Justice Committee on Oct. 22nd, 2009

[The Chair, Conservative, Ed Fast]

I call this meeting to order. This is meeting 41 of the Standing Committee on Justice and Human Rights. Today is Thursday, October 22, 2009. We're continuing our study on organized crime in Canada.

I want to thank all of the witnesses for attending. You may know that we undertook the study some time ago. We heard witnesses in Ottawa. We've already travelled to Vancouver, where we heard a lot about street gangs. I think we on the west coast have a lot to learn from you because you've had your own challenges in Quebec and you have had some successes, so we're anxious to hear some of the solutions you're proposing.

In any event, I just want to go through the list of witnesses. Representing the Barreau du Québec, we have Giuseppe Battista as well as Nicole Dufour. Welcome.

Representing the Canada Border Services Agency, we have Angelo De Riggi. Representing Criminal Intelligence Service Canada, we have Pierre-Paul Pichette. Representing the Royal Canadian Mounted Police, we have Inspector Sylvain Joyal as well as Inspector Martine Fontaine. And representing the Sûreté du Québec, we have Inspector Denis Morin as well as Francis Brabant.

Welcome to all of you.

What we'll do is go in the order that I've mentioned. We're starting, actually, with Angelo De Riggi. Then we'll move up to the Barreau du Québec.

Please proceed.

[Angelo De Riggi, Manager, Regional Intelligence Division of Quebec, Canada Border Services Agency]

Do I start in English or French?

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Your choice.

[Angelo De Riggi]

Mr. Chair, honourable members of the committee, thank you very much for inviting me to participate in today's hearing.

I represent the Canada Border Services Agency, Regional Intelligence Division of Quebec. My name is Angelo De Riggi.

For the Border Services Agency, the Quebec region is the second largest in terms of size and has an 813-kilometre border with the U.S., the longest shared border in Canada.

The Canada Border Services Agency is responsible for securing Canada's borders at our ports of entry, which consist of 32 land border crossings, 25 airports—including three international airports—nine marine ports, six railroad stations and five inland customs offices.

Currently, there are approximately 2,400 employees working for the CBSA in the region.

Each year, we process more than four million air passengers, six million road travellers and around two million commercial releases. Of these, we conduct nearly 600,000 examinations each year. Last year, CBSA and the Quebec region took nearly 16,000 enforcement actions in the travellers' field section resulting in 2,451 narcotic seizures.

[The Chair, Conservative, Ed Fast]

Mr. De Riggi, could you just slow down a bit? The interpreter is having trouble. Thank you.

[Angelo De Riggi]

The result was 2,451 narcotic seizures and 378 currency seizures at entry points alone.

The Intelligence Division of the CBSA has the mandate to identify the threats and to communicate, in due time, strategic operational and tactical intelligence in order to support the activities of CBSA and Citizenship and Immigration Canada. We apply these principles with our law enforcement partners, that is to say the Sûreté du Québec, the RCMP, and all of the other law enforcement agencies in Quebec.

Our national priorities are terrorism, illegal immigration, narcotics, money laundering, and strategic exports. These are the targets that we have.

The Intelligence Division is divided by mode of transportation, that is land, marine and airport. Within these teams we assign intelligence officers to different joint projects and task forces.

The different joint forces operations dedicated to fight organized crime which we contribute to are: the Integrated Border Enforcement Team at Valleyfield, Lacolle and Stanstead; the National Port Enforcement Team—Port of Montreal; a Combined Forces Special Investigation Unit, the UMECO; the Integrated Proceeds of Crime Unit, the IPOC; the Federal Airport Investigation Unit, the SEFA—Pierre-Elliott-Trudeau; the Armed Munitions and Explosives Joint Task Force with the Sûreté du Québec and other police forces—we are part of this team; liaison with different law enforcement partners; and liaison with the RCMP drug section.

During the course of 2008-2009, the Intelligence Division has also assisted operations dealing with narcotics and money laundering by collecting, analyzing and disseminating intelligence to the front-line officers. Our primary mandate is to give front-line officers information so that they can intercept goods at the ports of entry.

We assign intelligence officers to different projects who have the knowledge of international transportation, port and airport operations and border operations. The experience and knowledge of the intelligence officers have contributed to furthering the investigations and the fight against organized crime.

