The privileged lot of lawyers

Rosenfeld, who is appealing his three-year sentence, told an undercover RCMP officer that it was "20 times safer to be a lawyer involved in this activity," in Canada compared to the U.S. because of lax rules and regulations.

The Toronto Star
September 2, 2006

The privileged lot of lawyers
Solicitor-client secrecy under scrutiny. Helps crooked lawyers operate: Critics.
Betsy Powel and John Duncanson

Peter Shoniker was candid as he boasted to the undercover Mountie - who was wearing a hidden recording device - that there wasn't a "f- —ing judge in this city" who would grant a wiretap authorization on his phone lines.

He was right.

The case of Shoniker, who is to be sentenced for money laundering on Wednesday, highlights the complexities and challenges for law enforcement when they go up against a privileged set, particularly lawyers.

As Shoniker put it, lawyers of his ilk are "untouchable."

That perception is deeply troubling to Ben Soave, the retired RCMP chief superintendent who headed up the probe that led to the arrest of Shoniker - a former Crown counsel who counts a general, police chiefs, judges and politicians among his close friends.

The Shoniker case should be a wake-up call to justice officials and the public, says Soave. He argues law enforcement officials need greater flexibility to go after lawyers they believe are exploiting the centuries-old principle of solicitor-client privilege to shield themselves from the prying eyes of investigators.

As Soave puts it, "This gap in our justice system, if not rectified, will create the public perception and, more important, some lawyers to believe they are above the law. Imagine a lawyer who has been recruited, compromised or corrupted by organized crime and then gets appointed to the bench." He adds "Change must take place for the sake and integrity of the majority of law-abiding, dedicated, ethical and proud members of the legal profession."

Solicitor-client privilege is a principle of law that protects the disclosure of all communication between a lawyer and his or her client. That leaves investigators no choice but to stop recording from wiretaps that might pick up their conversations.

The Supreme Court of Canada has repeatedly upheld lawyer-client privilege as a cornerstone of the legal system. Increasing pressure by law enforcement, however, has put the legal profession on the defensive. While lawyers understand public concern, the law of privilege "is based upon respect for the oath and the honour of the lawyer who is duty-bound to guard the client's secrets," says a 2005 submission by the Law Society of Upper Canada to the American Bar Association.

"The solicitor-client privilege lies at the very heart of the common law system. Thus preservation and nurturing of the privilege is fundamental to the due administration of justice in our society."

While it's not known how many members of the bar misuse their privileges to shield illicit activities, the risk is "especially high" for lawyers who are needed for their legal expertise, influence and a variety of reasons, says Soave, who started consultancy firm Soave Strategy Group after retiring.

According to a new book, a Montreal-based crime family has a special branch of lawyers who use their presence to protect sensitive meetings from police scrutiny.

The book, The Sixth Family The Collapse of the New York Mafia and the Rise of Vito Rizzuto, says police in Quebec believe lawyers have been involved in money laundering, the setting up of shell companies, fraudulently obtaining official documents and accessing individuals' personal details.

Police also believe lawyers have offered their phone lines and opened cellphone accounts in their names, allowing crime associates to conduct business in their offices out of the earshot of police wiretaps, the book says.

"Police believe that the main cells of the organization each have their own designated lawyers," say Lee Lamothe and Adrian Humphreys, Toronto-based investigative journalists. "This would be a key distinction from other criminal organizations that maintain above- board but ongoing professional relationships with lawyers."

Margaret Beare, a former director of the Nathanson Centre for the Study of Organized Crime and Corruption at York University's Osgoode Hall law school, says a study of RCMP money laundering cases showed that "when it (the case) was very sophisticated and involved a large amount of money they virtually always had a lawyer involved at some stage, not always as a criminal, or member of the criminal organization, but sometimes."

But solicitor-client privilege is not ironclad, she said, at least in theory. "If there's evidence that a lawyer is actively engaged in the criminal conduct of the client, that privilege would not hold," said Beare, co-author of the upcoming book Money Laundering in Canada The Chasing of Dirty and Dangerous Dollars.

Yet it's very difficult to get that evidence in the first place, adds Soave, because the chances of a judge signing a wiretap authorization is "one in a million."

Investigators tried in the Shoniker case and didn't get it. In the end they launched an undercover sting operation in hopes of catching Shoniker in the act.

