Bill C-52 (Historical)

Retribution on Behalf of Victims of White Collar Crime Act

An Act to amend the Criminal Code (sentencing for fraud)

This enactment amends the Criminal Code to
(a) provide a mandatory minimum sentence of imprisonment for a term of two years for fraud with a value that exceeds one million dollars;
(b) provide additional aggravating factors for sentencing;
(c) create a discretionary prohibition order for offenders convicted of fraud to prevent them from having authority over the money or real property of others;
(d) require consideration of restitution for victims of fraud; and
(e) clarify that the sentencing court may consider community impact statements from a community that has been harmed by the fraud.

Retribution on Behalf of Victims of White Collar Crime Act

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Madam Speaker, in fact, it is one of the questions I asked when we were discussing this bill, why $1 million, not $1.5 million or $500,000?

The fact is that $1 million is basically established as the benchmark within fraud in criminal case laws within the courts. We also have to realize 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 and energy. In essence it is premeditated. There is a lot of planning that has to go into it.

Such frauds demonstrate a tremendous amount of contempt and disregard for law-abiding Canadians, the fact that people fall prey and become victims of their scheme.

The law should be clear that any fraud of that scope must be met with a minimum term of imprisonment. We believe $1 million is the appropriate level.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, this is an initiative that we support as well, at least as far as getting the bill to committee is concerned.

The government is offering a lot of false hope that people are going to be able to get restitution in these cases of fraud. The member should know that the people who are perpetrating these frauds are actually spiriting the money out of the country. It is being hidden in tax shelter areas like the Cayman Islands. The government would be well advised to develop a strategy in that regard and try to shut down these tax havens. Furthermore, it should try to license participants, police them more properly and set up a proper regulatory body that does not have a lot of industry insiders regulating the industry.

That is where the problems are. This law is to deal with the problem after it has already reached the point where there is probably nothing left in terms of restitution for the people. I would ask the government to reconsider how it is approaching this matter. The legislation should be at the end of the process, not at the beginning of it.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Madam Speaker, I do not accept the premise of my hon. colleague's question, but I do support the fact that there are other measures that could be taken as we proceed.

As I mentioned in my comments, this is a springboard for further discussion to move other pieces of legislation forward. In fact, we are dealing with Bill C-52. We are looking at minimum mandatory sentencing. We need to deal with economic crime and the serious effect that white collar crime has on families and communities across the country.

There is a provision within the proposed legislation. It is very exciting. Restitution will be required in the sense that the judges will now have to work with the victims. There will be an online form. They will be able to work with the Crown prosecutor and ensure that the dollar value is calculated. If restitution is not provided, the judge has to provide reasons.

This is one of the most proactive aspects of this bill. We want to make sure that people get the money back. It is often said that these carpetbaggers take the money and do not pay it back. They have to pay it back and they also have to do the time that fits the crime.

This is one step in the journey of many bills that are in the House. With the way it is right now, criminals could receive house arrest for committing a crime. That is ridiculous. We need to continue to support this as a whole House. This is a non-partisan issue and it is for the benefit of all Canadians.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Madam Speaker, I was particularly determined to take part in this debate because many of the victims of self-styled financial advisor Earl Jones live on Montreal's West Island. It may be that most of them live there. In other words, a large number of those victims live in my riding of Lac-Saint-Louis. I personally know some of the victims or the loved ones of those who lost a fortune because of Mr. Jones' actions.

I would also like to commend the community of Montreal's West Island, the people of the community who pulled together to help these victims. Some people have even made personal donations to help victims get through this very difficult period in their lives.

I would also like to attest to the courage of many of these victims, who are in a very difficult financial situation and who continue to fight for change in the legal system to deal with white collar crime, which seems to be creating victims on a daily basis from what we see in the news.

Technically, fraud or financial crime is not a violent crime, but as the previous speaker pointed out, it is a crime that inflicts a form of violence on people. Some of the stories I have heard coming out of the Earl Jones case leave no doubt that people who have been victimized by him are under extraordinary stress.