[The Chair, Conservative, Ed Fast]

Thank you. I think you understand the process. Each organization has 10 minutes to present, and then we'll open the floor to questions from our members.

Mr. Battista.

[Giuseppe Battista, President of the Committee on Criminal Law, Barreau du Québec]

Thank you, Mr. Chair.

Thank you, members of the committee, for having invited us. I am speaking today as Chair of the Advisory Committee on Criminal Law of the Barreau du Québec.

We would like to take this important opportunity to reiterate a few messages and concerns that we have been expressing for some years now in relation to the reform of criminal law.

First, the toughening up of criminal laws, through stiffer sentences and the elimination of prosecutors and the courts' judicial discretion, in our opinion, undermines the effectiveness of the criminal justice system.

Second, in order to improve the efficiency of the criminal justice system, whose ultimate goal is to do justice and not to punish, two things seem obvious to us.

First of all, we must ensure above all that police and prosecutors working on organized crime investigations receive the financial resources they require. Investigators must have the technical and legal support they need during investigations whereas prosecutors must have the opportunity to set up teams to study the cases and to adequately prepare them in order to see them through to their conclusion.

Secondly, the modernization and simplification of criminal procedure are also desirable. On this issue, we refer you to the Report of the Minister's Roundtable on Criminal Law, which followed a meeting held in Toronto on November 1, 2002. We could also refer you to the deliberations of the symposium on criminal justice organized by the Canadian Association of Chiefs of Police, which all the other stakeholders in the justice system participate in.

I would like to refer you to some of the elements in the Report of the Minister's Roundtable on criminal law.

First, this meeting brought together 26 criminal lawyers and academics from across Canada. They were invited by the Department of Justice to discuss criminal law reform in November 2002. While the report on these discussions is not a transcript of the points of discussion upon which there was consensus, it is a first step in a continuing process of public consultation by the Department of Justice to help identify criminal justice priorities.

The document indicates that Criminal Code reform should reflect appropriate social and economic values as well as the enhancement of local resources. The minister at the time supported the idea of the need for a pre-determined set of values to guide the reform.

As for values in criminal law, if we rely on a public policy document published by the Department of Justice in 1982 entitled “The Criminal Law in Canadian Society” there are two major objectives in criminal law: preservation of the peace, crime prevention and protection of the public—the objective of security; and fairness, impartiality and the protection of the rights and freedoms of the individual against the powers of the state and the provision of a fitting response by society to wrongdoing—the goal of justice.

There is an inevitable tension between these two goals. A free and democratic society has the challenge of finding a balance between these two objectives. We would like to emphasize some of the values drawn from the report on the roundtable in Toronto in 2002, to which criminal law should be tied.

The fundamental purpose of criminal law is security—to preserve the peace. The criminal law must provide a fitting response to wrongdoing while respecting the principles of justice and fairness and the rights and liberties of the individual.

The sentencing of an offender must seek his rehabilitation and to repair the harm this offender has done to individuals and to society, to the extent possible.

The punishment for an offence must reflect the gravity of the offence as well as the degree of responsibility of the offender. There must be discretion in the criminal justice system, and I emphasize the word “discretion”, to ensure that the goal of rehabilitation is not lost and that the least restrictive yet still adequate punishment is given.

Similar offences committed in similar circumstances should result in similar punishments.

Offenders may be separated from society when necessary but, reintegration of the offender into society should be the goal.

The criminal justice system must recognize that teenagers are less mature and must keep young people separate from adult accused and offenders, except when allowed by law.

The criminal justice system must treat victims of offences and witnesses to offences with courtesy, compassion and respect. Victims and witnesses should not suffer harm as a result of their involvement in the criminal justice system.

The criminal law must describe in clear and accessible language the actions that society has determined are criminal and penalties for those offences.

I remind you that these are the basic principles...

[The Chair, Conservative, Ed Fast]

One moment. Could you go back a couple of sentences? The interpreter missed one sentence.

[Giuseppe Battista]

Yes. I'm sorry.

The criminal justice system must treat victims of offences and witnesses to offences with courtesy, compassion and respect. Victims and witnesses should not suffer harm as a result of their involvement in the criminal justice system.

