CITATION : R. v. Duell, 2024 ONSC 6952

COURT FILE NO.: CR 23-30000655-0000 DATE: 20241213

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

HIS MAJESTY THE KING – and – ALETH DUELL

Counsel: J. Humphrey, counsel for the Crown K. Anor, counsel for Ms. Duell

Heard: September 19, 2024

Reasons for Sentence

H. McArthur J.:

Introduction

[1] A jury found Aleth Duell guilty of one count of fraud over $5,000 in relation to Tiffany Mann, one count of fraud over $5,000 in relation to Mabel Scharf, and one count of money laundering. The jury acquitted Ms. Duell of fraud over $5,000 in relation to the complainant Wendy Choi.

[2] Ms. Duell is a 72-year-old first offender. She is a mother to three, grandmother to three, and apart from the offences before the court has led a productive and law-abiding life. The defence argues that given the mitigating factors in this case, the appropriate sentence is a conditional sentence followed by two years probation. While acknowledging that denunciation and deterrence are the paramount sentencing objectives, she argues that a conditional sentence can properly reflect these goals.

[3] The Crown counters that while a sentence in the upper reformatory range is fit and proportionate, a conditional sentence would fail to give proper weight to the primary sentencing objectives of denunciation and deterrence. He urges me to impose a sentence of two years less a day, followed by two years probation. He also seeks a free-standing restitution order in the range of $60,000 to $80,000. He further requests an order pursuant to s. 380.2 of the Criminal Code, R.S.C. 1985, c. C-46 prohibiting Ms. Duell from seeking, obtaining, or continuing any employment, or becoming a volunteer in any capacity, that involves having authority over the real property, money, or valuable security of another person.

Circumstances of the Offence

[4] The frauds in this case were characterized as “romance frauds.” There are a multitude of ways in which such scams can operate. The targets are often vulnerable, but can present differently, with varying ages, races, life experiences, and vulnerabilities. In general, the perpetrator approaches their target virtually, and learns about them through online chats. The specifics of the scheme are designed to appeal to the particular victim.

[5] At trial, the Crown argued that Ms. Duell knowingly assisted in an on-going scheme to defraud the complainants by receiving money that they sent and laundering it by purchasing gold, which was then transferred to Bitcoin. Ms. Duell’s position at trial was that she was also a victim of fraud. The defence maintained that Ms. Duell was an unwitting dupe who honestly believed she was involved in a legitimate business.

[6] Each of the three complainants testified about being approached online and scammed into sending large sums of money to various people and accounts. The first complainant, Ms. Choi, was contacted on Facebook by a man named Charles. After they had chatted online for a while, he told her he was sending a package to her. She then began receiving threats over this package: Ms. Choi was told that she would be in trouble with the law unless she sent money. Over the course of several years, she sent payments to various accounts and people that totalled over 1 million dollars. She sent some of the money to companies owned by Ms. Duell. Ms. Duell then sent the money to various companies in China.

[7] Ms. Duell testified that she dealt with Ms. Choi’s money as instructed by Tom Milverton, a man she had met online. While they never met in person, she said they began a romantic relationship that evolved into a business partnership. Mr. Milverton was a consultant, and she believed that the money Ms. Choi sent was for consulting fees and to purchase equipment. She tendered bank records showing that the sums she received from Ms. Choi were forwarded to various businesses in China.

[8] Ms. Scharf testified that she was contacted by a man named Anthony Davyyd on LinkedIn. After they had been communicating on the computer for a while, he told her that he had a reward for some work he had done and was sending her the package. He asked her to pay for shipment and other costs. He told her that she would be reimbursed and that he would give her a diamond necklace for her troubles. As instructed, she sent numerous bank drafts and cheques to companies owned by Ms. Duell. She spoke with Ms. Duell several times to confirm shipping details. During one of those conversations, Ms. Duell asked Ms. Scharf if she would be interested in investing in a “lotions and potions” business.

