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

[Kirsty Duncan, Liberal, Etobicoke North, ON]

Mr. Speaker, we support this bill. One of the recommendations we would like to consider is the parole after serving one-sixth of the sentence. That needs to be looked at in committee.

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

Mr. Speaker, I am very pleased to hear that the Liberals will be supporting the tough on crime agenda of this Conservative government. I wish they could somehow convince the Bloc members to do the same thing and to protect victims of crime rather than protect criminals. It would be very refreshing.

I was wondering if the member could comment on the new sentencing tool for this particular offence. It is preventing the commission of further crimes. Indeed, the court can actually order that people who are found guilty of these particular crimes or are under court order are not able to participate or continue to help, for instance, non-profit groups, or deal with money, securities or land. In particular, this will help people not commit further offences nor commit further aggravating factors. We know they have already committed the offence. They are already under the jurisdiction of the court. This will ensure that they cannot deal with money and other securities.

I would like to hear her comments on that, and whether or not she supports that particular aspect of this bill.

[Kirsty Duncan, Liberal, Etobicoke North, ON]

Mr. Speaker, I think I was clear in saying that the prohibition for handling another person's money is important. Someone who has been caught should not be able to handle other people's money or property.

We also think it is very important that victim impact statements be heard and that there is an attempt to redress losses.

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

Mr. Speaker, I think the member knows that the United States has fairly tough laws and certainly has a far better track record than we have of putting some of these white collar criminals in jail.

However, the fact is that Bernard Madoff got away with his crimes for so long because the regulatory authority was basically controlled by insiders and people in the industry. In fact, it was a member of the regulatory body who brought the whole case to the authorities on several occasions and they ignored him. That has been tied to the fact that when governments appoint the regulatory bodies, they actually take people right out of the industry, which compounds the problem. They should be appointing people who are at arm's length from the industry in the first place.

I would ask the member to comment on that.

[Kirsty Duncan, Liberal, Etobicoke North, ON]

Mr. Speaker, at the beginning I gave examples of large corporate crimes in the United States, such as Adelphia and WorldCom.

One of the things I mentioned in my speech is that there needs to be more resources for our police for fraud investigations. So tax them at the beginning.

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Speaker, I have a question for the member for Etobicoke North. As we all know, that period of time at the end of one's sentence, when the person is let out on probation, is often to allow the convicted person into a program of transition back into the community, that they are not just simply released into the community, that they go into a transitional program to help them better prepare for a life in the real world again, as opposed to just releasing them unprepared.

I am wondering if the member for Etobicoke North has any feelings about the value of this transitional period at the end of a sentence as opposed to simply being thrown out into the street.

[Kirsty Duncan, Liberal, Etobicoke North, ON]

Mr. Speaker, my hon. colleague raises an important idea. However, it is the one-sixth parole piece we have to come back to. I think this is something that really needs to be looked at in committee.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Mr. Speaker, it was interesting to see the NDP members stand up and talk about getting tough on crime when they, quite frankly, refused to vote for our agenda and protecting victims.

I saw one particular clause of this proposed legislation from the Conservative Party to get tough on crimes and that was in relation to data from 2006 and 2007 only 20% of fraud convictions resulted in a restitution order. Those victims, who are as a result of whatever activity of a criminal, are out of money and out of pocket. They often are looking for that. It was a bit shocking to see that only 20% of those people who are actually damaged in this way would receive a restitution order from the court.

In this particular circumstance, I thought it was a great initiative of this Conservative government in that it would require sentencing courts to ask whether reasonable efforts were being made to give victims a chance to indicate whether they wanted restitution, which I imagine they would.

Secondly, the courts would also be required to consider restitution in all fraud cases and to provide reasons if restitution is not ordered. I thought this was great because it obviously stands up for victims and not for criminals. I would like to hear the member's comments in relation to that.

[Kirsty Duncan, Liberal, Etobicoke North, ON]

Mr. Speaker, sadly, in my riding we have had numerous cases of fraud. We have had elderly people come to us who have lost everything. The police have told us that they do not have the resources. They have told us that even for a small fraud it takes an average of two years to chase the evidence.

It is important that we give the police the resources and the tools they need to chase corporate fraud. It is important that we protect Canadians. We have the responsibility to provide restitution.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I am pleased to rise on behalf of the Bloc Québécois to debate Bill C-52 , which is getting off to a bad start.

This bill was announced by the Minister of Justice on Monday morning. For the past few weeks we have been asking questions in the House. I hope that my colleagues opposite, who are always reading notes, will remember that the Bloc Québécois was already asking questions about this bill on June 15, 2007. It was announced with great fanfare everywhere in Canada but in the House of Commons.

