Lawyers Gone Bad

by Philip Slayton

  Articles in Winnipeg newspapers tell another story. On July 28, 2005, the Winnipeg Free Press reported “seventeen Pakistanis trying to emigrate to Canada claim they are out thousands of dollars following a contractual dispute between a Winnipeg Web-based immigration consulting firm and a private immigration agent from Pakistan.”16 The Pakistani agent, a retired Pakistan army colonel, said that he paid webimmigration.com $35,000 on behalf of his seventeen countrymen, but received no service. “People are after my blood,” said the colonel. Chen claims, not surprisingly, that the Pakistani colonel is a con man who uses many aliases and is wanted by the Pakistani police. Later it was reported that, also on July 28, a lawsuit was filed claiming that webimmigration.com received $44,000 from nineteen clients but didn’t deliver services that were promised.17 In August 2005, the RCMP and Winnipeg police confirmed that they were considering launching a formal investigation into webimmigration.com. Chen has described this as “jumping on the band wagon,” and says that there has not been any real police investigation of her immigration business.

  I wrote to Chen, asking if I could come and see her. A lengthy reply arrived almost immediately. “I think it is important that you do get my side of the story,” she wrote. “I have learned that stonewalling only hurts my family, friends, and business interests. I would rather you have my side of the store [sic], which is the ‘truth,’ backed by ‘evidence,’ rather than going on gossip and false statements.”18 In her email, Chen attacked the Law Society of Manitoba and the RCMP, accusing them of unethical and illegal behaviour, and of colluding against her. Two days later, I received another message:19

  All of the newspaper stories were “black propaganda”. The stories were published for the primary purpose of destroying my reputation, and instilling a belief in the community that I was the head of a smuggling drug and immigration ring. What the initial reports did was corrupt and twist the truth, and to amplify the falsehoods to the extend [sic] that they are believed without “evidence”. And, it worked. The RCMP were hoping that these initial false reports would destroy me. I was so young and naive, that I actually believed at the time that saying nothing was noble in character, but it worked to my detriment. How do you prove a negative??? You can’t.

  In November 2005, with Ingrid Chen’s connection to Patrick Armstrong and the Los Bravos motorcycle gang much on my mind, I went to Winnipeg to see her. She asked that we meet at the offices of her lawyer, Gene Zazelenchuk, a sole practitioner. She wrote, “Please understand that we are meeting at my lawyers [sic] office so I can easily provide you with ‘proof’ or ‘evidence,’ not because I have anything to hide and need my lawyer to protect me.”20

  My appointment was for 9 a.m. on a cold and windy Thursday. I walked to Gene Zazelenchuk’s office at the corner of Portage Avenue and Vaughan Street, just by Winnipeg’s old Hudson’s Bay store. Zazelenchuk’s office is small, old-fashioned, and cluttered. His wife is secretary, receptionist, and office manager. Zazelenchuk, in his mid-fifties, is well dressed and articulate. He doesn’t have fax or email. He says that he answers the telephone “sometimes.”

  Chen arrived late. She wore jeans, boots, and a colourful top. “I’m sorry I haven’t talked to you on the telephone, and just used email,” she said. “I don’t like to talk to people on the phone anymore the way I used to, I’ve lost trust, there was the wiretaps, I’ve completely changed.” We talked about the criminal actions that have been brought against her. Chen was excitable, forceful, and combative. Zazelenchuk worked hard to manage and restrain his client.

  “Why are they picking on you?” I asked. “I don’t fit the cookie mould,” said Chen. “I’m Asian, female, young, an easy target. There are lots of racists in Winnipeg. I was born in Taiwan, and they hold that against me. They’ve always said, right from my bail hearing in 1999, that I’m a flight risk, that if I go to Taiwan I’ll never come back. That’s crazy, I have investments here, I have a lot of equity in my house, my parents are here, my nineteen-year-old son lives here. They thought I’d just fall over, but I’m a survivor, I’m not going to be a victim. My parents are behind me. My father says there are evil people in the world, and that’s why I’m in trouble. But I have a lot of stress.”

  “She’s just a kid who’s been beat up bad,” interrupted Zazelenchuk.