[9] The man Ms. Scharf was chatting with also directed her to send money to a gold trading company, Gold Stock. This was not to buy gold, but to facilitate payment of various fees. Ms. Scharf said that Ms. Duell served as a “business consultant” in dealing with Gold Stock. Ms. Duell said that she believed she was legitimately involved in assisting Mr. Milverton’s business. Mr. Milverton instructed her to use Ms. Scharf's funds to notionally purchase gold, which was then converted to cash and subsequently to Bitcoin. Ms. Duell sent it to various accounts as instructed.

[10] Ms. Mann testified that a man named Chan Lee contacted her on Instagram. After they chatted for a while, he told her that he was sending her a gift. She believed that Mr. Lee was going to move to her area and was sending money so that he could buy a home, and they would live together. She was contacted by a shipping company and told to send payments to cover things such as shipping, duties, and other fees. At some point, she was threatened that if she did not pay the fees, she would be in trouble with the law. She was also asked to send funds to Gold Stock, which she did. Ms. Mann testified that over the time she was defrauded, she sent about $300,000 to various people and accounts. She sent Ms. Duell $40,000 payments twice. Ms. Duell then used the money Ms. Mann sent to notionally purchase gold at Gold Stock, which was then converted to cash, further converted to Bitcoin, and then sent to various accounts. Again, Ms. Duell testified that she believed that she was involved in a legitimate business and was simply following the orders of her “boss”, Mr. Milverton.

[11] The jury acquitted Ms. Duell of the count in relation to Ms. Choi. Thus, they either believed her when she said was duped into dealing with Ms. Choi’s money by the man holding himself out to be Tom Milverton, or, were left in a reasonable doubt by her evidence.

[12] However, they reached a different conclusion in relation to Ms. Scharf and Ms. Mann; each of whom, she dealt with some time after Ms. Choi. While the jury of course did not give reasons, the verdict suggests that they found that Ms. Duell was wilfully blind by the time she was dealing with Ms. Mann’s and Ms. Scharf’s money and converting it to Bitcoin. That is, by this point in time, she knew that she should inquire whether the money was obtained by fraud, but she did not make the inquiry because she did not want to know the truth.

Impact on the Victims

[13] Ms. Mann declined to provide a victim impact statement, explaining that she wants to move forward with her life and put this matter behind her. But having seen her testify, it was clear that the fraud had a significant impact on her. She lost a great deal of money and felt embarrassed and upset that she fell for the scam.

[14] Ms. Scharf wrote a moving letter outlining the substantial impact that the fraud had on her. Ms. Scharf is a widowed senior. She wrote that given her age, she cannot start a new career or job to financially recover from the loss of funds. Because of the loss, she is being forced to sell her house, and is haunted by nightmares of winding up homeless. Ms. Scharf has lost her trust in people. She feels betrayed, bitter, and ashamed. She wrote that she cannot talk to anyone about what happened as she fears she will be seen as an “idiot” who fell for a fraudster. She feels that she has no future.

[15] I was impressed with Ms. Scharf’s testimony at trial. She came across as a vibrant, witty, and lovely woman. I sincerely hope that she recovers from this incident. One thing that will help is getting some of her money back. Setting aside the issue of restitution from Ms. Duell, I note that Suleman Khaled, the individual Ms. Duell dealt with at Gold Stock, testified that he still had $40,000 belonging to Ms. Scharf. For some unknown reason, as of the sentencing hearing, he had not returned that money to her. The Crown advised that efforts were being made to have that money returned to Ms. Scharf. If that has not happened yet, I expect that action will be taken to ensure that Ms. Scharf quickly receives this money back from Mr. Khaled. While it is only a portion of the money Ms. Scharf lost, it should help to some extent.

Circumstances of Ms. Duell

[16] Ms. Duell is 72 years old. She is a first offender.

[17] Ms. Duell was born in the Philippines. She was the eldest of two children. Her father was a soldier with the United States Army and died when she was only three years old. Her mother owned and operated a general store and remarried when Ms. Duell was young. Thereafter, Ms. Duell was primarily raised by her paternal aunts.

