It’s not clear how much of the almost $500 million in restitution ordered for fraud victims in Ontario has been paid
Carin Smith and her then-husband just wanted to pay off their mortgage a little faster.
But Smith and Smith’s marriage ended when the investment deal they agreed to in 2008 turned out to be a scam. She got a full-time night job so she wouldn’t lose her home in Acton, Ontario. She also took out a new mortgage for 25 years when she could have paid off her old one in 10.
Smith said, “It changed my life in every way.” “I don’t believe anyone… “I’m not going to retire at 65 because I still have 15 years to pay on my house.”
The 54-year-old woman lost $70,000, which came from the equity in her home and went right into the pockets of Daniel Reeve, who is now in prison for fraud. According to the criminal case against him, Reeve used Smith’s money to pay other investors.
In June 2018, Reeve received the maximum 14-year sentence for fraud after being found guilty of stealing nearly $11 million from at least 41 people between 2007 and 2008. The judge also told him to pay his victims nearly $11 million in restitution within 10 years, even though the judge thought “there is no chance of repayment.”
Reeve’s sentence was cut to four years because of the time he spent in jail before his trial. In February 2019, eight months after he was sentenced, he was put on day parole because he was not thought to be a threat to commit a violent crime. But Reeve was back in jail within a few months because police said they caught him trying to sell a new pyramid scheme.
Even though Reeve’s parole was taken away, his original sentence was cut to 10 years on appeal, and he was free by June 2020.
Smith says that Reeve hasn’t paid her back a single cent yet.
The first part of CBC Toronto’s investigation series The Cost of Fraud, called “The Cost of Fraud,” looked at how Ontario’s overburdened justice system isn’t able to stop most of the skyrocketing frauds in the province. Part two explains why it’s hard for fraud victims to get their money back, even though there has been a way for them to do so for a long time.
WATCH | Why people who lose money to fraud often have to pay more to get it back:
Ontario doesn’t keep track of the results of restitution
Since 2010, courts in Ontario have ordered fraudsters to pay almost $500 million in restitution to people like Smith. But the provincial government doesn’t keep track of how restitution orders turn out, so it doesn’t know how much of that money ends up going to victims.
Lawyers and people who help victims of fraud told CBC Toronto that restitution orders are often not followed. And if fraudsters don’t pay in Ontario, it’s up to the victims to try to get them to by making the restitution order a civil court judgment.
“Why, as people who have been scammed, do we have to keep being blamed for what someone else did to us?” asked Smith. “That’s wrong.”
Vanessa Iafolla, who teaches about financial crimes at Wilfrid Laurier University and works as a consultant for fraud victims, said, “That’s not a good way to spend taxpayer money.”
“It’s not a good way to hold someone accountable if they can just get away with not keeping their end of the deal.”
By looking through sentencing decisions and news stories, CBC Toronto was able to find half a dozen fraud victims in Ontario who were supposed to be paid back. All of them said that the people who were found guilty of stealing from them had not given them a penny yet.
Courts usually give fraudsters a certain amount of time to pay back their victims, but in almost half of the cases CBC looked at, that time had already passed.
Try to get the government to do something
The executive director of the Canadian Resource Centre for Victims of Crime, Aline Vlasceanu, said that putting the responsibility on victims and letting them figure it out on their own is not the way to do things.
“We’re just re-traumatizing victims.”
Other provinces, like Saskatchewan, Alberta, and PEI, have government-run restitution programs that help track restitution orders and enforce them on behalf of victims. However, this kind of help isn’t required by the federal government right now.
In December, the federal standing committee on justice and human rights said that the government should take a more active role in enforcement. In its report, “Improving Support for Crime Victims,” the committee suggested that the Department of Justice work with provinces and territories to come up with effective ways to help crime victims get their money back.
In an email, a spokesperson for the Department of Justice said that the government will respond to the report in April.
Vlasceanu would also like Ontario to start keeping track of what happens with restitution orders.
“There are no numbers that keep track of what’s really going on,” she said. “The first thing we need to do is figure out what’s going on.” So keeping track of these numbers and having them on hand would be very important.
Based on the numbers that are available, only 23% of fraud sentences in Ontario over the past 10 years included restitution. Even though less than a quarter of fraudsters were told to pay back their victims, the Ontario Court of Justice has ordered nearly $330 million and the Superior Court of Justice has ordered nearly $128 million since 2010.
but the numbers stop there.
CBC Toronto asked the Ontario Ministry of the Attorney General why it doesn’t keep track of how much restitution is recovered for victims and if it has any plans to create a restitution enforcement program, like some other provinces have, to take the burden off of victims.
In a statement, a ministry spokesperson said that the ministry keeps track of funds in a restitution trust account, but there are also other ways to pay restitution in Ontario, such as directly to the court, to the victim, or through a lawyer.
“Because there are so many ways to pay restitution, the total amount collected or paid out is not tracked centrally,” said spokesman Maher Abdurahman.
In its statement, the Ministry didn’t say anything about a restitution enforcement program, but it did say that victims don’t have to pay anything to file restitution orders in civil court in the province.
Civil vs. criminal system
Even though the restitution system has changed, a Toronto civil fraud recovery lawyer says that criminal cases are usually not the best way to get money back after fraud.
“In most cases, the money has been gone for a long time,” said Norman Groot, who started the law firm Investigation Counsel PC and only helps people who have been scammed.
Groot tells his clients to try the civil system first because it can move much faster.
“The best chance of getting the money back is if we can start tracking down the money and trying to freeze assets before the thief knows his time is up,” he said.
“You can file a criminal complaint if nothing works.” I call them the fraudsters of the lost cause. “Once you’re in the criminal system, you’re more interested in getting punished than in getting better.”
Groot admits that there is a catch: victims of fraud who have already lost money must still have more money to hire lawyers like him. Most of the time, his firm tells clients that going to civil court isn’t worth it unless they’ve lost at least $250,000.
Iafolla said, “If you’re a victim of fraud in this country and you want justice, you need to have a lot of money.”
So, for people like Smith, who couldn’t afford to lose $70,000, the only option is probably a restitution order through the criminal system that they might have to enforce.
“How should I try to get him to pay back the money?” Smith asked.
“The courts, the police, and the government are in charge.” “If this is the sentence that was given to him, why isn’t it being carried out?”
TOMORROW: In part three of “The Cost of Fraud,” CBC Toronto will talk about ways to fix Ontario’s problem with fraud, such as creating a special office where police and prosecutors can work together to stop large-scale scams.