In 1996 and 1997, I participated in the preliminary hearing for what would turn out to be Canada's largest tax fraud ever prosecuted. The courtroom was awash in paper. The case involved 400 bankers boxes of seized documentary evidence, six seized computer hard drives, hundreds of seized diskettes, various seized backup tapes, 3,000 income tax returns, taxpayer representations, and investigation work papers.

Two Toronto businessmen and a Swiss national, who was arrested in Florida and extradited to Canada, were charged with two counts of defrauding the public of tax revenues by making false partnership loss claims of $118 million, and defrauding Canadian investors of $22 million in 36 limited partnerships. They were also charged with producing false documents to Revenue Canada and to investors to whom they promised part ownership in 36 luxurious 80-foot yachts. In reality, only two yachts existed. The accused used two Swiss shell companies, which purported to supply services and financing for the operation but, in reality, only provided false invoices, loan statements, and other documentation.

At the time, I was a complex case manager in the Toronto Centre Tax Office's Investigation Division; my job was to assist in presenting the mountain of evidence in court. The daunting task centered around maintaining 12 sets of 36 volumes for the judge, the witnesses, the defense and Crown (the federal prosecutor) lawyers, the court reporters, and all the administrators. Handling this much paper was too cumbersome and expensive.

In 1995, we had acquired a state-of-the-art imaging system to "digitize" documents. The system not only provided us with a less costly method of disclosure than paper but its search engine also gave us a powerful analytical investigative tool. But we still didn't have an effective method to present the digitized evidence before a judge and jury.

At the time there hadn't been any electronic jury trials, which we could use as examples. However, we were able to find the necessary system components from local vendors. In 1999, with the support of the Province of Ontario and Revenue Canada, the first electronic courtroom in Canada became a reality. To prepare for the case, we electronically scanned every piece of evidence and stored the data on 45 CD-ROMs. Each set of compact discs contained 25 gigabytes of data, which is equivalent to 542,000 single pages or 114,000 documents! Next, we had Courtroom 6-2 of the Ontario Court of Justice in Toronto specially wired to accommodate 18 computer screens, which could flash evidence within seconds to the jury box, the judge, the Crown and defense counsels, the witness box, the court reporters - even the accused in the prisoners' dock and the courtroom audience in the public seating area. The jury box had six 15-inch, flat-panel monitors - one monitor for each two jurors. (Note: A construction crew had to install the underground wiring and juror chairs were replaced because the original ones weren't high enough for the jurors to see past the monitors.) The counsels' podium included a monitor to refer to when addressing the judge and jury or questioning the witnesses. And lastly, at the fraud examiner's station, we installed a computer that could search the entire evidence database for documents during court proceedings.

A "broadcast" computer (a 450-megahertz unit with 100 megabytes of RAM and a 50-gigabyte hard drive) was at the heart of the system. From this computer, an operator (a member of our investigations staff, trained by our in-house computer evidence recovery specialists) could search for and transfer images to all the computer screens in the courtroom. The broadcast computer had special on/off switches to control which monitors displayed each piece of evidence. For instance, to avoid the jury being shown a document that hadn't been proven in court, the operator first could send the image to counsel, and then await their instruction before displaying it on the monitors in the jury box.
All the digitized evidence was saved to the hard drive of the broadcast computer so images could be called up in seconds. Each image was electronically "tagged" with court exhibit numbers, which appeared in a pop-up window on the screen. Each image had a unique nine-digit number in the upper right-hand corner of each page so duplicate images could be distinguished easily. The first three digits indicated a box number in which that court exhibit was located and the remaining six numbers indicated the location of that exhibit in the box.

The operator also had a special overhead projector to display documents that hadn't been scanned electronically. Despite the marvels of electronic wizardry, we as fraud examiners and prosecuting attorneys felt that there was still a place for original documents. In a fraud trial, showing jurors the actual "cut and paste" falsified documents created by the accused obviously has more persuasive impact than a document on a computer screen.

With the evidence scanned and the courtroom wired, we were ready to go. During the next six months of defense pre-trial motions before a judge and an eight-month trial before a jury, thousands of documents were flashed electronically across the courtroom screens. It was Canada's first attempt at "paperless justice" before a jury and garnered plenty of interest from the public and legal communities.

Initially, criminal disclosure of all evidence was made to the counsel of the two accused men via CD-ROMs. A third accused man was later arrested. Because all the evidence had been electronically scanned, we were able to provide the counsel of the third accused man full disclosure of all 400 boxes of evidence on CDs within less than a week. Our only cost was copying the data onto the CDs. This method of digital disclosure saved us substantial time and money compared to providing disclosure on paper.

With the aid of the computer monitors, the lawyers could zoom in on a particular paragraph of an evidential document for the jury's review. It was an effective way of conveying complex issues, and it allowed the counsels to spend more time on their main talking points. They didn't have to worry about locating and dispersing documents; the broadcast computer operator did this electronically.

