Some fraud victims we deal with inquire as to whether it is worth attempting a recovery from a fraudster who advises that he or she gave all of the money away to others, such as to charity or the poor. Some fraudsters have even dubbed their conduct as that of a present day “Robin Hood” – committing fraud to right a social wrong and not for personal gain. The Courts have rejected the Robin Hood defence and we have been able to obtain recovery from such Robin Hood bandits as part of our fraud recovery practice.
Bell Canada v. Lorraine Reid – the Robin Hood Defence in Civil Fraud Cases
We act for Bell Canada Inc. (“Bell”) and other corporations in fraud recovery matters. From 2010 to 2012, one of Bell’s employees, Lorraine Reid (“Reid”), engaged in a scheme in which she sent cheques from Bell to family members and friends who she felt were experiencing financial hard times. The various cheques – in values from $1,000 to $30,000 – totaled over $145,000. Reid worked in the accounting department of Bell and was responsible for sending refunds to Bell’s clients on accounts for which they had overpaid over time. Instead of returning the money to Bell’s clients, she changed the payee instructions to that of her family and friends and had cheques from Bell sent to them.
Reid’s fraudulent conduct was discovered by Bell security in June 2012. Bell reported the matter to police, but as often occurs the case was lost in the police backlog for almost two years. The claim was therefore issued on February 28, 2014, before the limitation period for making a claim expired. We thereafter liaised with police to ensure they had the necessary information to support their case. As a result of liaison with police, criminal charges were laid in January 2015. In addition to arresting Reid, the police also arrested Reid’s family members and friends as being recipients of the proceeds of Reid’s unlawful Robin Hood conduct.
On December 2, 2015, we brought a motion for partial summary judgment in the civil courts against Reid in the amount of approximately $145,000, being the amount that Reid diverted from Bell’s customers to her family and friends. The Court’s endorsement contained the following quote:
Reid states that she is not liable in fraud, conversion and breach of fiduciary duty because she gave money to poor defendants and did not benefit herself. She advances a so-called “Robin Hood” justification. While the story of Robin Hood is an entertaining children’s tale, both children and most adults understand that stealing for any reason is wrong. No such defence is recognized in law, need I say more?
I find that the grounds for fraud (see Bruno Appliance v. Hyrniak (2004) SCJ No. 8) and breach of fiduciary duty (see France v. Smith (1987)S.C.J. No. 49) have been satisfied. Accordingly I grant the declaration and judgment sought by Bell.
In January 2016, we made full recovery from Reid in the full amount of the judgment, plus interest and costs. Reid mortgaged her home to pay the judgment. The criminal matter remains outstanding as against Reid and her family and friends. As the motion Bell brought in the civil courts was for partial summary judgment, Bell still has the option of seeking further recovery from Reid, her family and friends for consequential losses as well.
R v. Lise Thibault – the Robin Hood Defence in Criminal Fraud Cases
With respect to the use of the Robin Hood defence in the Canadian criminal law context, we provide the story of Quebec Lieutenant Governor Lise Thibault (“Thibault”). In May 2015, Thibault plead guilty to a criminal charge of fraud which her defence lawyer, Marc Lebelle, characterized as a “Robin Hood” offence. Marc Lebelle submitted that Thibault was an advocate for the disabled, and accordingly should be given a lenient sentence.
The total value of Thibault’s fraud for the purpose of the guilty plea was $429,676. The Crown alleged the actual value of the fraud was over $700,000. The Crown alleged that Thibault submitted fraudulent expense claims to the federal and provincial government for expenses that were personal and not associated with her role in public office. Thibault’s position was that she gave over $1.5M to charity for para-alpine skiing. See http://findlaw.ca/blog/legal-life/bad-beat-quebec-robin-hood-commits-700k-fraud-259/#sthash.DQUKK6A2.dpuf.
The Court sentenced Thibault to 18 months jail, and issued a $300,000 restitution order, requiring Thibault to pay $200,000 to the federal government, and $100,000 to the provincial government. The Court held that Thibault forgot that in her role as Quebec’s Lieutenant Governor she failed to set a good example for Quebecers. The Court held that Thibault’s fraud was a breach of trust. For further information, see http://www.cbc.ca/news/canada/montreal/lise-thibault-sentencing-1.3249849.
Robin Hood Defences to Fraud in the USA
The Robin Hood defence to fraud has also been rejected in American cases. In one such case, Joyce Crain (“Crain”), a medical professional, was involved in a scheme where she forged doctor’s signatures for over $100,000 of prescription medication which she gave to patients who could not afford to pay for it. The following submissions were made in that case:
Robin Hood is merely a folk hero. He’s a character born for the purposes of sheer entertainment with heroic motivations absent of reality. In other words, Robin Hood never had to deal with the complexities of healthcare fraud litigation. In real life, donning the Robin Hood persona doesn’t work. It just doesn’t mesh with the structures and laws of modern society.
The prosecutors sought an eight-year sentence. The Court, however, was of the view that Crain was unlikely to re-offend, and sentenced Crain to 2 ½ years in jail. For further information, see http://www.fiercehealthpayer.com/antifraud/story/strange-saga-misguided-crusader-who-got-30-months-prison-fraud/2015-04-21
In another American case, Jeffrey Gonsiewski (“Gonsiewski”), a vice president of the loan department at First Security Trust and Savings Bank in suburban Chicago bank, was sentenced today to 5 years and 3 months in federal prison following his fraud conviction for changing the terms of at least 100 loans for at least 50 customers and causing the bank to lose at least $5.1 million. Gonsiewski altered loan documents to make it appear that customers’ payments were current when he knew they were actually overdue, which prevented the bank from taking timely action to collect delinquent loans and protect its assets.
Gonsiewski plead guilty to the fraud charges. His defence submitted to the Court was that he “fancied himself sort of a modern-day Robin Hood at a time when consumers were becoming increasingly delinquent on their bank loans.” However, according to the plea agreement that he signed, the bank and the government had quite a different view. In addition to the jail time, Gonsiewski was also ordered to pay restitution of $5.1M. For further information, see https://www.fbi.gov/chicago/about-us/our-partnerships/partners
At Investigation Counsel, we investigate and litigate fraud recovery cases. If you discover you are a victim of fraud, contact us to have your case assessed and a strategy for recovery mapped out before contacting police or alerting the fraudster. We also promote victim advocacy and academic discussion through various private and public professional associations and organizations. If you have an interest in the topics discussed herein, we welcome your inquiries.
Norman Groot, LLB, CFE, CFI – January 25, 2016