Do the RCMP get their man if he is white collar?

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further to predatory practices by financial providers, and passive assistance from financial regulators

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is it OK to "look the other way"

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Case studies that I have undertaken point to negligent misrepresentation as one of the key elements in most financial scams that we have seen. Unfortunately you have not seen any prosecutions in this area. One would wonder why these crimes are a free ride in Canada. Speaking of Free Ride, read John Lawrence Reynolds factual account of financial crime in Canada titled FREE RIDER. It will educate you beyond what you wished to know about our financial system.


[admin]

Presentation to the Ontario Standing Committee on Government Agencies

Diane A. Urquhart, Independent Financial Analyst

Monday, February 23, 2009, 5:30 P.M.

(Released February 23, 2009 9:00 A.M.)



Opening Statement

Ontario Members of Parliament have to fulfil the government's public safety mandate, which is to protect life and the money needed to live.

As MP's you serve the people of Ontario under this public safety mandate. Given the evidence that the OSC and the investment industry SRO's have been facilitating systemic misconduct in the investment industry, you need to restructure both securities regulation enforcement and securities crime policing.

The world and Canada is suffering the worst economic crisis since the Depression as a consequence of a financial crisis created by abuses in the credit derivatives and mortgage markets. A few people in the banking and investment industries have made millions of dollars for themselves in schemes that have mauled investors. The schemes have put the financial industry itself in peril. The world economies are being brought down by the financial industry's negligence, failure to meet its duties to customers and even widespread systemic securities fraud.

The Canadian investment industry, the Ontario Government and the OSC are telling the public we have the best investor protection in the world and that all is well. Everyone knows this is not the case. There is widespread fear amongst Ontarians about their pension fund deficits, depleted personal retirement savings and whether their jobs are safe. The Ontario Pension Benefits Guarantee Fund and the Ontario Government will be asked to fund billions of dollars of pension fund deficits, at companies in trouble, like Nortel and Air Canada. Nortel is not even paying the severances of its terminated employees. These employees, without work and without severance to pay their families' bills while looking for new jobs, are treated as unsecured creditors in CCAA proceedings. CCAA proceedings are forums for protracted negotiations between senior management and large creditors, and a precarious place for retired workers and terminated employees to have their fate determined.

President Barack Obama says "There needs to be a shift in ethics on Wall Street, "[We need a] crack down on the culture of greed and scheming." Paul Volcker, the former Federal Reserve Chief, says "the financial system we have known will never return. Too many weaknesses and flaws have been exposed." German Chancellor Angela Merkel says before the Berlin European Union Summit on Sunday, February 22nd: "No financial market, no financial market product, no financial market stake holder can be without regulation, without oversight,"

Canada has had two of its own alleged systemic securities frauds - income trusts and non bank asset backed commercial paper . These two toxic income products have combined losses of over $58 billion. There have been no sanctions by the OSC or the SRO's for the systemic misconduct in either income trusts and non bank ABCP. No retail owners of these toxic income products have received any OSC or SRO's facilitation of compensation for their damages due to breaches of securities rules and regulations.

We remain optimistic, however, that the outcome of current investigations by IIROC, the OSC and L'Autorité des Marchés Financiers will be the laying of allegations of breaches of securities rules and regulations and the facilitation of a full cash settlement for the 36 Canadian families owning more than $1 million of ABCP. These families have lost their right to sue for remedy of their damages under the ABCP CCAA Plan, despite acknowledged breaches of securities rules and regulations in the ABCP fiasco. These families have lost large portions of their lifesavings for the Plan's purpose of ensuring the country's financial stability, and for the apparent bragging rights of Canadian banks being well-regulated and having strong balance sheets.

The U.S. FBI has 1,800 mortgage fraud and 38 securities fraud investigations going on directly related to the current financial crisis. Canadian police are not conducting investigations of alleged frauds directly related to the current financial crisis.

The top priority for structural change is for Ontario to support a new independent Canadian Securities Crime Unit, to deter both rogue fraudsters and systemic fraud in the investment industry. The Securities Crime Unit proposal has been developed by Gary Logan, the former detective sergeant of the Toronto Police Services Fraud Squad. Mr. Logan developed a similar system for mortgage fraud in Ontario. Our work on improving Canada's securities crime system is supported by the National Pensioners and Senior Citizens Federation and the United Senior Citizens of Ontario.

The Investment Industry Association of Canada and the Canadian Coalition for Good Governance is proposing a new National Enforcement Agency as a division of the new national securities commission. We are at the crossroads where Ontario MP's can accept the investment industry's proposal to move to full control over securities crime policing in this Province and throughout Canada. Or, Ontario MP's can choose to meet their public safety mandate to protect the money Ontarians need to live.

Ontario cannot afford to choose the investment industry's path this time - even the investment industry cannot afford to take its own proposed path. Confidence in the investment industry and the road to economic recovery, compels us to choose the road of an independent securities crime policing system. The Canadian securities regulators and SRO's did not protect pensions and personal retirement savings in this financial crisis, so how can you trust them to do so now. The past practices of the investment industry and its regulators have undermined the fabric of our society.

Diane A. Urquhart

Independent Financial Analyst

Mississauga, Ontario

Tel: (905) 822-7618

Cell: (416) 505-4832

E-mail: urquhart@rogers.com



Backgrounder

Income Trusts - Prospectuses Approved Despite US Criminal Prosecution and OSC Senior Corporate Finance Staff With Concerns About Cash Yield Deception

· OSC stamped hundreds of income trust prospectuses in the 2000's decade, despite the 1994 U.S. Department of Justice criminal prosecution of Prudential Securities for deceptive cash yields and an OSC Senior Corporate Lawyer publishing the same concern.



