CASH FLOW IN MAPLE COUNTRY
Inside the Quebec syrup cartel and the $18-million heist that has Hollywood calling.
Michel Gauvreau has reason to be wary of physical endeavors. “I’m an accountant, not an athlete,” he says. Yet once a year, he scales unusual heights — a job that, on one occasion, almost killed him.
Gauvreau does inventory for the Federation of Quebec Maple Syrup Producers. In August 2012, he entered a huge warehouse along the Trans-Canada Highway, halfway between Montreal and Quebec City.
Thousands of metal drums filled with maple syrup were stacked in pyramids, the biggest piles standing 12 barrels wide, 22 barrels deep and six barrels high.
The best view for counting barrels is near the top. Gauvreau gripped the heavy, 45-gallon containers and pulled himself up. Near the summit, a barrel suddenly shifted and Gauvreau jerked backwards. The two below his feet wobbled. For a terrifying moment his life hung in the balance.
“I almost killed myself,” he says, the emotion of a close call still audible in his voice. “A 600-pound barrel isn’t supposed to move.”
He checked the barrel that had moved and found it empty. Puzzled, he lifted the lid on a couple more and they, too, held nothing but air. He cut short his counting, climbed down and called the federation.
“Everyone said to themselves, ‘No one is going to steal maple syrup.’ I say this sincerely . . .”
PAUL ROUILLARD , FEDERATION OF QUEBEC MAPLE SYRUP PRODUCERS
He returned later with federation officials and Quebec provincial police, the Sûreté du Québec. He began a full inventory to calculate the insurance claim. The final tally was staggering: almost twothirds of the 16,000 barrels had no maple syrup. Out of 10 million pounds, about six million were gone — $18 million worth.
That makes it one of the biggest heists in Canadian history. Oozes heritage Few images conjure up folksy Canadiana as vividly as maple syrup — pancake breakfasts, horse-drawn rides through sugar bushes, buckets hanging from spouts in maple trees. It oozes heritage, particularly in Quebec, where aboriginal people taught French settlers how to harvest and boil sap from sugar maples in the 1500s.
Today, there is little about the industry that’s quaint. The golden nectar is big business, marked by rebellious producers, an active black market and what one lawyer called “judicial guerrilla warfare.” The only Canadiana left is constitutional battles over which level of government has jurisdiction to export the syrup.
In 2009, the industry pumped an estimated $735 million into Canada’s economy. Quebec is the undisputed champion, accounting for 76 per cent of global production and 92 per cent of Canada’s.
Dominating the sticky empire is the Federation of Quebec Maple Syrup Producers, which emerged as a powerful legal cartel in 2002. Maple syrup produced in Quebec must be bought and sold through the federation if containers of more than five litres are involved.
The federation is backed by a large majority of the 7,400 Quebec producers it represents. It has, after all, almost doubled the bulk price of the province’s syrup in the past dozen years and, therefore, the price on international markets. A 45-gallon drum, the kind the federation uses to store syrup, is worth about $1,800. By comparison, the international price of a 42-gallon barrel of crude oil was just $107 in early September. The retail price gap is even wider.
The federation sets quotas for Quebec producers and protects the price with what it calls its “global strategic reserve.” When production booms, the federation reduces market supply by stocking more. When production drops, it sells stock.
This year, after record spring production, the federation’s stockpile is expected to grow to a mind-bending 70 million pounds, some 117,000 barrels. At almost $3 a pound, barrels piled high in warehouses start looking like mountains of gold. Security didn’t keep pace The first big theft was in 2006, when the maple syrup stockpile was 37 million pounds. That spring, thieves made off with 1,000 barrels — valued then at $1.5 million — from a warehouse in the village of Scott, south of Quebec City. The theft wasn’t discovered until months later, and no one has ever been charged.
Six years later, the reserve hit 56 million pounds and the average price was 30 per cent higher. But security didn’t seem to have improved much.
The Saint-Louis-de-Blandford warehouse stored about $30 million worth of syrup. Police say the robbery began shortly after the federation finished stockpiling its 2011 harvest.