[18] Ms. Duell has three sons. She had her first son at the age of 25. The father was someone she met while vacationing in Manila. She did not tell him about her pregnancy and never sought financial assistance from him. She raised her son with support from her family. At the age of 34, Ms. Duell began a romantic relationship with a man living in Canda. He sponsored her to come to Canada, and they married in 1988. A year later Ms. Duell gave birth to her second son, and a third son in 1992. That same year, Ms. Duell and her husband separated. However, they have remained close and have an amicable relationship. Ms. Duell is now the grandmother of three children. She lives with her two youngest sons.

[19] Before coming to Canada, Ms. Duell pursued higher education. Because of her father, Ms. Duell received financial assistance from the U.S. Veterans’ program; this opportunity motivated her and allowed her to achieve her educational goals. She obtained two degrees in the Philippines: a Bachelor of Science in Liberal Arts and a Bachelor of Commerce degree.

[20] After completing her studies, Ms. Duell obtained her first job, working in a government office in Cebu City, doing administrative work. Following that, she spent three years working as a customer service representative for a private pharmaceutical company. She then spent five years working for the Philippine government as a “field officer.”

[21] After immigrating to Canada, Ms. Duell attended community college and completed academic upgrading courses, including refresher math, english, and accounting. She then started working in the financial district in Toronto as a “Pension Administrator.” She worked for various companies until April 2018, when she retired at the age of 65. By all accounts she was a valued employee and was applauded by her employers for her “commitment and loyalty.”

[22] Ms. Duell told the author of the Pre-Sentence Report (“PSR”) that she now lives off funds from the Canada Pension Plan, Old Age Security and Guaranteed Income Supplement, which totals about $2,000 a month. Her son, however, advised that he has concerns that she is not receiving that money, or has signed it away to someone. He noted that she seems to have no money and that he is required to help her with her finances, including paying their rent.

[23] Ms. Duell has a close and loving relationship with her three sons. They regularly attended her trial and sentencing hearing. They each spoke to the author of the PSR. They described their mother as a generous, caring, and loving woman. Her two youngest sons, Gerhard Tabada-Duell and Anton Tabada-Duell, also wrote letters of support that were filed as exhibits on the sentencing hearing.

[24] The author of the PSR noted that Ms. Duell attended for four in person interviews. Each time she presented as “attentive, respectful and professional.” The author noted that Ms. Duell would likely benefit from individual counselling for any psychological issues and coping with stress. Her sons also emphasized that they believed their mother needs this type of assistance.

Sentencing Principles and Objectives

[25] As noted in R. v. Lacasse, 2015 SCC 64, at para. 58, the “determination of a just and appropriate sentence is a highly individualized exercise that goes beyond a purely mathematical calculation. It involves a variety of factors that are difficult to define with precision.”

[26] Section 718 of the Criminal Code provides that the “fundamental purpose of sentencing is to protect society and to contribute ... to respect for the law and the maintenance of a just, peaceful and safe society...” This is to be accomplished through the imposition of just sanctions that have one or more of several objectives enumerated in ss. 718 (a) to (f), including denunciation, general and specific deterrence, and rehabilitation.

[27] Section 718.1 sets out the fundamental principle of sentencing, which is that any sentence imposed “must be proportionate to the gravity of the offence and the degree of responsibility of the offender.”

[28] The Criminal Code lists several other principles to guide sentencing judges. The parity principle is set out in s. 718.2 (b) and provides that “a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances.” Given the highly individualized nature of the sentencing process, however, the sentencing principle of parity remains secondary to proportionality: R. v. Parranto, 2021 SCC 46, at para. 38. Sentences imposed for offences of the same type will not always be identical: R. v. Mann, 2010 ONCA 342, at para. 17; Lacasse, at paras. 53-58.

[29] The totality principle is addressed in s. 718.2 (c) of the Criminal Code, which provides that where consecutive sentences are imposed, the combined sentence should not be unduly long or harsh. The totality principle is important in this case, because Ms. Duell is to be sentenced for several offences.