· 50% of all income trusts with public offerings during 2001-2006 have slashed their distributions.



· The average distribution cut is -67% and the prospects for distribution and price recovery post recession are poor.



· Income trusts were not safer than common equities, which was how they were marketed to seniors.



· Income trusts did not have better investment returns than bonds, which was how they were marketed to seniors.



· All business income trusts, except for the best five, are down -40% or -$31 billion since their last public offerings. They were sold to seniors who asked for capital preservation of their lifesavings

Non Bank ABCP - Securities Regulators Have Made No Sanctions & No Assistance for Retail ABCP Owners After 17 Months

• Canadian savings used to buy assets that were pledged as first security to the international banks.

• Canadians unknowingly insured the bad loans of these international banks.

• International banks bought leveraged credit default swap contracts to insure their bad loans, with rights to call margin and force liquidation of the Canadian trusts [tried to extort $60 billion from owners & Canadian governments in December 2008.]

• ABCP buyers were told the paper was safe with bank guarantees from the same international banks.

• Just one credit rating agency – DBRS gave top ratings, while S & P and Moodys gave ratings below the minimum standard.

• Trust sponsors made unjust enrichment, while the ABCP buyers bore all the risk and received no risk premium.

• JPMorgan invented credit default swaps in 1997, which is the “product from hell” causing the world’s financial crisis, but gets $100 million advisory fee to restructure the Canadian ABCP Market devastated by its invention.

• Damages Loss % Loss

Secondary Market Trading
-85%
-$27 Billion

Accounting Valuation (Caisse & Domtar)
-45%
-$ 14 Billion




• Under $1 million retail ABCP holders fought for their own cash settlements without the assistance of the IIROC or OSC. Over $1 million retail ABCP holders left out, now need IIROC or OSC actions since CCAA Plan takes away their right to sue for remedy of their damages.

Ontario Government and OSC Facilitation of Non Bank ABCP

• In 2005, allows sale of Non Bank ABCP to retail market buyers under $50,000, provided credit rating agencies give minimum credit ratings. OSC does not supervise the credit rating agencies despite this delegation of public interest responsibility.

• In 2005, gives DBRS an exemption from civil liability for misrepresentation in the secondary market.

• In 2006, several OSC Commissioners give exemptive relief decisions for BMO, TD and CIBC to sell ABCP with just one DBRS credit rating above its minimum at R1 (high) and S&P and Moody's failing their credit rating tests.

• On Jan. 2, 2009, Purdy Crawford and Goodmans LLP gives late amendment to the ABCP CCAA Plan so that DBRS and its legal counsel get their fees paid during the ABCP Restructuring.

• On Dec. 30, 2008, Huston Loke, President of DBRS, refuses to disclose who has paid DBRS and how much they have been paid during restructuring and for the “A” credit rating on the new notes.

Securities Crime Policing Broken

• RCMP IMET took effective exclusive jurisdiction for securities crime policing in 2003, and other Canadian police forces reduced their resources in this field. The RCMP is the only police force in Canada without a Police Services Board.

• David Wilson, OSC Chairman controls too much of the securities enforcement system. OSC has been captured by the investment industry. The OSC delegates investor protection to the investment industry SRO's - IIROC and MFDA. These investment industry regulatory agencies have spent 6 years building partnership with RCMP IMET.

• Disband the failed RCMP IMET – Securities Commissions – SRO's partnership model and re-engage independent securities crime policing model, involving all Canadian police forces.

i. New Canadian Securities Crime Unit for securities crime complaints intake and assessment

ii. Use fraud police experts to interview victims and prepare assessment reports

iii. Assign investigations by pre-established jurisdiction protocols to RCMP, provincial, regional and municipal police

iv. New Securities Crime Unit independent of securities commissions and SRO's -IIROC and MFDA

v. Put structures in place to ensure anti-corruption and clear accountability for the public safety of pension funds and personal retirement savings.

• The investment industry’s solution of one National Enforcement Branch is an enforcement model designed to fail.

i. National securities commission goes beyond partnering with securities crime police to fully controlling it.

ii. Shuts out Canada’s other police forces.

iii. Lacks structure for public accountability.

iv. No independent securities crime intake and assessment

v. Contaminated criminal evidence and likely securities criminal case failures

[admin]