As the chief fraud examiner during the trial, I conducted electronic word searches on at least 100 potential Crown and defense witnesses. These searches resulted in a more expeditious, exhaustive and comprehensive analysis than would have been possible sifting through the evidence manually. As a result, I was able to assist the Crown in doing a much more effective examination of its own witnesses and cross-examination of the defense witnesses. I could search any word, any group of words, or any word within proximity to another word and get instant results. I also could use "fuzzy" logic and define degrees of error in my searches. Many of the searches I was able to conduct within minutes would have required a legion of fraud examiners working around the clock had they been done manually. At one point, I had to find all documents from Switzerland that contained a specific fax number. Within seconds, I had a list of the documents for my analysis. (An appendix from this search became "key" Crown evidence at trial.)
The electronic evidence database also proved beneficial during trial preparation. Prior to electronic imaging, assembling materials for a witness interview in a voluminous case often was a hit-or-miss undertaking that relied heavily on the memories of the witnesses, fraud examiners and attorneys. Having access to all the evidence in a searchable format - even when traveling - was invaluable. For instance, while I was in England conducting an interview, a witness wasn't able to recall a particular name. Using the search engine, I was able to refresh the memory of the witness by showing him documents reflecting the name changes. As a result, I obtained a more thorough and useful interview.

The ability to access relevant documents instantly during trial preparation, witness interviews and court proceedings proved to be indispensable; it provided a high degree of confidence that the manual paper system couldn't deliver.

On Dec. 9, 1999, the jury found the two Toronto tax shelter promoters guilty for their roles in a $118 million tax fraud. On Feb. 15, 2000, the main promoter was sentenced to 10 years and fined $1 million, while his associate received a seven-year sentence. The sentences imposed were the longest in Canadian taxation history. (The third accomplice pleaded guilty at the preliminary hearing and was sentenced to two years in prison including time served in a Florida jail. He had agreed to testify as a government witness against the other two accused at the preliminary and the trial.)

While the trial lasted 14 months, we felt that it would have been much longer if the documents hadn't been electronically stored. Crown lawyers were able to more effectively present the evidence and they were more thoroughly prepared to interview and cross-examine witnesses. The preparation that was done in one night could have taken a month of hard work if our only resources were boxes upon boxes of paper documents.

Looking beyond the trial, because of the electronic courtroom, we now have computerized records of all evidence exhibits if criminal and/or civil appeals arise in the future. In the end, everyone involved in the case agreed that electronic courtrooms are the way of the future and certainly the way to go in voluminously documented cases. The doors of this electronic courtroom remain open. Perhaps more fraudsters will find themselves facing a courtroom monitor and a jury in the future.

James W. Davies, CFE, CGA, CFI, an investigator with more than 25 years of experience, is an investigations team leader at the Toronto Centre Tax Services Office of Canada Customs and Revenue Agency. For nine years, he was the complex case manager of the above tax fraud investigation until its successful conclusion in 2000. His e-mail address is: Jim.Davies@sympatico.ca. (Davies thanks Ron Allen, CFE, CMA, CFI, for his assistance in writing this article.) 

High-tech Courtrooms may be New Wave Internationally for Everyday Trials 

Beginning with the end of the last decade, numerous courtrooms throughout the world are bring retrofitted for the latest technology to make trials more efficient and help unclog justice systems' pipelines.
The voluminous paperwork of several recent high-profile trials - Microsoft anti-trust, the U.S. embassies bombing, Whitewater, Bre-X, the Pan Am Flight 103 bombing over Lockerbie, among others - was digitized and some of these cases presented to jurors, judges, and counsel on high-resolution monitors. But how soon will the technology be incorporated into courts systems for routine trials?

The worldwide interest shown in The College of William and Mary's showplace Courtroom 21, a joint project with the National Center for State Courts, might be some indication of international courtrooms in the near future. Fred Lederer, project director and chancellor professor of law at William & Mary, said in an interview with The White Paper, that Courtroom 21 probably has received visits from "almost every country except for the Vatican, Liechtenstein, and Malta!" Speaking quickly in-between giving separate tours to 25 Romanian judges and Delaware court officials, Lederer said there are 300 to 500 significant electronic courtroom facilities in the U.S. and Australia but figures are uncertain because there is no one information clearinghouse on high-tech courts. One recent news report said the United Kingdom government is determined to electronically outfit all of its courtrooms by 2008.

William & Mary's McGlothlin Moot Courtroom, the hub of the Courtroom 21 project, is equipped with computer monitor displays for participants, a 40-inch monitor located behind the bench for remote judicial appearances and a 50-inch plasma display behind the witness stand for evidence and remote witness appearances. William & Mary bills Courtroom 21 as "the most technologically advanced courtroom in the world."

Shortly after the courtroom's 1999 renovation, the college demonstrated its capabilities for CBS Evening News, according to W&M News, a publication of the college.

During the demonstration, The Honorable Robert Jones, United States District Judge for the District of Oregon, presided over a mock civil trial from Portland but appeared life-size in the college courtroom in Williamsburg, V.A., on the large monitor behind the bench.
The witness appeared remotely from the Barker Courtroom of the Ninth Judicial Circuit in Orlando, Fla. As counsel examined the witness about the air crash that was the center of the case, computer animation depicted the flight's last minutes on the LCD monitors in front of the jurors.

"Today's innovative broad bandwidth telecommunications makes it clear that tomorrow's trials won't need all their participants in the same place," said Lederer, in the college newspaper article. "To cut costs and provide increased flexibility and ease for the public, our courtrooms increasingly will become information hubs in which evidence and participants will appear from elsewhere in the world."