“Follow the Money”

I have a clear mental picture of on more than one occasion, sitting around a conference room table, a new homicide case fresh in hand, and debating the merits of one course of action over another. Discussions would eventually come around to one of the items that needed proving; namely, motive.

When the motive was not clear, a reliable side-kick would invariably jump up and holler: “Follow the money!” We would all laugh both because of the manner of the exclamation which had been said with such ferocity, but also because of the obvious nature of what was being proclaimed.

If you want to find crime in this country, this Province, or in your towns and cities, truer words were never spoken. You only need to “follow the money”. This would seem patently obvious to almost everyone who is paying attention. What is less obvious maybe, is whether or not in this country, we actually care. And by “we” I mean Canadians in general, and the police in particular.

Having never seen polling with regard to the views of the general population in terms of their level of concern it is hard to make some definitive statement about the views held by the country as a whole. So this is more of a question than an answer.

However, when it comes to the police the preponderance of the evidence suggests that in fact the police don’t care, or if one was more generous, have chosen to make commercial crime the lowest rung on the ladder of operational policing.

From the police officer trying to avoid the call for a “fraud cheque” or the misuse of a credit card, to the upper management of the municipal, Provincial, and Federal forces who demonstrate an innate ability to ignore the economic crime swirling around them. Their internal view seems to be that since the public is not complaining, why worry, after all it doesn’t “trend” and paper cuts do not make as good a television snippet as assaults and car crashes.

To be sure, the problem of economic crime is complicated. White collar crime in Canada like other countries includes a broad range of offences which can and do include: fraud, bribery, Ponzi schemes, insider trading, embezzlement, cyber-crime, money-laundering, identity theft and forgery.

White collar crime is itinerant, moving easily across boundaries, from city to city, Province to Province, so it becomes necessary to co-ordinate multiple agencies and their variety of investigative groups. The investigations themselves become entangled in this web of jurisdictions and interests. Each agency have different levels of priority, different levels of expertise, different Crown counsels, and different levels of financial support. Stymied in most cases by their own current policing structures.

There are many levels to this blanketing economic cloud– ranging from large national in scope cases, such as SNC-Lavalin or the Bre-X mining scandal of 1997; to the more common such as identity theft and forgery. In between are layers of administrative, political, and government fraud in the millions of dollars.

If one just considers the world of the “scam“, the number of ways the public is being fleeced is only limited to one’s imagination: on-line purchase scams, wire fraud, romance scams, employment scams, crypto-currency scams, shady contractors, and fake invoices. And if you think that these are small problems, they estimate that $19 million was taken in, just in romance scams.

The RCMP and the Financial Crime Unit according to their own web site tells us that we should rest assured as the RCMP is mandated and “contributes to the security of the Canadian economy and seeks to protect Canadians”( take note of the terminology in that they are only “seek”ing and “contributing”). 

The RCMP themselves are also quick to point out that the primary responsibility for things such as fraud, rest with other jurisdictions and they in effect often become an “assistance” agency.

The RCMP have three parts in their weak arsenal aimed at combatting this “growing” problem; the Commercial Crime Branch, the Proceeds of Crime Branch, and the aggressive sounding Financial Action Task Force.

This latter Task Force is actually a policy-making group, Canada being one of a total of 37 other countries. They are there “to set standards and promote effective implementation of legal, regulatory, and operational measures…”. They are apparently geared to “generating the necessary political will to bring about national legislative and regulatory reforms..”. One of the areas often referred to is the need to disrupt money laundering around the world. Suffice to say that in that world, they are not doing a great job in Canada at the moment.

So while this Task Force is circling the globe attending meetings, that leaves us with the Commercial Crime Branch, and the Proceeds of Crime Branch.