On Monday, the bill was announced in Calgary by the minister, in Montreal by the Minister of Public Works and Government Services, and in an Ottawa hotel by the Minister of Justice. The only thing they did not do was distribute a copy of the bill to the journalists present. However, they explained what it was all about. They are giving this bill a poor start in life.

We would like to tell this House that we will be voting in favour of the bill. I hope that my Conservative colleagues will finally understand that we are voting for this bill not because we support their agenda but because we intend to study it in committee and make substantial amendments. I hope that is clear to our Conservative friends. They should not believe that this bill will be passed handily. We will be making improvements in committee.

The chair of the Standing Committee on Justice and Human Rights told the House yesterday that all bills would be studied quickly in committee. I have good and bad news for him: the good news is that I hope he will be chair of the committee for a long time; the bad news is that we will take whatever time is necessary to study this bill thoroughly and, in particular, to add what we believe a bill should contain, that is, sufficient measures to fight, rein in or at least adequately punish these white collar criminals.

I am going to share a true story. A man from Quebec just pleaded guilty to charges of fraud, so we can talk about it. Vincent Lacroix defrauded 9,000 investors. It is true, so I can say it. I am not talking about Mr. Jones, who also defrauded a lot of people. I am talking about Mr. Lacroix, who scammed people out of more than $150 million.

The bill has good intentions, but does anyone believe that the $150 million Vincent Lacroix stole is still sitting in a Canadian bank account? I hope that nobody in the House is naive enough to believe that the money is still in Canada.

This bill has two big problems. If we want to go after white collar criminals, we have to go after tax havens. I will explain what tax havens are, because I have a feeling that my Conservative colleagues do not really get it.

Their government has supported tax havens, and even helped create them in the first place in countries like Panama, Jamaica, the Bahamas and the Cayman Islands. Anyone in Canada can deposit a million dollars in an account anywhere—be it Jamaica, the Caymans or Panama—but the money must be declared. Interest earned on the money must be declared. Money and interest invested in other countries must be taxed in Canada. But some people conveniently forget that they have put money in accounts in other countries, and they conveniently forget to declare it. Consequently, those countries become tax havens.

What do people think white collar criminals do? We are taking on extremely smart criminals here. We have to be honest and tell it like it is. These criminals are brilliant. They plan their schemes carefully. They spend months, even years, planning their schemes.

What do they do? They cheat people and take their money.

Are they going to deposit $150 million in some off shore account overnight? No, instead they will deposit small amounts: $1 million, $500,000, $2 million, $700,000. They deposit money outside of Canada a little at a time and then forget about it. They also forget to pay back those who gave them the money to invest. So they are in fact stealing from and cheating people.

Until we eliminate tax havens, this bill is doomed to failure. It is not complicated; it is doomed to failure if this government does not understand and agree that tax havens must absolutely be eliminated in conjunction with this bill, because that is where the money goes.

I hope there is no one—least of all the hon. member for Lévis—Bellechasse—naive enough to believe that Vincent Lacroix's money is still in Canada. I hope nobody believes that, because if they do, they are out in left field.

There are two important points here. The first, which I already addressed, is that tax havens must be eliminated. We have already asked the minister about this. This is about criminal law. Some of us have practised criminal law. I did for 30 years. I can say for sure that during my entire career, I never saw anyone sentenced to less than two years for fraud involving over $1 million or $2 million. I have never seen that.

Mr. Burns from the Trois-Rivières area just pleaded guilty to fraud involving $4 million. He stole $4 million. Does anyone really believe that this man will be sent home to put his feet up and relax, as the members across the floor would have us believe? Please. The proof is that the organization that monitors Quebec's financial markets prosecuted Vincent Lacroix and managed to get a sentence of 12 years. That sentence was reviewed, re-examined and reduced by the court of appeal.

That is not the end of it. Mr. Lacroix was convicted and has just pleaded guilty to fraud in the amount of $150 million. Is it possible that he will be given a sentence of less than two years? What is he going to do? I will tell you what he is going to do. He has pleaded guilty and the judge has sentenced him to 12 or 13 years. If the one-sixth rule is not eliminated, he will be eligible for release after serving one-sixth of his sentence. That has been requested. Let us do the math: dear Mr. Lacroix will be eligible to get out of prison after one-sixth of his sentence, in a year and a half or two years. He will then be 50 years old. And what will he do then? He will get on a boat or a plane or a train or a subway, or get in a car, or all of them if necessary, to get as far away as possible and go to whatever tax haven he has put his money in. That is why speedy action must be taken.

And that is the problem with this bill. At present, it is not possible, because the government is going about it piecemeal, amending anything at all in the Criminal Code, and introducing things. I think the Minister of Justice neglected and forgot to look at his Criminal Code when he introduced this bill, because when we consider the victims, the court has to be sure, before sentencing, that the victims have been heard. That is in section 718 of the Criminal Code. Why is he putting this in the bill? It is not necessary, because it is already there. What point is there in putting it in again? It is just one more thing to complicate the Criminal Code, according to the judges.

