Presentation Transcript

1. Update on Fraud and Investigation Law May 30, 2014

   Norman Groot, LLB CFE CFI Investigation Counsel PC Barristers & Investigation Consultants 416-637-3141 ngroot@investigationcounsel.com
2. Peeping Toms or Men With Vision Investigation Law Snowdy – Deemed Undertaking Intrusion Upon Seclusion – Jones atsTsige / Amax ats Karrys Negligent Investigation – Correira LPO False Arrest (finds committing – Altman) Malicious Prosecution (Teskey) Obstructing Justice - Baros
3. PIPEDA C-12 - An Act to amend the Personal Information Protection and Electronic Documents Act Breach Notification Investigation Body designation State Farm – OPC has no jurisdiction over private investigators because they are agents
4. Investigation Counsel PC Fraud Recovery Law: prosecution of: Investment frauds – MTI ats Shlaimoun Employment frauds – HBC atsPastuchuk Corporate frauds - Trojan Insurance frauds – GCNA ats DAC Relationship - Slenys Independent Supervising Solicitors ICN (looking for police lawyers) / ACFI
5. One Stop for Fraud: TPS-SMG Fraud Victims are Often Confused: Retribution versus Restitution Private (civil) versus Public justice (Crown) Private versus Police investigations Setting Objectives and Managing Expectations – the Assessment Process recovery means private prosecution first
6. Recovery & Retainers Fee for Service MTI ats Shlaimoun Deferred Fee HBC atsPastuchuk Hybrid Deferred Fee Glentelats Alvarez Class Action and Contingency
7. Triage and Assessment P/Is are often First Responders Statements and Documents Financial Communications Computer Forensics & Spoliation Witness Statements Initial Report with options and estimates
8. Cautions to Victims Do Not Contact the Fraudster unless under controlled communications Do Not Given any More Money to the Fraudster Do Not Contact Associates of the Fraudster Unless under controlled communications Do Not Contact Police
9. Advice to Victims contact a trusted friend or professional for an objective review of the breach of trust preserve and organize documents Financial and communications research an appropriate fraud recovery lawyer – they are not all the same Cachet atsNowack obtain an assessment / options in writing
10. Option A: Recovery Norwich Pharmical – traces through third parties – usually banks Affidavits and Motions Follow the Money Identify Secondary Defendants (professionals) Do Not Involve Police - MTI Investigate through Bankruptcy – Rosen Reassess for Mareva and Anton Piller
11. Option B: Retribution Coordination of Civil and Criminal a matter of timing Purpose of Criminal Law: investigate crime general deterrence specific deterrence rehabilitate the offender Purpose of Civil Law – recovery / declarations
12. Civil Claims and Criminal Complaints Civil: Investigate and Issue Claim Bell ats Reid: know your case Criminal: Timing Complaint to Police networks assist getting prioritized on their list must be comprehensive and complete will states with supporting documents often one chance with an intake officer victims with baggage - Spiegel
13. Why Restitution Orders are Not Recovery Orders To Rehabilitate the Offender – not compensate the Victim Are often partial quantums of the loss Only required to pay within means – so as not to force into a probation breach Are only enforceable during probation – and probations officers do not breach
14. Comparison of Civil and Criminal Justice Limitation Periods: two years from date of discovery in civil litigation: Sears no limitation for indictable / hybrid criminal offences such as fraud Freezing Money: police do not do this Use of Money: defence lawyers Control of Pace of Investigation / Prosecution
15. The InvestigationCriminal versus Civil intake witness complaint background checks through data banks police data banks verus private date banks Production orders versus Norwich Search Warrant versus Anton Piller Bail Conditions versus Mareva Computer Forensics and Forensic Accountants
16. Initiating the ProcessCriminal versus Civil Swearing information versus Statement of Claim control of timing / naming Doe Defendants Arrest of fraudster versus Service of Claim Criminal: if fraudster can not be located, the case is stalled Civil: substituted service motions First Appearance versus Statement of Defence in civil, the fraudster must give his position, or be noted in default and the claim is deemed true
17. Disclosure & DiscoveryCriminal versus Civil Right to Silence - Documents Criminal: Crown disclosure Civil: defendant disclosure Right to Silence - Discovery Criminal – Pre-Lim of Crown witnesses Civil – examination of fraudster and co-defendants Effect of the Deemed Undertaking Rule
18. Scope of DiscoveryCriminal versus Civil Section 490(15) of the Criminal Code: access to search warrant evidence examine on charges laid versus torts alleged one chance versus multiple motions making private evidence public reassessing cost of litigation reassessing timing of complaint to police
19. TrialsCriminal versus Civil Burden of Proof Criminal: beyond a reasonable doubt Civil: balance of probabilities Right to Silence Criminal: no evidence from the accused Civil: read in discovery transcripts Focus of Trial Criminal on Accused Civil on Victim
20. JudgmentsCriminal versus Civil Liability Guilt versus Declaration Damages Length of Sentence versus Dollar Judgment Recovery Restitution versus Payment of Frozen Proceeds Aftermath Parole versus the judgment debtor process
21. Assessments Norman Groot, LLB CFE, CFI Investigation Counsel PC Barristers & Investigation Consultants 416-637-3141 ngroot@investigationcounsel.com
22. BMP Global ats the BNSJuly 22, 2005 The effect of ss. 7(3) and 7(5) of PIPEDAis that: a bank may disclose personal information, without the consent of the individual, regardless of the purpose for which the information was originally collected, for the purpose of conducting a preliminary investigationprovided that: the disclosure is made to a designated private sector investigative body; and, the disclosure is related to investigations of breaches of agreements or contraventions of the law.
