Court of Appeal for Ontario

Date: 2019-05-16 Docket: C63942

Judges: Hourigan, Paciocco, and Harvison Young JJ.A.

Between

Her Majesty the Queen Respondent

and

Mark Zirkind Appellant

Counsel

Edward Prutschi, for the appellant

Jennifer Conroy and Kerry Benzakein, for the respondent

Heard: May 7, 2019

On appeal from the convictions entered on January 16, 2017 by Justice Todd Ducharme of the Superior Court of Justice and from the sentence imposed on June 29, 2017.

Reasons for Decision

Overview

[1] The appellant was convicted of one count of trafficking in property obtained by crime (contrary to s. 355.2 of the Criminal Code) and one count of possession of property obtained by crime (contrary to s. 354(1) of the Criminal Code) following a judge alone trial after police discovered $1,136,555.00 in cash in his car. The primary issue at trial was whether the Crown had proven beyond a reasonable doubt that the appellant knew of the criminal origins of the funds. The appellant testified on his own behalf. He was convicted and sentenced to 4 years' imprisonment. He appeals from both his convictions and sentence on the grounds that the trial judge erred by:

1. Failing to properly apply the principle from R v. W.(D.), [1991] 1 S.C.R. 742;

2. Failing to provide sufficient reasons for conviction; and

3. Imposing a sentence that was grossly disproportionate to the offence in these circumstances.

[2] For the following reasons, we would dismiss the appeal from conviction, grant leave to appeal the sentence but dismiss the appeal from sentence.

The Facts

[3] An extensive Agreed Statement of Facts formed a large part of the evidence at trial.

[4] On February 23, 2014, the appellant flew from Montreal to Toronto on a one-way ticket and rented a car. For several days prior, the appellant had been communicating through phone calls and text messages with a man named Justin Soon to arrange a meeting in Toronto. Justin Soon was under surveillance and his calls and text messages were being intercepted by police in furtherance of a drug investigation.

[5] The meeting between Mr. Soon and the appellant ultimately took place in a parking lot at the Yorkdale Mall on the afternoon of February 23, 2014. The police had Mr. Soon under surveillance at that time. The police saw Mr. Soon get out of his car with a black and red duffle bag and get into the appellant's rental car. Mr. Soon got out of the car a few minutes later and walked back to his car without the bag.

[6] Later that night, an OPP officer stopped the appellant's car, which was travelling eastbound on Highway 401, shortly before 10:30 p.m. The OPP officer testified that he stopped the appellant for speeding, in what he described as a routine traffic stop. As a result of the officer's observations of and interaction with the appellant, the appellant was arrested for possession of property obtained by crime and the vehicle was searched. The money was found in a number of bags in the car. The bags, the money, and several surfaces in the car (including the glove compartment, driver's control surfaces, back seat and trunk) tested positive for the presence of cocaine.

[7] The Agreed Statement of Facts stipulates that $250,170 found in the red and black duffle bag obtained from Mr. Soon was derived from cocaine trafficking.

[8] The appellant testified at trial. The appellant is an orthodox Lubavitch Jew. He admitted that he was transporting money and that he had done this a few times previously. He denied knowing that the money was property obtained by crime. Rather, he testified that he believed the money was "Shoah Gelt", that is, money belonging to Jewish people living in Europe or Asia who believed there would be another Holocaust and who wished to move their money to a place of safety so that it would not be confiscated as it was during the first Holocaust.

[9] The appellant testified that he had agreed to transport the money at the request of a man named "Avrum Reish". The appellant agreed and was honoured to do so, describing the task as a great "mitzvah" or commandment from God.

[10] The appellant testified that he had travelled from Toronto to Montreal to transport money on three or four prior occasions. He testified that he never flew back to Montreal with the money because he was afraid that the money would be discovered or lost. The people he met in Toronto who gave him the money had no obvious signs of being Jewish, but the people to whom he gave the money in Montreal appeared to be orthodox Jews.

[11] In cross-examination, the appellant agreed that Avrum was a stranger and had approached him unsolicited. He admitted that he made no inquiries about Avrum or asked for details about where the money would end up. He never asked any questions about how the money came into Canada and stated that he did not have a telephone number for Avrum. He did not remember if he had tried to reach Avrum after his arrest but testified had not heard from him since his arrest.

The Decision Below

[12] The trial judge began by summarizing the events leading up to the appellant's arrest. He referred to the Agreed Statement of Facts, noting that $1,136,555 was found in the appellant's car, and that a portion of that money (i.e. the money found in the black and red duffle bag, totalling $250,170) was admitted to be property obtained by crime. He identified the primary issue in the case as being whether the Crown had proven beyond a reasonable doubt that the appellant was knowingly in possession of property obtained by crime. A secondary issue was whether the Crown had established beyond reasonable doubt that all of the money found in the car (i.e. other than that in the red and black duffle bag) was property obtained by crime.

[13] The trial judge then proceeded to review and consider the appellant's testimony. The trial judge began by rejecting the suggestion that Avrum was, in fact, moving money on behalf of Jews living in Europe or Asia because (1) the money from Mr. Soon was admitted to be the proceeds of cocaine trafficking; and (2) it was incredible that, had that been the case, the appellant would not have been contacted following his arrest by Avrum or the Jews to whom the money belonged to find out what had happened to the money.

