McNAUGHTON

Interim Decision #2663

MATTER OF MCNATJORTONT

In Deportation Proceedings
A-19811498

Decided by Board July 26, 1978
(1) A conviction for conspiring to affect the public market in securities with intent to
defraud in violation of section 338(2) of the Canadian Criminal Code, a section covering
substantially similar conduct to that made criminal in the United States by the Se-
curities Act of 1933 and the Securities Exchange Act of 1934, is a conviction for a crime
involving moral turpitude.
(2) Once guilt has been adjudicated by foreign court and the adjudication has not been
overturned the Board of Immigration Appeals will not retry guilt.
(3) A foreign conviction, to be the bathe fora finding of inadmissibility, must be for oornitiot
which is deemed criminal by United States standards.
(4) Once it has been determined that a foreign conviction is for conduct vrhieh is deemed
criminal in the United States, prevailing United States standards will be applied to
determine whether the erhue luvulves moral turpitude.
(5) Where the conviction is one for conspiracy, moral turpitude is present if the substan-
tive offense to be committed pursuant to the conspiracy involves moral turpitude.
(6) A crime, a necessary element of which is intent to defraud the investing public,
involves moral turpitude, and the motivation for the crime does not bear on the nature
of the offense.
CHARGE:
Order: Act of 1952—Section 241(a)(1) [8 U.S.C. 1251(a)(1)] and 212()(9) 18 U.S. C.
1182(a)(9)]—Excludable at time of entry—convicted of a crime
involving moral turpitude
ON BEHALF OF RESPONDENT: Stephen Tornay, Esquire
1831 Fourth Avenue
San Diego, California 92101
RY: Milhollan, Chairman; Maniatis, Appleman, Maguire, and Farb, Board Members

This is an appeal from the immigration judge's decision of October 13,
1S77, in which he found the respondent deportable as charged. The
appeal will be dismissed.
The record relates to a widowed male alien, a native and citizen of the
united Kingdom, who was last admitted to the United States on June 5,
1977, as a nonimmigrant visitor. He is charged with deportability under

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section 241(a)(1) of the Immigration and Nationality Act, 8 U.S.C.
1251(a)(1), on the basis that he was excludable at the time of entry under
section 212(a)(9) of the Immigration and Nationality Act, 8 U.S.C.
1182(a)(9), because of the conviction of a crime involving moral tur-
pitude.
A copy of the respondent's record of conviction is in our record. It
indicates that the Quebec Court of Sessions for the District of Montreal
found him guilty of conspiracy to commit a violation of section 338(2) of
the Canadian Criminal Code, which provides as follows:
Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a
false pretense within the meaning of this Act, with intent to defraud, affects the public
market price of stocks, shares, merchandise car anything that is offered for sale to the
public, is guilty of an indictable offense and is liable to imprisonment for ten years.

The finding of guilt was affirmed by - the Court of Appeals for the
Province of Quebec, but that court substantially reduced the respon-
dent's sentence.
Opinions were written in the respondent's case by each of the three
members of the Quebec Court of Appeals, as well as by the trial judge.
Copies of these opinions are before us. We learn from them that the
respondent's conviction arose out of his participation in a mining stock
deal. He agreed with certain other investors to operate what is known in
Quebec as a "box." An explanation of the use of the "box" may be found
in the following excerpt from the opinion of Judge Turgeon of the Court
of Appeals:
At the period which concerns us, let's say 1571, it was common practice in Montreal at
the Canadian Stock Exchange, for the promotion of new mining or industrial stock, to
have a means for assuring a well-regulated market in terms of its quoted worth at the
Exchange, for the purpose of preventing disorderly and excessive fluctuations to the
low or the high side. For this purpose, the promoters used, what was convenient to call
in the brokerage, a "box" which T will translate es "hoite" (box), for lack of a better
word. For this purpose, the operator of the box, who could be a broker or a mere
individual, had to have at his disposal a certai3l number of the company's shares and a
certain amount of money. When the price of the stock, or rather of the transferable
security, rose in an excessive manner due to a large demand, the operator of the box
would sell part of the shares he had in his possession on the market by means of the
Exchange. Conversely, when the quoted price of the shares fell in an unwarranted
manner because of too large a number of shares offered for sale, the operator of the box
-would buy some of these shares at the Exchange in order to stabilize the market. One
should note here that, in terms of the common usage of the Exchange, the box should
xkot serve to enrich the person or people who op crate it: its role was essentially to assure
"au orderly market". This manner of operation was at least tolerated by the Canadian
Ztock Exchange which asked of its promoters of securities that they run an orderly
inarket for their shares.
It was found that the "box" involved in the respondent's case was
used to enrich its operators, rather than to assure an orderly market.
The respondent's co-conspirators, it was found, manipulated the "box"

