[LINK] "Canada a fraud nation?"

[rfmcdonald]

Thanks to Will Baird for pointing me in the direction of this news story.

Karen Marie Fernets is a serial embezzler who bilked thousands of dollars from several employers in Saskatchewan, Alberta and the Yukon. Last month, Fernets was sentenced for theft and fraud charges dating back to 2005. Compared with other recent economic crimes, her tactics were unsophisticated -- she made a series of cheques payable to her own bank account.

This has been the year of white-collar scandals and schemes in Canada, ranging from disgraced Montreal financial advisor Earl Jones, charged with having spent at least $12-million of his clients’ money, to Ponzi schemes run by Toronto fund manager Weizhen Tang, who allegedly ran a $60-million fraud, and the duo from Alberta -- Milowe Allen Brost and accomplice Gary Allen Sorenson -- who have been charged with embezelling roughly $100-million from unwitting investors.

Now a recent report by PricewaterhouseCoopers suggests Canadian companies make great targets for fraud. In their latest global economic crime survey, Canada was the fourth most fraudulent nation in the world -- behind Russia, South Africa and Kenya.

In its survey of more than 3,000 companies in 54 countries, 56% Canadian companies reported economic crimes over the past year. That’s a 10% increase since 2003, the highest level in six years.

So does Canada have more thieves in our midst, or are we just better at ferreting out perpetrators?

Good news, bad news.

Tipoffs from internal or external sources are higher in Canada than in other countries, as is our ability to detect fraud through electronic means. Automated systems used to detect inconsistencies or suspicious transactions accounted for more than 10% of frauds detected by companies in Canada. Thanks to rats and routers, more crimes are being reported in Canada then elsewhere.

[. . .]

The most common type of fraud encountered in Canada is asset misappropriation, although accounting fraud and money laundering are also prevalent. Canada has a better track record when it comes to other types of economic crime. Whereas 27% of global respondents reported be a victim of bribery and corruption, only 7% of Canadian respondents experienced such crimes. In addition, while intellectual property infringement made up 15% of global complaints, only 7% of Canadian firms claimed such incidents.

“We’re not as bad as many [developing] countries, but if you look around the OECD, the really developed economies with strong democratic governments, I think we are pretty high on the list for having a high incidence of commercial fraud,” says Mr. Grout. He says the reason for that is the lack of deterrents. “We don’t put anyone in jail,” he said.