Money laundering

The Attorney General of Ontario sought forfeiture of $99,210 in Canadian currency seized at Fallsview Casino, alleging it was the proceeds of unlawful activity, specifically money laundering.

The respondent, Branavan Kanapathipillai, claimed the funds were from legitimate gambling and a third mortgage.

The court reviewed expert evidence, financial tracing, and the respondent’s explanations, ultimately finding the Attorney General met the burden of proof on a balance of probabilities.

The court ordered the funds forfeited, finding the respondent’s explanations unconvincing and the circumstances highly suspicious.

Aleth Duell, a 72-year-old first offender, was found guilty by a jury of two counts of fraud over $5,000 and one count of money laundering, related to romance fraud schemes.

The Crown sought a custodial sentence of two years less a day, while the defence argued for a conditional sentence.

The court imposed a global custodial sentence of two years less a day, followed by two years probation, emphasizing denunciation and general deterrence due to the large-scale nature and devastating impact of the frauds.

The court declined to issue a restitution order due to the offender's limited means and lack of quantifiable profit, but imposed a lifetime prohibition order under s. 380.2 of the Criminal Code against managing others' property, money, or valuable security, and waived the victim surcharge.

The appellant, David Holden, appealed his conviction for fraud over $5,000 and money laundering, and his 12-year sentence, in relation to a multi-million dollar Ponzi scheme.

The conviction appeal argued the trial judge impermissibly inferred guilt from fabricated evidence.

The sentence appeal challenged the application of aggravating factors and sought a reduction due to COVID-19 incarceration conditions.

The Court of Appeal dismissed both the conviction and sentence appeals, finding no error in the trial judge's reasoning regarding the conviction and upholding the sentence as fit given the extensive aggravating circumstances, including the large scale of the fraud, its devastating impact on victims, and the appellant's history of similar offenses.

The accused, Marvin Watson, sought a bail review under s. 520 of the Criminal Code after being detained for serious drug trafficking and money laundering charges.

The court found errors in law in the original Justice of the Peace's decision regarding the secondary and tertiary grounds for detention, and the failure to consider s. 493.2 of the Code.

The court conducted a de novo bail hearing, considering the strong Crown case, the gravity of the offences, and the proposed strict bail plan with multiple sureties and GPS monitoring.

The court concluded that the applicant discharged his onus on all three grounds (primary, secondary, and tertiary) and ordered his release under stringent conditions, including house arrest and no access to communication devices.

The appellant, Michael Cady, appealed his convictions for possession of property obtained by crime and laundering proceeds of crime.

His wife had defrauded her employer of over $1 million, depositing funds into a joint account.

The trial judge found that the appellant either knew the funds were illegally obtained or was wilfully blind to their origin, citing several "red flags" including his wife's prior fraud conviction, bankruptcies, and the couple's lavish spending inconsistent with their declared income.

The Court of Appeal upheld the trial judge's finding of wilful blindness, stating it was not inconsistent with the appellant's claim of deferring to his wife's financial management, especially given his admission of suspicion.

The appeal was dismissed.

East West Investment Management Corporation sought an order to pay funds into court or a declaration that its continued management of funds for Thomas Higgins and the TRH Foundation did not contravene the Criminal Code, due to a risk that the funds might constitute proceeds of crime from a German tax fraud scheme involving Maple Bank.

The court, exercising its inherent and supervisory jurisdiction over trusts, granted the order allowing East West to pay CDN$4,398,168 into court, with the consent of the respondents, to mitigate East West's risk of liability under money laundering laws.

Sase Aggregate Ltd. appealed a lower court decision that largely dismissed its claims against Michelle Langdon, wife of a former pit manager who defrauded Sase of over $2.1 million.

Sase sought a constructive trust over the proceeds of sale of a property owned by Langdon, alleging knowing receipt, knowing assistance, and unjust enrichment.

The application judge found Langdon had no knowledge of the fraud and that Sase failed to properly trace its funds into the property, except for an admitted amount of $177,632.38.

The Court of Appeal dismissed Sase's appeal, upholding the application judge's findings that Sase failed to establish the elements for knowing receipt, knowing assistance, or to properly trace the bulk of the funds into the property, and that Langdon's legitimate sources of funds were adequately explained.

The applicants sought to enforce letters rogatory issued by a Michigan court in a civil criminal-enterprise proceeding.

The application, initially against seven non-parties, was bifurcated to focus on two respondents, Rouzbeh Behrouz and Majestic Food Services, Inc., who later became parties to the Michigan action and opposed the letters rogatory.