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for their own profit, with his knowledge, although the respondent did
not profit personally from the operation of the "box."
During the criminal proceedings the respondent maintained his inno-
cence on the basis that he had had no knowledge that the "box" was
being operated other than to stabilize the market. However, the trial
judge and the Court of Appeals found that he must have known the
"box" was actually being operated to enrich some of its operators.
Alternatively, he argued that operation of the "box" for the profit of
its operators was not a violation of the Canadian statute, but was a
permissible practice. This defense likewise was rejected. Despite the
absence of precedent on the point, the Canadian courts found that the
practice was a violation of the law, and that the respondent should have
known it to be.
The respondent makes three arguments as to why the conviction
should not form the basis for his deportation. First, he argues that he
was not guilty of the offense of which he was convicted. Second, he
argues that the conduct which formed the basis of his conviction in
Canada would not constitute a criminal offense in the United States.
Third, he argues that the crime of which he was convicted in Canada is
not a crime of moral turpitude, a necessary element of the ground of
deportability with which he is charged.
As to the respondent's guilt or innocence of the offense of which he
was convicted, his guilt has been adjudicated by the courts in Canada
with criminal jurisdiction. It is not our place to retry that issue. Brice v.
Pickett, 515 F.2d 153 (9 Cir. 1975); Mytitts v. Uhl, 210 F. 860 (2 Cir.
1914); Matter of Fortis, 14 I. & N. Dec. 576 (BIA 1974); Matter of
Sirhan, 13 I. & N. Dec. 592, 594 (BIA 1970). The respondent must
address any attack on the merits of the conviction to the courts with
criminal jurisdiction. The respondent advises that he has uncovered
evidence that testimony against him at his trial was perjured, and that
he has requested an investigation by the Quebec authorities. To date,
however, so far as we are aware, the respondent's conviction remains in
farce.
The respondent next argues that his conviction was for conduct which
would not constitute a crime in the United States. A description of the
eonduet found criminal is provided in the decisions of the trial and
appellate judges. It was found that the "box," through the use of dummy
corporations controlled by its operators, made sales to itself which
appeared on the Montreal Exchange as arm's-length transactions. These
sales were made when the price of the stock was increasing. Often the
sales by the "box" to itself were the last purchases of the day, at a price
higher than the next to last sale for the day. These sales had the effect of
creating an appearance that the price was rising. The trial court con-
cluded that: "the box's sole aim was profit to the operators of the box

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and to create an artificial volume of shares bought and sold on the
market." This manipulation of the "box" was contrary to the tolerated
use of the "box" for the promotion, of an orderly market.
It was noted in the decisions that the respondent's participation in the
"box" was limited. The actual manipulations were done by the respon-
dent's co-conspirators, and as stated above, the respondent did not
profit personally. However, it was found that the respondent had
knowledge of the way in which the "box" was being operated inasmuch
as he had financial control of one of the companies through which the
"box" operated, because he was kept informed of all the transactions
involved, and because he must have noticed that the value of the shares
rose unceasingly for a certain period. The respondent was convicted on
the basis of the finding that he possessed knowledge of the operations of
the "box." His motives were described as arising from a desire to please
one of the investors, a Mr. Eckersley, who was president of a charitable
foundation which distributed funds for the purpose of medical research.
The respondent, who was himself president of a cancer research founda-
tion, hoped to receive generous gifts from the latter's foundation for the
two foundations with which the respondent was associated. (Opinion of
Judge Turgeon, Court of Appeals of Quebec, pp. 14, 18.)
The respondent is correct in his argument that when a foreign convic-
tion is the basis for a finding of inadmissibility, the conviction must be
far conduct which is deemed criminal by United States standards. It is a
necessary element that the act underlying the conviction be something
forbidden by United States law, 37 Op. Att'y Gen. 293 (1933).
Counsel cites the case of United States v. Brown, 5 F. Supp. 81 (S. D.
N.Y. 1933) for the proposition that identical conduct in the United
States would not be considered a crime.' The case actually stands for the
contrary proposition. The United States securities laws contain two
offenses which bear substantial similarity to the Canadian statute in-
volved. Under section 10(b) of the Securities Exchange Act of 1934, 15
78j(b):
It shall be unlawful for any person, directly or indirectly, by the use of any means or
instrumentality of interstate commerce or of the mails, or of any facility of any national
securities exchange ... to use or employ, in connection with the purchase or sale of any
security registered on a national securities exchange or any security not so registered,
any manipulative or deceptive device or contrivance in contravention of such rules and
regulations as the Commission may prescribe as necessary or appropriate in the public
interest or for the protection of investors.

