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.