[30] The restraint principle is reflected in s. 718.2(d) and provides that an offender should not be deprived of liberty if less restrictive sanctions may be appropriate in the circumstances. Subsection 718.2(e) highlights the particular importance of restraint and requires that “all available sanctions, other than imprisonment, that are reasonable in the circumstances and consistent with the harm done to victims or to the community should be considered for all offenders…”

[31] The various sentencing objectives and principles often compete with one another, in that maximizing the denunciatory or deterrent effect of the sentence may be contrary to the rehabilitation of the offender and the principle of restraint, and vice versa. That said, the competing objectives and principles must be balanced in a way that respects the principle of proportionality. Even when denunciation and deterrence are the paramount sentencing objectives, the sentencing judge retains discretion to assign significant weight to other factors, such as rehabilitation, in giving effect to the fundamental principle of proportionality: R. v. Friesen, 2020 SCC 9, at para. 104; R. v. Rayo, 2018 QCCA 824, at paras. 103, 107-8.

[32] Pursuant to s. 742.1 of the Criminal Code, with some exceptions, if a person is convicted of an offence and the court imposes a sentence of imprisonment of less than two years, the court may impose a conditional sentence. A court may only do so if satisfied that allowing the offender to serve their sentence in the community does not endanger the safety of the community and is consistent with the fundamental purpose and principles of sentencing.

[33] Since sentencing is highly individualized, the determination of a just and appropriate sentence requires the court to assess the aggravating and mitigating factors related to both the offence and the offender. Such an assessment is also mandated by s. 718.2 (a) of the Criminal Code, which states that a sentence should be increased or reduced to account for any relevant aggravating or mitigating circumstances relating to the offence or the offender. I turn now to the aggravating and mitigating factors in the present case.

Aggravating and Mitigating Factors

Aggravating Factors

[34] Ms. Duell participated in a large-scale fraud scheme. While she was neither the mastermind nor the architect of the scheme, she played a key role in receiving money from the victims, and then converting the funds into gold, and then into Bitcoin.

[35] Both Ms. Mann and Ms. Scharf suffered significant financial losses. While it appears that some of the funds they sent went to other unknown accounts, a portion of their money went into accounts held by Ms. Duell. The financial impact on Ms. Scharf, who is a retiree, is particularly dire.

[36] Both victims have also suffered psychological harm. They feel betrayed and embarrassed. Ms. Scharf’s victim impact statement leaves no doubt about the profound impact that the fraud on her.

[37] While there was not a typical relationship of trust with Ms. Scharf, Ms. Duell was trusted. Ms. Scharf characterized Ms. Duell as her “business consultant” in a letter she sent to Gold Stock. Ms. Duell violated the trust Ms. Scharf placed in her.

[38] Ms. Duell profited from her participation in the scheme. I accept the defence submission that it does not appear that she obtained a significant financial benefit. Apart from the small “commissions” she noted in her ledgers, it does not seem that Ms. Duell made a lot of money from her participation in the frauds. She lived in quite modest circumstances and there was no evidence of large sums of money being found in any of her accounts. But the fact remains, she did turn a profit from her assistance in the frauds.

[39] Ms. Duell did not end the frauds on her own volition. Rather, the frauds only came to an end after transactions were flagged by a bank.

[40] The victims have not received any restitution.

[41] Ms. Duell had a trial. Despite the jury’s verdict, she continues to assert her innocence. That is not aggravating. But it does mean that she does not have the mitigation in sentence that she would have if she had pleaded guilty or if she accepted responsibility and expressed remorse.

Mitigating Factors

[42] Ms. Duell is a first offender. She is 72 years old, and apart from these offences has been pro-social.

[43] She has been on bail for several years without incident, which supports that she has rehabilitative potential.

[44] She has a solid educational and work history.

[45] She is by all accounts a loving mother and grandmother.

[46] She has strong family support, which will assist her as she attempts to move forward from this incident.

[47] I turn now to my analysis as to what a fit and proportionate sentence would be in this case.

Analysis

[48] Both the Crown and defence submitted several cases in support of their positions. What emerges from the authorities is that in major frauds such as the one in this case, the paramount sentencing objectives must be denunciation and general deterrence: R. v. Drakes, 2009 ONCA 560, at para. 26; R. v. Garrick, 2014 ONCA 757, at para. 25. Large frauds are generally planned and premeditated, and often committed by persons of otherwise good character. Indeed, the good character of the perpetrator is often what allows and enables the fraud to occur. Thus, while rehabilitation is still an important objective, offender-based considerations are generally less important in large frauds: R. v. Scholz, 2021 ONCA 506, at para. 24.

[49] As explained in Scholz, at para. 18, given the need to emphasise denunciation and deterrence, the general established range for large-scale frauds is three to five years: see also R. v. Bogart, [2002] O.J. No. 3039 (C.A.), at para. 36, leave to appeal refused, [2002] S.C.C.A. No. 398; and R. v. Davatgar-Jafarpour, 2019 ONCA 353, at para. 34. In some exceptional cases, however, reformatory jail sentences of less than two years, and even conditional sentences, have been imposed in large-scale, breach of trust frauds, where particularly strong mitigating circumstances exist.

[50] The Crown fairly acknowledges that considering Ms. Duell’s advanced age and previous unblemished record, her matter is one of those exceptional cases where a sentence in the upper reformatory range, rather than a penitentiary sentence, is warranted. I agree with this reasonable concession.

[51] Given that Ms. Duell will receive a sentence below two years, a conditional sentence is an available sentence, subject to two questions. First, would a conditional sentence endanger the public? The answer is clearly no. Ms. Duell has been on bail for several years without any suggestion that she breached the terms of her release in any way. I am confident that if she received a conditional sentence that she would abide by the terms of the order.

[52] Second, would a conditional sentence be consistent with the fundamental purpose and principles of sentencing? In my view, regrettably, the answer must be no. Apart from her advanced years, Ms. Duell does not have the mitigating factors that have occasionally led to the imposition of conditional sentences on other offenders. She did not plead guilty: see in contrast, R. v. Campbell, 2005 ONCJ 286; R. v. Ari, [2001] O.J. No. 3757 (S.C.). She has not made any restitution: see in contrast, Ari, at para. 7. She does not have any serious health issues: see in contrast, Campbell, at para. 30.

[53] While I agree with defence counsel that the jury verdict suggests that they found Ms. Duell wilfully blind, that is not mitigating. There is little difference in the moral blameworthiness between actual knowledge and willful blindness: R. v. Sidhu, 2009 ONCA 8, at para. 17; R. v. Downey, 2017 ONCA 789, at para. 10.

[54] Ms. Duell assisted in a large-scale fraud scheme that had a devastating impact on her victims, Ms. Mann and Ms. Scharf. Her offending was not isolated, but instead continued over many months and involved two victims. Not only did she receive the money from the victims in her accounts, but she then converted the money to gold and then Bitcoin – thereby helping to ensure that the money cannot be traced and recovered. Considering the aggravating factors, a conditional sentence would be inconsistent with the fundamental purpose and principles of sentencing. A conditional sentence would fail to give proper voice to the primary sentencing objectives of denunciation and deterrence.

[55] Considering the pressing need to emphasize those sentencing objectives, a custodial sentence is required. At the same time, I agree that given the mitigating factors that a sentence below the range is warranted. I have determined that a global sentence of two years less a day is fit and proportionate. This sentence gives primacy to denunciation and deterrence, while still giving weight the objective of rehabilitation and the important principle of restraint.

[56] The sentence should be structured as follows:

• Count 2, two years less a day;
• Count 3, two years less a day, concurrent to count 2; and
• Count 4, one year, concurrent to count 2.

[57] Following her sentence, I am placing Ms. Duell on probation for two years. As the author of the PSR noted, Ms. Duell would benefit from individual counselling. This observation is echoed by her sons, who hope that she will be given the assistance she requires. The terms of the probation order are attached as Appendix “A”.

[58] I turn now to consider the ancillary orders requested by the Crown.