The court addressed significant evidentiary challenges, particularly regarding hearsay, clarifying that the Ontario court's role is not to determine the truth of allegations but whether the evidence sought is relevant and necessary for the foreign court.

The court found that the applicants satisfied the prerequisites and criteria for enforcing letters rogatory, including relevance, necessity, and unobtainability of evidence, and that granting the order was not contrary to public policy.

The application was granted.

The Attorney-General of Canada, on behalf of the United States, brought an application under s. 29 of the Extradition Act seeking an order to commit the respondent into custody for extradition on a charge of money laundering.

The court found sufficient admissible evidence to justify committal for trial in Canada for money laundering, including evidence of the actus reus (withdrawing proceeds of fraudulent tax refunds from various accounts) and mens rea (knowledge or willful blindness that funds were proceeds of crime, inferred from circumstantial evidence).

The court granted the order of committal.

The applicant, facing extradition to the U.S. for fraud and money laundering, sought disclosure of materials related to his provisional arrest warrant.

He alleged that the respondent (Crown) misled the issuing justice by misrepresenting his planned departure as an attempt to escape, despite his regular contact with CBSA.

The applicant argued this constituted an abuse of process, requiring a stay of proceedings.

The court applied the Larosa test for exceptional disclosure in extradition proceedings, finding that the allegations were capable of supporting the remedy, had an air of reality, and the sought documents were likely relevant.

The court granted the application for disclosure of various materials related to the provisional arrest warrant, including those from law enforcement, CBSA, Department of Justice, and the affiant's own investigation, subject to privilege and redaction.

The plaintiffs, Quantum Dealer Financial Corporation and NextGear Capital Corporation, brought a motion for summary judgment against the Guillen Defendants (Claudia Guillen Aracely, Jasmin Ivonne Guillen, 2564523 Ontario Inc., and Garnette C. Williams) and sought default judgment against Toronto Fine Cars and Leasing Inc. and Diego Sebastian Diaz.

The plaintiffs alleged that Diego Diaz, controlling shareholder of Toronto Fine Cars, fraudulently dissipated assets from the dealership by selling financed vehicles and failing to remit proceeds.

They further alleged that the Guillen Defendants assisted in and knowingly received these fraudulently obtained funds, using a newspaper business (Compra Y Venta, operated by 256 Corp.) as a money laundering vehicle.

The court found the Guillen Defendants' explanations for financial transactions and marital breakdown narrative to be incredible and inconsistent, exhibiting "badges of fraud." The court granted default judgment against Diego Diaz and Toronto Fine Cars and summary judgment against the Guillen Defendants, finding them jointly and severally liable for the unremitted proceeds, NSF charges, contractual interest, and punitive damages, based on the doctrines of knowing assistance and knowing receipt.

The appellant, David Earle, appealed his conviction for fraud over $5,000 and sought leave to appeal his sentence.

The trial judge had found that Earle defrauded clients of Global Precious Metals (GPM) of nearly one million dollars by leading them to believe they were purchasing physical precious metals when they were only acquiring notional "metal positions." The appeal raised issues concerning undue delay under the Charter (s. 11(b)), the trial judge's assessment of the mental element of fraud, ineffective assistance of counsel, and the quantum of restitution and fine in lieu of forfeiture.

The Court of Appeal dismissed the conviction appeal and the sentence appeal, except for quashing the victim fine surcharge.

The appellants, Conroy and Kharla Rose, appealed their convictions for possession of proceeds of crime and money laundering.

The Court of Appeal allowed the appeals from conviction and ordered a new trial on two main grounds: the trial judge erred in dismissing an additional juror without random selection, thereby improperly constituting the jury, and erred in admitting evidence of Conroy's prior convictions in the form of judicial reasons without proper balancing of probative value against prejudicial effect and inadequate jury instructions.

Kharla Rose's separate appeal regarding unreasonable trial delay under s. 11(b) of the Charter was dismissed, as the delay was deemed reasonable under the pre-Jordan Morin framework.

This is a bail application pending leave to appeal to the Supreme Court of Canada.

The applicant, Marshall Kazman, was convicted of serious fraud and money laundering offences, and his appeal to the Court of Appeal for Ontario was dismissed.

He sought release under s. 679(3) of the Criminal Code, arguing that his application for leave was not frivolous and that exceptional circumstances related to the COVID-19 pandemic, his age (64), and pre-existing health conditions (asthma, respiratory, heart) made his continued detention unnecessary in the public interest.