I know of one case. I do not know the individual personally nor do I know the person's name, but I have heard in the community that one of the victims is a 99-year-old woman who was living in a retirement residence. She lost everything as a result of the fraudulent behaviour of Earl Jones. She is 99 years old and has to move to the home of one of her children. Everyone can imagine the shock to the system of someone who is 99 years old, who all of a sudden is subjected to a drastic change in her lifestyle. As I said, the previous speaker brought out many examples of people whose lives have been physically damaged by being victims of financial crime.

In the case of Earl Jones, when the story broke in this past summer, I attended a victims meeting along with elected representatives from other levels of government in my community. I was informed of some of the tactics Mr. Jones would use to defraud his victims. I would like to share some of them with the House.

Earl Jones would prey on people who were emotionally drained. For example, perhaps someone who had been caring for an ill loved one who had since died simply wanted someone to settle the estate and do the paperwork which unfortunately accompanies the death of a person. Earl Jones would convince such people, especially widows, to give him power of attorney so that he had control over their lives. In other words, he would have the power to sign all kinds of documents in their name, often without their knowledge.

He would also say to individuals that he would take care of everything for them, that they could have their phone bills and municipal tax bills sent to his office and he would pay them. In the last couple of years, as Earl Jones became financially squeezed, he would not pay the bills and the individuals in question would not know that the bills had not been paid because the late payment notices would go to Earl Jones. People suddenly woke up to the fact that their insurance had not been paid for a year and they were not insured, or that their taxes had not been paid for a year and a half and they were at risk of losing their home. This is a particularly underhanded crime.

We are talking about an extremely underhanded crime here. The government must take action against this type of fraud.

Not only are there repercussions on the health of the victims, but, as the hon. member who spoke before me was saying, these crimes undermine the public's confidence in the Canadian financial system. The Canadian financial system is extremely important to the health of the economy.

Such crimes shake people's trust in financial advisors in general. Many financial advisors across Canada, honest people, are suddenly being looked at suspiciously by people who are wondering whether their advisors are honest and trustworthy and whether their investment advice is sound. There are other victims in addition to those who lost significant amounts of money.

I am very proud that the Liberal Party was able to develop a platform or program that was comprehensive enough for this type of crime. I would like to acknowledge the contribution of the member for Beauséjour and Liberal justice critic, who helped develop this platform. I would also like to acknowledge the contribution of Michel Picard, Ph.D., a Liberal candidate in Saint-Bruno—St-Hubert, who worked for a number of years on the RCMP's anti-fraud unit, and who contributed a number of ideas regarding financial crimes to the Liberal platform. I would obviously like to thank the member for Bourassa for his contribution to this platform.

The bill is a step in the right direction but a couple of issues need to be addressed. One is the fact that even if the bill were to pass, it would still be possible for fraudsters, who have received a minimum two year sentence for defrauding their clients, to apply for parole after one-sixth of their sentence. Therefore, it is possible that, despite the public relations value of a two year minimum sentence, fraudsters would only serve a few months in jail. I do not know if the public would take very kindly to knowing that the bill leaves a gap in the current situation.

The other point is that this is not just a question of sentencing reform. Getting to the bottom of financial crime or preventing financial crime is not just a question of tightening the sentencing regime. These crimes can be complex. I would refer to a case in Calgary where the police have been investigating for a number of years but could not find evidence of wrongdoing until very recently. One of the reasons was that the financial arrangements were so complicated that it took a great deal of time, energy and effort to try to understand them.

Therefore, if we are going to stop financial crime in this country, we need to give the RCMP the resources it needs. It may only need to hire more officers or more forensic accountants, for example, but it is very important to give the RCMP the resources it needs to track what is happening when it suspects there might be some criminal activity. The government should be investing more in the RCMP and perhaps other police services to give them the capacity to follow these developments.

The other problem many victims have, and we have heard this first-hand from the victims of Earl Jones who have come to see me and from some of my colleagues, is that the banks are very slow in providing information following a fraud. For example, after a fraud it is very important that the victims obtain financial statements and different kinds of information from the banks but the banks are not required to provide this information within a specific period of time. The Liberal Party proposes that the banks be limited to 30 days for responding to an information request from victims of a fraud as that would accelerate the process of investigating and perhaps charging the alleged fraudster.

