Ont. probes dropped charges in alleged Ponzi scheme

Joe Groia, a leading white collar defence lawyer and the former head of enforcement at the Ontario Securities Commission, said attorneys general across the country don’t give the Crown and the courts the resources they need to prosecute white collar cases…“Crown prosecutors don’t see enough of these cases to develop real expertise,” said Groia. “In criminal court, I will win cases I should lose because I’m better at the process.”

http://www.cbc.ca
November 16, 2010

Ont. probes dropped charges in alleged Ponzi scheme
CBC News

Ontario's attorney general says he is investigating why criminal charges were dropped against a Toronto man accused of operating a multimillion-dollar Ponzi scheme.

"I have asked the chief prosecutor to get to the bottom of it and I've asked for the report as quickly as possible," Chris Bentley said in Ontario's legislature on Tuesday, responding to a question by NDP justice critic Peter Kormos.

Chris_Bentley.jpg

Ontario Attorney General Chris Bentley said he will probe revelations that the Crown Attorney's Office withdrew charges against Tzvi Erez, partly because it said the court system lacks resources. (Nathan Denette/Canadian Press)

The question was in response to a CBC News investigation that revealed the Crown Attorney's Office withdrew charges against Tzvi Erez, partly because it said the court system lacks resources.

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

In an email obtained by CBC News from Crown attorney Christine McGoey, the Crown stated that one of the reasons it decided not to proceed was because of the competition over trial time.

"We do not walk away from cases," Bentley said on Tuesday. "We have resources for the cases that need them and where more are required, we find them. I take a number of the reports that I have heard and read in the media very seriously. They cause me a great deal of concern."

CBC News had asked Bentley about the case in October and the minister had declined to comment.

In June 2009, Erez was charged by Toronto police with one count of fraud over $5,000, seven counts of forgery and one count of violating his probation on a prior fraud conviction.

The charges were based on evidence provided by one of Erez's alleged victims, Willy Tencer.

Erez's alleged fraud first was exposed following the February 2009 bankruptcy of his Toronto printing company, E Graphix.

A 295-page report was filed in Ontario Superior Court in Toronto by receiver Jerry Henechowicz, whom the court appointed to vet investor claims and locate and seize assets as part of the civil bankruptcy proceeding against Erez's companies.

"It is clear from the receiver's investigations that Tzvi operated a Ponzi scheme," states the report.

Tsvi.jpg

Tzvi Erez was accused of swindling more than 70 investors of $27 million, but the Crown dropped charges against him. (CBC)

The report also stated that Erez obtained tens of millions of dollars in loans for his printing business based on documents that turned out to be elaborate forgeries.

"Investors would be provided … forged purchase orders, invoices and other documents to support what was presented as a highly profitable yet underfinanced print-brokerage business," the report says.

The federal government has pledged to crack down on white collar criminals. In May, the Harper government introduced Bill C-21, the Standing Up for Victims of White Collar Crime Act, which proposed minimum two-year sentences for fraud offences of $1 million or greater.

But Lincoln Caylor, a partner at law firm Bennett Jones, who specializes in fraud cases, said sentencing is not the problem.

“We’re not getting convictions in the first place. There’s not enough resources to do it, and when it does get to the Crown’s office, and charges are laid, the Crown’s office currently is not set up properly to deal with it," Caylor said.

Joe Groia, a leading white collar defence lawyer and the former head of enforcement at the Ontario Securities Commission, said attorneys general across the country don’t give the Crown and the courts the resources they need to prosecute white collar cases.

Instead, Crowns tend to focus their efforts on personal crimes such as murder and sexual assault.

“Crown prosecutors don’t see enough of these cases to develop real expertise,” said Groia. “In criminal court, I will win cases I should lose because I’m better at the process.”

Pamela Stephens, a spokeswoman for Justice Minister Rob Nicholson, said that the administration of justice, including the courts, is a provincial/territorial responsibility.

She said since taking office, support payments to the provinces have increased by 30 per cent or $12.7 billion and that in 2010-11, the federal government allocated $54 billion in transfer payments, an increase of $2.4 billion over last year.

"It remains up to each province to allocate resources … according to their priorities," she said.

http://www.cbc.ca/canada/toronto/story/2010/11/16/ontario-ponzi.html


Brought to you by WikidFranchise.org

Risks: Affinity fraud, Bankruptcy, Canada, Ontario lax on fraudsters, Canada: An unwise place to invest, Canada: white-collar crime haven, Caveat emptor canard, Criminal charges, Emboldens industry bottom-feeders, , Forgery, Fraud, Identity as a competent, logical and non-greedy person shattered, Ontario Securities Commission, Ponzi (pyramid) scheme, Trust, Canada, 20101116 Ont probes

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License