The criminal law must describe in clear and accessible language the actions that society has determined are criminal and penalties for those offences.

We have several traditional suggestions to make. First of all, we must have confidence in judges and provide legislation that will facilitate proper trial management. This should be done within the framework of consultations that would involve, most importantly, lawyers for the defence and the Crown workinging our judicial system.

We must show restraint when dealing with rules of disclosure of evidence. The disclosure of evidence is a fundamental right which is tied to the right to make full answer and defence. To unduly limit the rules of disclosure may result in miscarriages of justice. We can confidently state that cases reported in various jurisdictions of miscarriages of justice and rules of disclosure are often connected. Failure to disclose evidence is often the source of a miscarriage of justice.

We must take into account the work of various committees dealing particularly with the rules of disclosure of evidence, of judicial discretion and of the determination of evidence. In particular, there will be Mr. Justice Major's report, which will be published following the Air India Commission of Inquiry. I believe that important lessons will be drawn from this report, and with all due respect, I suggest that you use that as a basis for your work. It would be best to wait for the conclusions of such commissions on these issues.

The simplification of the rules in terms of criminal justice does not and should not signify a limitation of judicial discretion. In this regard—I was talking earlier about trial management—we must consider that if there is a problem in terms of disclosure and particularly in the case of major criminal organization investigations, we are often dealing with investigations that last for years. In the course of their investigations, police often collect hundreds of thousands of documents. And this must be properly managed by the police forces who are investigating, by the prosecutors who must manage this documentation and information in order to use it adequately before the courts and present it intelligibly and intelligently, and who must ensure they respect their obligations and their duty to disclose so that the accused may know what evidence there is against them, in order to properly prepare their defence as the case may be.

In conclusion, I will say that the fight against crime is not simply a matter of stiffer sentences. We must also look for solutions that promote prevention, and not only react to crimes that have already been committed. Thank you.

[The Chair, Conservative, Ed Fast]

Merci.

We'll move now to the Criminal Intelligence Service Canada.

Mr. Pichette.

[Pierre-Paul Pichette, Chief Executive Officer, Criminal Intelligence Service Quebec, Criminal Intelligence Service Canada]

Thank you, Mr. Chairman.

I thank the committee members for their invitation.

My name is Pierre-Paul Pichette and I have been working for the City of Montreal Police Services for almost 33 years. I have been the Director General of the Criminal Intelligence Service of Quebec since the 15^th of September, 2008.

The SRCQ's mandate is to promote the secure sharing of intelligence between the stakeholders involved and to ensure the gathering of information from public organizations. It is primarily intended to coordinate criminal intelligence between Quebec partners.

The SRCQ team is made up of civilian personnel, police officials from various police forces and interns who come from various areas of study such as criminology, communications, and who participate in the drafting of analyses.

I am also responsible for the coordination of meetings between the different committees in the service in order to follow the development of its mandate and the unfolding of its three-year plan. The goal of creating an independent and transparent organization is to promote the exchange, the sharing, the accessibility and the development of intelligence for the various police services.

The SRCQ was created by an order in council of the Quebec government on February 14, 2001, and its budget comes primarily from Quebec with the exception for the moment of one person who is seconded to us by the RCMP. I would just like to specify, Mr. Chairman, that the SRCQ is part of the Criminal Intelligence Service of Canada, the CISC. However, it truly is independent because we report to the Quebec government.

As for our three-year plan, the activities and initiatives of the SRCQ fall into four main areas. The first is to ensure the integration and pooling of all criminal intelligence gathered and held by the police forces of Quebec, and to put this intelligence at their disposal securely. The second is to promote the exchange of criminal intelligence between police forces and information between public organizations and the gathering of data from internal and external agencies in order to fight against criminality and organized crime. The third is to ensure best practices in criminal intelligence as well as their development through the establishment of standards and working methods and by promoting training. The fourth is the production of strategic analyses to support the decision-making in the fight against organized crime.

In Quebec, recognizing the impact that organized crime has on Quebec society as well as the constraints imposed on public agencies, criminal intelligence officials from the main police organizations agreed in 2003 to exchange information on the nine main branches of organized crime active in Quebec. This distribution of responsibilities allowed each organization to concentrate on three of the major branches, allowing for the best value for money in terms of the investment of resources while ensuring full access to information held by each of the services concerned.

