ONTARIO COURT OF JUSTICE
BETWEEN:
HIS MAJESTY THE KING
— AND —
ISIDOR SUBOTIC
Before Justice P.F. Band
Reasons for Judgment released on May 26, 2026
Mr. R. Morin counsel for the PPSC
Mr. J. Morische counsel for the PPSC
Mr. N. Khakhar counsel for the PPSC
Mr. D. Basile counsel for Mr. Subotic
Mr. G. Lafontaine counsel for Mr. Subotic
BAND J.:
I. INTRODUCTION
1Mr. Subotic came to the attention of police in the context of a broader investigative project in which judicially authorized phone intercepts and other means were used to investigate a group of individuals accused of manufacturing and distributing contraband tobacco. Mr. Subotic stood trial on two counts of laundering proceeds of crime,1 one count of possessing cannabis for the purpose of distributing it2 and one count of forgery.3 The offences are alleged to have taken place between January and June 2020. The Crown proceeded by indictment.
- Laundering Proceeds - Silver
2It is alleged that a shipping container with 18,000 kg of Korean silver bullion worth $10,000,000 was stolen at the port of Montreal in January 2020. Each ingot weighed 30 kg. Police forces in Ontario and elsewhere investigated the matter and recovered some of the silver in the United States and Canada. It is alleged that Mr. Subotic came into possession of a quantity of silver that he knew or believed had been stolen and attempted to sell or broker the sale of it to others. The Crown claims that it was silver from the Montreal theft.
- Laundering Proceeds – Real Estate
3It is alleged that Mr. Giovanni “John” Raimondi, an associate of Mr. Subotic, ran an illegal tobacco operation on a reserve in Ontario and that they and others funded the purchase of land and construction of a new house in Mississauga for the purpose of reselling it. It is further alleged that, in doing so, Mr. Subotic dealt with proceeds of Mr. Raimondi’s operation, knowing or believing them to have been derived from a designated offence: namely the sale of contraband tobacco (contrary to ss. 121.1 of the Criminal Code or s. 32 of the Excise Act). The Crown maintains that Mr. Subotic did so to recoup a debt from Mr. Raimondi.
- Possession of Cannabis for the Purpose of Distribution
4It is alleged that Mr. Subotic and his brother, Nenad Subotic, illegally possessed 149 kg of cannabidiol (CBD) in powder form for purposes of distributing it. Acting on a search warrant, police seized the powder from a storage locker. The powder was in 1 kg containers and 10 kg pails. The documents pertaining to the storage locker indicate that it was rented by a company called DIN’s Accounting, of which Mr. Subotic was a director. The rental documents list Nenad Subotic and Mr. Subotic as the customer and alternate contact, respectively, as well as their phone numbers.
5On April 29, Mr. Subotic and his brother had a conversation in which Nenad Subotic told him that he had “one pail” in his car. Later that day, the two met in the parking lot near DIN’s Accounting, where a large white, screw-top pail exchanged hands. The pail was opened and the person alleged to be Mr. Subotic was seen putting his hand inside and inspecting its contents. In the following days, Mr. Subotic communicated with other persons about CBD, the industries surrounding it (both legal and illegal) and selling it.
- Forgery
6It is alleged that Mr. Nenad Bozovic is an associate of Isidor and Nenad Subotic. In March 2020, the Royal Bank of Canada (RBC) terminated its banking relationship with Mr. Bozovic. It is alleged that Mr. Subotic forged, or helped Nenad Subotic forge, an RBC financial statement for Mr. Bozovic to enable him to obtain banking services elsewhere. The forged document inflated Mr. Bozovic’s holdings by $100,000, compared to a recent legitimate statement issued by RBC. The documents were found in Mr. Subotic’s office at his condo.
7The Crown alleges that Mr. Subotic intended that the document would be used or acted on by someone as if it were genuine, and that such a person would thereby be prejudiced.
II. Kinds of Evidence and Means of Proof
8The evidence in this case is voluminous. It consists primarily of intercepted communications, by way of wiretaps and car probes. There is also a considerable amount of documentary evidence. Some evidence of police surveillance was presented, as well as the testimony of a small number of witnesses. Evidence was also presented about the fruits of judicially authorized searches.
9Mr. Subotic made many reasonable admissions that enhanced the efficiency of the trial and permitted us to focus on the central issues in dispute. These included:
the identities of the persons heard in the intercepted communications, including Mr. Subotic’s;
that Mr. Subotic is also known as Izzy;
that the Toronto condo and the Land Rover where items were seized by police were his;
that he was the owner of the cell phone (with number ending 9291) and laptop that police seized; and
that, in March 2022, Nenad Bozovic pleaded guilty to, and was sentenced for, forgery and CBD-related conduct that had occurred between April and June 2020.
10Mr. Subotic did not testify or call evidence in his defence, except for the fact that he does not have a criminal record. This was presented as an agreed fact after the Crown closed its case.
11While the Crown did not lay conspiracy charges, it seeks to rely on the co-conspirator’s exception to the hearsay rule in regard to the counts of laundering proceeds (real estate) and forgery. The evidence in question is found predominantly in the intercepted communications. The Crown argues that, if admitted, the evidence will assist in proving beyond a reasonable doubt that Mr. Subotic was a member of two conspiracies in which he engaged in acts and declarations for purposes of effecting their goals.
III. Applicable Legal Principles
A. The Burden and Onus
12The Crown bears the entire burden of proof in this case, and that burden never shifts to Mr. Subotic. Unless the Crown can prove each element of an offence beyond a reasonable doubt, Mr. Subotic is entitled to be acquitted of that count: see R v Lifchus, 1997 CanLII 319 (SCC), [1997] 3 SCR 320 at para. 36 and R v W.(D.), 1994 CanLII 76 (SCC), [1994] 3 SCR 521. A reasonable doubt can arise from the evidence or the absence of evidence.
13Related to the criminal burden of proof in cases which, like this one, involve circumstantial evidence, is the principle set out by the Supreme Court of Canada in R v Villaroman, [2016] SJC 33, at paras. 18-37. The Court explained that an accused person cannot be found guilty unless the trier of fact is satisfied beyond a reasonable doubt that the accused’s guilt is the only reasonable inference to be drawn from the proven facts. Put differently, I must consider whether other plausible theories or reasonable possibilities that are inconsistent with Mr. Subotic’s guilt arise from the evidence or lack of evidence.
14I must conduct the analysis in respect of the totality of the evidence and not in a piecemeal fashion. What is more, the Crown does not need to
negative every possible conjecture, no matter how irrational or fanciful, which might be consistent with the innocence of the accused"…"Other plausible theories" or "other reasonable possibilities" must be based on logic and experience applied to the evidence or the absence of evidence, not on speculation (para. 37; internal citation omitted).
B. Conspiracies
15A conspiracy is “the agreement of two or more to do an unlawful act, or to do a lawful act by unlawful means”: R v O’Brien, 1954 CanLII 42 (SCC), [1954] S.C.R. 666, at p. 9. In R v Carter, 1982 CanLII 35 (SCC), [1982] 1 S.C.R. 938, the Supreme Court of Canada explained that
to convict an accused upon a charge of conspiracy the jury, or other trier of fact, must be satisfied beyond a reasonable doubt that the conspiracy alleged in the indictment existed, and that the accused was a member of it.
16In R v Root, 2008 ONCA 869, at paras. 66-71, the Court summarized the elements of the offence. The Crown must prove the following beyond a reasonable doubt:
(i) an intention to agree;
(ii) completion of the agreement; and
(iii) a common (unlawful) design
Further, there must exist an intention to put the common (unlawful) design into effect.
17The Court explained that “the important inquiry is not about the acts done in pursuit of the agreement, but whether there was, in fact, a common agreement in the first place to which the acts are referable and to which the alleged conspirators were privy”: at para. 67. As such, the focus is on whether there was an agreement and, if so, on what was agreed. What was done in furtherance may help to establish the core element of conspiracy: the agreement.
