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

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

Madam Speaker, looking back to 1920 and Charles Ponzi in the United States, he had collected $10 million from 10,000 investors by selling promissory notes that claimed to pay 50% profit in 45 days. That seems to be a pretty hefty amount. When the scheme was exposed, the Boston bank collapsed and investors lost most of their money. Indications are that in July 1920, he was taking in about $1 million a week. He made an arrangement with the bank to deposit the funds.

The bank itself, Hanover officials soon realized that Ponzi was not paying his initial investors with interest income but with the deposits of the new investors. Nevertheless, the bank eagerly sold Ponzi a large amount of its stock. The bank officials knew he was doing something wrong, and yet they let him in as an investor in their bank.

Interestingly enough, Ponzi declared bankruptcy, but the bankruptcy court ordered all of the people who had been paid by Ponzi during the life of the scheme to return the proceeds to the bankruptcy trustee who distributed the money on a pro rata basis to all of the victims. Ponzi himself was eventually convicted of fraud in both state and federal courts and imprisoned for several years.

Even then, way back in 1920 there was some restitution made but it was done through the bankruptcy court, not through a law like this one.

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, I think this is a very good example from history. In Quebec, we talk about pyramid schemes, but we need to remember that it was Mr. Ponzi who invented this system. Once again, it seems to me that the government could send much clearer signals that fraud does not pay in Canada and that victims will not be left out in the cold.

For example, if the Criminal Code provisions on confiscating proceeds of crime were amended to include fraud of $5,000—we are not talking about fraud of $1 million—that would send a very clear signal from the outset that offenders cannot benefit from the proceeds of their fraud or crime.

The police forces could also be reorganized, as my colleague from Marc-Aurèle-Fortin proposed. As minister of public safety, he had experience with the Carcajou squad, which is now a model for similar squads. Again today, the Government of Quebec announced that it was setting up a squad modelled on the Carcajou squad. It takes police to deal with white collar crime, but it also takes accountants and financial experts who can track down these fraudsters. I do not sense either from this bill or from any of the Conservative government's actions that it has a real desire to attack the root causes of economic fraud, white collar crime and white collar criminals.

As I said, on the contrary, a number of political decisions that have been made in recent months and years show that the Conservatives are making white collar criminals' lives easier.

[Serge Cardin, Bloc, Sherbrooke, QC]

Madam Speaker, I congratulate my colleague on his speech. Some points were not surprising, but were particularly concerning, especially the reference to the Minister of Public Works, who said that we were just following the wind. But the member confirmed that we have been proposing eliminating parole after one-sixth of a sentence since 2007.

The Conservatives are trying to take advantage of the mood in the country and among people who have been victimized by these types of fraud. Our colleague also mentioned that for cases of fraud or crimes involving large amounts of money, most sentences were longer than two years. The government is now saying that for $1 million, it is two years.

In Mr. Lacroix's case, who cheated some 9,000 people out of about $141 million, a judge sentenced him to more than 13 years. There is a message to be found there too. He was sentenced to 13 years, but how much time will he serve? Two years and a few months? If he had received a sentence of one day per person victimized, for the 9,000 people affected, that would have amounted to 24 years. Even with 24 years, one-sixth of the sentence would be four years. So there would be a two-year sentence for $1 million, but a four-year sentence for $141 million, by serving one-sixth of the sentence.

Furthermore, the government refuses to do anything about tax havens. The Minister of Public Works will not budge, claiming that it is difficult to organize. But eliminating parole after one-sixth of a sentence has been served, that is relatively easy.

I would like to hear what my colleague thinks about these points, which I believe are very important.

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, I thank the hon. member for Sherbrooke for his question.

A bill was introduced before the House to abolish the two sections that allow for parole after one-sixth of a sentence has been served. It was not complicated. The Conservative government was asked to pass it at all stages in the House, but it refused to do so. It has some explaining to do to the public regarding why it refused to pass a very simple bill at all stages, a bill that would have eliminated the practice of granting parole after one-sixth of a sentence has been served.