23. BMP Global ats the BNSJuly 22, 2005 Section 7(3)(d) does not restrict the disclosure of information to information concerning only those individuals directly implicated in the contravention of the laws of Canada. Scheller testified that, as with corporate security officers at other financial institutions, he is a designated officer of the Bank Crime Prevention and Investigation Office (the “BCPIO”) for the purposes of the PIPEDA. 
24. BMP Global ats the BNSJuly 22, 2005 BNS argued that given the applicable statutory regime and Scheller’s designation as a BCPIO, the BNS was clearly authorized to release personal information relating to the plaintiffs, without the consent of the plaintiffs, to other financial institutions for the purpose of investigating or preventing a suspected fraud.   BNS argued that it is not material whether the plaintiffs were suspects or victims of the fraudulent activity.  More specifically, BNS was authorized to release information to the RBC, who, as the victim of the fraud, assumed conduct of the investigation into the counterfeit cheque.
25. BMP Global ats the BNSJuly 22, 2005 Held: “I agree with counsel for the plaintiffs that the BNS has not succeeded in demonstrating that these provisions of the PIPEDA apply in this case.  I will deal with each of these subsections in turn.”
26. BMP Global ats the BNSJuly 22, 2005 Subsection 7(3)(d)(i) of the PIPEDA provides that disclosure of personal information without knowledge or consent is permissible where: the disclosure is made on the initiative of the organization, the disclosure is made to an investigative body; and the organization has reasonable grounds to believe that the information disclosed relates to a breach of an agreement or a contravention of the laws of Canada, a province or a foreign jurisdiction that has been, is being or will be committed.
27. BMP Global ats the BNSJuly 22, 2005 All three conditions must be met in order to justify the disclosure under s. 7(3)(d)(i).  The first condition is not contested by the parties.  It is clear that the BNS took the initiative to disclose information.  The second and third conditions under s. 7(3)(d)(i) however are contested. 
28. BMP Global ats the BNSJuly 22, 2005 Second Condition: As noted by counsel for the plaintiffs, there is no evidence that the disclosure in this case was made to an investigative body, as there is no evidence that the representatives of the RBC who received the information were designated as BCPIO officers.  Scheller’s designation as a BCPIO officer under the PIPEDA is irrelevant unless there is evidence that he was the person who made the subject disclosures.  There is evidence, however, that other persons at the BNS made the disclosures.
29. BMP Global ats the BNSJuly 22, 2005 Third Condition: the disclosure is reasonable for the purposes related to investigating a breach of an agreement or a contravention of the laws of Canada or a province. this was not decided or even commented on
30. Surveillance Through Residential WindowsMilner v. Manufacturers Life Insurance,[2005] B.C.J. No. 2632 (B.C.S.C.) Case shows the courts are not necessarily in tune with the OPC Held: Privacy violations are dependent on the particular cases Location is always key - Plaintiff filmed through front window from a roadway in front of her home
31. Surveillance Through Residential WindowsMilner v. Manufacturers Life Insurance,[2005] B.C.J. No. 2632 (B.C.S.C.) Expectation of privacy highest in one’s home – conversely no expectation of privacy in public places: Druken ats Fewer No expectation of privacy if possible to view actions from public places Discretion on judges re admission of evidence as to reason why surveillance was undertaken