FRAUD LOSSES OFTEN DON'T GET PAID BACK

By DONAL O'CONNOR STAFF REPORTER
STRATFORD BEACON HERALD
Posted 4 days ago
Based on a Superior Court judgment handed down Feb. 23, Community Futures Development Corp. of Perth County stands to recoup about $760,000 from the Stratford businessperson who defrauded the taxpayer- funded company, but the question now is how much of this public money will materialize.
Under the law, a number of steps may be taken to enforce the court's judgment, but the responsibility for enforcement depends to a large extent on the creditor's determination to settle the score. Efforts aimed at recompense may include investigation of the debtor's assets, seizure and sale of the debtor's real estate and personal property and garnishment of wages.
The means a debtor may have to satisfy the court order also comes into play.
"We intend to pursue this to the full extent of the law and our ability and we'll see wherever it takes us," said Community Futures general manager Nigel Howard in response to a query from The Beacon Herald about the company's chances of recovering the missing funds.
As reported in The Beacon Herald Feb. 24, the court judgment in the Community Futures civil case named J.D. Graham, a former loans manager with the company, as debtor. Graham has more recently been a co-owner of the P'Lovers store in Stratford.
The broad range of circumstances that may be involved in this or similar cases makes it impossible to predict the outcome in terms of actual recovery of funds, but law professor Allan Hutchinson of Osgoode Hall Law School at York University said in an interview that in general there's a reasonably good chance of recompense.
Hutchinson noted wages can be garnished and liens put on personal property and the process can go on for a long time. But he pointed out as well that much depends on whether a person's property is in his own name, whether in a joint name or transferred to a partner.
One challenge is isolating access to particular monies lost in a fraud.
"In general they (Community Futures) are in the same position as any other creditor. The court has a lot of devices available, but they only work if the person has got the assets."
Hutchinson noted that sometimes people sue even though they might not get all the money back to send the message: "We don't tolerate fraud."
There probably are statistics on the degree of success in similar cases, but interpretation is difficult, he said.
"Remember, most cases get settled and that means people don't pay the full amount. They make some deals and compromise."
Although he declined to comment on the specifics of this case, Hutchinson said there probably would have been some deal arrived at about how the debtor intends to pay back what's owing. There are costs involved in the recovery process as well, but Hutchinson said that too is a responsibility of the debtor.
"Because if they put people through a lot of trouble then they have to pay for that cost as well."
The defendant would have likely already signed off on a sworn and registered document listing his assets, he said.
"Rightly or wrongly they don't put people out on the street. And I think one of the things the court would recognize here is that the winners in this case are not people. It's not as though their lives have been ruined."
"Even though the money should be paid back, this organization is still going to continue, the development corporation. And they can, after all, set this off as a business loss."
Hutchinson is associate vice-president and dean of graduate studies at Osgoode Hall Law School.
doconnor@bowesnet.com