Another issue raised by victims of financial fraud is that when a fraud is discovered it turns out that previous tax returns going back many years often become a fiction and they have no way of going back beyond maybe the immediate year to amend tax returns and get some tax relief in the process. Victims have told me that when they go to see the tax authorities, whether they be federal or provincial, the tax authorities themselves do not know how to handle the situation. They just do not know what to tell these people. It is not just a question that their hands are tied by the law or by regulation. They do not even know where to begin. We may need to put more resources into training tax collectors or the people who work for Revenue Canada in how to deal with these situations, how to go back and look at previous tax returns so that maybe the victims can get some tax relief.

Another suggestion was brought to my attention. The government could require companies that operate under federal jurisdiction, like banks or telecommunications companies, to temporarily ease the burden for these victims. For example, for people who must continue to pay their phone bills, the companies could maybe give them a little 12-month break. Obviously, these customers would later reimburse the money they owe. As things stand, we can imagine a situation in which a telephone company would suddenly decide to cut off a victim's service because they had not paid their bills for a few months. Perhaps we should do something on this end to help victims of financial crimes, but obviously not with this bill.

I also would like to raise the issue of a national securities regulator. I am pleased the government adopted an idea from the Liberal platform on this issue, which was to refer the matter to the Supreme Court for some kind of guidance as to whether the federal government would have the constitutional authority to create a national securities commission. As the House knows, this was an idea put forward by the Liberal Party. It is much better to do that than to propose a commission and then to spend years in court when challenged by provinces like Quebec, Alberta and perhaps Manitoba in court waiting for a decision on whether the federal government has the constitutional responsibility or not.

I would like the government to provide more information on how a national securities regulator could prevent financial crime from happening in the future. I personally that the reason the government is proposing a national securities regulator is not so much to do with financial crime. That is a convenient reason in the current circumstances. Obviously, the government is looking at creating a national securities regulator perhaps as a means of integrating the Canadian economy more than it is presently in the hopes of stimulating more economic growth, and that the real reason is not to stop financial fraud.

Right now, no one on the government side has told us exactly how a national securities regulator would prevent financial crime. What will prevent financial crime is pouring more resources into police authorities so they can do the investigative work that they need to do.

Therefore, it would be helpful if the government would spell out exactly how creating a national securities regulator, how replacing one bureaucracy with another, would prevent financial crime. Perhaps there are some reasons why that would happen but they have not been highlighted yet.

The only thing I would like to add to my remarks is that it would be a good idea for the government, separately from this legislation, to begin international negotiations on a convention or some kind of agreement that would bring countries together to combat financial crime.

For example, when there is a financial crime, it might be hard for the banks of one country to get the information they need from the banks of another country. We have international agreements against terrorism, obviously, and we have international agreements to track other kinds of criminal activity, such as financial transactions involving money laundering and so forth, but maybe it is time for the government to take a somewhat multilateral approach to this and try to kickstart negotiations toward an international protocol to combat financial crimes.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, the member made several important points.

When we look at the United States and the case of Mr. Madoff, Harry Markopolos found out about this Ponzi scheme 10 years ago and turned over all the information to the SEC. However, when he was asked how long it took him to find out about it, he said that he became immediately suspicious because Madoff never reported losing money in any month. He knew it was a fraud in about five minutes.

The fact is that the ability is there for people to pick up on these frauds at very early stages.

We just recently developed money laundering laws that require real estate and insurance people to report suspicious transactions. The key here is the banks. The commonality that these fraudsters use is the banking system. The banks are already required to report deposits over $10,000 in cash, but we should have stricter reporting requirements on the banks.

I liked his idea about forensic auditing, because that is part of it too, but the tools are all there right now. We just need to work together, rather than having a kind of hands-off disinterest in this problem. These people have been operating right under the noses of the banking system all these years.