Of policing and regulation
Barry Critchley, Financial Post
Integrated training -- which is meant to lead to integrated policing -- was the major topic of a five-day conference organized last week by the Canadian Police College.
Titled "Integrated Financial Investigations Course -- Investment Fraud," the session , held in suburban Toronto, was the first of its kind and marked the first time a College conference had been opened up to non-police including regulators and forensic accountants. The 32 attendees heard from a variety of speakers including police agencies and regulators.
"If we have a genuine wish to change the enforcement culture from one of isolation and individualism to one of co-operation, corroboration and active participation, a good start is to have the front-line investigators receive some common training," said a backgrounder prepared by John Silter, the RCMP superintendent who organized the course. He argues that integrated policing meets the needs of victims "who would much prefer to see some form of strong integration and cohesiveness on the part of all agencies handling their case."
That's one point of view. Others have a different one, particularly when the police don't have as much independence as is required to do their job.
For instance, under Ottawa's rules a potential Integrated Market Enforcement Team (IMET) investigation is required to be presented to IMET's Joint Consultative Group, a body comprised of managers from the various agencies involved in the enforcement and prosecution of criminal, quasi-criminal and/or regulatory matters. [See paragraph 3 of Page 2 in the attached letter from Dean Buzza - Director RCMP IMET on Criminal Investigation Procedures 12112008]
Presumably the policy means IMET is obliged to share the complaint, and the evidence, to the Group -- which then decides if it will investigate. "And the chances of them doing it [given their record over the years] is zero," said investor advocate Diane Urquhart, who points to the $32-billion ABCP debacle as one example of how the process doesn't work. Those who felt they were defrauded and who lodged a complaint would be told to take the matter to IIROC (Investment Industry Association of Canada), which would decide, she said. Meanwhile, the RCMP isn't allowed to launch its own investigation. (Months back, the OSC said it was mulling charges.)
Gary Logan, a former detective sergeant who spent 32 years with the Toronto fraud squad, argues, "The police should decide on the criminality. They should make the assessment of whether there is any criminal conduct, based on the facts. That should then be assigned by police to a police investigation. The regulatory bodies should not be involved at all with criminal assessment. They don't have the knowledge, formal training or expertise."
Urquhart, who was also in Ottawa last week, has a similar view. And she doesn't like what's in the works, especially given the push by the federal government for a national securities regulator.
"Basically, there will be a situation where all of the securities regulation and crime enforcement will be under one national body. There will be no differences of opinion or places for people [with complaints] to go, and a private board will oversee the national securities commission."
In her view, "Integrated policing should be policing with other police, not policing with regulators."
So why are the authorities, as well as some industry associations, pushing for a system where the interests of the police seem to be subordinated? Urquhart believes "it's for no other purpose than control."
bcritchley@nationalpost.com
RELATED NEWS ON PROPOSED SECURITIES CRIME UNIT AT THE FOLLOWING WEBPAGE.
http://www.youtube.com/watch?v=Mb5zpALTy88
Diane Urquhart, Independent Financial Analyst, and Gary Logan, former Detective Sergeant of the Toronto Police Services Fraud Squad, are interviewed by Steven D'Souza of CBC News at Six. The story is about a DVD hosted by these two veterans in their respective fields on the proposed Canadian Securities Crime Unit (CSU). This is a new structure to organize and fully utilize the resources and facilities of all the police agencies of Canada in order to provide for the public safety of pension funds and personal retirement savings throughout Canada.

[admin]

These poor guys no longer even get their man if he is right inside their own organization. It is sad to see such blind adherence to "worst practices".

Globe editorial


Self-investigation is self-defeating


Deddeda Stemler/Canadian Press
Members of the Royal Canadian Mounted Police in front of the B.C. legislature.
Several high-profile cases have helped shake public confidence in the RCMP. The least that can be done to restore it is to ensure that the Mounties are not above the law
From Wednesday's Globe and Mail Last updated on Wednesday, Aug. 12, 2009 04:12AM EDT
Paul Kennedy, the chair of the Commission for Public Complaints Against the RCMP, has confirmed what many already believed: The system for investigating members of Canada's national police force is badly flawed. It is indicative of the continuing lack of accountability at the higher ranks of the RCMP that, rather than a full acknowledgment of these problems, the reaction to Mr. Kennedy's moderate proposal to fix them has already been defensive.
To call the RCMP's internal investigation process a system at all may be slightly too charitable. “There is currently no national, centralized co-ordination of member investigations,” Mr. Kennedy said in yesterday's report, which looked at 28 investigations involving Mounties. “That means that no member of the RCMP, including the RCMP commissioner, can tell you how many criminal investigations have been undertaken into its own members.”
Mr. Kennedy did not find any standard for how the investigations are conducted, either. If one existed, it might at least dictate a certain distance between the investigators and the investigated. Perhaps the commission would not have found that, in one-quarter of the cases, the primary investigator personally knew his or her subject, and that even more often, he or she was of an equal or lower rank than the person being investigated.
Even if stricter guidelines were in place, however, it would still be problematic for Mounties to be investigating each other in serious cases. There are so many pressures and potential conflicts in police investigating one another that an argument can be made that investigations should be turned over to civilian bodies, as is now the case in Ontario and Manitoba. The British Columbia Civil Liberties Association lamented yesterday that Mr. Kennedy did not go so far as to recommend that reform for the RCMP. The Mounties should embrace as a very fair compromise Mr. Kennedy's recommendation that “certain cases” – including all involving death – should be turned over to a different police force or a provincial criminal investigation body.
Instead, the RCMP is non-committal. It will consider the recommendations, Commissioner William Elliott says, but Mr. Kennedy's language is too harsh, his proposals may be too sweeping and an overhaul “may not be warranted.”
If the RCMP won't take responsibility, then the federal government should intervene. Several high-profile cases, most notably that of Robert Dziekanski, have helped shake public confidence in the national force. The least that can be done to restore it is to ensure that the Mounties are not above the law.