18At para. 68, the Court wrote that the conspirators, who need not know or communicate directly with each other, may have different roles. While they need to know the “general nature of the common design,” they need not all know the details. What is more, “[e]ach conspirator does not have to commit or intend to commit personally the offence the conspirators have agreed to commit.”
- The actus reus
19At para. 71, the Court explained that the “actus reus is established upon proof of the agreement to commit the predicate offence, for example to possess or launder the proceeds of crime.”
- The mens rea
The mens rea includes “the goal of the agreement,” that is, “the commission of the substantive offence”: ibid.
C. The Co-conspirators’ Exception to the Hearsay Rule
20The co-conspirators' exception to the hearsay rule permits the use of out-of-court statements made by a co-conspirator against the accused. Like conspiracy itself, the exception is based on the law of agency: R v Chang, [2003] OJ No. 2304 at para. 84 (C.A.).
21The exception is governed by the Carter test. The Supreme Court of Canada explained it this way in R v Mapara 2005 SCC 23:
Statements made by a person engaged in an unlawful conspiracy are receivable as admissions as against all those acting in concert if the declarations were made while the conspiracy was ongoing and were made towards the accomplishment of the common object …. Following Carter, co-conspirators' statements will be admissible against the accused only if the trier of fact is satisfied beyond a reasonable doubt that a conspiracy existed and if independent evidence, directly admissible against the accused, establishes on a balance of probabilities that the accused was a member of the conspiracy. (Internal citation omitted.)
22As the Court explained in Carter, the first step requires proof of the existence of a conspiracy beyond a reasonable doubt. To that end, all relevant and admissible evidence can be considered. If a conspiracy is proved to exist, the Crown must then prove the accused’s membership on a balance of probabilities. That determination can only be based evidence that is directly receivable against the accused. While hearsay is not admissible against an accused person at this stage, “triers of fact are entitled to consider the acts and declarations of the individual accused in their context, that is, against the picture provided by the acts and declarations of the alleged co-conspirators”: R v. Wang 2013 BCCA 311, at para. 63.
23If the Crown has proved the existence of a conspiracy and demonstrated the accused’s membership in it, then it is permissible to use any acts or declarations of any of the members that were made “in furtherance” or “towards the accomplishment of the common object” against the accused. A judge’s role in determining whether an act or declaration is “in furtherance” is a modest one: all that is required is “some evidence upon which a jury could find that the declaration was made in furtherance of the conspiracy”: R v Bogiatzis 2010 ONCA 902 at para. 42. The purpose of using such acts or declarations is to determine whether the accused is guilty of the offence beyond a reasonable doubt.
24Acts or declarations of members made before the accused joined the conspiracy cannot be used to prove the accused’s knowledge or participation in it: R v Proulx 2016 QCCA 1425. However, in R v Container Materials Ltd., (1940) 1940 CanLII 369 (ON HCJ), 74 C.C.C. 113 at para. 297 (Ont. Sup. Ct.), the Court held that evidence of what has been done prior to the accused joining can be received against the accused “to indicate the nature of the agreement.” See also R v Loewen, [1999] MJ No. 125 at para. 20 (C.A.), indicating that such evidence can be used to show the “origin, nature and object” of the conspiracy.
D. Laundering Proceeds
25Section 462.31(1) of the Criminal Code reads as follows:
Every one commits an offence who uses, transfers the possession of, sends or delivers to any person or place, transports, transmits, alters, disposes of or otherwise deals with, in any manner and by any means, any property or any proceeds of any property with intent to conceal or convert that property or those proceeds, knowing or believing that, or being reckless as to whether, all or a part of that property or of those proceeds was obtained or derived directly or indirectly as a result of
(a) the commission in Canada of a designated offence; or
(b) an act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence. (My emphasis.)
- The actus reus
26The actus reus of the offence – “uses, transfers the possession of, sends or delivers to any person or place, transports, transmits, alters, disposes of or otherwise deals with, in any manner and by any means…” – is intended to capture “a broad array of activities involving property or the proceeds of property. Almost anything done with property will satisfy the conduct component of the offence”: see R v Trac 2013 ONCA 246, at para. 83 and R v Tejani, 1999 CanLII 3765 (ON CA), [1999] OJ No. 3182, at para. 26.
27In Root, supra, at paras. 101-103, the Ontario Court of Appeal held that a completed offence of laundering proceeds requires that the accused have had possession of the property or proceeds. On the other hand, to prove an attempt, the Crown need only prove that the accused “took more-than-preparatory steps to obtain possession of the proceeds.”
- The mens rea
28The mens rea of the offence has three components:
(i) intentionally dealing with property or proceeds in one of the enumerated ways;
(ii) intending to conceal or convert the property or proceeds; and
(iii) knowing or believing that, or being reckless as to whether the property or proceeds were derived directly or indirectly as a result of a designated offence.
29Conceal means “to hide.” Convert has a broader meaning: “to change or transform”: Tejani, supra, at para. 28.
30Knowing requires not only a belief, but a true belief. Where the Crown seeks to prove knowledge, it must also prove that the property or proceeds were in fact derived from a designated offence: see United States of America v Dynar, 1997 CanLII 359 (SCC), [1997] 2 SCR 462, at paras. 41 and 69. In those cases, the truth of the matter must be proved as part of the actus reus.
31On the other hand, belief that the property or proceeds were derived directly or indirectly as a result of a designated offence is a sufficient guilty state of mind: see Tejani, supra, at para. 18.
32Belief about the illicit source of the property or proceeds is also sufficient to make out the offence of attempting to launder proceeds of crime: ibid.
33With respect to conspiracies, “the subjective state of mind of the person who conspires with others to launder money is also the belief that the money is derived from an illicit source.” This is because “the essential element of conspiracy is the existence of an agreement to put the intention of the conspirators into effect”: Dynar, supra, at para. 108.
E. Possession
34In R v Lights 2020 ONCA 128, the Court explained the concepts of personal and constructive possession. The mens rea of personal possession requires that the accused have knowledge that they have physical custody of a thing, and that they know its nature. Those two elements “must co-exist with an act of control”: at para. 45. Constructive possession, on the other hand, requires that the accused
(i) have knowledge of the character of the thing;
(ii) knowingly put it in a place, irrespective of whether the place belongs to or is occupied by the accused; and
(iii) intend to have the thing in the place for use or benefit of the accused or another person: at para. 46.
35Additionally, control entails power or authority over an item, whether or not it is exercised: R v Chalk 2007 ONCA 815, at para. 19.
IV. The Issues
36The parties presented the issues and their arguments in extensive written submissions, which were then followed by answers to some questions I posed and discussed with them on the record.
37Mr. Subotic argues that the Crown has failed to prove his guilt on any count and that, therefore, he is entitled to be acquitted of all of them. He makes specific arguments but also relies on the Villaroman principle across the board.
38By way of introduction, I present a high-level description of the arguments. I will engage with them with more specificity below.
- Laundering Proceeds – Silver
39The Crown argues that the count is made out based on the intercepted communications and evidence found in Mr. Subotic’s cell phone, including photos of a silver ingot. The Crown maintains that the theft is proved – and Mr. Subotic’s true belief about it – based on non-hearsay uses of the evidence pertaining to the police investigation and recovery of some of the stolen silver and Mr. Subotic’s unique knowledge about it. The evidence proves personal possession of a silver ingot, and constructive possession of the rest of it, as Mr. Subotic had been attempting to broker a deal and at one point thought that he had completed a sale of 300 ingots. This is sufficient to make out an attempt to sell them, since he had taken the steps that were in his control. The Crown also maintains that the mens rea of belief, which is sufficient, is made out. So too is wilful blindness, given the things Mr. Subotic was saying and doing in relation to the silver.
40Mr. Subotic argues that the Crown has not proved possession, personal or constructive, or a completed transaction. Therefore, the count has not been made out. He also argues that the theft itself has not been proven because the information provided by the police about it is hearsay. As such, the Crown’s case on mens rea is limited to belief. The Crown’s case falls short on that requirement as well, as Mr. Subotic’s state of mind regarding the silver did not go further than suspicion about its origins. This, too, is fatal to the Crown’s argument about attempt.