Commercial Crime again according to the RCMP web site maintain 27 offices throughout the country. In terms of the work being generated it seems to often mention the need to build “awareness” and develop “strategic partnerships”. This is government language code found throughout the bureaucracies for not doing much at all. They boast of their “many successful public awareness and enforcement initiatives. ” They claim to have 450 officers in those various offices and their site features a photo of a business suited offender wearing handcuffs. But, trying to find actual examples of their “enforcement initiatives” is more difficult.

In 2019 a business and accounting firm, MNP LLP released a “Fraud Aware” study where they reviewed some 200 criminal fraud cases throughout all of Canada, in Ontario, Quebec and British Columbia. BC had the highest loss levels with a total of $14.3 million. What is noteworthy in this figure, and keep in mind that we are only looking at fraud charges, is not the amount of loss, but how little that their efforts amounted to. In the recent study into money-laundering in B.C alone, regulators are now estimating that $1.7 billion went through B.C. Lottery Corporation accounts with large amounts funded by loan sharks and criminal bank drafts.

Fifteen Ponzi schemes in this country amounted to losses of $549 million. Two cases of stock manipulation by themselves amounted to $87 million in losses.

The scarier figure is that they estimate that less than 5% of the fraud was reported in this country. They also indicated that civil procedures were “often timelier and routinely more effective” than reporting the matter as a a criminal offence. This is combined with lenient sentencing in Canada, unlike China where there is a possible death penalty, or even the United States where in 2002 they passed Sarbanes-Oxley act, and punishments were increased in light of the Enron scandal.

In the above studied cases, it should be added, 70 percent of the convictions asked for restitution, but the recovery rate was a mere 29%.

Many financial and legal experts that have for decades been outraged by the lack of effort in this country to combat “white collar crime”.

Spencer Lanthier, in receiving an award as a Corporate Director of some note, said in his remarks, “this city, this Province (referring to Toronto, Ontario) this country has a reputation of being the best location to carry out white collar crime, corporate fraud in the industrialized world”.

In a report on investment fraud in 2014, the Canadian Foundation for the Advancement of Investor rights reached some damning conclusions. They alleged that little data is kept on either fraudsters or their victims, enforcement agencies were not talking to each other, and that the public’s reporting rate was “extremely low”.

The police are now often seen as leaning towards giving up and spend more time trying to get out of these cumbersome, lengthy, and tedious investigations. Some argue the laws are insufficient and the burden of proof too steep. (In Ontario, the police were reportedly telling business people who had been victimized by fraud that they should investigate it themselves and that they were not interested in any event unless the fraud was over a $1million)

You need only to scratch the surface in this country to find the seedlings of suspicion.

If there is any activity involving millions of dollars, or even billions, that is where you will find the criminal and corrupt lurking. Let’s take a few of the bigger possibilities; the marihuana industry, the construction industry, or in large pipeline and hydro projects. Let’s also glance into the government funding behind large infrastructure projects, the millions being given to the indigenous, or lotteries and gaming. It seems that if there is a pot of money there will also be those willing to stick their hands in regardless of entitlement.

And in speaking of gaming, in British Columbia, we may finally be given a chance to look into gaming in this Province and the subsequent laundering of monies. It has been a long time coming, but great hope is being put into the upcoming inquiry by Justice Cullen. This writer is hopeful, but not entirely optimistic.

Cullen has a good reputation, but one must remember that he was formerly a Regional Crown and Assistant Deputy Attorney General when the NDP was in power from 1991 to 2001 before being named Judge.

He is a friend of the NDP, so count on them going after former Liberals, but not so sure the NDP themselves or their friendly compatriots will come under any pressure. Cullen, was a prosecutor for 20 years so we will have to wait and see if he thinks there is criticism needed from the effort or lack of effort put in by the police. Nevertheless, it is one of the few inquiries in recent memory where the “white collars” may be on the run.

Peter German in an interview described money laundering as the “back office for organized crime”. Will they go there? How far will Justice Cullen dig? Only time will tell.

