Chinese retail tycoon’s fraud conviction thrown out

China’s supreme court threw out a retail tycoon’s fraud conviction on Thursday, May 31, 2018 in an unusual show of leniency toward entrepreneurs amid a string of high-profile detentions that has rattled the Chinese business world.

Zhang Wenzhong, former chairman of one of China’s biggest retail chains, Wumart Stores Inc., was released in February after serving 12 years in prison on charges that included improperly obtaining technology development subsidies.

The Supreme People’s Court ruled that while Zhang, a computer scientist who studied at Stanford University and founded Wumart in the 1990s, violated rules in applying for the subsidies, he did so unintentionally and his company was eligible to receive them.

Zhang and another executive who was convicted had no `”subjective intention” to commit fraud, the court said. It said their convictions were a “misapplication of the law and should be corrected.”

The ruling was a rare success by a high-profile defendant in the midst of a marathon anti-corruption crackdown led by President Xi Jinping.

It reflected the ruling Communist Party’s desire to `”strengthen the protection of the legitimate rights and interests of entrepreneurs,” said a Supreme Court official quoted by the website of the Shanghai newspaper The Paper.

In a possible effort to reassure entrepreneurs about their status in the state-dominated economy, the unidentified official acknowledged they face uncertainty about evolving rules and sometimes need to make unorthodox arrangements.

“In some places, there has been an unfair and unreasonable treatment of private enterprises,” the official was quoted as saying. The official said when authorities find “irregular practices” they should be examined in a “developmental perspective.”

A series of Chinese businesspeople have been prosecuted or detained for questioning since 2016 about possible offences including fraud, embezzlement and bribery.

On Wednesday, May 30, 2018 a lawyer for the imprisoned founder of China’s biggest privately owned insurance company said he will appeal an 18-year prison sentence on fraud charges. Wu Xiaohui of Anbang Insurance, which owns New York City’s Waldorf Hotel, was convicted of improperly raising billions of dollars from investors and diverting company money to his own use.

The founder of a Shanghai-based company that was buying a stake in Russia’s biggest oil producer, Rosneft, was detained in March, according to news reports. A Chinese-born Canadian businessman disappeared from Hong Kong in early 2017 and news reports say he might have been abducted by mainland police for possible trial.

Zhang was accused of improperly obtaining 31.9 million yuan ($4.9 million) from a government program for a logistics and information management project. Prosecutors said only state-owned companies were eligible and Zhang colluded with a subsidiary of a government enterprise, China Chentong, to obtain the money.

The supreme court said the rules had changed by the time Wumart applied and private companies were eligible.

“It is in accordance with the industrial and development policies of that time,” the court said.

It gave no indication why a lower court that upheld Zhang’s conviction in 2009 failed to notice the rule change that would have freed him.

Zhang stepped down as chairman of Wumart’s parent company after being detained in 2006.

The supreme court also overturned Zhang’s conviction on charges he and other investors improperly used 40 million yuan ($6.1 million) from a customer’s account at an insurance company to trade stocks.

The facts of that case were unclear and “lacked sufficient evidence,” the court said.

Court Allows Video Surveillance Evidence Despite Defence Failing to List Document

Source: Erik Magraken BC Injury and ICBC Claims Blog

Reasons for judgement were released May 30, 2018 by the BC Supreme Court, Vancouver Registry, allowing the introduction of video surveillance evidence despite counsel failing to disclose this evidence on their list of documents.

In today’s case (Karpowicz v. Glessing) the Plaintiff was involved in a collision and sued for damages.  The Defendant “retained a private investigator and, on June 27, 2016, filmed a short video of the plaintiff at the Vancouver International Airport accompanied by his wife and children.”  Plaintiff’s counsel was provided the video ahead of a mediation but the document was never listed on the Defendant’s formal list of documents.  The Plaintiff objected to the video’s introduction at trial but the Court ruled the evidence was admissible as there was a lack of prejudice from the failed disclosure.  In reaching this conclusion Madam Justice MacNaughton provided the following reasons:

[34]         I have concluded that the video evidence should be admitted. While I agree that the defendant had a clear obligation under Rule 7‑1(9) to list the video as a document as soon as it came into his possession, I accept defence counsel’s representation that the failure to list the video was not for a tactical advantage at trial. Counsel frankly acknowledged that it was an oversight on her part, and as soon as the plaintiff raised the issue, the video was listed in the supplementary list of documents. The late listing of the video has not caused the plaintiff prejudice.

