Debates of Oct. 22nd, 2009

Retribution on Behalf of Victims of White Collar Crime Act

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

Mr. Speaker, earlier today, one or more of the members from the Bloc made reference to Vincent Lacroix who received an eight year sentence but only served sixteen months and was back on the streets in two and a half years. Their argument was that people should not be serving only one-sixth of their sentence and that it does not make sense.

I wonder what the member of the government has to say about that in response to the Bloc member's comments and what the government plans to do about it.

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

Mr. Speaker, I appreciate that from the member and I appreciate the NDP's new-found help in relation to the criminal justice system. We appreciate their help in this and we would appreciate them to continue to not just talk about it in the House but to vote for it as well when it comes time.

I am especially talking here about the Bloc members. When they talk about this, they talk and talk about all the justice issues that they want to stand up for but when it comes to voting and standing up for victims and Canadian families, they are not there.

I would have to take what the Bloc says with a grain of salt when it comes to justice issues. Quite frankly, I would encourage my friend from the NDP to ask his party to come forward with better ideas to help us move forward with a tough on crime agenda, which we are doing.

[Roger Pomerleau, Bloc, Drummond, QC]

Mr. Speaker, I was listening to the member, and I heard him conclude with a sentence that really surprised me. There are some English phrases that sound really good, that really express what people are trying to say. He said “If people do the crime, they will do the time”. That is easy enough to say, but in reality, that is not what happens.

We know that criminals who get caught—and this is what happened to Vincent Lacroix, as the NDP member said—get the sentences they deserve, but once they have served one-sixth of the sentence, they are automatically released, often getting out after a few months even if they have been convicted of serious crimes.

I would like to know why the member said that the Bloc Québécois talks and talks but never does anything. Not long ago, we suggested that the government take a day to eliminate conditional release after serving one-sixth of a sentence before Mr. Lacroix was sentenced to ensure that he and those like him serve their sentences in full. But the government refused to do it. Why?

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

Madam Speaker, unfortunately, it is just like the Bloc members to politicize things that they can have no control over. They really can do nothing for Quebeckers because it is only the Conservative MPs from the Quebec region who can do anything for Quebeckers, and we know that.

We do look at the proposals the Bloc members bring forward. However, I would, as would all members on the Conservative side, appreciate the Bloc members actually voting for this justice legislation when it comes time to vote. It is one thing to talk about it, one thing to work on it together in committee and come up with proposals but it is another thing to stand up for Canadians and actually apply the law as necessary. That is what it takes for the Bloc to come on board with us and we would appreciate the Bloc members doing so.

Will the Bloc members be supporting this particular bill? Will they be supporting minimum mandatory sentences? What I have seen in this place in the past is that they simply do not stand and vote with what Canadian priorities are.

I would ask the member to stand now and tell us if his party will be supporting this bill and supporting minimum mandatory sentences.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Madam Speaker, one of the things I am so excited about, not only about this legislation but about some of the other legislation that we have been bringing forward, is that we are finally putting the rights of victims ahead of criminals.

I wonder if the parliamentary secretary might comment on the fact that many of the frauds that are being committed are being committed using technologies that are readily available at home. I am wondering if he might comment on whether sentencing someone to house arrest might just lead to the offender reoffending, and whether he agrees that this is another reason that we should be imposing some minimum mandatory penalties on these heinous crimes, the crimes he mentioned that affected a curling club in his riding. He also might comment on how those curling club members must have felt to know that they had been defrauded by a gentleman of this sort.

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

Madam Speaker, I can assure the member and all members of this House that it is devastating for non-profit groups that are doing barbecues, car washes and whatever they possibly can to raise funds for organizations to help community members and community events, to have somebody come along, take that money, put it into a slot machine, gamble it away at cards or spend it on holidays.

Oftentimes I have seen clubs that have had to close down as a result of being defrauded and even members of that club actually having to put in money to cover bills, which is atrocious. I do agree with the member that having minimum mandatory sentences is necessary to give guidance to the judges and justices across this country so that not only do we have consistency across the country but we have transparency in the judges' decisions.

It would ensure that people who do these crimes know what will happen to them, know they will spend time in jail. We not only need to deter these criminals from reoffending, as this particular bill addresses, but also others who see what they can get away with, that if they want to steal $2 million and get six months in jail, they see that is not going to happen anymore.

Under this bill, it will not happen. I would welcome the Bloc and the NDP to come on board with this House and work with us to get this legislation passed and to get other tough on crime and criminals legislation passed as well.

It has taken us a long time to move forward from where we were prior to taking government, but we are moving forward and we are picking the best pieces of legislation to do so and getting good results for Canadians.

