Michael Ford (post until Oct. 31/19)
Legal Suppliers

Little deterrence for financial fraudsters: Downs

Advancing technology and shrinking police resources are combining to boost financial fraud in Canada, says Jim Downs, the founding partner and managing director of MKD International Inc.

“Financial fraud is big business and a growing industry,” he tells AdvocateDaily.com, noting that credit card and bank fraud are on the rise across the country.

“It’s just mind-boggling how many different scams are out there,” Downs says. “I know banks are putting up safeguards to mitigate against potential frauds, but the technology is moving very fast, and the bandits are pretty smart.

“Only a desperate fool would take a gun into a bank these days," he adds.

By contrast, Downs explains there’s little deterrence for prospective fraudsters, with police facing an uphill battle to properly investigate complaints and an even tougher one to gain convictions. As a former Toronto Police detective himself, he knows how officers feel about fraud cases.

“Fraud investigations for police are very time-consuming and there are so many of them.  Just about any fraud investigator will have a huge stack of files waiting to be tackled. It’s very difficult to put in the time that’s needed for each one,” Downs says. “Crown offices dislike fraud related prosecutions too because it can take weeks even months of court time to prove a case with any substance to it.”

As a result, he says law enforcement and prosecutors tend to prioritize extremely high-value frauds, leaving many of the minor cases to slip through the net. Even those that result in convictions offer little in the way of deterrence, due to what Downs views as light sentences for white-collar offenders.

“If it’s just a fine or a short jail sentence, it simply becomes a cost of doing business for these fraudsters,” he says.

However, Downs says MKD, the only firm of its size in Canada where all of its investigators are former police officers, can give clients a head-start by completing some of the legwork before an official complaint is made.

His team takes an active role in investigations — interviewing witnesses and collecting documents before pulling together a file to present to law enforcement.

“The police will review it and, if they accept the case, they’ll follow through and complete the investigation. It makes their job a lot easier,” Downs says.   

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