The subsequent exchanges of provincial status reports allowed us to follow the evolution of these nine branches, thereby contributing to a comprehensive overview of the common trends. The ensuing reports underwent impact analyses and were the subject of discussions between the parties after which it was agreed that certain adjustments would be made and a new version of the protocol was extended in 2008.

The protocol also provides for the participation of all Quebec police services. This contribution is a result of the obvious fact that organized crime activities are felt in all communities and that vigilance and awareness are the best weapons with which to fight against this phenomenon.

In this way, taking into account the obligations set out in the Police Act concerning criminal analysis and contributions to intelligence, the Quebec police forces at every level are invited to participate in the exchange process in order to take advantage of the common documents generated by their contribution.

In short, the implementation of the protocol resulted in several significant advantages. For example, it allows us to optimize the gathering and distribution of intelligence among the participants; to maximize the use of human, material and financial resources of the police organizations involved; to contribute to the awareness of the new modus operandi and the new kinds of crime associated with the branches of organized crime. I must point out that the advantages of this strategic monitoring are however strictly limited to the nine targeted branches. It also allows for a sharing of criminal intelligence on an on-going basis, and for us to improve trust between stakeholders.

We should point out that no provision of the protocol should be interpreted as limiting the ability of the services involved to investigate any aspect of criminal behaviour, including the branches that other services are responsible for. This is a protocol on the exchange of intelligence.

The objectives of the Minerva protocol are: to improve common knowledge of the identified organized crime branches in order to support decision-making and to ensure the cohesion of police strategies; to improve cooperation between intelligence professionals by promoting targeted exchanges on strategic themes; to improve the methodology of intelligence exchanges by establishing a framework; and to share the responsibilities of the stakeholders under the current protocol and define the limits of their responsibilities.

In conclusion, the organized crime branches were divided according to the following chart. The Sûreté du Québec assumes provincial responsibility for what we call organized crime—motorcycle gangs from Quebec and from Eastern Europe. The City of Montreal Police Services, for its part, assumes provincial responsibility for all organized crime involving "Asian", street gangs, and Middle and Near East gangs, whereas the RCMP assumes strategic monitoring for aboriginal, Italian and Latino-American organized crime.

Mr. Chairman, I have finished my presentation and I am now available to answer any questions the committee members may have.

[The Chair, Conservative, Ed Fast]

Thank you.

We'll move on to the Royal Canadian Mounted Police, Monsieur Joyal.

[Inspector Sylvain Joyal, Officer in Charge, Drugs Section, Montreal, Royal Canadian Mounted Police]

Mr. Chair, members of the committee, allow me to introduce myself. I am Inspector Sylvain Joyal. I am the officer in charge of the RCMP Montreal Drug Section. It is a privilege for me and a unique opportunity for the Royal Canadian Mounted Police to be here today. I would also like to mention that I am with Inspector Martine Fontaine. Inspector Fontaine is the officer in charge of the Montreal Integrated Proceeds of Crime Section.

I want to thank you, Mr. Chair, for allowing me to address the committee for the next few minutes on the issue of organized crime in Quebec. I will take this opportunity to discuss with you some of the differences between today's organized crime compared with the situation in the 1970s. I will also highlight the contemporary challenges we must face to fulfil our mission to ensure safe home and safe communities. It will be a pleasure for both of us to answer your questions following the presentation.

First, as you know, Mr. Chair, the RCMP in Quebec does not have a primary public safety role as it does elsewhere in Canada. Under the Quebec Police Act, calls from the public requiring emergency assistance regarding such offences as individual cases of theft, fraud or drug trafficking fall under the jurisdiction of municipal or provincial police departments. Our mandate consists in providing federal police services and investigating national and international organized crime.

[The Chair, Conservative, Ed Fast]

Monsieur Joyal, perhaps I could have you slow down a little, please.

[Insp Sylvain Joyal]

Given this fact, our level of response must be part of an integrated approach.

