REMEDIES FOR ORGANIZED CRIME
AND OTHER UNLAWFUL
ACTIVITIES ACT, 2000
LOI DE 2000 SUR LES RECOURS
POUR CRIME ORGANISÉ
ET AUTRES ACTIVITÉS ILLÉGALES

OFFICE OF THE NASSAU COUNTY DISTRICT ATTORNEY (NEW YORK)

ONTARIO PROVINCIAL POLICE

NIAGARA REGIONAL POLICE SERVICE

STATE OF NEW JERSEY
DEPARTMENT OF LAW
AND PUBLIC SAFETY

US DEPARTMENT OF JUSTICE,
DRUG ENFORCEMENT ADMINISTRATION

FEDERAL BUREAU OF INVESTIGATION

JUDY MACDONALD

LORNE PARK

TAMIL ANTI-RACISM COMMITTEE

J-39 J-39

ISSN 1488-9080

Legislative Assembly Assemblée législative
of Ontario de l'Ontario

First Session, 37^th Parliament Première session, 37^e législature

Official Report Journal
of Debates des débats
(Hansard) (Hansard)

Wednesday 21 February 2001 Wednesday 21 février 2001

Standing committee on Comité permanent de la
justice and social policy justice et des affaires sociales

Chair: Marilyn Mushinski Présidente : Marilyn Mushinski
Clerk: Tom Prins Greffier : Tom Prins

LEGISLATIVE ASSEMBLY OF ONTARIO ASSEMBLÉE LÉGISLATIVE DE L'ONTARIO

STANDING COMMITTEE ON COMITÉ PERMANENT DE LA JUSTICE
JUSTICE AND SOCIAL POLICY ET DES AFFAIRES SOCIALES

Wednesday 21 February 2001 Wednesday 21 février 2001

The committee met at 0959 in room 151.

REMEDIES FOR ORGANIZED CRIME
AND OTHER UNLAWFUL
ACTIVITIES ACT, 2000
LOI DE 2000 SUR LES RECOURS
POUR CRIME ORGANISÉ
ET AUTRES ACTIVITÉS ILLÉGALES

Consideration of Bill 155, An Act to provide civil remedies for organized crime and other unlawful activities / Projet de loi 155, Loi prévoyant des recours civils pour crime organisé et autres activités illégales.

The Chair (Ms Marilyn Mushinski): I'll call the meeting to order. Good morning, ladies and gentlemen. This is a continuation of the meeting of the standing committee on justice and social policy to consider Bill 155. Gentlemen, if I could please ask you to take your seats as quickly as possible. Bill 155 is An Act to provide civil remedies for organized crime and other unlawful activities.

OFFICE OF THE NASSAU COUNTY DISTRICT ATTORNEY (NEW YORK)

The Chair: The first deputation this morning is Robert Nigro, assistant district attorney for the Office of the Nassau County District Attorney (New York). Good morning. You have 20 minutes.

Mr Robert Nigro: Good morning. I am the chief of the civil forfeiture unit of the Nassau county district attorney's office, Nassau county, Long Island, New York. For the past 12 years, it's been my job to oversee the prosecution of civil forfeiture actions in Nassau county, a county of approximately 1.6 million people.

In New York state, the way the statute is drafted, it's the prosecutors of criminal wrongdoing who become the claiming authorities, those charged with the responsibility of bringing the civil actions. So my practice is primarily in civil court, but I am a member of the district attorney's staff. It's one of the rare instances where a state prosecutor is given civil authority. It's exclusively felony criminal conduct, although prosecutions are not always necessary. In reality, virtually all of our cases are based on someone's criminal prosecution and ultimate conviction. It's only in those rare instances, and only in drug cases, where if there is no identifiable individual defendant, if we can make out a case for criminal wrongdoing by clear and convincing evidence, we can predicate a forfeiture on that. That happens in situations where the defendant may have fled or in one or two instances where the defendant is deceased. We can still maintain our civil actions and prove our case by clear and convincing evidence.

Our statute, unlike the statute that you're proposing here, is in personam. It's a rarity in US law as well. What we go after is a person's interest in property; we don't go after the property itself. This gives us a very great latitude in what we can attach and, when they ask us, what we can go after. It permits us to get a judgment against the individual, and that judgment, by New York law, can be satisfied out of virtually any of the property that they may own. That way, if they've passed the proceeds of a crime through their hands on to others, but they have assets from other sources, those other assets can be used to satisfy the judgment. It makes it a much more effective tool. It also avoids the necessity of having to track particular property to its ultimate location.

But still, the judgment is based upon us having to prove how much money they made in a criminal enterprise. That remains our burden and that's where we are put to our proof and we have to gather the appropriate evidence.

As I said, it's a very powerful tool, and we have to be very careful in the way that we use it. We are constantly vigilant and we guard against potential abuses. We don't want to be accused of having sold a disposition in a criminal case for an increased amount of money in a forfeiture action, or that we have prosecuted an unworthy criminal case just for the purposes of trying to make some money out of it. Those are the things we are very concerned about and those are the things we don't allow to happen in our office.

We term it the excellent second punch in a one-two combination against criminals. It takes the money out of the criminal equation and it's an effective economic disincentive. It also leads to an erosion of a criminal enterprise from within. For example, it removes the seed money. We do a lot of forfeiture actions against illegal gambling businesses. These are usually organized-crime-related, if not actually run by them. But the money they make in that, they use in other areas. That money, if it's taken in forfeiture, is not available for those other things. It's not used for loan sharking; it's not used for drugs or the seed money for another enterprise.

We have actually watched in our own courtroom as the captains of an OC group show up to hand envelopes of cash to their soldiers to pay off their forfeiture actions. What this does is, the money which goes up the ladder now has to come back down the ladder and it's taken by the government and it's lost to the criminal enterprise. It's not a thing that's going to break the back of organized crime, certainly, but it does have an effect.

We've noticed that certain illegal businesses have been driven out of Nassau county. We no longer have as many, or any that we can locate presently, wire rooms doing illegal gambling in our county. They prefer to be outside our county. Other things: for example, we go after those "legitimate" -- and I use the quotation marks to indicate that it's not really legitimate -- businesses that are fronts for other illegal businesses. For example, the nail shops which were prevalent in our county, which were just a front for prostitution, no longer exist because we cleaned them back out to the walls. We take all the business's accoutrements, and when they are no longer available, they leave the county. A pawnshop where an individual may have been swapping diamonds for zircons, we took the entire store. In one location they were selling forged autographs of sports figures; we took the entire store. Those businesses are gone. They will think twice before setting up again in Nassau county. They are small examples but it is, in our small area, an effective way of doing it.

Vehicles are another large part of what we do, and they're not done for the money, because vehicles are a loss leader. They cost more to deal with than they are worth. But if we look at our obligations, one of our obligations is to safeguard our community by taking these vehicles off the street, whether they are used by drug dealers or drunk drivers. They are a dangerous instrument on the street, and it's an obvious sign of criminal wealth. When the Jaguar and the Mercedes-Benz of the drug dealer are no longer in the hands of the drug dealers but in the hands of the police, it makes a very important statement. It does go far, we've noticed, in reducing the negative effect of crime on particular neighbourhoods where we emphasize the use of forfeiture in conjunction with diligent police work.

To give you an idea of some of our statistics, although they would not be equated to what you might have in this province if you had a forfeiture law, between January 1997 and December 2000, our unit dispersed a total of $5,191,704 to crime victims, various state and local agencies and our own office, as required by statute. In the last 15 years it's over $13 million we've taken in. We in our office had access to $1.889 million over the four years. We share part of that with the state, to go back into the general fund, which goes to use for other purposes.

One of the biggest recipients of forfeiture in New York state is the Office of Alcoholism and Substance Abuse Services. In the last four years they have received $1.5 million from us. This money goes back and is used throughout the state for drug treatment and drug education programs.

Our law is unique in the sense that it particularly provides for money taken in forfeiture to go back to victims, but not only to victims of the crime for which the defendant was convicted but victims of any crime of that defendant. So victims are a high priority for our statute, and over the last four years $225,000 went back to victims. That doesn't seem like a very big figure, but when you consider the number of gambling cases and drug cases where there are no obvious victims, although society certainly does suffer, in those cases the money is divided up between the state and local agencies, the district attorney's office, the police department and, as I said, the Office of Alcoholism and Substance Abuse Services.

We also auction off a lot of the property we seize. Over the last four years we have auctioned off 148 vehicles, including boats, motorcycles, cars and trucks, and about $400,000 was gained from those sales. We also take a number of the vehicles and put them into service. We have undercover vehicles, from tow trucks to coffee trucks to expensive cars, that are now on the roads, not paid for out of government monies but provided gratis by the forfeiture program, and they are used for a variety of purposes. It provides a vehicle that the criminal defendant otherwise wouldn't see. It's not the usual Dodge Diplomat or Ford Crown Victoria that the police use; it could be a Titan motorcycle or it could be a souped-up car of one form or another, and they are very effective. But since you didn't put any money into obtaining them, you can use them once or twice and then you can sell them and gain the money back from that.

We've had a large number of cases from different parts of the country. We've recently had a case where a defendant was driving through Arkansas, was stopped by the police and was found to have 250 pounds of marijuana in his vehicle. That vehicle was allowed to travel on to Nassau county, where it met up again with the marijuana, delivered to a location in Nassau county. The individuals met the vehicle. They had $250,000 in cash in their residence. Their residence was attached. It was ultimately not forfeited as part of the negotiation, but they served up $425,000 in forfeiture and now a large marijuana dealer in Nassau county is out of business.

We have other cases of a similar nature, a lot of gambling cases which, as I say, have had a very great effect on that criminal practice in Nassau county.

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I am reminded of the line from a movie where an individual was using Wall Street -- in fact Wall Street was the name of the movie -- to illegally gain money. An old individual in the backroom tells him, "There's a funny thing about money. It makes you do things." That's the one watchword we have in my office: you don't do it for the money. The money is good, it's a measure of how successful you are, but the money is not the reason. The reason we do this is because it's an excellent way of removing one of the -- it's not going to stop homicides, it's not going to stop assaults of one form or another, but it is going to go after those crimes that are based on economic incentives and it's very effective.

I realize my 20 minutes are not up, but if there are any questions I'd be glad to answer them.

The Chair: There is time for a couple of questions from each side. Mr Caplan, do you have any questions at this time?

Mr David Caplan (Don Valley East): Not at this time.

Mr Peter Kormos (Niagara Centre): Thanks for coming up here. Are you using state legislation or federal legislation?

Mr Nigro: We use both. We use the state legislation because my district attorney feels that the ability to turn back a third of it to the state for drug treatment programs is very useful. With federal forfeiture money, he can only use a portion of that for social programs, which he does, but that's limited by federal law. So we prefer to use state forfeiture law and we use that almost exclusively.

Mr Kormos: The federal legislation we're referring to colloquially here is the RICO legislation. Is that correct?

Mr Nigro: There is RICO both on the federal and state levels. We have our state RICO component, which has a forfeiture aspect to it as well, which is not used as often. Federal RICO is one portion of federal forfeiture, but you have federal criminal forfeiture and you have federal civil forfeiture. That's the one that recently underwent some changes with the recent CAFRA legislation this past year.

Mr Kormos: I want to understand you. I got the impression that it was only in drug cases that you didn't need a forfeiture process based on a conviction.

Mr Nigro: We don't need a conviction as a predicate. We have what are called pre-conviction and post-conviction forfeitures. The pre-conviction is on drugs. "Pre" means "not"; we don't really need a conviction. The best example is, we are litigating against the estate of a deceased drug dealer who committed suicide while incarcerated. He can't be convicted, although we can prove from the evidence we garnered in the investigation that he was a drug dealer of cocaine for a long period of time. He has an estate of approximately $1 million. We can't convict him but we can certainly continue to go after that estate and then forfeit that money.

Mr Kormos: Is the need for a conviction problematic from your perspective?

Mr Nigro: No. Virtually all our cases are based on a conviction. My office looks at it that the primary responsibility of the district attorney is criminal prosecution, and the forfeiture is an adjunct to that. We don't let our forfeitures control our prosecutions, but our prosecutions can certainly control the forfeiture. I liken it to the tail of the dog. That's the head, and the tail follows where the head leads.

Mr Kormos: We're grateful that you and some of your colleagues have come up here, because the standard is clear and convincing evidence --

Mr Nigro: Without a prosecution, yes, it is.

Mr Kormos: -- which I understand is higher than the standard on a balance of probabilities. I don't know if that's American jargon or not.

Mr Nigro: I've heard disputes about that, but that's the generally accepted position, that it is a higher burden of proof than what we would call the preponderance of the evidence.

Mr Kormos: Again, has that been problematic for you?

Mr Nigro: Not so far. We haven't litigated very many, but no one in New York has litigated very many of these because they are resolved in conjunction with the criminal prosecution. This one, because there is no prosecution, will either be settled or tried. We feel we have the ability -- we start with the idea that we've got to build a case beyond a reasonable doubt against a criminal defendant. When you no longer have that, the "clear and convincing" is easier to meet. So we have "proof beyond a reasonable doubt"; to be able to provide the "clear and convincing" is not going to be difficult.

Mr Kormos: It's a policy issue, then, for Nassau county to have decided to use "clear and convincing" only in drug cases when there is no conviction?

Mr Nigro; No. That's dictated by the facts of the case. For example, if we had a case against an individual who absconded and we couldn't convict him, we would fall back to the "clear and convincing" burden of proof as the necessary standard for that forfeiture.

Mr Kormos: What if an accused had, for whatever reason, been found not guilty by a court, simply not guilty? Would you then pursue it on a "clear and convincing" standard?

Mr Nigro: Technically you could. The question that remains is, why was there not a conviction? Was the evidence suppressed? If it was suppressed in that case, it probably would be suppressed in our case. Was the individual in fact not guilty? If we don't believe there is evidence of guilt and that clear and convincing evidence is not going to be met, we wouldn't continue with the forfeiture. But there are conditions in situations where someone could be found not guilty or their guilt is not proven beyond a reasonable doubt where we still could prove a case by clear and convincing evidence. If that case arose we would examine those facts and, if necessary, continue with the forfeiture.