[35]         If it had been listed in the summer of 2016, presumably it would have been done so as a privileged document. The plaintiff would have known of its existence, but not its content, as the video was not required to be disclosed until the defendant determined to rely on it at trial. On that determination, the video was disclosed to the plaintiff. The disclosure was in advance of the deadline for disclosure in Rule 12‑5(10).

[36]         The plaintiff has had time to consider the video and to prepare to address it in his evidence at trial. The defendant had the right to investigate the plaintiff’s claims and the video is relevant to the issues the plaintiff has put before the court.

[37]         As to the issue of privacy, the video was taken at Vancouver International Airport at the passenger pickup area. The plaintiff and his family had no reasonable expectation of privacy while at the airport. The video focuses on the plaintiff, and the plaintiff’s spouse and the children are incidental to that focus or in the background of the video. Counsel for the defendant has obscured the faces of the children so that they are not identifiable.

[38]         In all these circumstances, I conclude that the video ought to be admitted.

Six Montrealers facing extradition to the U.S. for alleged fraud

A Pennsylvania woman who is among the alleged victims of a lottery scheme involving six Montreal-area men has testified she lost nearly US$300,000.

The six are facing extradition to the United States to face charges related to the alleged fraud of US$1.35 million.

Court documents provide similar testimony from two other alleged victims in Pennsylvania as well as two from California, and one each from Massachusetts and Oregon. They were all led to believe they had won a Canadian lottery.

The documents allege the Pennsylvania woman was first targeted in November 2011, when a man identifying himself as a Canadian-based attorney told her she had won $80,000 in a lottery in Canada.

But before she could receive the prize, she was allegedly told she had to pay taxes and customs fees totalling $8,000. The fees could be paid through Western Union and/or MoneyGram.

After she wired that amount, an individual who claimed to be a U.S. customs officer allegedly contacted her and said the prize was actually $800,000, meaning additional taxes of more than $88,000.

The court documents allege she was then contacted by another person claiming to be an agent with the Internal Revenue Service. She was told there was an additional $900,000 lottery prize but again had to pay taxes and fees before she could collect. The woman was also provided with lenders to help her pay for the additional fees.

In the end, the American lost about $295,000 _ her life savings _ because of the allegedly fraudulent sweepstakes.

The fraud artists allegedly used prepaid cellphones to call the Americans and then tell them to send money to cover taxes, transfer fees and insurance.

The phones were obtained and listed under fictitious names.

The six accused, who allegedly conspired with one another, range in age from 53 to 72 and were arrested at the request of prosecutors in Pennsylvania.

American authorities allege the group was part of a network that operated out of Montreal from May 2011 through at least October 2013.

The alleged victims never received the winning lottery money they were promised.

The recent arrests came after a three-year inquiry that involved the RCMP and Quebec provincial police.

It was part of a U.S.-Canada initiative known as “Project COLT,” which targeted telemarketers.

RCMP investigators say the accused are to appear in Quebec Superior Court in early June.

$85,000 Non-Pecuniary Assessment for Chronic PTSD and Post Concussive Issues

Erik Magraken: BC Injury and ICBC Claims Blog

Reasons for judgement were published April 3, 2018 by the BC Supreme Court, Vancouver Registry, assessing damages for chronic issues following a concussive injury.

