Jail shady lawyer: Crown

Rosenfeld told him it was "20 times safer to be a lawyer involved in this activity," because of the country's lax rules and regulations, Majcher testified. Chambers separately told him it was "one thousand times safer" to be operating in Canada, he added.

The Toronto Star
March 18, 2005

Jail shady lawyer: Crown
Sentence hearing in laundering case. Abused privilege, judge told.
Betsy Powell

Simon Rosenfeld should receive a five- to seven-year prison sentence to signal Canada's commitment to fight money laundering and send a message to corrupt lawyers who are involved in the trade, a Crown attorney has told an Ontario Superior court.

Yesterday at his sentencing hearing, Rosemary Warren called Rosenfeld, 58, a "Canadian ambassador for money laundering" who repeatedly, in undercover police sting operation recorded on surveillance tapes, mocked the justice system and "advertised" the country as a safe haven for crooks.

Warren said the sentence should also reflect Rosenfeld's abuse of his solicitor-client privilege and take into account that while he laundered what he thought was $500,000 in drug money, diverting it to a police-controlled bank account in Florida, he also believed it was the beginning of an illicit "ongoing relationship."

Rosenfeld, free on bail since his August 2002 arrest, pleaded not guilty at his three-week trial. A jury convicted him Feb. 22 of two counts of money laundering and one count of attempting to possess the proceeds of crime.

The trial proceedings provided a rare look at how the Mounties fight money laundering, a criminal code offence that means taking money derived from an illegal act and making it appear legitimate. The maximum penalty is 10 years imprisonment.

Rosenfeld was one of two Canadian lawyers ensnared in a sting that was part of a much larger FBI-RCMP securities fraud and money laundering investigation called Bermuda Short. Vancouver lawyer Martin Chambers is already behind bars in the U.S. after receiving a 16-year prison sentence.

The fact two Canadian lawyers were among those to get caught up in the sting highlights a serious problem in Canada of shady lawyers exploiting their position to disguise illicit dealings and then hiding behind solicitor-client privilege, Warren told Justice Tamarin Dunnet.

Warren pointed to Auditor General Sheila Fraser's report released late last year that raised concerns about criminals and terrorist financiers avoiding detection through lawyers, the only group of Canadian professionals exempt from federal disclosure regulations, in contrast to other countries, including the U.S.

Federal law requires anyone transporting $10,000 or more across the Canadian border to report the movement to Fintrac, the federal anti-money-laundering centre. Financial institutions and others are also required to report suspicious financial transactions.

Vancouver-based RCMP Inspector Bill Majcher, the principal undercover operative in the sting that nabbed both Rosenfeld and Chambers, returned to the stand yesterday after testifying at the trial.

He elaborated on the sting in which he duped Rosenfeld, Chambers and others into believing he was Bill MacDonald, financial front man for a Colombian drug cartel generating between $1 and $2 million U.S. a day in cocaine sales.

Majcher, who was qualified as an expert witness on money laundering, recalled asking both Rosenfeld and Chambers, on different occasions, if it was better to launder money as a lawyer in Canada or the U.S.

Rosenfeld told him it was "20 times safer to be a lawyer involved in this activity," because of the country's lax rules and regulations, Majcher testified. Chambers separately told him it was "one thousand times safer" to be operating in Canada, he added.

Majcher also explained about how he came to meet Rosenfeld, evidence the jury was not allowed to hear.

Posing as MacDonald and wearing a hidden recording device, he was first introduced to Rosenfeld at the Miami Hyatt hotel March 11, 2002 after the Yorkville lawyer flew down for a meeting. Majcher testified he had been told Rosenfeld was someone who would be able to get drug money into the financial system without alerting authorities.

Majcher testified how, while seated in a restaurant negotiating Rosenfeld's commission for cleaning cash, he pulled out a U.S. $1 bill and said to Rosenfeld: "If I give you this $1, do we have solicitor-client privilege?"

Rosenfeld responded yes. "Okay, then, what we're discussing is cocaine money," Majcher testified as saying.

Yesterday, Warren spent the afternoon reviewing sentencing in other money-laundering cases, highlighting those involving lawyers.

Noting the law respecting money laundering "is all over the map," she noted Canadian cases but also the United Kingdom and U.S. where she said money laundering is dealt with very seriously.

Glen Orr, Rosenfeld's lawyer, has not yet had a chance to respond but yesterday challenged Majcher to provide examples of when and where his client previously laundered dirty money. Orr said Rosenfeld's lack of "expertise" was amply demonstrated by his inept handling of a money counter machine in a Toronto hotel room caught on an RCMP surveillance videotape and shown to jurors.

"You did not have a specific instance of him laundering money in the past," Orr said to Majcher on the stand.

The hearing is scheduled to resume this morning.

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