Mr Kormos: Has that been very frequent in your experience?

Mr Nigro: No. We had one case where the federal authorities stepped over us and took a criminal case and the individual was convicted on the criminal side in this federal venue. Then our case was dismissed but we continued with the forfeiture case.

Mr Kormos: You're restricted to Nassau county in terms of crimes committed in Nassau county or felons who reside in Nassau county or assets in Nassau county.

Mr Nigro: Yes. The claiming authority's authority comes out of the ability to prosecute the criminal action in his county. But in a pre-conviction case -- for example, where you had a conspiracy that would be prosecutable in Nassau county -- you could then bring a forfeiture action in Nassau county. You may not have an actual completed crime in Nassau county, as far as a substantive crime, but you have conspiracy or intent. You could then prosecute the forfeiture in Nassau county.

Mr David Tilson (Dufferin-Peel-Wellington-Grey): This is our second day of hearings where we've had different types of people come and make comments for and against our legislation. Some of the criticism of Ontario's proposed legislation is that it's going to give the police too much power and it's going to give the politicians too much power. I don't really agree with that. The gist of their presentations seems to be, "We understand that you're trying to deal with organized crime, but you're going beyond that with your forfeiture and seizure provisions. This will affect the good citizen, the average citizen, and there will be an abuse of power by the police and an abuse of power by the Attorney General." Has this issue been discussed?

Mr Nigro: That's a constant concern, and it's a criticism we don't reject out of hand. We always have to be concerned, any time you apply the criminal law or any law that deprives someone of their rights or property, that it be fairly enforced. The potential is there, even with the average criminal statute, that if someone has an evil motive, they can misuse it.

Forfeiture is the same way, but you still have to do it in the courts. We're not seizing property; we have no seizure ability in our forfeiture. We have the ability to go to a court and ask for an order of attachment, which we can do ex parte. But within five days it becomes adversarial and it's litigated. We have no more authority than the courts will give us. We're put to our proof before the courts, and the courts authorize us to do this.

I think we've had one or two attachments not granted in 15 years and only one overturned by an appellate court. They're primarily like search warrants. You have to go in and show the court that you have reason to believe this person is committing these crimes, that there's a likelihood someone will be convicted or that we can prove the requisite elements for a conviction in a particular case before they'll give you the authority, plus you have to show how much money they've made, and that analysis has to be fleshed out before the court. So it's not likely that the police will decide, "Let's target this individual," and go and take their property. They'd have to get the collusion of the court and the collusion of the prosecutor. It wouldn't be feasible, and I don't think it's likely to happen.

Mr Tilson: I appreciate those comments and I appreciate your coming and telling us the success your jurisdiction has had.

Yesterday, we had the Toronto Police Services Board; indeed, the chief of police of Toronto came and indicated his support for the legislation and indicated that it will be part of a number of tools that police organizations and the Attorney General will be able to use in dealing with organized crime.

Obviously our concern is that we have jurisdiction between the federal government and the provincial government. Criminal matters are dealt with by the federal government under the Criminal Code, and we deal with property matters, where this legislation is geared. I thought I picked up some comments about organized crime coming from other jurisdictions into your jurisdiction and the seizure of those assets that may have been brought into your jurisdiction. Did you say that?

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Mr Nigro: I said they were driving in the other direction, but you do get criminals coming in from other jurisdictions. If you make it unhealthy and unproductive for them to stay, they won't. But it's not so much that this is a pass-through. We have found that certain things, like the large-scale marijuana dealers, will not set up a stash house in Nassau county. One, the real estate values are just too high. It's easier to park the drugs in adjacent New York City, Queens county or Suffolk county, which is a little more rural, and bring them into Nassau county.

We had a very large marijuana dealer who we're currently litigating against -- that's the individual who was prosecuted federally. He lived outside Nassau county but did a lot of his business within Nassau county. He would drive through and bring his product in. We now have attached eight pieces of property in the city of New York -- he had very large real estate holdings. We've gone outside our county to attach those assets and divest him of virtually everything he had gained through this enterprise. He was never a Nassau county resident, he never located his drugs there, but he did do business there and we were able to reach out and take that which was dear to him.

The Chair: Thank you very much, Mr Nigro, for coming in this morning.

Mr Nigro: You're very welcome.

ONTARIO PROVINCIAL POLICE

The Chair: The next delegate is Vaughn Collins, Deputy Commissioner of the Office of the Provincial Commanders, Investigations/Organized Crime unit. Good morning.

Mr Vaughn Collins: Good morning. My name is Vaughn Collins. I'm the deputy commissioner of investigations/organized crime for the Ontario Provincial Police. I've taken the liberty of bringing Detective Inspector Don Perron. He's an OPP officer who is currently in charge of the RCMP Toronto integrated proceeds of crime unit. I have him available, if we have time, should the panel wish to ask some questions in regard to some of the relationship between that piece of legislation and what we're talking about today.

Thank you for allowing me the opportunity to attend this meeting to give you a brief overview of organized crime, its impact, the commitment of the OPP to work with our partners to combat that issue and the need for innovative tools such as Bill 155.

At the outset, let me say that the OPP supports the need for legislation such as we're talking about here. The public, the media and police communities have recently expressed concerns with respect to gaps in legislation which seemingly allow organized criminals to continue to profit from criminal activities, to intimidate communities and to expand their sphere of power and wealth with few, if any, penalties.

Organized crime has capitalized on unlimited resources and rapid advances in technology to establish itself in all areas of Ontario. Combating organized crime has become a major priority for law enforcement in Ontario. It's a priority for the OPP. We have recognized this and recently created a new command structure with a focus on organized crime.

Some people may not be aware that one of the mandates of the OPP is to provide specialized investigative supports to municipal police services. Additionally, we coordinate many provincial investigative initiatives and joint forces operations targeting high-level organized criminals.

Over the past 15 years there has been a dramatic increase in the number of established criminal organizations in Canada. Their primary goal is the acquisition of wealth and the pursuit of power. Organized crime activities affect the lives of all Canadians, socially and economically. The average citizen would probably identify the crimes of drug trafficking and illegal gaming as associated with organized crime groups. Today, organized crime groups are involved in a wide range of criminal activities which include money laundering, prostitution, illegal immigration, alcohol, tobacco and weapons smuggling, securities fraud, credit card fraud, document fraud and telemarketing, to name a few.

These groups make huge profits from their crimes. Estimates to date are as high as $17 billion across the country annually. They carry out their criminal activities unhindered by many of the jurisdictional burdens, legal restrictions and resource limitations that we encounter in law enforcement.

Organized crime groups launder their criminal assets through a web of accountants, lawyers and seemingly legitimate businesses. This provides staggering challenges to investigators, forensic accountants and crown attorneys who attempt to link criminal proceeds to those organized crime groups and their members.

Legitimizing illegal proceeds permits criminal expansion from the illicit into the legitimate economy and therefore extends the scope of criminal influence and power to the extent that sophisticated criminal organizations can become or get to the point where they're untouchable.

In l989, Parliament recognized that the seizure of profits was necessary in the fight against organized criminals. They amended the Criminal Code so that illicit profits could be seized and restrained, and forfeited following conviction. Unfortunately, the legislation is limited to enterprise crime, designated drug, customs and excise offenses only. There are some interesting comparisons between the federal legislation and Bill 155. A seizure or restraint application under the Criminal Code requires the Attorney General to sign an undertaking prior to seizing the assets. Such an undertaking is not required under the proposed bill, and from a practical perspective this streamlines the process for us in terms of seizing and restraining issues.

The criminal proceeds of crime legislation requires a conviction of a substantive offence before forfeiture. In comparison, Bill 155 would allow forfeiture without a charge being laid. It would allow for the confiscation of third-party properties such as businesses that are being used by organized crime groups to hide criminal profits. This is an important strategy, in my view, to dismantle complex criminal organizations and to thwart their efforts to hide behind ventures posing as legitimate businesses. In my opinion, it is one of the key points in the legislation.

Findings of fact in proceedings under Bill 155 shall be made on the balance of probabilities. Federal proceeds of crime legislation demands a higher standard of proof, that being beyond a reasonable doubt. The higher level of proof in the criminal process demands greater effort on the part of the crowns and the police to successfully prosecute.

In regard to "instruments of unlawful activity," the proposed legislation is providing a caveat similar to the Controlled Drugs and Substances Act and the anti-gang legislation of "offence related property." What this means is that you don't have to prove that the property was obtained by proceeds of crime; you only have to demonstrate that the property is facilitating a criminal activity. This is not available currently in a criminal proceeds of crime investigation when the substantive offence is an "enterprise crime offence."

In both pieces of legislation there is a provision to compensate victims who suffer losses from unlawful activities. The chances of recovery for those victims, I believe, are much greater in the civil process because of the issue of no criminal charges being required and a lower burden of proof on the balance of probabilities. I suggest that the civil process has the opportunity to step forward, or the government does, on behalf of those victims in situations where many of the victims wouldn't have the ability or the finances to do it themselves.

The province of Ontario currently has a process to distribute and share the funds resulting from criminal forfeitures. The proceeds of crime grant program is established to ensure equitable distribution and access of monies derived from those forfeitures, and the civil legislation would provide the ability also for municipal corporations, public bodies and the province to recover losses incurred as a result of criminal activities. This will provide an opportunity for police services to recover the costs associated with their participation in Bill 155, which in turn will encourage its use.

The focus of the proposed legislation is that it relates to any illegally obtained assets by any person. This sends a strong message that states, "Crime doesn't pay," for anyone who engages in unlawful activity. Bill 155 will arm the police with an additional option to remove profits from criminals where a criminal proceeding potentially has or may fail.

There are a couple of concerns I would like to comment on. I believe that the police will be the custodians of information relied upon to identify targets and to initiate a civil action under this bill. In my view, it's necessary to have a mechanism in place that protects the integrity of ongoing parallel criminal investigations.

In many instances the police will have control of the information or be the originator of the information. In the fight against organized crime we often make use of information from intelligence files, informants, agents and other confidential sources. These set the basis for our investigations. Obviously, this would also be the basis upon which many criminal targets would be identified for this legislation to be used. We are concerned that the use of that kind of information could inadvertently open the doors to information that should not be revealed, endangering individuals, exposing police techniques or other investigations in progress. Without some kind of assurances that such information would be protected, we would be reluctant to identify targets for the legislation to apply to.

If there is a police component to the actions coming from Bill 155 it's reasonable to assume that we'll be called upon to provide resources. I can't imagine how the legislative would go forward without some involvement of the police in the future, and the obvious concern is then the draw on the resources of the police service. It makes us somewhat nervous; our resources are already stretched in the battle against organized crime, so we would want to have a better understanding of the impact of engaging in this on police resources.

To try and close quickly, Bill 155 is an initiative that complements the Ontario organized crime strategy. I believe it will assist in taking the profit out of crime and limit the opportunities of organized criminals to achieve profits through illegal activities. I applaud the government for this latest initiative and I thank you for the opportunity to speak with you today.

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The Chair: Thank you very much, Mr Collins. Mr Kormos, do you have any questions? We have about nine minutes, three minutes each.

Mr Kormos: Again, you may or may not know that all of our constituency offices are on the phone to PhoneBusters, for instance, and other facets of what you do on a pretty regular basis, so we're familiar, at least I am, with that impact on our communities.

I'm interested in two things in particular; one, because we haven't heard a whole lot about the experience with the 1989 amendments to the Criminal Code, the federal provisions for forfeiture of proceeds of crime. Dr Beare, from the Nathanson Centre for the Study of Organized Crime and Corruption, was here yesterday saying that Ontario is the province that has used that legislation the least. That was all she said; she didn't provide statistics or numbers. Do you have any stats or any familiarity with where Ontario ranks in terms of utilizing those sections of the Criminal Code as compared to other provinces?

Mr Collins: Yes. I will ask Inspector Perron to answer briefly also. There are two entities in the province that essentially do this work: the federal-led initiative, which the inspector managers at the RCMP have resources engaged in, and we in the OPP have about 16 people full-time at this currently, under the criminal legislation. We are about to enhance that to include support funding and a more collaborative effort with many of our other municipal police colleagues. We will be doing some of that work also, so the actual activity is increasing.

In terms of how it relates to the rest of the country, perhaps Don will have an idea.

Mr Don Perron: I'm not in a position to compare our statistics with other provinces. I really don't know how well they've been faring at applying the legislation.

Mr Kormos: Can you then give us a sense of what has been the experience with the team, I presume, of lawyers and investigators who are doing the federal Criminal Code applications? What's been the experience? Have we got any numbers about how much has been forfeited over the course of a year or two years or five years, or even just a general idea?

Mr Perron: As far as the federal initiatives, I have not been made privy to the numbers they have. I just arrived on the unit there about a month ago. As far as the OPP is concerned, we've been in existence since 1997 and I'd say we average anywhere from $3 million to $6 million a year that is seized as proceeds of crime. You can practically say that half of that is based on drug proceeds investigations and half are enterprise crime investigations.

Mr Kormos: That's utilizing the forfeiture provisions of the Criminal Code --

Mr Perron: That is correct.

Mr Kormos: -- as compared to court-ordered simply as a part of the process in terms of evidence that's seized.

My modest experience with this suggests that -- and you refer to this, sir -- the investigation of this level of crime is very labour-intensive, it's very high-tech-intensive. You're doing stuff like surveillance, infiltration; you're conducting investigations sometimes over very lengthy periods of time. My modest experience is that when there are gaps, when there are breaks in that surveillance, that is when there are weaknesses perhaps from time to time in a crown attorney's case in the prosecution.

You talked about the already stretched resources. I want you to talk about that a little bit. What could you do if you had specific allocations and, more significantly, if you were able to specifically target -- if you could say to this government or any other, "Give us X number of resources so that we can go after those telemarketers," which, as you know and I know, hit old people, hit very vulnerable people. What would you need to do and how could you strategize that?