We are saying that the one-sixth of sentence rule has to be eliminated, and that we have to tackle tax havens. This is urgent. It has to be done at the same time as this bill is supported, amended, changed and chopped up in committee. It all has to be done at the same time, and the parole system has to be eliminated.

The best one is what I heard in this House yesterday afternoon, when the Minister of Public Works and Government Services told this House that the Minister of Public Safety was currently looking at the parole system and did not want to go at it piecemeal, and rather wanted to make comprehensive changes. That is really laying it on a bit thick, since that is exactly what they are doing in the Criminal Code.

They are chopping it up and amending it. If it is not section 742, it is section 350. If it is not section 350, it is section 132. This government will amend anything anywhere, without making sure there is any logic behind it. That is what the judges are criticizing it for. It has been criticized by the Quebec bar and in argument in various court cases. Unfortunately, judges cannot speak and do not often speak. When they do, however, particularly retired judges, they say that this government has no vision.

Tough on crime: that means nothing. It means nothing when they do not take all the appropriate action.

This bill is like Bill C-42 yesterday. They are eliminating conditional sentences. Where will those people end up? Unfortunately, they will end up in the prisons of Quebec, the prisons of Ontario, the prisons paid for by provincial governments . The prisons in Quebec are overflowing right now. The same is true in Alberta, in Vancouver, and everywhere in Canada. They are thinking no further ahead than to respond to a supposedly immediate need.

It is really too bad, but this bill does not meet society's needs at the moment. This is something the Bloc has criticized and will continue to criticize. In addition, the bill could send the wrong message. Fraud in the amount of $2 million or more warrants a sentence of two years or more in prison. In other words, someone committing fraud in the amount of $1.5 million would deserve a six month prison sentence perhaps. That is what it says. It runs the risk of sending the wrong message and resulting in lesser sentences. At the moment, the average sentence for fraud of over $2 million is at least five years, and I checked out only the sentences in Quebec and some elsewhere in Canada. I did not look further afield. It is a minimum of five years. What have they done with this bill? We do not need this. The sentences already exist and they are longer than two years.

Other things must be dealt with. They have been telling the Bloc for a very long time that their tough on crime policy requires a series of measures that, in combination, will ensure that crime is fought properly. For example, a police squad has to be established. We have to stop thinking the RCMP is limited to catching drug dealers. It will have to become specialized. There will have to be special squads, which some of us call the accountants or auditors, that may consist of police officers. Some officers did not know the other side of this. In the past, there were police officers who knew about drugs. That is good and can continue, but special squads will have to be set up and the people in them will have to be able to read a balance sheet and follow a trail.

I have explained that to the Minister of Justice. I do not think he understood, so I will explain a little more to him. Does he think that the funds appearing on balance sheets exist? Those who commit fraud for huge sums do all sorts of things. They are really brilliant. They can have balance sheets say things that practically no one can understand. It takes special squads. The banking regulations must be tightened. Bank secrecy is all very well, but today, in our situation, the banks must cooperate with the police squad on the trail of white collar crime. The Income Tax Act must be amended.

In addition, I hear my colleagues opposite talking about confiscating assets. I heard the member from the Quebec City region, the Parliamentary Secretary to the Minister of Justice, who sits on the Standing Committee on Justice, say on air yesterday that it will be possible to remove and seize assets belonging to white collar criminals. Is someone in this House dreaming? Do they think that white collar criminals bought themselves 44 houses, three castles and four boats? Oh, come on! They buy themselves a house and maybe a cottage, but all the money is in tax havens. Often, the house is not in their name but in the name of their brother or sister. How will it be proven that the house was purchased with assets or money from the fraud perpetrated by Vincent Lacroix? Good luck! That is what is happening now. So, this money has to be tracked and the special squads will be able to do it.

I was talking about tax havens, and they should certainly be eliminated. They are a great place for hiding money, stealing and committing fraud. We should also abolish the right to parole after one-sixth of the sentence has been served.

I would go even further. Although I was a criminal lawyer and defended people accused of serious crimes, I have always said and will continue to say in the House that parole should be earned. That should be included in the bill because people who do nothing, who just sit in prison and wait for a quarter or a sixth of their sentence to go by, are not doing anything to earn their release. They are just sitting and waiting in these schools for crime, which is what penitentiaries are. If they do nothing, they do not deserve parole. It has to be earned.

Programs have to be made available. If people do not participate in them, they should serve their full sentences. That is what we say and what I have been repeating in the House ever since I was elected in June 2004. Criminals must serve their sentences. We do not need minimum sentences. They do not solve anything. But criminals must serve their sentences. As things stand now, people sentenced to three years in prison do not even serve eight months.

