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Dave
Thornton 's attempts to expose fraud in Ontario | Summary
of Devryn Ross's brief to federa court (pdf file)
Deveryn Ross
- 10-year battle to clear
name
- Ex-lawyer seeking to
prove innocence
By Dan Lett, Winnipeg Free
Press, Mar 19, 2005
A former Brandon police chief
and a former Manitoba attorney general are calling for a new
trial for a Brandon man convicted of fraud in 1995, who has spent
the last decade trying to prove his innocence.
Retired Brandon Police Chief
Dick Scott and former attorney general Jim McCrae have both taken
the unusual step of publicly supporting Deveryn Ross in a bid
to prove his innocence.
Ross, a successful lawyer,
was convicted of fraud in 1995 for his part in a failed restaurant
venture and spent five months in jail. Ross recently filed an
appeal to the federal justice minister under Sec. 696 of the
Criminal Code to have his case reopened.
The Justice Department is now
actively investigating Ross's claims. In a 400-page brief, Ross
claims evidence that he could have used to defend himself against
nine charges of fraud over $5,000 should have been disclosed
to him.
After reviewing new evidence
unearthed by Ross that was not available at his trial, both Scott
and McCrae said they believe a new trial is justified.
"You know, we're talking
about a man's life and he (Ross) should get a fair trial,"
said Scott, Brandon's chief of police from 1995-2001. "I
think the material that I've seen would show me that he deserves
another trial." McCrae, who served as Manitoba's attorney
general from 1988 to 1993, said he cannot determine if Ross is
innocent.
But after reviewing evidence
highlighted in his federal justice submission, McCrae said he
believes there is a need for a new trial.
"If the whole case was
not before the judge, then that is not fair," said McCrae.
"So, let's go through the process and let's give Mr. Ross
the benefit of a trial with all the evidence."
Ross was convicted of two counts
of fraud in connection with a $1-million failed restaurant venture.
The federal application brief focuses on new evidence uncovered
after his conviction in 1995, which Ross claims contradicts the
testimony of two key Crown witnesses -- mutual fund salesmen
Sheldon Gray and William Knight.
The two Brandon salesmen, who
were partners in the restaurant venture, testified at trial that
Ross had mislead them and investors about the risks and rewards
associated with the project.
However, in his application
to the federal Justice Department, Ross stated that following
his conviction he discovered Knight and Gray had told a different
story about their involvement in the failed restaurant investment
to the Manitoba Securities Commission. In settlement agreements
completed on the very day in April 1995 that Ross's trial began,
Knight and Gray pleaded guilty to 54 violations of securities
law, including selling securities without a licence.
The federal application brief
noted that Knight and Gray admitted before the MSC they deceived
investors by promising the restaurant investment was guaranteed.
The two also acknowledged they
took money from their clients' mutual fund accounts without obtaining
"required signatures." Police determined some of the
withdrawal forms had forged signatures, the federal brief noted.
After making these admissions,
the two salesmen were given a variety of punishments.
Knight, who was already retired,
was suspended from selling securities for three years and ordered
to pay $8,000 in costs. Gray had his licence suspended for six
months and agreed to repay $500,000 to investors, and $8,000
in costs.
The second major piece of new
evidence highlighted in the application to the federal justice
minister involves a deal that was struck between the investors
and Knight and Gray to sue Ross after his conviction.
According to information obtained
from the Law Society of Manitoba, and highlighted in Ross's application
to Ottawa, the investors asked the MSC to impose minimal penalties
for Knight and Gray. In exchange, the two mutual fund salesmen
agreed to sue Ross and give the proceeds to the investors, the
federal brief noted.
Former Manitoba Crown attorney
Paul Jensen, who prosecuted Ross, declined to be interviewed,
but in a statement issued by his lawyer, he denied withholding
any material evidence from Ross. Jensen also denied offering
Gray and Knight any immunity from criminal charges.
The trial judge and appeal
court were well aware of the role played by Knight and Gray in
the Perkins investment, and determined that Ross was still guilty,
Jensen added. Sheldon Gray declined to be interviewed. In an
e-mail response, Gray said he co-operated fully with the securities
commission and the Crown, and had no part to play in deciding
which evidence was disclosed to Ross.
