Court of Appeal for Ontario
Date: February 8, 2018
Docket: C56562, C56593, C56594, C57374, C62486, and C63299
Judges: Watt, Hourigan, and Miller JJ.A.
Docket: C56562 and C63299
Between
Her Majesty the Queen Respondent
and
Ramanan Kenegarajah Appellant
Docket: C56593
Between
Her Majesty the Queen Respondent
and
Rajitha Kanagarajah Appellant
Docket: C56594
Between
Her Majesty the Queen Respondent
and
Anantha Neeranjan Appellant
Docket: C57374 and C62486
Between
Her Majesty the Queen Respondent
and
Kuhen Neshan Appellant
Counsel
- Michael Dineen, for Anantha Neeranjan
- Ian Kasper, for Rajitha Kanagarajah
- Mark Halfyard, for Kuhen Neshan
- Ian Smith, for Ramanan Kenegarajah
- Michael Bernstein, for the respondent
Heard: November 20, 2017
On appeal from: Convictions entered on October 12, 2012 by Justice Joseph A. De Filippis of the Ontario Court of Justice, with reasons reported at 2012 ONCJ 636.
Judgment
Hourigan J.A.:
Introduction
[1] The appellants were tried on an Information containing over 100 counts related to a large-scale credit card fraud and money laundering scheme that operated over several years. They were convicted of various offences, including fraud over $5,000, participation in a criminal organization, identity theft, possession of property obtained by crime, and money laundering.
[2] The appellants raise various grounds of appeal, some unique to their individual cases and some that overlap among some or all of them. These grounds of appeal are considered in detail below. In summary, I would dismiss all of the appeals, save for that part of Ramanan Kenegarajah's appeal wherein he submits that he was convicted of counts with which he was not charged.
Facts
[3] The following brief factual summary is sufficient to place the issues in these appeals in context.
[4] A "bust out" fraud starts with a perpetrator gaining access to a person's bank or credit card account and then creating a fraudulent credit profile. A credit card is applied for and issued by a financial institution. The low initial credit limit is gradually increased after the fraudster makes a series of small purchases and payments. Once the credit limit is increased to a sizeable amount, the fraudster makes large purchases and obtains cash advances. They then abandon the credit card, leaving the financial institution that issued it with an unpaid debt.
[5] Before considering the circumstances of the charges, it is helpful to identify the appellants and their interrelationships. Mr. Kenegarajah (formerly known as Kanagarajah) is the brother of Rajitha Kanagarajah. Kuhen Neshan is married to Anantha Neeranjan.
[6] In 2001, authorities were alerted to suspected bust out frauds discovered by the Manager of Security at American Express ("AMEX"). Mr. Neshan, an employee of AMEX, came under suspicion and inquiries into his activities revealed that he accessed 21 different credit card accounts. Although police investigated the frauds and conducted a search of a Toronto residence in connection with Mr. Neshan, he was never charged in relation to these activities.
[7] In 2007, police in British Columbia investigated reports that Mr. Neshan and Mr. Kenegarajah were involved in financial impropriety at a Hindu temple. The police located the men and maintained surveillance on them. Mr. Kenegarajah was arrested for fraud. Ultimately, however, the Crown in British Columbia did not prosecute Mr. Kenegarajah.
[8] The story resumes in Ontario in 2009. The Durham Regional Police investigated a complaint from a British Columbia resident regarding fraudulent credit cards that were opened in his name, one of which had been used at an automobile store in Markham, Ontario. The police determined that the transaction was linked to a 2008 Land Rover leased to Ms. Kanagarajah. Further investigation revealed that a 2001 Audi A6 was also registered to Ms. Kanagarajah.
[9] The police conducted surveillance on these vehicles, which revealed a pattern of activity by Mr. Neshan and Mr. Kenegarajah. On weekday mornings the two men would leave from 30 Bissland Drive, Ajax, and travel throughout the Greater Toronto Area, conducting various bank transactions, visiting retail stores and post office boxes, and using credit cards in other people's names. Throughout the day they would stop off at 30 Bissland Drive and other residences. They were never observed attending a legitimate place of employment or business. The police believed that the activities were consistent with a pattern of bust out frauds.