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

Madam Speaker, I am pleased to speak to Bill C-52 today and I am also pleased that the government has introduced the bill. The NDP caucus will be supporting the bill at second reading to get it to committee where we can perhaps make some improvements to the bill as it is written now.

The bill provides a mandatory minimum sentence of imprisonment for a term of two years for fraud with a value that exceeds $1 million. I questioned the government this morning about how it determined the $1 million because it seems to me that fraud is a serious issue no matter how big it is. In law it is certainly something that lawyers thrive on. I am sure that we will find lawyers trying to argue whether or not fraud was $1 million or whether it was under $1 million, and there will be huge arguments about that.

Perhaps the threshold should be a lot lower than $1 million. I am just not sure about that issue. I asked the government that question and I did not really get a good response. I know one of the government members asked that very question as well and I do not recall whether the member received a satisfactory answer either.

The bill provides additional aggravating factors for sentencing. It creates a discretionary prohibition order for offenders convicted of fraud to prevent them from having authority over the money or real property of others. It requires consideration of restitution for victims of fraud and it clarifies that the sentencing court may consider community impact statements from a community that has been harmed by the fraud.

I want to go back to the issue of restitution for victims of fraud. This is a provision of the bill which on the surface sounds good. I certainly hope that victims see some restitution as a result of this particular provision, but I would not want people to get their hopes up very high on this particular issue. Over the years my experience has been that there are probably very little restitution possibilities when dealing with these fraudsters.

The whole argument about schemes, frauds and Ponzi schemes really boils down to issues of people who are less than honest, bilking people of hard-earned savings and monies, and then in fact spiriting the money away into tax havens. While the economy is good, these schemes tend to thrive because if the stock market is going up and as the economy is expanding, it is easy for them to cover their tracks and hide the fact that they are engaging in a fraudulent activity.

It is when the economy goes down as it has right now that we see these schemes start to collapse because they cannot pay out the returns that they have promised people.

I would suspect there are many more of these beneath the surface. If the recession were to deepen, get worse or to last a longer period of time, we would see more of these schemes exposed. At the end of the day, after all the litigation and investigation, there is really going to be nothing there for the victims.

Therefore, why make these promises that victims are going to get their money back when we know that it is not going to happen. Having said that, I still think that it is a good provision in the bill. It is something that we should put in the bill just in case there is some money left over for restitution.

However, there are many difficulties with this whole area and I think the parliamentary secretary alluded to it in the last part of his speech in which he said that bringing in a bill such as this only provides for part of the problem.

This bill deals with the problem after it becomes a problem. What we want to do as a Parliament, as a government, as a society, is to deal with these issues before they become a problem. We want to be able to catch the Bernie Madoffs before they embark on their programs of bilking people out of money.

I want to use Bernie Madoff as an example, where Harry Markopolos was able to uncover Bernie Madoff 10 years ago. Ten years ago Harry Markopolos, who was working at the time for Rampart Investment Management in Boston, was asked if he could duplicate Madoff's strategy. It makes sense that if people are competing in a market and can offer 30% returns on 90-day certificates that they will have a lot of customers, but in addition to having a lot of customers, there are going to be a lot of people who want to duplicate their system and compete with them because they are obviously making a lot of money.

When Harry was asked to do that, he immediately became suspicious because Madoff never reported losing money in any month. In a country of 300 million people and a securities commission that is supposedly a watchdog, why was no one questioning the fact that Bernie Madoff had never reported losing money in any month?

He said that he knew it was a fraud in about five minutes. He took his information to the Securities and Exchange Commission. When he went to the Securities and Exchange Commission, he was rebuffed because Bernie Madoff had been a big, known figure at the time, had been involved in the industry, and had a good reputation. In fact, I believe one of Bernie Madoff's sons-in-law was actually working for the securities commission as an investigator. So we can see it is one little happy family down there at the securities commission.

When Harry Markopolos came forward and presented the entire case 10 years ago, 1999, to the securities commission, he was told to get lost, essentially. He went back several times, and in fact at a certain point he was concerned and was checking his car for bombs and so on. I think his comment was that Madoff had something like 65 billion reasons to wish him out of the way.

Once again, that is a great example of the system not working. So what did we learn from that? We learned that we have to have proper regulatory bodies that are not populated by people from the industry, that it should not be taking people from the mutual fund industry, the securities industry, out of a company that they have worked for, for 20, 30 years, and they know all the players, and pop them in, sort of like a retirement package, the securities commission that is watching the same company that they have been working for all these years.

It is just one happy little group that parties together, socializes together and who know each other. How can we possibly expect that they are going to be doing a proper due diligence and investigating one another? We need more police-type forces here. We need investigative forces.