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RCMP COURSE FOR 3: $220,000

Rebuilding Image; Deputies slated to attend Arizona leadership school,
documents show
As part of an overhaul intended to restore trust in the RCMP, the force is
planning to spend nearly a quarter of a million dollars to send three of its
executives to Arizona for "personal transformation" and "accountability"
training.
Contract documents show the Royal Canadian Mounted Police intends to enrol
deputy commissioners in courses offered by Malandro Communication, a private
management training firm based in Scottsdale, Ariz.
Fees for the three students are expected to be $220,000, according to an
advance contract award notice published by the RCMP. The per-person cost of
the training is more than the average annual salary of an RCMP member.
The cost of travel and accommodations will be extra, said an RCMP
spokeswoman.
Sergeant Julie Gagnon said the program in Arizona is being offered through
the RCMP's "change management team," part of the organizational
transformation intended to rebuild public faith in the force.
The decision to award the contract to Malandro is justified in the contract
documents with information that borrows heavily from the company's
promotional material.
The document says the "3 for 1 High Performance Leadership" session the RCMP
officials will take focuses on their organization's "unique leadership
problems and behavioural barriers to success."
It explains the session is "not focused on skills acquisition. It's about
personal transformation. The leader won't just understand his/her road-map
to success, they will believe in it and know they can do it."
Another session the RCMP officers will take is called "100 per cent
accountability" and produces "significant behavioural changed (sic) need
(sic) to raise performance and build a culture of accountability," according
to the contract notice.
There are eight RCMP officers at the deputy commissioner level, one level
below Commissioner William Elliott.
The RCMP declined to identify who would be taking the course in Arizona.
The Malandro website refers to three-day "private CEO sessions," but it is
unclear if this is the program the RCMP officers will attend.
The RCMP was unable to provide further details on the course and Malandro
Communication did not respond to a request for comment.
The advance contract award notice gives other potential suppliers 15 days to
make a better offer if they can match the specific requirements of the
contract -- in this case, the RCMP says Malandro is the only known firm that
can deliver the "leadership transformation services" it needs.
Advance contract award notices are used by the government to award contracts
without a full tendering process, even though they are technically
considered to be competitive.
The RCMP has been rocked in recent years by controversy over its use of
Tasers on suspects and its handling of the case of Maher Arar, an Ottawa man
who was detained in the United States and then taken to Syria, where he
spent a year in prison. The force's transformation plan makes repeated
references to leadership, and says it will make a "substantial investment in
a leadership learning continuum."

[admin]

Victims burned while RCMP fiddled for years with
Alberta Ponzi scheme

BY DAVID BAINES, VANCOUVER SUN SEPTEMBER 18, 2009


It would have been Edna Coulic's 44th birthday today. The Kelowna woman won't be around to
celebrate because she committed suicide last October.
Her sister, Gloria Lozinksi of Calgary, said Coulic became depressed after she realized she had been
duped out of $300,000 in a massive Ponzi scheme perpetrated by Alberta confidence men Milowe
Brost and Gary Sorenson.
Both were charged with fraud by the RCMP Integrated Market Enforcement Team in Calgary earlier
this week. Estimates of total losses range from $100 million to $400 million. Brost is out on bail, and
Sorenson is believed to be hiding in Honduras.
Lozinski figures they should both be charged with murder: "At the end of the day, they pretty much
pulled the trigger," she told the Calgary Sun.
This is the brutal reality of white-collar crime. It is not simply a crime against property, it is a very
personal and debilitating assault against innocent people.
Parliament is beginning to respond. In 2004, the Criminal Code was amended to increase the
maximum sentence for fraud from 10 years to 14 years. Earlier this week, the Conservative
government announced it will introduce further amendments that, among other things, would provide
minimum mandatory sentences for serious frauds.
It is not likely, however, that any of this would have saved Coulic. The damage had already been done.
The key is to detect these schemes at an early stage and prosecute the perpetrators in a timely
manner. The problem is not so much what we do with fraudsters when they get to court, it's getting
them to court. In this regard, Canada is a complete failure.
I first wrote about Brost in December 2002, when he was pitching his investment schemes at T. Harv
Eker's Millionaire School. (Eker is a North Vancouver motivational speaker who has introduced his
devotees to many fraudulent investment schemes. He is, in my view, a public menace.)
At the time, Brost and his company, Capital Alternatives Inc., was promoting a gold investment
scheme, which was based in the Bahamas and operated out of Central and South America. He told
investors the scheme was "backed 100 per cent in gold concentrate and gold bullion", and the
expected return was 20 to 60 per cent.
He was also promoting an investment in "stale credit card debt," which he grandly called the


http://www.vancouversun.com/story_print ... 7&sponsor=
"Consumer Debt Recovery Program". He claimed thissort of debt could be acquired at a deep discount
and turned into cash at a large premium -- 18 to 54 per cent per year.
In June 2004, I reported that Brost was stumping around B.C. promoting these schemes.
"A few weeks ago, he made a presentation at University College of the Cariboo in Kamloops," I wrote
at the time. "On May 30, there was another meeting at the Radisson Hotel in Burnaby. The pitch
appears to be working. I have been told that one man in his 60s has invested $250,000 of his
retirement money."
I asked Sasha Angus, then the B.C. Securities Commission's enforcement director, whether he knew
about Brost's activities.
"We are aware of the situation and looking at it," Angus told me.
In September 2004, the Alberta Securities Commission issued a cease-trade order against Brost and
his main operating company, the Institute for Financial Learning, forbidding them from selling
investments in the depository and three other schemes.
In October 2005, the Alberta commission issued another notice of hearing alleging that Brost and
Capital Alternatives had induced investors to invest millions of dollars into another scheme called
Strategic Metals Inc.
At that point, the commission referred the file to the RCMP Integrated Market Enforcement Team,
which began an investigation.
In February 2007, the hearing panel found Brost had illegally sold $36.5 million in investments. "Brost
not only does not recognize the seriousness of his misconduct, but he is also prepared to shamelessly
overlook it," the panel noted. It fined him $650,000 and permanently banned him from the Alberta
market.
The B.C. Securities Commission piggy-backed on this order and also issued a permanent ban, but not
until April of this year.
It didn't matter, of course, because Brost ignored every administrative order that was issued against
him. The only thing that would stop him was jail. But the RCMP IMET team in Calgary didn't file
charges and didn't put Brost behind bars until this week -- four years after the Alberta commission had
referred the file to the police.
Why did this take so long? Supt. Eric Mattson, who heads the IMET team, told the Calgary Herald they
"could not act until there was enough evidence. "
"During that time, we didn't want to be seen as market-breakers. We don't want to accuse a group of