[10] On March 3, 2010, Mr. Neshan and Mr. Kenegarajah were stopped by police while driving the Land Rover, and arrested. Cash, credit cards in the names of other people, gift cards, cheques in the names of other people, bank receipts, ledger books containing handwritten names, addresses and other data, were all seized.
[11] Search warrants were executed at 30 Bissland Drive, Ajax and at 311-11753 Sheppard Avenue East, Scarborough. Among the material seized as a result of the search warrants were over 50 credit cards in the names of people other than the accused, data for several individuals and financial institutions, over $100,000 in cash, multiple mobile phones, electronics and other luxury goods. The records for the mobile phones were accessed and revealed over a thousand calls to six financial institutions.
[12] Multiple charges were laid against the appellants. The Crown submitted that over a period of 10 years Mr. Neshan and Mr. Kenegarajah primarily carried out the bust out frauds, assisted by the other appellants. The Crown's case consisted largely of evidence from the affected financial institutions, surveillance evidence, and evidence from the searches.
[13] At the end of their trial, counsel for Mr. Neshan and Mr. Kenegarajah brought a motion to have certain counts quashed on the basis that they violated the single transaction rule as set out in s. 581(1) of the Criminal Code of Canada, R.S.C., 1985, c. C-46. The trial judge found, however, that each of the impugned counts alleged a single transaction and complied with s. 581(1).
[14] The trial judge dismissed the conspiracy charges as against all defendants. Mr. Kenegarajah and Mr. Neshan were found guilty of the global charges of fraud, money laundering, and participating in a criminal organization as well as most of the other substantive counts. Ms. Neeranjan and Ms. Kanagarajah were also found guilty of participating in a criminal organization and a few other substantive counts.
Issues
[15] The issues raised in these appeals and my conclusions on each issue may be summarized as follows:
(i) Did counts in the Information against Mr. Kenegarajah and Mr. Neshan offend the single transaction rule in violation of s. 581(1) of the Criminal Code?
No. The impugned counts were broadly framed, spanned a number of years, encompassed multiple transactions in different locations and, in some cases, involved different or additional perpetrators. However, there is no basis to conclude that the trial judge erred in dismissing the motion to quash. He identified and applied the correct legal principles and appropriate factors that are relevant in determining whether a count violates the single transaction rule. The trial judge's conclusion was justified based on his finding that the appellants' conduct amounted to a single, large-scale fraudulent scheme and that they suffered no prejudice as a consequence of how the counts were framed.
(ii) Did the trial judge convict Mr. Kenegarajah on counts for which he was not charged?
Yes. It would appear that through inadvertence the trial judge entered convictions on counts for which Mr. Kenegarajah was not charged. While he was not sentenced on these counts, the convictions must be quashed. There was also a typographical error regarding convictions on count 1 versus count 2 that must be rectified.
(iii) Did the trial judge provide insufficient reasons and err in finding beyond a reasonable doubt that Ms. Neeranjan had knowledge and control of property obtained by crime?
No. The trial judge provided sufficiently detailed reasons in convicting Ms. Neeranjan on the counts of possession of property, including currency, obtained by crime over $5,000. The convictions were well rooted in the evidence and free of legal error.
(iv) Did the trial judge err in concluding that Ms. Kanagarajah obtained a mortgage on the strength of a false employment confirmation letter?
No. There was compelling evidence to ground an inference that the employment confirmation letter was relied upon by the complainant in authorizing the mortgage transaction.
(v) Did the trial judge err in finding that Ms. Kanagarajah and Ms. Neeranjan knowingly participated in a criminal organization?
No. The trial judge did not err in his application of the test for a criminal organization or otherwise err in law. There was ample evidence that demonstrated they were members of a criminal organization and knowingly participated in its activities to facilitate or commit indictable offences.
Analysis
(i) Single Transaction Rule
[16] The single transaction rule is set out in s. 581(1) of the Criminal Code:
581(1) Each count in an indictment shall in general apply to a single transaction and shall contain in substance a statement that the accused or defendant committed an offence therein specified.