We have realized, over time, that we could not work in isolation. We had to work in partnership and promote a coordinated and integrated approach. What I'm referring to here, is what is at the very foundation of projects Borax, SharQc, Machine and Colorie. These major investigations were on the front pages of every newspaper of Quebec last spring. This integration of police forces is also at the foundation of the success of two very active multidisciplinary units in Quebec. These are the Combined Forces of Special Enforcement Unit and the Aboriginal Combined Forces of Special Enforcement Unit, which, through their success and impact on crime, have demonstrated that they play a significant role in ensuring the well-being of Canadians and Quebeckers.

This being said, it's not all roses in the law enforcement world. In the same manner as police organizations have created partnerships, organized crime is also relying on alliances between various groups to carry out their actions.

Organized crime is present wherever there is money to be made. Organized crime is diversified. It is infiltrated in many areas of society. It is involved in many profit-generating crimes. Project Colisée which was conducted in 2006 by our Combined Forces Special Enforcement Unit, revealed the widely diverse nature of organized crime activity. Recently, one of our investigations revealed direct links between an outlaw motorcycle gang and tobacco smuggling (Project Château).

One of the features of organized crime is in fact its determination to establish a monopoly based on risk, for the production, distribution and sale of illicit goods in a given market. Today's criminals think like business people. They have a list of goods for sale and seek to maximize their profits. It is these huge profits that enable organized crime to maintain its influence and increase its lead on police forces. Ironically, it's not rare to see at the conclusion of our investigations that the accused are much more concerned with the loss of their assets than with the length of their sentences.

Despite the fact that profits and the power gained from money are what motivates crimes, the maximum sentence for possession and laundering of proceeds of crime is only 10 years. Dirty money, the globalization of our economies, the opening of our borders and the development of business technologies have facilitated the expansion of organized crime within democratic nations.

One of the major strengths of organized crime lies in its ability to identify and exploit the weak links in our legislation. Over the years, organized crime groups have become more sophisticated in their activities and have polished their image. They have taken advantage of the gaps and weaknesses of our system with surgical precision, using leading-edge technologies.

The Internet has become increasingly accessible, and the number of users now exceeds the billion mark. Software applications allow safe data transmission around the world in less than one second. Money changes hands in a binary form in a virtual space through computers, credit cards, debit cards and even smart cards. At the same time there are virtually no resources to help law enforcement agencies adapt to emerging technologies. The time spent looking for appropriate approaches means that we have to delay our actions, and that is allowing criminals to go about their business undisturbed.

In addition, in the 1970s, electronic surveillance worked very well in major conspiracy investigations. In the 21^st century, this technique has become a real nightmare. Technology makes it increasingly difficult to intercept telephone conversations. And while the interception of conversations is sometimes possible, the burden of proof placed on investigators keeps increasing.

It is not uncommon for a police agency to have to produce in evidence thousands of conversations to prove a conspiracy case and meet the standards established in current case law. As a result, this shows criminals the innovative techniques used to investigate organized crime. In some cases, to comply with the rules of disclosure we have to give back the money seized to avoid compromising an ongoing investigation or to protect the identity of a witness.

Money being legal in itself, lawyers defending criminals will do everything to recover the money seized. More importantly, interception and disclosure costs have escalated, forcing law enforcement agencies to drastically limit their actions.

Many criminals make it an actual career to engage in criminal activity. This is a fact! Therefore we often find that subjects under investigation are also involved in other major cases. To perform our duties diligently, we must look into the past of our subjects under investigation to establish both the commission of previous substantive offences and total assets. Unfortunately, we are limited by the period of document retention. This is a major hurdle in the pursuit of our investigations.

As for financial institutions, they retain documents for a maximum period of five years. This interferes with efforts to obtain valuable evidence regarding the origin of funds and financial transactions. The use of forensic accountants is now required in most cases, especially in economic crime investigations. This illustrates how difficult it can be to track financial transactions and money.

The limitations on income tax information that can be obtained in the course of an investigation are also a major issue. I am referring in particular to section 462.48 which limits access to income tax information that is significant for our investigations.

In addition, when offence-related property is seized, the proportionality test can result in joint possession between the government and the criminal (R. v. Ouellette) or partial forfeiture of the equity.

Mr. Chair, while technologies are rapidly developing and transportation is getting increasingly available and efficient, we are still working within a legal framework that could be reviewed to better suit our reality. I am referring here to the notion of evidence gathering in those cases extending beyond Canada's legal jurisdiction as is the case for most major investigations conducted by the Royal Canadian Mounted Police. It becomes more difficult for us to do our jobs when criminals travel, call or send electronic messages abroad. Mutual legal assistance processes make it difficult to obtain evidence in a timely manner.

