COURT FILE NO.: CR-22-10000021-0000 DATE: 20230913 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

HIS MAJESTY THE KING - and - joseph rassi and ERIK FISHMAN

Counsel: Renna Weinberg, for the Crown Joseph Rassi, self-represented Anil Kapoor and Alexa J. Ferguson, Amici Curiae

Heard: May 3, June 9 and September 13, 2023

M. Forestell J.

REASONS FOR SENTENCING OF JOSEPH RASSI

Overview

[1] Joseph Rassi entered guilty pleas on May 3, 2023, to two counts of Fraud over $5,000.00. The matter was adjourned for sentencing. I heard sentencing submissions on June 9, 2023, and I reserved my decision on sentencing until today.

[2] The Crown seeks a sentence of three years’ imprisonment. The Crown also seeks an order under s. 380.2 of the Criminal Code, R.S.C., 1985, c. C-46 limiting Mr. Rassi from employment or volunteer work that involves having authority over the real property, money or valuable security of another person for five years and a freestanding restitution order in the amount of $70,000.00.

[3] Mr. Rassi seeks a conditional sentence. Mr. Rassi is self-represented. I have had the benefit of the submissions of amici curiae in this case. Mr. Kapoor and Ms. Ferguson, acting as amici, provided a Book of Authorities. Mr. Kapoor supplemented the oral submissions of Mr. Rassi in support of a conditional sentence.

[4] Amici also submitted that an order under s. 380.2 was not necessary because Mr. Rassi did not abuse a position of trust. Alternatively, amici submit that the order should not completely prohibit employment that involves having authority over the money or property of others but should require that Mr. Rassi be supervised in any such position.

[5] In these reasons I will set out the circumstances of the offences, including the impact on the victims, the circumstances of Mr. Rassi, the relevant sentencing principles and the application of those principles to these offences and this offender.

Circumstances of the Offences

[6] The circumstances of the offences are set out in detail in the Agreed Statement of Facts.

[7] The two complainants are strangers to each other. One lives in Alberta and the other in Nebraska. Both were victims of a previous fraud in which they each had made upfront payments for gemstones and diamonds with the promise of financial gains that did not materialize. In September of 2019 they were both contacted by a man identifying himself as a lawyer named Paul Bennett. “Mr. Bennett” told them that a class action lawsuit in relation to the gemstone fraud had been settled in California. “Mr. Bennett” provided documents that appeared to be official court documents to that effect. They were told that they were entitled to a share of the settlement but that they had to pay a 12% fee to the law firm.

[8] One complainant was told that his share of the settlement was $350,000.00 USD and he could access it by paying 12%. He was then offered a bigger share of the settlement if he paid a 12% fee on the larger amount. Mr. Bennett put the victim in touch with “James Adelman” who worked for Premier Credit Union. Mr. Adelman was in fact Joseph Rassi.

[9] Posing as Mr. Adelman, Mr. Rassi directed the victim to make a number of payments totaling $469,065.28. The money was paid into accounts registered to associates of Mr. Rassi. The victim then travelled to Toronto to pick up his cheque for the settlement. He met in person with Mr. Rassi (who presented himself as Mr. Adelman) and a man who was introduced as “Paul Bennett”. At the meeting, the two men tried to get the victim to pay even more money in order to get an even larger settlement. He was unable to pay any more. He received no money from the two men.

[10] The second victim was told that to receive his share of the class action settlement he would have to pay 12% of $800,000 USD. He was provided with fake documents. He was directed to contact “James Greenstein” from “Premier Credit Union”. “James Greenstein” was Joseph Rassi. Mr. Rassi directed the victim to pay a total of $81,640.50 USD to an account registered to an associate of Mr. Rassi. The second victim also flew to Toronto to pick up his settlement cheque. Mr. Rassi met with the victim. Mr. Rassi showed the victim a bank draft for $6,800,000.00 and told him that he would have to pay 12% of that amount to get the increased payment. The victim was unable to pay anymore and did not receive the bank draft.

[11] Both victims took photographs with Mr. Rassi at their meetings. A search warrant was executed at Mr. Rassi’s residence. When police searched his house and BMW, they located electronic devices that had messages between “Mr. Adelman” and the first victim and “Mr. Greenstein” and the second victim. The devices also had photographs of wire transfers and banking information for the victims.