[17] On appeal, Mr. Kenegarajah and Mr. Neshan submit that the trial judge erred in failing to quash the following eleven counts for violating the single transaction rule:
| Count | Offence | Complainant | Time Period |
|---|---|---|---|
| 1 | Fraud over $5,000 | "the public" | Jan. 1, 2001 - March 3, 2010 |
| 3-10 | Fraud over $5,000 | Each count related to a different financial institution: Bank of Montreal Mastercard, JP Morgan Chase, Canadian Tire Mastercard, MBNA Canada Mastercard, Capital One Mastercard, HBC Mastercard, CIBC Visa, American Express | Jan. 1, 2001 - March 3, 2010 |
| 64 | Impersonation | "numerous victims" | Jan. 1, 2001 - March 3, 2010 |
| 92 | Money laundering | n/a | Jan. 1, 1997 - March 3, 2010 |
[18] These appellants submit that the trial judge failed to engage in the proper analysis of the single transaction rule. Instead, he focused on the lack of prejudice to these appellants and their failure, earlier in the trial, to object to the counts or to seek a remedy such as particulars or severance. These appellants also submit that the trial judge failed to consider that relaxation of the single transaction rule is only permissible in exceptional circumstances, none of which were present in this case. With respect to prejudice, these appellants submit if it is necessary to show prejudice, that they were prejudiced by how the counts were framed.
[19] Mr. Kenegarajah and Mr. Neshan further submit that the evidence established that the alleged fraudulent activity consisted of a number of discrete transactions, which should have been charged separately. They note that the counts span an extended length of time (9 years and 13 years) and that, within the charge periods, there were extended gaps where there was no evidence of fraudulent activity. They also emphasize that the alleged activities victimized different individual and institutional complainants, occurred in different locations and involved different perpetrators (i.e. not every accused was involved in each of the fraudulent transactions). The combined effect of these factors is that the counts, as particularized, cannot be considered a single transaction.
[20] Finally, these appellants rely on similarities between the facts of their case and this court's decision in R. v. Rafael, [1972] 3 O.R. 238 (C.A.) in submitting that the trial judge erred in finding that the conduct in this case could be considered a single transaction.
[21] I would not give effect to any of these arguments and would dismiss this ground of appeal.
[22] Mr. Kenegarajah and Mr. Neshan are correct in submitting that their failure to raise the single transaction rule earlier in the trial, or to seek a remedy such as severance or particulars, is not fatal to this ground of appeal. It is, however, "a telling indicator that the accused [were] not prejudiced by the indictment as drafted": R. v. S. (H.S.), 2009 ONCA 102, 265 O.A.C. 206, at para. 25. See also: R. v. K. (C.) (1999), 127 O.A.C. 261, at para. 11 (C.A.).
[23] Counsel's arguments regarding prejudice must be considered in light of the underlying purpose of the single transaction rule: to ensure that an accused is aware of the charge against him or her and is able to make full answer and defence: R. v. Chamot, 2012 ONCA 903, 302 O.A.C. 104, at paras. 36-37; R. v. Katigbak, 2011 SCC 48, [2011] 3 S.C.R. 326, at para. 82. The validity of a count is to be assessed in light of this purpose.
[24] Avoiding prejudice is the underlying purpose of the single transaction rule, and the presence (or absence) of prejudice is therefore a critical component of the test to determine whether a particular count offends that rule. The significance of prejudice is also reflected in s. 590(2) of the Criminal Code, which allows an accused to seek remedies in respect of a count that offends the single transaction rule, but only on the ground that the count, as framed, "embarrasses him in his defence."
[25] A lack of prejudice was a significant – if not determinative – factor in Katigbak. There, the Supreme Court of Canada concluded that the impugned count was not invalid for violating the single transaction rule, even though it would have been preferable to divide the count.
