ONTARIO COURT OF JUSTICITCE
BETWEEN:
HER MAJESTY THE QUEEN
— AND —
DENISE HENN
Before Justice Angela L. McLeod
Guilty plea on September 13, 2021
Reasons for Judgment released on October 28, 2021
Kathryn Ginn counsel for the Crown
Chuck Syme counsel for the accused
OVERVIEW
1Ms. Henn has been convicted of defrauding her employer of $45,222.26. The offence dates run between July 2013 and January 2016, the latter being when Ms. Henn was arrested.
2The matter was judicially pretried in December 2018, May 2019 and July 2020, by three different jurists.
3The guilty plea and sentencing submissions occurred on September 13, 2021.
SUMMARY OF THE FACTS
4Ms. Henn was employed as an account manager for a small business. She was responsible for accounts receivable and payable and had full access to the company bank account.
5In February 2016, she was laid off. In March 2016, the owner was reviewing an account and detected an anomaly. He was advised by his bank that funds had been deposited into an account held by Ms. Henn. Police were called and it was ultimately determined that between 2013 and 2016, Ms. Henn transferred a total of $45,222.26 into three separate accounts, two of which were in her name and one was in her young daughter’s name.
6There were 73 individual transactions of fraud.
7No restitution has been paid in advance of the guilty plea ( see comment below).
8The fraud was committed in support of greed.
9This matter has a tortured history. Ms. Henn was first before the court in July 2016. There have been multiple bench summons for her attendance, three judicial pretrials, a trial set and vacated. It has been in the system for some 44 months in total.
10No explanation was given for the 14-month delay between the judicial pretrial that this court held in July 2020 and the plea date in September 2021.
POSITION OF THE PARTIES
11The Crown seeks a custodial sentence in the range of 15 – 18 months, a fine in lieu of forfeiture, probation, a DNA order and restitution.
12In support of this position, the Crown argues that the principles of general deterrence and denunciation are paramount. This is an employee fraud, there is a breach of trust. No restitution has been paid at the time of the plea, an example of a lack of remorse. The fraudulent transactions only concluded because of the loss of opportunity.
13The Crown submits that any mitigation garnered by the lack of a criminal record is minimized as it is because of the lack of prior antecedents that Ms. Henn was able to secure her position of trust.
14The defence submits that a conditional sentence is appropriate and relies heavily on the fact that Ms. Henn had her third child after she was arrested; the child is now 2.5 years of age. He argues that the degree of planning “was simple and not sophisticated”, that Ms. Henn is the sole bread winner for her family and that were she to be given “a structured environment” she would pay restitution. She has “bad credit” and could not borrow the monies required to pay the restitution in advance of the plea.
15Remorse, says the defence, was expressed in her confession to the police upon her arrest.
CIRCUMSTANCES OF THE DEFENDANT
16Ms. Henn is 38 years old. She has a child in her 20’s, one in grade 9 and the toddler. She separated from the father of the youngest child in 2019.
17Between the time of her arrest in 2016 and the spring of 2021, Ms. Henn had sporadic employment and relied primarily upon Ontario Works and payments from the Child Tax Credit.
18Since the spring of 2021, she has been steadily employed at a local golf course.
19Ms. Henn addressed the court directly and advised that her income has only been $2150 per month and her bills exceeded $1900, as such, she was unable to pay any restitution. She had been relying upon food banks. She stated that since becoming employed regularly she has been able to catch up on her bills and to “put money away”. She is now in a position to start to make restitution.
20A presentence report was not sought. No letters of support were tendered. There are no mental health concerns, no addiction issues identified.
AGGRAVATING AND MITIGATING FACTS
21I find the following to be mitigating factors for consideration:
(1) The plea of guilty, although very late and as such is minimalized;
(2) The lack of a criminal record, although I adopt the Crown’s submission in this regard and find that this too is minimalized;
22I find the following to be aggravating factors for consideration:
(1) The breach of trust;
(2) The quantum of funds, which is considerable for a small business;
(3) That her employer was in fact a small business, which I infer from the facts was having some sort of financial set back as she was laid off and the owner took over the management of the accounts, rather than replacing her with a new accounts manager;
(4) The extended delay in the resolution;
(5) The fact that Ms. Henn used her youngest child’s bank account as a depository for the stolen funds;
(6) The large number of transactions;
(7) The extended period of time over which the funds were stolen;
(8) The lack of restitution paid in advance of the plea. I note that in spite of Ms. Henn commenting that she was able to pay off all of her debts and able to put money away, she made no effort to pay back her former employer. In this regard, she could have made any effort, paying some nominal amount monthly and it would have been an expression of remorse (updated on day of sentencing, Ms. Henn post plea, on the eve of sentence imposition, provided her counsel with a money order in the amount of $2000);
(9) The lack of insight into the impact of her actions upon the small business. Ms. Henn’s comments were lacking in this regard.
