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.
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."