[26] Similarly, the significant role that the presence (or absence) of prejudice plays in determining whether a count is invalid due to violating the single transaction rule is reinforced by a brief survey of the decisions of this court. In the following cases this court cited a lack of prejudice to the appellant in dismissing an appeal on this ground: S. (H.S.), at para. 24; K. (C.), at para. 11; R. v. Canavan, [1970] 3 O.R. 353 (C.A.), at paras. 17-19; R. v. Hulan, [1969] 2 O.R. 283 (C.A.), at paras. 29 and 32-33. In contrast, in the following two cases this court cited prejudice to the appellant in allowing an appeal on this ground: R. v. Selles (1997), 34 O.R. (3d) 332 (C.A.), at paras. 33-36; and R. v. Monk, [1988] O.J. No. 94 (C.A.), at paras. 17-19.
[27] In oral submissions counsel for Mr. Neshan submitted that these appellants were prejudiced because there were potential issues or defences that could have been raised, for example, the existence of a potential alternative suspect in relation to the 2001 AMEX activity. In my view, this argument fails to establish prejudice. Even assuming that any such potential defences existed, the appellants have not demonstrated that it was somehow not open to them to pursue those defences because of how the Information was drafted.
[28] I note as well that the trial judge granted a similar fact application due to the interwoven and interrelated nature of the offences. Therefore, even if the impugned counts had been divided, evidence in relation to each count would have been admitted and been available for use as similar fact evidence across all counts.
[29] It must be noted that the defence strategy at trial was simply to hold the Crown to the strict proof of its case. To paraphrase the conclusion of McLachlin C.J. and Charron J. in Katigbak, there can be no suggestion that the appellants in this case were not aware of the case they had to meet at trial, or that they were somehow hampered in conducting their defence. It is not sufficient to say, as counsel did in his oral submissions in this case, that the framing of the counts could have affected how the appellants conducted their defence.
[30] Mr. Kenegarajah and Mr. Neshan submit that the trial judge failed to acknowledge or appreciate that relaxation of the single transaction rule is permissible in exceptional circumstances only, and is not the norm. In my view, the appellants' submission about what qualifies as an exceptional case is too narrow. A case will fall within the exception to the single transaction rule as long as the acts encompassed within the count can be treated as one transaction.
[31] In R. v. Rocchetta, 2016 ONCA 577, 352 O.A.C. 130, at para. 44, this court identified the different factors that may make a series of acts a single transaction:
A series of acts that are sufficiently connected will make up a single transaction for the purposes of s. 581(1). The sufficiency of the connection will depend on the circumstances. The requisite connection may be established by the proximity in time or place of the acts, the identity of the parties to the acts, the similarities of the conduct involved in the acts, the ongoing relationship of the parties to the acts, or other factors tending to show that each act is properly viewed as part of the larger whole: see R. v. Hulan, [1969] 2 O.R. 283 (Ont. C.A.).
[32] Applying these factors to the present case, the trial judge was justified in finding that the conduct amounted to a single transaction. While the acts did not necessarily share proximity in time, place or complainants, the trial judge did find that they shared strong similarity in the nature of the conduct involved; the conduct was part of a large and sophisticated bust out fraud scheme perpetrated by both these appellants over several years.
[33] Finally, the appellants rely on what they submit are factual similarities between their case and this court's decision in Rafael. However, Rafael involved allegations of fraud carried out over a period of five years, involving 24 different complainants. After reviewing a number of authorities, including Hulan and Canavan, the court, at paras. 18-19, found that the conduct did not amount to a single transaction:
The result therefore was that this became an indictment in which 24 persons were alleged to have been defrauded, on dates varying widely in time, by offences taking place at different localities and involving different amounts, but more importantly, involving also quite different representations to the individuals who were called as witnesses.
After careful consideration, we are not able to conclude that the events which the Crown proved in this case can be regarded as occurrences which together form a single transaction.
[34] These appellants submit that Rafael is more consistent with the facts of this case than the authority relied upon by the trial judge. I disagree. In Rafael, the most significant consideration identified by the court was that the nature of the impugned conduct in relation to each complainant was inconsistent. This is reinforced by how the court in Rafael characterized the material facts in Hulan and in Canavan, at paras. 10 and 15, respectively, emphasizing that the presence of a similar pattern of conduct in those cases led to a different result. Mainly, to a finding that the single transaction rule was not violated.
