debate on the real ways to fight economic crime. One of these ways is advocated by the legal profession and those who write about crime or legal matters and it is eliminating the granting of parole after one-sixth of the sentence has been served.
Since the start of the week, the responses by the and the have intimated that this is a highly complex matter, when in fact, it is a matter of repealing two sections of the Criminal Code.
A decade ago, parole was not granted after one-sixth of a sentence had been served. This practice appeared over the course of the years. So, we could backtrack, given that it does not allow for criminals found guilty to be sentenced or to serve much of their prison term. So the matter of serving one-sixth of a sentence can easily be reversed by repealing the two sections that gave rise to this measure.
They do not get it. There is no logic in the responses by the and the . Why is the government delaying the implementation of this measure, which has the full support of all groups and which would be very easy to implement?
Today in question period, the leader of the Bloc Québécois wondered whether the Conservative government—and this brings me back to my introduction—did not want to use a perfectly logical, effective and fully supported measure, namely eliminating parole after one-sixth of a sentence has been served, in order to include other measures which are far less popular, effective and transparent.
We are used to having these little poison pills with the Conservative government in connection with perfectly valid measures that have the support of consensus and has been proposed often by the opposition. I would point out that the Bloc has been proposing eliminating parole after one-sixth of a sentence since 2007. This is not something we invented in response to the white collar crimes of recent months. It comes from in-depth study by the Bloc and its supporters over the years. This is what we fear, and our fears are based on experience.
One I remember, for example, is the bill that created a whole set of tax measures, into which the government had inserted a little, tiny clause that meant that funding could be denied for films or works that were considered not to be in the public interest. If I recall correctly, that was Bill C-10. No one had noticed it in this House, in spite of the work done by the Standing Committee on Finance. The Senate noticed it, and the government, rather than take responsibility for the problem and eliminate it, did its utmost to try to keep it. This is one example, but we have seen a number of others over the several sessions since this Conservative government has been in office.
Eliminating parole after one-sixth of sentence would be an extremely easy thing to do. We could include it in this bill. We could even, in the cases of Vincent Lacroix and Earl Jones, make sure that the two of them serve a healthy portion of their sentences rather than what will be the case as a result of this government’s inaction. In January 2011, Vincent Lacroix will be as free as a bird, or very nearly. I cite these two examples again because they are the best known in Quebec.
This bill does not include those elements. Another major element that has not been talked about and that the government does not want to talk about is the question of tax havens. I come back to what I said a moment ago. This means that people commit fraud and think they will be able to come out of it just fine, based not just on the fact that they will be released after one-sixth of their sentence, but also on the fact that as a result of all sorts of mechanisms that are allowed under the Canadian Income Tax Act, that money will be sitting in tax havens, safe from the Canadian tax authorities. The negligence of the Conservative government on this issue is blatant.
Two weeks ago, Statistics Canada revealed that, if I recall correctly, there is $146 billion owing from Canadian taxpayers. These are mainly very wealthy individuals. As we know, an ordinary taxpayer does not have the resources to pay the accountants and lawyers they need to make use of all these mechanisms. There are also companies, the banks among them. We know that the Canadian banks, in particular, use tax havens to a huge extent. This is money that is sitting in tax havens, as a result of negligence on the part of Liberal or Conservative governments. Eventually, when these fraud artists are released, they are going to be able to get the victims’ money back, safe from the Canadian justice system and Canadian tax authorities and, it has to be said, with the complicity of the Conservative government of Canada.
Here is one of the examples we gave this week. It had to do with signing an agreement to weaken the border between Panama and Canada. Everyone knows that Panama is a tax haven. It is notorious. We just signed an agreement to make it even easier to transfer money from Canada to Panama. That is completely counter to current policy directions espoused by responsible governments, such as the administrations of President Obama and President Sarkozy, who have condemned the situation and are seeking solutions. Not only are our government and our not seeking solutions, they are creating new problems.
Here is another example in addition to the agreement with Panama. They are not doing anything about the tax agreement with Barbados. When the Conservatives were in opposition, they made much of the fact that Canada Steamship Lines, which belonged to the Minister of Finance, Paul Martin, who later became Prime Minister, used schemes allowed in Barbados to avoid paying taxes in Canada. Not only have they maintained the tax agreement with Barbados since coming to power, they have reversed a decision made in one of the budgets to prevent double deduction of interest in the case of foreign investment. We are moving backward instead of forward like almost all of the other G20 countries.