That was the weakness of the securities exchange in the United States. Now some changes have been made. There are some tough people in there, effective in January, and hopefully they are going to right the ship.

It seems that all of these bodies tend to drift over time and until something happens everybody is reasonably happy. Then something blows up and we realize that, well, no, these were the wrong people running the ship.

Let us take a look at our own securities commission in Ontario. One of the big arguments we have had in the House, and I know my Bloc colleague understands it well, is the whole idea of the national securities regulator. Being from Manitoba I know that over the last few years we have been opposed to that. I see the arguments for having a national regulator. The other G7 countries have it and it is probably a good idea, but what the government is missing in its analysis is not what it is called, whether it is a national regulator or 10 provincial regulators, it is who do we have running the regulators? Who is running the national regulation system?

If we had a national securities regulator and filled it with people who worked in the industry, then we would not have any better results than we have right now with the Ontario Securities Commission. It has a very sorry track record, a terrible record of imprisoning almost no one. It may have been lucky to catch three or four people in the last 10 years and this is even when the whole case was given to it. Even when the whole thing was put right in front of it, it still could not somehow take action.

In the United States, however, we see more activity in that area, but it comes from the judicial system in the United States. Let us take Conrad Black as an example. He did his crimes in Canada, as a matter of fact, I believe it had to do with non-competes that he was signing with CanWest when it was buying all those newspapers and there were $40 million worth of non-compete agreements in each one of these deals that he got, and his shareholders went after him when they realized that he was taking the $40 million when it should have belonged to Hollinger.

Conrad was a Canadian. I know he became a British citizen at some point, but he was a Canadian. He operated here his whole life. He had his companies here and yet surprise, he is doing time in a Florida jail. By all accounts I gather he is having a great time down there. It does not seem like a very tough jail he is in and he seems like he is happy enough that he might want to stay there a little longer based on the last transmissions we heard from him. But, my point is that the public must have confidence in its government to protect it. When we see people like Conrad Black and Madoff literally just walking away and when they do get caught, they do not spend much in the way of jail time, it is a problem. It breeds cynicism within the public.

That is why I was intrigued by another part of the Bloc's argument today that the sentences should be longer than one-sixth of the sentence. Mr. Vincent Lacroix, who is just one example of many, received an eight year sentence, but because people can get out of jail after serving only one-sixth of their sentence, this man was back on the streets in only two and a half years. So once again the public questioned this. If his sentence was eight years, then what is he doing knocking on my door after only two and a half years? What kind of a system is this that allows that?

Perhaps it is the Bloc's intention to introduce an amendment at committee to rectify this situation or to deal with it in some sense, but if we are going to give Mr. Lacroix two and a half years, then that is what the penalty should be. Do not have a judge say that he is supposed to spend eight years and then after only one-sixth of his sentence, how does he get out of that? I would like to know how the government is planning to deal with that issue because once again, I thought that was a very good argument the Bloc had.

I have to say at the outset that I am so impressed with the lawyers in this Parliament. I have never seen so many lawyers in one place outside of a legal convention. There are some extremely smart lawyers here, and the Bloc caucus is just one example that has several lawyers. The Liberal caucus and the NDP caucus have some, and I am sure there are a few really smart lawyers on the government side too. I have been listening to them very closely. However, their whole approach to the legal side of things has sort of been more along the lines of how it appears from a political point of view. That is the argument, I suppose, and they do not take the view of the legal family represented in the other parties in opposition. They simply go along with the government line that somehow, if they could showcase the bill as being tough on crime as opposed to smart on crime, that will pay off in getting votes back home.

All we have to do is look at the minimum sentence laws in the United States. That is the subject of another bill which we will be getting to fairly soon. In the 1980s California had Ronald Reagan's three strikes and you are out regime. His solution was to build a lot of prisons, and of course his buddies were building private prisons, so he could reward his friends as well. They built wall-to-wall prisons and put people in prison. I do not have the stats handy, but the United States stands alone in terms of the number per hundred thousand people who are incarcerated. The crime rate in the states has not gone down one bit. It is probably even higher than it has ever been. Just recently, because of budgetary problems, Governor Schwarzenegger, who would hardly be soft on crime, and who is a Republican, though hardly a George Bush Republican, has had to release thousands of people from prison because it has been found that the minimum sentence laws do not work.

I am just pointing out to the member of the government that there are all sorts of evidence and examples of crime approaches that work, and there are examples of those that do not work. I gave examples before about car theft in Winnipeg, about how putting immobilizers in cars and having teams of police investigators going after the limited number of car thieves who steal the maximum number of cars has produced results. That is something that works. That is what the government should be doing. The government is mandated by the public to be here to find solutions that work, and not just stuff that knocks an MP's rating up five points in the polls overnight. That is what Conservative members have been doing.