Under section 17(a) of the Securities Act of 1933, 15 U.S.C. 77q(a):
It shall be unlawful for any person in the offer or sale of any securities by the use of

' We could not And In the cited decision the language which is quoted in the brief as a
gluotation from that case.

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any means or instruments of transportation or communication in interstate commerce or
by the use of the mails, directly or indirectly—
(1) to employ any device, scheme, or artifice to defraud. . .
A violation of 15 U.S.C. 78j(b) was found by the Supreme Court in a
case in which a corporation's assets were used to acquire shares of its
Own stock. Supt. of 'mu:rouse of New York v. Bankers Life & Cas. Co. ,
404 U.S. 6 (1971). In Securities and Exchange Com'n, v. Commonwealth
Sec., Inc. , 410 F. Supp. 1002 (S.D. N.Y. 1976), the District Courtfor the
Southern District of New York found a violation of both of the above
sections because of self dealing. In the latter case, the defendants
misused their dominant market position to manipulate trading and in-
flate the price of certain securities artificially for their own gain. The
following statement appears in the decision:
In a free and open public market, it is the cconpeting judgments of numerous buyers
and sellers at an auction which establishes the fair price of a security. When individuals,
occupying a dominant market position, undertake a scheme to distort the price of a
security for their own gain, they violate the securities law by perpetrating a fraud on all
public investors.
The conduct discussed in Securities and Exchange Cam.'n, v. Com-
monwealth Sec., Inc., supra, appears to be very similar in type to the
conduct for which the respondent was convicted. Like the defendants in
Securities and Exchange Com'n v. Commonwealth Sec., Inc. , supra, he
was in a dominant market position, and he was involved in a scheme to
distort the price of securities through rigged purchases by controlled
accounts. Thus, it appears that the conduct of which the respondent was
convicted would constitute a criminal violation in the United States.
Therefore, judged by United States standards, the Canadian conviction
is for conduct which is prohibited in the United States.
Having established that the conduct would be adjudged criminal , by
our standards, however, is not the end of our inquiry. We are left with
the question of determining whether the crime involved moral tur-
pitude. We look, as counsel urges, to prevailing United States stan-
dards in making this determination. 39 Op. Att'y Gen. 95, 96 (1937j; 39
Op. Att'y Gen. 215, 220 (1938); 37 Op. Att'y Gen. 293 (1933), supra.;
Matter of P—, 6 I. & N. Dec. 400, 403 (BIA 1954); Matter of P—, 3 I. &
N. Dec. 56 (CO 1947, BIA 1948). The Canadian statute involved, 2 and
the record of conviction serve as a guide in this inquiry. The Canadian
statute has been quoted above. From the record of conviction we have
2 Here the respondent was convicted of the crime of conspiracy. Whether a conspiracy
involves moral turpitude depends upon whether the offense to be committed pursuant to
the conspiracy involves moral turpitude, Matter of P—, 3 I. & N. Dee. 56 (CO 1947, BIA
1948). Conspiracy to commit an offense does not involve moral turpitude unless the
substantive offense charged therein involves moral turpitude, Mailer of G--. 7 I. &
Dec. 114, 115 (BIA 1956); Hirsch v. INS, 308 F.2d 562 (9 Cir. 1962).