It is all smoke. We will study the bill in committee and come up with concrete solutions for the justice system, specifically with regard to the practice of serving only one-sixth of a sentence, and, more generally, for ways to curb the use of tax havens by fraudsters who shelter their assets from Canadian justice and tax law, and we will find ways to give the stolen money back to the victims. That is what the Bloc Québécois will do in committee.
Madam Speaker, the bill contains a number of provisions that are designed to ensure that people who devise serious fraud offences receive tougher sentences. The objective of the bill is clear and simple. It would amend the Criminal Code to improve the justice system's response to the sort of large scale fraud we have all been hearing so much about lately.
New Canadians are among those who are vulnerable to fraud. They choose to come to Canada because they trust our justice system. They believe that those who commit crimes will be sentenced and put behind bars. However, when they unfortunately become victims of fraudsters they are appalled to discover that these criminals can easily walk away without any serious consequences and start committing those same crimes again. The victims cannot get their hard-earned money back and there is no protection for them.
Bill would send a message to those who think they can outsmart Canadians and dupe them into handing over their hard-earned savings. On the contrary, the bill would make clear that fraud is a serious crime for which there must be serious consequences.
It is also designed to improve the responsiveness of the justice system for victims of fraud. These proposed measures would send a strong message to the victims of fraud that the crimes committed against them are serious and the harms they suffer would be taken into account and addressed to the greatest degree possible.
Overall, the measures in the bill would do much to increase Canadians' confidence in the justice system.
I would like to speak for a while about the restitution element of the bill. Restitution is defined as the return or restoration of some specific thing to its rightful owner. It is distinct from compensation which in the Canadian legal system is a scheme of payments managed and made by provincial or territorial governments to assist victims of crime. Restitution is the payment by the offender of an amount established by the court. The Criminal Code currently provides for restitution for criminal offences including: damages for the loss or destruction of property, bodily or psychological harm, bodily harm or threat to a spouse or child.
An order for restitution is made during the sentencing hearing of a convicted offender. It is part of the overall sentence provided to an offender as a stand-alone measure, or as part of a probation order or a conditional sentence.
Restitution orders may be particularly appropriate in the case of fraud offences. In several recent high profile cases we hear from media accounts of thousands of dollars taken by offenders. These shocking cases of duplicity have deprived many innocent Canadians of hard-earned savings and in truly awful cases of retirement funds. It will be a decision in each trial as to whether restitution will be appropriate.
Our proposals provide that in the case of fraud the sentencing judge must consider an order of restitution as part of the overall sentence for the offender. The court shall inquire of the Crown if reasonable steps have been taken to provide victims with the opportunity to indicate whether they are seeking restitution. This step will ensure that sentencing cannot happen without victims having had the opportunity to speak to the Crown and establish their losses.
The courts have found that it is not possible to make an order when the amount is not readily ascertainable or when it is difficult to apportion the amount among several victims. To further assist victims our proposals include an optional form to assist victims in setting out their losses. The form identifies the victims, their losses and clarifies that the victims need to provide receipts, bills or estimates in order to assist the court in making the restitution order. In all cases these losses must be readily ascertainable.
Put together, these proposals will increase the likelihood of orders of restitution being made. It is our hope that these proposals will increase the responsiveness of the legal system to victims of fraud.
I would note that the Federal Ombudsman for Victims of Crime recommended improvements to the restitution scheme in one of his first recommendations to the . These proposals, while not as exhaustive as the ombudsman urged are steps along the road of improving the experience of victims in the justice system.
This morning a member opposite asked what the government is doing to prevent offenders from committing further crimes. Canadians are deeply troubled by the possibility that convicted offenders will be able to resume their activities and defraud yet other Canadians.
To address concerns about the potential for repeated behaviour, the bill includes a new sentencing measure which allows the sentencing court to order that a person convicted of fraud should be prohibited from having employment or engaging in volunteer activities that involve having authority over other people's money, real estate or other valuable securities. The court could prohibit the offender from engaging in such conduct for any length of time it considers appropriate, including any period during which the offender is serving a prison sentence. Breach of the prohibition order would be a separate offence.
By preventing the offender from having the opportunity to commit another fraud, the bill would help to minimize the further victimization of Canadians.
There are several prohibition orders already in the Criminal Code, such as the one which can be imposed on someone convicted of sexual offences against children, prohibiting them, among other things, from working in schools or other places where they would be in a position of trust or authority over young people.
I am confident the measures in this bill will help send a strong message to the fraudsters out there that their time is up. I am also pleased that the bill can act as a springboard for discussion and raising awareness about fraud more generally.
I hope all hon. members will support the bill and help to ensure it is passed into law as quickly as possible.