Skip to main content

Justice Minister Rob Nicholson holds a press conference to discuss white-collar crime legislation in Ottawa on Tuesday, Oct. 20, 2009.Sean Kilpatrick

The federal government is promising to enact a law to keep big-time fraudsters in jail longer, but victims of white-collar crime say Ottawa needs to do more to get them behind bars in the first place.

White-collar crime has become a hot-button political issue over huge Ponzi schemes that were unearthed after last year's stock market collapse, and the Harper government Tuesday staged three news conferences across the country trumpeting plans to unveil a new fraud sentencing bill Wednesday.

Justice Minister Rob Nicholson said the centrepiece is to be a new minimum two-year sentence for fraud of more than $1-million. The bill will also include a list of aggravating factors, such as the impact on victims, that judges can consider to impose stiffer penalties.

Some of the fraud victims who stood alongside Conservative ministers to applaud plans for the sentencing bills said what will matter more is beefing up police fraud squads so swindlers know they stand a good chance of getting caught.

"If you look at how many cases the RCMP actually follows where a white-collar criminal is charged, it's pathetic," said Marcia Ouslis, an investor who lost money in the murky $215-million collapse of Montreal hedge fund Norshield Asset Management.

"If you don't investigate properly and charge them, then it does not matter how strict the sentences are."

Several victims groups are pressing the government to set up a new national fraud investigator, arguing that the RCMP's integrated market enforcement team (IMET) is ineffective, she said.

"There's a whole bunch of us who are very concerned that the systemic problems are not going to be addressed, and it's just a panacea."

Diane Urquhart, a financial consultant who works with victims groups, said many feel they get "the runaround" between securities commissions, overloaded local police and the RCMP when they report fraud. Ottawa and the provinces must bolster specialized investigation squads, she said.

Mr. Nicholson argued the Conservative government has pumped money into funding RCMP and city police officers for local policing; the IMET was given an extra $10 million last year.

"I think these are a considerable help," he said.

The Harper government has also said it will introduce another bill to remove people convicted of serious fraud from the list of criminals who are eligible for parole after serving one-sixth of their sentence.

The sentencing bill to be tabled Wednesday will also include a list of aggravating factors that judges can use to apply stiffer sentences, such as the effects on the victims, whether records were destroyed, and the complexity of the scheme. It will also require judges to consider restitution orders.

Mr. Nicholson's plans prompted some lawyers to suggest it would have little real impact on sentences for major fraud.

At his news conference Tuesday, Mr. Nicholson said he did not know how many people convicted of fraud over $1-million received sentences of less than two years. The Justice department provided a list of 10 people convicted of major fraud last night, of which five received sentences shorter than two years: three were two years less a day in jail, one was a conditional sentence of two years less a day for helping prosecute others, and one was for 18 months.

Opposition politicians said the government appears more interested in a PR blitz, noting that Mr. Nicholson's news conference was his fourth to tout the bill to be tabled today, than effective measures.

Politicians are under pressure to crack down amid major fraud cases like that of Montreal financial adviser Earl Jones, accused of bilking middle-class clients of $50-million, or the charges in Calgary against Gary Sorenson and Milowe Brost, accused of swindling clients out of as much as $400-million in a pyramid scheme.

Bloc Québécois Leader Gilles Duceppe argued that the government could do more by cracking down on parole for white-collar criminals, and access to tax havens, than with two-year minimum sentences for million-dollar frauds.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe