DATE: 20030326

DOCKET: C38873

COURT OF APPEAL FOR ONTARIO

RE: HER MAJESTY THE QUEEN (Applicant/Appellant) – and – PETER WILSON (Respondent)

BEFORE: MCMURTRY C.J.O., MORDEN and FELDMAN JJ.A.

COUNSEL: Gregory J. Tweney for the applicant/appellant

Alan D. Gold for the respondent

HEARD: March 14, 2003

RELEASED ORALLY: March 14, 2003

On appeal from a sentence imposed by Justice Lauren E. Marshall of the Ontario Court of Justice dated September 9, 2002.

E N D O R S E M E N T

[1] The respondent pleaded guilty to fraud over $5,000 and received a conditional sentence of two years less a day. The Crown appeals this sentence and asks that the conditional sentence be set aside and that an appropriate custodial term be imposed.

[2] The respondent was employed as the chief chiropodist for the University Health Network, which is an association of three Toronto area hospitals. Between 1996 and 2000, he submitted hundreds of false invoices to his employer, thereby defrauding the hospital system of approximately $900,000. In some cases the invoices were inflated, in others they were for non-existent work, and in other cases they were for personal expenses. Each invoice was approved by the respondent and submitted to the University Health Network for payment. In many cases the respondent acted in concert with third parties.

[1] In March 2000, acting on an anonymous tip, the University Health Network conducted an internal audit of the chiropody unit. As a result of this audit, the respondent’s criminal activities were discovered and the police were contacted. The respondent was charged with fraud in February of 2001. A year later, he gave a detailed statement to the police admitting his involvement in the fraud.

[2] We accept the Crown’s submissions that (1) the trial judge over-emphasized the significance of the respondent’s guilty plea; and (2) that a conditional sentence is demonstrably unfit in this case for three reasons: (i) it is outside the range of sentence recently approved by this court (we refer to R. v. Bogart (2002), 2002 41073 (ON CA), 167 C.C.C. (3d) 390 (Ont. C.A.) (leave to appeal to the Supreme Court of Canada denied March 20, 2003) and the decisions reviewed in it); (ii) it fails to satisfy the principle of general deterrence; and (iii) it is disproportionate to the gravity of the offence and the respondent’s degree of responsibility.

[3] In Bogart, the facts of which are, in many important respects, strikingly similar to those of this case, Laskin J.A. on behalf of the court affirmed the principle that cases of large scale fraud by persons in a position of trust have generally resulted in substantial sentences of imprisonment. At pages 399-400 he said:

Both before and after Parliament’s introduction of conditional sentences, cases of large-scale fraud by persons in a position of trust have typically resulted in substantial jail sentences. In his recent judgment in R. v. Dobis (2002), 2002 32815 (ON CA), 58 O.R. (3d) 536, 163 C.C.C. (3d) 259 (C.A.), my colleague MacPherson J.A. has thoroughly reviewed these cases. His review shows that ordinarily these frauds merit a penitentiary sentence in the range of three to five years. Even where mitigating considerations have reduced the sentence to the reformatory range, a jail term, not a sentence served in the community, has usually been imposed.

Health care professionals who defraud provincial health care plans have also normally received a jail sentence. As this court said in R. v. McCrystal (1992), 55 O.A.C. 167 at 169, where a doctor defrauded OHIP of nearly $85,000 by submitting false claims for fees, “[i]t is well-established that, in the absence of special circumstances, a custodial term should be imposed for an offence of this nature.”

Special circumstances that might justify a conditional sentence for OHIP fraud include circumstances where the amount of the fraud is relatively small, the doctor has made full restitution before sentencing or the doctor can point to exceptional personal circumstances such as ill health or advanced age. None of these special circumstances exists here.

[4] Neither do special circumstances exist in the case before us.

[5] The sentence imposed in this case fails to satisfy the fundamental principles of sentencing particularly in light of factors relating to the seriousness of the offence and the respondent’s moral blameworthiness:

Seriousness of the Offence

[6] Fraud over $5,000 is a serious offence attracting a maximum penalty of ten years in prison. The quantum of the fraud in this case, was, as indicated, around $900,000. The fraud was systematic and well planned, taking place over four years and involving several participants. Were it not for the anonymous tip received by the University Health Network, it might never have been discovered. As a result of the fraud, the University Health Network suffered substantial losses most of which were unrecovered (the civil settlement with the respondent resulted in the recovery of only $150,000, a small portion of the loss). The respondent also returned computer equipment for which he had arranged for the University Health Network to be invoiced and which he had used at his home for his personal use. Further, the general public was deprived of resources that could have been put toward important medical services.

The Respondent’s Moral Blameworthiness

[7] This was an extremely serious breach of trust. The respondent was entrusted with the administration of the chiropody department at Toronto’s largest hospital, a trust he repeatedly violated over an extended period of time. The respondent was motivated by greed. He used his share of the proceeds of his crime to purchase expensive merchandise and services, including a week long trip to Whistler, British Columbia for himself and his family. The respondent cooperated with the police and hospital officials only after an audit revealed his fraudulent activities. Although the respondent has made some restitution, the majority of the public funds he misappropriated have not yet been recovered. The respondent enlisted the help of his teenage son and two of his son’s friends to commit some of the fraudulent acts. This was not only a breach of trust with respect to his employer, but a grave breach of his responsibility as a parent.

[8] In the result, the appeal is allowed, the sentence is set aside and in its place, we impose a sentence of eighteen months imprisonment. A warrant may issue to be exercised in the discretion of the Crown.

“R.R. McMurtry C.J.O.”

“J.W. Morden J.A.”

“K. Feldman J.A.”