http://www.vancouversun.com/story_print ... 7&sponsor=
committing crimes and say, 'Don't do this,' because at the end of the investigation perhaps we don't
have sufficient information to lay charges and we'd be open to [civil litigation] as well. We may end up
interfering with what could have been legitimate business."
In my view, these comments are outrageous. This was a patently fraudulent scheme when I ran across
it in 2002. It was a patently fraudulent scheme when the Alberta commission referred it to the RCMP in
2005. Depending which start date you use, it took seven years or four years for the Mounties to shut
this thing down. That is a disgrace. But the real tragedy for Canadians is that this is par for the course.
Two years ago, the Conservative government tried to clean up the mess that is the RCMP IMET
program, but the attempt has utterly failed. Prime Minister Stephen Harper's proposed amendments to
the criminal code will do nothing to solve the problem of timely prosecution.
What we need is a royal commission of inquiry into white-collar crime in Canada. Nothing short of a
complete overhaul can save us from this systemic dysfunction. Let's not allow Edna Coulic to die in
vain.
dbaines@vancouversun.com

[admin]

Request for Public Safety Hearing on White Collar Crime

Minister Jim Prentice
Environment Minister and MP for Calgary Centre-North

And

MP Garry Breitkreuz
Chairman of the Committee of Public Safety and National Security

and

Roger Prefontaine
Clerk of the Committe of Public Safety and National Security


I am the chair of the Shire Victims Group, a group of 3000 alleged victims
of white collar crime. I am embarrassed daily to report back to our the
Shire Victims Group that the RCMP have not taken significant action in
starting an investigation into the crimes of Shire International alleged by
our victims despite the four months that have passed since our first attempt
to file a complaint. The RCMP continue to wait for information through
victims, our civil action and the bankruptcy protection process and the onus
is on us to prove fraud has taken place so that they can investigate. I ask
how the average Canadian citizen can undertake an investigation to prove
fraud without the powers of the RCMP?

The RCMP response to repeated requests to further an investigation into
Shire International is that there are not sufficient resources and that such
an investigation with be both costly and long. Each time I provide new
information with hopes that it will be enough, I am met with the same
answer, its not enough and there are still not enough resources. Sadly, it
took a full 8 weeks to hop from group to group and investigator to
investigator just to get an appointment and be able to make my first
complaint. It is a frustration to our entire group that the RCMP waits for
us to conduct an investigation through the civil court processes and then
turn that information over to the RCMP.

I would like to request a Public Safety Committee hearing on police
services' handling of securities crime, financial fraud, and white collar
crime complaints, assessment, investigations and prosecutions. With the
growing media reports of white collar crime across Canada, I wonder how many
victims out there have yet to report that they are victims of similar crimes
due to the current state of the system and lack of investigations due to
insufficient resources and procedures in place. Such crimes need to be
investigated quickly and correctly to ensure that justice is served for
victims and others are deterred from committing such crimes in the future.

Sincerely,

Jenn Lofgren

cell: 403-922-2224
email: investor@telus.net
blog: http://shireinvestor.blogspot.com

[admin]

images.jpeg (2.74 KiB) Viewed 1100 times

http://www.webmechanic.com.au/IFFL/Merendon.htm

But the veil of secrecy has now been pierced, and a far darker story has
begun to emerge. A story of fraud and deception on an almost unimaginable
scale.

In February 2007, the Alberta Securities Commission (ASC) found Brost guilty
of a $36.5 million investor fraud known as Strategic Metals. Some of the
fraud proceeds found their way to MM. In July, the ASC identified Brost as
the mastermind behind the fraud, and fined him $650,000, the largest fine
ever issued in the ASC's history. Brost actually admitted to his part,
stating (page 5, paragraph 21 of the full report) he had "set wheels in
motion that led to what amounted to a fraud on investors". The ASC report's
concludes with the statement (paragraph 139, page 27) "Given that this is...
a fraud on investors, we urge staff... to refer this case to the authorities
responsible for administering criminal laws."

The Royal Canadian Mounted Police (RCMP) have launched a separate criminal
investigation into the Strategic Metals case. Under the Canadian Freedom of
Information (FOI) Act, we obtained an RCMP search warrant issued October
2006. It cites evidence that the Merendon Mine refinery and gold mining
operations are a hoax. It includes eyewitness accounts from former MM
employees who claim the company has only a small amount of gold, which they
melt down again and again each time an investor group comes through. It
cites evidence from an individual with a strong background in gold refining,
who claims the refinery is an utter sham which might deceive the general
public but is not nearly sophisticated enough to deceive anyone in the
industry. Witnesses claim MM does possess some legitimate assets, but
nowhere near the amount necessary to repay investors, with or without the
massive income they are now owed by the company. The company survives
solely because the IFFL has successfully and fraudulently convinced
investors to keep their money invested for the long term.

Read the October 2006 RCMP Search warrant for yourself.

Read JUNE 2007 updated RCMP Search Warrant - Further evidence of fraud!!


The information in these warrants is shocking. Undoubtedly IFFL structurists
will attempt to discount the report, or denounce it as a lie. But one thing
is sure - an experienced criminal court judge deemed this evidence
sufficiently credible to grant a far-reaching search warrant to the RCMP.
Those who ignore it do so at their own peril.

