COURT OF APPEAL FOR ONTARIO
Weiler, Feldman and Gillese JJ.A.
BETWEEN
Her Majesty the Queen
Respondent
and
Roberto Cunsolo
Appellant
Edward L. Greenspan, Q.C. and Michael Lacy, for the appellant
Suhail Akhtar, for the respondent
Heard: April 25, 2014
On appeal from the conviction entered on June 6, 2011 and the sentence imposed on January 9, 2012 by Justice S. Casey Hill of the Superior Court of Justice, sitting without a jury.
1The appellant was convicted of committing fraud over $5,000 because of his participation in a mortgage scheme involving 23 residential mortgages and approximately $4 million. He was found to have actively participated in the scheme by storing documents, monitoring and recording transactions, undertaking relevant calculations and taking possession of laundered proceeds. His trial testimony was rejected as incredible and incapable of raising a reasonable doubt, in the face of overwhelming circumstantial evidence of guilt.
2He was sentenced to a total of 18 months’ incarceration and ordered to pay restitution in the amount of $250,000.
3He appeals from both conviction and sentence.
4For the reasons that follow, the appeal is dismissed.
FACTS
5Between September 2003 and February 2004, Ontario Wide Finance (“OWF”), a company headed by Fouzan Beg, committed a series of fraudulent transactions that caused various financial lenders to forward mortgage funds for non-existent real estate transactions.
6The appellant was one of the accomplices that Mr. Beg used to assist in the preparation of documents, the financing, and the withdrawal of monies from various financial institutions. At trial, the appellant acknowledged knowing Mr. Beg but denied any participation in the fraudulent schemes.
7The money received through the fraudulent activities was subsequently laundered through financial institutions that were unaware of how the money was obtained. One institution that was frequently used to launder money was the Continental Currency Exchange (“CCE”), a kiosk-style business in a mall. Mr. Beg and his associates would often withdraw cash from the CCE.
8On January 30, 2004, a CCE employee, Ms. Brooke Johnston, phoned Det. Nobbs of the Durham Regional Police (DRPS) and indicated that she was concerned about several large-sum financial transactions that had occurred in the preceding months. She indicated that CCE had received approximately $880,000 in Canadian CIBC bank drafts since October 2003. Ms. Johnston informed Det. Nobbs that a man named Junaid Razui would typically pick up the money when it was ready and that he would normally be accompanied by two other individuals. She also stated that the first bank draft had been drawn on an account held by Rafael Valencia. Both Rafael Valencia and Junaid Razui were later discovered to be aliases used by Mr. Beg.
9Det. Nobbs received a tip that there was going to be money exchanged at the CCE in Oshawa at 7:00 p.m. on February 6, 2004. The police made a plan to observe the money exchange at CCE. After allowing the transaction to take place, the police would retrieve the money, and identify the responsible parties.
10On the afternoon of the same day, Det. Nobbs learned that the Peel Regional Police (PRPS) had arrested Rafael Valencia and that he had made a comment about needing to be in Oshawa. The PRPS confirmed that Rafael Valencia was, in fact, Fouzan Beg.
11Shortly after Det. Nobbs received this information, Ms. Johnston contacted him to say that she had received a call indicating that the person who was to pick up the money had been in an accident and that a woman named Lisa Audette would be picking up the money instead. Ms. Audette was described as a black woman with hair flipped at the back.
12A woman matching this description arrived at the CCE, picked up the money, and placed it in two white plastic bags. She left the mall accompanied by two men, one of whom was later identified as the appellant.
13The surveillance team watched the three individuals approach the appellant’s car, unlock it remotely, and open the car doors. At that point, the police began to approach the car, and the three individuals fled in different directions. The police pursued them and arrested all three.
14Following the arrests, Det. Nobbs decided that the car should be searched incident to arrest in order to retrieve evidence. He directed Det. Bates to take control of the car. Det. Bates seized the two white plastic bags filled with cash from the back seat of the car.