The other argument that the Bloc has made, which I find really important, is with regard to the issue of tax havens. We had a Liberal government for years and years before that had ample opportunity to deal with the whole issue of tax havens. We even had a Prime Minister who had a bunch of his boats registered in some foreign country. It might have been Panama.

[Roger Pomerleau, Bloc, Drummond, QC]

It was Barbados.

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

It was Barbados, the member said.

The fact of the matter is that we should be trying to limit tax shelters and tax havens, because it is about time we stopped rich people from taking their money outside the country to avoid taxes. How can we have a good medical system and roads in this country if people are taking their money out of the country to avoid taxes? We have to put an end to these tax havens. What do these fraudsters do? They are not stupid. They get the money out of the country. As soon as they see things going downhill, the money is gone.

Then we get into banking regulations. The Speaker has indicated I am running out of time, and I have a lot more issues to discuss here, but we have to deal with tougher banking regulations to make certain that banks report suspicious activities, more so than they are doing right now. I know they are required to report deposits in cash of over $10,000. We can make further requirements of the banks that will help solve this problem. We should be regulating the industry. We should require more bonding. We should require that the people who are involved in these businesses have proper regulatory authorities so that they can be watched, and so that they have to report.

Real estate brokers and agents have to report every year. They have to keep their funds in trust—

[The Acting Speaker, NDP, Denise Savoie]

Questions and comments. The hon. member for Crowfoot.

[Kevin Sorenson, Conservative, Crowfoot, AB]

Madam Speaker, I spoke on this earlier in the day and the member stood and questioned me, so I would like to return the gesture and favour to him.

One of the things he pointed out in his speech, which I appreciated, was his indignation toward the fact that the courts were giving certain sentences and in just a few short months, in some cases, these individuals were being returned to the streets. I am quite pleased to hear that the member would have that type of indignation towards such a fact.

There is statutory release in this country. In some cases, two-thirds of the way through sentences offenders can be sent back out on the street. His party has for a long time been on record as supporting those types of policies that would allow criminals to be given what we call early or statutory release. My question to him is whether he would support measures to get rid of statutory release. There is ample opportunity in this place to do that.

He also mentioned the Bloc Québécois in his speech and talked about Bloc members bringing certain facts forward. They questioned earlier whether anyone was getting under two years for fraud charges. I will take the member back to the sponsorship scandal in Regina v. Coffin, where the person pleaded guilty to 15 counts of fraud, totalling $1,556,625. There were aggravating circumstances and he received 18 months.

As he suggested, in many of these cases the sentences the offenders receive and what they actually serve are two different things. Would he support measures to have what we call truth in sentencing, whereby if someone is sentenced to six or eight years, that is what they serve?

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

Madam Speaker, I was attempting to look up the sentence that Charles Ponzi received for his conviction back in 1920. To me it did not seem like a very strong sentence at that time either.

I am simply pointing out to the member what the Bloc speaker had to say this morning about this particular fraudster in Quebec, who received an eight-year sentence and served only 16 months. To me that indicates there is a problem.

I do not think anybody serving an eight-year sentence should necessarily be released after only 16 months. If the judge really feels that eight years is what a person should serve, then that is what he should serve. I would think that would gain more support from the public.

We, too, look at the victims in these situations and there has been a big improvement over the years in victims' rights compared to what existed even when I was first elected in 1986. I know of cases of break-ins in Manitoba in which the victim could not get any information at all from the police. Now it has totally changed and the Manitoba government, through the Filmon Conservative government and the Gary Doer NDP government over the last 10 years, has gone a long way to giving victims more rights in the process. That is where we should be moving over time.

I realize that sometimes things take a little longer than they should to develop but every member of Parliament and every Party in the House can learn to be a little more flexible when the public demands it.

[Claude Gravelle, NDP, Nickel Belt, ON]

Madam Speaker, I would like to thank my colleague for his presentation today.

Fraud is fraud, whether it involves half a million dollars or $1 million. I would like the hon. member for Elmwood—Transcona to give me his thoughts, if he has any, on where the $1 million number in this bill came from.

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

Madam Speaker, I am not sure where they came up with the $1 million. As the member said, fraud is fraud, whether it involves half a million dollars or $1 million. I would think that if one were to lose $20,000 or $30,000 it would be a big deal, so at what point they decided that $1 million was the limit for the bill, I am really not sure, but once again, that is an argument that we can take up at committee.

We have all agreed that we are going to support this bill. We are going to get it into committee and at that point, at that level, we will be coming up with suggested amendments. I am sure the Bloc will have some amendments. The NDP, I am absolutely certain, will have amendments to this bill, and the government may have some as well.