- Laundering Proceeds – Real Estate
41The Crown relies on the co-conspirators’ exception to the hearsay rule to prove that Mr. Raimondi and Mr. Subotic agreed to finance the purchase of a lot and construction of a home on it because of a debt that Mr. Raimondi owed Mr. Subotic. The project was funded to a great extent by Mr. Raimondi, whose source of income was the illegal manufacture of cigarettes on a reserve without the required authorizations. The illicit source of Mr. Raimondi’s money was known to, or believed by, Mr. Subotic. In addition to coordinating and facilitating aspects of the project (transferring funds to the builder, retaining counsel, etc.) Mr. Subotic also came into personal possession of a funds from Raimondi, including a quantity of cash. Mr. Raimondi expressed a desire to be kept out of the paperwork, and Mr. Subotic expressed a desire to be in control of the project. Both, the Crown argues, took steps to conceal their participation. For example, moneys were delivered from an account in Mr. Raimondi’s wife’s name. A draft payable to the lawyer was drawn from the account of a corporation of which Mr. Subotic was the sole director. Mr. Subotic had the title to the property transferred to his son. Paying the builder, Roy Segal, in cash was also discussed. All of this, Mr. Subotic did to benefit from the sale of the property.
42Mr. Subotic argues that his conduct in relation to the project is susceptible to plausible and reasonable inferences incompatible with guilt: e.g., transferring title to his sone could have been for tax purposes; Mr. Raimondi may have wanted to keep his involvement in the build a secret from its previous owner, not the entire world. He also points to the fact that what the Crown describes as efforts to conceal the source of funds (use of corporations of which Mr. Subotic is a director, transfer to his son who shares his last name, etc.) are hardly difficult to see through. He also argues that there is no admissible evidence to prove that Mr. Raimondi’s funds were from an illicit source. As such, the critical element of knowledge – as true belief – is not made out. He points to the absence of evidence, including the lack of expert forensic accounting evidence, the lack of evidence that cash was received by Mr. Subotic. He also points to the fact that if Mr. Subotic received funds from Mr. Raimondi, they were received electronically and had, therefore, already been converted.
- Possession of Cannabis for the Purpose of Distribution
43Based on intercepted communications, police surveillance and documents, the Crown argues that this count is made out in relation to the 149 kg of CBD powder that was seized from the storage locker. In particular, Mr. Subotic had constructive possession of the CBD powder, which he intended to sell without the required authorizations. He also had personal possession of a pail of the powder on one occasion. In the intercepts, he displayed a knowledge of the substance and the industry surrounding it, both licit and illicit, and indicated an intention to sell the CBD. The amounts at issue exceeded what is permitted by the Act for those who are not authorized. There is also evidence that he had purchased pails like those that were in the storage locker in the past.
44Mr. Subotic raises two main arguments: one, based on Villaroman, and the second, a more technical one about the count itself.
45He argues that the Crown has not proved possession (personal or constructive) beyond a reasonable doubt as there is a plausible inference that his brother Nenad had exclusive access to, and therefore possession of, the storage locker. Also, there is a lack of evidence as to Mr. Subotic’s ability to access the locker: no key or access card, and no notation of an access code.
46With respect to the count, Mr. Subotic points out that he is charged with possession for the purpose of distribution, contrary to s. 9 of the Act, not possession for the purpose of selling, contrary to s. 10 of the Act. “Distribute” and “sell” are defined in s. 2 of the Act. Since “sell” was carved out and defined separately, it cannot be included within the definition of “distribute” due to the ejusdem generis principle. The definition of “distribute” appears to entail non-commercial activities, while “sell” clearly denotes commercial transactions. An alternate interpretation would collapse s. 10 into s. 9.
47While there may be evidence that Mr. Subotic intended to sell the CBD powder, there is no evidence that he intended to distribute it.
48In response to this, the Crown points to the broad language used in the definition of “distribute”, which has been described as non-exhaustive. The Crown argues that the definition of “distribute” does not connote only non-commercial activities. The Crown also relies on the fact that there is parity in the sentences for both types of offences (commercial and non) and argues that s. 10 (selling) was necessary to close the cut-out in s. 9, which allows for the sharing of less than 30 g of cannabis between adults.
- Forgery
49The Crown relies on the co-conspirator’s exception to the hearsay rule to prove that Mr. Subotic entered into an agreement with Nenad Subotic and Mr. Bozovic to alter an RBC statement so that Mr. Bozovic could use it to open a new bank account which, in turn, would prejudice a bank who relied on it. The Crown alleges that Mr. Subotic either altered the document or assisted the others in doing so. The evidence consists of one intercepted conversation between Nenad Subotic and Mr. Bozovic, a subsequent intercepted conversation between Isidor Subotic and Nenad Subotic, the termination letter, the real RBC statement and the altered one. Police found the real and altered statements on the desk at Mr. Subotic’s condo, along with his laptop and an ID badge bearing his name and photo. Mr. Subotic was there as well, and the user profile on the laptop was “Izzy Subotic.” The Crown maintains that the altered document amounted to a forgery even if it was incomplete or substandard.
50Mr. Subotic argues that the call between Nenad Subotic and Mr. Bozovic cannot be used to prove a conspiracy against Mr. Subotic because it preceded his involvement. He also argues that the state of the document is too rudimentary and that even an attempt cannot be made out. It was so “patently lacking in authenticity” that Mr. Subotic could not have intended that it be advanced and treated as authentic by anyone. Moreover, the Crown has not proved who authored the document, there is a lack of electronic evidence that Mr. Subotic did anything with it and there was no printer in his office.
51Other inferences are also available: e.g., that Nenad Subotic created the document; also, perhaps a person referred to – “Raffi” – asked for the document so that he could justify advancing funds to Mr. Bozovic.
V. Analysis
A. Laundering Proceeds – Silver
- The alleged theft
52To prove the alleged theft, the Crown relies on evidence and records not for their truth, as they would be hearsay, but as original circumstantial evidence. They include the testimony of Kyle Eltherington, a director of risk management at Brinks Canada, who was involved in the investigation and reviewed records relating to the alleged loss. He was also involved in the recovery of some of the silver from the United States and western Canada.
53He explained that 18,000 kg of silver from Korea, worth $10,000,000, had been reported stolen in Montreal in January 2020. Each bar weighed 1,000 oz.
54The Crown also relies on a waybill and “theft list” that were provided by the Montreal police. The waybill refers to 20 pallets of silver ingot from Korea Zinc Co., Ltd. and includes a “bar list” identifying serial numbers of the silver ingots that were in each pallet.
55The Crown also relies on certain things that Mr. Subotic possessed or communicated to others as original circumstantial evidence of his knowledge of the theft:
a photograph on Mr. Subotic’s phone of a silver bar bearing a number identical to one that was on the “bar list”, as well as 999.9, 30.583 Kg, and Korea Zinc Co., Ltd.; and
a phone call in which he told someone that the silver would have to be shipped to Toronto from Montreal.
See R v Evans, 1993 CanLII 86 (SCC), [1993] 3 SCR 653 at pp. 662-663 and R v Bridgman 2017 ONCA 940 at para. 77.
- The actus reus
Uses … or otherwise deals with
56In WhatsApp and phone conversations, Mr. Subotic tells more than one person that he received possession of a 30 kg silver ingot. Someone had put it in his car. Mr. Subotic complained about its weight to his brother Nenad Subotic: “I almost killed myself carrying it man it’s like …. Yeah seventy pounds….” He also had the photograph of a silver ingot on his phone, which he shared with someone with whom he was discussing the sale of silver on February 21, 2020.
57In various conversations, Mr. Subotic discusses trying to have the silver smelted down, have the serial numbers removed and sell it. On April 8, a person named “Masoud” told him that a buyer told him (Masoud) “I’ll buy whatever you have.” On May 1, Mr. Subotic told someone named “Dave” “I think I sold three hundred bars I just have to figure out the logistics.” On May 1, he told someone named “Elana” that he “sold that eight tonnes of silver” and that he “just gotta figure out how the fuck to ship it….” On May 13, he told his brother Nenad Subotic that the “silver bricks” were available.