The government needs to spend more time advertising the problem. It has millions and millions of dollars for feel-good advertising, for “the land is strong and vote Conservative” ads, but it should be running advertising campaigns on this very problem, on how to report and how to discover these sorts of fraudulent activities.

There are a lot of different areas that we should be looking at right now. The tools are out there. We just need to act on them.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Madam Speaker, I agree that we need to act on many fronts. It would be valuable for different levels of government, federal and provincial, to do more public awareness on this issue. I do not think there is any doubt about that.

As I mentioned in my remarks, we in the Liberal Party believe that banks should need to cough up financial reports much more quickly after a fraud is committed. I know that does not prevent the fraud from happening in the first place but I think it is incumbent upon the banks to react quickly to these situations.

I am not a banker. I do not work in a bank, obviously, and I do not know much about the nature of banking transactions within the banking sector. I would only hope that after the headline cases involving Earl Jones and others that the banks are being much more vigilant with respect to these transactions.

It is possible that the banks are being vigilant but that, in selected cases, someone within the bank was not doing his or her job, in which case that person should be held responsible and the banks standing behind the person should be held responsible. For example, if we find out that in some of these fraud cases an error was made by a bank and that the millions of dollars lost to the clients of Earl Jones, for example, were the result of a banking error, then the bank should be held responsible through the court system.

I agree with the hon. member that the banks have a responsibility always to keep a vigilant eye on what is going on.

[Brian Jean, Conservative, Parliamentary Secretary to the Minister of Transport]

Madam Speaker, I found it a little puzzling that the NDP member would ask us to advertise how to catch criminals and what criminals will get as far as penalties, but, at the same time, he does not want the government to advertise how Canadians can take advantage of tax savings, how they can help themselves and how they can have a boost in confidence in our Canadian economy. I find that somewhat puzzling but it is good to see that the NDP is finally getting onside with the government's tough on crime agenda.

It should be noted that the Liberals are finally, in this place at least, coming forward and supporting the Conservative government. I wish they could convince the members in the other place to do the same.

However, I wonder if the member could comment on the statutory aggravating circumstances and the new four aggravating circumstances that are being put into the bill, specifically the impact of the fraud on the victims, the complexity and magnitude of the fraud, the failure of the offender to comply with the applicable rules and regulations, and any attempt by the offender to conceal or destroy records relevant to the fraud.

Quite frankly, I think most Canadians would think that those things should have been put in place long ago by a previous Liberal government, and obviously was not, but we have finally moved forward on those four particular aggravating circumstances that are very crucial to the sentencing factor. I wonder if he could comment on that.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Madam Speaker, these appear to be good, sound ideas. Yes, it is very important to take account of the repercussions of the fraud on the victim and also on the community. As I was saying before, when a fraud like this occurs, it impacts the livelihood of financial advisers everywhere. All of a sudden they find themselves under suspicion and no doubt there has been a drop in their business. It is good to bring in the idea of the impact on the community.

I would urge the hon. member not to view this as a partisan issue. Unfortunately, often terrible situations must occur before governments act. The government has had four years to address this issue, but is only addressing it after the Earl Jones case has come to light.

It is important that we treat this as a non-partisan issue because the victims themselves do not have much patience. It is good that the government has brought in some legislation. It is good that the parties are working together to send the bill to committee.

I do not think there is anyone in the House who does not feel sympathy for victims of financial crime. Earl Jones' crime was committed in my riding. There really is not a day that goes by that I do not think about those victims and what the loss of their lifesavings means for them and their families.

There are some very good ideas in this legislation. Maybe we could make the legislation better, tougher when it gets to committee. That is the crux of the issue.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Madam Speaker, I want to point out what may be an omission in the statute and I wonder whether the member has noticed it or wants to comment on it.

Clause 4 in the bill deals with prohibition orders against those who are convicted of these types of crimes. The prohibition order would allow the court to give an order prohibiting the offender from seeking, obtaining or continuing any employment or becoming a volunteer in any capacity that involves having authority over money, et cetera. What it does not deal with is a fraudster who is self-employed. The prohibition order only deals with employment or volunteering.

