No Justice for the Defrauded

By BJ Bjornson

What is it with the Canadian �justice� system and its inability to deal with large fraud cases? A few months ago, it was a major mortgage fraud case that was dropped. Now, a guy accused of bilking $27 million from more than 70 investors in a Ponzi scheme using expertly forged documents will not be prosecuted for his crimes. The reason: It wasn�t really all that serious, and besides, the investors should have known better. I only wish I was joking about that last part.

The Ontario Crown Attorney's Office withdrew criminal charges against a Toronto man accused of operating a multimillion-dollar Ponzi scheme partly because the court lacks resources, CBC News has learned.

According to a report filed by a court-appointed receiver, Tzvi Erez, 43, used a series of expertly forged documents to defraud more than 70 investors of $27 million.

. . .

According to a Sept. 30 memo written by Tencer's lawyer, Lou Brzezinski, assistant Crown attorney Donna Gillespie told him the charges were dropped "because the courts were tied up with more serious criminal matters [such as rape and murder]."

. . .

The Crown also suggested another reason charges were withdrawn was because the victim should have known better.

In her email, McGoey said the complainant in the case "was an experienced businessman" but he did "not seek to verify the invoices of the suppliers."

Assistant Crown attorney Gillespie echoed that consideration when she appeared before court to have the charges withdrawn.

"The Crown is not attributing blame to the complainant, of course, but before investing large amounts of money in a business venture, an experienced businessman would endeavor to confirm the legitimacy of the business transaction and there should be due diligence on behalf of the lender or the investor before doing so," she said.

Now, not to put too fine a point on this, but one of the major elements of fraud cases is the fact that the perpetrator deliberately made a misrepresentation with the intent to defraud. Granted in a civil case the additional factors that the misrepresentation must be believed and relied upon by the victim to their detriment also need to be proven, since you cannot recover damages if they didn't occur, but that doesn�t seem to be a problem here either. And because criminal fraud cases generally only require that the perpetrator knowingly made false statements with the intent to defraud, whether or not the victims should have known better is completely irrelevant.

Further, from reading the whole article, I get the feeling that the authorities were never really very serious about pursuing this case to begin with.

After the alleged fraud was discovered, Brzezinski provided Toronto Police with all the documentation gathered during the receivership. His client, Tencer, gave police a sworn affidavit and supporting documentation detailing the alleged scheme.

Several other investors also contacted police and offered to give statements. But many investors, including Steiner, did not come forward, believing instead that they would be contacted in the course of the investigation.

Instead, the police brought charges based only on the complaint of Tencer.

Not even talking to the other victims of this fraud shows a rather significant lack of interest. Under most circumstances, such interviews would be one of the first steps in building up a case against the accused. The lack of doing so makes me suspect that there was never any intent to take this case seriously right from the beginning.

On the bright side, at least now we know that stealing really large sums of money is something our legal system believes doesn�t need to be taken too seriously.