Mr Collins: That's a pretty broad question, Mr Kormos.

Mr Kormos: I know.

The Chair: You've got about 20 seconds.

Mr Collins: And I have 20 seconds to answer.

Mr Kormos: Oh, you've got all the time you want.

Mr Collins: I don't expect that we would ever be able to match the resources of the organized crime people we're tackling within policing. There is a direct relationship to the amount of investment made in enforcement and prosecution to the potential effects. Examples of units that have been successful would suggest that, yes, they're expensive and, yes, we could use more resources. I can't put a number to it.

Mr Kormos: That's not very encouraging, is it?

Mr Collins: No, it isn't. I'll give you a quick example. In terms of outlaw motorcycle gang activity in this province and the recent changes in the Hells Angels, which is I think creating some concerns, we're looking at probably 200 Hells Angels in Ontario. Each of those operates in a cell with up to about 10 direct people reporting to them. You're looking at a criminal organization overnight that you can identify with 2,000 criminals actively engaged in Ontario, and that is only at the top end. To attack something like that, as you said, complex investigations require resources, funding and expertise. How many of those 2,000 people could we attack with the resources we have? So we do what we can with the resources we're given and we have some successes. What we really need, sir, is additional tools in the toolkit, and I think that's what we're talking about today.

Mr Tilson: I have met with pretty well all of the chiefs of police and police officers, Ontario Provincial Police people, in my riding, which is a semi-rural, urban riding, and I discovered that there is a bike gang out in the countryside owning some property. I don't think they cause a great deal of trouble but they're there. It got me thinking, because a lot of the comments that come from police agencies and lawyers who talk about organized crime, talk about organized crime as being in the cities, in the urban areas. As the representative with the Ontario Provincial Police, can you tell the committee whether organized crime is limited to urban areas? Is it just a Toronto problem?

Mr Collins: No, I don't believe it's strictly a Toronto problem. Obviously where the economy is the strongest, where the resources are, that will attract a number of people essentially. One would expect to see some of this in an urban environment. But it is widespread and its impacts are broader than that.

I was reading recently in the paper about crack cocaine being sold across the street from a high school in downtown Barrie. Having some knowledge that that comes from an organized crime group shows an impact that is outside the city of Toronto. There are outlaw motorcycle gang clubhouses and activity in rural Ontario. There is more and more often organized crime making use of the quiet corners of rural Ontario to do hydroponic marijuana growing, with people they hire and fund to do that. There are those examples and many more, sir, that would suggest this is not just a big-city issue.

Mr Tilson: I know you were in the room when the first speaker spoke, Mr Nigro, an assistant district attorney in New York. I'm interested in suggestions for improving the legislation. Dealing specifically with section 15 of the bill -- and I don't know whether either of you have had an opportunity to look at the bill. Section 15 talks about the special purpose account and lists off where payments can be made out of the account to victims to compensate the crown, to compensate municipal corporations etc. I was interested in his comments about how seized and forfeited pieces of equipment -- vehicles, boats -- are indeed being used now to fight organized crime. I don't know whether you've had a chance to look at that section as to whether or not you believe that section should be made any broader to assist police in the fight against organized crime, appreciating the restrictions, the jurisdictional problems that the province has.

Mr Collins: The section appears to me to be fairly broad, although not likely as broad an application as one sees in the American example from the earlier years where police agencies that seized a vehicle from a drug dealer would be driving it the next day in some cases and potentially using it for other purposes.

There's always a dilemma in terms of, what is the motivator for the police agency engaged in this? Is it strictly the seizure of the goods or is it for the greater good, which we all should be working on, and that's in terms of putting these organizations out of business. So I think you have to be somewhat careful about how it's done.

However, what is encouraging about that section to me is the potential for some of the resources to come more directly back to policing, and I'm talking about the resource issues here, and I certainly think that first the victims need to be compensated and the government should be looking after them.

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Second, if the resources of the police, agency or the prosecution group are not flowed back through into the ministry or the agency that does it, there is a disincentive to continue to put more resources into that kind of work, because what you're really doing is taking police resources -- pressure to have a uniform presence on the street, as an example -- and putting them into specialist work and the one spot goes vacant.

I see potential for some of this to flow back in through to the police and I'm encouraged by that.

The Chair: Mr Caplan, you have about a minute. Sorry, they took your time.

Mr Caplan: We'll get them back for that some later time.

Commission Collins, thank you very much for your presentation. You've been talking quite a bit about the resourcing available. Back in the May budget, about a year ago, there was an announcement of a fund of about $4 million. Has that money flowed?

Mr Collins: Some of it has.

Mr Caplan: But has it all?

Mr Collins: It's flowing, is perhaps a better word. Announcements are good things and we encourage them. The money is flowing in. For example, in the proceeds-of-crime unit in the OPP that I talked about, some of that money was to go into supporting other police resources to work on that, and they are coming to do it. But setting up the systems and getting the equipment and people trained takes time. So that is occurring, and some portion of that $4 million you talked about has already flowed into that and other things.

Mr Caplan: How much?

Mr Collins: As I understand it from the Solicitor General's side of the House, half of that money came our way. It is all being flowed into a variety of different initiatives. That's one that I just spoke about.

Mr Caplan: It's been announced several times. But it's been budgeted for for almost a year now, so the money is there.

Mr Collins: The money is there. We're putting things in place.

Mr Caplan: About half is unspent? Is that what you're saying?

Mr Collins: I'm not certain if there is money unspent or where it's at in terms of that.

Mr Caplan: Thank you.

The Chair: Thank you very much, Mr Collins, for coming in this morning.

NIAGARA REGIONAL POLICE SERVICE

The Chair: The next presenter is Chief Gary Nicholls, Niagara Regional Police Service. Good morning, Chief.

Mr Gary Nicholls: Good morning. I would ask Inspector Beaulieu if he could join me, Madam Chair.

The Chair: Certainly.

Mr Nicholls: Recognizing the time constraint, I apologize at the outset for perhaps moving very quickly through the significant volume of information, but I think it important that I shed some light on it specific to my jurisdiction and Mr Kormos's jurisdiction, the Niagara region.

Let me say at the outset that I am very grateful to you and wish to thank you for the opportunity to address the committee today. I am speaking on behalf of my community. I feel it is very important that members of the standing committee gain some insight into the very real challenges that exist in investigations of organized criminal activity and enforcement. I will try and be brief, but I want to capitalize on this time with you to address in general terms the impact of organized crime in Niagara. I also wish to speak specifically about the impact of outlaw motorcycle gang activity, including the anticipated impact of the expansion of the Hells Angels motorcycle gang in the province of Ontario and specifically in Niagara. I also wish to address the presence and impact of traditional organized crime in Niagara.

Organized criminal groups operating in Niagara and elsewhere in the province are engaged in a complex range of illegal activity. You have heard much of that. Despite the varied nature of the crimes, a common theme exists in the motivation for organized criminal activity. The commission of all organized crime, in my view, is motivated by greed. Where there is potential for profit and the acquisition of assets and wealth, there is the potential for participation of organized criminals to involve themselves in an extensive list of unlawful activity. Without the potential for profit, the involvement of organized crime would be, in my view, non-existent.

The Niagara region provides a unique opportunity and fertile ground for the continued advancement of organized crime. These opportunities present a significant challenge for law enforcement in Niagara and include the following: the region's four major border crossings; access across international waterways; the region's position between major Canadian and American centres; the existence of a world-renowned tourist industry attracting millions of visitors annually; the casino in Niagara Falls; the prevalence of exotic night clubs attracting a US clientele; and the existence of both well-established and newly established outlaw motorcycle gangs with extreme potential for rivalry, conflict, encroachment and violence.

I wish to briefly capsulize some of the highlights and some of the more prevalent organized crime activity experienced in Niagara. This list is by no means exhaustive.

Drug trafficking, as we've heard this morning and perhaps yesterday, is a significant component of organized crime. There are several organized crime groups involved in this activity, not the least of which are the biker gangs and the members of traditional organized crime.

Niagara is often central to and a common denominator in organized-crime drug trafficking and drug importation schemes through our proximity to the US border.

Increased activity of organized people-smuggling into the United States is prevalent among organized crime members.

Organized crime involvement in contraband smuggling through the US border into Canada is ongoing and specific to liquor and cigarettes among just a couple. An example is 40,000 cases of American liquor valued at US$8.4 million seized at the Niagara crossing. We see potential for a resurgence in cigarette smuggling with the anticipated rise in price.

A dramatic increase in organized crime interests in vehicle theft has been referenced, and we are experiencing that as well in Niagara. Generally auto theft incidents have doubled since 1980, and during the same time period theft recovery rates have declined proportionately. Declining recovery rates are a clear indication to us that organized crime is participating in this activity in regard to the dismantling of motor vehicles and the transfer of stolen vehicles and re-registering them for their use out of province and in fact internationally.

Illegal gaming and related activities, including gambling machines and loansharking, are prevalent in Niagara, particularly among members of traditional organized crime.

An Eastern European organized crime influence in Niagara has been linked to drug trafficking, gambling, gaming offences and prostitution mostly operated through legitimate business fronts.

Counterfeit offenses have risen dramatically in Niagara, specifically in and around the casino.

Organized child pornography distribution and importation has been experienced, as evidenced with increased seizures of child pornography materials at the border crossings.

These activities in Niagara and indeed elsewhere in the province have had a direct impact on our daily lives. I would be remiss if I did not comment on more significant, yet overlooked social costs attributed to the commission of these crimes, particularly drug trafficking. There are substantial long-term consequences in health care, labour productivity, enforcement costs, the negative impact on the potential of our youth, drug-related property and street-level crimes, and particularly the violence potential in the desperation and the disoriented state of drug users who commit crimes. The total impact of organized crime literally, in my view, serves to undermine Canada's future.

The Niagara Regional Police Service, and indeed the entire law enforcement community in Ontario, also share a deep concern over the violence potential that has been, and will continue to be, demonstrated by rival organized crime factions, in particular motorcycle gangs, in their struggle for control. This is a key public safety issue affecting the liberty and security of all law-abiding citizens and a direct consequence of organized crime activity. The propensity for violence among the more prominent organized crime groups cannot be understated. We've witnessed that here in Canada.

In Niagara we have endured the existence of a long-standing motorcycle gang and they exist today. We foresee some conflict with the insurgence of the Hells Angels in Niagara. We have had a number of investigations involving the local motorcycle gang that currently exists in Niagara, and I think it's a demonstration that we have been unsuccessful in our efforts in eradicating this organized Outlaws Motorcycle Club in Niagara despite some significant successes that we've had along the way with traditional criminal investigations.

The investigation of criminal activity, as has been reported, is very labour-intensive. Although investigations are always successful to varying degrees, apart from resulting in the incarceration of select criminal members for brief periods, the well-established and entrenched illegal activities carry on with new faces and new members almost without pause.

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In Niagara, as I've mentioned, we have had the infiltration of the notorious Hells Angels. They come with unlimited financial support. They will be attaching themselves to the local club, we believe. That is a potential for significant conflict in our particular jurisdiction. Certainly, we expect that there will be a negative impact on crime in general and an increased level of organized crime activity in our region as a result. Over the past few months in Hamilton and Niagara we have witnessed this expansion, and it has been ambitious.

I want to speak specifically as well about some activity with regard to traditional organized crime. We have been, in some cases, very successful in our endeavours in this regard. But again, although we have had some success, our success has been limited to the extent that we have not been successful in eradicating it. Our hopes of eradication are limited indeed.

As the chief of police in Niagara, I am very proud and want to report to this committee that we have been a leader and a committed supporter of traditional criminal legislation directed at seizing and obtaining lawful forfeiture and proceeds since May 1996. We have had some successes, Mr Kormos, in that regard. We are in a position to report briefly on that. But as I say, we are considered a model in Canada, for that matter, in working with the RCMP locally in that specific regard. We have two investigators working with two RCMP investigators, and we have been very successful. So what we are hoping for is your encouragement with this particular legislation as a support to current criminal legislation that we have utilized and will continue to utilize in Niagara.

I wish to comment on the relative investigation in Niagara using traditional law enforcement methods to combat organized crime. They have been well reported in the media, but in May 1997, a well-known traditional organized crime figure was murdered in Hamilton. Shortly thereafter, in July, an associate of his was also murdered in his home in Niagara Falls. The investigations were very quickly linked, and we began a joint investigation with Hamilton, Halton, the Ontario Provincial Police and the RCMP in a multi-jurisdictional task force called Project Expiate.

We were very successful in that endeavour, but it took a two-year investigation with resources that stretched us to the max. It culminated in the arrest and conviction of three members of traditional organized crime, which is not something that's easily done, I can tell you. We solved, with that particular investigation, three execution-style murders and some ancillary offences. But I can tell you that even though we were awarded the Award of Excellence by the Criminal Intelligence Service Canada, we did not manage to deal with the root cause and motivation of these murders. It was indeed a battle for money and a battle for control. It continues and will continue as long as we are unable to eradicate organized crime as best we possibly can with every conceivable tool.

Again, we in Niagara would want to encourage this committee to give serious consideration to this legislation. We've talked about the extremely labour-intensive and expensive terms of the application of resources and employing effective strategies to ensure success. As well, we want to continue to target organized crime in a much more effective manner. What we are dealing with as far as Bill 155, we believe, is an internationally recognized law enforcement strategy in causing permanent disruption and indeed permanent dismantling of some criminal organizations. Taking the profit out of crime is the key to disrupting organized criminal enterprises and networks.

We see Bill 155 as a unique perspective in attacking it from the civil remedies, civil application. We see it as a proven strategy. I was interested to hear Mr Nigro's comments this morning. We see it as a proven and unique approach, but relatively uncharted in Canada. It has been reported as well that the level of proof is reduced, allowing us to deal with a level of proof required less than criminal law. In addition, the rules governing admissibility of evidence in civil matters are reduced, resulting in a more level playing field for police and prosecutors. These factors give rise to a stronger likelihood and higher probability of success in certain cases by utilizing civil process as opposed to traditional efforts with the criminal process.