[35] In my view, Rafael should be distinguished on the basis that, in the present case, the trial judge found that the nature of the impugned conduct was similar. The various offences encompassed by the counts were part of a global bust-out scheme operated for several years by the appellants.
[36] In summary, I am not satisfied that the trial judge erred in his analytical approach to this issue. He was entitled to consider the appellants' failure to raise the single transaction rule or to seek a remedy earlier in the trial. He was also justified in emphasizing the lack of any prejudice suffered by the appellants. It is clear from his reasons that, notwithstanding finding a lack of prejudice, the trial judge went on to consider, based on an application of the appropriate legal principles to the evidence and circumstances of the case, whether the various incidents of impugned conduct in the case before him were so closely related as to amount to a single transaction. It follows from the foregoing that I would reject this ground of appeal.
(ii) Errors Regarding Counts
[37] After a careful review of the Information and the trial judge's reasons, it is clear that Mr. Kenegarajah was convicted of counts for which he was not charged. Crown counsel has provided this court with a sentencing document that clarifies that this appellant was not sentenced on these charges. While that is of some comfort, the fact remains that Mr. Kenegarajah was convicted of offences with which he was not charged. An order will go quashing Mr. Kenegarajah's convictions on counts 53, 56, 58, and 59.
[38] In addition, there is a typographical error in the trial judge's reasons. He acquitted all of the accused on count 2 yet entered a conviction for Mr. Kenegarajah and Mr. Neshan on this count in his reasons and the Information. It is clear that he entered the conviction on count 2 instead of count 1. For these two appellants, the convictions on count 2 will be quashed and acquittals will be entered. In addition, for these two appellants, convictions will be entered on count 1.
(iii) Possession of Property Obtained by Crime
[39] Ms. Neeranjan submits the trial judge failed to provide sufficient reasons in support of his finding that she had the requisite knowledge and control of property obtained by crime. She further submits the trial judge relied on speculation rather than evidence in convicting on these counts, and that he erred in finding that wilful blindness could be inferred.
[40] The trial judge provides reasons for the conviction on these counts, at para. 158, as follows:
Kenegarajah, Neshan, and the latter's wife, Anantha Neeranjan are charged with possession of property by crime, namely furniture, electronics, and appliances (count 55) and money (count 57) on March 3, 2010. Counsel for Neeranjan submits there is no proof that she knew about her husband's activities. The uncontradicted evidence belies this submission. The most important relevant paragraphs are 60, 62, 64, 67 and 70 with respect to the search warrant at 30 Bissland Drive. The home was filled with the proceeds of crime, including furnishings, credit cards, cell phones and money stashed in various places. All items would be in plain view or accessible to the woman of the household. There is nothing to suggest Neeranjan could reasonably believe the two men were lawfully employed. There is nothing to suggest she could reasonable believe the property was legitimately purchased or that there was some plausible explanation for why over $100,000.00 was strewn about, rather than deposited in a bank. Indeed, the evidence points to her knowledge of the criminal conduct of Neshan and Kenegarajah. At best, she was wilfully blind. In any event, I have no doubt all are guilty.
[41] The law regarding insufficient reasons is well established and need not be considered in detail. Broadly, a trial judge has a duty to provide reasons that explain the result, foster public accountability, and permit effective appellate review: R. v. M. (R.E.), 2008 SCC 51, [2008] 3 S.C.R. 3, at para. 15. A claim of insufficient reasons is not a free-standing ground of appeal and an appeal will only be allowed where the reasons foreclose appellate review: R. v. Vuradin, 2013 SCC 38, [2013] 2 S.C.R. 639, at para. 10. If an appeal court encounters difficulty in reviewing reasons, it may supplement the reasons by considering them in the context of the evidentiary record: R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869, at paras. 52 and 55.
[42] Do the trial judge's reasons on this count permit appellate review? In my view, they do. The trial judge undertook a very detailed review of the evidence in the first part of his analysis. When he considered the various charges, he did not repeat the factual findings made earlier. For these charges, he referenced the paragraphs that detail the search of Ms. Neeranjan's home and noted that the items were all visible to her. There was no direct evidence of knowledge or control but the trial judge held that the circumstantial evidence was sufficient to ground a finding that she had both knowledge and control of the proceeds of crime. While it is open to this appellant to challenge that analysis, and she does, it cannot be said that the reasons do not permit meaningful appellate review. The task for this court is to determine whether the trial judge's findings were available to him on the evidence. I turn next to that issue.