"I certainly never withheld
information from the Securities Commissions or the Crown Attorney's
office and co-operated fully with their investigations,"
Gray wrote. "I have no idea what information was disclosed
to Mr. Ross at the time of his trial, or what effect that would
have on the fraud charges against him."
William Knight denied having
any specific recollection of the case, which took place nearly
10 years earlier.
Manitoba Justice has refused
to comment on the particulars of the Ross case pending the results
of the review by the federal justice department.
The Manitoba Securities Commission
confirmed it shares intelligence with Manitoba Justice, but pointed
out that it is not the commission's responsibility to disclose
any evidence in a criminal proceeding.
dan.lett@freepress.mb.ca
- Appealing for justice
- Brandon lawyer convicted of fraud calls
on federal minister to help clear name
By Dan Lett, Winnipeg Free
Press, Mar 20, 2005
THE first lesson Deveryn Ross
learned was that in the suicide-watch cell at the Brandon Correctional
Institute, they never turn out the lights. Harsh fluorescent
lights saturated the cell. Inmates were awakened every 15 minutes,
just to ensure they were still alive. And for sheer entertainment,
every once in awhile a guard would stop by and "dare you
to do it."
A single day in this cell led
Ross to a second lesson. "A suicide-watch cell is an interesting
misnomer," Ross recalled. "Because even if you don't
want to kill yourself when you go in, you will before you get
out."
It was June 1995 and Ross had
just been convicted of two counts of fraud for his part in a
failed $1-million restaurant venture. Ross maintained his innocence
throughout his trial, and was acquitted of the most serious of
the nine charges against him. But the presiding judge convicted
him on two lesser counts.
From successful lawyer to convict,
it was quite a turn of events. Just a year earlier, Ross was
earning good money, running a successful legal practice, writing
a column for the local newspaper and enjoying the accolades of
being the local boy who made good. He and his family lived in
an elaborate brick heritage home that was formerly the official
residence in Brandon for the lieutenant-governor.
Now, he was a convicted criminal,
about to be disbarred, with no way to earn money to support his
family. He spent five months in jail and was strip-searched more
than 100 times while in custody. But Ross had a lifeline: He
decided almost the moment the judge found him guilty that he
was going to prove his innocence. Ross has dedicated the last
years of his life to filing a voluminous appeal to the federal
justice minister under Sec. 696 of the Criminal Code, which gives
the minister the power to order a new trial if he is convinced
a miscarriage of justice likely occurred. Federal investigators
are now negotiating access to file material from Manitoba Justice.
 The 400-page application brief, which
tries to pull together all the new evidence, is Ross's best,
and last, hope to prove his innocence.
"Over the past 10 years,
many, many people have encouraged me to simply put this thing
behind me and move, for the sake of my health and the sake of
my family," Ross said.
"(But) when you know that
you have been wrongly convicted and are able to prove it, you
owe it to yourself and your family to fight to clear your name
and set the record straight."
*****
The source of Ross's undoing
would be found in the home-style menu of a Perkins family restaurant.
A successful U.S. chain, Perkins had opened its first Canadian
restaurant in Winnipeg in the late 1980s. In 1990, a group of
Brandon businessmen, including Ross, decided they would pursue
the second Canadian franchise.
Ross had become arguably one
of the most successful lawyers in Brandon. He was involved in
a majority of the large real estate transactions in the city,
and had built a client list that included many of Brandon's leading
citizens. It was not unusual, then, that a group of local businessmen
would look to Ross to take care of all the paperwork for a limited
partnership that would build and lease out a Perkins franchise.
Kevin Lumb, a longtime friend of Ross, tried to raise the capital
to build the restaurant but was unable to find investors.
Ross turned to two mutual fund
salesmen, Sheldon Gray and William Knight, to find investors.
According to a brief filed in support of his Sec. 696 application
to Ottawa, Gray and Knight recruited a group of elderly investors,
all pre-existing mutual fund clients, who were willing to take
$850,000 from their retirement savings to buy the land and build
the restaurant in downtown Brandon. A separate consortium, led
by Lumb, focused on efforts to secure the franchise and operate
the restaurant. Rental fees from this second consortium would
be used to pay dividends to Gray's and Knight's investors. Ross
processed all the legal paper work and dividend payments.