CASELAW
23In R. v McEachern (1978), 1978 2506 (ON CA), 42 C.C.C. (2d) 189 (ONCA), Howland C.J.O. stated at p. 191, that “the most important principle in sentencing a person who holds a position of trust is that of general deterrence.”
24In R. v. Gray (1995), 1995 18 (ON CA), 76 O.A.C. 387 (ONCA) at pgs. 398-399, Carthy J.A. highlighted the need for general deterrence in fraud cases:
…there are few crimes where the aspect of deterrence is more significant. It is not a crime of impulse and is a type that is normally committed by a person who is knowledgeable and should be aware of the consequences. That awareness comes from sentences given to others.
25In R. v. Bertram (1990), 40 O.A.C. 317 (ONCA), the Court observed that most major frauds are committed by well educated person of previous good character. The court held at pg. 319:
The sentences in such cases are not really concerned with rehabilitation. Instead, they are concerns with general deterrence and with warning such persons that substantial penitentiary sentences will follow this type of crime, to say nothing of the serious disgrace to them and everyone connected with them and their probably financial ruin.
26Justice Pringle, in R. v. Lebel, 2018 ONCJ 748, reviewed the case law in considering whether a conditional sentence would be appropriate in a breach of trust frauds. She wrote,
27Precedent establishes that the difference between imprisonment in jail and in the community is often the presence, or absence, of "exceptional mitigating circumstances". For example, in R. v. Dobis, supra, at para. 54, the Court of Appeal for Ontario rejected a conditional sentence, observing "...there are none of the extreme personal mitigating circumstances that were central to the decisions to impose conditional sentences in two large scale fraud cases, Underys, supra1 , ('the many mitigating circumstances of the offender': para. 4), and Bunn, supra2 , ('The respondent was the sole provider and caregiver for both his wife, who suffered from multiple sclerosis and had been confined to a wheelchair for years, and their teenage daughter': p. 517)."
28In parsing out why conditional sentences have been imposed in some breach of trust fraud cases, Hill J. concluded in R. v. Atwal, 2016 ONSC 3668, [2016] O.J. No. 3109 (Ont. S.C.J.) that:
While a conditional sentence, with properly tailored punitive conditions, can effect a measure of general deterrence and denunciation, many of these cases where a conditional sentence was appropriate involved pleas of guilt and/or certain exceptional mitigating circumstances.
29Mr. O'Connor, for the defence, provided a number of cases where the presence of exceptional mitigating circumstances grounded a conditional sentence for breach of trust fraud. In R. v. Corner, [2005] O.J. No. 3590 (Ont. S.C.J.), an account executive stole approximately $160,000 from her employer over the course of years. Like Mr. Lebel, she had a serious alcohol problem and a significant gambling addiction. Unlike Mr. Lebel, she confessed to her crimes before being found out. Victim impact was grave, since her fraud affected not just the company but many innocent employees.
30The defendant in Corner had made $2000 in restitution and was truly remorseful. She had taken no counseling to address her addictions and struggled to maintain abstinence on her own: on the day she pled guilty, she relapsed and gambled away $400. She pled guilty, albeit in the Superior Court of Justice, and received a conditional sentence. At para. 20, Durno J. referring to the need for a sentence to be proportionate to both the gravity of the offence and the degree of responsibility of the offender, said:
This is a serious offence. Her degree of responsibility is moderate, since I accept that her actions after they commenced were driven by gambling addiction. The need for general deterrence is reduced in situations where the motivation was an addiction. Reference R. v. Horvath(1997), 1997 9759 (SK CA), 117 C.C.C. (3d) 110 (Sask. C.A.) that I have been referred to today, which also spoke of an individual with a very serious gambling problem.
At para. 22, he continued,
I must also stress general deterrence to others who would be tempted to steal from their employers, although I accept the comments made in Horvath with respect to the relevance of general deterrence for someone who commits an offence because of an addiction.
31Rutherford J. in R. v. Kioussis, 2011 ONCJ 823 (Ont. C.J.), sentenced a former law clerk and office manager to a conditional sentence for Fraud Over. The accused had taken funds from her employer and altered the company software program to cover it up. The total loss was $600,000 over years. $70,000 in restitution had been made prior to sentencing. While this was mitigating, the impact on her victim, a lawyer, was tremendous. He was forced into bankruptcy, sued by 28 clients, and saw sanctions placed on his own law licence.
32The accused had pled guilty, which no doubt had significant impact on the sentencing result. She had no criminal record and the offence was not motivated by greed. Further, the offending had roots in mental health issues, including major depression and severe anxiety.
