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JONESIE: Why embezzling money seems all the rage

January 23, 2019 - 2:00 PM

 


OPINION


With all due respect to Walter White, when people break bad, they don’t make meth.

It used to be pot. Court lists and police press releases were loaded with people who reached their sixties and seventies without anything for retirement. So they assessed the risk and found it favourable. A future of Kraft Dinner and depending on the kindness of strangers? Or use 40 years of gardening experience to make some tax-free cash?

But what about that risk? Sentences for a first time offender growing marijuana was at worst a short jail sentence and only one of a husband-wife team would take the hit. More important than the sentence when assessing risk, however, is always the likelihood of getting caught. If they did, it was because they tried to bypass their power supply or didn’t mitigate odours or when complications like humidity damaged their homes or simply melted snow on their roofs much faster than their neighbours. Still, the law was on their side and police had lots of work to do before breaking in the door.

Sometimes they’d get caught and start the risk assessment again.

That whole equation obviously changed a lot since marijuana was legalized last year.

I suppose that leaves embezzlement as perhaps the last great Criminally Desperate Get Rich Quick scheme. Shall we assess risks on that? They’re remarkably similar.

Maybe circumstances are the first clue. There’s a half dozen local charities and businesses and school parent advisory councils locally that we are aware of — some reported, some waiting for statements of defence — all missing money, many trying to recover assets from people they trusted. This is among a broader provincial context of money laundering through our casinos, real estate scandals we are only beginning to understand and piggies at the trough around the legislature.

Penalties for financial crimes for first time offenders can vary widely but jail is highly unlikely. We’ll come back to that later. But again, the more important question in the risk assessment is: What’s the likelihood of being caught?

Const. Ann Donnelly went to school in business before she joined the RCMP and became one of two fraud investigators at the City of Kelowna RCMP detachment — the only two dedicated fraud investigators outside of the Lower Mainland. Most general duty police officers are capable of handling small fraud investigations but the more complicated files — from Kelowna, at least — go to them.

Nearly all of them take years.

"Usually what ends up happening is I have to learn the business first,” she tells me. "I am a police officer and I have a diploma in business but that doesn’t tell me how a business normally operates and how internal processes happen. That is the first step.”

That could mean having to become an instant expert on patents, stock returns or insurance, learning internal notes and jargon and codes, figuring out what goes in and what comes out before understanding what’s missing. That takes time. Each case presents its own quirks and complications. Even simple embezzlement can take a lot of time, by necessity.

She has the same standards of evidence gathering as crime scene investigators on a murder. She can’t rely on documents handed over by victims, only verified original information and often from banks. Instead of the scattergun warrant to find evidence, she uses production orders to make banks hand over specific true originals. That takes three months. And if that information leads to a demand for more information, well, that’s another three months. And so on. (So if you’re waiting on the results of an investigation, be patient.)

Simply finding evidence of fraud isn’t enough, her job is to find out the entire extent of the fraud to show the depth of the deception and therefore, any kind of meaningful sentence. 

“In the past, we didn’t see much in the way of sentencing for fraud,” she says. “They see it as money, not a ‘persons’ offence… What I like to do is show the personal side because usually this affects people drastically... often people who commit fraud were close and trusted. That really, really hurts and that’s what I try to show the judge. It's not just money.”

In my experience, the courts do still see it that way.

So do the rest of us.

We all seem to share some ambivalence about commercial crimes, embezzlement, tax evasion and money laundering. So much that the RCMP regularly rely on that in their Mr. Big murder investigations. They mastered the art of inducing people to commit small crimes like depositing money or counting money and slowly ratcheting that into (what the subjects believe) are far more serious crimes.

Why don’t we care more about so-called white-collar crime? Some guy desperate for drugs who decides to wear a mask, stick his finger in his jacket and demand money from the till is going to jail for a long time. But the guy behind the till who calculates his moves with a sober mind to steal monthly from his employer likely isn’t going to jail unless Donnelly works extra hard to unearth the real impacts of his crime and deception. 

Isn't that loss of trust, that impact on the lives of other people as great or greater than the threat of physical violence? Even physical violence itself? Measure a black eye or a scar against the financial ruin of a family business or the loss of donations to a charity. It’s often difficult to even measure because fraud is one of those crimes people are too embarrassed to report. Doesn’t that tell us something else about the specific and general affect of these crimes?

So back to my risk assessment. You’ve been working away at Local Charity and you already know no one’s looking at the books. Maybe you’ve already been skimming a little bit, forgot to file a receipt or to pay back petty cash and no one noticed. And now the doctor says it’s cancer (it’s often a medical diagnosis. Or a gambling problem). You’ll be gone soon and your family has got nothing and worse you’re so broke you can’t do anything with them in your final days. The cash is right there. If you get caught, you’ll probably just be fired. Police might not even investigate. If they do you might be dead by then. Chances are your employer would be too embarrassed to ever make it public. If you do survive and police investigate and it becomes public, you aren’t looking for work anymore anyway, you won’t go to jail and, it seems, people just don't care much.

My guess is we are going to see more of this, not less. That risk equation only changes with greater certainty that offenders will be caught and courts will recognize the greater damage done. That only happens if people change their attitudes about it and demand accountability.

First step is reporting. There’s no real criteria for which cases they will investigate, but there’s no dollar threshold for starting an investigation, it can be $2,000 or $2 million.

“There are lots of factors for why we would take on a case,” Donnelly says. “If it's complicated or something is going to have lots of public attention then we would take it on as well."

But be prepared to show an investigator proof the fraud has occurred — they aren’t fishing for you. Next, find out your rights and options by talking to a lawyer and if you can recover any money. 

“There’s a misconception out there that if you are pursuing someone civilly you can’t do it criminally,” Donnelly says. “It works jointly. The main purpose in going civil is to get the money back. The criminal investigation and pursuit is to make a person accountable for what they did and to prevent them from doing it again.”

Again, public exposure can help. Feel to free to reach out to me at: mjones@infonews.ca or 250-718-2724.

— Marshall Jones is the editor of iNFOnews.ca

News from © InfoTel News Ltd, 2019
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