Nothing can be done with people like that. They are sent to prison for three years and get out after eight months. They have learned nothing. That is the problem the Conservatives do not understand. If we want to deal seriously with crime, we have to deal seriously with the reason why criminals are able to get out most easily, and that is parole. We have to put an end to this system which allows people to be released after serving one-sixth of their sentence. They do not even serve a third of it. Conditional release has to be earned.

We think this bill should be studied in committee and the justice minister should appear before the committee. I already know what my first question will be for the minister. I hope he will be prepared and that someone on the other side will tell him. Has he ever seen sentences of less than two years handed out in cases of fraud over $1 million? If someone can answer that, I would like a response as soon as possible. This kind of fraud generally attracts sentences of six or seven years.

At this stage, I can say that the Bloc Québécois will be in favour of the bill. However, I would not want this to be misunderstood. I will say it one last time. It is not at all because we agree with the Conservatives’ tough on crime program. It is because we want to amend this bill to reflect what modern Quebec society wants.

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

Mr. Speaker, I applaud the member for giving great notice to the Minister of Justice of the first question he is going to ask at committee. Let us get the answer, because it is an important question. Just how many times has the sentencing for serious fraud offenders involving large amounts of money gone in the wrong direction, at least from the point of view of the common man?

Bill C-52 is an important reform, and there are reasons it is happening now and going ahead as opposed to having happened 25 or 50 years ago.

The Parliamentary Secretary to the Minister of Transport suggested that opposition parties were joining the Conservatives in their get tough on crime agenda. I just want to signal as one member that that is absolutely not the case, but there are many members in the House, and I think all opposition parties are going to support the bill for good rational reasons.

I would like the hon. member to comment on the insinuation that somehow the get tough on crime agenda has been adopted by all parties in the House.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I agree with my colleague. The Bloc Québécois does not and certainly will never support the Conservatives’ tough on crime agenda.

We have figures now showing that this magical tough on crime approach does not accomplish what it is supposed to accomplish. According to US figures, minimum sentences have not reduced crime, quite the opposite.

Minimum sentences are not a solution for a fact that is easy to understand, namely, that crime cannot be reduced by imposing longer sentences. What we are trying to make the Conservatives understand is that criminals should serve their time behind bars. Let them serve their time in prison.

If we manage to make them understand that, we will have taken one step in the right direction, at least.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Speaker, my colleague from Abitibi—Témiscamingue failed to mention one very important factor in this bill, and that is the victims of fraud or white collar crime.

Restitution is an important part of this bill. It affects both adults and minors.

On October 14, I was at the Centre jeunesse in Lévis, which is doing excellent work in the Chaudière-Appalaches region. Officials there told me that when it comes to preventing crime and encouraging young people to stop committing this type of crime, the idea of restitution is very important. So there is something in this bill about restitution for both adults and minors.

The bill would require judges to consider restitution from the offender in all cases of fraud involving an identified victim with ascertainable losses. There are different measures to allow for this. It would also require the Crown to advise the court what steps have been taken to allow victims to set out their readily ascertainable and quantified losses to the court so that restitution can be considered.

So this bill has an extremely important aspect that would acknowledge the losses incurred by victims. I would like to ask my colleague whether he plans on supporting these measures in the bill. Does he plan on supporting the bill in the House, but also, when the time comes to vote, will he rise in this House to support it?

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I will just say first that, unlike some members of this House, I have never remained in my seat and I have always voted. I will vote again, and I will vote for this bill so that it can be chopped up, changed, amended or transformed in committee, as the public wants.

I will now answer my colleague's question. If he were to read section 718.2 of the Criminal Code, he would see that everything in this bill that has to do with restitution is already in the Criminal Code. Judges shall—not “may” or “could” or “are not required”, but “shall”—ensure that victims have been heard. This is not an option; judges must hear the victims.

This is exactly what the judge did in the case of Vincent Lacroix. He met with the victims' association, as he is required to do under the Criminal Code. There is no need to include this in the bill, because it is already in the Criminal Code. This is what we would call needless redundancy. The government is not tackling the real problem, but sending up a smokescreen by saying that this is a major measure. It is not a major measure at all. It is already in the Criminal Code. There is no need to put it in again.

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

Mr. Speaker, I think the government is offering a lot of false hope here if it thinks people will get proper restitution for these schemes.

The member has rightly pointed out that the big problem here is that the government needs to come to grips and deal with tax havens. The people who run these schemes, particularly Ponzi schemes, get money out of the country. They put money in Panama and the Cayman Islands so that when the time comes and the scheme has unraveled, there really is no money left to give back to the people in terms of restitution.

The government needs to deal with the whole issue of tax havens but, more important, it needs to deal with the whole issue of industry insiders who are running the regulatory bodies. We need to take action in those two areas to prevent these things from developing in the first place, because once they develop it is too late.