Toronto Chapter Newsletter
Volume 11, Issue 7
July 1, 2011
Penny Hill, Chapter Administrator:
Brenda Young, CFE, Newsletter Editor:
Toronto Chapter Dinner Meetings
Editor’s Message December 2013
The ACFE - Toronto Chapter looks forward to bringing you more top notch dinner meetings in 2014. Our venue will remain at the University Club Toronto, 380 University Avenue.
December marks the close of another year – it’s hard to believe we are at this time once again.
We would like to take this opportunity to thank our guest speakers of 2013 for sharing their knowledge and expertise with us and providing a variety of interesting topics. We appreciate their time provided to the Toronto Chapter and look forward to seeing them and others in the New Year.
We would like to remind you that dinner meetings will resume again in the New Year. The ACFE – Toronto Chapter hopes you have enjoyed the dinner meetings held at the University Club and we look forward to offering many more terrific speakers and topics in 2014!
2013 recap of our guest speakers and topics: January 2013 – Edward Nagel – Fraud and Corruption in the Construction Industry.
Work has also begun on the 14 Annual Toronto Fraud Forum ‘2014’. The one-day fraud forum provides two tracks of presenters; an insurance fraud track and a general fraud track. The event has been very successful in past years and 2013 was no exception.
March 2013 - Denise Bambrough & Elissa Sinha – Employee Fraud: Detection, Investigation and Response.
We would like to put a call out to all authors. Have you considered writing an article for an upcoming newsletter? The ACFE – Toronto Chapter newsletter is looking to hear from new people as well as our loyal contributors. If you have an idea for an article or would like to contribute an article for the newsletter, please forward your ideas or a copy of your article with permission to publish, to Penny Hill, chapter administrator at email@example.com.
April 2013 - Sandy Boucher – Digital Forensics – An Investigators View.
We look forward to seeing familiar faces and getting to know some new ones in the New Year. Have a safe and happy holiday season!
March 2013 – Andrew Kautz – Employee Fraud: Avoiding Backlash to the Investigation.
October 2013 – Norm Groot – Funding Fraud Recovery Litigation. The ACFE – Toronto Chapter dinner meetings provide an opportunity to network with others and to gain further insight on fraud related topics. The guest speakers encourage interaction and questions from registrants. All registrant’s names are submitted for a draw at the end of the meeting. Consider joining us for a dinner meeting in 2014! Meeting dates, speakers and topics will be posted in future newsletters and on the website: http://www.acfetoronto.ca/events_activities.php
The Rights of Canadians By David Debenham, JD, LLM, DIFA, CMA, CPA, CFE
By all accounts, Roland Eid (“Eid”) is an interesting man. In the latest chapter of his life he has managed to arrange for the Government of Canada to fund his defense counsel to defend charges of criminal fraud leveled against him by, 1 you guessed it, the Government of Canada. How he managed to do that is a tale in itself, and you will see. However, let’s begin at the beginning. The charges in this case relate to an alleged scheme conceived of and executed by Eid to flee Canada for Lebanon in December 2007 with $1.7 million dollars that belonged to ICI Construction Management (“ICI”). It is further alleged that when he left Canada, Eid left ICI bankrupt and creditors claiming losses in the range of $10,700,000. In 2007, ICI had won a $4.5-million contract to move, rebuild and demolish several buildings for an RCMP training facility on land owned by the Department of National Defence, a $1-million refit of Foreign Affairs' Lester B. Pearson building; and various other public and private projects. Halfway through the projects Eid abruptly left Ottawa for Lebanon in 2008, and ICI suddenly closed its doors and went into receivership. The company failed to complete the various projects, leaving the trades with only a claim against a bankrupt company or in some cases, a claim for the 10% holdback against federal government labour and material payment bonds in others. It is undisputed that in late December 2007, Mr. Eid and his wife Marlene Eid left Ottawa and travelled to Lebanon with $1.7 million dollars which they allege was from the sale of ICI. These funds were transferred into Mr. Eid’s bank account in Lebanon. Roland Eid’s wife Marlene testified that they could spent the entire $1.7 million during their first four years abroad — principally on a movie produced by Roland and some construction projects in Syria “that didn’t work out.” The Eid family returned to Ottawa in March 2012, alleging they were penniless. At the time Eid returned to Ottawa, there were no criminal charges pending against him or his wife, although he was aware of civil judgments registered against them with respect to ICI. Subsequent to his release on bail, he found employment as a project manager with a reputable land developer, while his wife Marlene who was also facing charges, was able to secure part-time employment three days a week as a dental assistant. All the charges against Marlene Eid were eventually withdrawn at the request of the Crown. A 6 week trial on all charges is set to begin on September 9, 2014. Mr. Eid has brought what is commonly known as a Rowbotham Application. He argued he cannot afford to retain counsel and that counsel is essential for his right to a fair trial under the Charter. The Rowbotham case stands for the proposition that “a trial judge confronted with an exceptional case where legal aid has been refused and who _________________________ 1