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the verdict and sentencing opinions by the trial court and the Quebec
Court of Appeals. '
The specific conduct which was found to be criminal in the respon-
dent's case was the manipulation of the "box" in such a way as to give
the appearance to the public that bona fide sales of the stock were being
made at higher prices than was actually the case. This had the effect of
artificially raising the price of the stock for the benefit of the operators
of the "box," and to the detriment of the investing public. As described
above in the quotation from Securities and Exchange Com'n v. Com-
monwealth Sec., Inc., supra, a violation of the securities law hi this
manner is deemed a fraud on the public.
Fraud has, as a general rule, been held to involve moral turpitude,
Jordan v. DeGeorge, 341 U.S. 223 (1951) (defrauding the United States
of taxes on distilled spirits); Mercer v. Lance, 96 F.2d 122 (10 Cir. 1938)
(defrauding a person of a large sum of money); U.S. ex rel. Berlandi v.
Reimer, 30 F. Supp. 767 (S.D. N.Y. 1939), affd 113 F.2d 429 (2 Cir.
1940) (defrauding the United States of taxes on distilled spirits); U.S. ex
rel. Amato v. Commissioner of Immigration Ellis Island, New York
Harbor, 18 F. Supp. 480 (S.D. N.Y. 1937) (petty larceny); U.S`_ ex rel,
Partuda v. Day, 16 F.2d 328 (S.D. N.Y. 1926) (issuing of checks without
sufficient funds, with intent to defraud); Ponzi v. Ward, 7 F. Supp. 736
(D. Mass. 1934) (use of the mails to defraud); Matter of Martinez,
Interim DeeisiOn 2611 (MA 1977) (passing counterfeit money); Matter of
P--L, 3 I. & N. Dec. 56 (CO 1947, BIA 1948) (obtaining money by false
pretenses); Matter of F— , 2 I. & N. Dee. '754 (CO 1947, BIA 1948)
(defrauding government of customs duties).
From these cases it can be seen that whenever a crime has involved
intent to defraud, it has been found to involve moral turpitude. The
crime of which the respondent was convicted included "intent to de-
fraud" as an element necessary for conviction. The fraud was committed
against the investing public as a whole. The number of potential victims,
therefore, was very large.
Moral turpitude, which is a vague term, has been described as amr-
thing done contrary to justice, honesty, principle, or good morals; con-
duct contrary to the accepted and customary rule of right and duty owed
between man and man, either one's fellowman or society in general, 37
Op. Att'y Gen., supra, Matter of P—, 6 I. & N. Dec. 400 at 403-
Deceptive practices engaged in to affect the public market price of
stocks or shares at the expense of the investing public certainly violates
the customary rule of right and duty owed between man and man in
relation to society in general. Intent to defraud the investing public,
which is an entire segment of society, is at least as heinous as intent to
deraud an individual or the Government (who were the victims of the
e ases involving fraud listed above).

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A purpose common to the securities acts was the goal of substituting
for the philosophy of caveat emptor a level of business practices more
consonant with what was believed to be morally acceptable, SEC v.
Capital Gains Research Bureau, 375 U.S. 180, 194 (1963). It was felt
that public policy could no longer tolerate certain practices. The fact
that the criminal prohibition of the practices is fairly recent in origin
does not detract from the inherent immorality of the acts. As stated in
Rudolph, v. United States, 6 F.2d 487 (D.C. Cir. 1925) (and quoted with
approval in 39 Op. Att'y Gen. 215, supra, at 221):
Many things which were not considered criminal in the past have, with the advance-
ment of civilization, been declared such by statute; and the commission of the offense if
it involves the violation of a rule of public policy and morals, is such an act as may
involve moral turpitude.

We are not unaware of the sympathetic aspects of the respondent's
case, which prompted the Quebec Appeals Court to reduce his sentence.
The respondent's motivation, naivete, and ignorance of the law, how-
ever, do not bear on the nature of the crime itself, which must be the
test of whether it involves moral turpitude.
The Supreme Court observed in Jordan v. DeGeorge, supra, that in
every deportation ease where fraud has been proved, Federal courts
have held that the crime at issue involved moral turpitude. After ob-
serving:
f I)t can be concluded that fraud has consistently been regarded as such a contaminat-
ing component in any crime that American courts have without exception, included such
crimes within the scope of moral turpitude,

the Court found the crime of conspiring to defraud the United States to
be a crime involving moral turpitude. We see no reason to depart from
the direction there laid down. We find the crime of conspiring to defraud
the investing public to be a crime involving moral turpitude.
ORDER: The appeal is dismissed..

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