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Famous White Collar Criminal Cases from Canada

In our minds the word criminal is usually associated with a street drug dealer or a robber who sneaks into a bank at night, but in recent decades these types of crimes have been decreasing in number. A criminal can easily be a well-dressed businessman who comes to work every day and uses advanced financial skills to transfer money from the company’s financial accounts to his own without anyone noticing. This is an example of white collar crime, which includes frauds committed by business and government professionals. Though non-violent, they can cause significant damage to investors, workers, families and governments.

Some high profile white collar criminals like Bernard Madoff or Enron managers are known worldwide, but what is the situation in Canada? Its overall crime rate may be low, but Canada is not lagging behind with its white collar crime professionals, neither in terms of their skills nor the financial damage they cause. A survey from PricewaterhouseCoopers reports that more than half of the companies in Canada report being victims of fraud. Actually, Canada has for a long time been accused of being too soft on such white collar crimes, the accusations being that the trials are too lengthy and the sentences are low. But it has to be taken into account that this type of crime is difficult to prove, and wrongful accusations are frequent.

Let’s see which white collar crime cases are best known in Canada.

1) The Sorenson and Brost Ponzi scheme

Two businessmen Gary Sorenson and Milowe Brost ran one of the biggest Ponzi schemes in Canada for nine years (from 1999 to 2008), tricking more than three thousand local and international investors. The investors were promised a high return rate (35%) if they invested their money into a business with gold refinement. But such thing didn’t exist. Instead, the old investors were paid up with money from the new ones. After a certain period, the payments stopped and the fraud started to unravel. Many of the the victims were left completely broke after having invested all of their savings. Total damages were estimated to $100 – $400, and Sorenson and Brost were sentenced to 12 years in jail.

2) The Livent scandal

Livent Entertainment of Canada Inc. was an entertainment company listed on Toronto Stock Exchange in 1993. The company grew fast and based on its successful financial reports it attracted a lot of investments. However, in 1997 the first signs of trouble started to emerge with the first reports of losses. The following year the company filed for bankruptcy and a criminal investigation was launched. A couple of its managers and two co-founders, Garth Drabinsky and Myron Gottlieb, were accused and sentenced in the court of Ontario for defrauding the shareholders by “cooking the books” – hiding losses and misstating financial statements. Furthermore, the company’s auditors Deloitte & Touche LLP were also ordered to pay over 84.8 million dollars for failing to prevent the fraud, a decision the company said it will complain about.

3) Brian Molony’s compulsive gambling

Brian Molony from Toronto embezzled millions of dollars from the Canadian Imperial Bank of Commerce where he worked primarily to satisfy his gambling addiction. He deposited millions of dollars from the bank into a company owned by a Las Vegas casino, which allowed him to lead a lavish gambling lifestyle. Finally he was arrested in 1982., and the casino company Caesars was also sued because it was confirmed they knew the money wasn’t his, but they still heavily encouraged him to continue gambling. Caesars got a settlement, while Brian served two and half years in jail. A book was later written about his-out-of control gambling.

4) Bernie Ebbers and WorldCom

Bernard Ebbers is a Canadian-born businessman who is serving a jail sentence in USA for fraud and conspiracy. At the time, his case was the largest accounting scandal in the USA history. He was a CEO of a telecommunications company WorldCom. In 2002 the internal auditors discovered an accounting fraud worth approximately 3.8 – 11 billion dollars. The company’s revenues and assets value was inflated by using false documents. As a consequence, Bernie Ebbers is now serving a 25-year jail sentence, and the USA has passed a set of new business regulations to prevent such things from happening again.

5) Harold Ballard

Harold Ballard was the owner of the Toronto Maple Leafs and their home arena, Maple Leaf Gardens. He was a successful businessman who did a lot for Canadian sports, but in 1971 he was convicted of fraud, theft and tax evasion on 47 accounts. Funds from Maple Leaf Gardens were used for his own personal causes, like paying a limousine for this daughter. For that he served 3 out 9 years in jail.

6) Alan Eagleson

It can fairly be said that Alan Eagleson is one of the most complicated figures in the history of hockey. On one hand, he introduced a lot of beneficial changes to hockey, like the possibility for players to unionize and negotiate their own contracts. On the other hand, he skimmed money from tournaments and embezzled money from his clients. As a lawyer, he gave financial advice to players and passionately fought for their rights. However, his career crumbled when he got accused and sentenced for corruption when negotiating contracts for the players, racketeering, insurance fraud (taking part of the money the players received from insurance funds) and much more. He stepped down from NHLPA in 1992, got disbarred as a lawyer and removed as a member from the Order of Canada.

7) Conrad Black

Conrad Black was the head of a US publishing company which controlled multiple newspapers in North America. In 2007, he was convicted for misusing 60 million dollars from the company’s shareholders and served about two years in jail. Consequently, the Ontario Securities Commission barred him from becoming an officer or director of any Ontario company that issues securities.

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