  Who’s beating her up? Chen told me that it was the RCMP, the law society, and the Crown, colluding to destroy her. “That is why we are suing for malicious prosecution,” said Chen, referring to her action against RCMP officer Margaret Gregory, now with the Surrey B.C. detachment, and Clyde Bond, a Crown attorney. I asked why anyone would collude in this way. “I told you,” said Chen. “They thought I was an easy target. And they were all after career advancement, this is how those people do it.” Time was up, and I left Gene Zazelenchuk’s office.

  A few days after our meeting I received an email from Ingrid:21

  Sunday I was speeding in my car, and arrested. There was an error on the police computer, and they couldn’t get a copy of my court order until the next day. I was put into the remand center for two days, just to have the Crown consent to my release. But, at least this time I was psychologically prepared to accept the fact.

  And then another, a few days after that:22

  I am not a perfect person, but at least I can look anyone in the eye with pride.

  … What is the worst that they can do to me??? Jail??? I am not afraid of Jail. Been there, done it. Its not that bad. I can survive.

  The worst that they have done to me, is hurt my family, friends, and especially my boyfriend. The damage is already done, and that time lost, can not be repaired.

  Why has Ingrid Chen got into so much trouble, so consistently, starting so early in her career? How is it that a young lawyer, in the first decade of her professional life, has faced four criminal trials, two criminal convictions, civil suits, suspension from the bar, likely disbarment, and numerous police investigations?

  Some things are clear. Ingrid Chen has spectacularly bad judgment. She has the wrong friends. She talks in a foolish way. She leaps into situations that a lawyer should avoid at all costs. She lacks common sense. Some things are less clear. Does Ingrid also lack a sense of the values underpinning the Canadian legal system? Did law school fail to teach her these? It is hard to say. What is missing in Ingrid may be ineffable, unique to her.

  IN MAY 2006, the Law Society of Manitoba finally held a hearing to consider Ingrid Chen’s disbarment. The ponderous official machinery was still functioning. It was almost seven years from Ingrid’s first arrest. The law society hearing lasted ten days. At the end of 2006, Ingrid Chen was still waiting to learn whether she will be disbarred.

  FIVE

  WILD AND CRAZY GUYS

  Simon Rosenfeld and Peter Shoniker

  Crooks hire lawyers. Why shouldn’t they? Crooks, like everyone else, buy and sell houses, get divorces, have contractual disputes, and so on; they need legal services and are entitled to them. But crooks, unlike most people, also commit crimes. Do lawyers sometimes use their special status to help them do so? Do lawyers use the principle of solicitor-client privilege to help launder the proceeds of crime? International organizations think they do. The Canadian government, the RCMP, the Auditor General, and close observers of the scene think they do. Well-known Toronto lawyers Simon Rosenfeld and Peter Shoniker did. How effective is the response of the law, and those who regulate the legal profession, when a lawyer works for the mob?

  ON MARCH 11, 2002, Bill MacDonald, a Colombian drug cartel money man, was having dinner in Miami with Toronto lawyer Simon Rosenfeld. The fifty-fiveyear-old Rosenfeld had practised law since 1974. MacDonald pulled out a U.S. one-dollar bill. “If I give you this,” MacDonald asked Rosenfeld, “do we have solicitor-client privilege?” “Yes,” said Rosenfeld. “Okay,” said MacDonald, and handed over the dollar. With that out of the way, the two men started talking about how Rosenfeld could help launder cocaine money for Colombian drug lords. Unfortunately for Rosenfeld,
“Bill MacDonald” was really Bill Majcher, an undercover RCMP officer working on a joint RCMP/FBI sting called “Bermuda Short.”1 Majcher, a good-looking, middle-aged man who normally wears expensive suits, was once an investment banker, trading Euro-bonds in London.2

  After the Miami meeting, the Rosenfeld sting moved to Toronto. On Friday, May 31, 2002, just before one o’clock in the afternoon, Majcher—wearing a purple checked shirt, black slacks, and a concealed recording device—parked his rented car in front of Rosenfeld’s law office at 14 Prince Arthur Avenue in downtown Toronto. He went in and met Rosenfeld, and then the two men went down the street to have lunch at Opus, an expensive Italian restaurant. “The fresh cut flowers, artistic wine displays and soft lighting, combine to create a beautiful setting,” says a website describing Opus. “The kitchen is noted for perfectly grilled meat, fish and fowl, tantalizing pastas and risottos, adventurous vegetables, and inventive desserts.”3

  Over lunch, full of braggadocio, Rosenfeld told Majcher about trouble he was having with some ex–Russian Army explosives experts, a criminal group he referred to simply as “the Russians.” The Russians, said Rosenfeld, had lost money in a deal with one of his “associates,” and for a while thought that Rosenfeld himself might have been involved in ripping them off. His associate, said Rosenfeld, was going to be “taken out” by the Russians, who would probably blow up the associate’s car or house with him in it.

