Court File and Parties
ONTARIO COURT OF JUSTICE
DATE: 2021 04 21 COURT FILE No.: Newmarket 20-099550 / 20-11980
BETWEEN:
HER MAJESTY THE QUEEN
— AND —
VERA KASOTTY
Before: Justice David S. Rose
Heard on: February 11, April 16, 2021 Reasons for Judgment released on: April 21, 2021
Counsel: Ms. S. Kim, counsel for the Crown Mr. V. Semyonov, counsel for the accused Vera Kasotty
1Ms. Kasotty pleaded guilty before me to the Charges of Fraud Over $5000 and Arson. The Crown asks for a jail term of Two years less a day, with ancillary orders. The Defense argues for a Conditional Sentence of that same duration. These are my reasons for sentence.
Project Platinum
2The charges arose out of Project Platinum, in which the York Regional Police investigated the infiltration of organized crime into the tow truck industry operating in the Greater Toronto area. Specifically, tow truck operators were organizing staged motor vehicle collisions in order to profit from the resulting insurance claims. The fraud involved fictitious losses, and payment of fees for non-existent towing, repair charges, car rentals and physiotherapy. During Project Platinum various phone lines were intercepted pursuant to a wiretap authorization from the Superior Court. At the top of the organization was Alex Vinogradsky.
Staged Collision of the Lexus
3According to the facts admitted by Ms. Kasotty, intercepts on Mr. Vinogradsky’s phone showed that in the period between March 4 and March 6, 2020 Ms. Kasotty was planning to defraud her insurance company, Northbridge Insurance, by staging a collision which would result in the total loss of her Lexus. This would then require her insurer to pay her the replacement value of the Lexus. The plan involved a staged collision on Vanley Crescent and Chesswood Drive in Toronto. The collision would result in damages to the Lexus which would render it a write-off.
4That is what happened. On March 5 Ms. Kasotty did indeed file a collision report with the police which purported to claim that she was driving her Lexus when it was hit by another car, at around 11 am that day. Mr. Vinogradsky sent Ms. Kasotty’s husband a text just after noon that day giving him the address of the Vingradsky pound at 144 Oakdale Avenue in Toronto where the wreck should be taken. Mr. Kasotty asked Mr. Vinogradsky if the car would be repaired, to which Mr. Vinogradsky replied “…what you asking me” and “its not my first day”. Intercepts revealed that Mr. Vinogradsky coached Ms. Kasotty on how to report the collision to the police. Mr. Vinogradsky was candid about not wanting to give details about how to report the collision over the phone, and that Mr. Zahawi was to meet Ms. Kasotty to help her report it.
5The insurance company determined that the Lexus was indeed a write off and payed out just under $39,000. There was also a bill for car rental for Ms. Kasotty after the collision. After the Lexus was sold for scrap the insurance company had a net payout of $33,009.57.
Arson on March 29, 2020
6Ms. Kasotty’s husband Igor owned a transport truck through a numbered company. He earned a living driving it. Starting on March 10, 2020 Mr. Kasotty began discussing a plan to set fire to his truck. Again, the scheme was to destroy it in order to get the Insurance pay out. Ms. Kasotty was involved in this scheme too.
7Intercepts on March 12, 2020 captured Mr. Vinogradsky cautioning Ms. Kasotty about sending him information about the truck fire over the telephone. As he said to her “ don’t you think its not smart” in relation to speaking openly about the truck which was to be set on fire. Ms. Kasotty admitted that it was not indeed very smart. Intercepts also revealed that the Vinogradsky group wanted to profit from the fire by charging the truck’s insurer for towing, storage and clean up.
8Intercepts captured discussions between Filippo Genova and Omer Zahawi on March 23 and 28 discussing the planned arson and where the wrecked truck would be taken in order to bill the insurance company for towing and storage. The plan was to take the wreck to Mr. Vinogradsky’s pound on Champagne Drive. At 10:23 pm on March 29, Mr. Genova and Mr. Zahawi were captured on the phone discussing the final plans for the arson, and where to tow the truck.