Victim Impact

[12] I received a Victim Impact Statement from one victim. The transcript of an excerpt of the preliminary inquiry testimony of the second victim was filed. In the transcript the victim speaks of the impact of the offence upon himself and his family.

[13] Both victims lost savings that they relied upon for retirement. The first victim has returned to work fulltime as a result of the loss. Both victims expressed a loss of trust in other people because of the offences. One of the victims wrote that he felt embarrassed and ashamed to have been caught by this scheme.

Circumstances of Mr. Rassi

[14] Mr. Rassi is 36 years old. He was 32 years old at the time of these offences. He was born in Lebanon and came to Canada when he was five years old. He attended high school but left school after grade 10. His father died when he was 17 years old. This had a significant impact on Mr. Rassi. He began to use hard drugs around this time. In 2017 his brother died by suicide. His substance abuse issues worsened. He was addicted to oxycodone and hydromorphone. He continued to use substances until quite recently. At the time of the sentencing submissions, Mr. Rassi reported that he had attended a rehabilitation programme and had been substance free for about two months.

[15] Mr. Rassi moved in with his older sister when he stopped using substances. His sister has essentially kept him on house arrest since he moved in with her.

[16] Mr. Rassi is separated from his wife. His wife left the home with the children after their home was searched as part of this investigation. They have two children, ages 6 and 9 years. Mr. Rassi continues to be involved in raising his children.

[17] Mr. Rassi reported that his sister, who is a manager of a large window company, has offered to assist him in getting work as a window installer. Mr. Rassi previously worked as customer service agent for several years.

[18] Mr. Rassi has no criminal record.

Analysis

[19] In considering the appropriate sentence to be imposed on Mr. Rassi I have considered the general purposes, principles and objectives of sentencing as set out in the Criminal Code, R.S.C., 1985, c. C-46. The fundamental principle of sentencing set out in s. 718.1 of the Code is that the sentence should be proportionate to the gravity of the offence and the degree of responsibility of the offender.

[20] Related to that principle, is the principle that a sentence should be increased or reduced to account for any relevant aggravating or mitigating circumstances relating to the offence or the offender.

[21] There are aggravating factors relating to the circumstances of the offences in this case. The amount of the fraud is substantial. The fraud was sophisticated (although Mr. Rassi was not the architect of the scheme and received only a portion of the proceeds). The actions of Mr. Rassi were not impulsive or brief but occurred over a lengthy period of time. The victims were vulnerable and were targeted based on their vulnerability, having been defrauded previously.

[22] There are also mitigating factors. Mr. Rassi entered a guilty plea which is indicative of remorse, and which has saved this court time and resources. Mr. Rassi has experienced hardships in his personal life, including the loss of his father and brother. Mr. Rassi struggled with addiction at the time of the offences but has taken steps to address his addiction. He has the support of his sister. He has two young children.

[23] Mr. Rassi has no prior criminal record. This is also a mitigating factor.

[24] All sentencing objectives are relevant to the offence of fraud, including the denunciation of unlawful conduct, specific and general deterrence, and rehabilitation.

[25] The most important objectives in sentencing an offender who has committed a large-scale fraud are denunciation and general deterrence. As Epstein J. wrote in R. v. Drakes (2006 CarswellOnt 8638 SCJ, aff’d 2009 ONCA 560, at para. 26), “There is a real need to emphasize denunciation and general deterrence in the realm of large-scale frauds with devastating consequences for their victims. There is a real need to warn individuals currently involved in such scams, and those devising new ones, that substantial penitentiary sentences will follow this type of crime…”.

[26] Large-scale frauds generally attract sentences in the range of three to five years’ imprisonment. Sentences in the reformatory range may be appropriate where there are significant mitigating factors. A gambling addiction has been held to attenuate the emphasis on general deterrence in a fraud case. (See R. v. Lebel, 2018 ONCJ 748; and R. v. Inshinalli, unreported May 3, 2004, per Keenan J. OCJ.) Mental or physical health problems have also been found to justify sentences in the reformatory range. (See R. v. Kioussis, 2011 ONCJ 823; and R. v. Bogart, 2002 ONCA 41073.)