We want to suggest that the main focus in Bill 155 should allow for law enforcement to be more effective and efficient in reducing the opportunity for profit. These challenges are not easily accomplished in the application of criminal law, given the extensive resources and personnel that are dedicated to the integrated proceeds of crime unit in Niagara and elsewhere in the province.

I sincerely believe the law enforcement community in Ontario applauds and adamantly supports any legislative initiative that will add to our repertoire of investigative strategies. We see Bill 155 as an important tool in our ongoing battle against organized crime. It is with great respect that we recommend to this committee and urge you to endorse the provisions of Bill 155.

I hope this information, although lengthy -- and I apologize again for that -- has been helpful in allowing you to give serious consideration to advancing this piece of legislation.

The Chair: Thank you very much, Chief Nicholls. There's time for one question from each party.

Mr Tilson: The burden-of-proof issue has surfaced throughout the hearings. Some of the civil rights lawyers have been critical of it and said we should be using "beyond a reasonable doubt." Other people have indicated their support for the burden of proof that's put forward. I forget --

Mr Nicholls: "Balance of probabilities."

Mr Tilson: "Balance of probabilities," which is spelled out in one of the sections. I don't know too much about the American burden of proof. We've had Mr Nigro come and talk a little bit about it, but we do know there's another burden of proof that's somewhere in between. You referred to it, but can you elaborate a little more where you stand on the burden of proof?

Mr Nicholls: Certainly, Mr Tilson. We will continue to use the criminal process, because we have been successful. We see it as a very legitimate process in our efforts. But where the burden of proof is "beyond a reasonable doubt," we have had significant difficulty putting those cases together with our crown attorneys. They have been difficult to the extreme, but we have been relatively successful.

We see the burden of proof that is lower than "beyond a reasonable doubt," the "balance of probabilities," as a viable option, at least from my perspective, given the fact that, as Mr Nigro reported earlier this morning, it is put before the court. It is nonetheless a civil process that is put before the courts, and I think that process encourages a very rigorous review of all the evidence. But in fact it is a lesser evidence, given the fact we're dealing with property crimes and not an individual's liberty. So I accept it as legitimate. I encourage the committee to deal with it in that respect, because it's appropriate in circumstances dealing with property issues.

The Chair: Mr Caplan.

Mr Caplan: Thank you, Madam Chair. Chief Nicholls being from Niagara, I think it's only fair to allow Mr Kormos to ask a question, being that it's probably his own time. I'll pass it over to Mr Kormos.

Mr Kormos: Thank you kindly, Mr Caplan. Peculiarly, I know Chief Nicholls and Inspector Beaulieu very well, and for a long time too. I'm very pleased with the new chief's appointment late last year.

I'm pleased to hear about the utilization of the Criminal Code provisions and about Niagara being very much in the leadership. What's been the success rate of defence by the persons being targeted? What's been your experience in that regard?

Mr Nicholls: Perhaps the inspector can speak to that. I can tell you that I think the defence against that legislation has been somewhat significant. If we were holding our own, I think that's perhaps the best we can do in these matters. Specifically to the criminal cases that have been put before the courts without success -- Gary, I don't know whether you can speak to that.

Mr Gary Beaulieu: When we're fortunate enough to take a case before the criminal court and it's put to a defence, we've been very successful at that stage. The unfortunate part for law enforcement is that many of our cases, which we feel are very strong, simply don't reach that threshold where we can advance it in a criminal case and in many cases charges aren't laid under those circumstances. That's where this particular legislation may be useful as another tool for us.

Mr Kormos: I have no doubt about the utility. Thank you very much.

The Chair: Thank you, Chief Nicholls and Mr Beaulieu.

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STATE OF NEW JERSEY
DEPARTMENT OF LAW
AND PUBLIC SAFETY

The Chair: The next presenter is Paul Zoubek, First Assistant Attorney General of New Jersey, USA. Good morning. Thank you for coming up.

Mr Paul Zoubek: Good morning. It's a pleasure to be here. Thank you, members of the committee. I appreciate the opportunity to speak before you today and share the New Jersey experience concerning civil asset forfeiture, particularly in the context of organized crime.

If I can step back for a second, I'm First Assistant Attorney General of the state of New Jersey. The way in which our law enforcement is structured in the state of New Jersey, we have 21 separate counties, and by statute the Attorney General is the chief law enforcement officer of the state and can set guidelines and procedures pursuant to statute for each of the county prosecutors' offices that may be involved in forfeiture actions. The Attorney General's office has separate law enforcement powers and a separate state grand jury that it can utilize in conjunction with civil forfeiture.

As you've heard from a number of speakers already, organized crime is a multi-billion dollar industry that has a devastating effect on legitimate economic enterprise by diverting money from lawful commerce while rewarding and financing ongoing illegal activity.

How do we best attack such crime? One of the ways we do so is by trying to take the profit out of that kind of crime. Asset forfeiture can destroy the money base necessary for the continuation of illegal enterprises and serves to attack the economic incentive to engage in organized criminal activity. It also deters individuals from using their property to facilitate criminal activity. Perhaps best of all, it rededicates the money from illegal activity to the public good.

New Jersey's civil asset forfeiture law is one of the most comprehensive forfeiture statutes in the United States. In essence, it provides for the seizure, by law enforcement, of any cash and property having a direct link to an indictable criminal activity. Like the statute this committee is considering, we deal with two basic kinds of asset forfeiture that we're looking at. One involves the instrumentality of crime and the second is the proceeds of crime.

Under our system, the seizure can be triggered in two ways: immediately upon seizure of contraband, such as weapons or drugs on site, by a police officer where there are criminal charges filed; where no criminal prosecution is immediately contemplated, the seizure can only occur on approval of our trial court level judge known as a Superior Court judge. Under our New Jersey law, the state has 90 days, once a seizure is made, to initiate a formal forfeiture action. This is done by filing a verified complaint with the civil part of the local trial court.

One of the things that makes our civil forfeiture statute unique is that unlike laws in many states, the application of our law is not limited to specific offences such as narcotics, money laundering or illegal gambling. In New Jersey the statute enables us to seek forfeiture of cash and property in the case of any indictable offence, felony offence, where we can establish by a preponderance of the evidence that there is a direct and substantial link between those assets and the crime. In contrast to the Nassau county experience, the New York experience, our statute is what is referred to as an in rem property statute, not an in personam statute that addresses a person's interest in an asset. We are going after the asset itself. The statute also provides that all civil forfeiture proceeds will be redistributed exclusively for law enforcement purposes.

With the power that New Jersey's forfeiture statute provides, namely ability to take away cash and property in the possession of another, even where it is a criminal, there obviously are significant property rights in mind and we need to be responsible in the way the forfeiture laws are used and the way they are administered. The ability to seize assets and property carries with it an obligation to be vigilant about possible abuses of discretion, the proper use of forfeiture procedures and prosecutorial overzealousness that may threaten individual freedoms and reinforce the prospect of corruption.

We have established Attorney General guidelines with respect to the use of the forfeiture laws in the state of New Jersey and we have also established a very comprehensive system to oversee the use of those forfeiture funds by law enforcement. I will touch on some of those issues a little bit later and answer questions in that regard, but now I'd like to talk about why we feel that civil forfeiture in New Jersey has evolved into a significant law enforcement tool.

Put simply, civil forfeiture is a means by which we can take the profit out of all types of indictable crime, from drug dealing to fencing stolen property, from loansharking to insurance fraud. From our perspective, this is vital because most crime that is not motivated by passion is motivated by greed. Show me the money, show me the interest of organized crime in New Jersey to make profits. Indeed, if there's one thing we've learned from our experience in law enforcement, it's that lawbreakers often display a remarkable degree of both persistence and inventiveness in the service of their greed. Through civil forfeiture, the ability to take away the proceeds and instrumentalities of crime, we can attack them where it hurts.

Prior to coming to the Attorney General's office in New Jersey, I was a federal prosecutor in the US Attorney's office for a period of time. I remember one defendant who had turned the state's evidence who was testifying for me. He was facing a significant amount of time but, more important, he was facing a significant amount of forfeiture. All the way up until his sentencing he was willing to trade additional time in jail if he could just get more of his property back, property that was acquired by paying off union leaders to rob union workers of their due work by a couple of dollars an hour over a 10-year period. What amazed me was that that individual would sit there, right before he was about to testify in court, and seek to trade, because he had more interest in keeping the proceeds of his crime than necessarily spending a little bit more time in jail.

Through forfeiture we also can make it more difficult for ongoing criminal enterprises to fund themselves as they often do. In New Jersey we have been involved in the fight against traditional organized crime for a number of decades. Indeed, our division of criminal justice in New Jersey was formed in 1970, after there was a Life magazine article that focused on the influence of organized crime on businesses and political institutions in New Jersey. It was around that time that the criminal and civil RICO statute was put in place and thereafter a forfeiture statute was put in place to give us the tools to be able to fight organized crime.

Working in partnership with federal authorities, we have been able to decimate a number of traditional La Cosa Nostra families in New Jersey from an attack not only as it relates to investigating cases in a traditional format, as you talked about in terms of surveillance but, most important, remembering that the way Al Capone was first incarcerated was not by the mighty pistol, not by the mighty work of a surveillance agent; it was by the pencil work of an accountant.

We have worked in New Jersey to develop very sophisticated computer models and computer tracking systems that can put information in about an organized crime group and track their assets. In tracking their assets, you're not going to track them to the LCN bank account at a particular bank; you're going to have to go through a whole labyrinth of shell corporations in order to trace the money.

What we have seen in New Jersey is a transformation -- yes, some involvement in illegal betting, some involvement in loansharking -- but we have seen the movement of organized crime into otherwise legitimate businesses. When that happens, that really attacks potentially the fabric of the local economy and the fabric of the confidence in institutions in New Jersey. We have utilized asset forfeiture to attack, for example, in New Jersey waste hauling businesses and alleged connections between La Cosa Nostra and some of those businesses. We have used that in a number of cases to go after the assets and proceeds of illegal activity and to seize those illegal proceeds. I can tell you that has an important impact.

We send a message that I think that is powerful through the appropriate use of civil forfeiture: get caught stealing or committing insurance fraud, trafficking in drugs or engaging in other criminal activity for profit and you may lose more than just time. You could lose your car, your home, your business and/or other valuable assets.

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Because they are such valuable assets, you have to have appropriate protections in place, but I had a case in one of the poorest cities in New Jersey in which the chief financial officer of that hospital and two senior members of that hospital, in a period of time in which the hospital could barely afford to pay its nurses and could barely afford equipment, ripped off the hospital for $8 million. There were a number of members of the community who would drive in their fancy Porsches into Camden, New Jersey, one of the poorest cities in the country, with the ill-gotten gains from their proceeds. It sent a very significant message to that community when the accountants went back and traced the proceeds to the $1.2-million house acquired by the chief financial officer, which all came from the mouths, potentially, of the patients of that hospital. When that was seized, it sent a very important message to the community. I don't care whether it's in a white-collar sense when you're sending that message or whether you've forfeited the gold Mercedes the drug dealer is using in the neighbourhood to come in each day and poison that particular neighbourhood; the community reacts to those forfeitures when it sees that the individuals who have been flaunting their illegal activity are finally addressed in that fashion. I think it makes an important impact.

We in New Jersey have set up a number of safeguards as they relate to forfeiture. One of the first things we did was set up a wall in all the prosecutors' offices that have both a criminal and civil forfeiture function: there can be no communication between those involved in civil forfeiture actions and those who are involved in criminal actions, to make sure they're not utilizing the information they can gain at a lower threshold and to make sure there's protection of parallel criminal and civil matters.

One of the problems we encountered at times when we put systems in place was related to the utilization of the asset forfeiture dollars. I can tell you, responding to one of the prior speakers' questions, it's only appropriate at a time when we in the States, much like you here in this province, have significant budgetary challenges. We're in this business of law enforcement in organized crime because the organized crime entities and cartels have forced us to do so. What better way to fund, if you will, parts of that fight than with the legal proceeds that have been drawn out from the neighbourhoods and drug dealing or that have been drawn in unfair and illegal competition with legitimate businesses by organized crime that has infiltrated otherwise legitimate businesses, than to put that back into that fight?

That fight can be won, can be successful, if we match technology for technology and if we utilize some of the techniques we have available to us to track their funds. They're smart, but they're not that smart, because they sometimes don't believe we're going to have the perseverance to track through the 55 shell corporations in which they've hidden all their money. But it's a pleasure when that accountant investigator comes out from that room with 50,000 pages of documents, comes out with his list showing that he has established that the proceeds have been traced. One of the things we have found when we file civil forfeiture actions against well-known organized crime entities is that often they are not interested in engaging in the lengthy discovery process that is required, perhaps, for them to establish that their assets were not achieved by legitimate means.

I'm happy to be here. We think this is one of the tools in the toolbox that law enforcement needs to address organized crime. Given some of the things I've even heard here today, I do recommend strongly that the committee consider this bill.

The Chair: Thank you very much, Mr Zoubek. There's time for about one question each.

Mr Caplan: Mr Zoubek, thank you for your presentation today. You mentioned on a number of occasions that in the bill in New Jersey, in the statute in New Jersey, there are appropriate safeguards and protections. You gave one example. In your reading of Bill 155, are there appropriate safeguards and protections against unreasonable forfeiture and seizure?

Mr Zoubek: I think the standards set forth in the bill are appropriate. What we did in New Jersey was that all the protections are not necessarily set forth in the statute, but rather are guidelines that prosecutors use in administering the statute.

Mr Caplan: So if I could be clear, you don't find any protections in the bill and you hope that at some time some guidelines would be issued?

Mr Zoubek: No, I think I said just the opposite of that. I said I found the bill, in and of itself, in terms of what a statute requires in terms of protections by the standards set forth within it, to have appropriate protections. What I'm saying is that in the administration of law enforcement as it relates to this bill -- and what we have done in New Jersey -- you're not necessarily going to want to put in a statute how a forfeiture account is administered by a law enforcement agency. That's more in terms of an administrative matter.

