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Canada’s Corporate Crime Record gets a Boost

by investor on 26/03/09 at 11:52 am

Canada, long criticized for its dismal record on white-collar crime prosecutions, secured its first major victory Wednesday in the high-profile conviction of disgraced theatre impresario Garth Drabinsky.

The fraud and forgery convictions, which follow a decade of investigation and pre-trial motions and hearings, are expected to help the country’s reputation overseas where it is perceived as weak on enforcement involving stock market and investment crimes.

“This is the first high profile conviction… It should show that corporate crime is taken seriously,” said veteran criminal lawyer Alan Gold of the two-counts of fraud and single forgery convictions against Mr. Drabinsky as well as his former right-hand man at Livent Inc. Myron Gottlieb.

However, he said the impact will be muted by the 10 years it took to get the case from an initial investigation through to convictions.

His concern about the impact on justice of long delays in prosecuting cases in Canada is shared by corporate crime specialists, including the man who led the investigation into the accounting fraud that took place at Livent while the company was mounting well-known Broadway musicals such as ‘Show Boat’ and ‘Kiss of the Spiderwoman’.

“I really think it is a shame that it took this long,” said Craig Hannaford, a longtime commercial crime specialtist at the Royal Canadian Mounted Police who was instrumental in bringing the charges against Mr. Drabinsky, Mr. Gottlieb and two other former Livent executives in 2002. “That has to be fixed in this country. It just can’t take that long,” said Mr. Hannaford, who is now a private consultant.

He said the slow process has encouraged enforcement agencies outside the country, including the United States Department of Justice and the U.S. Securities and Exchange Commission, to move in on corporate shenanigans involving executives of Canadian-based companies such as Royal Group and Nortel.

“Are we looking now at another 10 years before those cases make it through the courts?” said Mr. Hannaford.

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