Bill C-21 (Historical)

Standing up for 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.

Standing up for Victims of White Collar Crime Act

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Madam Speaker, it is always a pleasure to sit in on the debates when the member for York South—Weston gives his presentation. I know all in the chamber certainly have a great deal of respect for his interventions, yourself included, Madam Speaker.

The issue of mandatory minimums has been discussed and debated in this House a great number of times. I think we all have reservation, and the impact they have on reducing crime has proven to be minimal. Certainly if time in jail were any indication of a reduction in crime, there would not be any crime in the United States because the United States' answer to pretty much any social problems and to crime is to lock up people. I know that both Texas and California are rethinking their approach to mandatory minimums. California for the most part is bankrupt because of what it has done with its penal system.

That being said, I know there are some concerns about this bill. Some of the victims groups liked where the Liberal Party amendments were going. As well, the Canadian Bar Association is not totally enamoured with this bill. However, the RCMP has come out in support of the bill and believes it should be a deterrent to these types of crime. I am inclined, and some of my colleagues whom I have talked to about this are as well. It is not a crime of passion or revenge; it is not an emotional crime. This is a very pre-determined crime. It is an organized crime.

I would like my colleague's comments on that. Does this stand apart from other crimes with regard to whether or not mandatory minimums might have an impact on this type of crime?

[Alan Tonks, Liberal, York South—Weston, ON]

Madam Speaker, I appreciate the member's question and his comments with respect to the House listening to the overview that I have given. That is greatly appreciated.

I think the House really appreciates the nature, culture and difference of the scheming that goes on with respect to this type of fraud. It is hard to compare mandatory minimums in other issue areas to this particular type of crime. I would reference that the minimum sentence proposal in this bill will apply when the value of subject matter of a number of fraud offences totals over $1 million, but let us look at the manner in which it would be applied.

For example, if a person is convicted of 10 fraud offences of $125,000, the judge must impose a sentence of at least two years. On the other hand, the minimum sentence applies solely to a person convicted of the general offence of fraud under the subsection.

The bottom line is that, in this case, the mandatory minimum is an attempt through the criminal justice system to give a signal that it does not matter the huge magnitude of the scheming, and so on, but it is the nature with respect to restitution that may be sought and ordered by the judge to pay back the victim, as well as to dispel the idea that one can get away with this. Even if it is a $125,000 fraud, the mandatory minimum will kick in.

So in its attempt to dissuade, to prevent, to put the emphasis on prevention to some extent, I would not suggest that it goes the whole way, but to answer the member's question, with this type of crime, this is the type of amendment to the criminal justice system in terms of the application of mandatory minimums that hopefully will be more effective in prevention.

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

Madam Speaker, even with their 1,200 convictions in the last five years for crimes, versus our five, the Americans are still not satisfied with their system, because under the U.S. Securities and Exchange Commission, which is the regulatory body, they still have had to deal with these issues, such as the Southern Baptist Convention Ponzi scheme, Bernie Madoff and others.

All the evidence seems to point to the fact that there is a coziness that develops between the regulators and the people they are supposed to regulate. They keep hiring people from the companies that they are regulating. They attend the same Christmas parties and go to the same golf tournaments, and that seems to be part of the problem.

If they could appoint or hire people who have a law enforcement type of approach, I think we would all be better off. We would be able to catch these schemes earlier on.

[Alan Tonks, Liberal, York South—Weston, ON]

Madam Speaker, I certainly do not put myself forward as an expert with respect to the kind of situation that exists in the United States. However, I do identify with the victims and the nature of victimization to which the member has made reference.

On the proposition that we have a single regulator, the role of the single regulator and the issues with respect to the Bank Act and the responsibility of accessory after the kind of crime that occurs, we can recall that when we had seniors victimized, where they actually lost their property, there was not even any concern with respect to the banks asking the appropriate questions for detail or law firms being brought into the equation with respect to accountability.

To answer the question, I think the review of the regulatory regime should encompass the kind of questions that had been asked, the kind of—

[The Acting Speaker, Denise Savoie]

Order. I must interrupt the hon. member. His time has lapsed.

Resuming debate, the hon. member for Newton—North Delta.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Madam Speaker, I will be sharing my time with the hon. member for Richmond Hill, who is my good friend and always has very positive contributions to the House. I would also like to thank the member for York South—Weston, who spoke earlier with passion. This legislation is very important to me.

In British Columbia, we go out to the neighbourhoods and crime is one of the key issues we are facing in our communities. I would like to brief Canadians today on Bill C-21. This legislation includes a mandatory minimum sentence of imprisonment for two years for fraud valued at more than $1 million, it provides additional aggravating factors for sentencing that requires the consideration of restitution for victims, it allows sentencing courts to consider community impact statements, and it allows courts to issue prohibition orders preventing convicted persons from contacting the property and money of others.