[59] First, the Crown is seeking a free-standing restitution order of between $60,000 to $80,000. Defence counsel is opposed, noting that Ms. Duell has no means to pay restitution. Ms. Duell is a 72-year-old retiree, living on a fixed income of modest means. She argues that the Crown has not demonstrated a flow of funds in a quantifiable amount to Ms. Duell: R. v. Ari, [2001] O.J. 3757 (S.C.), at para. 13. Defence counsel highlights that, at most, Ms. Duell appeared to earn small commissions for her role in the scheme, and that she was not the party who significantly profited from the frauds.

[60] In assessing this issue, I keep in mind that restitution orders should be made with “restraint and caution": R. v. Robertson, 2020 ONCA 367, at para. 7; R. v. Zelensky, [1978] 2 S.C.R. 940. When assessing whether to make a restitution order, the court should look at all of the circumstances. The court should consider the nature of the offence, and, when money has been taken what has happened to that money: R. v. Castro, 2010 ONCA 718, at para. 27. Although the offender's ability to make restitution is not a precondition to making the order, it is an important factor which must be considered: Castro, at paras. 26-27. Further, the impact of the order on the offender's prospects of rehabilitation must be weighed and considered: Robertson, at paras. 8, 11.

[61] Balancing all of the factors, I have determined that a restitution order would be inappropriate in the circumstances. The money sent by Ms. Mann and Ms. Scharf to accounts held by Ms. Duell does not seem to have been kept by Ms. Duell, instead it seems she received a small commission for her assistance in the frauds. While Ms. Scharf trusted Ms. Duell, this was not a classic breach of trust situation. Ms. Duell is a retiree with limited income. She will be sentenced to a jail term of two years less a day. She has no present ability to pay restitution and does not appear to have any future prospects that would allow her to pay restitution.

[62] Second, the Crown is also seeking an order pursuant to s. 380.2 of the Criminal Code, prohibiting Ms. Duell from seeking, obtaining, or continuing any employment, or becoming a volunteer in any capacity, that involves having authority over the real property, money or valuable security of another person. I have determined that it is appropriate to make this order for life.

[63] In reaching this conclusion, I keep in mind the comment in R. v. Fishman et al., 2023 ONSC 5101, that a s. 380.2 prohibition order excludes an offender from "participating in a wide variety of otherwise lawful activities", including many forms of employment and can result in "significant restrictions" on an offender's liberty and security of the person: see also, R. v. Hooyer, 2016 ONCA 44, at para. 47. That said, there are two factors that lead me to conclude that the order is warranted in the circumstances of Ms. Duell’s case. First, given that Ms. Duell is a retiree, the order will not impact her employment. Second, Ms. Duell has not acknowledged any responsibility for her participation in the frauds. Given her lack of insight into her actions, the order is appropriate to ensure that the public is protected.

[64] Finally, given that Ms. Duell will be serving a sentence of two years less a day, and that she is a retiree with limited means, defence counsel asks me to waive the victim surcharge. I am persuaded by the defence submission and as a result I am prepared to waive the victim surcharge as posing an undue hardship.

Justice Heather McArthur

Released: December 13, 2024

Appendix “A”- Probation Terms for Aleth Duell

Statutory conditions:

1. Keep the peace and be of good behaviour.
2. Appear before the court when required to do so by the court.
3. Notify the court or the probation officer in advance of any change of name or address, and promptly notify the court or supervisor of any change in employment or occupation.

Additional Terms

4. Report in person to a probation officer within two working days of your release from custody, and after that, at all times and places as directed by the probation officer or any person authorized by a probation officer to assist in your supervision.
5. Do not contact or communicate, directly or indirectly, with the following individuals: Tiffany Mann and Mabel Scharf.
6. Attend and actively participate in all assessment, counselling, and rehabilitative programs as directed by probation, in particular for coping with stress and psychological issues.
7. Sign any release of information forms requested to enable your probation officers to monitor your attendance and completion of any assessments, counselling, or rehabilitative programs as directed.
8. Provide proof of your attendance and completion of any assessments, counselling, or rehabilitative programs as directed.

Released: December 13, 2024