Wednesday, September 23, 2009

Canadian Justice versus U.S. Justice- Vincent Lacroix vs. Edward Hugh Okun

After losing his final attempt to have the 200 fraud charges against him stayed, Vincent Lacroix finally threw in the towel this week and pleaded guilty in a Montreal courthouse to the 200 hundred fraud charges levelled against him.

Lacroix, Quebec's most notorious fraudster,(yes, even bigger than Earl Jones) created and ran an investment firm- 'Norbourg', which bilked about 9200 hundred investors, mostly elderly, middle class Quebec retirees of approximately 115 million dollars.

In his first trial, where Mr. Lacroix was convicted of various securities offences, he put on quite a show, playing the part of a buffoon, exasperating the court to no end. The judge was not particularly amused and was so angry at the lack of remorse displayed by the defendant that he sentenced Lacroix to twelve years in prison, notwithstanding that the maximum allowed by law was only five years. The creative approach used by the judge to pile on the extra time was correctly reversed by the court of appeal. Mr. Lacroix was then released on parole after serving one-sixth of the revised five year sentence, availing himself of the provision in the law that allows non-violent offenders convicted of their first crime to be paroled after a short stint in jail.

The guilty plea which he entered in court Monday would typically lead to a reduced sentence, but it's likely that Judge Richard Wagner will also throw the book at him. Even judges, who are usually impervious to public opinion, can occasionally be influenced by media attention and intense public interest.

For the cheated investors, it's still disappointing, the maximum sentence that Mr. Lacroix faces under Canadian law is just fourteen years.

Because of his previous conviction, Mr. Lacroix will no longer be eligible for parole after serving one-sixth of his sentence, but with good behaviour, he will be eligible for parole in just under five years.

As for the missing money, Yves Michaud, Quebec's self-styled investor advocate put it rather succcinctly; "The money must be hidden offshore, Vincent Lacroix couldn't have spent $115 millon on strippers."

Most people are convinced that Lacroix stashed money somewhere, perhaps buried in his backyard and that he'll eventually have the last laugh.

Well, Vincent Lacroix's right-hand man, √Čric Aselin, who after declaring bankruptcy in 2007 was found last summer to be hiding $125 000 in cash in a bank safe deposit box. The money which was wrapped in plastic wrap, was found to contain residue of earth!

If Lacroix did hide some money, he'll have plenty of time to enjoy it. He'll be forty-seven years old when he gets out of jail. In fact, his lawyer told reporters that Mr. Lacroix just wants to 'turn the page and get on with his life.'

Too bad that for many of his elderly victims, it's too late for turnarounds.

The story of Miami businessman Edward Hugh Okun is remarkably similar to that of Vincent Lacroix. Using his position of trust, he ripped off clients, who had placed money with his company. His fraud, while somewhat different from Lacroix's, had essentially the same disastrous effect on investors. You can read the details here.

Even the amount of money stolen from investors was remarkably similar to the amount stolen by Mr. Lacroix, the only difference being that Okun used the money to openly finance a rich and lavish lifestyle.

Both men have similarly shown no remorse.

Until the comments expressing regret made by Mr. Lacroix's lawyer on Monday, he never once made a sympathetic statement towards the people he had cheated. His apology in front of his guilty plea can only be viewed as self-serving.

In Okun's case, his attorney said that his client didn't feel that he did anything wrong, and that he had always intended to return the money.

It seems that con men never give up the con....

At his trial, eight of Okun's victims recounted how their worlds collapsed after having had their money stolen. One suffered a stroke, another a heart attack. Many lost their life savings, and all confessed to being deeply affected by the ordeal.

"The toll of human loss, of misery and suffering that Mr. Okun's unbridled greed caused, is enormous," commented the judge in sentencing Mr. Payne.

Because of Edward Okun’s crimes, many victims in this case experienced near financial collapse and personal pain,” said U.S. Attorney Dana J. Boente. “Today’s sentence is proper punishment for such an egregious breach of trust by a financial advisor.

Prosecutor's had asked the judge to sentence Okun to 400 years in prison, but the judge thought that the request was a bit excessive.

Instead he sentenced the con artist to 100 years in prison!

"It will ensure Mr. Okun can do no harm to people ever again," Payne said. "It will promote respect for the law. It will, I think, deter those who . . . are tempted by the presence of easy money."

Here's the kicker to the story.

Okun is Canadian and lived in Toronto with his first wife, when he first started out on his con-artist life.

According to his ex-wife;
"The marriage lasted 4 years. During that time Ed unknowingly took a good portion of my father’s retirement savings, pretending to have invested it with a reputable mortgage company as an investment.
It was discovered when I went to a divorce lawyer to inquire about a separation. In the course of my lawyer’s investigation, he discovered many other fraudulent actions of Ed. My parents pressed both criminal and civil charges,but shortly thereafter dropped the criminal charges because Ed was threatening to hurt me. They were successful in getting a civil judgement against him but he fled Canada, and they were unable to collect any of the thousands of dollars he took. I was left with a 1.3 million dollar debt to the Canadian Bank of Commerce and to another company for a 53 foot boat that he had bought. I was in University here in Toronto full time for the 4 years we were married and not involved with his business. Until a month ago I had not heard anything about him. I am pleased to know that he is finally being held responsible for his actions. He also misused his Mother’s and Sister’s family trust fund, leaving them in a terrible situation."
Perhaps if the Canadian justice system had assumed it's responsibilities and done it's job back then, the hundreds of defrauded investors wouldn't be looking at financial ruin today.

There is a cost to coddling criminals, especially con artists, who have an atrocious rate of recidivism.

They need to stay in jail, not only as punishment, but as a protection to the public against future crimes.

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