I do not know whether there are any members here on either side of the House who sit on the justice committee where the matter will be addressed.

I can think of one fraudster from Toronto who defrauded many people by selling faulty franchises. A group of people tried to deal with this and get a response from the feds or the province, but they felt that they fell between two jurisdictions. They never did get anything.

The portion of the bill dealing with prohibition orders could address the current problem of the guy who sold all the phony franchises. He is still out there selling phony franchises. The guy is self-employed and most of these guys are. They do not care if they are employees or not.

Could the member comment on that?

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Madam Speaker, my hon. colleague has brought up an important point. That is precisely why committee work is important. It is precisely why we need to send the bill to committee to round out the rough edges.

No doubt members on the government side have taken note of the hon. member's point and hopefully that will be addressed at the justice committee.

[Kevin Sorenson, Conservative, Crowfoot, AB]

Madam Speaker, it is a pleasure to speak to Bill C-52, an act to amend the Criminal Code, which deals with sentencing for fraud.

Before I get into the body of my speech, I want to say that during the break last week and the summer recess, members had the opportunity to go into their constituencies and hear the real concerns of constituents. Not so much during the summer but during break weeks when the schools are still operating, we have the opportunity of going into the schools and speaking to students in grade 6, grade 9 or grade 12 where the curriculum deals with governance and governing.

We have the pleasure of telling students part of what our job in this place is. We have the responsibility of representing constituents, their ideas and concerns here in this remarkable institution. We also have the responsibility of taking their concerns and building law. Sometimes we see a real common sense need for a law change. Other times we hear about certain aspects of law that should be changed to address certain concerns.

The bill we are debating today deals with the frauds that we have heard about more and more often over the past number of years. Stories have come out of the United States. Stories have come out of every province in Canada. They have been around for a long time.

It seems that as time goes on, there is a greater propensity for people to get involved in schemes that are the plan of someone who has sat down, concentrated and drawn up a Ponzi scheme or some type of scam. People get involved in things that may have a certain degree of common sense to them but later they find out that it has drifted and become fraudulent and the people who have perpetrated those offences have done it knowingly. Members have an opportunity to speak about that in the House.

In my riding numerous people have phoned me about these types of scams, schemes and frauds. These things have cost them. We can sit back and think of all the terms that we use, such as, buyer beware, huge risk investments, all those types of things, but speaking to these people on the phone or sitting down in a coffee shop and dealing with individuals who have been hit hard in some cases, there are tears, passion and emotion. In some cases they have lost everything.

In his speech earlier, the minister described what fraud looks like today and why it is a problem for Canadians. Today's criminals are very sophisticated. Any Canadian could fall victim to their schemes.

As the minister said, there are numerous threats to Canadians when it comes to fraud. He mentioned a number of them. There are organized crime frauds. There are forgers, those who work their way into a fraudulent scheme by forging documents that look very official. There are fraudulent telemarketing scams, Ponzi schemes, security frauds, bogus charity scams, accounting frauds, all sorts of mail and personal information theft and many other schemes. It is becoming increasingly difficult for Canadians and their families to detect when they are dealing with legitimate businesses and legitimate charities, or with others that may be fraudulent.

A problem is that by the time many Canadians find out that what they have just invested in or what investments they have had for a number of years have been determined as being fraudulent, in some cases it is far too late. They have handed over their hard-earned dollars for an investment that appeared worthy and safe, but it was not.

Most of my riding is rural. In some cases, although our Internet connections may not be all that great, pretty well everyone is on high speed Internet. Many of the rural communities are not on high speed Internet yet, but through wireless and other things, we have access to it. We are as vulnerable as anyone living in the big cities. All Canadians have money they want to invest. We want to prepare for retirement. We want to be protected from losing the money we worked hard to earn.