The RCMP criminal investigation is ongoing. Assuming Brost and Sorenson are
convicted of criminal theft, droves of IFFL investors will quickly flee and
attempt to recover their funds. If the search warrant evidence is accurate,
most will be unsuccessful.

ARE YOU WILLING TO RISK YOUR LIFE SAVINGS THAT THE RCMP EVIDENCE IS WRONG?

Back to top

Last update: Aug 2007.

____________________________________________________________________________
________________________________________________

RCMP Alberta IMET criminal charges not laid until September 15, 2009!

[admin]

Toronto Star

Why politicians are afraid to take on the RCMP
December 26, 2009


By James Travers
National Affairs Columnist
OTTAWA

Some anniversaries should never be forgotten. It was four years ago this Christmas holiday that the RCMP meddled in a federal election, tilting its outcome, as even Conservatives confirm, and arching eyebrows over the relationship between the national police force and ruling parties.

Little has changed since. It remains a mystery why in the heat of a campaign then-Commissioner Giuliano Zaccardelli curiously revealed a criminal investigation into alleged Liberal income trust leaks. It remains a glacial work in progress to reform an RCMP that a 2007 inquiry concluded is horribly broken.

Wrapped around both the mystery and the slow-motion reforms are layers of fear and distrust more common to tinpot dictatorships than mature democracies. Politicians are keenly aware of the proven RCMP career-wrecking potential and dot a line between its behaviour and success resisting reorganization and civilian oversight.

Those changes were to be in place this month. Instead, Ottawa is delaying again, this time for Justice John Major's report on the 1985 bombing of Air India Flight 182.

While delaying, Conservatives are comforting a force rattled by serial snafus, including an internal pension scandal and Robert Dziekanski's Vancouver airport death. Gone within days will be Paul Kennedy, the RCMP complaints commissioner whose scathing reports and urgent demands for independent investigations embarrassed Mounties and irked Conservatives.

Ottawa insists reform and a new commissioner are coming. But restoring trust begins with fully airing what Zaccardelli did and why it's so easy for him to remain silent.

Each of the three national parties has reason to push the past under the rug. Liberals want to erase memories of the ethical failures and infighting Zaccardelli stirred, the NDP prefers to forget its fevered response to the faxed RCMP letter and Conservatives have zero interest in adding a retrospective taint to an election victory.

Still, public trust demands the removal of all suspicion that a federal election was less than free and fair. Conservatives are not only failing to restore that confidence, they are compounding the legitimate worry that politicians are too intimidated or self-interested to act when the RCMP plays politics.

That reticence is easily explained. Wild RCMP runs at high-profile politicians, including Ontario's former finance minister Greg Sorbara and B.C.'s one-time premier Glen Clark, are reminders that the RCMP, despite concerns about its competence, is still credible enough to ruin those in public life.

Logic argues that it's in the interest of political elites to modernize a historic force that operates with the secrecy of a cult. Implementing fundamental changes recommended more than two years ago and still promoted by Kennedy would protect politicians from frivolous investigation while restoring public faith that the RCMP is safely under civilian control.

Both should have been priorities after Zaccardelli, later defrocked for misleading Parliament in the Maher Arar affair, apparently tinkered with an election. Any doubts about the legitimacy of that campaign should have been dispelled before voters next cast a ballot.

Instead, politicians opt not to risk RCMP wrath. Instead, a country that actively promotes its democratic brand abroad is now marking the fourth anniversary of an outrage so beyond the Canadian experience that it remains hard to believe it happened here and still harder to accept that the truth remains securely under lock and key.

James Travers' column appears Tuesday, Thursday and Saturday.

[admin]

Red flags hang over Mounties' image


THE CANADIAN PRESS

The use of an RCMP Taser against Robert Dziekanski at
Vancouver's airport was "inappropriate" and the explanations
of the four officers involved weren't credible, says the force's
independent watchdog. (Dec. 8, 2009)
December 26, 2009

James Keller, The Canadian Press

VANCOUVER–An RCMP cadet wearing a blue T-shirt and her hair tied back in a bun stands remarkably still against a chain-link fence as a steady stream of pepper spray is blasted at her face.

She opens her eyes and starts whimpering from the pain, scrambling to complete a set of tasks that include repeatedly kneeing a fake suspect and finding a radio lying on the ground to call for help

"I can't breathe," she says through tears once the exercise is over, exhausted and hunched over one of her instructors at the RCMP's training centre in Regina.

It's a scene from Courage In Red, a television series that broadcast for the past two months documenting the daily lives of RCMP members, from the grind of basic training to isolated policing in the far North.

The show, which looks like a recruiting video, is an attempt to boost the Mounties' profile at a time when Canadians are increasingly skeptical of their national police force, with recent scandals and controversies continuing to tarnish their iconic image.

It might take more than a feel-good television series to repair the force's battered image ahead of a year that could prove pivotal for the RCMP's future in this country.

Reports from the public inquiries into Robert Dziekanski's death and the 1985 Air India bombing are almost complete, major policing operations such as the Vancouver Olympics and the G20 will be under heavy public scrutiny, and all of that will come before 2012 contract negotiations with provincial and territorial governments, at least one of which has mused about dropping the RCMP altogether.

Observers say the RCMP can survive its current malaise, but only if it successfully addresses very real concerns that it isn't accountable and has no appetite for change.

The Mounties tend to handle most criminal investigations involving their own members, and provincial oversight bodies typically have no jurisdiction over the national force. The RCMP's own watchdog can only make non-binding recommendations, and some critics say those recommendations are too often ignored.