In today’s case (Curtiss v. The Corporation of the District of West Vancouver) the Plaintiff fell into an open meter box on a sidewalk owned by the Defendant.  The Defendant denied liability but was found negligent at trial.  The fall resulted in a concussive injury with post concussive difficulties and PTSD.  The Plaintiff was expected to have lingering symptoms into the future.  In assessing non-pecuniary damages at $85,000 Mr. Justice Marchand provided the following reasons:

[92]         As a result of her fall, Ms. Curtiss suffered cuts, scrapes and/or bruising to various parts of her body, including her forehead, nose, upper lip, hands, lower legs and left inner thigh. She also experienced balance issues, dizziness and headaches.   Ms. Curtiss’ cuts, scrapes and bruises all healed within the first one to three months.  Her throbbing headaches lasted the better part of a year, and she still gets headaches when she experiences high levels of stress. She still has occasional balance problems.

[93]         Ms. Curtiss has received psychological counselling and acupuncture treatments since her fall and her condition has improved over time. She has recently returned to daily walking and working in her garden. Nevertheless, her self-reports, and the reports of those who are close to her, clearly establish that Ms. Curtiss is not the same person she was prior to her fall. She has trouble sleeping. She has become anxious and forgetful. She is less confident and self-sufficient. She is no longer able to multi-task. She is less active, occasionally walks with a cane, looks down during walks and gardens far less.

[94]         Two family physicians were involved in Ms. Curtiss’ post-accident care, Drs. Dean Brown and Brian Brodie. Based on her loss of consciousness, memory loss, headaches, dizziness, imbalance, agitation and anxiety, both diagnosed Ms. Curtiss as having suffered a concussion as a result of her fall. In his April 7, 2017 report, Dr. Brown’s prognosis was that Ms. Curtiss’ symptoms would gradually improve with a full resolution within a year or so. In his September 8, 2017 report, Dr. Brodie’s prognosis was that Ms. Curtiss was highly likely to “go on to suffer some symptoms of post traumatic disorder”.

[95]         Ms. Curtiss also submitted a report dated August 25, 2017 prepared by Registered Psychologist, Dr. William Koch. As a result of Ms. Curtiss’ vigilance to danger when walking or driving, excessive startle response, avoidance of conversations about her fall, disturbed sleep, and anxiety-related concentration deficits, Dr. Koch has concluded it is probable that Ms. Curtiss suffers a “subsyndromal” Posttraumatic Stress Disorder (“PTSD”). Dr. Koch noted a number of positive and negative prognostic indicators in Ms. Curtiss’ case. He concluded that Ms. Curtiss’ prognosis for further improvement is “negative” unless she receives further psychological treatment. Dr. Koch recommended a further 20 hours of therapy, which Ms. Curtiss had started by the time of trial.

[96]         In cross-examination, Dr. Koch agreed with a list of further positive prognostic indicators put to him by counsel for the District. Specifically, Dr. Koch agreed that the following were positive prognostic indicators: Ms. Curtiss was open to treatment; Ms. Curtiss had returned to treatment; Ms. Curtiss reported benefitting from treatment; Ms. Curtiss had returned to daily walking; and Ms. Curtiss would soon no longer be involved in litigation. On the last point, Dr. Koch indicated that while litigation stress may soon stop, “other stressors may pop up.”

[97]         Based on all of the evidence, I accept that Ms. Curtiss’ life has been significantly adversely affected by her fall. Though her cuts, scrapes and bruises healed relatively quickly, her post-concussion symptoms and subsyndromal PTSD have persisted. While I have optimism for further improvement, given the length of time her symptoms have persisted, the efforts she has already put into her recovery and her age, I doubt that Ms. Curtiss will ever fully return to her pre-accident condition…

[109]     The cases cited by counsel support an award of non-pecuniary damages within the range suggested by Ms. Curtiss of $75,000 to $90,000. In my view, an award of $85,000 will adequately compensate Ms. Curtiss for the profound impact her fall has had on her physical and emotional wellbeing. Before her fall, Ms. Curtiss was an exceptionally happy, active and productive 74-year-old woman. The accident, however, caused a significant decline in her performance at work, her level of activity, her confidence in herself, and the joy in her life. As I have stated, in my view, though Ms. Curtiss will continue to make improvements, she will not fully return to her pre-accident condition.