Another group, Transparency International reported on how financial disclosures rules in this country allow “opaque corporate and land registries”. They reviewed ownership of the top 100 residences in Vancouver with an asset value of close to a billion dollars and found that over half had “murky ownership”. Their report was titled “No Reason to Hide” and concluded that Canada has become “a destination of choice for white collar criminals”.

It is bit of an understatement to say that the enormity of the problem in Canada is staggering. We point out countries like Mexico or the Congo as countries of extreme corruption. One wonders if the only difference is that we are just a little better at keeping it under cover.

The citizens of this country seem to see “white collar” criminal acts as less than other crimes. Sociologist Edwin Sutherland, in 1939, defined “white collar crime”as a crime “committed by a person of respectability and of high social status in the course of his occupation”. Maybe our complacency comes from the fact that we see it as partially victimless and partly as smart people “outsmarting the system”. After all we still applaud the person who avoids paying their fair share of their income taxes.

In a recent report, the Conservative MP Peter Kent launched a public complaint against the RCMP for their clear lack of effort in pursuing the fact that Liberal PM Justin Trudeau had been the beneficiary of three private family trips to visit the Aga Khan, the billionaire philanthropist. Trudeau had already been found in breach of four sections of the Conflict of Interest Act, yet this was not enough to prompt a criminal inquiry apparently.

Commissioner Lucki reached new heights in obfuscation when she stated that the RCMP could not “productively pursue an investigation” (my italics).

The Aga Khan Foundation Canada by the way has received over $330 million over the years of Federal support.

Economic crime is insidious and slowly eating out the inner core of this country. The levels of distrust and the growing narrative is that every public and private entity may be corrupted, and it is causing everyone to question some of the fundamental precepts of a functioning democracy.

The U.S. is already beginning to crumble. Trump is proving to be a threat to the very foundations of the U.S. constitution, not because of what he says or what policies he enacts, but because of the the level of corruption which he is fomenting. The stink of corruption is leaking into the Department of Justice and the Federal Bureau of Investigation, and has led to misuse of Congressional funds and the firing of bureaucrats who refused to be corrupted. (In another aside, there is really no Whistleblower protection in this country)

Canada may be even in a worse position with its lack of interest. A massive wake up call is needed and enormous monies and resources are needed to be spent to correct the decades long complacency in this country.

So far, there does not appear to be any political appetite from any party to begin to address this growing pandemic which is built on a belief that we are somewhat immune, somewhat removed from corruption. We follow the plane returning Canadians from China like the press helicopter following the Bronco driven by O.J. but show little interest is what is going on right in front of us.

As this blogger writes the Ottawa Citizen is reporting on former Commissioner Bob Paulson and some questionable billing for his services. It seems that Mr. Paulson’s firm, the lofty sounding Independent Investigation and Review Services billed $116,286.95 for three months work; roughly $1933.00 per day, for him and two others to “review material”, to “develop an interview plan”, conduct interviews, and of course “parking” and “mileage.”

Was this a major significant inquiry, well no, it was to do with a City counsellor for Ottawa and his inappropriate behaviour to some employees. Normally that would type of investigation would fall to a person in the Human Resources Department.

As was said earlier, scratch the surface, and just “follow the money”.

Photo courtesy of 401(K)2012 via Flickr Commons – Some rights reserved

One thought on ““Follow the Money”

  1. Dear Peter,

    The Clinton Foundation, followed closely by the Trudeau Foundation is nothing more that a politician turning to crime and money laundering.

    I transferred to Langley in 1991. With almost 27 years in the Force I had never seen a theft written off as a “Civil Matter”.

    Someone owned an article which someone else stolen and with some convoluted color of right now claims it to be civil and the member bought in to it. Going back to the basics, the first person lawfully owned the article and someone took it. Virtually a spin-off of fraud.

    Keep up the good work but is it possible to get the Comm’r to read or feed it from the bottom up!

    Mel

    >

    Like

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