15The car was then impounded and various other items were seized. The police obtained a key to open the trunk, from which they retrieved knapsacks, a briefcase, and a box of business papers. They also seized various incriminating documents and a daytimer that were in plain view in the back seat. No search warrant was obtained at that time, and the car was released on February 7, 2004. The items seized were stored in a police locker.
16On February 10, 2004, the police obtained a search warrant to open the duffle bags, knapsacks, and briefcase, and they seized additional incriminating documents.
THE PRE-TRIAL MOTIONS
17The defence moved to have the court exclude the evidence obtained as a result of the car search, alleging breaches of ss. 8 and 9 of the Charter.
18In a ruling dated September 25, 2008, the trial judge concluded that while there was no s. 9 violation, there was a breach of s. 8.
19Regarding s. 8, the trial judge concluded that because the search was incident to an unlawful arrest, the search itself was unlawful and contrary to s. 8. The Crown had not established the reasonableness of any search and seizure of the contents of the trunk as a search incident to arrest. Furthermore, the search warrant obtained on February 10, 2004 was facially invalid because the descriptions of the items to be searched for and the underlying offences were impermissibly vague and ambiguous.
20Having found a s. 8 violation, the trial judge entertained submissions on whether the evidence should be excluded under s. 24(2). He released a 23-page ruling on this matter on October 2, 2008, in which he concluded that the evidence should not be excluded.
21After the ruling and during the course of the trial, the Supreme Court released its decision in R. v. Grant, 2009 SCC 32, [2009] 2 S.C.R. 353. Consequently, the trial judge entertained further submissions on the exclusion of evidence. He then carefully reviewed the matter in light of Grant.
22In a second, 17-page ruling on ss. 9 and 24(2) dated November 6, 2009, the trial judge reversed his earlier ruling in part and concluded that the appellant’s unlawful arrest was a violation of s. 9. However, he again concluded that the evidence should not be excluded pursuant to s. 24(2).
23In his analysis of the first branch of Grant – the seriousness of the breaches – the trial judge reviewed the police actions in detail. He concluded that the police did not intend to breach the appellant’s constitutional rights and were operating in a context in which they had imperfect information. On the day of the arrest, Det. Nobbs honestly believed that the pending CCE transaction had criminal elements, although he was unaware of the specifics. As the time of the transaction approached, Det. Nobbs received further information from the PRPS indicating that Mr. Beg had been arrested and suggesting that he had intended to participate in the CCE transaction. It was this evolving situation that led to the appellant’s arrest. The police did not appreciate that their grounds for arrest fell short of the required standard. The trial judge summarized his analysis of the seriousness of the breach as follows.
The seriousness of the cumulative s. 8 and s. 9 Charter breaches cannot of course be understated. The police conduct was not, however, egregious. Haste, misjudgment and carelessness characterized the actions of the DRPS. No intent to breach constitutional rights existed. It appears that the DRPS were a step behind the PRPS investigation and that of various private sector entities. Though not a justification for imposing unconstitutional detention, arguably, at the time of his arrest, Mr. Cunsolo was in the possession of items which would have afforded reasonable grounds to arrest. In all the circumstances, neither a good faith nor a bad faith finding is warranted.
24Regarding the second branch, the impact of the breaches on the Charter-protected interests of the appellant, the trial judge stated that while the s. 9 breach interfered with the appellant’s personal liberty, he was not mistreated. Any s. 8 breaches affected non-bodily physical evidence and did not intrude upon the appellant’s bodily integrity. There were no conscription or self-incrimination violations established on the evidence.
25Under the third branch of Grant, dealing with society’s interest in the adjudication of the case on the merits, the evidence obtained was highly reliable documentary evidence and crucial to the Crown’s case on a serious charge.
26The trial judge concluded that the evidence should not be excluded under s. 24(2), saying:
The gravity of the cumulative Charter breaches did not fall at the more serious end of the spectrum but rather in the mid-point range. As described, there existed no markedly intrusive impact upon Mr. Cunsolo. The adjudication of the case on its merits would be very much disfavoured by failing to admit the evidence.
On the balance, having regard to all the circumstances, and the long-term repute of the administration of justice, and while this remains a close case, the applicant has failed to demonstrate that the admission of the seized evidence could bring the administration of justice into disrepute.