58The strength of the inference that Mr. Subotic not only possessed and handled the silver bar, but also transported it in his car, is overwhelming. I am satisfied beyond a reasonable doubt that this conduct is captured by the “broad array of activities” listed in s. 462.31(1) of the Criminal Code.
Derived as a result of a designated offence
59I also agree with the Crown that the circumstantial evidence proves beyond a reasonable doubt that the silver in question was stolen. It simply beggars belief that Brinks and multiple police forces would embark on an investigation in which they traveled to physically recover silver bullion if that were not so. Also, I agree that Mr. Subotic was possessed of knowledge that was unique and unusual: namely, the inscriptions on the silver bar that was in his possession – particularly the number that matched one of the 600 or so that were in the “bar list” – and that the silver was in Montreal.
60That said, my finding about knowledge is unnecessary as a matter of law. If I am in error about it, proof of belief is a sufficient state of mind for purposes of s. 462.31.
- The mens rea
Knowledge or belief
61I am satisfied beyond a reasonable doubt that Mr. Subotic believed that the silver had been obtained by crime.
62In the search history on Mr. Subotic’s computer, police found that sites had been accessed or watched on May 5, 2020, in response to such searches as “How to store Gold Silver,” “How to Hide Silver Bullion,” “royal Canadian mint stolen silver bars.” Also accessed was a Toronto Star story about a Royal Mint worker who was to be sentenced for smuggling “165k worth of gold.” Many of the searches were associated with the email address izzysubotic@hotmail.com.
63In a conversation on February 21, the person to whom Mr. Subotic sent the photo of the silver ingot told him “My guy knows about these bars, they not as clean as you think bato.”4 In a conversation in March, “Mike” asks Mr. Subotic if the silver is “legit like what’s the deal.” This exchange followed:
Mr. Subotic: I’m not gonna say no to you just because…They’re telling me yes .. Okay and that scares me when you know when right out of the gate cuz I asked him for papers and whatever and they’re like well we don’t have papers…so I …
Mike: Is it
Mr. Subotic: I’m gonna say no
Mr. Subotic also tells Mike that “these guys will give you like (unintelligible) from from my understanding whatever the the spot rate is minus thirty percent.” Mike then tells him “That sounds pretty pretty you know low right….”
64On March 26, Mr. Subotic and “Michael” discuss the silver:
Michael: You think it’s real
Mr. Subotic: (unintelligible) one hundred percent real I just don’t know on the hot
Michael: Where is it
Mr. Subotic: Hot meter I had a sample here the guy gave me a thirty kilo sample
When Michael asks him why the people “won’t just go into a fucking bank and sell it”, Mr. Subotic responds: “Because obviously they didn’t get it through regular means.” Michael’s response: “(unintelligible) yeah that’s a problem.”5 On May 1, Mr. Subotic tells “Elana” that he has to figure out how to ship it and that “the guy” is “going to a smeltering place here….”
65Based on the internet searches and the conversations Mr. Subotic had with various people, there can be no doubt that he believed that the silver was obtained by crime. In February, someone told him that the silver was not “as clean as you think.” Later, because the people he spoke to told him they did not have “papers”, he told Mike that the silver was not legitimate. Given the context, “papers” must have referred to proof of ownership or provenance. “Hot” is a commonly used term for things that are stolen. What is more, why else would there be a 30% discount if the silver was legitimate? Why else would he want to smelt it and risk reducing its value?6
Converting
66Mr. Subotic’s conversations make it clear that he intended to sell the silver. There can be no reasonable doubt about that.
Concealing
67Mr. Subotic talked with others about having the silver smelted and broken down into smaller pieces. “Mike” told him that stamps and serial numbers are good, from the perspective of value, “as long as it doesn’t lead to some paper trail that’s no good.”
68There is only one reasonable or plausible inference as to why Mr. Subotic was trying to have the silver smelted: he intended to conceal its origins.
Personal and constructive possession
69As I have stated above, Mr. Subotic was in personal possession of a single 30 kg silver ingot. What is more, based on the totality of the evidence, I am also satisfied beyond a reasonable doubt that he was trying to convert and conceal that single ingot and approximately many tonnes of silver (comprising 300-390 30 kg ingots7) that were not in his personal possession. It would seem that it was still in Montreal.
70However, I am left in a state of reasonable doubt regarding his ability to exercise control over the larger amount. Based on my reading of the evidence, Mr. Subotic was acting as a broker of sorts, for a percentage. The evidence contains no intercepted communications between Mr. Subotic and the person(s) who were holding the silver in Montreal. Yes, at one point he thought he had made a sale and was turning his mind to the logistics of transport but, while it is a close call, the evidence does not convince me beyond a reasonable doubt that Mr. Subotic had the ability to exercise control over the silver.
71I have considered whether an attempt is made out regarding the balance of the silver. The evidence does not provide me with an understanding of the additional steps that Mr. Subotic would have needed to take to obtain possession of the silver. As such, the inference that Mr. Subotic had taken no more than preparatory steps to obtain it is reasonably plausible.
72For these reasons, I am satisfied beyond a reasonable doubt that Mr. Subotic was in possession of, and dealing with, one 30 kg silver bar for purposes of concealing or converting it, knowing and believing that it had been stolen. He is therefore guilty of Count 5.
B. Laundering Proceeds – Real Estate
- Carter Step 1: Was there a conspiracy/common criminal enterprise?
73The Crown alleges that Mr. Subotic laundered proceeds of Mr. Raimondi’s sales of contraband cigarettes by being involved in the purchase of land on Mississauga Road from a Robert Ragno and the subsequent construction of a house on it. To prove the requisite elements of that offence, the Crown seeks to rely on the co-conspirator’s exception to the hearsay rule.
74To do so, the Crown must first prove the existence of the conspiracy beyond a reasonable doubt, using all relevant and admissible evidence. If that is proved, the Crown must then prove that Mr. Subotic was probably a member of the conspiracy using only evidence that is directly admissible against Mr. Subotic. If the Crown succeeds, then it is open to the Crown to demonstrate that things that were said and done by any of the co-conspirators were “in furtherance” of the agreement’s aims. Those things, in turn, can be used in an effort to prove beyond a reasonable doubt that Mr. Subotic was a member of the conspiracy. The Crown alleges that once all the admissible evidence is taken into consideration, the elements of the offence of laundering proceeds will be made out beyond a reasonable doubt.
75As a judge sitting alone, it is difficult to articulate reasons and the Carter test itself in a case in which a conspiracy count is not laid, particularly when it comes to the mens rea. This is because a conspiracy is, by definition, a common criminal enterprise and, in this case, Mr. Subotic’s knowledge or belief regarding the source of Mr. Raimondi’s funds is a disputed element of the laundering offence that is alleged against him.
76Courts and authors have acknowledged a further difficulty. The Carter analysis is challenging to apply in cases, like this one, alleging a two-person conspiracy: see Bogiatzis, supra at paras. 24-26. Yet, the Carter test remains in place. In applying it, I must be careful not to jump from proof of the conspiracy (beyond a reasonable doubt) to proof of membership (on a balance of probabilities). Some of the evidence available at Step 1 is not admissible against Mr. Subotic at Step 2.
77I have decided to approach the task by addressing the Carter test first, followed by the elements of the offence of laundering proceeds. In doing so, I have been careful not to presume that Mr. Subotic’s level of belief or knowledge as to the nature of the source of the proceeds has been proved. I have also been careful to consider the evidence that is admissible on the question of membership separately from that which goes to the existence of the agreement.
78For the following reasons, I am satisfied beyond a reasonable doubt of the existence of an agreement between two persons (here, Mr. Subotic and Mr. Raimondi) to use the proceeds of Mr. Raimondi’s contraband cigarette business to build the house in Mississauga.
79The “take down” in the broader investigative project occurred on June 1, 2020. That included searches of locations associated with Mr. Raimondi, and his arrest. The searches of Mr. Subotic’s condo, Land Rover and the storage locker took place on June 1 as well.