Mr Kormos: You are here with Chief Nicholls and Inspector Beaulieu of Niagara Regional Police Service, one of the larger police forces in Ontario and similarly one of the areas, because of its unique geographic location, impacted by organized crime. They talked about having two Niagara regional police investigators and two federal police force investigators working on their forfeiture program under the Criminal Code provisions. Give us a sense of the number of people working on the investigative end and the lawyering end in New Jersey to make this program work on the scale you're talking about.

Mr Zoubek: What we have done in New Jersey, and it partly relates to our role in the Attorney General's office: we have a staff of about half a dozen lawyers dedicated specifically to this and about a dozen investigators. But frankly, what we have utilized is extensive training programs to train local law enforcement to recognize some of the issues that are necessary to do some of these investigations. For law enforcement, in order to get people who can handle the computer and do the computer analysis, are we going to wait and hire everybody out of college to do that? I think part of it is retraining, but one of the things is that an accountant working on these matters can provide significant assistance.

It's important that there is an investment in that specialized kind of investigator, in addition to identifying -- for example, we have training programs in place that identify for local police officers what they are to look for during the course of a police stop that may be related to what they need to do when they find $200,000 in the back seat of a car. If they do the right things on that occasion, it can secure the civil asset forfeiture we need to accomplish.

Mr Wayne Wettlaufer (Kitchener Centre): Thank you for coming this morning and appearing before us. I believe you said that the proceeds of any forfeiture of cash or property in New Jersey are used for law enforcement purposes exclusively.

Mr Zoubek: That's correct.

Mr Wettlaufer: You're aware, I believe, of section 15 of Bill 155, that we will be using some of the proceeds to compensate victims of unlawful activities. I wonder, first of all, if you could comment on that provision and, secondly, if you could tell us how you compensate victims in New Jersey.

Mr Zoubek: I think that's an excellent proposal in your legislation. When there is a readily identifiable victim and the recompense can be utilized as set forth in this legislation, I think that's important. In New Jersey, in an instance in which there is a theft of, let's say, $50,000 from an elderly couple through telemarketing fraud or something, there are mechanisms by which that money can be returned to the victims. Our forfeiture statute was addressed more to the generalized crime you may have against the public by organized crime, in which you don't necessarily have an identifiable victim as opposed to the public good being adversely impacted by their attempted control of an institution or by their infecting otherwise legitimate businesses.

I think the portion you have in your legislation that relates to victims is very important. It's important that the defendant's rights in a civil forfeiture case are protected, but we in law enforcement don't often enough remember and ensure there is full and complete compensation to the victim.

The Chair: Thank you very much, Mr Zoubek, for coming this morning.

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US DEPARTMENT OF JUSTICE,
DRUG ENFORCEMENT ADMINISTRATION

The Chair: The next presenter is Mr Lawrence D'Orazio, Senior Attorney, Drug Enforcement Administration, USA. Good morning.

Mr Lawrence D'Orazio: Madam Chair and distinguished members of the committee, good morning. Thank you for the opportunity to speak today about asset forfeiture from my agency's perspective.

Asset forfeiture is one of the most important tools in the Drug Enforcement Administration's fight against drug traffickers. My remarks will focus on the central role asset forfeiture plays in that fight. Most Americans agree that criminals, including drug traffickers, should not be allowed to benefit financially from their illegal acts. Our federal law provides that the profits and proceeds of designated crimes, as well as the property used to facilitate certain crimes, are subject to forfeiture.

Asset forfeiture is one of law enforcement's most effective weapons against drug trafficking, because it takes the profit out of the illicit drug trade, thus removing the incentive others may have to commit similar crimes in the future. Not only are the profits of crime taken away from the criminals, but asset forfeiture also dismantles the physical and financial infrastructure essential to the continuing vitality of criminal organizations. Lastly, asset forfeiture provides the means to help victims and to fund law enforcement programs to further combat crime.

Asset forfeiture has been a part of the American legal system jurisprudence since the founding of the nation. Current federal law contains numerous protections against possible abuse. The process also provides for the protection of innocent parties whose property may have been seized, including banks and other financial institutions that may have a third-party interest in the seized property. Such parties may elect to have the courts consider their interests, or they may seek administrative relief without the need to proceed in court.

Powerful international drug syndicates operate around the world, supplying drugs to American communities, employing thousands of individuals to transport and distribute drugs to American youth. They smuggle tons of cocaine and heroin into the United States and distribute and sell it in communities across the country. As a result of selling their poison, these organizations generate millions, possibly billions, of dollars of US currency as profit. They need to return this profit somehow to Colombia and Mexico. The drug traffickers take money from American citizens who become hooked on drugs. They drain this currency from the American economy and divert it to the personal consumption of a few individuals living outside the country.

Where, in the past, seizures of currency involved in drug cases might have been in the thousands or tens of thousands of dollars, now seizures of bulk amounts of US currency are in the millions of dollars. In the nature of the international drug trade, because of currency transaction reporting requirements, to a large degree illicit profits are no longer laundered through banks but are smuggled in vast amounts out of the US and into foreign hands. Many of DEA's cases involve seizures of these shipments of bulk cash being smuggled outside the United States. The international traffickers isolate themselves from the monies and have the money transported separately from the drugs, oftentimes by couriers who are well paid for their services. In many of these cases, nobody claims ownership of this ill-gotten cash. To do so would be to run the risk of criminal prosecution, so the monies are civilly forfeited.

There are large dollar amounts connected with drug asset forfeiture because of the nature of the drug trade. One example from just one case will illustrate this point. During 1998, in numerous investigations within the United States, DEA worked with federal, state and local law enforcement partners to arrest members of an international drug trafficking syndicate who were operating on US soil. Resulting from a series of co-operative investigations which linked trafficking organizations in Mexico, Colombia and the Dominican Republic to their operatives in various US cities, over 1,200 individuals were arrested. Almost 13 tons of cocaine, two and a half tons of methamphetamine and 127 pounds of heroin were also seized. Almost $60 million in US currency was seized as a result of that investigation.

Asset forfeiture, civil and criminal, is one of DEA's most powerful weapons against narcotics traffickers. There are several circumstances where civil forfeiture is the most effective method of removing the instrumentalities and profits from narcotics trafficking. Since criminal forfeiture requires the conviction of the violator, it is not available in cases where the drug trafficker is a fugitive, deceased or resides outside the reach of US extradition laws.

In instances where law enforcement intercepts an illegal money courier with bulk amounts of cash, civil asset forfeiture law enables the DEA to seize and forfeit these illegally obtained assets. The couriers, who either know little about the underlying illegal activity or are told not to ask questions, are paid generously for their services. Couriers are frequently chosen because they have no drug criminal history and are purposely isolated from the underlying illegal activity through an intricate system of cells that make up the structure of the drug trafficking organization. In many cases, the courier denies any knowledge of illegal activity, disavows any ownership interest in the currency, may not be arrested and is free to leave throughout this encounter. Therefore, criminal forfeiture is simply not an option. However, as a result of the investigation, DEA would be able to forfeit that currency after proving by a preponderance of the evidence that the currency either represents the proceeds of narcotic trafficking or was intended as payment for narcotics.

Today's international organized criminal groups are strong, sophisticated and destructive organizations operating on a global scale. They are shadowy figures who send thousands of workers into the United States who answer to them via daily faxes, cellphones and pagers. These syndicate bosses have at their disposal airplanes, vessels, radar, communications equipment and weapons in quantities that rival even some legitimate governments. Whereas previous organized crime leaders were millionaires, the Cali drug traffickers and their Mexican counterparts are billionaires. These enormously wealthy criminals should not be allowed to enjoy the profits of their crimes. Drug trafficking is a crime of greed and is profit-motivated. Asset forfeiture is a vital tool in striking blows at the drug trade at one of its most vulnerable spots: the money. Law enforcement must be able to take the profit out of drug trafficking.

The Drug Enforcement Administration has asset forfeiture investigative groups in nearly all of its field divisions and provides asset forfeiture training to thousands of drug law enforcement officers, both domestic and international. The agency's asset forfeiture program was responsible in fiscal year 1997 for the seizure of cash and other assets totalling $412 million. In fiscal year 1998, there were more than 7,700 DEA cases, in which over $351 million in cash and assets was seized. In fiscal year 1999, over 8,000 seizures brought more than $359 million. In addition to this figure was $90 million that was the US share from a 1995 case that was repatriated in that year. As part of nearly 8,000 cases in fiscal year 2000, a total of more than $346 million was seized.

DEA agents across the country, together with our state and local partners, carry out controlled deliveries of the drug shipments they seize. Our operations do not stop with intercepting the drugs or the cash. We use these seizures to develop information on the trafficking organizations. We follow the cash because it forms a trail to the criminals who transport the drugs. By identifying and arresting members of the transportation cells of drug trafficking organizations, along with the US customers, law enforcement authorities are better positioned to target the command, control and communication of a criminal organization, and arrest its leadership.

Many of our investigations and enforcement operations point to the connection between domestic law enforcement in the United States and the problems posed by international drug trafficking organizations in Mexico. These operations show, as do most of our investigations, that arresting the leaders of international organized crime rings often ultimately begins with a seemingly routine event in the United States. For example, two troopers from the Texas Department of Public Safety performed a traffic violation stop on a van with New York plates on Interstate 30. They became suspicious when they learned that one man was from New York while the other was from El Paso and they were not well acquainted. Neither man owned the van and their stories conflicted regarding where they were going and where they had been. The driver and passenger consented to a search, and the troopers found 99 bundles of money hidden in the vehicle's walls. It took three hours to count the $2 million in cash.

After receiving an anonymous call, the Tucson Police Department and drug task force officers raided a warehouse containing 5.3 tons of cocaine. The same Texas troopers also stopped a northbound tractor-trailer and seized 2,700 pounds of marijuana. Follow-up investigation connected this interdiction to the previous seizure of money, to the cocaine warehouse in Tucson and to ongoing investigations in various other states.

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These investigations would not be as successful as they were if we did not have asset forfeiture authority. All of these investigations provided our special agents and federal prosecutors with the key to uncover the operations of the Amado Carrillo-Fuentes organization. This powerful Mexican syndicate was apparently using US trucks and employees to transport huge amounts of cocaine to various US destinations. Information learned from the investigation showed that just one Juarez-based organized crime cell shipped over 30 tons of cocaine into American communities and returned over $100 million in profits to Mexico in less than a two-year period. The resulting investigation, Operation Reciprocity, resulted in 53 arrests and the seizure of more than 7.4 metric tonnes of cocaine, 2,800 pounds of marijuana and $11.2 million in cash.

Asset forfeiture plays a key role in our most complex investigations, some of which could not take place successfully without this vital tool. The 22 separate DEA, FBI and US Customs investigations in eight separate judicial districts from August 1997 to July 1998 came under the name of Operation Rio Blanco. These investigations led to the identification of the top leaders of a trafficking group operating in the United States, 90 arrests and the seizure of 3,500 kilograms of cocaine and $15 million in US currency. Working within current legal restrictions, operations such as Rio Blanco can inflict significant damage on drug trafficking organizations.

Aside from traditional drug investigations, asset forfeiture plays a key role in money-laundering investigations as well. Money laundering takes place because the drug lords need to insulate themselves from the drug smuggling in an attempt to avoid criminal prosecution. The traffickers will attempt to obscure the drug profits, making it appear that the money is legitimately gained wealth. DEA's strategy in money-laundering investigations is to direct law enforcement actions not only at the arrest of the violators and seizure of their contraband, but also toward the seizure and forfeiture of their illegally obtained and laundered assets. Asset forfeiture takes the profit out of drug trafficking by seizing laundered money that can be tied to trafficking. There are several examples of successful DEA investigations and operations that have resulted in such seizures.

Operation Dinero was a long-term DEA and IRS money-laundering undercover program initiated by the Atlanta field division in 1994. During the first phase of Dinero, cash transactions and money pickups were used to connect drug trafficking and drug cell money groups in the United States. These pickups were necessary in order for undercover agents to gain greater credibility with the drug trafficking organizations' hierarchy and to establish the traffickers' trust in them to handle large financial transactions. Phase 2 of this operation targeted major drug trafficking accounts and assets. Operation Dinero was concluded with worldwide impact, with the following results: 88 individuals were arrested, nine tons of cocaine was seized, and $82 million in cash and property was also seized. These results occurred in the United States, Canada, Spain and Italy. Not only was a significant portion of the international drug trafficking organization crippled by the arrests, but a small fortune was denied for those members of the organization who remained at large.

Another example is Operation Skyline, a money-laundering operation directed toward the identification and arrest of members of the Cali Mafia. In 1995, negotiations for money-laundering services had been established and three cash pickups totalling approximately $250,000 were made. Two of the negotiators stated that they were to organize the laundering of $1.2 million in cash. These negotiators were arrested and $540,000 in cash was seized at the time of the arrest.

In a separate investigation under Operation Skyline, a DEA undercover agent in Houston, Texas, had been in extensive telephonic negotiations with a suspect to provide money-laundering services. Uniformed officers stopped the vehicle and recovered approximately $600,000 in US currency. Both suspects denied knowledge or ownership of the money. Upon culmination of Operation Skyline, over $2.7 million in cash was seized.

These examples show how we use asset forfeiture to take the profit out of drug trafficking. We are sure that most Americans agree that criminals, including drug dealers, should not be allowed to benefit financially from their illegal acts. As these illustrations show, we conduct asset seizures against real criminals, and these actions are a vital part of DEA's effort to combat drug crime. If we did not have civil asset forfeiture, it would severely cripple law enforcement's ability to strike the kind of blows against drug trafficking illustrated by these examples.

Thank you very much, Madam Chairwoman and members of the committee.

The Chair: Thank you, Mr D'Orazio. There is time perhaps for one question each.

Mr Kormos: This is pretty discouraging stuff this morning. My impression is that notwithstanding the very -- dare I say it? -- liberal seizure standards you have, you're still just nipping, like a fly buzzing around you, or a mosquito. I'm not criticizing the process, because I think it's repugnant for any citizen to see criminals keeping the profits of their crime, but you haven't suggested that this has in any way even dented the drug trafficking industry. It just seems so incredibly huge, profitable, and big bucks. Can you tell us that you have made a calculable impact on drug trafficking per se as a result of asset seizure?

