Canada’s ‘psychic’ swindler is off to prison. But experts say we’re failing to prosecute this type of fraud

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It would have been quaint if it were not so criminal.

This week’s sentencing to 10 years in prison for Montreal-native Patrice Runner, the mass-mailing fraud mastermind behind a US$175-million scheme, closed a chapter on a largely analogue era of criminal history.

His crimes were marked by bogus psychic predictions, random “lucky” numbers and all-seeing Indian shamans — tales tailored to elderly victims and transmitted through that most dated of communications means: the letter folded into an envelope and sent through the mail.

Prosecutors said Runner led an organization that conned 1.3-million people in Canada and the U.S. between 1994 and 2014 by sending personalized letters that were meant to build close relationships with victims, many of whom made dozens of payments, handing over thousands of dollars.

Some things have changed in the years since Runner’s criminal enterprise — and many near-identical mail-fraud operations — ended due to the concerted investigative work of U.S. federal agents and criminal prosecutors.

The companies that provided contacts of potential victims or processed the millions of dollars worth of payments have either shaped up or shut down.

“I don’t know that this could get reconstituted,” says Clayton Gerber, an inspector with the U.S. Postal Service Inspection Service who worked on the Runner case.

“The world is shifting away from letters.”

But some things have not changed.

The elderly are still falling victim to silk-tongued strangers at worrying rates.

And authorities in Canada are failing to take concerted action against fraud targeting seniors in the country, according to seniors’ advocates.

They say that the government hasn’t followed through on promises to enact specific elder abuse laws and prosecutors have been unwilling to take up cases, both of which have allowed criminals to thrive.

“If you walked into a bank with a gun and stole $5,000 and got caught, they’d put you in jail and throw away the key. But you can take $250,000 from a senior and likely just get a slap on the hand,” said Bill VanGorder, chief of advocacy and policy with the Canadian Association of Retired Persons.

“We’re told that organized criminals are finding this a much easier and better kind of crime to get involved in than others because it is so easy to do and the risk of being caught is low and the risk of really being punished in any way is even lower.”

People working on the problem say that seniors who fall victim to fraudulent schemes experience fear, stress and tremendous embarrassment. The vast majority refuse to report the crimes to police for investigation and potential criminal prosecution, meaning that accurate figures for the number of victims and total losses is hard to come by.

One often-cited statistic says that only 10 per cent of elderly victims come forward, but that estimate dates to 2004, a long-ago era when lettermail was only just beginning its precipitous decline.

VanGorder said the most recent trends in elder fraud stem from the COVID-19 pandemic.

“There is the isolation that made older people more interested in having some contact of some kind and the fact that older folks have been dragged kicking and screaming into the digital world and working online,” he said.

An Ontario Bar Association conference last year on elder fraud heard that the most prominent schemes now in play are emergency and romance frauds, in which seniors are contacted by strangers with a concocted story about a relative in dire need of cash, or seduced by someone seeking access not to their heart but their finances.

The Ontario Provincial Police announced charges this week against 14 people from Quebec involved in a scheme that targeted seniors with a landline telephone who would be contacted and pressured to provide bail to get family members out of jail. The group collected more than $2.2-million across Canada since February 2022, the OPP said.

The Hamilton Spectator reported last year on the case of a couple who handed over $8,000 to a tearful caller posing as their grandson who said he needed the money to get out of jail after getting into a car accident that sent a pregnant woman to hospital.

“The love of family, for your grandchild, just overwrote the intelligence level,” victim Dave Bartolotta told the paper.

In 2022, Canadians reported losing $59-million in romance scams, according to the Canadian Anti-Fraud Centre.

The impacts are more than just financial. A Texas study found increased likelihood of death within five years for victims of elder abuse, particularly those who have suffered physical and financial exploitation.

“My personal experience is three (years),” Sgt. Martin Franssen, of Durham Regional Police’s Senior Support Unit, told an Ontario Bar Association conference last year.

“On the surface there are no bruises. On the surface there is no wound that you can see. But psychologically, that wound is there through stress, fear, embarrassment.”

Rates of prosecution can vary greatly.

The United States Justice Department regularly announced indictments, guilty verdicts and sentencing of its elder fraud cases.

One case from December 2023 involved charges against two men who allegedly laundered US$2 million stolen through grandparent scams. The alleged mastermind, 45-year-old Christopher Fagon, is suspected of having created businesses and bank accounts that were used “to conceal the true nature of the funds,” according to authorities who announced the charges.

Fagon is believed to have relocated to Toronto from Los Angeles before the arrests were made.

Gerber, the U.S. Postal Service inspector said “there’s way less prosecution” in Canada for such crimes, and that American law enforcement have found it “challenging” to have suspects extradited from Canada to face justice in the U.S.

In one case related to mass-mailing fraud, charges were filed in the U.S. in 2019 against the heads of Vancouver-based PacNet Services Ltd., a company that allegedly processed the payments made by victims to the companies running the fraud operations. Rosanne Day, who was in charge of the company’s Vancouver headquarters, has reportedly not yet been extradited to face charges in U.S. court.

“I’m going to retire and move to Canada and start a fraud scheme. It would be a wonderful retirement,” Gerber said sarcastically.

“It’s inexcusable. They have all the same laws. … It’s just a question of whether they want to do it. Law enforcement wants to do it. I can tell you because I’ve worked with many Canadian officers. They throw their arms up. It’s the prosecution. There’s not the will to prosecute.”

It wasn’t supposed to be this way.

In late 2012, Prime Minister Stephen Harper’s Conservative government passed Bill 36, an elder abuse law making the courts consider a victim’s age in sentencing.

In 2019, Conservative MP Alice Wong introduced a motion calling on the House of Commons to come up with a national response to fraud against seniors that would provide resources and support for victims and create new legislation to combat the criminal activities.

In 2021, then-justice minister David Lametti was appointed to cabinet with the mandate to tackle elder abuse by establishing a standard definition of the illegal activities, defining the scope of the problem in Canada and passing new criminal laws.

The need for distinct elder abuse legislation is a source of debate.

Franssen, the Durham police sergeant said criminal laws already on the books that outlaw theft, fraud and money laundering are sufficient.

“What we need is a desire to acknowledge the fact that this is going on and then a desire to proceed through the criminal justice system,” he told the Ontario Bar Association conference.

But Heidi Illingworth, the then-federal Victims of Crime Ombudsperson, wrote to the government in 2021 to argue in favour of specific laws she said were necessary to identify and tackle the problem.

“Creating specific offences may lead to easier identification and reporting by family members, social work and health care officials, and could also enable law enforcement to intervene more promptly and effectively in cases of elder abuse,” she wrote.

If those new laws have not appeared after all these years of debate, it may be a lack of political will. But the public silence of its already-vulnerable victims also plays a part.

VanGorder likened such frauds to harder-to-ignore criminal and public safety issues like car accidents at dangerous intersections or fires. The only difference being the relative invisibility of the elderly victims and the shame, isolation or physical and cognitive limitations that leave them unable or unwilling to report their losses.

But going public with these personal violations, these deeply private transgressions is exactly what must happen for a change to come, said Franssen.

“A one-off nobody listens to. For a hundred one offs, the (alarms) go off,” he said. “When people don’t tell us these things … you do get the false statements of ‘Crime is down.’ But anybody working in this world knows its actually the opposite. It’s on the way up.”

This article was originally sourced from www.thestar.com