We are on the right track here. The bottom line with fraudsters and legislation dealing with fraudsters is that we are dealing with the problem after the horse is already out of the barn. The government and Parliament should be dealing with preventive measures, and I would hope some members on the government side would look into that and perhaps come up with some legislation of a preventive nature.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Madam Speaker, I appreciate the opportunity to ask a question of my colleague on the other side of the House.

I am glad that he has indicated that he is happy to support this bill now and get it into committee, as am I. He talks about the $1 million limit maybe being a problem, and also about adding some amendments to this bill to improve it, which is what we do in this House and in committee.

I wonder if the hon. member would be kind enough to perhaps outline two or three other things that he sees as potential deficiencies in the bill right now and that could be improved.

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

Madam Speaker, I really would like to look at just two or three deficiencies in the whole area, which the government should be looking at and which I was not able to deal with before.

We should be looking at bank regulation changes, so that the banks can help root these fraudsters out. We should be looking at the RCMP, and once again the Bloc has suggested having forensic accountants. Forensic accountants are very slow but they do an excellent job of finding out where the money went.

We have to look at the whole area of regulating. Lawyers are regulated and have trust funds, so if someone loses money through a lawyer, the Law Society pays. Real estate agents and brokers, and insurance agents and brokers are all registered to do business. They all have bonding. They all have liability policies so if the public loses out, they can always take them to court. They have good protection. They can find a lawyer to represent them and take the insurance agent or real estate agent to court. They have backup. Why should things be any different for people who are operating these companies?

People cannot sell securities in Manitoba or anywhere else without a licence. As a matter of fact, they routinely catch people out making unauthorized sales of securities. Why aren't these people caught? That is my question and that is why maybe we need some advertising campaigns at the federal and provincial levels to remind people not to fall for this. They keep doing it though. They keep falling for the argument that they can get a 35% return on a 90-day certificate.

I am reading stuff here from Ponzi's days in 1920, and nothing has changed. There are the same jail terms pretty much, by the sounds of it. Adjusted for inflation, it is the same amount of money that has been taken away, and people are just signing up for these things. The people themselves should be showing a lot of common sense here and asking questions.

I am wondering where all the competitors are. Where are the banks? Where are the other people who will say, “Come on in and show me what these people want to sell you”?

By the way, there are a lot of different scams. There are the pyramid scams. There are the Ponzi schemes. There are a lot of them and the police know all about them. They know that in any given city in Canada, it is the same 40 people who are involved--

[The Acting Speaker, NDP, Denise Savoie]

Resuming debate, the hon. member for Leeds—Grenville.

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

Madam Speaker, I am very pleased to speak to Bill C-52. We hope this bill will tackle white collar crime.

Recently when the Minister of Justice introduced the bill, he said that fraud can have a devastating impact on the lives of its victims, including feelings of humiliation for having been deceived into voluntarily handing over their life savings. All too often this type of despicable act happens where people take advantage and prey on those who are vulnerable. Often they should know better, but unfortunately they are taken advantage of.

Bill C-52 contains six measures, all of which are designed in some way to enhance the sentencing process for offenders who are convicted of such fraud. The first element is the mandatory prison sentence where Canadians are most concerned about large-scale frauds that wipe out people's life savings and demonstrate extreme greed and indifference to others.

To address this concern, the bill includes a mandatory prison sentence of two years for any fraud or combined frauds which have a value of over $1 million. The mandatory prison sentence would act as a floor, for a variety of aggravating factors would also be applied to raise the actual sentence well above the two year range in many cases. We all know that more than two years is clearly justified in many of these cases.

There are currently four statutory aggravating factors for fraud in section 380.1 of the Criminal Code. This bill will add new aggravating factors to that list to set out additional characteristics of fraud which are particularly troubling. The new factors will focus on: one, the impact of the fraud on its victim; two, the complexity and magnitude of the fraud; three, failure of the offender to comply with applicable rules and regulations; and four, any attempt by the offender to conceal or destroy records relevant to the fraud.

Another measure will require the sentencing court to state on the record which aggravating and mitigating factors it has applied. This is to ensure transparency in sentencing and to ensure that the statutory rules in section 380.1, which sets out aggravating factors and factors that are prohibited from having a mitigating impact, are effectively applied.

The bill also gives the courts a new sentencing tool aimed at preventing the commission of further frauds and victimization. The court will be able to order as part of a sentence that the offender be prohibited from having work or remuneration, or volunteering in a capacity that involves having authority over another person's money, valuable securities or real property. The order is discretionary and is available for any period up to life.