Perhaps the Conservatives still had something else in mind—that is possible—but there was no reason to delay that. If Vincent Lacroix should happen to be released in January 2011, at one-sixth of his sentence, the Minister of Public Works—although I must say, I doubt he will still be the minister by then—will have some explaining to do. He will have to live with the fact that, because of partisan politics, he refused to work with the Bloc Québécois to find a real solution to deal with crooks. In that regard, I think the Conservatives will have some explaining to do in the days ahead, especially in committee, regarding their refusal to help eliminate the practice of parole after one-sixth of the sentence.

In closing, I would remind the House that this proposal has been in the Bloc's platform since 2007. In their 2007 budget, the Conservatives put an end to double deductions of interest. Today, we are still proposing the elimination of parole after one-sixth of a sentence, but the Conservatives are backpedalling on their 2007 proposal concerning double deductions of interest for Canadian investments abroad.

[The Acting Speaker, NDP, Denise Savoie]

Resuming debate, the hon. Parliamentary Secretary to the Minister of Multiculturalism.

[Some hon. members]

Oh, oh!

[The Acting Speaker, NDP, Denise Savoie]

Order, order. The hon. parliamentary secretary.

[Alice Wong, Conservative, Parliamentary Secretary for Multiculturalism]

Madam Speaker, I am pleased to have the opportunity to speak on the subject of Bill C-52, An Act to amend the Criminal Code (sentencing for fraud). The bill contains a number--

[Some hon. members]

Oh, oh!

[The Acting Speaker, NDP, Denise Savoie]

I would ask the hon. members who want to pursue the debate to leave the House.

[Alice Wong, Conservative, Richmond, BC]

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 C-52 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 Minister of Justice. 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.

[John Cannis, Liberal, Scarborough Centre, ON]

Madam Speaker, the hon. member so eloquently talked about what we have to do to protect our citizens or people in general who get defrauded. She talked about restitution and all that in the bill. Yesterday we were debating another crime bill and how we get the judiciary to enforce it. We talked about mandatory sentencing.

I want to ask the member simply this. We have heard the story over again. We could sit here as legislators and draw up the best legislation and so on. What is in this piece of legislation that will enforce the law, for example, that will guide the judiciary to put penalties to bring these people to justice and to get justice for the victims? What provisions are in this piece of legislation which will do that to help these people?

[Alice Wong, Conservative, Richmond, BC]

Madam Speaker, I have said quite clearly that the bill does provide the judicial system and the judge, the court, with the ability to do so, because when they do the sentencing, they have to look at that possibility and also provide the victim with the possibility to apply for restitution.

Then we also facilitate those victims. Very often we only protect the criminals. We always forget the victims. In this bill we protect the victims because their money was taken. They were cheated out of their money and had to suffer, without any means of getting their money back. This bill handles that exactly.

[Roger Pomerleau, Bloc, Drummond, QC]

Madam Speaker, we have spoken at length today—and some colleagues did so before me—about criminality in the United States as an example for what we should do here. We know that in the United States, much harsher sentences are given to many more people. Their prisons are full and yet their crime rate is at its highest.

I have always thought to myself that often in the United States much harsher sentences are given for fraud and money matters than for attacks against individuals. For example, Al Capone was locked up, not for the murders he committed, but for the taxes he failed to pay. All that because Eliot Ness's team that was investigating him, there were some very good accountants. It is a good example of what we want or need here and that is for police services to be specialized today with accountants to properly pursue people who commit fraud.

I think my colleague should acknowledge, in light of the U.S. system, that there is no real correlation between being tough on crime and reducing the crime rate. That is what I would like her to address.

[Alice Wong, Conservative, Richmond, BC]

Madam Speaker, we have a very unique situation here where for too long we have been protecting criminals.

When we talk about prisons, in other words, we could just look at the costs without realizing that we have to look at the victims. There are the social costs to the victims. They have lost their hard-earned money, especially those who have lost their pension income. Their lives depend on that.

We can never really belittle the seriousness of those crimes and compare them to those who attack people physically. I think there are other means of handling those other issues which are in other areas. The Conservative Party is the only party which works hard to bring forth tough measures to fight all crimes. Unfortunately, we do not get all the support from the opposition.

I am hoping that this time, from now on, members opposite will really honour Canadians by acknowledging that this is a special situation where we are doing things in our own Canadian way.