Six charged in Norbourg case

Date: Wednesday, June 18, 2008
Author: Bertrand Marotte, Globeandmail.com

MONTREAL — Police have laid criminal charges against six people in the Norbourg Asset Management Inc. fraud case.

Among those arrested Wednesday morning are Vincent Lacroix, the disgraced founder of Montreal-based Norbourg, who is already serving time for having defrauded thousands of investors in the scandal.

His jail sentence was handed down under the penal code and not the criminal code.

Until Wednesday's arrests, Mr. Lacroix had been the only one charged in the Norbourg case.

Four others were also arrested, facing criminal charges: Félicien Souka, Serge Beugré, Jean Cholette and Rémi Deschambault.

A sixth, Jean Renaud, has not yet been arrested, said Corporal Luc Bessette of the Royal Canadian Mounted Police, which conducted a three-year investigation in collaboration with the Quebec securities watchdog leading up to the arrests.

The six men were being charged with a combined 922 counts – mostly related to fraud – for a total of $95-million.

Each count carries a maximum possible jail sentence of 14 years.

The mutual fund company was shut down in 2005 after a police raid. Three years later, a Quebec Superior Court judge said at the end of Mr. Lacroix's penal trial that the prosecution clearly demonstrated the systematic nature of the wrongdoing over a period of five years – between 2000 and 2005 – and Mr. Lacroix's role as the mastermind of 137 transactions involving the diversion of $115-million from the firm's coffers.

The evidence at Mr. Lacroix's trial showed how $115-million was diverted into various bank accounts, including several in Mr. Lacroix's name and under his wife's name.

The prosecution showed how Mr. Lacroix used the funds for various purposes, including buying a country inn and other businesses, and tried to cover up the paper trail.

Mr. Lacroix was sentenced in January to a prison term of 12 years less a day and fined $255,000. He is appealing his conviction.

Cpl. Bessette said Mr. Lacroix was arrested Wednesday morning at the prison in the Montreal area where is he is serving out his sentence.

The criminal probe that was conducted jointly by the Mounties and Quebec's securities watchdog was a separate investigation from the one that ended up in charges being brought under the penal code against Mr. Lacroix.

The latter are not criminal and come under the jurisdiction of civil law. Criminal charges rely on the evidence brought to light under a distinct investigation and do not simply involve using the same evidence that was used in the penal prosecution, according to an RCMP official.