Jim Maloway

[Retribution on Behalf of Victims of White Collar Crime Act, October 23rd, 2009]

Madam Speaker, the member summed up the problem and the solution to the problem extremely well in her presentation.

One of the areas we have to look at, particularly in this bill, is the requirement for restitution. We already know that the possibilities of restitution are rather minimal. At the time that these fraudsters are found out, it is usually after a period of time when the market drops. They are unable to pay their bills anymore and they cannot keep the scheme going. In the meantime, they have had ample opportunity to spirit the money away, particularly to tax havens such as the Cayman Islands, Panama and other places like that.

I would ask the member whether she would agree that we should be making an effort in this country to do something about these tax havens so that we can stop the fraudsters from hiding the money.

[Retribution on Behalf of Victims of White Collar Crime Act, October 23rd, 2009]

Madam Speaker, I want to point out that Harry Markopolos discovered the whole Ponzi scheme that was perpetrated by Bernie Madoff, and he did so 10 years before the scheme was uncovered.

He went to the SEC, which is why I want to deal with the comments the government member just made regarding the National Securities Commission. He went to the SEC but the SEC is an old boys' club composed of industry insiders. In fact, I believe Bernie Madoff's son-in-law is one of the investigators.

My point is that it does not matter what sort of organization is set up, it is the people who are running the organization who need to be arm's length people, they need to be armed with police type powers and they need to have forensic accounting facilities included with them.

Just having a national securities regulator, if a bunch of industry insiders are appointed to run it, it will not get us any further down the road.

[Retribution on Behalf of Victims of White Collar Crime Act, October 23rd, 2009]

Madam Speaker, the member is correct. The tax havens in the Cayman Islands, Panama and so on are really the important part that the government is forgetting about. It talks about restitution but there will be no restitution because fraudsters are going to get their money to the tax havens.

In addition to that, I would like to ask the member what he thinks about the idea of toughening up the banking rules to require the banks to be more vigilant about the activities of people like this. For example, currently the bank has to report anyone who comes in with a cash deposit of over $10,000. Why can the government not come up with some more stringent rules for the banks?

[Petitions, October 23rd, 2009]

Madam Speaker, my petitioners call for the release of Ms. Birtukan Mideksa from arbitrary imprisonment. Ms. Mideksa is the president for the Unity for Democracy and Justice Party of Ethiopia. She has been held in prison by the Government of Ethiopia since December 2008, without charge, on a politically motivated life sentence.

She is a confirmed prisoner of conscience according to international human rights organizations such as Amnesty International. She was pardoned of all charges against her before being rearrested for apparently no reason. In contravention of Ethiopian law, Ms. Mideksa was imprisoned without any formal hearings and was not given full access to her lawyer.

International human rights monitoring organizations have been denied access to Ms. Mideksa as well. Serious allegations of human rights abuses have been made, indicating that Ms. Mideksa has been held in solitary confinement in life-threatening conditions and has been prohibited from reading books and visiting her family.

The petitioners call on the House of Commons to pass private member's Motion No. 334, which requests that the government make use of every means at its disposal, in addition to working with its allies in the international community and the United Nations, to exert maximum pressure on the Government of Ethiopia to immediately and unconditionally release Ms. Mideksa and allow her to participate fully in her position as leader of a political party.

[Retribution on Behalf of Victims of White Collar Crime Act, October 23rd, 2009]

Mr. Speaker, the government is certainly raising false hopes with the public when it suggests that this bill is going to require restitution for victims.

We all know that these white-collar criminals spirit the money out to tax havens in the Cayman Islands, Panama and other places. By the time these Ponzi schemes are broken and the white-collar criminals are caught, the money is all gone.

So why should we hold out hope? It is a good idea to have it in the bill, but to emphasize that people are somehow going to get their money back is to delude and misrepresent the bill to the people of Canada.

[Retribution on Behalf of Victims of White Collar Crime Act, October 22nd, 2009]

Madam Speaker, looking back to 1920 and Charles Ponzi in the United States, he had collected $10 million from 10,000 investors by selling promissory notes that claimed to pay 50% profit in 45 days. That seems to be a pretty hefty amount. When the scheme was exposed, the Boston bank collapsed and investors lost most of their money. Indications are that in July 1920, he was taking in about $1 million a week. He made an arrangement with the bank to deposit the funds.

The bank itself, Hanover officials soon realized that Ponzi was not paying his initial investors with interest income but with the deposits of the new investors. Nevertheless, the bank eagerly sold Ponzi a large amount of its stock. The bank officials knew he was doing something wrong, and yet they let him in as an investor in their bank.

Interestingly enough, Ponzi declared bankruptcy, but the bankruptcy court ordered all of the people who had been paid by Ponzi during the life of the scheme to return the proceeds to the bankruptcy trustee who distributed the money on a pro rata basis to all of the victims. Ponzi himself was eventually convicted of fraud in both state and federal courts and imprisoned for several years.

Even then, way back in 1920 there was some restitution made but it was done through the bankruptcy court, not through a law like this one.

[Retribution on Behalf of Victims of White Collar Crime Act, October 22nd, 2009]

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--

[Retribution on Behalf of Victims of White Collar Crime Act, October 22nd, 2009]

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.

[Retribution on Behalf of Victims of White Collar Crime Act, October 22nd, 2009]

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.

[Retribution on Behalf of Victims of White Collar Crime Act, October 22nd, 2009]

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—