80A conversation of that day between Mr. Subotic and an acquaintance named Lolita8 was intercepted. The Crown submitted that while this conversation took place at the end of the investigation, it is highly probative of the existence of an agreement and why Mr. Subotic entered into it. I agree. The following is part of what was said (the emphasis is mine):
172
Isidor Subotic:
Oh my God fuck my fucking buddy’s girlfriend called
173
me up says just so you know the fucking uh buddy’s
174
in they picked him up
175
Lowlita:
Oh
176
Isidor Subotic:
I’m like picked him up for what I mean I got a few
177
guesses but but I’m like I fucking told him and I told
178
him fuck he I barred him from here he can’t come to
179
my house
180
Lowlita:
Okay
181
Isidor Subotic:
You know but it’s fucked up because you know he
182
talked me into going and and and building a house in
183
Mississauga
184
Lowlita:
Oh no do I know this person
185
Isidor Subotic:
(Unintelligible) no huh
186
Lowlita:
Do I know them
187
Isidor Subotic:
Uh I don’t know no I don’t think you know him no
188
Lowlita:
Oh
189
Isidor Subotic:
He was the guy who fucking borrowed (unintelligible)
190
Lowlita:
Oh you told me about something
191
Isidor Subotic:
The the the Lambo in my fucking
192
Lowlita:
Yeah
193
Isidor Subotic:
Parking spot down there I told him to get this fucking
194
shit
195
Lowlita:
Lambo
196
Isidor Subotic:
Out of here yeah he had a fucking Lambo and he goes
197
(unintelligible) just fucking drive it around keep it in
198
your parking spot whatever I’m like get this fucking
199
shit out of here man are you crazy and then I was
200
covering it up
201
Lowlita:
I think you told I think you told me about it
202
Isidor Subotic:
You know I was covering the fucking thing up
203
because I didn’t want anybody to see a Lambo beside
204
my car
205
Lowlita:
(Unintelligible)
206
Isidor Subotic:
I went in there you wanna hear (unintelligible)
207
Lowlita:
(Unintelligible) he was getting fucking he was getting
208
the land from your buddy or something like that your
209
friend was gonna help him (unintelligible)
210
Isidor Subotic:
Yeah (unintelligible) transfers yeah we transferred it
211
on on on Jake’s name yeah
212
Lowlita:
Great
213
Isidor Subotic:
Well but he’s gotta shell out the money to to Roy
214
who’s building it right I mean
215
Lowlita:
Yeah
216
Isidor Subotic:
He did most of it he but he still owes him like fifty
217
grand or whatever to start building he fucking took a
218
mortgage out for two million to build the fucking
219
place (sighs)
220
Lowlita:
Oh oh no
221
Isidor Subotic:
Well I don’t give a fuck I’ll sell it what can I do I’ll
222
sell it no building no nothing fuck you
223
Lowlita:
(laughs) (Unintelligible)
224
Isidor Subotic:
That was one of the conditions when he asked me I
225
said dude I ain’t doing it until (unintelligible) unless I
226
control it if I don’t control it fuck I don’t know what
227
the hell you’re doing
228
Lowlita:
Right
229
Isidor Subotic:
He does that the the the tobacco on on on the reserves
230
you know
231
Lowlita:
Oh you told me yeah you told me about the kid
232
Isidor Subotic:
Yeah the kid he’s a fucking so I barred him from here
233
right I said you can’t come here man you cannot come
234
here I don’t wanna be seen with you I don’t wanna
235
associate with you I don’t wanna have anything to
236
fucking do with you cuz what you think they’re
237
they’re not eyeballing you up there you know
238
Lowlita:
Right
239
Isidor Subotic:
And then he got and then he got fucked then he went
240
there and then they closed the reserve they wouldn’t
241
allow anybody in or out
242
Lowlita:
Oh no
243
Isidor Subotic:
Yeah so he he’s bribing the the whatever those guys
244
patrolling to let him out and like fucking keep him in
245
there keep him two three years (unintelligible) then he
246
can’t get in trouble so anyways his girlfriend today
247
fuck (unintelligible) I’m like in on what
248
Lowlita:
Hmm
249
Isidor Subotic:
You know because last year he got fucking popped
250
with uh you know cuz they send all the the the their
251
cigarettes to um
252
Lowlita:
Oh
253
Isidor Subotic:
Uh to Vancouver right
254
Lowlita:
Hmm
255
Isidor Subotic:
And remember I went in on on on one reserve thing
256
with him (unintelligible) but under the condition that
257
whatever is made on the reserve stays on the reserve I
258
ain’t shipping out I ain’t (unintelligible) I ain’t doing
259
any of that
260
Lowlita:
Yeah yeah yeah yeah
261
Isidor Subotic:
And then like you know he agreed and whatever and
262
then he got fucking greedy cuz he makes three times
263
more money if we ship it right
264
Lowlita:
Right yeah you told me he got he shipped
265
(unintelligible) got caught or whatever
266
Isidor Subotic:
Yeah and then (unintelligible) they pinch him with a
267
fucking tractor trailer that’s a couple a million bucks
268
down the drain
269
Lowlita:
Right
270
Isidor Subotic:
Thank God I said give me my fucking money
271
(unintelligible)
272
Lowlita:
(laughs)
273
Isidor Subotic:
(Unintelligible) well actually he still owes money
274
that’s why I did the real estate thing with him cuz
275
that’s the only way I’m gonna get my fucking money
276
from him
277
Lowlita:
(Unintelligible)
278
Isidor Subotic:
He still owes me you know I’m like (unintelligible)
279
and he and it’s a good business even on the reserve
280
like you know the guy could make four or five
281
hundred a month
282
Lowlita:
Yeah
283
Isidor Subotic:
But that’s not enough that’s not enough fucking he
284
wants to play the fucking gangster
81It is evident, in the context of all the evidence, that “the kid” to whom Mr. Subotic was referring is Mr. Raimondi and that “Roy” is Mr. Segal, the builder. What Mr. Subotic said also makes it clear that he agreed to build a home with Mr. Raimondi to recoup a debt, and that Mr. Raimondi had to “shell out” money to Mr. Segal.
82There is a large quantity of evidence, which I do not propose to list in its entirety, that further proves the agreement. In it, the men refer to money amounts like “65” and “25k.” It is obvious from the context that “k” means “a thousand” and that when they do not use the term “k”, they are, at times, talking about thousands.
83On January 22, 2020, Mr. Raimondi is seen on CCTV in the lobby of Mr. Subotic’s condo building handing him a quantity of cash. In a phone call of January 23, 2020, Mr. Raimondi and Mr. Segal arrange to attend at Mr. Subotic’s condo. In a phone call of January 27, Mr. Segal and Mr. Raimondi discuss where to build the house; Mr. Segal also tells him that he is involved because Mr. Raimondi “came from Izzy.” On February 18, Mr. Raimondi and Mr. Segal discuss “closing” and meeting up regarding the “retainer.” Mr. Segal refers to “you guys” and Mr. Raimondi says he will see “Izzy’s lawyer.” On February 20, Mr. Segal told Mr. Raimondi “this whole thing is for Izzy”.
84On February 21, a bank draft was made payable to Mr. Subotic’s real estate lawyer, Timothy Kinnaird, who was later disbarred. It came from a company, Eden Investments, of which Mr. Subotic was a director.
85In a phone conversation of February 24, Mr. Raimondi gave someone directions to the law office of Timothy Kinnaird to drop off a “bank draft”. That draft – in the amount of $125,000 to Timothy Kinnaird in trust – was reflected in an account associated with an Emilia Raimondi, his wife.