The most difficult criminal organizations to investigate are the ones that show discipline and have learned from past mistakes. Using the massive disclosure of evidence made available to them, they have been able to better understand the limitations and effectiveness of law enforcement investigative techniques in Canada and abroad. The subjects we investigate no longer have assets in their names and if they do own assets they have no equity. They lease vehicles. They use nominees that cannot easily be dismantled. They own assets and bank accounts abroad. They use trust accounts and change their approaches with respect to income tax reporting to avoid reflecting their lifestyles, etc.

While we are dealing with high-level organized crime, which can easily be identified (outlaw motorcycle gangs, mafia, street gangs) or with organized crime on a lower scale, one fact remains: criminal organizations are skilled in the areas of planning and structure! The use of professionals to facilitate the commission of offences has now become standard procedure in the underworld. If you allow me, I will leave it to the Sûreté du Québec to address this issue with you.

Mr. Chair, I would like to bring your attention to a matter that is dear to my heart, and I am talking about promoting public awareness of the harm caused by organized crime. There is no doubt in my mind that we must take a more aggressive and strategically oriented approach in the area of communication. People must know about the facts. Let's take money laundering for instance, which is a crime that affects society in general, but for which we receive few complaints from the public. Several presentations and training sessions are available to business owners, financial institutions and professionals to educate them on how to detect money laundering. However, such communication and education efforts should not be the sole responsibility of law enforcement agencies.

With respect to juvenile crime, we also recognize young people to be key players in the prevention of crime in their communities. Consequently, we must look for stakeholders from various backgrounds to give more credibility to our awareness initiatives. Our Drug and Organized Crime Awareness Service promotes this approach.

Mr. Chair, my intent with this presentation is not to induce fear, but to share our reality with you. In my years as a police officer, I have been in a position to observe that the gap between the resources available to organized crime and those allocated to law enforcement to fight organized crime is widening, but unfortunately at our expense.

Our legal system is now a step behind the current situation that has emerged from globalization and technological advances. Its components, namely prevention, enforcement, the judicial and post-judicial process should be more closely aligned.

In this context, I share the opinion of a colleague from British Columbia who appeared before you last April, and who stressed the importance of providing police officers with the best possible tools to help them bring major case files to a successful conclusion. One way to achieve this is to amend certain laws, for instance the Canada Evidence Act.

Let me say once again that the only way we can wage a successful fight against organized crime is through global action. To efficiently disrupt criminal organizations, we must continue to address the very motivation behind organized crime, which is profit-driven. I firmly believe that solutions already exist in this regard.

The fact that you are taking the time to listen to field people like my colleague and myself shows that you are concerned by the situation. Incidentally, let me say that we are very grateful to you for this opportunity today.

Thank you.

[The Chair, Conservative, Ed Fast]

Thank you.

We'll move on to the Sûreté du Québec, Inspector Denis Morin.

[Inspector Denis Morin, Sûreté du Québec]

Mr. Chairman and honorable members of the committee, my name is Denis Morin and I am an inspector and chief of the organized financial crime unit. With me today is Mr. Francis Brabant, legal counsel for the deputy director general for criminal investigations of the Sécurité du Québec, Mr. Steven Chabot.

I would like to begin by thanking the committee for allowing the police community to speak to an issue which we are all concerned about, namely organized crime.

Please allow me to begin, as did my colleague from the Royal Canadian Mounted Police who spoke previously, by clarifying several issues regarding the way police forces are organized in Quebec, and the role of each force in the fight against organized crime.

Police services are organized into six levels of service by order of increasing complexity. Policing is carried out by various municipal polices forces, and each force provides a certain level of service, depending on the population it serves or its geographical location, as well as by the Sûreté du Québec. In accordance with the law, the Sécurité du Québec also provides services of a higher level than those provided by municipal police forces.

Although every level of police force fights organized crime, coordination at the provincial level is the responsibility of the Sûreté du Québec. The SQ encourages cooperation between the different police forces, which is an indispensable strategic aspect to effectively fight organized crime. Further, there is an increasing number of partnership agreements in this area which include more and more varied partners. The Minerva protocol is a good example of such a partnership created to fight organized crime.