Simon Fraser University criminologist David MacAlister argues there simply isn't enough oversight of the RCMP. Until that changes, he says, the force's image problems will only get worse.

"People are probably starting to wonder, why do we have the RCMP? They're not accountable locally, so why would we bother keeping them?"

Paul Kennedy, the outgoing chair of the force's complaints commission, released a report this year that called on the RCMP to stop investigating itself in serious cases to avoid conflict of interest. He repeated that recommendation in a report this month that scolded the officers involved in Dziekanski's death and criticized the subsequent homicide investigation.

The RCMP, however, has appeared hesitant to accept Kennedy's recommendations, saying changes are in the works but suggesting a blanket policy forbidding the force from investigating its own officers would be impractical.

The force and the federal government also say they're waiting for the Dziekanski and Air India reports before deciding just what changes to make.

Kennedy says the RCMP knows what's wrong and how to fix it, and should have acted by now.

RCMP Sgt. Tim Shields, who served as the force's media relations officer in B.C. during the high-profile public inquiry into Dziekanski's death, readily acknowledges the Mounties have work to do, and he insists change is imminent.

"It's without question the RCMP's image has taken a hit, and we are going to work as hard as we can to try and rebuild that trust with the public," says Shields.

"What is important is that the public sees that there is an effective system in dealing with those mistakes and that changes are made as a result of that system."

Shields acknowledges 2010 could be a make-or-break year for the force, especially with the massive RCMP-led security operation at Vancouver Winter Olympics.

"I think it's fair to say that this is a very critical time for the RCMP," he says. "I doubt that the organization has been the focus of as much media attention as we received over the past couple of years, and our response to some of these major incidents is going to determine the outcome of public opinion and possibly the future of the force."

[admin]

did I miss a meeting somewhere or is financial crime in Canada just considered "standard industry practice"?

** Media News ** No jail in sight for [Garth] Drabinksy

by : Theresa Tedesco, The Financial Post, Thursday, February 11, 2010

In the never-ending legal saga of Garth Drabinsky and Myron Gottlieb, the few hours the duo spent in custody last August [2009] just after they were handed stiff prison terms could be the only time they ever serve for orchestrating a massive accounting fraud at now-defunct theatre company "Livent Inc."

Last week, Drabinsky, 60, and Gottlieb, 66, who were each convicted of two (2) counts of fraud and one (1) count of forgery by Ontario Superior Court Justice Mary Lou Benotto on March 25, 2009, were granted an extension of their bail pending their appeal. The duo want the Court of Appeal to overturn the fraud convictions and prison sentences, seven years for Drabinsky and six for Gottlieb.

Under the terms of their release last August, the theatre executives were required to surrender on Feb. 5, 2010

However, the two men whose case has become synonymous with Canada's perceived ineptitude at prosecuting white-collar crime did what they have done for almost a decade. They applied for an extension of their so-called "sunset clause" -- and the Ontario Court of Appeal granted it, with the consent of the Crown Attorney's office.

Now, their new surrender date is June 11, 2010. But don't expect the disgraced theatre impresario or his former business partner to present themselves to be fitted for a prison jumpsuit that day either.

Consider that the criminal case against Drabinsky and Gottlieb began in 2002 when the RCMP charged the pair in October, 2002, with defrauding investors of $500-million. And that was three (3) years after the pair was already dodging the U.S. Attorney for the Southern District of New York and the U.S. Securities and Exchange Commission, which filed a bevy of criminal and civil charges against the former Livent executives in 1999. Facing the prospect of 140 years in prison and up to US$16-million in fines -- and fearing they wouldn't get a fair trial--Drabinsky and Gottlieb became fugitives from the United States and took their chances with the Canadian court.

That trial didn't happen until 2009 -- almost seven (7) years after the RCMP charges and a decade after the U.S. indictments.


FRAUDSTER'S FREEDOM EXTENDED ENDLESSLY TIMELINE
- 1999 U.S. District Attorney and the U.S. Securities and Exchange Commission file criminal and civil charges against Garth Drabinsky and partner Myron Gottlieb.
- OCTOBER 2002 - RCMP charges Drabinsky and Gottlieb with defrauding investors of $500-million.
- MARCH 25, 2009 - Each is convicted of two counts of fraud and one count of forgery.
- FEB. 5, 2010 - Drabinsky and Gottlieb's initial surrender date.
- JUNE 11, 2010 - New Proposed surrender date.

........please read the full article online at - http://www.financialpost.com/story.html?id=2548282&p=1

[admin]

This story is a picture perfect example of how connections, corruption and cronyism have infected our financial system, our political system and heaven forbid our law enforcement. It illustrates how millions of dollars of advance trading were ignored while the man with the $7,000 profit was hung out to dry.

Ex-bureaucrat guilty of breach of trust

Finance department director knew changes were coming to income trust tax treatment
BY DON BUTLER, THE OTTAWA CITIZEN MAY 5, 2010