86In a phone call of February 26, 2020, Mr. Subotic and Mr. Segal discussed the fact that the house was going to be too big and hard to sell. They also discussed the fact that Mr. Raimondi had paid for permits and that the project would be transferred into the name of Jakob Subotic. In a March 2 phone conversation, Mr. Raimondi tells another male that he is building a property on Mississauga Road. In a phone conversation of March 3, Mr. Segal and Mr. Subotic talk about “Tim” [the lawyer]. Mr. Segal also tells him that he had met with John [Raimondi] who told him that he and Mr. Subotic would be providing two cheques, one for $1.5 million and one for $1/2 million. In text messages of March 3, Mr. Segal tells Mr. Subotic that he will send him banking information and mentions $187,500. On the same date, a company called Canon Communications Corp. (“Canon”) transferred the equivalent of $187,500 re “interest payment for 2630 Mississauga Rd.” The company’s records indicate no relationship with Mr. Subotic. On March 4, however, Mr. Segal told Mr. Subotic that “everything went through.”
87In that call, they also discussed the fact that the lawyer had been disbarred and that Jakob Subotic would need a different lawyer. In a phone call of March 5, Mr. Subotic and Mr. Raimondi discussed the need for a new lawyer. In a conversation in Mr. Raimondi’s car on March 8, Mr. Subotic and he discussed what Mr. Subotic was to do with the “150” that he “picked up.” They also talked about a shortfall in the project, and the fact that Mr. Raimondi had asked Mr. Segal to obtain a new drawing for the house. On March 12, Mr. Subotic and Mr. Segal exchanged text messages about the shortfall. On March 17, they texted about the shortfall again, and Mr. Segal told Mr. Subotic that he and Mr. Raimondi needed to come up with $352,000. Mr. Subotic said, “ok let me see with John.”
88On March 17, a charge of $1.5 million was registered against the property with Jakob Subotic as the chargor. In a phone call of that day, he and Mr. Segal spoke of the “need to discuss strategy.” In a phone call of March 18, Mr. Raimondi told Mr. Segal that he would get Mr. Subotic to provide quantities of money and that he would also provide some. They also agreed that the three of them should meet.
89In a phone call of March 18, Mr. Raimondi and Mr. Segal talked about finances. Mr. Raimondi said he would get Mr. Subotic to provide funds. In particular, he refers to “65.”
90On March 20, Mr. Subotic told Mr. Segal that $71k had been deposited into Jakob Subotic’s account and asked who he should make out a draft to.
91On April 15, Mr. Subotic texted Mr. Segal that “the kid sent me a message to send $25k. I have done that. Please confirm it should be there in 30min.” Mr. Segal confirmed a short time later. In a notebook that was seized from Mr. Subotic’s condo, a note indicates that $25k was sent to Roy on a space in a list between April 13 and April 18.
92On May 18, Mr. Subotic and Mr. Segal had a conversation about money. Mr. Subotic asked if Mr. Segal would accept “paper,” which he clarified to mean “cash.”
93In text messages of May 19, Mr. Subotic told Mr. Segal “I have $160k to send you…. I have 160k right now and will get more from him in the next few days…,” and asked for the “wire instructions.” On May 20, Mr. Segal confirmed receipt. Mr. Segal’s banking records indicate that $162,485 was received from Eden Investments re “Mississauga Rd Payment.” A note seized from Mr. Subotic’s condo indicated “May 20 – 162,500 CND Roy.”
94A mortgage document dated May 21 was seized from Mr. Subotic’s condo. It shows a mortgage from Mr. Segal to Jakob Subotic regarding the Mississauga property.
95A handwritten document that was seized from Mr. Subotic’s Land Rover shows what appear to be monetary amounts and persons or things they are associated with, such as “mortgage”, “rob”, “city deposit”, “to builder”, “draft to lawyer,” etc. One entry reads “125 k - draft to lawyer.” Another reads “65 k - to builder.”
96In the middle of the page, Total – 762700 is written. Then, below the entries 125 k - draft to lawyer and 65 k – to builder, the last entry reads Total = 952700.
97I turn now to evidence about Mr. Raimondi in particular, as it relates to the unlawful nature of the alleged common enterprise. In a December 19, 2019, phone call with an unknown male whom, it appears, he was trying to coax to continue working for him, Mr. Raimondi said he had invested $2 million into it and ordered another machine that would lead to getting “fifteen skids a week.” He also explained that he makes more money selling Chinese cigarettes as his “case price goes up.”
98In a conversation in his car on January 18, 2020, Mr. Raimondi talked about expensive cigarette machines, that cigarettes are his “main thing” and that they are supposed to be sold on reservation. The topic of licences comes up, and the male asks him if he is “going that way.” Mr. Raimondi responds that he is not. Some entities do, and “they pay taxes and everything.” He then explains that he's been working with some reserves for 10 years.
99In text messages with someone named Zhi Jun Liu on February 22, Mr. Raimondi asked Liu if he could go see his friend and “pick up paper.” Liu responded that he asked the other person to “give you 34000 first as I shipped 5 case more.” Liu also mentioned his driver’s phone number ending in 5957.
100The next day, in a call with a male at the number ending 5957, the two arranged to meet. Later that day, Mr. Raimondi and Mr. Segal met in Mr. Raimondi’s car. Mr. Raimondi told him “here’s the rest.” Mr. Segal asks, “what’s here” and Mr. Raimondi responds, “the thirty.” He also tells Mr. Segal not to mention to someone else that he is involved.
101In a conversation in his car on March 2, Mr. Raimondi told a male words to the effect that he does not talk about the “shops on the reserve” over the phone. He also told him, “I make cigarettes I have two factories on the reserve” and that he was building a big house on Mississauga Road.
102In a conversation in his car on April 24, Mr. Raimondi explained that he opened a second factory on a reserve and that he had been living in an eight-bedroom apartment there. He also told him about his first factory, which he built from scratch ten years ago. He continued. He was helping someone with “smokes” make “five ten K a month to do nothing zero absolutely zero…” The “cops aren’t even allowed on the rez” he told him, and “I got a full compound you can’t even look into it …. If you were to stare at my place from the street you can’t see inside … You either need a fucking … helicopter or a fucking drone to look inside.”
103In his car on April 26, Mr. Raimondi showed a male a property on Mississauga Road. He told him “I’m just going to build it and flip it.” Describing the property, he said “yeah this is all mine….”
104In his car on May 15, Mr. Raimondi explained to an unknown male why he would not want to get a licence to make money from cigarettes on reserve as follows:
…you open up a whole another can of worms fucking trying to get a licence … you gotta deal with the government Revenue Canada this and that… I’m a fucking criminal they’re not giving me a fucking licence … I got no criminal record but bro I’ve been charged fucking a million times … they’re not gonna give me a fucking licence…
105Mr. Subotic’s call with Lolita and the additional evidence I have just described lead irresistibly to the conclusion, beyond a reasonable doubt, that two persons – Mr. Subotic and Mr. Raimondi – entered into an agreement to use Mr. Raimondi’s money to fund the building of the house on Mississauga Road.
- Carter Step 2: Were Mr. Subotic and Mr. Raimondi Members?
106It is obvious, based on the evidence that is directly admissible against each man, that both were probably members of the conspiracy that has been proved to exist beyond a reasonable doubt. In the context of the evidence before me, Mr. Subotic’s own words to Lolita suffice to demonstrate his membership. He told her that Raimondi had talked him into building a house in Mississauga, and that it was the only way he would recoup his money. In the context of a discussion about “closing,” Mr. Segal referred to “you guys” and Mr. Raimondi told him that he would “see Izzy’s lawyer.” That constitutes an admission against Mr. Raimondi. He told others that he was building a property in Mississauga that he was going to “flip.” Mr. Subotic told Mr. Segal (and Lolita) that he wanted to be, and was, in control. When the shortfall became evident, Mr. Segal told Mr. Subotic that he needed Mr. Raimondi and him to come up with $352,000; Mr. Subotic said he would see with Mr. Raimondi. The lawyer was Mr. Subotic’s, and the property ended up in his son’s name (with no apparent involvement of his son).