In my constituency we see transfers of farms into the hands of the next generation. We see that less and less all the time because the next generation is not really buying into this whole farming thing, but that is another story. However, at some point we do see a transfer of farmland or business or however people have made their livelihood, and as they are ready to move into their retirement, they realize they have a little nest egg. They have cash in the bank. They have sold their farm. They have had their farm sale and they have the proceeds from the sale of the machinery. They have paid off some debts. There may be a small little nest egg left. Many times they are approached by those who are slick, who say they have a way for them to turn that little nest egg into a much larger one, and those people become vulnerable.

There are people in my constituency, indeed probably some who are related, who have received a phone call telling them they have won some gift if they pay for the shipping. They received that one gift, and that was real. They received their gift. Then all of a sudden they are told that if they send more money, they will get a bigger gift, and they have been chosen out of a lot of people. Pretty soon they have invested thousands and thousands of dollars into a scheme. The more they put into it, they realize that they have to keep contributing to the scheme or they could lose it all, so that is what they have done. They have been enticed into it. They are honest and good people who have never, ever thought of breaking a law or being caught up in something like that. The people at the other end are involved in organized crime or they are fraudsters. They do this to hundreds and hundreds of people. They do this to many people in my riding. I know this because I get the phone calls.

At some point Canadians and people around the world are defrauded out of millions of dollars. In some cases it is only $10,000, $15,000, $20,000, but the cumulative effect is that millions of dollars are made by those who say that they will set up a scheme to make some money.

In some cases, we know that the losses can be devastating to individuals and families. I will not go into the devastation that it causes, but we have heard about these losses ending in the break-up of a marriage, the break-up of a family.

A case was reported in the Calgary Herald about a son who knew that something was not right and that something was going on, so he investigated. He was one of the key individuals who brought down a Ponzi scheme into which had been drawn hundreds of people and cost Canadians millions of their retirement dollars. This is part of their response to those types of issues and those types of concerns that Canadians have.

Our government has been elected and re-elected to stand up for Canadians. Today with Bill C-52, we are helping Canada's criminal justice system stand up to fraud. The bill will improve the Criminal Code sentencing provisions for fraud to ensure that sentences imposed on offenders adequately reflect the harm they cause.

Once again we are putting the rights of the victim before the rights of the criminal. In most of our justice legislation, we believe the protection of society is the guiding principle. Bills like this serve to act as a deterrent to those who knowingly set up such a scheme.

For the type of legislation we bring forward today, frauds that have a value of $1 million or more, there will be a minimum sentence of two-year imprisonment. If the fraud was larger than that, as so many are or if there were other aggravating factors at play, the sentence could be well above the two years. This may seem lenient, particularly to victims who have been severely hurt by a white-collar crime. Again, I would remind them that this puts in place minimum sentences.

A number of years ago, a former government said that it would get tough on this kind of thing and it increased the maximum sentences. The problem is very seldom do we see where a judge ever imposes anything close to a maximum sentence. There may have been in a few cases. In many cases, those who set up such schemes, never see any jail or any prison time. This would give certainty to the fact that those who devised such fraudulent schemes would see time in prison.

Bill C-52 goes much further than that. It would also add additional factors to the list in the Criminal Code for fraud offences. The bill provides that if the fraud had a particularly significant impact on the victim because of their financial situation, health or other factors, age or retirement, then these factors should be considered as aggravating and increasing the sentence handed down to the perpetrator of the crime.

As well, Bill C-52 provides that the more sophisticated or complex the fraud is and the longer it lasted, the higher the sentence should be. If offenders broke regulations or if they concealed or destroyed records that would show where the money went and help recover it, that is if they tried to destroy evidence that would serve against them, then these factors should be considered as well and cause an increase in the sentence handed down to the convicted fraudster.

I mentioned just in passing that the legislation will serve as a deterrent. That is what we are trying to do. We are trying to prevent future frauds. The prevention element is found in the new prohibition order, and this can be part of the offender's sentence.

Bill C-52 would make it so that offenders could be prohibited from having authority over another person's money, real property or valuable securities in any employment or any volunteer capacity after they served out their sentence. This means anyone convicted of deceiving innocent people through fraudulent means, enticing them into handing over money or tricking them or whatever, the individual could be prevented from doing it again.