Soave said he can't remember a case in the nine years he ran the Combined Forces Special Enforcement Unit (CFSEU) where they succeeded in getting authorization to bug a lawyer.

The unit is made up of several police agencies that specialize in complex investigations and use wiretaps extensively. But when it comes to lawyers, wiretaps are impossible to get.

"Our hands are tied, investigators are frustrated (so) … they don't even bother to make the effort anymore," Soave said.

Beare argues in her book that "when we look at policies and procedures and legislation regarding lawyers, who is it that's making those decisions? It's the Department of Justice lawyers … the reality is they all went to law school, they're all part of the social club. So you've got lawyers' (making) rational and serious decisions regarding the conduct of their colleagues."

Staff Sgt. Glen Oickle, RCMP investigative supervisor involved in the Shoniker case, said changes relating to the status of privilege are "very slow in coming."

The problem for police arises when a lawyer is the target of an investigation. Because they can't intercept every call made to a lawyer, it's almost impossible to persuade a judge they should be allowed to listen in.

For example, when an organized crime figure is being bugged and his lawyer calls, police automatically turn off the listening device. Soave said authorities have gone so far as to propose having another lawyer or even a judge monitor the calls to ensure they don't break solicitor-client privilege. That offer has fallen on deaf ears.

So that leaves them sometimes with no alternative but to launch other costly, often complex sting operations, like the one the Mounties did on Simon Rosenfeld, the only other Toronto lawyer in recent memory to be convicted of money laundering.

Rosenfeld, who is appealing his three-year sentence, told an undercover RCMP officer that it was "20 times safer to be a lawyer involved in this activity," in Canada compared to the U.S. because of lax rules and regulations. For example, questions have been raised as to the role about the conduct of former senior prosecutor Calvin Barry, who was recorded by the undercover Mountie during the sting operation.

It was Barry, believing the undercover agent wanted to move money skimmed from a pension fund, who put him in contact with Shoniker.

The Crown decided not to charge Barry, who has since left the downtown Crown attorney's office.

After the introduction, the undercover officer gave Shoniker several payments totalling $750,000 in cash that ended up in a covert New York bank account, which was actually controlled by the police. The Crown alleged Shoniker then handed the cash to a Toronto jeweller, his co-accused, Babak Bobby Adeli Tabrizi, who completed two separate transactions. He has not yet had his day in court.

In June 2004, Shoniker was arrested and charged with money laundering.

He vowed to fight the allegations but, last month, pleaded guilty to one count of money laundering and theft over $5,000. He claimed, through his lawyer Edward Greenspan, that a serious sleep disorder and boozing led to his lapse in judgment.

The Crown, however, painted him as a braggart and a liar who knew what he was doing. Greenspan will be arguing Wednesday his client should be given house arrest, while the prosecution will seek jail time.

When Shoniker pleaded guilty, many powerful and wealthy friends were there to support him, including former Toronto police chief Julian Fantino and retired Maj. Gen. Lewis MacKenzie.

Many wrote letters asking the judge consider Shoniker's years of service in community, both as a prosecutor and defence lawyer.

In one letter, Ron Sandelli, a former Toronto police officer now in charge of security for the Toronto Blue Jays, took issue with the RCMP using a sting operation to get Shoniker.

"I will never understand how the RCMP and the CFSEU justify using a sting operation to ensnare Peter Shoniker.

"Why they would find it necessary to create a fictional crime in order to get Peter Shoniker to commit another crime is something I don't understand," wrote Sandelli.

Oickle declined to comment on the criticism, but a senior prosecutor, who asked not to be named, said there's no other way to get the "big guys. You know they're doing it but you're not going to get the evidence without directly offering it to them," said the Crown, who has prosecuted cases arising from stings.

In an interview, Sandelli said it's not that's he's against police undercover stings - he oversaw many in 31 years of policing.

But he thinks the Mounties were misguided to zero in on Shoniker when there are so many serious criminals running around.

Shoniker, he says, is a liar and a drunk but there's no way he's a money launderer. "He'd be the guy who'd be looking for the local laundromat to put the money in there thinking he was going to wash it.”

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Risks: Royal Canadian Mounted Police, RCMP, Money laundering, Theft, Solicitor-client privilege used to shield white-collar crime (self and others), Organized crime, Wiretap authorization virtually impossible if a lawyer is the target, Canada: white-collar crime, Canada, 20060902 The privileged

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