Mr D'Orazio: I agree with you that there are plenty of opportunities to exercise asset forfeiture. I think but for asset forfeiture, the problem would be a lot worse. If you need quantitative numbers, I think I've listed the portion that DEA was responsible for throughout the years, which is significant.

Mr Kormos: I don't see how it could be much worse. That's my problem, I guess. Thank you.

Mr Tilson: Our standard of proof is talked about in section 16 of the bill. I'd like you to elaborate somewhat on your preponderance-of-evidence standard, as to whether that's a civil standard, or is that something else?

Mr D'Orazio: The preponderance-of-evidence standard is a civil standard that's used in civil asset forfeiture. It's generally described as a weighing of the evidence to the extent that 51% of a given fact is true, and it's used exclusively in a civil proceeding.

Mr Tilson: When I use the words "balance of probabilities," are you familiar with that term?

Mr D'Orazio: That term is not used in US jurisprudence.

Mr Tilson: The test that most of the American jurisdictions, if not all of them, use -- I'm trying to compare that to the test that's being proposed in this bill, but it doesn't sound like you're able to do that.

Mr D'Orazio: I'm not familiar with what the balance of probabilities would be in Canada. Another description of a preponderance-of-evidence standard has been "more likely than not" that a given fact is true.

Mr Tilson: That's a good way of putting it. Thank you.

Mr Caplan: I'm just curious, Mr D'Orazio, if you're familiar with any situations where assets were seized or forfeited from somebody who was innocent, where there was that kind of case, and what the result was. Were they able to get back their assets, or what kind of consequences were there?

Mr D'Orazio: I think the Drug Enforcement Administration would potentially seize property of innocent owners due to the standards involved. However, there are protections that are built into the system to ensure that the innocent owners are adequately protected from an unjust forfeiture of their property.

Mr Caplan: Maybe you could tell us a little bit about that. What were the protections from an unjust seizure?

Mr D'Orazio: For one, I would have to say that the Drug Enforcement Administration does not conduct unjust seizures. We do extensive training of our agents on how to conduct seizures and it's done according to the law and the Constitution. In my experience with the DEA, in 10 years I have yet to see someone sue an agent successfully for an illegal-asset-forfeiture seizure. US law permits aggrieved individuals not only to go through the forfeiture process to protect their assets but also to proceed against the agency and the individual agent personally if they feel that an illegal seizure has occurred.

Mr Caplan: But there is no protection in Bill 155 for that kind of remedy, is there?

Mr D'Orazio: I've read Bill 155. I have been advised it would be inappropriate for me to comment on the bill --

Mr Caplan: We're having hearings on Bill 155.

Mr D'Orazio: -- but there are many provisions in Bill 155 that are also present in US law. One of the provisions is the protection that innocent owners have against the forfeiture of their property. That is in US law, and the Drug Enforcement Administration fully supports that law.

The Chair: Thank you very much for your presentation this morning, Mr D'Orazio.

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FEDERAL BUREAU OF INVESTIGATION

The Chair: The next presenter is Mr Tom Fuentes, chief, organized crime section, criminal investigation for the Federal Bureau of Investigation. Good morning, Chief.

Mr Tom Fuentes: Good morning. Thank you for inviting me here this morning. My name is Tom Fuentes. I'm chief of the FBI's organized crime section. I've served in this position for the last three and a half years. I've been an FBI special agent for over 21 years.

The mission of the FBI's organized crime program is to identify and neutralize criminal organizations that present a threat to American society but also an international threat, and therefore indirectly to American society through threats to our allies and working partners overseas.

The FBI defines organized crime as any group having some manner of formalized structure which is motivated by greed and maintains its position through the use of violence or threats of violence and thereby has a significant impact over the people in their various localities and regions. This differs from definitions concerning terrorism, for example, which may be motivated by ideology or some other belief system. In the case of organized crime, we define it fairly narrowly as not merely a criminal conspiracy or a group of individuals gathering to commit a crime, but a structured organization which normally attempts to exist for a long run, such as a La Cosa Nostra crime family or a Sicilian Mafia crime family.

The FBI's organized crime section is divided into three basic components. We have a unit addressing La Cosa Nostra -- Italian organized crime and labour racketeering; a unit addressing Asian criminal enterprises; and an agent addressing Eurasian and Russian-speaking organized crime groups.

La Cosa Nostra is considered by the FBI and the United States Department of Justice as still the most significant organized crime threat to the United States. I should add here that in our organized crime program we separate drug trafficking organizations from our organized crime program, so groups that are addressed by our drug section and the DEA that specialize almost exclusively in drug trafficking such as the Mexican and South American drug trafficking organizations are addressed in a different program. Our program addresses predominantly Italian -- La Cosa Nostra -- Eurasian and Asian organizations.

Currently in the United States we place La Cosa Nostra membership at approximately 1,000 members. Initially, for many years, we had 25 structured La Cosa Nostra families. We feel we've reduced that now to about 10 or 11 that are still posing a significant threat, including the five New York-based La Cosa Nostra families and the New York/New Jersey-based DeCavalcante family.

In addition, we have, I should add here, with regard to Italian organized crime a number of very significant investigations that we've conducted over the years. Currently, new investigations are ongoing with not only the RCMP and CSIS, but also many of the provinces and the large municipalities here in Canada, including Toronto, Montreal and Vancouver.

In our program we have a number of investigations also connected to Canada involving Asian criminal enterprises. Throughout the 1990s, many people expected Hong Kong and Chinese-based triads to attempt to relocate to North America in connection with the turnover of Hong Kong in 1997 back to the PRC. We did not see that level of departure from Hong Kong, but we did see significant immigration to North America, to many of the Asian communities in the US and then predominantly into Vancouver in Canada. Along with the good citizens who immigrated, we also had organized crime follow them, in many cases preying on their own communities and in some cases now expanding into the general populations of both our countries.

We have a number of investigations involving the trafficking of southeast Asian heroin in particular from Asia into Vancouver, across mainland Canada and then down into the northeast part of United States. A number of these investigations are ongoing and sensitive, but we do see the nexus between large-scale international organized crime in large cities in both of our countries.

We also have more recently, during the last 10 years, seen a tremendous escalation in Eurasian organized crime groups. This would include Russian groups based in Moscow and several other Eastern European cities from the former Soviet Union, and also newly emerging groups such as from Kosovo and some other areas of eastern Europe that are expanding their operations worldwide and in many cases operating, again, in Canada and in the United States.

We participate in a number of international working groups and organizations. I represent the FBI at the G8 law enforcement project subgroup. Canada is represented by both the RCMP and CSIS, colleagues of mine who have attended many of these meetings over the years, and also from the other G8 members who attend these meetings. It's already been true in our individual countries, but we have now seen the connection growing internationally, motivated by the profits.

What we are seeing and what concerns us the most is that the dollar values that we are speaking of would have been unbelievable to the original organized crime activities of many of our groups. For example, La Cosa Nostra organizations generating tens of thousands of dollars in individual gambling operations or tax schemes and various other fraud cases pale in comparison to some of the financial crimes that we are beginning to see involving attempts to penetrate the global financial network and our securities industries and some of our multinational large corporations, generating billions of dollars of profit for organized crime internationally, compared to millions or hundreds of millions in the past. We have, for example, the Bank of New York investigation involving the transfer of $7 billion over 18 months to three accounts in the Bank of New York. In this case, we are researching and analyzing 286,000 financial transactions over that 18-month period. The transactions passed through over 100 banks in 35 countries, including Canada and, obviously, the US.

As I mentioned earlier, we look at organized crime as being motivated strictly by the money, the greed factor, and the acquisition of power which comes from the wealth they're able to attain and retain. We feel very strongly in the US that both criminal and civil forfeiture provide a significant tool in being able to at least take away the profit motive in the first place, or reduce the profit motive -- again, it doesn't entirely do so, but we think it is effective in making a significant reduction -- and, if they've already decided to engage in criminal activity and have already attained the proceeds, to at least take that away so that they can't maintain their power base by maintaining control of the assets or pass them on to other family members or subordinates in the criminal organization. In some cases, we see where the older generation almost stoically go to jail, knowing that they've passed on the wealth and the power to the next generation, to their sons, who will acquire that control of the organized crime families.

I should add that I am not a forfeiture analyst or forfeiture specialist in terms of the processing of the financial records or in terms of the actual litigation surrounding the seizure and forfeiture of assets. But what I do address is that this is a tool that we use in an attempt to eliminate or significantly disrupt the organization itself. So we are not looking at forfeiture in our program as a method of generating income for the United States government or for our agency or the ability to seize proceeds of crime strictly so that we can keep that and supplement our budget. We are looking at this strictly from how it impacts on the organized crime group itself, on their ability to maintain their power, their base of operations and use that wealth to maintain that power base, to conduct the corruption that's necessary in order for an organized crime group to sustain itself and enable it to manipulate our systems, which can only be done if you're in control of significant wealth.

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The Chair: Thank you very much, Mr Fuentes. We have enough time for perhaps two minutes each.

Mr Toby Barrett (Haldimand-Norfolk-Brant): Thank you, Mr Fuentes. For a number of years, I understand that the US federal government and a number of states have used their RICO laws to go after unlawful activity.

Mr Fuentes: Yes.

Mr Barrett: A couple of years ago the Ontario government and, I think, Guatemala used the US RICO laws to go after tobacco companies. I think this was thrown out of court. I don't know whether it's still being pursued. Is it feasible for foreign countries to use US RICO legislation to go after organized institutions that may be affecting Ontario citizens or residents of other countries?

Mr Fuentes: It's a very difficult question because the RICO statute is an extremely powerful tool. It took a long time from the time of its passage in the US in 1970 until the time that we began bringing significant RICO prosecutions, approximately 10 years, in the United States. There was a high learning curve, both for the investigators and for the prosecutors themselves. I think the fact that it's also sensitive to the context of a much larger level of US laws and protections -- our constitutional safeguards, the Bill of Rights and protections against unlawful search and seizure and privacy laws are all intertwined. The RICO statute had to be used in that context. So I can't specifically comment on how that will affect other countries, not knowing the rest of their criminal justice system and infrastructure.

Mr Tilson: Very briefly, can you tell us how the proceeds of assets -- money, anything -- that are forfeited are distributed in the United States?

Mr Fuentes: In our system, during an FBI investigation, when we actually seize the assets, then the processing of that is turned over to the US Marshals Service. It actually gains control over the assets and then oversees whether the assets are auctioned or however they're disposed of. As a general rule, the proceeds go back to the general US treasury.

I know under certain limited circumstances some of the assets, for instance, an airplane or a boat, can be returned to law enforcement, and in certain undercover operations, with very close scrutiny from the Department of Justice, assets can be returned during an ongoing project. So if you have a money-laundering investigation, certain proceeds can be returned during that project to conduct that investigation, but it's very strictly controlled. As a general rule, though, it goes to the marshals, it goes back to the general treasury.

Mr Caplan: Thank you, Mr Fuentes, for coming here today and for your presentation. One of the aspects of Bill 155 is the very broad and sweeping powers that allow the Attorney General to collect and disseminate personal information about literally anybody in the province of Ontario. Do you have similar kinds of laws that are used or that are related to the work you do at the FBI as it relates to organized crime?

Mr Fuentes: As I mentioned earlier, I'm not an expert in the actual litigation surrounding the forfeiture. During our investigations we assign forfeiture specialists to the team, to the task force, and they, with the attorneys both in the United States Attorney's office and with the forfeiture attorneys at the Department of Justice, work very closely on that. That's really beyond my expertise.

Mr Caplan: I'm just curious, because Bill 155 says that the Attorney General can collect personal information about any individual, to put it very roughly, to determine whether they should even proceed with an action under Bill 155, to conduct a proceeding or to enforce an order. The first part really bothers me. We're going to start collecting information to decide whether or not we're going to begin an investigation. I'm really wondering what kind of tool that would be to the police or to the Attorney General in order to combat what they obviously feel is a very significant problem. Do you have any opinion about that?

Mr Fuentes: I'm trying to determine what you're asking, really, not having the full context of that part of the provision. This is a very resource-intensive area. It's very difficult to analyze the financial records, as was mentioned earlier: the number of shell corporations and fraudulent accounts and individuals who don't exist who maintain these accounts. It's very difficult to do, so it may be a determination of whether it's going to be worth it to assign those kind of resources to do that investigation. I'm not sure. But we don't do it quite that way, as I mentioned. We're looking at the criminal activity and the proceeds associated with the crime.

Mr Kormos: Thank you very much. I've listened carefully to you and other law enforcement officers, both American and Canadian, this morning. I hear you talk, and I have to accept everything you say. We're all well aware of the grief that drug trafficking, prostitution and all the things you spoke of bring to families and communities.

At the same time, people are watching -- bear with me for a minute -- the Sopranos, a Hollywood production, on a weekly basis. People are talking over the coffee pot at the office about Tony's anxiety attacks and Carmela's lack of fulfillment. I have some real concern about a culture that glamorizes mob life, portrays it in a way that we identify with it sympathetically and then purports to be so adamant about obliterating it.

My concern is that organized crime -- because you've had RICO since, what, the early 1970s and low standards in many cases for thresholds of seizing assets. Has organized crime become so internalized, so much a part of the North American culture, that they're merely paying taxes like any other establishment corporation? Do they regard this as simply their tax that they pay? They're going to lose 10% or 20% of their proceeds every year to a RICO effort or to a Bill 155 effort. Is that their perspective? Are they really afraid of being put out of business by asset seizure?

Mr Fuentes: Yes, they are afraid of it.

Mr Kormos: How do we know that?

Mr Fuentes: We know that from extensive debriefings. We've had very high-level defections at the boss, underboss and capo level within a number of La Cosa Nostra families. Individuals such as Salvatore Gravano, Sammy Gravano, and others have told us that that's an extreme fear that they have, that they will go through a lifetime of acquiring this wealth and not be able to maintain it from a personal perspective, which they understand, but then not even be able to pass it on to members of their family and other associates and just lose it entirely, to lose all of the power and glamour that's associated with that.