33Finally, in R. v. Adams, 2009 ONCJ 383 (Ont. C.J.), a case from this court and this community, Green J. sentenced the defendant to a conditional sentence for a breach of trust fraud. The defendant, who pled guilty, did so after hearing a day of preliminary inquiry evidence. She admitted that in her capacity as the company's bookkeeper, she stole funds for herself and manipulated the accounting system to cover her fraud. She also mis-used the company's credit card. Her offending went on for over six years.
34However, the defendant also had a history of clinical depression and had attempted suicide in the past. To stabilize herself, she began seeing a psychiatrist for depression and anxiety. No restitution had been made, but the desire to do so was present. There was a favourable PSR and the accused, who was a first offender, was lucky to have solid community support. Green J. concluded that balancing the principles of sentencing, including the primacy of general deterrence and the grave victim impact, a conditional sentence was the correct disposition.
CONDITIONAL SENTENCE AND SENTENCING PRINCIPLES
27The fundamental purpose of sentencing set out in s. 718 of the Criminal Code is to protect society and to contribute, along with crime prevention measures, to respect for the law and the maintenance of a just, peaceful and safe society by imposing sanctions that have one or more of the following objectives:
(a) denouncing unlawful conduct and the harm done to victims or to the community that is caused by unlawful conduct;
(b) deterring the offender and others from committing crimes;
(c) separating offenders from society where necessary;
(d) assisting in the rehabilitation of the offender;
(e) providing reparations for harm done to the victim or to the community;
(f) promoting a sense of responsibility in the offender, and acknowledging the harm done to victims and the community.
28The fundamental principle in sentencing, as set out in s. 718.1, is that a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.
29Section 742.1 of the Criminal Code sets out the considerations for a CSO. In summary, there are four criteria to be met:
(1) the offender must be convicted of an offence that is not punishable by a minimum term of imprisonment;
(2) the court must impose a term of imprisonment of less than two years;
(3) the safety of the community would not be endangered by the offender serving the sentence in the community; and,
(4) a conditional sentence would be consistent with the fundamental purpose and principles of sentencing set out in ss. 718 to 718.2.
30The first three criteria establish whether a CSO is available; the last whether it is appropriate.
31A conditional sentence can serve the sentencing principles of deterrence and denunciation. In R. v. Proulx, 2000 SCC 5, the court held:
22 The conditional sentence incorporates some elements of non-custodial measures and some others of incarceration. Because it is served in the community, it will generally be more effective than incarceration at achieving the restorative objectives of rehabilitation, reparations to the victim and community, and the promotion of a sense of responsibility in the offender. However, it is also a punitive sanction capable of achieving the objectives of denunciation and deterrence. It is this punitive aspect that distinguishes the conditional sentence from probation, and it is to this issue that I now turn.
32Furthermore, the court held that a CSO is both a punishment and can be as harsh as incarceration:
41 This is not to say that the conditional sentence is a lenient punishment or that it does not provide significant denunciation and deterrence, or that a conditional sentence can never be as harsh as incarceration. As this Court stated in Gladue, supra, at para. 72,
in our view a sentence focused on restorative justice is not necessarily a "lighter" punishment. Some proponents of restorative justice argue that when it is combined with probationary conditions it may in some circumstances impose a greater burden on the offender than a custodial sentence.
A conditional sentence may be as onerous as, or perhaps even more onerous than, a jail term, particularly in circumstances where the offender is forced to take responsibility for his or her actions and make reparations to both the victim and the community, all the while living in the community under tight controls.
42 Moreover, the conditional sentence is not subject to reduction through parole. This would seem to follow from s. 112(1) of the Corrections and Conditional Release Act, S.C. 1992, c. 20, which gives the provincial parole board jurisdiction in respect of the parole of offenders "serving sentences of imprisonment in provincial correctional facilities" (R. v. W. (J.)(1997), 1997 3294 (ON CA), 115 C.C.C. (3d) 18 (Ont. C.A.) at p. 33).
ANALYSIS AND CONCLUSION
33The first three criteria of s. 742.1 are met; the question is whether, in all of the circumstances, a conditional sentence will be consistent with the fundamental purpose and principles of sentencing set out in ss. 718 to 718.2.
34There are no ‘exceptional mitigating circumstances’ in this case. Sentences cannot be decided, in whole or in part, upon sympathy. I am conscious of Ms. Henn’s young child; however, I note that she choose to have this child after she was arrested and before the courts, knowing the seriousness of her actions and the potential consequences.
35I give full credit to the plea, especially during the current global pandemic.
36I find that a conditional sentence would not meet the sentencing principles of denunciation and deterrence in this matter. While the total amount stolen is not exceptional, the number of transactions are.
37The sentence will be 12 months jail, 36 months probation including a term of restitution, a DNA order, pursuant to s. 462.37(3) a fine in lieu of forfeiture in the amount of $45,222.26
Released: October 28, 2021
Signed: Justice Angela L. McLeod