Serge Nadeau was a respected senior bureaucrat with a 14-year career at the Department of Finance when his world came crashing down on Feb. 15, 2007.
That's when Nadeau was charged with breach of trust under Section 122 of the Criminal Code, accused of using inside knowledge of pending changes to the tax treatment of income trusts to profit on a stock transaction.
He was discharged from his job as general director, analysis, in the department's tax policy branch the same day.
This week, more than three years after he was charged, the 53-year-old Nadeau pleaded guilty in Superior Court in Ottawa.
Justice Lynn Ratushny fined him $14,000 -- double his profit from his insider transaction -- and gave him a conditional sentence of 10 months. She also ordered him to do 100 hours of community service and prohibited him from trading securities, other than mutual funds, for 10 months.
Nadeau's crime was discovered almost by accident during one of the most politically sensitive police investigations in recent Canadian history.
In the middle of the 2006 federal election campaign, the RCMP announced it was investigating a suspicious spike in the purchase of income trust units.
The spike occurred just hours before then-finance-minister Ralph Goodale announced the Liberal government had decided not to impose a tax on income trusts, and would lower the tax on dividend income instead.
That prompted the opposition parties to accuse the Liberals of leaking the news to friends in the financial community. The allegation and police investigation helped defeat Paul Martin's government and elect Stephen Harper's Conservatives.
In an interview Tuesday, Nadeau's Montreal lawyer, Raphael Schachter, drew a line between his client's crime and the income trust leak case.
"This whole case of Serge Nadeau had nothing to do with the income trust leak case," Schachter said. But during the RCMP's 14-month investigation, he said, it "came across certain evidence that
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implicated Mr. Nadeau in this isolated incident."
Along with Nadeau's Ottawa lawyer, Richard Auger, Schachter spent months negotiating a plea bargain with Paul Lindsay, the Ontario assistant deputy attorney general who handled the case for the Crown.
"There certainly was the risk of a very lengthy trial, with perhaps over 30 witnesses," Schachter said, including "various individuals of note." By reaching a deal, the parties "avoided a major disturbance in the lives of many people and in the administration of justice itself."
Schachter said Nadeau is "as relieved as one can be for an individual who is an inherently decent and honourable man to have gone through what he went through."
"This has been the most onerous and difficult time of his life, professionally as well as personally. He wants to get on with his personal life and his professional life."
During the 2010 winter university term, Nadeau taught economics at the University of Ottawa. The university's website describes him as a "replacement professor to the rank of assistant professor."
Schachter said Nadeau hopes to continue teaching. "He's very well-respected and doing a fine job, and hopefully will continue in that area."
University of Ottawa spokeswoman Nadine Saint-Amour said Tuesday it was "too early to comment" on Nadeau's status.
In passing sentence, Ratushny considered a 17-page summary of the evidence that was accepted by all parties. It reconstructs the events that led to the breach of trust charges.
In its 2005 budget, the Martin government announced it would hold public consultations about possible tax changes to income trusts and other "flow-through entities."
The announcement caused uncertainty in capital markets, and drove the value of most income trusts down in anticipation of an impending tax.
By mid-November 2005, it was apparent that a non-confidence motion would trigger an election before the scheduled end of the consultations. As a result, Goodale decided to accelerate his decision.
During this period, there were several discussions within the Department of Finance to which Nadeau was privy. In particular, he attended key meetings on Nov. 21 and Nov. 22, 2005.
At the first meeting, the options were reduced to two: leave the tax treatment of trusts unchanged while reducing the tax on dividend income; or impose a small tax on trusts and reduce the tax on dividends.
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At the second meeting on Nov. 22, it was clear that Goodale was leaning toward the first option.
The following day, Goodale announced the tax treatment of income trusts would remain unchanged, while taxes on dividends would be reduced.
The announcement was made after financial markets had closed, to ensure no investor would have an unfair advantage.
According to the summary document, at 10:58 a.m. on Nov. 22, Nadeau transferred $45,000 from his RD Canada Trust line of credit to his TD Waterhouse discount brokerage account.
The next morning at 7:50 a.m. -- 10 hours before Goodale's announcement -- Nadeau electronically ordered the purchase of 3,100 units of the Yellow Pages Income Fund, a large income trust. The brokerage filled his order at 9:30 a.m., purchasing 3,100 units at $14.12 per unit. The total cost was $43,772.
When Nadeau bought the units, he knew there was a "high probability" Goodale would be announcing no change in the tax treatment of income trusts, "with the expectation that the trading value of the units would increase as a result of the announcement," the summary document says.
Nadeau knew, says the document, that "it would be improper to benefit personally from his knowledge" and that his purchase of the trust units "would be an apparent breach" of the public service's Values and Ethics Code.
On Dec. 1 and Dec. 12, 2005, Nadeau sold the Yellow Pages units in two batches, for $15.49 and $16.50 per share, netting a profit of about $7,000.
Neither Goodale nor Nadeau's superiors in the Department of Finance were aware of the transactions. Had they known, says the summary document, "they would not have approved of them and would have taken appropriate disciplinary action against Mr. Nadeau."
The document concludes there's no evidence Nadeau's action was the source of the "heavy market activity" on Nov. 23, 2005, that sparked the RCMP's politically fraught investigation. The source of that remains a mystery.

The RCMP could have found the identity of all the traders on that day in about twenty hours of detective work. It pointed at persons whom it would be "inconvenient" to prosecute, so the government bureaucrat takes the fall. An excellent example of Canadian corruption.

[admin]

Quote from a letter from RCMP saying that they "consult" with financial regulatory and self regulatory agencies "before" they consider criminal charges against financial crimes..............just like having some of the foxes sit in on the "consulting" group of the RCMP.

"However, even if a complaint does meet this initial threshold test, there is no guarantee that it will be undertaken as a full blown investigation by the Unit. In the case of an IMET investigation, the Unit Commander is obliged, by the conditions imposed by the federal government, to present all potential investigations to the Unit's Joint Consultative Group, ("JCG"), which is comprised of managers from the various agencies involved in the enforcement and prosecution of criminal, "quasi-criminal", and/or regulatory matters.

This is in direct contrast to what was quoted to me by an RCMP IMET Staff Sergeant in Vancouver recently.