Ross, Knight and Gray were
compensated for putting the deal together with units in the partnership.
All three men were each given two shares valued at $25,000 each.
The restaurant, opened in December 1990, was initially a great
success.
However, less than two years
into the venture, the Brandon restaurant ran into trouble. Eventually,
it lost its franchise after Lumb was unable to resolve a series
of disputes with the Perkins head office. The restaurant remained
open under a different name and continued to make enough money
to cover all its overhead and pay out regular monthly dividends
to the investors. Despite the fact the restaurant was a going
concern, the partnership fell apart in June 1992 when the Canadian
Imperial Bank of Commerce foreclosed on a $400,000 loan that
was obtained to cover unexpected cost overruns in construction.
The bank took action despite the fact the partnership had never
missed a loan payment, had enough money in the bank to cover
at least two months' service on the loan and was still making
a profit on operations.
It would take almost a year
before police were tipped to possible wrongdoing in the Perkins
partnership. A joint RCMP-Brandon Police Service investigation
determined the investors had been deceived about the risks and
hidden aspects of the venture and recommended criminal charges
against Ross, Knight and Gray.
In particular, court and securities
commission documents show police found investors had been promised
their Perkins investment and the return were "guaranteed,"
when in fact it was a risky investment with no guarantees of
success, and that they had not been told that Knight, Gray and
Ross received shares in the partnership in exchange for their
work.
The investigation found that
signatures had been forged on forms authorizing the withdrawal
of mutual fund monies, while in other cases more money was taken
than had been authorized.
However, after considering
the police recommendation, the Crown elected to charge only Ross,
arguing he misled his partners and investors about the risks
of the investment. Knight and Gray became the Crown's key witnesses.
In his application to the federal
justice minister, which echoes his arguments at trial, Ross states
vehemently he had no knowledge of the fraud, and that it was
Knight and Gray who recruited the investors and acted as chief
liaison with them during the life of the Perkins partnership.
Under intense cross-examination
by Tim Killeen, Ross's lawyer, Knight and Gray stuck to their
stories that they personally had never promised the investors
the partnership would be a guaranteed investment, and that they
had no knowledge of the forged signatures or unauthorized withdrawals
from the mutual fund accounts. The two salesmen claimed they
were "duped" by Ross, and thus were unable to properly
warn the investors about problems with the project.
A total of nine charges were
filed against Ross. In a trial before a judge alone, Ross was
acquitted of the most serious charges. However, he was found
guilty on two smaller and more complex charges.
On the first charge, the judge
found Ross failed to warn investors about the $400,000 bank loan
taken out to cover construction cost overruns, a debt that ultimately
brought down the partnership. Ross argued Knight and Gray had
full knowledge of the loan, and it was their responsibility to
inform the investors. The second count alleged Ross had earned
a $10,000 windfall by deceiving an investor who was trying to
buy additional units in the restaurant partnership.
Ross had obtained an option
on a partnership share owned by Gray, who wanted to cash in and
obtain some quick money. A month later, one of the investors
inquired about obtaining an additional share, and Ross ultimately
sold his option on Gray's share, for $10,000 more than he paid.
Although Ross was able to show the court he obtained Gray's option
legitimately, the investor complained he was deceived about the
source of the share and thus paid more than it was worth. The
court agreed.
Ross has argued the convictions
on these two counts are the result of the cumulative effect of
the charges laid by the Crown: after throwing nine charges up
against the wall, two finally stuck.
To date, Manitoba Justice has
not responded in any detail to Ross's claims in his federal application.
Ottawa has asked for detailed disclosure of all documentation
in its files, but four months after the request was made, little
has been provided. Ross said he believes this disclosure will
provide additional answers about why he was charged, and why
Knight and Gray were spared.
"Whenever you see an indictment
alleging a myriad of criminal offences involving thousands of
dollars," Ross said, "the immediate impression is that
the person who has been charged must be guilty of something."
*****
Ross was released in June 1995
on bail to await his appeal. He immediately started looking for
new evidence that would help him prove his innocence. Ross said
he began to suspect there might be information in the files of
the Manitoba Securities Commission that might be of assistance.