- Carter Step 3: Acts and Declarations “in Furtherance”
107The calls, observations and documents that I have described above are evidence that many acts were done and declarations made in furtherance of the agreement’s objective by Messrs. Raimondi and Subotic (or others, at their direction), and constitute further proof of Mr. Subotic’s membership in the conspiracy:
Going to the building project
− Conversations about where to build the house, retainers and closing;
− Ongoing conversations about the size of the build and additional designs;
− Conversations about financing, mortgages and whether cash can be used;
− Conversations in which Mr. Subotic tells Mr. Segal or Lolita that he is, or wants to be “in control”;
− Record keeping, such as notes and lists of apparent disbursements made or kept by Mr. Subotic;
Financing the building project
− Conversations between Mr. Subotic and Mr. Raimondi about funding the build;
− Instances of moneys sent or given to Mr. Segal or to counsel by Mr. Subotic or Mr. Raimondi or at their direction;
− Instances of moneys being sent or given to Mr. Subotic by Mr. Raimondi;
− Mortgage documents in Jakob Subotic’s name;
Going to the illicit nature of the building project/source of funds
− Mr. Raimondi’s conversations about his tobacco business, including lack of licences and revenue;
− Mr. Raimondi’s transaction involving “5 case” for “34,000” and subsequent turning over of “thirty” to Mr. Segal;
− The use of paper/cash and questions about whether Mr. Segal will accept cash;
− Putting the house in the name of Jakob Subotic, who has no apparent involvement in the project;
− Mr. Raimondi’s desire to have his involvement kept quiet;
− Mr. Subotic’s desire to be in control rather than Mr. Raimondi, whom he believes wants to play “gangster”;
− The use of other entities’ accounts to effect transfers, including Eden Investments, Emilia Raimondi and Canon.
108To be clear, I find that there are two clear and irresistible inferences concerning the movement of funds during the conspiracy:
(1) that Mr. Subotic facilitated or arranged for the transfer of $187,500 from Canon to Mr. Segal on March 3 or 4. This is because of the communications between the two of them on both dates, the timing of the transfer and Mr. Segal’s confirmation of receipt.
(2) that Mr. Raimondi sold a quantity of contraband cigarettes for $34,000 in cash on February 22 and provided $30,000 in cash to Mr. Segal the next day. Mr. Raimondi had referred to “cases” of cigarettes in other communications. Viewed in context, “paper” and “cash” are synonymous; Mr. Subotic also used both in a conversation with Mr. Segal. The fact that Mr. Segal asked Mr. Raimondi “what’s here” is evidence that the payment was cash; one does not need to ask how much a cheque or draft is worth.
- Laundering Proceeds – Actus Reus
Uses … or otherwise deals with
109The actus reus of laundering includes almost anything done with property or proceeds. There can be no reasonable doubt that Mr. Subotic used, transferred, sent, delivered, transmitted or otherwise dealt with Mr. Raimondi’s money, directly or indirectly, by various means, to facilitate the build of the house in Mississauga.
110Based on the evidence I have reviewed above, the total funds involved were between $769,985 – the sum of the amounts listed above – and $952,700 – the total on the list that was found in Mr. Subotic’s Land Rover.
Derived as a result of a designated offence
111I agree that the Crown has proved the illicit nature of Mr. Raimondi’s funds beyond a reasonable doubt. This is because of the combined effect of his communications (in which he discusses his business, revenue and expenses, and the reasons why he does not have a licence), his conviction for conspiring to unlawfully manufacture tobacco at the relevant time and the $500,000 fine that was imposed on him. While there are of course “dry conspiracies”, the evidence in this case – including the quantum of the fine – leads inexorably to the conclusion that Mr. Raimondi was, in fact, deriving proceeds from the manufacture and sale of contraband cigarettes.
- Laundering Proceeds – Mens Rea
112The Crown has also proved beyond a reasonable doubt that Mr. Subotic intentionally concealed or converted Mr. Raimondi’s funding, knowing or believing that Mr. Raimondi’s illegal tobacco business was the direct or indirect source of those funds, and that this state of mind coincided with being in possession of Mr. Raimondi’s illicit funds.
Converting
113Mr. Subotic wanted to control the project, and Mr. Raimondi wanted his name out of it. Mr. Segal treated Mr. Subotic like he was in control. On June 1, Mr. Subotic told Lolita that a condition of his involvement was that he be in control. He also told her that he did the project with Mr. Raimondi to recoup a debt; Mr. Raimondi had to shell out money and had done “most of it,” but still owed “like fifty grand or whatever.” Also, Mr. Raimondi delivered a quantity of cash to Mr. Subotic on January 22. Later, Mr. Subotic “picked up” $150,000 from him. Monies were provided, in various forms, to Mr. Segal by Mr. Subotic or at his direction.
Concealing
114Mr. Subotic also tried to conceal these conversions by using cash, or having moneys transferred by Eden or Canon. Mr. Raimondi did as well, notably through Emilia Raimondi. The transfer to Jakob Subotic was also done to conceal Mr. Subotic’s involvement. Likewise, Mr. Raimondi told Mr. Segal not to mention his involvement.
Belief
115Mr. Subotic told Lolita that he had participated in Mr. Raimondi’s tobacco operation in the past, but only on condition that things remained on reserve. By shipping things out, Mr. Raimondi was being greedy and playing the gangster. Mr. Subotic also “barred” Mr. Raimondi to avoid being seen to be associated with him. This was because his opulent lifestyle – e.g. driving a Lamborghini – would attract unwanted attention. Mr. Subotic knew that the authorities were “eyeballing” Mr. Raimondi. Mr. Subotic also knew that he had been arrested the year before regarding his tobacco operation. No wonder he let on to Lolita that he had a “a few guesses” as to why Mr. Raimondi had been arrested. This was an understatement. Mr. Subotic believed that Mr. Raimondi was in the lucrative business of making and selling contraband cigarettes.
116I also agree with the Crown that Mr. Subotic’s efforts to conceal his involvement in the build are further evidence of his belief in the illicit nature of Mr. Raimondi’s funds.
Knowledge
117While it is not strictly necessary for me to decide, I find beyond a reasonable doubt that Mr. Subotic’s belief about the illicit nature of Mr. Raimondi’s money was true so as to fix him with knowledge.
Possession
118Based on the evidence I have described above, I find beyond a reasonable doubt that Mr. Subotic came into personal possession of a quantity of Mr. Raimondi’s cash on January 22. In March he came into possession of $25,000 of Mr. Raimondi’s funds and in April, $150,000. The evidence also proves that Mr. Subotic came into personal possession of other amounts. For example, on May 19, he told Mr. Segal that he had $160,000 and would get more from Mr. Raimondi in the coming days.
119I also find beyond a reasonable doubt that Mr. Subotic had constructive possession of Mr. Raimondi’s funds, as he exerted control over them. Mr. Raimondi, who owed him money, convinced him to build the house in Mississauga. Mr. Subotic was in control, and Mr. Raimondi wanted to be kept out of it. Mr. Subotic was able to obtain funds from Mr. Raimondi and coordinate transfers. This arrangement was to their mutual benefit.
120Whether Mr. Subotic received cash from Mr. Raimondi or other forms of currency is beside the point. The wording of the offence makes it clear that the illicit funds can come directly or indirectly.
121I have considered whether inferences that are inconsistent with Mr. Subotic’s guilt exist that are also plausible or reasonable. I have found that there are none. For these reasons, I find Mr. Subotic guilty of Count 4.
C. Possession of Cannabis for the Purpose of Distribution
122Based on the video surveillance, the items seized and the documents relating to the storage locker, there is no question that it is indeed Mr. Subotic who is connected to the CBD powder. He is the one who met with his brother Nenad Subotic in the parking lot near DIN’s accounting and had conversations about CBD in the ensuing days.
123The issues I must resolve are:
(1) whether Mr. Subotic had possession of the CBD powder and, if so
(2) whether his conduct and intent are captured by s. 9(2) of the Act.
- Possession
124I have no difficulty finding beyond a reasonable doubt that Mr. Subotic had personal possession of a 10 kg pail of CBD when he met with his brother and that he put it into the back of his vehicle on April 29. The pail he was inspecting appears to be identical to the ones that were seized on June 1. It is a large white pail with a screw-top lid, and the labels are similar in size, shape, contents and colour. The following photos illustrate the point. The first two are from the surveillance; the third is from the search of the locker.