The excellent description provided by Inspector Joyal a little earlier revealed that profit is the main, if not the only, motive of members of criminal organizations. Since there is more and more money to be made from criminal activities, criminals are increasingly turning to facilitators and front men, and this is the issue I would like to talk about today.

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act imposes obligations with regard to record-keeping and mandatory statements made to providers of financial services and other persons who operate a business or who work in a profession which is likely to be used to launder the proceeds of crime. With this law, Parliament was addressing the concern raised by the increasing use of legitimate activities by organized crime to launder money.

However, our investigations have revealed the emergence of a new kind of accomplice working with criminal organizations. Usually called « facilitators » , this is what characterizes this new type of criminal. They are experts in their field, they are members of a professional order or they work in a liberal profession. They do not work exclusively for a criminal organization. They may also have legitimate clients. They are not forced to work with a criminal organization. They generally do so voluntarily. They are compensated for their involvement.

Professionals are sought out in particular because of their specific field of expertise, their status and the rules of confidentiality to which they are bound. The following examples simply illustrate the facts and do not intend to single out an order or profession in particular. So here are a couple of examples.

In the case of a recent investigation, which aimed to dismantle a criminal organization involved in fraudulent activities, tobacco smuggling and money laundering, investigators discovered that a lawyer specialized in securing credit had been contacted and recruited by the leaders of the organization to take part in a scheme involving loans to small businesses. The investigation revealed that the facilitator had produced false documents to secure a $250,000 loan from a financial institution.

In another case involving the GST and the PST in the area of precious metals, many companies which do not engage in legitimate activities, called "shell companies", were used to facilitate the issuing of false invoices to support false claims. To make it easier for the organization and to make it harder for the police, accountants and bankruptcy trustees looked after the successive incorporations and bankruptcies of these "shell companies".

As well, in the course of an investigation into fraud against the government, we established the participation of several lawyers acting as facilitators in a scheme involving false GST and PST claims. Their role was to recruit front men, to incorporate “shell companies” and open bank accounts.

Lastly, a recent fraud investigation led to the arrest of two certified accountants who were members of their professional order, as well as the arrest of a notary. The notary was using his own personal trust account to cash cheques relating to false invoices and to make it easier for the organization to conduct its activities.

So these professionals add value to criminal organizations in their capacity as facilitators. Despite the fact that they generally play a supporting role, their involvement remains nevertheless essential in helping the organizations reach their objectives.

However, it is hard to sanction their involvement. The hardest part is proving that the facilitator knew that these organizations were engaged in criminal activities. Incorporating a company, opening a bank account or handling an individual's bankruptcy are not criminal activities in and of themselves.

Indeed, several companies or corporations belong to criminal organizations which are listed under the address of a professional.

Further, in cases involving facilitators who are notaries or lawyers, enforcement of the Criminal Code or legal precedents which uphold the rules of client confidentiality, particularly as regards electronic surveillance or searches, makes the job of the police very complicated. These problems are due to the fact that those professionals have a certain standing in society and client confidentiality is considered to be extremely important.

Under current criminal law, there is no provision for specifically deterring professionals who have a certain status in society and who take advantage of their position to launder the proceeds of crime or to engage in other fraudulent schemes.

In our investigations into organized crime, particularly those involving drugs, there is a frequent use of strawmen. By this I mean a person who claims to be the owner of a property, or who registers an asset in his name, when in fact he is not the true owner of the asset in question. In the jargon, he is called a "dummy" or a "strawman".

In the course of our investigations, we have found two types of front men. They are used, first, to conduct their affairs with greater secrecy and therefore under the radar of police investigations; and, second, to amass personal goods and to minimize the risk of confiscation. In the first case, that might involve an accomplice who is often a lower-ranked member of the criminal organization, and in whose name there is a property where the organization could operate, for instance, a growop. In the second case, it might be people, who are usually the family members of the subject under investigation, who will agree to register several assets in their names, such as properties, luxury vehicles, boats or any other type of vehicle operated by the suspect under investigation. This method allows him to acquire goods.