The commission had prosecuted Knight, Gray and Ross for various
breaches of securities law, but intimate details of that process
had been largely overlooked because it unfolded at the same time
as the criminal trial in the spring of 1995.
Making his own inquiries, Ross
learned the securities commission completed settlement agreements
with Knight and Gray on the same day in April 1995 that his trial
began in Brandon. The Crown had made available hundreds of pages
of documentation from the commission proceedings as part of normal
disclosure. But the detailed agreements, which under normal circumstances
are public documents, were not provided, and Ross had never thought
to ask about them because he didn't know they existed.
In his federal application,
Ross noted that on the stand, Knight and Gray argued they were
as deceived as the investors. In the securities commission agreements,
Ross discovered that Knight and Gray acknowledged a great degree
of responsibility for misleading their elderly mutual fund clients.
Court documents clearly showed
the investors were a wrong fit for the high-risk Perkins venture.
Most of the investors were elderly, retired and had fixed incomes.
Several of them sold a majority of their retirement investments
to buy into the Perkins partnership. In the federal application,
it was stated that Knight and Gray, in order to entice the investors,
promised the investment had a guaranteed return of nine per cent.
As the securities commission discovered, the investment was,
in fact, never guaranteed.
Licensed securities salesmen
are required to have all investors fill out a "know-your-client"
questionnaire to ensure risk-averse clients are not stuck with
high-risk investments. Knight and Gray, who did not have licences
to sell securities, failed to do any kind of assessment on their
clients, and thus put elderly, risk-averse investors into a high-risk
investment.
However, Ross's application
to the federal minister noted that in those agreements, Knight
and Gray also admitted taking money from their clients without
obtaining "required signatures" on authorization forms.
This mirrored the findings of the joint Brandon Police-RCMP investigation,
which concluded "some documentation was forged in order
to obtain funds... and that Knight and Gray were the persons
who solicited the investment and had the document signed and
submitted for redemption."
The settlement agreements described
how two daughters of one investor, who had power of attorney
over their mother, did not know she had bought Perkins units
until her mutual fund statements arrived in the mail showing
tens of thousands of dollars had been withdrawn. The two daughters
claimed the signatures on their mother's redemption form were
forgeries.
Another investor who agreed
to invest $25,000 later found out in his statement that up to
$150,000 had actually been withdrawn. Again, the investor claimed
he had not signed a form authorizing that size of withdrawal.
After Gray and Knight pleaded
guilty to 54 violations of securities law, the commission dealt
out punishment. Knight, who was already retired, was suspended
from selling securities for three years and ordered to pay $8,000
in costs; Gray had his licence suspended for six months and agreed
to repay $500,000 to investors, as well as $8,000 in costs. "I
could not believe what I was seeing. I felt sick to my stomach,
because I knew that if those agreements had been disclosed prior
to my trial, I would have been acquitted on all counts,"
Ross said.
Toronto lawyer Philip Campbell,
who has been retained by Ross to process his application to the
federal justice minister for a new trial, said Manitoba Justice
should explain why the prosecutor who handled the case, Paul
Jensen, elected not to prosecute Knight and Gray when he found
out about the admissions made before the securities commission.
"At the securities commission,
they (Knight and Gray) admit to things they denied as Crown witnesses,"
said Campbell. "They admitted to the exact things that Deveryn
was accused of."
Ultimately, Ross's lawyer at
trial, Tim Killeen, was of the opinion at that time he could
not raise this new evidence at appeal because there was no indication
Jensen knew about the agreements and failed to disclose them,
thus he could not argue a procedural irregularity. Without an
indication the prosecutor failed in his duty to disclose, Killeen
theorized the new evidence was outside the mandate of the appeal
hearing.
However, the federal application
describes how a subsequent investigation by a private investigator
hired by Ross found that Jensen may have received details of
the MSC settlement agreements on April 18, 1995, the first day
of the trial.
Posing as an ally of the investors,
the investigator took a taped statement from Marc Boily, an MSC
investigator, in which Boily said he personally disclosed the
agreements at a dinner with Jensen and Linda Vincent, another
MSC lawyer, at the Royal Oak Inn in Brandon on the evening of
the first day of Ross's trial.