The Crown opposed, emphasizing the high enforceability interest given the serious convictions and the weak merits of the leave application.

The court granted bail, finding that while the merits of the leave application were weak, the applicant's specific health vulnerabilities combined with the public health risks posed by COVID-19 in a correctional setting constituted exceptional circumstances justifying release, without undermining public confidence in the administration of justice.

David Holden was found guilty of fraud exceeding $54 million and money laundering in a large-scale Ponzi scheme.

This decision outlines the sentencing, which includes 12 years imprisonment for fraud (concurrent with 8 years for money laundering), a restitution order, and a fine in lieu of forfeiture of $54,159,737, with a default imprisonment of 5 years consecutive.

The court emphasized denunciation, general deterrence, and separation due to the egregious nature of the fraud, its devastating impact on 65 victims, and Holden's significant prior record of similar offences and lack of remorse.

The accused, Fattah Abdel, was charged with possession of money obtained by an indictable offence and transferring money with intent to conceal or convert it, knowing it was derived from a designated offence, contrary to section 462.31(1)(b) of the Criminal Code.

The Crown alleged that Abdel received illicit funds totaling $348,751.57, which were obtained through an email hacking fraud committed against Air Palace and Rotor Maxx.

Abdel deposited these funds into a company account he controlled and then quickly dispersed them via bank drafts to pay off his personal and business debts.

He provided conflicting and false explanations for the funds' origin to his business partners.

The court found Abdel guilty on both counts, concluding that he either had actual knowledge that the funds were illicit or was wilfully blind to their illicit nature, given the unusual transaction, his desperate financial circumstances, and his deceptive actions.

The applicants sought to re-open the issue of the validity of a search warrant and rescind a Sending Order issued under the Mutual Legal Assistance in Criminal Matters Act.

This application was based on new evidence from a related British Columbia proceeding where a similar search warrant, based on the same Request to Send from Belgium, was set aside due to deficiencies in the supporting affidavit.

The Ontario court dismissed the application, finding that the affidavit supporting the Ontario search warrant was materially different and did not suffer from the same deficiencies as the British Columbia affidavit.

The court also disagreed with the British Columbia court's ultimate finding regarding the sufficiency of the Request to Send to establish reasonable and probable grounds in the context of an MLAT proceeding, emphasizing the spirit of international cooperation.

This application addressed which of two innocent parties, Bank of Montreal (BMO) or Asia Pacific International Inc. (API), should bear the loss from a third-party fraud.

An imposter fraudulently obtained a wire transfer of $428,000 from a BMO client's account to API's account for a gold purchase.

API subsequently released the gold to the fraudster.

BMO sought recovery based on a mistake of fact.

The court applied the "two innocent victims" framework, finding BMO was in a better position to prevent the fraud due to its lack of diligence in verifying the imposter's identity.

The court also determined that API could rely on the change of position defence, as its conduct, while lacking diligence, did not constitute wrongful or illegal activity under the Proceeds of Crime Act that would preclude recovery.

BMO's application was dismissed, and the funds were ordered released to API.

Joane LaPrise sought to quash her committal to stand trial on charges of fraud over $5,000, money laundering, and possession of proceeds of crime, following a preliminary inquiry.

The application focused on whether there was any evidence that the accused knew or was wilfully blind to the fraudulent enterprise.

The court reviewed the evidence, including the accused's senior role in the companies, her involvement in suspicious financial practices, and her knowledge of misleading information provided to investors.

The court concluded that there was sufficient evidence for a reasonable jury to find knowledge or wilful blindness, and therefore rejected the application to quash the committal.

Justin Soon was convicted by a jury of trafficking in property obtained by crime ($250,170) and possession of 143.4 grams of cocaine for the purpose of trafficking, along with possession of proceeds of crime ($51,390).

The court considered sentencing principles, aggravating factors (financial gain, contested guilt on one count, involvement with higher-level trafficker), and significant mitigating factors (no prior criminal record, successful rehabilitation efforts while on bail, difficult youth, strong family and friend support, partial acknowledgment of guilt during trial).

The court imposed a global sentence of 3 years and 2 months imprisonment, comprising 18 months for money laundering (consecutive) and 2.5 years for drug trafficking (concurrent with 2 years for possession of proceeds of crime).

Ancillary orders for forfeiture, DNA sample, and a 10-year weapons ban were also made.