9The truck was ultimately destroyed by fire on the evening of March 29, 2020 resulting in an insurance loss just under $60,000. The cost to put out the fire was just under $8,000.00. Notably, the intentional fire which destroyed Mr. Kasotty’s truck also destroyed two other trucks, a Mercedes, and a trailer which were parked nearby.
10Putting out the fire required six York Regional Fire Department trucks, two command units, and another support unit.
11In the hours after the fire Ms. Kasotty was intercepted taking instructions from another of the organizers of the fire, Mr. Genova, about where the destroyed truck should be sent. Apparently the truck was insured through Roberts transport and Roberts was insisting on the truck being sent to their own lot. The truck remained on the Robert’s lot through the time of the insurance company investigation, and the intercepts captured Ms. Kasotty telling Mr. Genova that she was sorry about that.
Ms. Kasotty
12The Pre-Sentence Report (PSR) shows Ms. Kasotty to be of otherwise good character. She was born in 1960 in the former USSR, and emigrated to Canada in the aftermath of its disintegration. The PSR shows her and her husband to have endured the struggles which tend to come with arrival in a new country and the efforts required to make a new life in Canada. The Kasottys have three grown children. Ms. Kasotty has a graduate degree from a Russian University, and worked there as an English teacher. In Canada she has found it difficult to get a job, but helps her husband’s truck driving business doing administrative tasks. Ms. Kasotty’s children speak highly of their mother. The PSR deems her suitable for community supervision.
13I would describe the PSR as overall positive. There is nothing in it which might suggest why Ms. Kasotty would engage in the fraud and arson which occurred in March of last year.
14I can only conclude that the motivation for the fraud and arson were opportunistic greed. She profited from the scheme insofar as her insurer paid her out for her Lexus. The fraud turned her Lexus into cash, which she was then free to spend as she liked. The fraud also turned a truck into cash, albeit more cash. It was not presented to me how she personally profited, but it is a fair inference that she was involved in her husband’s truck business, not just as the book keeper. The PSR discloses her to be close to her husband, and it is a fair inference that she profited from the pay out of the truck as her husband did.
15Ms. Kasotty participated in a scheme which can only be described as corruption in the towing industry. It had tentacles which brought together car towing, repair, rental, and physiotherapy which all become engaged when there is a motor vehicle collision. The scheme involved wildly overcharging for all of these services – sometimes offering little to no value for the payments sought from insurance companies.
16During submissions I was advised that Mr. Semyonov has $25,000 in trust which is for restitution. This is not the whole amount of the loss in this case but it is a substantial amount.
Sentencing positions
17The Crown and defence agree that Ms. Kasotty should serve a sentence of 2 years less a day plus ancillary orders. The Crown’s first argument is that all of that time should served in jail and not in the community. The Crown’s second argument is that a mixed sentence of imprisonment should be imposed, where 14 months is imposed for the Arson and the balance served in the community. Because there are two distinct offences before the Court for sentencing, a blended sentence is permissible in law so long as the overall sentence is less than 2 years, see R. v. Ploumis, [2000] O.J. No. 4731 (C.A.). The Crown position emphasizes general deterrence and denunciation.
18Mr. Semyonov argues for the entirety of the sentence to be served in the community as a Conditional Sentence. He argues that Ms. Kasotty is eligible for a Conditional Sentence and that she can give back to the community by way of community service.
The Conditional Sentence Regime
19Under s. 742 of the Criminal Code, an offender is eligible for a conditional sentence if the sentence to be imposed is less than 2 years, and more than probation. The sentencing court must be satisfied that serving the sentence in the community will not endanger the community and that such a sentence is consistent with the fundamental purposes of sentencing under s. 718 – 718.2.
20I agree with the Crown that general deterrence and denunciation are important principles which must be reflected in Ms. Kasotty’s sentence.