If this measure is used against a fraud artist and that fraud artist continues his or her ways, then the person failing to abide by a prohibition would itself become an offence. We are also insisting that the sentencing court consider if restitution can be ordered. This is where we really give the victims their day in court.

Last night I sat down and read through the bill a number of times. One of the things I noted in it and which we have advocated for a number of years is the whole idea of restitution. The bill states:

As soon as practicable after a finding of guilt and in any event before imposing the sentence, the court shall inquire of the prosecutor if reasonable steps have been taken to provide the victims with an opportunity to indicate whether they are seeking restitution for their losses, the amount of which must be readily ascertainable.

It asks the victims to be prepared to list the amounts that they have lost. It makes it much more accountable in the fact that it is not just rumour that they have lost millions or thousands. It asks specifically how much they have lost and if it will move forward to restitution.

If the bill passes, the sentencing court can consider if restitution can be ordered. We give them their day in court, because the bill also allows for a community impact statement. We have heard about victim impact statements, which are very similar, but this would be an individual who speaks on behalf of the community or constituency of people who have been taken in by such fraudulent activity. In Bill C-52, we make provisions for the delivery in court before sentencing of the community impact statement.

We talk about one or two families or a retired family being hurt, and I have made reference to it in my speech. In many cases people have been hurt by the same scheme. Entire towns or communities can really be affected, although it can be interprovincial and intercontinental as well. The productivity and economies of those communities can be affected in a major way. We are providing an opportunity for these people to speak as an individual or as a community. We are also adding those statements to the considerations before he or she is being sentenced.

I was watching CBC one evening after a certain Ponzi scheme came to light. The individuals had been charged and arrested. I watched as the media covered the victims. One woman spoke on how her sister, I believe, had ended up taking her life for a number of reasons. It was not just because she had lost a lot of money in the scheme, but in some ways it was because she could not live with the fact that she had been sucked in. Other people were asking her how she could be sucked into such a scheme. It absolutely demoralizes the person who has been taken.

I have made some poor investments in my time and I stand back and I think shame on me. However, for some of those who have invested in a scheme where there is nothing to show for it, the shame and disappointment is beyond what they are able to cope with.

We have watched stock markets rise. We have seen people invest in markets and make a significant amount of money. We have seen recently where those markets have cooled down and fallen. People have lost money, but they realize the risk of the stock market or of those types of investments. However, when people put their investment into a program or plan that they believe has very little risk and they lose everything, in some cases it is more than they can live with.

I urge my constituents and all Canadians to take these types of schemes very seriously and to visit the RCMP website. There is excellent information on frauds that are occurring and how to protect themselves and their families. As the Minister of Justice has said, education is our first line of defence. I would encourage my constituents and all Canadians across the country to educate themselves.

I remember parents and grandparents saying, “If something sounds too good to be true, chances are it is”. Although we have seen a lot of things that paid off when we had the strong economy, we now have to educate ourselves. The more Canadians know, the better they will be able to protect themselves. I am proud that our government is standing up to the fraudsters and trying to protect innocent, vulnerable Canadians from them.

I appreciate the opportunity to bring this important issue forward and to speak on it here in the Parliament of Canada.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, the member would know that Canadians, when they deal with their lawyers, they can deal with them properly. If the lawyer steals the money, the money will be reimbursed through the law society. They know they are protected when they deal with security dealers. If the money disappears, the security dealers are properly registered and properly bonded.

Therefore, the issue really becomes why people like Earl Jones are able to operate in an unlicensed, not bonded, unregulated environment. That is why there have to be further regulations put on the banks, just as we have federal regulations dealing with money laundering, where real estate agents across the country have to report suspicious activity. I believe lawyers are supposed to as well, at least that is what they talked about last year. Certainly life insurance agents have to report suspicious activity. If that onus were put on the banking system, these people would be unable to operate very long.

Do not forget, they are transferring money out of the country to tax havens in the Cayman Islands and other places. For all of these fraudsters that is the common element. They deal with banks. Banks are heavily regulated. Bank people are trained to spot suspicious activity. In fact, by law, they have to report deposits in cash over $10,000. It is not that much more difficult to train them to spot suspicious activity on the part of people like this.