The two final measures are aimed at improving the responsiveness of the justice system and the sentencing process to the needs of the victims. We really are here to stand up for the victims. We have to put these mandatory prison sentences into place. I know that some members on the opposition benches often do not support mandatory prison sentences and mandatory penalties as a deterrent but I can say that we do on this side of the House. I am glad to see that other parties are actually supporting this legislation. We do support these mandatory penalties and mandatory prison sentences to act as a deterrent.

I had a bill before the House in the 39th Parliament that proposed a mandatory prison sentence. That bill in fact got through second reading, so I was happy to see that members of the House in that Parliament did support these types of penalties and prison sentences as a deterrent.

Getting back to Bill C-52, three points of caution are needed. No criminal law reform can change the bottom line, namely, that if the offender does not have any or adequate assets, restitution may be a hollow remedy.

It should also be kept in mind that the crown is responsible for making the sentencing submissions. Victims will not have standing to advance their restitution request.

Finally, we cannot establish a collection mechanism for restitution ordered as part of the sentence as this would require extensive provincial co-operation and tracking. The cost would be prohibitive.

Another measure in the bill will specifically acknowledge the courts may consider a statement prepared by a representative of a community or definable group for consideration at sentencing for fraud cases.

Courts are already somewhat receptive to considering community impact statements describing the impact of a crime on a community as a whole in some cases. In fraud cases, for example, a large-scale fraud which has many identifiable victims in a small town could have an economic impact on that whole town. We have seen these types of cases in many communities throughout Canada.

We talk about the mandatory prison sentence and as I have said before, I strongly support these types of penalties to act as a deterrent. Earlier today a member from the Bloc Québécois asked if there were any cases where a person who has committed fraud over $1 million has been given a sentence that was under the two years that is being proposed in the bill. The truth is that there are. I would like to speak about some of those cases that were before the courts.

There was one case where the accused authorized loans to fictitious people, was charged with fraud over $5,000, and the fraud amounted to more than $4 million and lasted four years. The scheme was set up by another person and the accused merely implemented it. The aggravating factors were abuse of trust and that large numbers of fraudulent transactions were made over a period of time. The mitigating factors were the accused had no criminal record, he did not personally benefit and was also a victim of fraud. In that particular case there were two years less a day and the party to the offence received a sentence of four years. That case was not reported.

There was another case where the accused was charged with three counts of fraud over $5,000 relating to two loans totalling in excess of $3 million and the ongoing trading of shares. In that case there was a conditional sentence of two years less a day followed by a year of probation.

These are the cases which the Bloc Québécois wanted to know about.

There is another case where the accused pleaded guilty to fraud involving a GST remittance and payroll remittance over a five year period. In that case there was a 42-month penalty.

In another case the accused pleaded guilty to fraud over $5,000 for defrauding the Bank of Nova Scotia of $1.8 million in a one-month period. In that case the sentence was 26 months. I could go on and on. In another case the accused pleaded guilty to 28 counts of fraud spanning four years and totalling more than $1.5 million related to the sponsorship program. There was a restitution order.

There is another case where the accused was involved in the sponsorship scandal and pleaded guilty to 15 counts of fraud totalling $1.5 million. There was a sentence of only 18 months. In another case the accused was charged with fraud over $5,000 and defrauding the government in the amount of $1.1 million. The sentence was community service and what most would consider generally light penalties. In another case the accused operated a company that defrauded banks of over $2.5 million where the sentence was two years less a day plus a restitution order.

We see there is quite a number of cases where if a mandatory sentence were brought forward, there would have seen a much greater penalty for the accused. It is hoped that these additional mandatory prison sentences and penalties will once again act as a deterrent. I know that is what Canadians are looking for. They are hoping that many of these types of despicable acts are stopped.

Let me talk more about what the bill really can do. I keep talking about the important part of the bill being the introduction of the mandatory minimum prison sentence of two years. It will provide additional aggravating factors for sentencing for fraud and permit the court to receive community impact statements. The impact to victims and their families can be devastating.

We have heard about cases in the news recently. We heard the hon. member for Elmwood—Transcona talk about the Ponzi schemes. We all know about a case currently in Quebec. We also know about Bernie Madoff and the impact he had on many families in the United States.

That is why this type of legislation is so needed and demanded by Canadians. We as a government are taking action. Our Minister of Justice brought the bill forward. I have sat through the debate today and heard members from all sides talk about how important this bill is for Canadians.

One of the questions is why the proposed measures deal only with fraud and not other white collar crime offences. The offence of fraud really is extremely broad and flexible and can be charges in a wide range of conduct. While there are many different offences in the Criminal Code that can apply to any given set of facts, it is the offence of fraud that gets charged far more often than other offences. It remains the primary offence for going after those who deceive honest Canadians.