I share your concern that our society has glamorized high-level organized crime figures and grants them celebrity status. I'm not in a position to comment whether or not Al Capone was a greater celebrity in Chicago in 1925 than John Gotti was in New York City in 1990 or some of the individuals are now.

We know currently, for example, with La Cosa Nostra, we have individuals who do not want to be identified as the bosses. We have some of our LCN families in the US being run by two or three members of a committee who don't want to be identified and assume the boss position and have that celebrity profile.

We see both sides of that and we also see the efforts on their part to take many of their assets now and try to remove them from the US and put them into safe havens. We all know of offshore tax shelters. But beyond just the accounts being located offshore, we are working a number of international cases where members from overseas, some of these very large Eurasian organized crime groups that have obtained billions of dollars as a result of looting in their home countries and some of the countries of the former Soviet Union, are basically shopping for countries to acquire land.

We've had international surveillances involving our partners here in Canada and our partners in Australia and a couple of other very desirable countries where these individuals have taken a trip and visited all these countries trying to determine where the best place would be to buy land, buy hotels, buy resort housing, buy businesses and put their assets into more tangible assets than just merely having them in offshore bank accounts, where it's really just a paper figure.

We know of that from our personal experience and our personal observation in ongoing cases that we have right now. Basically they're shopping for the countries that have not only the most lenient sentencing guidelines or the most inexperienced or inefficient law enforcement or criminal justice systems, but a desirable place to live. Obviously Canada, the United States, many countries that are extremely desirable, have strong economies and are just terrific countries, as they attract the immigrants of the world and the honest people, they attract these criminal elements as well. They know that their assets will be safe in these countries because the economies are secure.

The perspective from which we look at it is, they're shopping, they want to put the money into something that they'll be able to keep. If they think they're going to lose it, they're going to go somewhere else.

Mr Kormos: So they didn't buy any Nortel last night.

Mr Fuentes: No comment.

The Chair: Thank you very much, Mr Fuentes, for your presentation.

We will recess for lunch and reconvene promptly at 1 o'clock.

The committee recessed from 1202 to 1302.

JUDY MACDONALD

The Chair: I call the meeting to order. The first delegation that we have this afternoon is Judy MacDonald. Good afternoon. You have 10 minutes and, hopefully, in that 10 minutes we'll have time to ask you some questions as well.

Ms Judy MacDonald: Ladies and gentlemen, Madam Chair and members of provincial Parliament, I thank you for this opportunity to be heard in public before your committee regarding the proposed Bill 155. My name is Judy MacDonald Musitano. I am before you as a law-abiding citizen, a taxpaying Canadian citizen who has, having been born, raised and educated in the Hamilton area, chosen to continue to reside in the city of Hamilton and operate a business there. I do not advocate organized crime or any other illegal activity, nor do I condone the livelihood supported by the proceeds of illegal or criminal wrongdoing. Yet I am told that I am a Mafia wife and that the business I laboriously worked and toiled to build over the last 15 years is owned by organized crime.

It is also apparent that my choice of mate has jeopardized my privilege to be judged and respected on my own merits. On or about the occasion of my marriage, a Hamilton police officer was noted to have made the flippant comment to me, "It's bad enough that you have to do business with the Mob, now you have to marry one too." Regardless of my personal and professional accomplishments as an individual, I have been labeled in some circles as a member of a crime family. If this were so, why would I come before this committee today?

The purpose of my appearance here today is to present myself and my circumstances and to use these as illustrations of the overwhelming forthcoming injustices with the inception of Bill 155. I am a prominent businesswoman in the Hamilton community. As an individual of strong moral character and integrity who has worked diligently to build a reputable and respectable business, I find it distastefully unconstitutional that I be painted with strokes from the same brush that paints illicit, illegal and criminal entrepreneurs. My personal encounters and experiences with the Hamilton police department reflect long-standing prejudices between them and those they presume to be organized crime.

As I have already pointed out, the allegations, unfounded and slanderous, are made without substantiated evidence or proof of criminal activity. Herein lies my fear: hearsay equals the assumption of guilt even before Bill 155 is in place. Where does the concept in Canadian law "innocent til proven guilty" come into the process? How do you propose to protect innocent individuals?

I have copies of correspondence to which I have had replies. You have them before you. Throughout the past months I have become increasingly aware and concerned as to from where information is derived and just who is doing the investigations. It would appear that once information is given to the offices of the Attorney General, this information is relied upon further to prosecute individuals who are accused and charged with criminal offences. Evidence is collected and investigations are to be done in order for crowns to be able to act accordingly. If misinformation is given and the individual is found not to have done any wrongdoing, is it up to the individual to prove their innocence? With this bill, if I cannot obtain information under the Freedom of Information and Protection of Privacy Act nor access my own property, accounts, documentation, could you clarify with me how I am to defend myself?

Is this legislation also limited only to individuals? Are you as a government body prepared to deal with already widespread levels of corruption and organized crime? Consider the Criminal Intelligence Service Ontario -- a report still not made public in regard to organized crime in waste management. Are these larger corporate giants excluded? Do you intend to make this a fair playing field for all of us? Are you going to ignore the public being victimized by these sectors as well? Is this in the public interest, or not in the interests of justice?

We talk of proceeds of crime. Are we prepared to look at the benefit of the revenues the province is receiving from the money laundering that already exists in the casinos throughout this province?

I am aware of the purpose and intention of this bill. Organized crime has its impact on all and, yes, I too have been victimized. I ask you to take a close look at the method of enforcement. In 1997, the provincial government funded $14 million for gambling and illegal activity. It was followed by a special investigation into the murders of two individuals in the Hamilton and Niagara areas. Within a span of eight months, charges were laid. Did this investigation consume all of these funds specifically designated for organized crime activity? Did the provincial government get their funds back for any unused portions of these fund? I am told that this major crime investigation only consumed $2 million of these funds, so where's the change?

The purpose is clear. Include in your bill protection to be afforded to the individual. I serve to gain nothing from coming here today. I am not a member of the legal community nor am I a member of the law enforcement community. I am a citizen and I have no protection from being victimized from this legislation. I would receive no recovery from losing my reputation, my business, my livelihood and my life. I use myself as an example before you of the damage that can be done, and already has been done, where there are no safeguards in place to protect individuals from allegations that they are part of organized crime or any unlawful activity.

I can tell you this: no one will ever take away my integrity or my character, and thus I am before you today. I thank you.

The Chair: Thank you very much, Ms MacDonald. There's time perhaps for one question from each party.

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Mr Dominic Agostino (Hamilton East): First of all, I want to thank you for your courage in appearing today. I know you didn't have to do this, and I know it's probably not easy.

Ms MacDonald: I chose to do this, Mr Agostino --

Mr Agostino: Exactly. I appreciate that.

Ms MacDonald: -- because I am very concerned over this legislation, not for the purpose of endorsing organized crime but for the citizens who have put everybody where they are in this room today.

Mr Agostino: You've made some very valid points, particularly in your letter, about the stigma that often is associated. As all members here believe, I think, that once someone has served the penalty that has been assigned by the courts for a crime they've committed, they should be allowed to carry on with their lives. Their lives should not simply be hinged on what happened in the past. I think you've pointed that out.

The question I want to ask you on the concerns you outline overall: do you believe this legislation will continue to stigmatize and target individuals unfairly simply based on perceptions or the past, rather than on what is occurring in their lives today?

Ms MacDonald: I can assure you that has already happened. I stand on no merit on my own accord in a hearing. I have been law-abiding. My husband's past is his past. I believe that a person should be allowed to continue through, if he's paid his debt to society.

The Hamilton regional police department at one point did tell me I was not privy to any privileges granted any other citizen because of whom I chose to marry. I was judged in a hearing on his past criminal background as opposed to my merits and what I've diligently worked for as an individual. That is where this bill is opening up the playing field, and it is very dangerous. I am an example. It has cost me $7,000 and three years to defend myself in court already, with no remuneration at all.

Mr Kormos: You've prepared a package of letters. One is a most unusual apology from the prosecutor, city of Mississauga, to Maria Musitano. I trust it's your daughter.

Ms MacDonald: That's correct; that's our daughter. She went to pay a traffic violation, and unfortunately the comment was made, even though it was said in jest.

Mr Kormos: What was the comment?

Ms MacDonald: "The only reason this officer is reducing your speeding ticket is that he believes you are part of a crime family." I take extreme exception these kinds of statements. Think before you speak.

It would be similar to me accusing you because you and I may have a coffee together. We are not guilty by association. There is legislation in place, as it exists right now, for proceeds of crime. Do not get me wrong; I do not condone any illegal activity. I work seven days a week from morning to night, and I know where every dime of mine is coming from and going to, and so it should be around the circle.

Children or anyone affiliated with a name should not be -- the issue at that point was to deal with a traffic violation; it was not on her family history. We certainly can agree that generations should not be accountable for previous generations. They have done their time. They have paid their penalties to society. Let them get on with their lives. There are individuals out there -- and we can all agree -- you do the crime, you pay the price. But prove, beyond a reasonable doubt, that an offence has occurred.

The Chair: Thank you very much, Ms MacDonald, for coming.

LORNE PARK

The Chair: The next presenter is James Park. Good afternoon, Mr Park.

Mr Lorne Park: Hi, how are you today?

The Chair: I'm well. How are you?

Mr Park: Very good.

The Chair: You have 10 minutes.

Mr Park: Yes, and hopefully I can use it wisely.

My name is Lorne Park. I was born and raised in Hamilton. I'm 63 years old. I'll be 64 this year.

Organized crime is the buzzword and flavour of the new millennium. I would like to thank this committee for allowing me to speak on Bill 155 and the concerns I have with this bill. First of all, I support the principle of this bill. In a perfect world it would work. However, in the real, not-so-perfect world, I have some serious doubts.

This bill has many downsides, as it removes my rights as set out in the Canada Act. Without protection, this bill could create an atmosphere of no accountability of the people enforcing it, and this could easily lead to civil unrest. After all, we do not live in a perfect world.

This committee has copies of the fabricated allegations directed at me by vindictive civil servants and our local police department in Hamilton, who did an extremely sloppy investigation to create an atmosphere of guilt. This led to a costly court case and the destruction of my name and business, which I will never fully recover from.

Why did it take five years through freedom of information to get only part of the information? I was entitled to all the information as part of full disclosure at my trial. The standard answer from the people responsible is, "This is a travesty of justice. We are sorry. You are a victim of the system. We must look ahead to the future and work as a team."

The people who created these fabrications are well-protected and have benefited with promotions or get-out-of-jail-free cards. You also have the written apology from the chief of police, which has helped me some but not a heck of a lot.

For years the Ministry of Consumer and Commercial Relations has turned a blind eye to ensure fairness and accountability in the marketplace. These regulators continue to cost the taxpayers hundreds of millions of dollars a year -- and I mean hundreds of millions of dollars a year. They wait for a buyout package and then enter into the self-regulating industry, which is an industry in disarray and that operates like the Wild West. Hopefully, we can get into some serious dialogue on this another day.

Each member has a copy of a letter sent to the previous member of the House, Mr Trevor Petitt, outlining several methods which I feel should be added to this legislation to protect the public from the abuse and breach of trust which exists today and will escalate if we are not protected. I ask each member of this committee to request a copy of the two binders submitted by the Ontario Bailiffs Association for changes to the Bailiffs Act. As these are public documents, there should be no problem getting them. I can guarantee a shocking insight into corruption and the very serious problems which exist with this ministry and other ministries associated with the Ministry of Consumer and Commercial Relations.

If this bill goes through, I think you folks should turn the cannons over and start investigating the Ministry of Consumer and Commercial Relations. I really believe that.

Going back to November 2000, I appeared in a Hamilton courtroom to post bail for my nephew -- it was a domestic problem. After two days of trying to get bail, the lawyer for my nephew told me, "We're getting kind of jacked around here." It eventually came out in a bail hearing two days later -- I don't know if anybody in this room has been at a bail hearing, but there are many questions answered and many questions asked. The whole theory of this bail hearing was directed, and did a 45-degree turn, to find out if I was part of organized crime because I've worked with a couple of people in the city putting together books that deal with organized crime.

We have a massive problem in the city of Hamilton with policing and bureaucrats. I'll tell you something that people here in Toronto don't understand: Hamilton exists and civilization exists west of Toronto. The city of Hamilton has more organized crime per capita than any city in North America. You've got the legislation. You people have abused the legislation. You don't want to get into enforcing the legislation you've got. This bill, under the disguise of bikers, is a smokescreen. This bill does not protect Joe Blow, because you're taking everything he or she owns and then saying, "Defend yourself." Defend yourself with what?

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You've also got a bill that will allow industry to get away with what they've been getting away with for years in my area because the regulators do not want to face a band of lawyers in three-piece silk suits, 10 or 15 at a crack. So the bill is going to hurt the little guy or somebody who is not politically correct in my city.

Thank you very much for allowing me to speak. If there are any questions, I'd be happy to answer.

The Chair: We have about three minutes left for questions. Anyone from the government side?

Mr O'Toole: I just wanted to make sure I recorded that correctly. You said, "The massive problem in Hamilton is more organized crime than in any city in North America."

Mr Park: Per population, yes.

Mr O'Toole: Do you have some substantive basis for making that kind of claim? It's a fairly serious indictment of the city of Hamilton.

Mr Park: It sure is. If you give me your card, sir, I will get you that information and fax it to you.

Mr Agostino: With respect to the comments made by Mr Park, I would take exception to that. I believe we have problems in Hamilton, as there are anywhere else across Canada and North America, but I think it's grossly unfair to the city of Hamilton and to the reputation of Hamiltonians to label it as the worst organized crime city per capita in North America or anywhere else. I think you have done a great disservice to the citizens of Hamilton. I respect your opinion, I respect what you have to say here today, but I think it's unfair to tar a community and a city in Ontario of almost 500,000 people as somehow the centre of organized crime in Canada. I think that's unfair and I hope you'll withdraw that.