In the taped statement, Boily
said Jensen was provided with copies of the settlements. "He
(Jensen) would have known. I mean, we had dinner with him at
the hotel that night and he was well aware of it."
Jensen has declined to be interviewed
about the case. Jensen's lawyer, Rocky Pollock, said it would
be inappropriate to make any public comment while Ottawa is reviewing
Ross's claims of innocence. "Mr. Jensen would now prefer
to let the matter be dealt with in the process that Mr. Ross
has chosen -- the ministerial review," Pollock wrote in
a letter to the Free Press this month.
Pollock said Jensen denies
that "he received full details of the MSC settlement agreements
the night of the first day of the trial from Boily or anyone
else." Pollock said Jensen believes that even if the actual
MSC settlement agreement was not available, Knight and Gray both
confirmed in cross-examination they had reached agreements with
the commission that included admissions and penalties, thus making
it "common knowledge." As for the decision to use Knight
and Gray as witnesses, effectively sparing them from prosecution,
Pollock said Jensen never entertained an immunity deal for either
man. "The topic of immunity never arose between Mr. Jensen
and Knight and/or Gray nor was Mr. Jensen ever contacted by counsel
on behalf of either witness," Pollock wrote. "Mr. Jensen
is satisfied that no police or Crown official granted, discussed
or otherwise implied immunity."
Crown Attorney Don Slough,
who has been designated as the Manitoba Justice spokesman on
this case, said he would not comment on the specifics while Ottawa
is reviewing Ross's allegations.
Doug Brown, director of legal
and enforcement at the Manitoba Securities Commission, refused
to confirm if or when his investigators provided the settlement
agreement to Jensen.
The settlement agreements are
not, however, the only new evidence highlighted in the application
to the federal justice minister. In addition, Ross raised evidence
surrounding civil litigation, and its possible effect on the
outcome of the trial.
Several years after his conviction,
the federal application also noted, Ross and his private investigator
discovered Knight and Gray had struck a deal with the investors
to share the proceeds of civil suits launched against Ross and
his law firm.
In his application to the federal
justice minister, Ross said he obtained information from the
Law Society of Manitoba, which was defending malpractice claims
by the investors against Ross's law firm in Brandon. Ross said
he was told by lawyers for the law society the investors had
asked the MSC to impose minimal penalties for Knight and Gray.
In exchange, the application brief noted, the two mutual fund
salesmen agreed to sue Ross and give the proceeds of the suits
to the investors.
Ross stated in his federal
application that Douglas Bedford, the lawyer representing the
investors, asked the commission to be lenient with Knight and
Gray to allow them the opportunity to repay some of the money
from the Perkins partnership. In return, Bedford signed agreements
with Knight and Gray that "assigned" to the investors
the proceeds of two civil lawsuits launched against Ross and
his firm. As long as this deal remained in place, the investors
agreed to cease all civil action against Knight and Ross, the
application brief noted.
The two suits, which were filed
in early 1995, were not served on Ross until May 24, two days
before the end of his trial. In an affidavit accompanying the
federal application for a new trial, Killeen stated this prevented
him from cross-examining the investors on whether the promise
of lawsuit proceeds had influenced their testimony.
In Manitoba, most law firms
pay for insurance through the law society to protect them against
malpractice. The law society lawyers told Ross that Bedford asked
for a $1-million out-of-court settlement, in exchange for which
he could ensure the suits filed by Knight and Gray would be dropped.
If all these bids had been successful, Campbell noted, the investors
would have received more than $2 million in restitution for the
$1 million they invested.
The combination of the settlement
agreements and the hidden civil proceedings form the backbone
of Ross's request for a new trial. The 500-page brief sent to
the federal justice department outlines in numbing detail the
case against Ross, while raising questions about the Crown's
strategy at trial.
Campbell said the entire case
against Ross relied on the ability of Knight and Gray to portray
Ross as the mastermind of the investment, the person who was
making all the big decisions and deciding which information was
given to investors. Knight and Gray steadfastly maintained at
trial that they did not know intimate details of the partnership.