[27] Mr. Rassi has a long-standing addiction problem. While the role this played in the offences is not entirely clear, I accept that it was a factor in the offences. I have considered that Mr. Rassi was not the architect of the scheme and that others received the majority of the proceeds.

[28] These factors lead me to conclude that a sentence of less than two years could be capable of satisfying the relevant sentencing objectives.

[29] I must therefore consider whether a conditional sentence is appropriate.

[30] In order to impose a conditional sentence, there are four statutory preconditions that must be satisfied. The first three are satisfied in this case: (i) there is no minimum sentence; (ii) a sentence of less than two years’ imprisonment is appropriate; and (iii) a conditional sentence would not endanger the public. The last precondition is that a conditional sentence must be consistent with the fundamental purpose and principles of sentencing.

[31] In cases involving a breach of trust, conditional sentences are rarely capable of satisfying the objective of general deterrence. (See R. v. Dobis (2002), 2002 ONCA 32815, 58 O.R. (3d) 536 (C.A.), at para. 51; R. v. Pierce, 1997 ONCA 3020, 1997 32 O.R. (3d) 321 (C.A.), at p. 337, 114 C.C.C. (3d) 23, at p. 40; and R. v. Taylor, 2012 ONCA 809, at para. 36.)

[32] This case is not a case involving a traditional breach of trust. Mr. Rassi posed as an employee of a financial institution, but he was not in fact in such a position of trust. Mr. Rassi also was aware that his accomplice posed as a lawyer — a person who would be in a position of trust. While this case does not involve a breach of trust, I do not find that the absence of this aggravating factor makes the principles enunciated in cases like Dobis, Pierce and Taylor inapplicable.

[33] As MacPherson J. wrote in Dobis, (at para. 51),

This court has said repeatedly that general deterrence is central to the sentencing process in cases involving large-scale frauds with serious consequences for the victims: see McEachern, Bertram, Gray and Holden, supra. Importantly, the court has said the same thing since the introduction of the conditional sentencing regime. Conditional sentences have been rejected in large-scale fraud cases such as Pierce, supra, and Ruhland, supra, and commented on adversely in the leading Ontario case dealing with conditional sentences, R. v. Wismayer (1997), 1997 ONCA 3294, 33 O.R. (3d) 225, 115 C.C.C. (3d) 18 (C.A.)

[34] The fraud in this case was a large-scale fraud with very serious consequences for the victims. I have concluded that a conditional sentence cannot meet the objectives of denunciation and deterrence. I therefore find that a conditional sentence cannot be imposed. A sentence of actual custody is required.

[35] I would have been prepared to impose a sentence of two years less a day. This type of fraud would generally attract a penitentiary sentence. The maximum reformatory sentence and a period of probation would be required to achieve the objectives of denunciation and general deterrence.

[36] Today Mr. Rassi has submitted that he would prefer a penitentiary sentence because of the programmes available at the penitentiary. I acceded to this request.

Conclusion

[37] I therefore sentence Mr. Rassi to imprisonment for two years concurrent on each count.

[38] I further order, under s. 743.21 of the Criminal Code, that Mr. Rassi have no contact with the victims during the period of imprisonment.

[39] In addition, there will be a freestanding restitution order in the amount of $70,000.00 (Canadian dollars) with $57,400.00 attributable to Mr. Snihur and $12,600.00 to Mr. Hahn.

[40] I also make the requested forfeiture order.

[41] Theft over $5,000.00 is a secondary designated offence and the Crown does not seek a DNA order. I agree that no DNA order is required.

[42] The Crown has also sought an order under s. 380.2(1) of the Criminal Code limiting the ability of Mr. Rassi to be employed or volunteer in a position where he would have authority over the money or property of other people.

[43] A s. 380.2 prohibition order excludes an offender from "participating in a wide variety of otherwise lawful activities", including many forms of employment. The imposition of a s. 380.2 prohibition order can result in "significant restrictions" on an offender's liberty and security of the person. (See R. v. Hooyer, 2016 ONCA 44 (C.A.), at para. 47.)

[44] The objective of the section is the protection of the public. I am not satisfied that an order is required to protect the public. I have considered the circumstances of the offences. Mr. Rassi was not in a position of trust or authority over the property or money of the victims. I therefore decline to make a s.380.2 order in this case.

M. Forestell J. Released: September 13, 2023