[43] This appellant submits that there was no evidence that she ever entered Mr. Kenegarajah's room in which much of the cash and credit cards were kept, and as such, knowledge has not been established. Further, she argues that there was no evidence of control, as mere indifference or passive acquiescence to the presence of stolen goods does not amount to control for the purpose of establishing illegal possession.
[44] In submitting that there was an insufficient evidentiary basis for the findings of guilt, this appellant is essentially making an unreasonable verdict argument. The test for appellate intervention is whether the finding is one that a trier of fact, acting judicially, could reasonably have rendered: R. v. Jackson, 2007 SCC 52, [2007] 3 S.C.R. 514, at para. 2.
[45] In my view, the trial judge's findings of guilt are well grounded in the evidence and were open to him to make. Count 55 relates to the "furniture, electronics, appliances and household articles" at 30 Bissland Drive where she lived with her husband Mr. Neshan, and Mr. Kenegarajah. It is clear on the evidence that the house was full of furniture, electronics, appliances and household goods and that these items were in plain view. In these circumstances, it was an available inference to the trial judge that this appellant had custody, access and exercised control over the property.
[46] Count 57 relates to the currency found in the appellant's home at 30 Bissland Drive. The police found over $100,000 cash in different currencies and denominations in various places in the home, which were either in plain view or accessible to Ms. Neeranjan. As such, there was an available inference on the evidence that this appellant had possession and control over the currency. Therefore, the finding of guilt on this charge was not unreasonable.
[47] Ms. Neeranjan complains that the trial judge did not adequately analyze whether there was sufficient evidence to establish that she was wilfully blind. In my view, this argument is of no assistance to this appellant given that the trial judge made a positive finding that she knew of the criminal conduct of Mr. Neshan and Mr. Kenegarajah. This positive finding of knowledge rendered the issue of willful blindness irrelevant.
[48] Finally, Ms. Neeranjan submits that the trial judge reversed the burden of proof when he stated, at para. 158, "there is nothing to suggest that [she] could reasonably believe the two men were lawfully employed." However, that statement needs to be considered in context. It followed a detailed consideration of the evidence against the appellants. That evidence established to the trial judge's satisfaction that Mr. Neshan and Mr. Kenegarajah worked full-time on the fraud scheme and there was nothing to suggest that they were lawfully employed. There was no reversal of the onus. This was merely an available inference drawn from the evidence.
[49] I would not give effect to this ground of appeal.
(iv) Mortgage Fraud
[50] Ms. Kanagarajah was charged, among other counts, with fraud over $5,000. The circumstances of the offence are as follows. This appellant purchased a home with a mortgage obtained from Home Trust Company. The Crown tendered business records from Home Trust Company regarding the mortgage application. Those records included an unsigned mortgage application and an employment confirmation letter from a Richard Frank on the letterhead of World Golden Stone Inc., which stated that this appellant worked for that company at a salary of $118,000 per annum. The owner of World Golden Stone Inc. testified at trial that neither Ms. Kanagarajah nor anyone with the name Richard Frank ever worked for the company. The Crown led no viva voce evidence from Home Trust Company regarding the mortgage approval process.
[51] Ms. Kanagarajah submits that this conviction is unreasonable because the Crown failed to prove an essential element of the offence, namely, that the Home Trust Company relied upon the false employment confirmation letter submitted as part of the mortgage application to its detriment. This appellant also argues that the reasons are not sufficient given the lack of evidence of reliance.
[52] I would not give effect to this ground of appeal. Again, the issue is whether the finding is one that a trier of fact, acting judicially, could reasonably have rendered. This appellant has not met this stringent test.
