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LEGAL REPORT: FORENSICS & CRIMINAL LAW to see more Ponzi schemes, such as the one perpetrated by Bernie Madoff, in the future. Many people are willing to fork over money to a seemingly nice person who promises large returns and inclusion in an elite group of investors. "The Madoff case was a stunning fraud given the amounts raised, the dura- tion of the Ponzi scheme, the fact that no assets were ever acquired, and the fact that the account statements were not computer generated," says Grout. "I cannot believe that people keep buying what these guys are selling. If it's too good to be true, it is!" Jim Patterson is co-chairman of the fraud law group at Bennett Jones LLP in Toronto and represents plaintiffs in sev- eral high-profile, alleged Ponzi scheme cases including the Alberta matter involving Gary Sorenson and Milowe Brost, who are accused of defrauding investors upwards of $400 million. The RCMP allege Sorenson and Brost oper- ated a series of phoney companies to which an international collection of investors loaned money with the prom- ise of a high rate of return in the gold market. Patterson agrees the cases are com- plex. "It's not just a simple debt collec- tion. The money often goes offshore and there are many documents that are part of the case that some lawyers who don't do these cases often may not be familiar with," he says. "What you need is to devise an action plan and bring that to the courts to seek recovery on behalf of the victims." Many times, investors who get caught up in such schemes are asked to sign a confidentiality agreement, which can protect the perpetrators from attracting any attention from police. When earlier investors are paid from funds obtained from new investors — which Patterson notes are called "lulling payments" — often they don't declare the profits on their taxes because the payments are so infrequent. "So that, along with the con- fidentiality document, prompts many investors, even if they have concerns, to say 'forget it, I'm not reporting it,'" he says. Therefore, a Ponzi scheme serves as the ideal guise. Yet while monies have been recov- ered in some cases, the task of identify- ing and freezing assets connected with the scam can be difficult and expensive. Patterson's law firm has turned to class actions to try to recover money for Ponzi scheme victims; the firm repre- sented a group of 200 investors who had lost money in a scheme that was set up as a ticket-scalping operation for con- certs and sporting events in southern Alberta and the northern United States. In that case, a confidential settlement was reached although generally litiga- tion can prompt a receiver to investigate and hopefully find any hidden money or assets. Accordingly, Bennett Jones is pre- paring a class action lawsuit against Sorenson and Brost, for which Patterson is counsel for the representative plain- tiffs. The class action has not yet been certified, and the criminal trial against Electronic Documents Records Management, e-Discovery and Trial Effectively navigate the legal challenges posed by electronic documents Electronic data is modifying how lawyers interact, changing how information is collected and used, and transforming the courtrooms. This in-depth resource examines and analyzes the issues relating to electronic documents, including: CLB • the sources and types of electronic documents • records management policies • the legal framework governing e-discovery in Canada ORDER your copy today Looseleaf & binder • $210 Releases invoiced separately (1/yr) P/C 0283030000 ISSN 1920-1737 • the preservation, collection, processing, review and production of electronic documents • the use of electronic evidence at trial This dynamic and burgeoning aspect of legal practice is clarified and explained with extensive reference to relevant Canadian and U.S. authorities. canadalawbook.ca For a 30-day, no-risk evaluation call: 1.800.565.6967 Canada Law Book, a Thomson Reuters business. Prices subject to change without notice, to applicable taxes and shipping & handling. CL1110 52 NO VEMBER / DECEMBER 2010 www. C ANADIAN Law ye rmag.com Editors: Bryan Finlay Q.C., Marie- W ith contributions from: Caroline Abela, Steve Doak, Paul D. Guy, Nikiforos Iatrou, Stephanie L. Turnham, David Vitale and John Wilkinson Andrée Vermette and Michael Statham