THE TRIAL AND SENTENCING DECISIONS
27An important issue at trial was the identification of the author of the incriminating documents seized from the car.
28At trial, the report of a handwriting expert was filed on consent. The report was based on 37 documents seized from the appellant’s vehicle, as well as 17 of the appellant’s “known” writings – copies of cheques written in the appellant’s chequebook. The “known” writings were poor in quality. The expert was unable to identify or eliminate the appellant as having written the 37 writings in question. He was able to conclude that the same individual wrote 9 of the documents and, with respect to certain other documents, he concluded that the same writer “probably” produced those documents.
29At trial, the appellant admitted that the daytimer seized from the car was his but stated that sometimes his brothers would write in it.
30The trial judge noted that the jurisprudence permitted him to conduct his own handwriting analysis; counsel made lengthy submissions as to whether he should do so.
31After noting that he was required to proceed with caution, the trial judge conducted his own comparison of the writing samples. In so doing, he had access to several of the appellant’s known writings that were considerably longer and of better quality than those which the expert had had.
32The trial judge adverted to two unique characteristics of the appellant’s writing: his tendency to write a lower-case “i” in words that were otherwise entirely capitalized, and his use of barred 7s (“7”). He noted that these characteristics were present in several of the key incriminating documents. The trial judge concluded that the appellant had authored these documents and that they were circumstantial evidence connecting the appellant to the fraud.
33The trial judge concluded that the whole of the evidence convincingly established that the appellant was involved in the fraud. He found that the appellant’s evidence was incapable of belief because the appellant was unable to explain the formidable circumstantial evidence that pointed to his guilt. There were numerous inconsistencies and improbable explanations in his testimony.
34In finding the case against the appellant “overwhelming”, the trial judge pointed to the following:
- the appellant’s connection to and physical presence at the OWF offices;
- the presence of the appellant’s fingerprints on the document seized by the police at the OWF offices and which identified properties that were the subject of fraudulent mortgages;
- a page missing from the appellant’s daytimer was found at the OWF office;
- the appellant’s handwriting on several documents, including his daytimer, which referred to transactions at the CCE;
- incriminating documents seized from the appellant’s car and found in a briefcase in the car bearing the appellant’s initials linking the appellant to Beg, OWF and the fraudulent transactions;
- two bank drafts made out to CCE, bearing the appellant’s fingerprints, and found in the locked briefcase seized from the trunk of the appellant’s car;
- the appellant’s presence at CCE on the date of his arrest and his participation in the collection of money on behalf of OWF;
- the acknowledged relationship between the appellant, Beg, and other members of the OWF partnership;
- the similarity in handwriting admitted by the appellant to be his own and the handwriting on documents used to perpetrate the fraud, combined with the report of the handwriting expert which confirmed that many of the documents had been written by the same hand.
35In his reasons for sentence, the trial judge found that the proven loss was $3,916,000. He noted other aggravating factors including: the large-scale commercial nature of the fraud; the significant degree of sophistication, planning and deception; the number of dishonest transactions involved; the lengthy period of the dishonesty; the nature and extent of the loss; and, that the termination of the offence was by arrest as opposed to voluntary cessation.
36While it was not possible to determine the degree to which the appellant personally benefited from the scheme, the trial judge rejected the appellant’s contention that he derived no personal benefit.
37The trial judge concluded that a fit and just sentence was 18 months’ imprisonment and a restitution order of $250,000.
ISSUES AND ANALYSIS
38The appellant raises three grounds of appeal:
- Did the trial judge err by relying on his own comparison of the handwriting evidence?
- Did the trial judge err in failing to exclude the evidence pursuant to s. 24(2)?
- Should the trial judge have imposed a conditional sentence and refrained from imposing a restitution order?
39At the oral hearing of the appeal, the court called on the Crown to address only the second issue.
(1) Did the trial judge err by relying on his own comparison of the handwriting evidence?
40The appellant argues that the trial judge should not have engaged in his own handwriting comparison and that he misapprehended the evidence when he did so. He also argues that the trial judge ought to have given the defence advance notice that he intended to rely on the “unique” characteristics of the appellant’s writing. The appellant argues that the trial judge’s failure to do so precluded cross-examination on this issue and created unfairness.