As members of the House, we are here to stand up for honest, hard-working Canadians and ensure that their interests are protected and that they are protected from those who would attempt to take their hard-earned savings and money they have put away to make sure they are looked after in their retirement.

Prosecutors often tend to avoid more of the specific offences because the basic fraud offence can cover the same ground and it may be easier to prove.

This legislation would be applicable in many of the cases that we are seeing.

I keep talking about this, but having a mandatory prison sentence hopefully will act as a deterrent. Sometimes the perpetrators of these particular crimes see such light penalties and the time that they may or may not have to spend in prison, depending on the judge, not as a deterrent. Sometimes acts may be committed that otherwise might not have been committed had there been a deterrent.

In 2004 the maximum sentence was increased from 10 years to 14 years in prison. The maximum penalty for specific securities-related fraud offences was also increased. Fourteen years is the longest maximum penalty in our law for non-violent crimes and it is the highest maximum penalty for a property offence.

It is clear that fraud is a very serious criminal offence. I would hope that in these cases the judges would use prison sentences that far exceed the two years when it is applicable, but in this particular bill, the minimum would be two years.

Recent events, including the Earl Jones case in Montreal, continue to attract significant interest across the country. This is what I have been talking about. It is that significant interest across the country with respect to our existing criminal law regarding white collar crimes.

Canadians really are concerned about large scale frauds that wipe out people's life savings or retirement savings and really demonstrate extreme greed and indifference to others. These proposed reforms are designed to ensure that sentences imposed in these cases adequately reflect the severe impact they have on the lives of the victims. As I said before, that is what we are here as parliamentarians to stand up for.

I did talk about some of the cases that have been handed down by the courts which really demonstrate the need for this bill. I would like to talk a bit more, specifically, about the mandatory prison sentence and how large-scale frauds would be punished under the bill.

As I said before, the maximum penalty for fraud is 14 years. It is the highest penalty in our criminal law, short of life imprisonment.

In this bill, we are introducing that mandatory prison sentence for fraud when there is a value over $1 million. It is not necessary that any particular victim be defrauded of over $1 million as long as it is accumulative, that together the frauds, where the offender has been sentenced, exceed $1 million in total.

I guess the best way to describe it is that a fraud of this size can only be described as large scale and would have been the result of a great deal of time, energy and planning and a significant amount of deception to have defrauded one or more people of over $1 million, all of which demonstrate a high degree of moral culpability. Such frauds demonstrate a tremendous amount of contempt and disregard for law-abiding Canadian citizens who fall victim to them.

The law should be clear that any fraud of that scope must be met with a minimum term of imprisonment. This is why we talk about this mandatory prison sentence of two years. Once again, I cannot say it enough that we need to put that type of penalty in place to act as some sort of deterrent.

We are seeing that this mandatory prison sentence of two years is lower than some of the sentences that the courts are currently handing down. Some sentences, we hear, are in the four to seven year range for these large scale frauds, which would be much more than $1 million, but there is no minimum sentences set out explicitly in the Criminal Code.

Currently, the court can take into account some of the mitigating circumstances in individual cases and end up with a sentence that is lower than two years. Therefore, it is appropriate for this Parliament to give guidance to the courts and to Canadians by clearly stating that the mandatory sentence be laid out clearly in these cases, and the mandatory minimum would serve as a starting point for a sentence calculation. A variety of aggravating factors, which are often applicable to a fraud of this size, such as its complexity, its duration, its large number of victims and the fact that the fraud involved a breach of trust, would also be applied to raise the actual sentence. I hope the judges do in fact hand down sentences that are well above the two year range.

The frauds that are of great concern to Canadians today are for these amounts that are well above $1 million, sometimes 100 times more than that amount and often above. Clearly, sentences for these types of frauds would be well above the starting point of two years, which is set for frauds of just the $1 million that we have been talking about. This measure would send a clear message to all that serious consequences await anyone who is thinking of getting wealthy by scamming Canadians.

We are seeing right now that there are some aggravating factors that are currently being considered by sentencing courts. There are already several mandatory aggravating factors for fraud offences in the Criminal Code. For instance, if the fraud involved a large number of victims or if, in committing the offence, the offender took advantage of the high regard in which he was held in the community, as well as under section 718.2 of the Criminal Code, there are generally applicable aggravating factors that could be applied.

In the context of fraud, the factor that arises most frequently is if the offender abused a position of trust or authority in committing the offence. We see that all too often.

