White-Collar Crime and Punishment

There are better ways to fight fraud than mandatory minimum sentences.

There is a consistent thread in the recent Conservative crime bills; get tough on crime by imposing mandatory minimum terms of imprisonment. And it seems intuitively appealing – send the bad guys to jail for clearly determined periods of time, crime rates will drop, and we will all have a more peaceful and safer society.

The trouble is that this vision has virtually no correspondence to reality. As much as we might hope that there are these kinds of simple solutions, science tells us, again and again, that reality is more complex. Take the most recent initiative – a minimum two-year term for frauds involving $1 million or more. The Justice Minister acknowledged at his press conference that he had no idea of past or current practices in such cases, a clear indication that he was proceeding not on the basis of the best available evidence, but simply to make a macho gesture of being “tough on crime.”

The problem with tackling white-collar crime is well known to those in the business of doing so: there simply are not enough resources to take cases to court. As one prosecutor told me not long ago, he can take a violent rapist off the street for six years with about 10 days work; it would take him two years just to get into court against a white collar fraud of significant proportion. The evidence is complex, those who are charged often have significant legal resources at their disposal, and the trials can go on for months.

If there was a quick and easy fix for this problem, it would have been implemented long ago. It’s certainly fair to note that the penalties for white-collar crime are relatively light in contrast to many crimes of violence, when one considers the extent of the harms done in many of these cases. Take, for example, the $175 million Eron Mortgage fraud – hundreds of men and women in B.C. with their retirement dreams in tatters, many with their physical and emotional health compromised, marriages dissolved, families in misery. The perpetrators – Brian Slobogian and Frank Biller – received sentences of six and three years respectively, but as non-violent offenders were eligible for release after serving one sixth of their sentences.

Perhaps a better fix than mandatory minimum terms is a change to parole eligibility for those who have defrauded others of more than $1 million – not as good a sound bite as a two year minimum jail term, but probably somewhat more effective. And, more important, we might try to understand how and by what means we can improve both prevention and prosecution. A promise of a mandatory minimum of two years is just empty rhetoric, putting the proverbial cart before the horse.