Lobster dealer sentenced to 5 years in prison for large fraud

A 58-year-old lobster dealer with a long and infamous past in southwest Nova Scotia has been handed five years in prison for defrauding a fisheries company of what the prosecutor in the case says was more than a million dollars.

Terry Banks, a Brooklyn, N.S., man with a prior record for large-scale fraud, was sentenced Wednesday by Nova Scotia Supreme Court Justice Pierre Muise, in a case that reverberated in the lucrative lobster industry when charges were first laid in 2017.

Crown prosecutor Rick Miller said outside the Halifax courtroom that lobster is a top Nova Scotia export and the industry deals in multi-million dollar transactions, but much of it still relies on trust, honesty and handshake deals to do business.

"When you allow someone like Terry Banks to get into this industry and take advantage of that, then there's a real detriment, because people go out of business, people lose their property, people lose their homes, their boats and everything," he said.

Muise convicted Banks in January following a trial. The judge said Wednesday that Banks has not shown any remorse, and he noted other convictions, including a 2008 case where Banks was imprisoned for defrauding a local bank of $2.5 million, money that still hasn't been repaid.

The animal rights group says lobsters' living conditions in grocery stores are unacceptable.
A holding tank at Independent Fisheries in Little Harbour, N.S., is shown in 2017. (Richard Cuthbertson/CBC)

This week's case relates to a company near Shelburne, N.S., called Independent Fisheries. The court heard testimony during trial that one of the owners had forbidden any sales to Banks, as he had stiffed Independent the year before.

During the 2014-2015 season, Independent began selling lobster to D. Light Seafoods International, a company owned by a Maine businessman with a good reputation.

But D. Light Seafoods was being run by Wayne Banks, Terry Banks's older brother, and some of the shipments were being diverted to Terry Banks's facility. Independent eventually realized it was out well over a million dollars for lobster that had been shipped out, but which had not been paid for.

Independent says it lost well over a million dollars in the fraud. (Richard Cuthbertson/CBC)
Independent says it lost well over a million dollars in the fraud. (Richard Cuthbertson/CBC)

Some of the evidence in the case came from Chris Malone, an Independent shareholder who handled sales. He was initially charged, but those were dropped and he testified for the prosecution.

Miller, the prosecutor, said outside the court that Malone testified he learned some of the lobster was being sent to Terry Banks, but was assured by Wayne Banks that D. Light would pay for it.

Michael Power, Terry Banks's defence lawyer, said in court that Malone was in fact the "kingpin" of the scheme, and pointed to a statement his client made to police claiming Malone was "skimming" some of the money.

He argued his client should not be sent to prison, and should instead receive a conditional sentence or a suspended sentence.

"We're dealing with lobster," Power told the court. "He didn't kill anybody, he didn't beat anybody up,"

Miller pegged the losses to Independent at $1.3 million, while the defence claimed it was much smaller and said Independent's books were unreliable. Muise concluded it was likely more than a million dollars, but the precise amount had not been proven.

He ordered Banks to pay $800,000 in restitution, and fined him $800,000.

The CIBC branch in Barrington Passage, N.S. A Crown prosecutor called Terry Banks the "architect" of an elaborate fraud who duped his local CIBC branch to the tune of $8 million.
Banks defrauded this branch of the CIBC in Barrington Passage, N.S., and was sentenced to prison in 2008. (Richard Cuthbertson/CBC)

Muise noted that when Banks was imprisoned in 2008 for the CIBC fraud, his wife and children were treated poorly in the community, but despite that "he quickly returned to the same lifestyle after release from custody."

"A further significant period of custody may promote a sense of responsibility in him and the acknowledgement of the harm done to the community, including his own family," Muise said.

Miller said the charges against Malone were dropped because the only evidence against him was the statement Banks gave to police. He said Malone denied any skimming when he testified, and the "Crown accepts that position."

Wayne Banks was also charged in the case, but was acquitted at trial in January.