[53] Was it reasonable to conclude that there was detrimental reliance by Home Trust Company? In my view, there is a strong available inference on this issue that was open to the trial judge. That inference is supported by the following facts. It is not disputed that the mortgage funds were advanced. It is also not disputed that the letter formed part of the business records of Home Trust Company. On the face of the letter there is a handwritten note indicating "verbally confirmed with Richard Frank on 12/2 @3:30," followed by a signature. I note that the letter is a business record and is, therefore, an exception to the hearsay rule.
[54] It is difficult to fathom how the inference drawn by the trial judge on these facts could be considered unreasonable. Indeed, the inference is almost inescapable. The mortgage form indicated that this appellant was employed by World Golden Stone Inc. and was earning $118,000 annually. The letter that formed part of the application supported that information. The note on the letter is clear evidence that the information was confirmed via a telephone call. Why would Home Trust Company confirm information if it were not relying upon it? Finally, mortgage funds were advanced. The causation inference made by the trial judge was well supported by the evidence and was not unreasonable. Further, there is no merit to the submission that the reasons are insufficient. This ground of appeal should also fail.
(v) Criminal Organization
[55] Ms. Kanagarajah submits that the trial judge adopted an incorrect legal analysis regarding the determination of when a group of persons becomes a criminal organization. In finding that a criminal organization existed during the period February 1, 2005 to March 3, 2010, the trial judge, at paras. 131-132, referenced the definition of a criminal organization described in R. v. Atkins, 2010 ONCJ 262, at para. 25:
Count 54 alleges the defendants participated in a criminal organization. Section 467.11(1) of the Criminal Code criminalizes the knowing participation or contribution to a criminal organization's legal or illicit activities. It does not require a criminal act itself and the accused do not need to be a member of the organization. In R. v. Atkins et al., 2010 ONCJ 262, it was held that:
Any reasonable interpretation of the statute would suggest that a criminal organization is at minimum, nothing more than: any three persons, however organized, who associate for more than offence, to commit serious offences for the benefit of at least one person in that group. … Maximum flexibility is achieved by the use of the words "however organized." There are no requirements for (a) formally defined roles; (b) continuity of association; or (c) a developed structure. While it is helpful if the group obligingly adopts a name associated with some notoriety, or dresses in a certain manner with coloured accessories or "patches," or establishes a territory, the fact is that no particular group structure or organization is actually required. Nonetheless, the persons who constitute "the group, however organized" are only associates of a criminal organization to the extent they share its criminal objectives.
I agree, on the basis of Atkins, that in this case the Crown must prove that: (a) a criminal organization existed during the period February 1, 2005 and March 3, 2010; (b) each defendant participated in the group or contributed to its activities; and (c) each defendant had knowledge that the group he or she associated with had as one of its main criminal purposes the facilitation of the offences of credit card fraud and identity theft and knowledge that his or her involvement in this activity would likely result in a direct or indirect benefit to the group or any person in the group.
[56] Ms. Kanagarajah argues that the Supreme Court of Canada in R. v. Venneri, 2012 SCC 33, [2012] 2 S.C.R. 211 effectively overruled Atkins, when it concluded, at para. 29, that a criminal organization must have some measure of continuity of association and a developed structure: "by insisting that criminal groups be 'organized', Parliament has made plain that some form of structure and degree of continuity are required to engage the organized crime provisions that are part of the exceptional regime it has established under the Code."
[57] Ms. Kanagarajah further submits that the trial judge compounded this legal error by failing to recognize or consider the effect of evidence that cast doubt on whether a criminal organization existed and whether she knowingly participated in that organization. She submits that there was no evidence of her being part of an ongoing course of conduct, given that she was acquitted of global conspiracy and money laundering charges. Further, there was the possibility, not considered by the trial judge, that she was only brought into the group for the single mortgage fraud offence. In addition, she argues that there was no evidence of whether she knew she was participating in a criminal organization or intended to commit the mortgage fraud for the benefit of the group.
[58] Ms. Neeranjan also appeals her criminal organization conviction. She submits that the trial judge's reasons on this count were insufficient for meaningful appellate review. Further, she argues the trial judge conducted no analysis of whether she advanced the interests of the criminal organization, knowing that the group had the characteristics of a criminal organization or for its benefit.
