Vancouver IMET: Seven- year chronology of policing disaster
FThere are currently 20 people on staff: 13 RCMP members, five civilian members and two support staff. The projected budget this fiscal year is $ 3.2 million. Taxpayers have shelled out more than $ 18 million over the last seven years to put two people in jail.
or the RCMP Integrated Market Enforcement Team in Vancouver, December is the cruelest month of all. Almost every year since the Vancouver IMET made its debut in December 2003, I have been providing annual progress reports. They have made for grim reading. Here are some excerpts:
• December 2003, the inauguration:
There was a lot of red serge, brass buttons and unfettered optimism at the official ribboncutting ceremony in Vancouver Monday for the RCMP’s newest initiative to combat stock-market crime.
Some 13 uniformed officers — including two wearing the traditional red serge tunics — were among 50 police, government and securities industry representatives who attended the official opening of the RCMP’s much-heralded Integrated Market Enforcement Team at 401 West Georgia ...
Earlier this year, the federal government announced it would provide up to $ 30 million per year to fund IMETs in Vancouver, Calgary, Toronto and Montreal. The plan is to combine the resources of RCMP, city police, provincial securities regulators, federal prosecutors and private forensic accountants for a coordinated assault on securities crime.
• December 2004, the first anniversary:
So far, the Vancouver team — which was formed to criminally prosecute stock market miscreants — has not yet secured a single criminal charge against anybody.
It is much too early to read anything into this …. But with a second team to be added in March or shortly thereafter, this is the year that the “ unfettered optimism” I observed at the official opening must translate into criminal charges.
• December 2005, the second anniversary: On Dec. 1, the 15-person group, which has an annual budget of $ 3 million, celebrated the second anniversary of its official opening. I say celebrated, but “ recorded” would be a better word to reflect the mood, because the team has not yet managed to obtain Crown approval to lay a single criminal charge.
“ Obviously we haven’t met the expectations of the public,” Insp. George Pemberton, who has been in charge of the Vancouver IMET team since July, said in an interview.
• December 2006, the third anniversary:
Believe me, I would love to report that this program has been a roaring success, that the Vancouver IMET has rounded up dozens of Howe Street crooks, and that those who escaped the dragnet are now cowering in fear. But the truth is something quite different …. To date, only one charge has been laid. Kevin Steele was charged in May this year with bilking 229 investors of more than $ 10 million in a commodities trading scam.
This case did not represent any sort of investigative or prosecutorial challenge. It was originally investigated by the U. S. Commodity Futures Trading Commission, and Steele made it clear from the outset that he would cooperate with the RCMP investigation. He pleaded guilty in June and was sentenced to six years in prison.
December 2007, the fourth anniversary:
Birthdays are not always happy occasions. Certainly, the fourth birthday of the Vancouver RCMP Integrated Market Enforcement Team is no cause for celebration.
So far, the team has laid only one charge, against commodities fraudster Kevin Steele. He pleaded guilty and was sentenced to six years in jail.
This is a pathetic level of production. Taxpayers should be concerned.
December 2008: The fifth anniversary: No charges. No story.
December 2009, the sixth anniversary:
While anniversaries are usually occasions for celebration, this one is an occasion to contemplate the sad state of law enforcement in this country …. Since inception, Vancouver IMET has charged only two people: Kevin Steele, who pleaded guilty to a commodity futures scam in 2006 and was sentenced to six years in jail, and Ian Thow, a Victoria stockbroker who was charged earlier this year with defrauding clients of millions of dollars and is now awaiting trial.
Two other major files are in progress: Vancouver geologist John Paterson, who allegedly defrauded investors in Southwestern Resources by altering assay results, and Sun Wan ( Sean) Kim, who allegedly
defrauded investors of millions of dollars in a commodity futures trading scheme earlier this year.
• December 2010, the seventh anniversary: As of today, there have still only been two charges and convictions to date ( Thow and Steele). Paterson has not yet been charged. Neither has Kim.
Kim, meanwhile, has been charged, tried, convicted and sentenced to five years in jail in South Korea on similar charges. Whether he will also be charged here remains to be seen. Insp. Ian Lawson, who is leading the Vancouver IMET while Pemberton is on other duties, said there are currently 20 people on staff: 13 RCMP members, five civilian members and two support staff. There are also two vacancies waiting to be filled. The projected budget this fiscal year is $ 3.2 million.
The bottom line is that taxpayers have shelled out more than $ 18 million over the last seven years to put two people in jail.
Lawson says it’s not fair to assess the team’s performance by the number of charges. IMET staff also assist other enforcement bodies, such as the B. C. Securities Commission, the U. S. Securities and Exchange Commission, the FBI and the Investment Industry Regulatory Organization of Canada ( the disciplinary agency for Canadian stockbrokers).
He also said IMET members conduct informal interventions on the street, such as calling on promoters and generally making their presence felt, which deters criminal activity.
As for the dearth of charges, he pointed to the high evidentiary thresholds, onerous disclosure requirements, the difficulty of conducting crossborder investigations, the time it takes to obtain and analyze banking and brokerage records.
My response to this? I simply refer you to my third anniversary report, in December 2006:
I cannot bear the thought of another year passing, and once again hearing the same old explanations and excuses. The IMET program has shown itself to be impotent, and that impotence is making stock market miscreants braver and bolder, the exact opposite of what it is supposed to be doing. It’s time to pull the plug on this disaster-in-progress.
My prescription? That’s easy. I simply refer you to my December 2009 report:
What we need is a royal commission of inquiry into white-collar crime prosecution in Canada. Nothing short of a complete overhaul can save us from this systemic dysfunction.