R. v. Eid (2013) ONSC 7084
The Rights of Canadians – cont. from page 2
is of the opinion that representation of the accused by counsel is essential to a fair trial, may, upon being satisfied that the accused lacks the means to employ counsel, stay the proceedings against the accused until the necessary funding of counsel is provided.” In considering whether to appoint counsel the trial judge is required to consider the seriousness of the charges, the length and complexity of the proceedings and the accused's ability to participate effectively and defend the case. The onus is on Mr. Eid to establish all three factors on the balance of probabilities. Because of the pervasiveness of legal aid, it will be the rare and exceptional case that the court will find it necessary to appoint counsel. Established in 1998 through the Legal Aid Services Act, Legal Aid Ontario is a not-for-profit corporation that provides legal aid services to low-income individuals in the province of Ontario. Legal issues that are covered by Legal Aid Ontario include matters involving domestic violence, family law, child custody, refugee and immigration hearings, and assistance in criminal cases where the accused faces a substantial likelihood of incarceration if convicted. In 2008, the Ontario Ombudsman criticized Legal Aid Ontario for funding the legal defence of Richard Wills. The report, Mr. Wills was alleged to be a person of means to fund his own defence who was charged with the murder of his longtime lover. In the months preceding his trial he allegedly had transferred his assets into his wife's name. Subsequently, he applied to Legal Aid Ontario where he was effectively provided a million dollar defence even though his application suggested that his defence would “only” cost $50,000. In the Eid case the defendant Eid estimated his legal fees would be approximately $100,000, even though there was no evidence as to the hourly rate nor as to Mr. Eid seeking estimates from other counsel. The court asked whether Eid proven on a balance of probabilities that he lacks the financial means to retain counsel. The earlier decisions of the Legal Aid Area Director and the Area Committee indicated Legal Aid was refused due to Mr. Eid’s failure to provide full financial information, in particular, regarding his bank accounts and businesses in Lebanon. In assessing his financial eligibility, Legal Aid Ontario also focused on the availability of support from family members including those of Marlene Eid, as well as the financial circumstances of Mr. Eid’s brother, Eid Eid, who originally acted as Mr. Eid’s surety and posted a $150,000 bond. The court was satisfied with Eid’s financial disclosure, and found that for the present purposes assistance by family members should be voluntary. The court refused to impose a significant financial obligation on them where there would be no reasonable prospect of Eid paying back any loans from family members in the foreseeable future, if ever. The court therefore enter a conditional judicial stay of proceedings in respect of the charges against Eid to remain in effect until such time as the Attorney General of Canada provides the funding necessary for the retention of legal counsel to represent Eid at his trial, in order to protect his Charter right to counsel.
The Rights of Canadians – cont. from page 3
So what does this mean? Let’s presume, for the sake of argument, that Eid is guilty, that Eid’s company was paid $10 million by the federal government, and that Eid looted the company rather than pay the trades that actually did the work on federal government projects. Presuming further, Eid goes on a lark and spends all the money on a spending spree for him and his family overseas. The trades are left with no recovery, or some claims for 10% of the money against a bond. All suffer a substantial loss. There is no federal Construction Lien Act to protect them on federal projects. Some go bankrupt. Many have to be supported by their family. None get their legal expenses paid by the government. Instead Mr. Eid gets his legal bill paid in full by the same government whose money he used to go on a bender overseas and who is charging him with several counts of fraud. That’s his right as a Canadian. What are fraud victims’ rights as Canadians? What are taxpayers’ rights in this case? These are more difficult questions to answer.
About the Author: David Debenham is a barrister and solicitor in the Ottawa law office of McMillan LLP (formerly Lang Michener).
David Debenham JD, LLM, DIFA, CMA, CPA, CFE
David, a lawyer with full accounting credentials and an overlay of forensics, is the author of The Law of Fraud nd edition) from and the Forensic Investigator (2 CARSWELL.
About the ACFE: The ACFE is the world's largest anti-fraud organization and premier provider of anti-fraud training and education. Together with more than 70,000 members, the ACFE is reducing business fraud world-wide and inspiring public confidence in the integrity and objectivity within the profession. Visit www.acfe.com for more details.