This technique of camouflage surely seems simplistic, but it is very effective in making police investigations longer and more complicated. As with situations involving facilitators, the main problem is due to the fact that it is hard to prove that the strawman realizes he is being used as a front to hide criminal activities.

The phenomenon whereby public servants use their work privileges to launder the proceeds of crime or to commit fraud against the government is also a matter of concern. Better known as embezzlement or corruption, these offences normally fall under sections 121 to 125 of the Criminal Code.

It is well known that criminal organizations launder the proceeds of their crimes by way of legitimate activities. To this end, they sometimes use companies which receive contracts from the government. They approach public servants and sometimes convince them to act as facilitators.

To conclude, all of these types of facilitation contribute not only to the enrichment of criminal organizations, but also, and more generally, to money laundering and illegal activities. From a social standpoint, the legal status of these people is what attracts criminal organizations, and this creates problems for the police, since they have to use extraordinary procedures when dealing with such situations.

We recommend that, when drafting your legislation, you take the full measure of the seriousness of these situations into account.

I would like to thank the committee for its attention.

[The Chair, Conservative, Ed Fast]

Thank you all. Your testimony has been very helpful.

We'll open the floor to questions, beginning with Ms. Jennings.

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

I thought we would also be hearing from Mr. Brabant, but if we instead go directly to questions, that's just fine.

I would like to begin by thanking the witnesses.

Mr. Battista, you said that in 2002, a round table had studied the criminal justice system. I imagine that it produced a report containing recommendations. What became of these recommendations?

Indeed, we have not had a criminal law reform commission for many decades. I will not say for how many decades, since that would be revealing my age, but I think, given the points raised by the police representatives, that new technologies, globalization and other factors have made it urgent that the government seriously consider the creation of such a commission. In my view, it is high time that we modernized our justice system while retaining its fundamental values. I don't think these have changed. I would like to hear what the Barreau du Québec thinks about that.

Inspector Joyal, you say at page 3 of your brief: « There are practically no resources to help police forces to adapt. »

Are you referring to the bill on the modernization of investigation techniques, which already existed at the time of the previous Liberal government, and which was finally reintroduced by the Conservative government last June? The bill should help modernize the Criminal Code with regard to electronic surveillance, new means of communication, the Internet and so on. When you refer to resources, is that what you mean?

[Insp Sylvain Joyal]

Indeed.

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

You talked about restrictions to obtaining tax information during an investigation. You referred to section 462.48 of the Criminal Code. I would like to hear more from you on this matter. However, I will first ask Mr. Battista to respond.

[Giuseppe Battista]

Thank you, Madam Jennings.

With respect to your first question, I alluded to important aspects that were addressed, but the report did not include any recommendations. Rather, it identified what the individuals had said. To my knowledge, there has been no follow-up.

With respect to updating the Criminal Code, I think it's a laudable idea and that many people, police officers, lawyers and judges, would not object. We do have to be realistic though. I personally say jokingly that the Criminal Code is regularly amended. There is a poll that is carried out to check that all lawyers, judges and police officers know the Criminal Code sections, and then they are changed. Except that there are only additions. For some sections, we are at subsection .72, and the list goes on. It is burdensome and sometimes useless.

The Bar Association has often spoken not so much to object, but to note that bills are sometimes passed to condemn a particular event and amend the Criminal Code, but that the code in some cases already covers the given offence. It may not be necessary to weigh it down.

The following approach would consider both the fundamental offences overall and issues of procedure. It would be an updating of what I was referring to earlier on regarding the disclosure of evidence, for instance. Today, the situation is difficult both for the Crown and for the defence and judges because the trial judge has jurisdiction over the process. Yet, it is between the time when the charge is brought and the trial date that the disclosure of evidence takes place. That is when problems occur. Judges do not necessarily have the tools they need. Indeed, trial judges must be designated. For instance, we could provide authority for a judge to act. Parties would then be bound by these types of judgments.

That's an example of a procedural reform that will be very useful. Obviously, that would be ideal. I think we have a duty to be realistic. I don't know if it's in the cards, but it's certainly an objective. In Quebec we have rewritten the Civil Code. So, it is possible to do this. In fact, it would be advisable.

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Thank you.

Inspector Joyal.

[Insp Sylvain Joyal]

I will defer to my colleague Ms. Fontaine.