125I am also satisfied that Mr. Subotic had possession of the remaining 1 kg containers and 10 kg pails that were in the storage locker. That finding is supported by several facts. Mr. Subotic was a director of DIN’S Accounting, which was renting the storage locker. He was also listed as an alternate contact on the lease. On April 29, Nenad told him he had a pail in his car. The two met and Mr. Subotic took possession of the pail. In a phone call around 12:35 p.m. on May 29, Mr. Subotic told Nenad Subotic “I need a sample at the storage place.” In a phone call with other people later that day, Mr. Subotic talked about “a key”, which one of the others appeared to interpret as “a key of CBD.” In context, it is clear that a “key” refers to a kilogram. It is also a term that is widely known in popular culture. In a WhatsApp message, someone asked Mr. Subotic “U still have the distilled oil.” He replied, “isolate I have (powder) distilled is oil.” The person asked, “How much.” Mr. Subotic responded: “150 kg 5k.” The other person indicated that they were “sitting with someone right now,” and Mr. Subotic replied, “ok tell them its ready for pick up in 15min.”
126Mr. Subotic knew the nature and exact quantity of the CBD, and where it was stored. He had the legal right to access it and had the ability to exercise authority or control over it. Even if he did not have the means of access – for instance a key or pass code – it is obvious that a simple call to his brother was all it took to have it delivered or made available to him. It is equally obvious that he intended to store it in the locker for his own benefit.
127No inference that is inconsistent with guilt (including that his brother had exclusive possession) is reasonable or plausible.
- For the purpose of selling
128It is obvious (and not really disputed) that Mr. Subotic was in possession of the CBD powder for the purposes of selling it.
129Mr. Subotic was in possession of almost 150 kg of CBD powder. That is a very large amount. He was not the holder of an authorization or licence. In the intercepts, he discussed his knowledge of the legal and illegal trade in CBD. He displayed knowledge of its nature and value, and the fact that taxes make it hard for “legitimate guys” to compete with “non-legit guys.” In a call of May 1, Mr. Subotic told someone “...meanwhile every month I have to pay juice for that CBD shit” and mentions that he had already given someone “seven hundred thousand dollars” for it. Given the context, it is obvious that “juice” is either interest or consideration. Later that day, he had a conversation in which it appears that the value of CBD was discussed. On May 29, after asking Nenad Subotic to bring him a sample, Mr. Subotic told someone that he would “be happier than pigs in shit if he gives me four…for a key.” Another person says or asks, “A key of CBD,” to which Mr. Subotic does not verbally respond. The WhatsApp messages I referred to above are further proof of Mr. Subotic’s commercial designs.
130The Crown has proved beyond a reasonable doubt that Mr. Subotic was in possession of the CBD powder for the purpose of selling it without authorization. No inference that is inconsistent with guilt is reasonable or plausible.
- Was Mr. Subotic in possession for the purpose of distribution?
131Mr. Subotic is charged with contravening s. 9(2) of the Act, the relevant parts of which read as follows:
Distribution
9 (1) Unless authorized under this Act, it is prohibited
(a) for an individual who is 18 years of age or older
(i) to distribute cannabis of one or more classes of cannabis the total amount of which is equivalent, as determined in accordance with Schedule 3, to more than 30 g of dried cannabis,
(ii) to distribute cannabis to an individual who is under 18 years of age,
(iii) to distribute cannabis to an organization, or
(iv) to distribute cannabis that they know is illicit cannabis;
Marginal note: Possession for purpose of distributing
(2) Unless authorized under this Act, it is prohibited to possess cannabis for the purpose of distributing it contrary to subsection (1).
132The relevant parts of s. 10 of the Act read as follows:
Selling
10 (1) Unless authorized under this Act, it is prohibited to sell cannabis, or any substance represented or held out to be cannabis, to
(a) an individual who is 18 years of age or older;
(b) an individual who is under 18 years of age; or
(c) an organization.
Marginal note: Possession for purpose of selling
(2) Unless authorized under this Act, it is prohibited to possess cannabis for the purpose of selling it contrary to any of paragraphs (1)(a) to (c).
133Section 2 of Act defines distribute and sell:
distribute includes administering, giving, transferring, transporting, sending, delivering, providing or otherwise making available in any manner, whether directly or indirectly, and offering to distribute. (distribuer)
sell includes offer for sale, expose for sale and have in possession for sale. (vente)
134I agree with the Crown that Mr. Subotic’s possession of illegal cannabis for the purpose of sale is captured by s. 9(2) for the following reasons. First, on its face, the definition of distribute is expansive. It is not limited to the forms of conduct that illustrate it; rather, the definition includes those forms of conduct. Second, based on the way the statutory regime is set up to permit the sharing – but not selling – of less than 30 g, a section prohibiting sale was required. Third, in my view, the forms of conduct included in the definition of “distribute” do not denote only non-commercial activities. Fourth, one cannot sell cannabis without engaging in conduct that would be included in the definition of distribute. Fifth, the maximum penalty for either form of conduct is the same (14 years).
135In my view, possessing cannabis for the purpose of selling it is a version of the offence of possessing it for the purpose of distributing it. Since the Crown has proved that Mr. Subotic intended to commit the most involved form of the offence – commercial distribution – there is no injustice in finding him guilty of what may arguably be an attenuated or pared form of that prohibited conduct.
136For these reasons, I find Mr. Subotic guilty of Count 7 (contravening s. 9(2) of the Act.)
D. Forgery
137The Crown seeks to prove this count by way of conspiracy. In doing so, it relies on the following evidence:
one intercepted call between Nenad Subotic and Neven Bozovic of May 29 (“the May 29 call”);
one call between Nenad and Isidor Subotic of May 31 (“the May 31 call”);
Mr. Bozovic’s banking records; and
the RBC statement and the alleged forgery that were found in Mr. Subotic’s office.
138While I have no doubt that Nenad Subotic and Mr. Bozovic agreed with each other to forge the RBC record to the prejudice of another bank, and in fact took steps to attain that goal, I am left in a state of reasonable doubt as to Mr. Subotic’s guilt. Not because of a lack of evidence that he had a printer or an absence of a forensic analysis of his computer; he told his brother he had printed and scanned it. Rather, because I am not convinced beyond a reasonable doubt that he was a member of the conspiracy or that he knew its origin, nature and object.
139It must be said that the evidence relating to this count is thin. More to the point, the May 29 call predated Mr. Subotic’s involvement with the RBC record. It cannot be used against him other than to prove the origin, nature and object of the conspiracy. It does not prove his knowledge of the scheme, or his membership in it. True, the May 31 call and the physical evidence make it plain that he was trying to alter the RBC document for Mr. Bozovic. Where the evidence falls short is in excluding other reasonable or plausible inferences. I agree with the Defence that a reasonable or plausible inference exists that Mr. Subotic did not intend for someone to rely on the document to their detriment. It may be weak, but it is not fanciful. As such, Mr. Subotic is entitled to be acquitted of Count 6.
VI. CONCLUSION
140For these reasons, the verdicts of this Court are:
Count 4: Guilty.
Count 5: Guilty.
Count 6: Not guilty.
Count 7: Guilty.
Released: May 26, 2026
Signed: Justice P.F. Band
Footnotes
- Contrary to ss. 462.31 of the Criminal Code of Canada (the Criminal Code) – Counts 4 and 5.
- Contrary to ss. 9(5) of the Cannabis Act (the Act) – Count 7.
- Contrary to s. 367 of the Criminal Code – Count 6.
- Bato seems to be a term of familiarity used by Mr. Subotic and others to refer to each other. Nenad Subotic and others refer to Mr. Subotic that way, albeit not exclusively.
- My emphasis.
- See conversation with “Mike” below.
- See calls with “Michael” of March 26, lines 126-134 and Elana of May 1, lines 22-28.
- It is spelled “Lowlita” in the transcripts of the intercepts. As counsel for the Defence pointed out, it is more likely to be spelled “Lolita.”