“It’s discouraging to think how many people are shocked by honesty and how few by deceit.” ~ Noel Coward
South Western Ontario
Police seize $6.5 million in counterfeit goods Police across Ontario seized millions of dollars in counterfeit goods and arrested 21 people. Police have seized $6.5 million worth in fake goods and arrested 21 people in connection with a cross-border counterfeit investigation, Toronto police confirmed Friday. Read more
Businessmen face charges over millions in tax evasion fraud Canada Revenue Agency alleges the men led investors to writeoff $14.7M in ‘fictitious losses’ Two Winnipeg businessmen face multiple charges over millions of dollars in alleged tax evasion and fraud connected to a company that tried to build a shopping loyalty rewards program. Read more
Currency fraud based in Toronto stole millions RCMP say
February 3-4, 2014 – ACFE presents – Conducting Internal Investigations – New Orleans, Louisiana: From receiving the initial allegation to testifying as a witness, Conducting Internal Investigations will prepare you for every step of an internal investigation of fraud. Lead an investigation with accuracy and confidence by gaining knowledge about legal considerations, document collection, interviewing skills and evidence documentation. The course is an instructor-led course, practical experience to take back and apply in your own work. Venue: New Orleans Downtown Marriot at the Convention Center, 859 Convention Center Blvd, New Orleans, Louisiana, USA To register: http://www.acfe.com/events.aspx?id=4294979748 April 3-4, 2014 – ACFE presents – Fraud Risk Assessment – Ottawa, Ontario: With organizations losing an estimated 5 percent of their annual revenues to fraud, the need for a strong anti-fraud stance and proactive, comprehensive approach to combating fraud is clear. This course will assist to: Develop a system of internal controls to address the entity’s fraud risks. Identify, assess and manage fraud risks from all sources. Support fraud risk management initiatives by establishing an anti-fraud culture and promoting fraud awareness throughout the organization. Address and respond to any identified instances of fraud.
InvestTechFx Techonolgy allegedly bilked investors of millions
The Mounties are looking for the people allegedly responsible for a currency trading fraud based out of Toronto that has reportedly bilked customers out of millions of dollars. Read more
Million dollar fraud hits Ontario banks, government: RCMP
The Mounties say they’ve broken up an alleged organized crime ring that police estimate bilked the Ontario government and banks of millions of dollars. Read more
Venue: Sheraton Ottawa, 150 Albert Street, Ottawa, Ontario, Canada
To register: http://www.acfe.com/events.aspx?id=4294979589
Your Board of Directors President Vice-President Treasurer Secretary Director Director Director Director and Immediate Past President Director
Astra Williamson, CGA, CFE Linda Lister, CGA, CMA, CFE, DIFA William Vasiliou, CGA, CFE, CCRA, CREA, DAC Tom Eby, CA, MBA Bruce Armstrong, CA, CFE Erik Bettencourt, CMA, CFE Graham Ospreay, FACFE, CSP Steven E. Silverberg, CA, CFE
firstname.lastname@example.org Linda.email@example.com firstname.lastname@example.org email@example.com BArmstrong@froeseforensic.com firstname.lastname@example.org
Jeffrey Weigensberg, CA, CFE, CFF, CPA, CA.IFA, CI
Ex Officio Members Alexander J. Wright, CD, BA, MB, A, CFP, RFP, Capt. (Retired) Kathleen Watson Brenda Young, CFE Ryan Watt
email@example.com firstname.lastname@example.org email@example.com firstname.lastname@example.org
Did you know….. Purchasing counterfeit or replica products may appear to be a great way to save on costs; however these products come with a high risk to safety and may even be supporting organized crime and terrorist groups. There are a number of concerns with purchasing product knock-offs besides the obvious, did you know…. • • • •
• • •
The identity of the original manufacturer of the product has been stolen where counterfeit products are involved. Harmful products that are replicated include toys, pharmaceuticals, diet products, perfume, batteries, make-up, and electronics to name a few. Any product can be reproduced. Health risks include improper dosages or toxic chemicals used to produce knock-off medications. Safety standards are not met in knock-off toys. o The filling used in stuffed toys has been known to contain dirty feathers, dog hair, cat hair and rags. o Paint may contain toxic chemicals including lead. o Small parts present choking hazards and / or parts which are easily broken off. Electronics do not meet safety standards, may be concern of a risk of electrical shock and fire hazard. Software may contain viruses / malware. Sale of counterfeit products means loss of money to legitimate businesses.
Be aware of what you are purchasing. Compare pricing, the old adage holds true – “If it seems too good to be true it probably is”. Check for flaws. There are usually subtle differences between the authentic version and the knock-off. Variances may include irregularities in the packaging of the product and colour of the package, may also include spelling errors in the name of the product. On November 29, 2013, police in Toronto charged 21 people after an investigation into the sale of counterfeit products worth $6.5 million dollars. See page 5 of the newsletter to read more on this and other fraud related news stories.