At Investigation Counsel PC, we often coordinate civil recovery actions with preparing criminal complaints for our clients. Our clients often seek information on how the criminal restitution process operates, and whether it is a reasonable and cost effective mechanism to obtain a recovery. In most cases, there is no clear answer at the time the question is posed, and only becomes more apparent as the civil and criminal cases unfold.
This blog is to provide fraud victims further legal information on the reasonable expectations they should have from criminal restitution orders based on the newly released (May 22, 2014) decision from the Ontario Court of Appeal in
R v. Solleveld:
The Solleveld case discusses the issue of only making a criminally convicted fraudster responsible for a pro rata share of the restitution order where there a multiple fraudster convicted.
Many fraud victims we deal with are of the belief that they are owed a free investigation by the police, and a free prosecution by the Crown, and through these means they have their best chance at a recovery. We advocate that where the losses are significant, fraud victims should have their case triaged by their own fraud recovery lawyer prior to making a complaint to the police or confronting the fraudster – see our blog Triaging Your Fraud Case:
However, as the issue of recovery through criminal restitution orders is a reoccurring one, we provide further information on this issue. Recently the Conservative Government introduced Bill C-32: An Act to enact the Canadian Victims Bill of Rights and to Amend Certain Acts. The entire text of the proposed legislation is available at:
We have reviewed the state of the law as reported in the Canadian Victims Bill of Rights and to Amend Certain Acts in our blog on enforcing criminal restitution orders:
We have blogged in the past on recovery for fraud victims on criminal restitution orders – see our blog Coordinating Criminal and Civil Justice for Fraud Victims:
R v. Solleveld – Where there are Multiple Fraudsters, Restitution Liability is Pro Rata
The Solleveld fraud involved three individuals: Robert Solleveld, Desiree Solleveld and Robert Cranston. The three of them were charged criminally with fraud and conspiracy and found guilty of operating a “high yield investment scam”. In total these fraudsters obtained $7,637,041.17 from a large number of “investors” or “joint venture partners” (“JVP’s”) using an entity called “Club TCSI”.
At their criminal trial, the Court only imposed a restitution order of $228,900 on the three fraudsters jointly. The accused Cranston appealed the restitution order against him. Cranston argued that because all three accused bore responsibility for these losses, the restitution order made against him should be limited to one-third of the restitution order imposed.
The Court of Appeal held that the fact that all three accused bore joint responsibility for the fraud was not raised by the Crown or Cranston in their submissions made at the sentencing hearing, and that the issue was not taken into account by the trial judge in fashioning his restitution orders. The Court of Appeal held that the trial judge’s failure to take this into account was an error. The Court of Appeal held that where there is joint liability for a fraud, the restitution order should reflect a pro rata share to each accused, and accordingly that Cranston’s restitution order should be reduced to $76,300.
Restitution Orders are Only One Part of a Fraud Recovery Strategy
The Solleveld case again demonstrates the limited role of criminal restitution orders as part of an overall fraud recovery strategy. In the civil litigation area, defendants are held jointly and severally liable for the full amount of the loss proven. In this criminal case, not only was the amount of restitution a fraction of the real loss, the amount each fraudster was held criminally responsible to pay was only a pro rata share. The Sollenveld criminal decision, as many criminal cases, underscores why fraud victims should coordinate civil and criminal prosecutions to maximize their fraud recovery efforts.
Coordinating civil recovery prosecutions with criminal complaints is something most fraud victims should canvas with their fraud recovery lawyers before commencing either process For further information on having a criminal restitution order enforced as a civil judgment, please contact us.
Norman Groot, LLB, CFE, CFI – August 27, 2014