[59] Finally, Mr. Kenegarajah submits that Ms. Kanagarajah's and Ms. Neeranjan's appeals of their criminal organization convictions should be allowed and, if they are, his conviction on that charge should be set aside because the statutory definition of criminal organization, being composed of three or more persons, has not been satisfied.
[60] I would not give effect to any of these grounds of appeal.
[61] First, with respect to the alleged legal error, it is true that the trial judge referenced a case that is inconsistent with Venneri to the extent that it suggests structure and continuity are not necessary in a criminal organization. However, in his reasons, at para. 170, the trial judge found both structure and continuity:
Different considerations apply with respect to the criminal organization count. Having regard to all my conclusions, I have no doubt that a criminal organization existed between 2005 and 2010. Neshan and Kenegarajah were the leaders of this group. Neshan's wife, Neeranjan, and Kenegarajah's sister, Kanagarajah, participated in the group and contributed to its activities, as set out above. All four individuals knew the group had as its criminal purpose the facilitation of credit card fraud and identity theft and each one benefited to a greater or lesser extent. This meets the criteria provided for in s. 467.1 of the Code. For reasons already stated, I am not confident that these observations apply to Nesarajah. Accordingly all but Nesarajah are found guilty of this offence.
[62] In his analysis, therefore, the trial judge followed the dictates of Venneri and made the necessary factual findings regarding the nature of the enterprise to ground a finding of participation in a criminal organization.
[63] Despite the submissions of Ms. Kanagarajah and Ms. Neeranjan, there was ample evidence that demonstrated they were members of a criminal organization and knowingly participated in its activities to facilitate or commit indictable offences. I note that these appellants do not contest the evidence presented by the Crown at trial establishing an enterprise in common between Mr. Neshan and Mr. Kenegarajah to defraud individuals and financial institutions.
[64] The properties purchased in Ontario, as part of the fraudulent scheme, include 311-11753 Sheppard Avenue East, Scarborough; 30 Bissland Drive, Ajax; 47 Portelli Crescent, Ajax; 87 Portelli Crescent, Ajax; and 1640 Pennel Drive, Oshawa. These transactions permitted the organization to launder the proceeds of crime and the properties were used as drop locations for mail from financial institutions that were victimized in the fraud. The Pennel Drive property was in the name of Ms. Kanagarajah. She also leased the Land Rover used by Mr. Neshan and Mr. Kenegarajah to commit the bank and credit card frauds. A police search of the Land Rover revealed evidence of the fraud, including two bust out ledgers used to keep track of the numerous false identities. A search of 311-11753 Sheppard Avenue East, Ms. Kanagarajah's residence, revealed approximately 13 mobile phones. Those phones were used to make over a thousand telephone calls to the financial institutions that were the victims of the fraud. It was open to the trial judge, based on this evidence, to find that Ms. Kanagarajah was knowingly complicit in the criminal organization's activities.
[65] Similarly, title to the Portelli Crescent properties were in Ms. Neeranjan's name. The trial judge expressly found that the properties were purchased as a means to launder crime proceeds. He also concluded that this appellant's ownership of a gas station was part of the same fraudulent scheme to launder money. There was, therefore, an evidentiary basis for the trial judge's finding that Ms. Neeranjan knowingly participated in the criminal organization. His reasons in this regard are sufficient, as they do not foreclose appellate review.
[66] It follows that Mr. Kenegarajah's submission that his conviction on this charge should be set aside because the statutory definition of criminal organization has not been satisfied must fail.
Disposition
[67] I would dismiss all of the appeals, save for that part of Mr. Kenegarajah's appeal wherein he submits that he was convicted of counts with which he was not charged. I would allow that part of the appeal and quash Mr. Kenegarajah's convictions on counts 53, 56, 58, and 59. In addition, for Mr. Kenegarajah and Mr. Neshan, I would quash the convictions on count 2 and enter acquittals in their place, and I would enter convictions on count 1 for both of these appellants.
Released: "D.W." February 8, 2018
"C.W. Hourigan J.A."
"I agree. David Watt J.A."
"I agree. B.W. Miller J.A."