Police and prosecutors work together from the beginning at the Serious Fraud Office
More than 500 investors from across Canada lost about $40 million altogether between 2013 and 2017 in a Ponzi scheme orchestrated by a Barrie, Ont., man involving point-of-sale terminals that never existed.
When Charles DeBono claimed he sold the company, Debit Direct, and took off to the Dominican Republic with investors’ money, reports flooded at least nine different police services.
“Initially, it was very unorganized,” said Peter Hammond, one of DeBono’s victims, who lost $55,000. “Depending on who you were, and where you were calling from, they’d direct you to one police department or another.”
But then, a newly formed initiative that brought police and prosecutors in Ontario together to try and tackle major fraud took on the case and centralized the investigation. Project Debit Direct was one of the first cases the province’s Serious Fraud Office (SFO) worked on after forming five years ago.
Last June, after a four-year investigation and prosecution, DeBono was sentenced to seven years in prison, which was cut down to just over four years after he received credit for pre-sentence custody. DeBono was also ordered to pay nearly $29 million in restitution to victims.
The case exemplifies both the benefits of dedicated fraud resources and specialists working together — and the limitations even those efforts face when it comes to victims recouping their losses.
“We’re going in after the fact where we’re fighting uphill,” said Det. Supt. Dominic Chong, director of the Serious Fraud Office for the Ontario Provincial Police (OPP).
“We have restrained or seized about $2.4 million in Canadian funds and about $4 million US in the Dominican — that’s a drop in the bucket.”
This week, CBC Toronto’s investigative series, The Cost of Fraud, has dug into Ontario’s growing fraud problem by showing how fewer reports are making it through the criminal system and how even those that do end in conviction aren’t necessarily helping victims or deterring fraudsters.
Part three looks at the province’s most significant attempt to improve fraud enforcement in recent years through the creation of the SFO, and how expanding the office’s model might help address some of the drop-off in fraud cases through the system.
Serious Fraud Office trying to set precedents
Since its inception in 2018, Ontario’s SFO’s investigation branch has taken on 12 cases, Chong said, which are generally lengthy and take years. So far, investigators have laid charges in four of those cases. Two are still before the courts, and the other two, which includes the Debit Direct case, ended in convictions.
“I look at the SFO as a centre of excellence for fraud investigation and fraud prevention,” said Chong.
“If there is something out there that no other police or law enforcement agencies have tackled before, and if we can successfully address that issue — that kind of sets the benchmark, or sets the precedent for other agencies and other police services to follow.”
Chong credits the SFO’s ability to take on those kinds of cases to resources that allow it to overcome some challenges facing other fraud investigators. Unlike other units, the office is self-sufficient when it comes to otherwise shared resources such as digital forensics, includes full-time investigators from both the OPP and several Greater Toronto Area police services and works with dedicated Crown attorneys from the get-go.
“Fraud investigations are very complicated,” he said. “It would be very challenging to have a Crown attorney assigned at the end of the investigation and be able to catch up enough to understand a case and be able to effectively prosecute the case.”
Fraud prosecutors could help address dropped charges
Extending fraud specialization from police to prosecutors is one way to address the roughly half of fraud charges Crown lawyers end up dropping in Ontario, according to the president of the International Centre for Criminal Law Reform.
“You could reduce that substantially if you knew that the prosecutors that are dealing with these cases are specialists in this area, and that they are dealing with judges who also are specialists in this area,” said Peter German, a lawyer and former deputy commissioner of the RCMP.
“I think it will reduce a lot of the disclosure problems.”
CBC Toronto requested an interview with the SFO’s chief Crown counsel to learn more about how the prosecution side operates, but Ontario’s Ministry of the Attorney General declined the request.
German argues Canada needs a national strategy for financial crime.
“Federal, provincial, municipal governments have to sit down at the table and say, ‘this is a significant issue,'” said German. “It’s not just for the politicians, it’s also for those that work within policing systems, prosecutorial systems, and the courts to advocate what they feel can best deal with this problem.”
Last year’s federal budget provided $2 million to Public Safety Canada to begin the initial work of developing and designing a Canada Financial Crimes Agency, which would become the national enforcement body for investigating complex financial crimes. But at this point the scope of jurisdiction for the proposed agency and how that would affect police services across the country remains unclear.
‘Fraud impacts everyone’
Outside of bolstering and fixing enforcement systems, many of the fraud experts CBC Toronto spoke to put just as much or more emphasis on changing the way society thinks about victims.
“We need to create this critical mass in terms of understanding fraud impacts everyone,” said Chong.
“I kind of equate it to drunk driving. Drunk driving in the ’60s and ’70s was tolerated. How did we get to where we are today? It’s through public education and crime prevention.”
The OPP — and by proxy, Chong — oversee both the investigations branch and adjunct services for the SFO. The office’s adjunct services include crime prevention, public education, training and victim services.
“What we realized when the SFO was established was that the victims of fraud really were not receiving the appropriate support that they need through no fault of anybody, just limited resources,” said Chong. “Fraud is often forgotten.”
SFO’s victim services liaise with the victims in their cases throughout the process, from investigation through prosecution and beyond.
Aline Vlasceanu would like to see that kind of support expanded so fraud victims have access to the same services as other victims of crime.
“The psychological impact, the social impact, the financial impact, the emotional toll that it takes on victims is just as big as if it were a violent crime,” said Vlasceanu, executive director of Canadian Resource Centre for Victims of Crime.
Given the limited police resources, Chong sees public education as the strongest tool to fight fraud — whether that be warning bulletins about prominent frauds from the Canadian Anti-Fraud Centre, or the SFO flagging scams to affected industry groups or communities being targeted.
“What we need to do is essentially turn off the supply of victims, or supply of potential victims, and limit the number of people that can be victimized by fraudsters.”
Source: CBC