Transcript Update on Federal and Provincial Private Sector Personal

Update on Fraud
and Investigation Law
May 30, 2014
Norman Groot, LLB CFE CFI
Investigation Counsel PC
Barristers & Investigation Consultants
416-637-3141
[email protected]
Peeping Toms or Men With Vision
• Investigation Law
– Snowdy – Deemed Undertaking
– Intrusion Upon Seclusion – Jones ats Tsige /
Amax ats Karrys
– Negligent Investigation – Correira
– LPO False Arrest (finds committing – Altman)
– Malicious Prosecution (Teskey)
– Obstructing Justice - Baros
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
Investigation Counsel PC
• Fraud Recovery Law: prosecution of:
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Investment frauds – MTI ats Shlaimoun
Employment frauds – HBC ats Pastuchuk
Corporate frauds - Trojan
Insurance frauds – GCNA ats DAC
Relationship - Slenys
• Independent Supervising Solicitors
• ICN (looking for police lawyers) / ACFI
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
Recovery & Retainers
• Fee for Service
– MTI ats Shlaimoun
• Deferred Fee
– HBC ats Pastuchuk
• Hybrid Deferred Fee
– Glentel ats Alvarez
• Class Action and Contingency
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
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
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 ats Nowack
• obtain an assessment / options in writing
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
Option B: Retribution
• Coordination of Civil and Criminal
– a matter of timing
• Purpose of Criminal Law:
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investigate crime
general deterrence
specific deterrence
rehabilitate the offender
• Purpose of Civil Law – recovery / declarations
Civil Claims and Criminal Complaints
• Civil: Investigate and Issue Claim
– Bell ats Reid: know your case
• Criminal: Timing Complaint to Police
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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
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
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
The Investigation
Criminal 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
Initiating the Process
Criminal 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
Disclosure & Discovery
Criminal 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 codefendants
• Effect of the Deemed Undertaking Rule
Scope of Discovery
Criminal 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
Trials
Criminal 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
Judgments
Criminal 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
Assessments
Norman Groot, LLB CFE, CFI
Investigation Counsel PC
Barristers & Investigation Consultants
416-637-3141
[email protected]
BMP Global ats the BNS
July 22, 2005
The effect of ss. 7(3) and 7(5) of PIPEDA is 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 investigation
provided that:
(i) the disclosure is made to a designated private sector
investigative body; and,
(ii) the disclosure is related to investigations of breaches of
agreements or contraventions of the law.
BMP Global ats the BNS
July 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.
BMP Global ats the BNS
July 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.
BMP Global ats the BNS
July 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.”
BMP Global ats the BNS
July 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.
BMP Global ats the BNS
July 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.
BMP Global ats the BNS
July 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.
BMP Global ats the BNS
July 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
Surveillance Through Residential Windows
Milner 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
Surveillance Through Residential Windows
Milner 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