Ontario establishes a Serious Fraud Office
At the end of August the Government of Ontario launched a new organization tasked with investigating and prosecuting complex white-collar crime. The Serious Fraud Office (the Ontario SFO) follows in the footsteps of similar structures in the UK and the United States, by creating a combined taskforce of both investigators and specialized Crown prosecutors with the resources to pursue complex financial crimes. The Ontario SFO will primarily focus on situations involving serious or complex fraud, bribery, and corruption and will have the power to seek criminal penalties, including imprisonment and the seizure of the proceeds of fraudulent activities. In pursuing this objective, it is expected that the Ontario SFO will work alongside existing law-enforcement agencies in Ontario.
The creation of the Ontario SFO follows from recommendations made in a confidential report by former Ontario Court of Appeal Judge Stephen Goudge Q.C.. Unfortunately, as Justice Goudge’s report was never released publicly, the details remain unknown. However, it is apparent that its recommendations centred on strengthening Ontario’s ability to effectively and efficiently combat the increasingly rapid growth of sophisticated fraudulent activity against both businesses and individuals.
The Ontario SFO is an office that is comprised of both investigators and prosecutors, which deviates from the traditional Canadian ‘siloed’ approach of having a wall between the two key enforcement functions. As has been demonstrated in the UK, bridging the gap between investigators and prosecutors permits for investigators to leverage the experience of the litigators and makes it more likely that prosecutors are kept abreast of pertinent aspects of the case while the investigation progresses – (rather than having to get them up to speed once authorities decide to proceed). In doing so, it is hoped that more and more complicated cases will be pursued and addressed expeditiously, which is important given the Supreme Court of Canada’s decision in R v Jordan, requiring that individuals facing criminal charges in Superior Court be tried within 30 months.
Integrated approaches to complex investigations are not new to Canada. In 2003, the RCMP launched its Integrated Market Enforcement Team (IMET). However, while IMET is focused on pursuing capital markets fraud, the Ontario SFO has been established to investigate and prosecute all varieties of complex fraud.
The establishment of the Ontario SFO is generally a positive development: complex frauds can be enormously sophisticated, wide-ranging and difficult to pursue. The goal of unravelling such frauds and prosecuting the perpetrators is best achieved using a multi-disciplinary approach. The time, resources and specialized expertise required to effectively pursue such cases are often beyond the ability of any one single agency to tackle: in many cases the skill sets required for both investigating and prosecuting many of these matters in the financial sector require a combination of traditional policing and lawyering-based skills. However, we do have some concerns about the limitations circumstances have imposed upon the SFO. First, complicated financial fraud is rarely limited to provincial boundaries, and a national enforcement initiative of this nature is long overdue. Further, the secrecy shrouding Justice Goudge’s likely extensive review impedes the public from properly understanding whether and to what extent an Ontario-only SFO can address the concerns he had identified. Further, at this stage, details regarding the Ontario SFO are limited and unlike the UK SFO, no guidelines or other materials have yet been published. More transparency would be welcomed, would identify areas for focused and incremental improvements, and therefore would better increase the likelihood of its success. That said, it is at least a step in the right direction, and hopefully will lay a foundation for even more ambitious areas of reform.