41We do not accept this submission.
42Defence counsel at trial was aware that the trial judge intended to conduct his own handwriting comparison and made lengthy submissions on the matter. The trial judge reviewed the applicable legal principles before engaging in his analysis and properly instructed himself to be cautious. His reasons make it clear that he understood the law and approached his task properly. There is no merit to the submission that he misapprehended the evidence.
43The appellant submits that he was not cross-examined on whether the fact that he wrote his “i”s amid capital letters and that he wrote “barred 7’s” was distinctive, and that it was therefore unfair for the trial judge to draw his own conclusion on that issue. We do not agree. The appellant could only have a lay opinion on whether he believed the consistent use of the small “i” and barred 7’s made his writing distinctive from that of other people. The trial judge was not drawing a conclusion about the appellant’s formation of letters and how they looked or the pressure he used with the pen, but rather the idiosyncrasies of his use of letters and numbers. The appellant acknowledged that he wrote one of the “PAiD” entries. The trial judge concluded that he must have written all of them. This conclusion was clearly open to the trial judge.
44The suggestion that the trial judge was required to give advance notice of his conclusion before he engaged in the analytical process that led him to that conclusion is untenable. The trial judge properly justified his conclusion by providing the details of his reasoning process. Nothing more was required, and no unfairness resulted from his approach.
(2) Did the trial judge err in failing to exclude the evidence pursuant to s. 24(2)?
45In our view, the trial judge’s ruling, which is to be given considerable deference, complied with the test enunciated in Grant. We see no basis for interfering with it.
46The trial judge articulated the proper legal principles and weighed the competing factors.
47In considering the seriousness of the Charter-infringing state conduct, the trial judge assessed the police conduct. He did not find bad faith on the part of the police. He found that the conduct was not egregious. Rather, “haste, misjudgment and carelessness” characterized the police actions. No intent to breach constitutional rights was found.
48The trial judge found that the impact of the breaches on the appellant’s Charter-protected interests was at the lower end of the spectrum. The s. 9 breach interfered with the appellant’s personal liberty through unlawful arrest followed by custodial detention. However, the appellant was not mistreated and he was granted judicial interim release. The s. 8 breaches impacted on non-bodily physical evidence.
49And, the documents seized from the appellant’s car were reliable and critical to the Crown’s case. The societal interest in the adjudication of a large-scale fraud is significant.
50We see no basis for interfering with the trial judge’s balancing of the Grant factors and his determination to admit the evidence.
(3) Should the trial judge have imposed a conditional sentence and refrained from imposing a restitution order?
51The appellant argues that the trial judge ought to have imposed a conditional sentence in lieu of imprisonment. He also submits that the restitution order was unwarranted.
52We do not agree.
53The jurisprudence of this court indicates that conditional sentences are not appropriate in cases involving convictions for large-scale fraud. Penitentiary sentences are typically imposed in such cases: see R. v. Drabinsky, 2011 ONCA 582, 107 O.R. (3d) 595, leave to appeal to S.C.C. refused, [2011] S.C.C.A. No. 491; R. v. Leo-Mensah, 2010 ONCA 139, 101 O.R. (3d) 366, leave to appeal to S.C.C. refused, [2010] S.C.C.A. No. 170; and R. v. Bogart (2002), 2002 41073 (ON CA), 61 O.R. (3d) 75 (C.A.), leave to appeal to S.C.C. refused, [2002] S.C.C.A. No. 398.
54Similarly, there was no error in the sentencing judge’s decision to impose a restitution order. The sentencing judge properly considered the applicable law. It was open to him to reject the appellant’s unsupported contention that he had not received any of the fraudulent funds.
DISPOSITION
55Accordingly, the conviction appeal is dismissed and while leave to appeal sentence is granted, the sentence appeal is also dismissed.
Released: May 7, 2014
(KMW) “K.M. Weiler J.A.”
“K. Feldman J.A.”
“E.E. Gillese J.A.”