Even when Mr. Jones was registering at the bank for his bank account, he should have had to produce registrations proving that he was a licensed investment dealer and that he had the proper bonding and registrations.

This is the type of additional activity at which the federal government should look. The bill is a good first start and we will support it to get it to committee. However, we should be looking at these other areas as well, and I think the member was alluding to that in his speech.

[Kevin Sorenson, Conservative, Crowfoot, AB]

Madam Speaker, I know a number of safeguards are in place already. I know, as the member has already mentioned, banks are required to report certain action that they may see when people walk in and withdraw $50,000 from a bank account or anything over $10,000. They are asked to file those types of reports.

I look across the way and I see a colleague from the Liberal Party whom I sat with on a national security committee. We have studied this. We know those types of withdrawals can be used for terrorist activities. My colleague is correct. It is organized crime.

This is not specific to pyramid schemes. Pyramid schemes are an offence in themselves and are listed somewhere else. However, a lot of this can also be the $4,000, $5,000, $6,000 investments multiplied over hundreds of people, which banks would not recognize it on the one side from those who are investing or losing the money. I think what the member is alluding to is they had better recognize it on those who are perpetrating that activity.

Let me very clear. Very seldom do these individuals use one little local bank and everything is there under one account in one branch or in one banking institution. Organized crime uses hundreds of different institutions. Those people are masters in being able to launder money, but they are also masters in being able to put it into a place where there is going to be very few questions asked.

I am not certain I would disagree with the member. We can always be looking at ways that we can better educate and better protect Canadians. I would hope that our government is doing that.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Madam Speaker, some of the issues the member for Crowfoot talked about are some of the very things I hear from my constituents.

I live in a rural riding that has a fairly large senior population. I know the legislation the government is bring forward is going a long way to help combat some of the issues with which we are dealing.

Earlier today a member from the Bloc Québécois wanted to know if there were any cases where a person who had committed fraud over $1 million had been given a sentence that was under two years. The fact is there have been cases like this.

Could the member for Crowfoot give us a few examples of those types of cases?

[Kevin Sorenson, Conservative, Crowfoot, AB]

Madam Speaker, the answer is yes, there have been. There have been a number of cases where the courts deemed differently because of mitigating circumstances such as first time offence, others with no criminal record or a case where it involved the community's best people. These were people who were volunteers in minor hockey programs or in their communities, but they were also involved.

In R v Cioffi the accused was authorizing loans to fictitious people. She was charged with fraud over $5,000. The fraud amounted to more than $4 million and lasted for four years. The scheme was set up by another person who was accused merely of implementing the program that someone else had set up. The aggravating factors in that case, the court found there was a huge abuse of trust. A large number of fraudulent transactions over a long period of time had taken place, so it was not just that she was caught up for a short period of time. The mitigating factors in this case: she never had an extensive criminal record. The accused did not personally benefit because she had set it up for someone else and the accused was also a victim of fraud. She ended up with two years less a day and the stay was granted.

In another case, R v McCarthy, the accused was charged with three counts of fraud over $5,000 related to two loans totalling in excess of $3 million and the ongoing trading of shares. The court found aggravating factors: breach of trust, considerable amount defrauded, significant number of victims. The mitigating factors were: no criminal record, no threat to the community, a record of community involvement. He received a conditional sentence. The $3 million impact to the economy is one thing that we did not really get into, but a $3 million fraud received a conditional sentence of two years less a day followed by a year of probation. The list is long.

One of the differences between governments is that when the former Liberal government tried to make it look like it was toughening up on this type of crime, it extended the maximum sentence. The courts simply did not give very many people the maximum sentence.

The bill says there will be a minimum sentence, a minimum of two years in prison for any fraudulent activity where people are charged and sentenced. Again, the bill also says we will look to restitution. That is what Canadians want. They want to know that there will be a degree of restitution where we can find it. That is what the bill does.