In conclusion, I am happy to see, having sat through this debate here in the House and having heard from members from both sides of the House today, that they want to get this bill to committee and are open to bringing forward additional potential amendments to see the support in this Parliament to get this bill through so that the fraudsters and those who would take advantage of vulnerable Canadians will be punished accordingly.

[Shawn Murphy, Liberal, Charlottetown, PE]

Madam Speaker, as the member has indicated, I think the bill should go to committee and it will generally be supported.

This is not the issue as far as white collar crime in Canada is concerned. I practised law for 25 years and my experience is that people cannot be convicted until they are caught. The real problem in Canada right now is that there is no regulation, no investigatory capacity and no prosecutorial capacity to deal with these cases. Even in the cases where someone is caught, it takes 8, 10 or 11 years before there is any conviction.

I do not know all of the regulations, but it seems to me that the town idiot could go out and advertise himself as a town planner. There is no training or education required. There is no self-regulatory body there. There is no supervision. It is an unregulated jungle out there now, and we are seeing that in the Earl Jones situation.

We are fooling the public if we think this will cure the problem. At the end of the day it might help a bit, but the crux of the issue is that we in Canada are dealing with an unregulated jungle that is not serving the public. Does the member across see Parliament doing anything to get to the real nub of the issue?

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

Madam Speaker, I talked about the deterrence side and passing mandatory prison sentences to act as a deterrent. I have supported those in the more than five years that I have served in Parliament.

I do not disagree with the hon. member that we need to ensure there are proper investigative processes in place. I know that once people know they have been scammed, they can call law enforcement right away, but we need to have the tools in place, which is what we are attempting to do with this bill. We are attempting to put those tools in place for the courts to act as a deterrent.

It is my hope that we would see fewer of these types of crimes committed. I urge the hon. member to vote for this bill at second reading and move it on to committee. He can bring forward additional positive amendments if he thinks those would be appropriate.

[Dave MacKenzie, Conservative, Parliamentary Secretary to the Minister of Public Safety]

Madam Speaker, I congratulate my colleague for speaking to this bill. He spoke with passion because he believes in what is in the bill.

My interest is greatly influenced by victims. My colleague across the floor mentioned his having been a lawyer for 25 years. I worked on another side of this issue. For 30 years, we watched victims. They are always the lost people in this whole thing. My colleague said that this has a devastating impact on victims. Make no mistake, many of these victims are elderly people who have been taken advantage of. They feel almost personally violated physically in the sense that they trusted someone who was close to them as a friend and sometimes even as a relative. They have been taken advantage of and have lost all of their whole being because their money is gone. We talked about the impact on victims. They lose their homes. Some of them even contemplate suicide. It is truly devastating.

I recently had the opportunity to be in Montreal and talk to some of the family members of some victims there and that feeling is so deep.

Is there any reason, in my colleague's wildest dreams, the people of the House would not support this kind of legislation? It tells the perpetrators of those most heinous crimes that they will go to jail for a minimum limited amount of time.

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

Madam Speaker, I know how passionate the hon. member for Oxford is for standing up for victims. He was in law enforcement for a long time. I had the pleasure of sitting on the public safety and national security committee with him in the last Parliament and saw first-hand his passion in standing up for victims, having, I am sure, investigated many of those types of cases over the years.

As I said in my presentation, the bill does take into account victim and community impact statements and they will be taken into account when a judge makes a decision. We know that the mandatory prison sentence in the bill is to ensure that those who commit those crimes will go to jail. I really do believe that if criminals know they will do the time, they may not do the crime. However, I think the message really is that if they do the crime, they will do the time.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, I am a little concerned about subclause 380.3(5), which states:

If the court decides not to make a restitution order, it shall give reasons for its decision and shall cause those reasons to be stated in the record.

If the member is serious about dealing with white collar crime and proposing a mandatory minimum of two years, which is fairly modest, it does not do anything to address the elderly who have put their trust in people and have lost money.

I am wondering if he can explain why it is that the court would have the discretion on whether there is a restitution order but no discretion on what the penalty is for the perpetrator.

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

Madam Speaker, I am glad to see that the member supports the need to go after those who perpetrate and commit these crimes.

As I said before, there is really no criminal law reform that can change the bottom line if the offender does not have adequate assets. There can be a restitution order made but that will not necessarily give those who were victimized the restitution they absolutely deserve.

Once again, I urge the hon. member to support the bill, move it to committee and bring those types of suggestions forward. I am sure the justice committee could look at them and there could be some positive moves made on that front.

[Claude Gravelle, NDP, Nickel Belt, ON]

Madam Speaker, I would like to ask the hon. member if this bill would prevent fraud in any way. Is this bill just closing the barn door once the animals have left it? Is there anything in the bill that would prevent fraud from happening in the future?