Madam Justice Mary Lou Benotto wants to send a message to white-collar crooks like Garth Drabinsky: Our justice system will deal with you severely. As she sentenced the former impresario to seven years in prison Wednesday, she argued that a crime like his is serious, because it "fosters cynicism [and] erodes public confidence in the financial markets." Sternly, she noted, "Those in business must know that this must be the response."
In fact, those in business must know Canada is a fine place to fleece the innocent and cook the books. Not for us the crusading prosecutors, the quick indictments, the speedy trials, and the lifetime jail sentences so popular in the United States.
Here, you can be pretty sure the law will take years to catch up to you (if it ever does). In the event you are found guilty, the penalty won't be so bad.
Thanks to our generous parole provisions, Mr. Drabinsky could get out of jail after 14 months or so. Not that he's going to the slammer any time soon. Not until his lawyer exhausts the appeals. "In the U.S., he probably would have been tried eight or nine years ago," says forensic accountant Al Rosen, who thinks Canada's systematic failure to prosecute corporate fraud is a bad joke. "And he probably would've got 20 to 40 years."
Today, after a decade of hefty legal bills, Mr. Drabinsky is so broke he has been reduced to begging money off distant acquaintances in exchange for discounts at his Yorkville art gallery. On the other hand, 10 years of freedom (and counting) may well be worth it. Journalists who began covering the Livent debacle early in their careers have grey hair now. Perhaps that explains the sense of anticlimax in the courtroom yesterday.
Compared to the obscure manipulations of Conrad Black (part of whose conviction may well be overturned by the U.S. Supreme Court), the fraud scheme carried out by Mr. Drabinsky and his partner, Myron Gottlieb, was plain vanilla. It involved an old-fashioned kickback scheme and a years-long effort to dupe the shareholders by making Livent's financial picture look far brighter than it was. The most surreal moment of the trial came when lawyer Eddie Greenspan (who also acted for Lord Black) proposed that instead of doing jail time, his client could embark on an inspirational speaking tour with the goal of urging young people to pursue their dreams in the performing arts. Had he made a similar proposal for Lord Black, he'd have been laughed right out of Chicago.
In the U.S., he probably would have been tried eight or nine years ago
Lord Black, unlike Mr. Drabinsky, will have to serve almost all of his 61/2-year sentence. Mr. Drabinsky could well get out of jail first. Surely, Lord Black (who stood by his old friend when times got tough) must be tempted to contemplate the unfairness of it all. After all, if Canada and not the United States had gone after him, chances are he'd still be a free man.
These days, as newly exposed Ponzi schemes spring up like ragweed, Prime Minister Stephen Harper is vowing a crackdown on white-collar crime. "These crimes have real victims," he declared last week, "and we should have a justice system that responds accordingly." But don't expect anything to happen soon. Unfortunately, the body entrusted with laying charges in cases such as Livent is still the RCMP, far better known for tasering the innocent than nailing the fraudsters.
"I've turned over files to the RCMP and nothing happens," laments Al Rosen, the forensic accountant. "We just don't have people who are trained in what to look for. We have bad securities acts. We have bad sentencing guidelines. We've had some bad court decisions. We're 80 years behind the U.S. If you're a crook, this is the best place to be."
Back in court, the judge had more tough words. "Members of the business community must be put on notice that honesty is the currency in which they trade," she said. "If they stray, the punishment will be certain and severe." Stirring words indeed. If only the system worked that way.
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