Lawyer says few resources for RCMP in Bre-X review
By
REG CURREN
The Canadian Press
CALGARY (CP) -- The RCMP and Canadian criminal laws are ill-equipped to handle far-reaching, complex commercial crime cases, says one of the lawyers for Bre-X Minerals shareholders.
Tom Buglas said he's not surprised the Mounties and justice officials decided not to pursue criminal fraud charges in the Bre-X gold mining scam.
"The Mounties are under-funded, under-manned and we have poor laws," Buglas said Wednesday. "These are very complicated cases that take a lot of manpower.
Calgary-based Bre-X collapsed in 1997 after its Busang gold deposit in Indonesia was revealed to be a hoax. Once valued at more than $6 billion on the stock market, Bre-X became worthless and went bankrupt.
But RCMP Insp. Peter Macaulay, who ran an investigative task force into the Bre-X collapse, said he had all the resources he needed -- there just wasn't enough evidence to proceed with criminal charges.
"There was no reluctance on behalf of the RCMP on supplying as many resources -- even the financial resources -- that were required in the investigation," he said.
The task force examined roughly 600,000 documents during its review, he added.
He described his team as top-notch with a wealth of fraud investigation experience.
But the conclusion was it would be too hard to track down witnesses now living outside Canada.
"It was extremely frustrating because you know an offence has taken place ... and there's a lot of roadblocks in this one," said Macaulay.
International laws protect witnesses who reside outside of Canada from being compelled to testify, Alberta RCMP assistant commissioner Don McDermid said in a release.
Macaulay said his 11-officer team were also stymied by people in Canada who were reluctant to say anything that could be construed as indicating negligence.
Buglas expressed disappointment in the legal system. He believes a criminal conviction would help civil lawsuits against Bre-X.
"It would certainly make it difficult for any one who was criminally liable to suggest they weren't negligent," said Buglas.
"It's disappointing, but I understand the problems the RCMP have."
Buglas said Alberta is a great place to commit large-scale commercial crime.
"Bre-X has shown the RCMP can't charge any one on these large matters and there's no mechanism to hold them to account on a civil basis."
Those seeking compensation have had to go outside the province because there's no legislation allowing for class-action suits.
Several such lawsuits are being built by former Bre-X investors, primarily in the United States.
The RCMP decision against criminal charges came a day after former Bre-X senior vice-president John Felderhof -- believed to be in his Cayman Islands mansion -- was charged with eight counts of violating Ontario securities laws.
But those charges of insider trading and releasing false news are not Criminal Code counts and are not extraditable offences. That means Felderhof can't be forced to return to Canada.
Felderhof has denied any knowledge of the fraud.
The RCMP said they were faced with pursuing an expensive, time-consuming court case "that has no chance of success" or not going ahead with any charges.
Tom Devlin, a longtime acquaintance of the late Bre-X founder David Walsh, was disappointed by the RCMP decision. He had been hoping the police would go after several other geologists in the Philippines who may have been involved in the fraud.
"From the investigation that Bre-X did it was pretty clear to us there are still four over there that looked pretty obvious they were involved in it," Devlin said.
The RCMP investigation centred on a complaint of criminal fraud brought forward by the Bre-X board of directors.
The Bre-X file will remain open but the case will not be actively investigated.
"If something comes to light, then yes, we're going to investigate it and continue on," said Macaulay.
Any investigation would also be hampered by the death of Walsh. The Calgary mining promoter suffered an aneurysm at his Bahamian estate and died nearly a year ago.
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