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Criminal - Mutual Legal Assistance in Criminal Matters Act. Canada (Attorney General) v. Georgiou
In Canada (Attorney General) v. Georgiou (Ont CA, 2023) the Court of Appeal considered motions for both leave to appeal, and a direct appeal, under the Mutual Legal Assistance in Criminal Matters Act (MLACMA) brought by a mother seeking assets forfeited by a US criminal court against the son. The underlying procedure was a relief from forfeiture against 'forfeiture of property' proceeding under CCC 462.42.
In these quotes the court exemplifies the event and procedural facts that the MLACMA sometimes involves:[6] In 2010, George was convicted in the United States of conspiracy, securities fraud, and wire fraud. He was: (i) sentenced to 25 years in prison; (ii) ordered to pay restitution of over $55 million USD; and (iii) ordered to forfeit the amount of $26 million USD, representing the proceeds of his offences.
[7] Under U.S. federal law, a forfeiture order for the proceeds of crime may be extended to include “substitute property” if the property subject to the forfeiture order cannot be located or has been transferred to third parties. Therefore, the U.S. government was entitled to seek forfeiture of any assets belonging to George in satisfaction of his obligation to forfeit proceeds of crime: Canada (Attorney General) v. Georgiou, 2018 ONCA 320, at para. 25, leave to appeal refused, [2018] S.C.C.A. No. 186 (“Georgiou (2018)”).
[8] In July 2012, APP Capital Inc., through its representative, transferred about $9.3 million into an account at the Royal Bank of Canada (“RBC”) in the name Brent David Emanuel, a nominee for George.
[9] In August and September 2012, on application by U.S. prosecutors, the U.S. District Court for the Eastern District of Pennsylvania made orders targeting the $9.3 million sum. On August 24, 2012, that court granted a Preliminary Order of Forfeiture for Substitute Asset. On September 21, 2012, that court issued an order restraining, as a substitute asset, the $9.3 million until further order of that court.
[10] American authorities then requested Canada’s assistance in enforcing the U.S. District Court’s orders, under a treaty providing for mutual legal assistance in criminal matters. The Act authorizes the Minister of Justice to deal with such requests. Section 9.3(1) provides:When a written request is presented to the Minister by a state or entity, other than the International Criminal Court referred to in section 9.1, for the enforcement of an order for the restraint or seizure of property situated in Canada issued by a court of criminal jurisdiction of the state or entity, the Minister may authorize the Attorney General of Canada or an attorney general of a province to make arrangements for the enforcement of the order. [11] Pursuant to s. 9.3(2) of the Act, enforcement steps were taken by the responding party. On September 24, 2012, Forestell J. made an order restraining the $9.3 million.
[12] George moved to set aside Forestell J.’s order. His motion was unsuccessful, as was his appeal: Georgiou (2018). This court held that a restraint order for the $9.3 million, a substituted asset as contemplated by American law, could properly be considered a restraint order of proceeds of crime for the purpose of the Act.
[13] On June 19, 2018, the U.S. District Court issued a Final Order of Forfeiture for Substitute Asset ordering forfeiture of the $9.3 million amount (the “Forfeiture Order”). The U.S. government then asked the Canadian authorities to enforce the Forfeiture Order.
[14] In April 2021, the Forfeiture Order was filed by the responding party and entered as a judgment of the Superior Court of Justice, pursuant to s. 9.4(3) of the Act.
[15] Section 9.4(8) of the Act provides that a forfeiture order being enforced under the Act shall not be executed before notice in accordance with s. 462.41(2) of the Criminal Code has been given to anyone who, in the opinion of the court, appears to have a valid interest in the property. The responding party moved for directions about the giving of notice.
[16] On May 10, 2021, Davies J. ordered “pursuant to s. 9.4(8) of the Act” that Loukia, Brent David Emanuel, and RBC be given notice of intended execution of the forfeiture order. The order directed any person claiming an interest in the $9.3 million to make an application.
Loukia’s Application
[17] Loukia’s application was expressly brought under ss. 9.4(8) and (9) of the Act. These sections refer to provisions of the Criminal Code that apply to domestic forfeiture orders. As noted above, s. 9.4(8) provides that a forfeiture order shall not be executed before notice to interested parties is given in accordance with s. 462.41(2) of the Criminal Code. Section 9.4(9) states that ss. 462.41(3) and 462.42 of the Criminal Code apply, with any modifications that the circumstances require, to a person who claims an interest in proceeds of crime. Section 462.41(3) authorizes a court, prior to making a forfeiture order, to order that property that would otherwise be forfeited be returned to a particular person if they meet specific criteria. Section 462.42(1) permits any person who claims an interest in property that has been forfeited to make an application for relief, subject to enumerated exceptions. Pursuant to s. 462.42(4), if the judge is satisfied the applicant meets the specified criteria (which are largely the same criteria as those stated in s. 462.41(3)), they may order such relief.
[18] Loukia sought a declaration that she has a 100% interest in the $9.3 million, that the funds are unaffected by the Forfeiture Order, and that the funds be paid to her with accrued interest.
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