Det.-Sgt. Luc Briand, the Sûreté du Québec’s chief investigator of the theft, won’t discuss the warehouse’s security features. Were it not for Gauvreau’s brush with death in August 2012, however, Briand believes all 10 million pounds would have vanished.
The combination of folksy naiveté and amber gold has attracted Hollywood. Late last month, The Hollywood Reporter revealed that Sony Pictures plans a movie about the great maple syrup heist, starring Jason Segel. It was described as a “dramedy.”
There was no forced entry. The thieves operated at night, removing 45-gallon barrels during a 10-month period, from October 2011 until August 2012. It took 150 trips of trucks with trailers 53 feet long, says Briand, whose team of investigators interviewed more than 200 people, including some linked to the heist.
The syrup was transported to a warehouse in Montreal’s east end and another in the Bellechasse region east of Quebec City. There, barrels were emptied, refilled with water and transported back to the Saint-Louis-de-Blandford warehouse. At some point, the thieves got lazy, or cocky, and returned the barrels empty. The decision proved fatal to their plans, and almost to Gauvreau. The loot then needed to be fenced. Richard Vallières is what the business calls a rouleur de barils — literally, a roller of barrels — a middleman who buys and sells maple syrup. But he does so without authorization from the Federation of Quebec Maple Syrup Producers. It considers him a notorious cartel buster.
In 2007, the federation took Vallières to Quebec’s agricultural tribunal, the Régie des marchés agricoles et alimentaires du Québec, which has the power to sanction and enforce cartel regulations. He was accused of sidestepping the cartel by buying 1.5 million pounds of maple syrup in fourlitre containers before selling it wholesale. He was fined $1.8 million, but has yet to pay.
“He knows the market and where to sell the syrup, where to distribute it — it’s Richard Vallières who has all the contacts,” Det.- Sgt. Briand alleges.
Police say Vallières, 34, lives in Loretteville, a suburb north of Quebec City. He is not charged with the warehouse theft. His charges include fraud, trafficking stolen syrup and possession with the intent to traffic. Vallières’ lawyer, Sarto Landry, sees no evidence linking his client to the stolen syrup. “Mr. Vallières earns a living honourably,” he says. “He’s a guy that is white as snow.”
Some of the stolen syrup took weeks to sell. It began to ferment, so the crooks were forced to pasteurize. The boiling operation was done at a warehouse in St. Nicholas, near Quebec City, rented byVallières, Briand alleges. “They were boiling regularly for a good period of time,” he says. Crossed the border Police began making arrests last December. One of the now two-dozen peoplecharged leads Briand to suspect the theft began as an inside job. Avik Caron, a 39year-old resident of Saint-Wenceslas, a town near the warehouse, is close to people from the warehouse, Briand says.
Another accused is Sébastien Jutras, who owns a trucking company in Bécancour, near Saint-Wenceslas. Brian says Jutras and Caron have known each other since childhood. Charges against Caron and Jutras include theft, trafficking of stolen goods and fraud. A pre-trial hearing has yet to be held, so none of the charges has been proven in court.
Briand believes his team traced twothirds of the stolen syrup. But less than 1 million pounds was seized and recovered by police. The other 5 million deflated prices as the market gobbled it up.
The stolen syrup, Briand says, went to buyers and dealers in Quebec, Ontario, New Brunswick and the United States. The companies named by police say they had no reason to believe the syrup they bought was stolen.
Police believe more than half of the stolen syrup crossed the U.S. border with proper documentation. Customs officials would not have been suspicious. “Nothing looks more like a drop of maple syrup than another drop of maple syrup,” says Simon Trépanier, executive director of the Federation of Quebec Maple Syrup Producers.
Police say it was sold to three American companies. The federation has filed a lawsuit in Vermont against one of them, Highland Sugarworks, freezing money the company owes Richard Vallières for the syrup it bought. Highland, which packages maple syrup, did not respond to messages from the Star asking for comment.
Another lawsuit freezes Vallières’ bank account in the U.S. In both suits, the federation argues it is after the $1.8 million fine the agricultural tribunal slapped Vallières with in 2007. ‘Wolves chasing a lamb’ Quebec’s provincial police failed to seize the syrup that went south. American authorities could not prove “wilful blindness” on the part of buyers, Briand says, because the price paid was not much below market value.