Ironically, the trial judge
and the court of appeal did not accept much of the testimony
of Knight and Gray. At appeal, the court labelled the two men
as "unreliable and dishonest" witnesses. How, then,
did Knight and Gray avoid prosecution themselves?
Ross has maintained throughout
that he only performed administrative functions for the partnership,
logging in all the investors' money, making sure it was properly
deposited and that dividends were paid to the investors. Ross
said he had virtually no contact with the investors.
In fact, in February 1994,
after the Crown had decided to proceed against Ross alone, a
Brandon Police background report supported Ross's application
to the federal justice minister. Although the police recommended
Ross be charged, it was clear to investigators that Knight and
Gray almost solely had responsibility for selling the investment
and processing the mutual fund redemptions. "In order to
induce their clients to invest in the venture, they made representations
to the various investors which were unsubstantiated or they knew
to be false and/or misleading in a material particular,"
the police report noted.
Campbell said Jensen made a
strategic decision to use Knight and Gray against Ross, perhaps
concerned that he would not get a conviction against all three
if they stood trial together. "There is no easy way to explain
why police did not lay charges against Knight and Gray based
on the admissions made to the securities commission," said
Campbell.
Jensen has generally refused
to discuss his strategy at Ross's trial. Pollock, Jensen's lawyer,
said prosecutors are not obligated to discuss "work product."
However, in an April 2001 taped
interview with Ross's private investigator, which is included
in the federal application, Jensen acknowledged he was well aware
of the role that Knight and Gray played in the fraud, and was
uncomfortable about using them as his main witnesses. Even though
Jensen acknowledged Knight and Gray were "negligent,"
he said he was concerned he couldn't make a case against the
two salesmen, and was unlikely to successfully prosecute Ross
without the testimony of his former partners. "I didn't
think we had enough evidence to charge (Knight and Gray) criminally,"
Jensen told the investigator. "And, quite frankly, I needed
them to testify against Ross."
*****
The Headingley Jail riot and
the birth of a health baby girl conspired to get Deveryn Ross
out of jail slightly ahead of schedule.
Ross was in Brandon Correctional
Institute with another year to go before parole eligibility when
the Headingley riot broke out on April 25, 1996. With Headingley
trashed beyond function, other provincial jails, including Brandon's,
were expected to handle a flood of displaced inmates. This, in
turn, required authorities to expedite parole for those inmates
who presented low levels of risk, or who had compassionate ground
for release.
Ross qualified on both counts.
In particular, Ross was able to point to the recent birth of
his second child, Celine, who arrived just two weeks before the
bloody riot. Ross was released in May, and completed various
stages of parole until his sentence officially expired in July
1997.
Ross's collision with the justice
system has been, until recently, a blind spot in his children's
lives. Ross's son, Duncan, was born five days before he was charged
in 1994, and neither he nor Celine has any memory of their father's
incarceration. With a pending application to the federal justice
minister, Ross recently revealed this sordid history to his children
and found, to his relief, that they were more supportive than
shocked.
Both my kids are doing great,"
Ross said. "That said, my life would be a lot easier if
I hadn't had to tell my kids that their dad has a criminal record."
The prospect of a judicial review of new evidence is still a
long shot. But the federal justice department has recently taken
Ross's case to the next level. After reviewing his claims, investigators
from the Criminal Convictions Review Group have begun a formal
investigation. The results of this investigation will be used
by Federal Justice Minister Irwin Cotler to determine, using
the powers outlined in Sec. 696 of the Criminal Code, whether
Ross deserves another hearing before an appellate court, or a
new trial. A federal investigation is not proof of a miscarriage
of justice, but few cases that reach this level are dismissed
outright.
Now approaching the 10-year
anniversary of his conviction, Ross said he is going to stick
with his crusade until there is no one left in the justice system
to badger.
"When you go through these
kind of experiences, it's kind of like living another life, or
being in another reality. You don't really believe that it's
happening. All you're trying to do is survive, with one overriding
thought.
"This too shall pass."
dan.lett@freepress.mb.ca
Also by Dan Lett: The
Monique Turenne story
|
Truth can never be
told so as to be understood, and not be believ'd. William Blake, The Proverbs of Hell