21I disagree with the Crown that, in the circumstances of this case, a Conditional Sentence cannot reflect those principles. As a majority of the Court of Appeal said in R. v. Sharma 2020 ONCA 478, at par. 110:
In Proulx, the Supreme Court explained that a conditional sentence, unlike a suspended sentence, is a jail sentence but served in the community. It serves the functions of deterrence and denunciation: Proulx, at paras. 41, 67. Indeed, conditional sentences may be available even in cases where deterrence and denunciation are the paramount sentencing objectives: R. v. Wells, 2000 SCC 10, at para. 35. A suspended sentence, on the other hand, is intended to promote rehabilitation and is normally imposed where deterrence and denunciation are not needed for the particular offender in the particular circumstances, or where there are exceptional circumstances: Proulx, at paras. 32-36; see Criminal Code, ss. 731(1), 732.1, and 732.2.
22In this case I find that rehabilitation is also a principle which must be reflected in Ms. Kasotty’s sentence, albeit one which is not quite as important as deterrence and denunciation. As the PSR notes, Ms. Kasotty would benefit from counselling sessions directed to helping her make better choices.
23I therefore find that in law Ms. Kasotty is eligible for a conditional sentence. This is a close case, but it on balance a conditional sentence will meet the needs of deterrence and denunciation. In making that finding I rely on Ms. Kasotty’s relative role in the scheme. She was an organizer insofar as she brought two vehicles to the group, and benefited financially from it, but she was at the same time a customer of a group whose members offered this service. It is also relevant that she was not a recruiter at large for the group. The intercepts revealed Ms. Kasotty to be unsophisticated in the mind of Mr. Vinogradsky, which assists in a finding that her moral culpability is much lower than the executives in the scheme. The cars destroyed in this scheme were hers or her husband’s. Ms. Kasotty is genuinely remorseful and has provided up front restitution. This is her first criminal offence, and I believe likely to be her last.
24Ms. Kasotty will receive a conditional sentence of 2 years less a day. I will receive submissions on the appropriate terms which include the counselling and community service suggested in the PSR. Arson under s. 434 is a secondary designated offence under s. 487.04. Given the facts I have heard it is in the interests of the administration of justice that Ms. Kasotty provide a sample of her DNA for transmission to the National DNA databank. Ms. Kasotty will be prohibited from possession weapons under s. 109 for 10 years. There will be a stand-alone restitution order in the amount of $20,000 payable to Northbridge Insurance and also one in the amount of $5,000 payable to the Roberts Group.
25I would not finish this judgment without commenting on the effects of the insurance fraud which is the subject of Ms. Kasotty’s charges. Her crimes are not victimless. The motor vehicle insurance scheme in Ontario is mandatory under the Compulsory Automobile Insurance Act R.S.O. 1990 c. C.25 (C.A.I.A.). Penalties for motorists not carrying cover are severe, see C.A.I.A. s. 2. When an insurance company is defrauded because a car is deliberately destroyed that loss is not borne by the insurer. Rather it is passed along to the other insured motorists by way of higher premiums. Everyone pays more. The broader insured public therefore bears the loss. This is a public fraud.
26There are other victims. Corruption in the towing industry has spilled into select auto repair shops, car rental agencies and therapy providers. All of these services are paid by the insurance companies when there is a motor vehicle collision. The tentacles of corruption in the towing industry reach into those sectors too. One car accident can be the source of revenue for many firms. One fake car accident provides illicit gains in the same manner. It is not difficult to see that many people can now gain from a car accident created out of whole cloth. The fake car accident industry is now sufficiently lucrative that competition among corrupt car towing organizations has led to internecine violence. Tow trucks are set fire to. Shots are fired. The highways in the GTA are dangerous enough without having this added element. What is more, corruption in the towing industry has led to intimidation of those who pursue lawful civil remedies for inflated towing, storage and repair bills.
27Lastly, as this case has shown, when a car is set alight in order to create an insurance loss it is difficult to control the fire. In this case two other trucks, a Mercedes and a trailer were all damaged by fire in order to destroy Mr. Kasotty’s truck. What is more, firefighters have enough risk in their work dealing with accidental fires. There is no reason to put them at the same risk to deal with intentionally set fires.
28It is not for a judge of the Ontario Court to recommend changes to the insurance scheme, or the unregulated nature of car towing, which will remedy this problem. Solving this is the role of the legislature. What I do hope is that the legislature will take this up with the urgency required.
Released: April 21, 2021 Signed: Justice David Rose