Quebec police had better luck in New Brunswick. On Sept. 25 last year, Quebec officers showed up at S.K. Export Inc., in Kedgwick, armed with a warrant signed by a local judge.
“They arrived like wolves chasing a little lamb,” says Étienne St-Pierre, the 69year-old owner of S.K. “They came at night with a warrant and they said, ‘Open the door.’ I said, ‘Wait until the morning.’ They didn’t want to wait so they cut off my security system and broke down the door.”
Assisted by the RCMP, Quebec police seized equipment, documents and, according to St-Pierre’s estimates, 1,200 barrels of maple syrup — more than 700,000 pounds. St-Pierre puts the value at $1.6 million. “That’s hard on my line of credit,” he says.
St-Pierre, who buys syrup from Vallières, is charged with trafficking stolen syrup, possession with intent to traffic, fraud and disobeying an order from Quebec’s agricultural tribunal. He says he’s innocent: “I knew nothing about the theft.”
The federation has been after St-Pierre for years. He buys about $1 million worth of maple syrup from cartel-busting producers in Quebec each year. To the federation, St-Pierre is a non-authorized buyer, an outlaw who robs the federation of its 12 cent a pound administration fee.
“The federation says I don’t have the right to buy,” St-Pierre says. “But I have no business with them. I’m licenced by the federal government and I can buy syrup from anywhere in Canada. I havenothing to do with the regulations they have in Quebec.
“They call me a black market,” he adds. “There’s nothing underground about it. I buy and I pay with a cheque. And I pay taxes. You can’t hide anything these days.”
“The federation wants to grab control of maple syrup across Canada,” he adds.
St-Pierre is also fighting to retain his lawyer, Sarto Landry, who has offices in Quebec City and Montreal. Landry represents a dozen of the people charged in connection to the warehouse theft. Crown prosecutor David Bouchard has filed a motion to have Landry thrown off the case, arguing the many clients he represents will put him in a conflict of interest during the trial.
Landry has filed legal motions to get the maple syrup seized by police returned to his clients. The stolen syrup the Sûreté du Québec says it recovered — almost 1 million pounds — is stored in a warehouse owned by the federation. But it remains the legal responsibility of provincial police.
In May, the Sûreté told a Quebec court the seized syrup was “showing signs of deterioration or contamination rendering it unfit for human consumption.” Police want to pasteurize what can be saved and destroy the rest.
Landry questions how anyone can prove the stolen maple syrup is the same syrup police accuse his clients of trafficking.
“Have you ever eaten stolen maple syrup?” he asks, sitting in the coffee shop of Quebec City’s main courthouse. “How could you know? It’s maple syrup, it’s not cocaine.” And if the syrup is bought and sold at close to market price, Landry adds, how can anyone prove that it was stolen?
He wonders why security at the warehouse was apparently so lax. He understands there wasn’t even an alarm system. “You don’t think that’s a bit unusual?” he asks, especially after the big 2006 robbery in the village of Scott.
“If you had $18 million, would you put it out there in front of everyone unprotected?” Landry says. ‘No one is going to steal maple syrup’ The federation pleads ignorance.
“Everyone said to themselves, ‘No one is going to steal maple syrup,’” says Paul Rouillard, the federation’s deputy director. “I say this sincerely, almost no one here thought we could have our maple syrup stolen again.”
Trépanier, the federation director, says warehouse owners guaranteed that a security guard would be on site, but not around the clock. “It wasn’t 24 hours a day, but at least there was a security guard who made the rounds every day.”
The federation’s insurance company has yet to pay the $18 million claim. Initially, it wanted to know if anyone from the federation was involved in the heist, Rouillard says. No one from the federation has been charged. The insurance company is now waiting for a final tally on the amount of eatable syrup recovered to calculate the precise loss.
The insurance company has since insisted on much tighter security at the two warehouses the cartel owns. Anyone with authority to enter must call a central security office and identify themselves with a personal code number. They in turn are given a code to access the warehouse. “I then have five minutes to enter,” Rouillard says.
“If they rob us again today,” he adds, “it’ll take James Bond to do it.”