Mr Park: Mr Agostino, I did not say Hamilton was the centre of organized crime for Canada or any other place. What I'm saying is that organized crime is rampant in the city of Hamilton. We have the tools, all the tools are there, but nothing has been done, absolutely nothing.

Mr Agostino: Sir, you said "per capita," so you're saying it is the largest, and Mr O'Toole restated that it is per capita the largest centre of organized crime, or the most organized crime, in North America.

Mr Park: I said, and I can be corrected if I'm wrong, that there is more organized crime in Hamilton per capita than anywhere in North America.

Mr Kormos: There, Mr Agostino, you got him to say it three times.

Mr Agostino: And I think it's wrong and it's unfair.

The Chair: Mr Kormos, you've got one minute.

Mr Kormos: Mr Park, you've got the most unusual letter here from a chief of police in Hamilton certifying that they are not in possession of any information that connects you with organized crime. I've never seen one of these before in my life.

Mr Park: Very fortunate.

Mr Kormos: I don't know whether I could get one if I asked for one too. How did you get the chief of police of Hamilton to write a letter saying, "We have no information connecting you with organized crime"? That's pretty wacko, quite frankly.

Mr Park: You would have to have been at the bail hearing when I was accused of being part and parcel of organized crime. If you gentlemen had read my brief, you would have got into freedom of information where I was falsely accused of being part of organized crime.

The Chair: Thank you, Mr Park.

TAMIL ANTI-RACISM COMMITTEE

The Chair: The next delegation is Sri-Guggan Sri-Skanda-Rajah from the Tamil Anti-Racism Committee. Good afternoon.

Mr Sri-Guggan Sri-Skanda-Rajah: I am hoping that you have received through the clerk a copy of the brief that the Tamil Anti-Racism Committee is presenting.

The Chair: Yes, we have your brief.

Mr Sri-Skanda-Rajah: I am not proposing to read the brief in its entirety. I would rather concentrate on some salient points. The brief, including the salient points, will by illustration of example enable you to sense some of the critiques that are being used by the Tamil Anti-Racism Committee.

The most important thing I want to convey to the committee is that the anti-racism committee supports the intent and purpose of the bill. I don't think anyone in my community, for example, would support the idea that people committing illegal activities should profit from them and therefore be in a position to keep the proceeds safely.

It is timely that this bill has been proposed. Therefore the committee supports the intention and the objectives of the bill. However, you will see set out in the submission some points that raise concerns as to whether this bill will be able to stand the test of charter challenges etc.

Let me read from portions of the bill. Paragraph (b) of the definitions, under section 2, infers that even if an offence takes place outside of the Canadian jurisdiction, a person can be prosecuted under the bill provided that offence is illegal in Canada or Ontario.

That component of the definition is problematic on several fronts. First and foremost, the Canadian legal system is based on the fundamental values of due process, charter rights for the accused and the rule of law. In contrast, the majority of the world community does not subscribe to these values and in many places the legal systems are simply corrupt, arbitrary and unacceptable by Canadian standards. The Canadian Charter of Rights and Freedoms guarantees that everyone shall be accorded due process when charged with an offence. In many jurisdictions the concept of due process does not exist. Canadian law requires detained prisoners to be accorded certain fundamental resources such as the right to an attorney, the right to remain silent, the right to bail, the right to an impartial judge or jury and other rights. This is in sharp contrast to the way many other countries operate.

A recent issue involving a young girl in Nigeria is a case in point. I am using that here reluctantly, but nevertheless to illustrate a point I want to make. Bariya Ibrahim Magazu was allegedly impregnated as a result of being raped by her father's acquaintances. She was charged and subsequently convicted of having sexual relations outside of marriage and falsely accusing three men of coercing her into having sex. The particular trial, according to many human rights observers, failed to accord the young woman due process. She was sentenced without the protection of her civil rights by what appears to be a questionable legal system and legal proceedings. Further, the young woman had the onus of proving her innocence as opposed to the state proving her guilt.

Hypothetically, if Bariya were a resident of Ontario and the persons who had sexual relations with her compensated her by depositing a sum of money in an account in Nigeria, that sum of money, in accordance with the provisions of this bill, would be property obtained by illegal activity. In such an instance, are the people of Ontario ready to accept that Bariya, a person resident in Ontario, has committed a crime in Nigeria? Would we, in such circumstances, be seeking an interlocutory order to preserve and secure their property -- money -- on the basis that it's the proceeds of illegal activity, as defined in this bill? In such an instance, are the people of Ontario ready to accept the word of the Nigerian government that a person living here in Ontario has committed a crime in Nigeria? Are the people of Ontario willing in such instances to accept as credible, evidence provided by the Nigerian government to use in a case to be tried in Ontario?

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There are some other examples that I have set out in the brief. I am not going to read those, but if you take the time to read it, it'll give you a fairly good idea why in circumstances the provisions of this bill will not work properly.

The proposal that is being put forward, and you will see that on page 3, is that some of the draft of this legislation should be amended so that it will deal with safeguarding problems developing from jurisdictions that have different systems of law, a different set of values etc.

The Canadian Charter of Rights and Freedoms is a largely progressive and valuable document that requires all Canadian laws to be consistent with those principles. The bill before this committee, although well meaning, is contrary, in our respectful submission, to the values espoused in the charter. In using evidence or convictions in another jurisdiction, without setting any type of standards by which we could assess that law, makes this bill likely to fall foul of the charter. Should a resident of Ontario be penalized here for an alleged crime based on a lower standard of a third country? If someone were to be charged under the legislation on information based on a conviction in a third jurisdiction, are we implicitly acknowledging the validity of that jurisdiction's legal system, even though it may be entirely autocratic or arbitrary?

The second aspect of the criticism that we direct to this bill relates to the provisions that provide for not giving notice to parties that would be affected by proceedings under this legislation. I think the justification for not providing notice when you seek an interlocutory motion is based on the reality that in the modern context it's very easy to dispose of property electronically. In a matter of seconds, you could transfer the interest in a property from one to another person etc. Therefore, in that sense, not giving notice to obtain an interlocutory order does make sense. The question is, once you have obtained that interlocutory order, is there any justification for not providing notice to the parties who are affected by such an order?

Subsection 4(1) provides that you are able to not give notice up to 10 days. I believe there are further subsections that suggest that you could seek an extension of not giving notice, etc. I don't think that is really warranted. I think if one follows the standards that regularly apply on interlocutory issues and the property has been preserved and secured, it's incumbent that notice be given. To seek a further extension, I would say, is more often an abuse of process than anything else.

Subsection 4(2) seems to mandate that a judge before whom an interlocutory order is sought is obliged to make an order. I think in that subsection the word "shall" has been very specifically used. What is troubling in that scenario is that a party, namely the Attorney General, is seeking an interlocutory order -- it's only the party seeking an interlocutory order that is presenting evidence at that stage. Even if the judge has doubts in mind as a result of that evidence, you are telling the judge under that subsection that an order shall issue. No other evidence has been heard. I don't think that is an appropriate type of demand. I don't think it's appropriate that it should be mandated. I think it's important that a judge of the Superior Court have the discretion as to whether such an interlocutory order should be issued and what terms and conditions should attach to it.

I'm sure there are other concerns with this bill. There has been reference to, I believe, the privacy area. I don't propose to get into that because I think I'm eating into the time. I'd rather be prepared to answer questions. Thank you.

The Chair: Thank you very much, Mr Sri-Skanda-Rajah. We have about five minutes for questions.

Mr Kormos: We've got five minutes total, or five minutes per caucus?

The Chair: Five minutes total.

Mr Kormos: So you'll let me know when I'm halfway through?

The Chair: I will indeed.

Mr Kormos: Very interesting and unique observations. What I want to make perfectly clear is that the word "shall" as compared to "may," in your view, is mandatory and denies a judge the discretion?

Mr Sri-Skanda-Rajah: Precisely, Mr Kormos.

Mr Kormos: That's relatively straightforward.

What's a little more complicated, though, is the business of out-of-country convictions. You've made reference to a number of jurisdictions that have, to be generous at the very least, criminal justice systems that don't have the same safeguards for accused persons as ours does.

Mr Sri-Skanda-Rajah: Yes.

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Mr Kormos: You're also contemplating criminal justice systems which are the tool of a totalitarian state?

Mr Sri-Skanda-Rajah: Yes.

Mr Kormos: So you're talking about the scenario wherein, let's say, a politician who was not in favour with the government could be accused, and indeed convicted, of drug trafficking, some other vile crime, merely to discredit him or her, where in that jurisdiction the courts were in the political control of the government.

Mr Sri-Skanda-Rajah: Those are scenarios I wish didn't exist but are very real in the world out there.

Mr Kormos: Because in that case it wouldn't be open for the government to say that wouldn't constitute a crime in Canada, because although there are some out-of-Canada offences that aren't offences in Canada, clearly drug trafficking, any number of sexual offences, frauds and so on are all crimes in Canada. So I very much share your concern about the reliance upon that conviction when it's not a conviction obtained in Canada or a conviction obtained with the same standards as a Canadian conviction would be being used as prima facie evidence of a commission of crime.

Mr Sri-Skanda-Rajah: That is one of the concerns that this bill, in its present form, is likely to lead to: mistakes of that nature.

Mr Kormos: I think everybody agrees that the bona fide proceeds of bona fide crime shouldn't be maintained by the criminal, but I think you raise issues that should cause us some real concern in view of the fact that Canada has a huge immigrant population, including from these jurisdictions that you and Amnesty International referred to. I'd very much like to hear from the government members in this regard.

Mr Tilson: The dilemma I have is that I can end up debating some of these things with you, and I don't think this is the forum. Our role is to listen to what you have to say. I can only say that if you read the bill, the bill only applies to property in Ontario; it doesn't apply to property outside of Ontario. The particular example that you gave I don't believe is a crime in Ontario. You and I may end up debating that, and I don't think this is the forum for that.

The steps to be followed must be approved by a Superior Court judge in the province of Ontario. I know you're aware of that: I assume you've read the bill and that's what the bill says. It only applies to Ontario law when those judges are making those decisions. I can only dispute what you're saying when you talk about the definition of "unlawful activity" in section 2 dealing with offences outside of Ontario. I just dispute what you say.

So that's my problem, sir. We don't have the time to debate it with you, but I will say I thank you for coming and making us aware of your concerns. I don't agree with some of things that you've said, but I do respect you for taking the time to come and make your views known to the committee.

Mr Sri-Skanda-Rajah: Shall I briefly make some observations on the point that you've raised, without necessarily getting to long debate? I think one of the concerns is the weight that would be given if some evidence is produced at the interlocutory stage that suggests that there's a conviction in another jurisdiction. Without getting into the details to see whether precisely applying our standards there would have been a conviction, the prima facie evidence of a conviction, prima facie evidence of what purports to be illegal activity, may hinder an effective application of this legislation. All I'm saying is that we have to fine-tune the legislation to make sure that we catch those things, without --

Mr Tilson: I was only responding to the example that you gave, which may be a crime in another country. It is not a crime in the province of Ontario, and that was my purpose of responding.

Mr Sri-Skanda-Rajah: I think that's a fair comment.

The Chair: Thank you very much, Mr Sri-Skanda-Rajah.

That concludes the meeting for today. Members of the committee, I would remind you that clause-by-clause consideration has been set for March 26. Amendments should be submitted both on this bill and on Bill 118, which we considered last week and on Monday, I believe, by March 19 at 12 noon. This meeting is adjourned.

The committee adjourned at 1345.

CONTENTS

Wednesday 21 February 2001

Remedies for Organized Crime and Other Unlawful Activities Act, 2000,
Bill 155, Mr Flaherty / Loi de 2000 sur les recours pour crime organisé
et autres activités illégales, projet de loi 155, M. Flaherty J-733

Office of the Nassau County District Attorney (New York) J 733
Mr Robert Nigro

Ontario Provincial Police J-736
Mr Vaughn Collins; Mr Don Perron
Niagara Regional Police Service J-740
Mr Gary Nicholls; Mr Gary Beaulieu

State of New Jersey Department of Law and Public Safety J-742
Mr Paul Zoubek

US Department of Justice, Drug Enforcement Administration J-745
Mr Lawrence D'Orazio

Federal Bureau of Investigation J-748
Mr Tom Fuentes

Ms Judy MacDonald J-751

Mr Lorne Park J-753

Tamil Anti-Racism Committee J-754
Mr Sri-Guggan Sri-Skanda-Rajah

STANDING COMMITTEE ON JUSTICE AND SOCIAL POLICY

Chair / Présidente

Ms Marilyn Mushinski (Scarborough Centre / -Centre PC)

Vice-Chair / Vice-Président

Mr Carl DeFaria (Mississauga East / -Est PC)

Mr Marcel Beaubien (Lambton-Kent-Middlesex PC)

Mr Michael Bryant (St Paul's L)

Mr Carl DeFaria (Mississauga East / -Est PC)

Mrs Brenda Elliott (Guelph-Wellington PC)

Mr Garry J. Guzzo (Ottawa West-Nepean / Ottawa-Ouest-Nepean PC)

Mr Peter Kormos (Niagara Centre / -Centre ND)

Mrs Lyn McLeod (Thunder Bay-Atikokan L)

Ms Marilyn Mushinski (Scarborough Centre / -Centre PC)

Substitutions / Membres remplaçants

Mr Toby Barrett (Haldimand-Norfolk-Brant PC)

Mr David Caplan (Don Valley East / -Est L)

Mr Raminder Gill (Bramalea-Gore-Malton-Springdale PC)

Mr John O'Toole (Durham PC)

Mr David Tilson (Dufferin-Peel-Wellington-Grey PC)

Mr Wayne Wettlaufer (Kitchener Centre / -Centre PC)

Also taking part / Autres participants et participantes

Mr Dominic Agostino (Hamilton East L)

Clerk / Greffier

Mr Tom Prins

Staff / Personnel

Mr Avrum Fenson, research officer,
Research and Information Services