Liberal MP who weathered gun registry fight not worried about new firearms bill

He’s the Liberal MP for a large, rural Ontario riding with lots of gun owners, but Bob Nault says he is not worried about a voter backlash over the government’s new firearms bill.

The Conservatives say the legislation would unfairly target law-abiding hunters and target shooters with fresh measures.

Nault, however, sees nothing in the bill that could stir up the sort of controversy that erupted over the universal long-gun registry in the 1990s – a fight he remembers well.

The latest legislation will have no major impacts on legitimate firearms owners, Nault, 62, said in an interview. “I think this is going to be put to bed fairly quickly.”

Not if the Conservatives have any sway.

Since the bill’s introduction last month, Tory MPs have called the move to tighten controls on the sale and tracking of firearms the creation of a new national long-gun registry.

The bill would require retailers to keep records of firearms inventory and sales for at least 20 years, a measure intended to assist police in investigating gun trafficking and other crimes. It would also require a gun seller to ensure a buyer’s licence is valid prior to the transaction.

“By going to the store level as opposed to the home, the Liberals are trying to bring in the registry by a back door,” Conservative MP Erin O’Toole said in the House of Commons. “In several Parliaments in the past we saw that it did not work, it did not hit crime, it cost hundreds of millions of dollars and it targeted law-abiding people as opposed to lawbreakers.”

The Conservative government dismantled the long-gun registry, a Liberal initiative that mushroomed into a costly computer boondoggle and stoked resentment in the firearms community.

The Liberals are quick to note the new plan to require commercial retailers to keep sales records would revive a measure that existed from 1979 until 1995, when universal registration of guns essentially replaced the store ledgers. Most merchants already record sales for safety and liability reasons and because it affects their insurance, the Liberals say.

As for greater scrutiny of sales, it’s the buyer’s licence, not the gun, that’s being verified, and no information about the firearm is exchanged, they add.

The Conservatives are using the firearms bill as “a wedge issue” to capitalize on the wariness of rural residents, said Nault, who won the northern Ontario riding of Kenora by just 498 votes in the 2015 election.

But he prefers to view the latest federal effort to control firearms as one step on a long path that stretches back to the late 19th century.

Nault, a gun owner whose father taught him to shoot as a youngster, was one of the MPs who provided advice to the government about what the Liberal caucus was hearing in the mid-1990s as Allan Rock, then justice minister, pushed ahead with the long-gun registry.

The current bill is nowhere near as far-reaching, Nault said. As of late last week, he had heard from 45 constituents with concerns about the legislation in his sprawling riding that covers one-third of the province.

Among the reservations: a measure that would restore the authority of RCMP experts to classify firearms without political influence, repealing cabinet’s authority to overrule Mountie determinations, and another that would roll back some automatic authorizations to transport restricted and prohibited firearms, such as handguns and assault weapons.

“As I’ve said to my colleagues, of course we’ll lose some votes in rural Canada, because whenever you talk about firearms, people naturally get upset about it,” Nault said.

But he insisted the bill is “quite balanced” and will have “virtually no impact” on 98 per cent of gun owners.

He stressed the importance of a provision that would expand the scope of background checks on those who want to acquire a gun. Instead of just the five years immediately preceding a licence application, personal history questions would cover a person’s entire lifetime.

“In Canada, owning a firearm is a privilege, not a right,” Nault said.

“Hopefully people will start to see this more as a non-partisan issue.”

California Judge: Coffee needs cancer warnings

A Los Angeles judge has ruled that California law requires coffee companies to carry a cancer warning label.

Superior Court Judge Elihu Berle said in a proposed decision Wednesday, March 28, 2018 that Starbucks and other coffee companies failed to show the threat from a chemical compound produced in the coffee roasting process was insignificant.

A non-profit group had sued coffee roasters, distributors and retailers under a state law that requires warnings on a wide range of chemicals that can cause cancer. One is acrylamide, a carcinogen present in coffee.

The coffee industry had claimed the chemical was present at harmless levels and should be exempt from the law because it results naturally from the cooking process to make the beans flavourful.

Proposed California judicial decisions can be reversed but are reversed rarely.

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