  The portly Rosenfeld, digging in to a dish of scaloppini, then explained that he was promoting the stock of a company that made a cream guaranteed to reduce stomach size if you rubbed it on the right places. He told Majcher that he could “load him up on company paper at $3 to $4,” paper that could then be sold for $95. By the time Rosenfeld was eating his caramel crunch, the two men were deep in discussion about money that could be made from mortgages, bankruptcies, and receiverships.

  Canada, said Rosenfeld enthusiastically over a latte, was “la-la land,” a dream place for criminal activity, because the police had so few resources. “Sounds good to me,” said Corporal Majcher. “I hope to take advantage of that.” Then Rosenfeld invited Majcher to a private game at a golf club later that summer organized by a strip club owner. There would be two naked women at every hole, said Rosenfeld. “It’s lots of fun!”

  After lunch, the two men went back to 14 Prince Arthur. On Rosenfeld’s desk were jars of cream and bottles of lotion for people with arthritis and wrinkles. Majcher told Rosenfeld that he had $250,000 Canadian of cocaine money that he wanted Rosenfeld to launder. If that went well, they would launder $2 million to $3 million a month. No problem, said Rosenfeld. It was agreed that Rosenfeld would send the laundered money to a Miami bank account three to five days after he got it, and that his fee would be 8 percent. As Majcher left, Rosenfeld gave him samples of the creams and lotions on his desk. With the bottles and jars, Majcher went to an RCMP safe house, briefed colleagues working on the sting, gave them his recording device, and wrote up his notes.

  The following Tuesday morning, June 4, Majcher went to Rosenfeld’s office carrying $250,000 in Canadian bills in a red and black tote bag. He gave the money to Rosenfeld, and they went to the Four Seasons Hotel in Yorkville for breakfast. At breakfast, Majcher told Rosenfeld to send the money to an account in the name of José Garcia at the North Miami branch of Wachovia Bank. Majcher also asked Rosenfeld if he could arrange “muscle.” Yes, said Rosenfeld, he could do that, through the Hells Angels. That evening the two men had drinks and dinner. Rosenfeld bragged about his sexual exploits, his ability to get information on people, how he paid off cops, and the “$2 billion in business that he had available to place.”

  The laundering transaction did not go smoothly. First, there was a delay in transmission of funds to Miami. Rosenfeld told Majcher it was because the money was in Canadian dollars; his “system,” said Rosenfeld, had been set up to launder U.S. dollars. Then, on Thursday, June 13, Rosenfeld said his “people” had found counterfeit bills in the $250,000. Majcher expressed suspicion and concern, and Rosenfeld quickly said it was okay, that $250,000 converted into U.S. dollars, with his fees deducted, would be sent to José Garcia’s account anyway. Majcher expressed satisfaction and went to Miami to wait for the money.

  It was a long wait. Nothing came on Monday. Nothing came on Tuesday. Nothing came on Wednesday. Majcher repeatedly telephoned Rosenfeld and asked, “Where’s my money?” On Thursday, $71,000 in U.S. dollars arrived. Nothing more came. Majcher headed back to Toronto and checked into the Hyatt Hotel at the corner of Avenue Road and Bloor Street.

  On Tuesday afternoon, June 25, Rosenfeld came to Majcher’s room at the Hyatt. A second tranche had now arrived in the Miami account, Majcher told Rosenfeld, but it was only $30,000. Rosenfeld assured Majcher that the balance would arrive the next day. A long and rambling conversation ensued about money-laundering techniques in general; pump-and-dump stock schemes; “technicians” that Rosenfeld employed who would kill people if necessary; a recent visit to Rosenfeld from the Russians, who brought him strawberries and warned him that in the next couple of weeks they were going to “blow up” Rosenfeld’s associate; Rosenfeld’s house, and the waterfall his wife wanted put in the backyard; and the possibility of warehousing cocaine in eastern Canada. Then Rosenfeld and Majcher went for dinner, back to Opus on Prince Arthur. A day or two afterward, the rest of the money arrived in Miami, and all was well.