This past week in Vancouver, there was a terrible incident of gang violence in the heart of a residential neighbourhood. There were 10 people shot and residents were left fearful for their safety. With this type of terrible violence, much like the case of Ephraim Brown, an 11-year-old gunfire victim in Toronto who was caught in the crossfire of gang violence, it is easy to place all of the emphasis on this kind of crime. But we cannot forget about the impact of white collar crime, where families, seniors and the most vulnerable of society can be completely destroyed as a result of criminal acts of fraud.

Just last year we learned about Earl Jones, who took over $50 million from dozens of victims in a 20-year-long Ponzi scheme run out of Montreal. Some of those victims included his own family members. These crimes are often overlooked in terms of the way our justice system responds. These criminals face a slap on the wrist, and more often than not, receive minimal jail time.

Fraud across Canada is reaching epidemic proportions. The latest figures available for 2007 show that there were 88,286 reported incidents of fraud in Canada. What was the conviction rate of these crimes? It was very low, a pathetic 11%. Of that 11%, only 35% received jail sentences, with over 60% receiving probation or a lesser penalty.

This is why it is so frustrating that both the NDP and the Conservatives have voted against a Liberal amendment to Bill C-21 that would have ensured a two-year mandatory minimum prison sentence for criminals who defraud the public through things such as Ponzi schemes.

The amendment would have done two things. Not only would these criminals have faced stiffer mandatory sentencing, but it would have also increased the time served before a white collar criminal could receive parole. There is absolutely no justification for the positions of both the NDP and the Conservatives that were taken in the committee meetings.

Victim groups and those who have had their life savings taken from them testified in front of the justice committee last year to ask for the very measures that this Liberal amendment would have provided. The changes suggested by the Liberal Party came directly as a result of listening to the people.

It is very important for us to go into the communities and listen to the people who have sent us to Ottawa to represent them, instead of listening to the leader of the Conservative Party, the Prime Minister, and take the message back to the communities. That is why my constituents, other Canadians and I would like to know from the members of these two parties, the NDP and the Conservatives, how they can possibly justify their vote to squash such measures.

The government talks a lot about being tough on crime and making criminals take responsibility for their actions. Yet when it comes to white collar crime, as usual, they play politics and vote down amendments that were in the best interest of all Canadians. Similarly, the NDP often plays a champion of victims' rights and protecting average Canadian families and seniors against schemes that take advantage of others. Yet in both cases, their rhetoric does not match up to their actions.

We are talking about people having their entire life savings, their long-term plans for retirement, and their hopes and dreams for the rest of their lives taken away from them. These white collar criminals have no regard for their victims, and just because they are not using a weapon such as a knife or a gun does not mean that they deserve a free ride on the backs of innocent victims of white collar crime.

Lives have been ruined as a result of these individuals. Seniors who have saved their entire lives to enjoy retirement have been forced back to work because they were robbed of their nest egg. Families trying to build a future for their children have been forced to take out loans to fund their children's education. Young couples looking to make an investment to build their future have been destroyed, and many marriages have broken up as a result.

The societal costs of these kinds of crimes are unimaginable. We as members of Parliament, regardless of what party we belong to, have an obligation to protect our constituents. Fraud and Ponzi schemes know no boundaries when it comes to region, race or financial background. Within society, the rate of these crimes has been increasing rapidly because our justice system has done little or nothing to deter those types of crimes. The reward far outweighs the risk at the moment.

The will of the House was to send Bill C-21 to the committee stage to listen to interest groups representing victims and to craft the best piece of legislation possible to really crack down on white collar crime. Yet after hearing from these victims groups, the NDP and the Conservative government chose not to listen to their requests. The scope of this bill in its current form is far too narrow when it comes to defining fraud, and it does little to provide a foundation to fight it.

There is no mention of increasing resources to police departments across the country to properly tackle these criminals. As I mentioned, there are no provisions for longer periods before parole eligibility; and it attaches a dollar figure to mandatory minimum sentencing when the act of Ponzi schemes such as the one in Montreal should not be punishable simply by the threshold of a single figure.

[The Acting Speaker, Denise Savoie]

It being 5:53 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

The hon. member will have his period of questions and comments when this comes back on the orders of the day.

(Bill C-21. On the Order: Government Orders:)

December 14, 2010--Third reading of Bill C-21, An Act to amend the Criminal Code (sentencing for fraud)--Minister of Justice.

(Bill read the third time and passed)

(Bill S-5. On the Order: Government Orders:)

December 10, 2010--Minister of Transport, Infrastructure and Communities--Consideration at report stage of Bill S-5, An Act to amend the Motor Vehicle Safety Act and the Canadian Environmental Protection Act, 1999.

(Bill concurred in at report stage)

The House resumed from October 29 consideration of the motion that Bill S-211, An Act respecting World Autism Awareness Day, be read the second time and referred to a committee.