  The following week, at the end of the afternoon on Thursday, July 4, Majcher visited Rosenfeld in his office to set up a second money-laundering transaction. As they discussed the details of the deal, Rosenfeld said that the situation between his associate and the Russians had become very serious. The Russians had just sprayed his associate’s house with machine gun fire. Shortly, said Rosenfeld, they would be blowing up his associate’s house or perhaps his car.

  The next morning Rosenfeld came to Majcher’s room at the Hyatt. A few minutes after he arrived, two undercover RCMP officers came in with a sports bag containing $200,000 in U.S. dollars and $800,000 in Canadian bills. By prearrangement, Majcher pretended to be angry when he saw the Canadian currency, screaming that the money was supposed to be in U.S. dollars. Rosenfeld told Majcher that the quality of Majcher’s people was not very good, and that his own people were very good, so that he didn’t encounter the type of problems Majcher was experiencing. Majcher and Rosenfeld started counting the U.S. dollars. The money-counting machine kept jamming. Rosenfeld said he “was no good with this as he had other people count all his cash.” With the money finally counted, Rosenfeld left.

  The proceeds of the second money-laundering transaction arrived slowly, in several tranches, in José Garcia’s Miami account. At a July 17 meeting in his office, Rosenfeld made the by now familiar promise that Majcher would get the rest of the money “today or tomorrow.” Majcher replied that “there are threads dangling” and that he didn’t like it and didn’t want to do business this way. The two men then discussed further money-laundering opportunities, importing cocaine into Canada, and Rosenfeld’s associate’s continuing difficulties with the Russians. Then Rosenfeld, not feeling well, went home. The following week, on July 24, Majcher, now in Miami, pressed Rosenfeld hard for $29,000 from the second transaction that he had still not received. It arrived later that day.

  Rosenfeld and Majcher continued to talk frequently on the telephone. On Wednesday, July 31, they met at the Hyatt in Toronto to discuss possible schemes. Rosenfeld boasted about his prowess in making money and said that he had been making between $1 million and $3 million a year for many years. Majcher said he wanted to launder a million dollars in the next week or two. The two talked about the possibility of laundering as much as $10 million a month and how that might be done. Rosenfeld said that in a week or two he was flying to Switzerland to meet a Gibraltar banker who could be helpful.

  Majcher went back to Miami. Rosenfeld never went to Switzerland. He and Rosenfeld talked several times in the first few days of August. They arranged to meet at Rosenf
eld’s office on the afternoon of August 14 so that Majcher could deliver more money for laundering. On the day, Rosenfeld was waiting for Majcher. Majcher didn’t arrive at the appointed time. A police team did. Rosenfeld was arrested. That same day, in a coordinated effort across the country, fifty-eight other Bermuda Short sting targets were also arrested. Pursuant to a search warrant, fifteen boxes of documents were seized from Rosenfeld’s office, and one box of documents from his home.4 Rosenfeld was charged with money-laundering and possession of the proceeds of crime.

  August 2002 was altogether not a good month for Rosenfeld. The day before he was arrested, an Ontario judge granted him a conditional discharge from bankruptcy, but on unusually onerous terms—actual payment to the bankruptcy trustee (as opposed to simply agreement to pay) of $250,000.5 Rosenfeld’s two principal creditors, the U.S. Securities and Exchange Commission (SEC) and his former partner, Michael Rinaldo, opposed discharge.

  The SEC was a Rosenfeld creditor because of a 2001 US$2.8 million judgment against him for securities law violations (Rosenfeld did not defend the action).6 A New York court found that Rosenfeld had orchestrated a “pump and dump” scheme in the early nineties involving the common stock of a company called Synpro Environmental Services. He released misleading information about Synpro’s assets to “pump” up its value. Then he “dumped” millions of personally held unregistered shares on unsuspecting investors through a complex network of offshore corporations and brokerage accounts. He also made kickbacks to brokers and stock promoters. The SEC investigation disclosed that Rosenfeld maintained bank accounts in Switzerland, Italy, and the Caribbean.

  Michael Rinaldo, Rosenfeld’s law partner until 1990, was a Rosenfeld creditor because of Rosenfeld’s breach of an agreement settling Rinaldo’s suit against him for fraud and breach of fiduciary duty. The Rinaldo action, begun in 1991, was settled in 1997. The minutes of settlement required Rosenfeld to make a series of payments to Rinaldo. Rosenfeld defaulted on the first payment.