[14] The trial judge then focussed directly on the question of whether the appellant believed that the money he was moving was "actually Shoah Gelt rather than the proceeds of crime". The trial judge referred to W.(D.), and provided six reasons for rejecting the appellant's testimony, including the appellant's failure to make any inquiries about Avrum and the fact that it was simply unbelievable that people who did not know the appellant would give him such large amounts of cash. The trial judge also stated that he disbelieved the appellant's claim that he had no way of contacting Avrum and found that the appellant's inability to remember any of the details about the people he met in Toronto or Montreal was feigned. The trial judge found that none of these issues in the appellant's evidence were explained by his religious beliefs.

[15] The trial judge then concluded that the appellant's testimony did not leave him with any reasonable doubt that he knew what was going on, for the same reasons the trial judge had provided for rejecting the appellant's evidence. Finally, the trial judge stated that "turning to the rest of the evidence, particularly the admissions in this case, I am satisfied beyond a reasonable doubt as to the guilt of [the appellant]."

The Conviction Appeal

(1) Did the trial judge err in his application of W.(D.)?

[16] We find no merit in the appellant's submission that the trial judge failed to properly apply W.(D.). The trial judge expressly referred to W.(D.) before he turned to consider the appellant's evidence. His analysis is structured according to, and follows, each of the three components of the W.(D.) test.

[17] The trial judge explained clearly why he rejected the appellant's evidence that he believed he was transporting Shoah Gelt, and provided six cogent reasons for doing so. He then found that the appellant's evidence, even though not believed, did not raise reasonable doubt for those same six cogent reasons.

[18] We do not agree with the appellant's submission that in arriving at these conclusions the trial judge erred in his application of the principles in W.(D.) because he failed to properly engage with appellant's religious beliefs, and how those religious beliefs would impact his knowledge as to the criminal origins of the funds. The trial judge reviewed the appellant's testimony as to his religious beliefs in some detail. In rejecting the appellant's testimony – and in finding that he was not left with reasonable doubt as a consequence of this testimony – the trial judge explained that none of the issues in the appellant's evidence were explained by his religious beliefs. We do not see any W.(D.) error in this regard.

[19] The trial judge then went on to consider the third W.(D.) requirement. He stated:

Thus, as [the appellant's] testimony does not leave me with a reasonable doubt, turning to the rest of the evidence, particularly the admissions in this case, I am satisfied beyond a reasonable doubt as to the guilt of [the appellant].

[20] We do not agree with the appellant's submission that the trial judge erred in respect of his analysis at this third limb of W.(D.). He demonstrated an appreciation that it would be improper to convict based on the rejection of the appellant's evidence, and acknowledged that for a conviction there must be sufficient proof in the evidence he does accept to establish the accused's guilt beyond a reasonable doubt. In our view, the appellant's argument is essentially that the reasons in this respect are insufficient (an argument we address below).

(2) Were the trial judge's reasons insufficient?

[21] We do not agree with the appellant's submission that the trial judge's reasons were insufficient in the circumstances of this case, though they were brief as they relate to the last W.(D.) consideration.

[22] The brevity of the trial judge's reasons raise two concerns. Of particular concern is the trial judge's failure to indicate what evidence grounded his finding that the third limb of W.(D.) had been satisfied and that the Crown had established beyond a reasonable doubt that the appellant knew he was transporting property obtained by crime.

[23] The first and broader question is whether the reasons are sufficient to explain to the appellant why he was convicted and to permit effective appellate review: R v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869, at paras. 24-25, 55; R v. R.E.M., 2008 SCC 51, [2008] 3 S.C.R. 3, at paras. 15-17. Where the trial judge's reasons – read in conjunction with the evidence and submission at trial – make clear how the trial judge arrived at his or her decision, the reasons will be sufficient: R.E.M., at para. 16.

[24] The context of this trial was that the Crown's case, in the absence of or upon rejecting the appellant's evidence, was strong and largely contained in the Agreed Statement of Facts. This was acknowledged by defence counsel at trial (not counsel on this appeal):

Defence Counsel: In relation to the third branch of W.D. it's – it's a little bit more difficult an argument […]

What if it was a different trial and he never testified? You have all the same evidence but not his testimony. Instead I called a sociological expert in Hasidic Jewry who testified about the way the Hasids are raised and how…

The Court: It would be a lot easier to convict him […]

Defence Counsel: Right. No, you would only be left with the evidence you have in front of you…

The Court: I mean – the argument can't be that he's a Lubavitch Jew and therefore he's not going to commit a crime.

Defence Counsel: No it's not.

The Court: At least that's not an argument that flies with me. So, it seems to me if you get – if you – if the Crown gets me to the third branch of W.D., where I have rejected he believes this is Shoah money then…

Defence Counsel: Like I said, Your Honour…

The Court: … I think you have a problem.

Defence Counsel: … it's not a powerful submission. [Emphasis added.]

[25] This short trial focused on the appellant's knowledge. Defence counsel in the above passage recognizes that the totality of the evidence amounted to a strong circumstantial case that the appellant did know that he was transporting property obtained by crime. There was overwhelming circumstantial evidence in this regard. This includes the cocaine residue found in the car, on the bags, and on the money, the evidence from the OPP officer about how nervous the appellant was during the traffic stop, and the secretive means by which the appellant transported the money. While proof of a particular state of mind (here, knowledge of the criminal origins of the funds) will almost always be based on circumstantial evidence, the only reasonable inference on the strength of the evidence at trial was that the appellant knew that he was transporting proceeds of crime. The trial judge's reasons – read in light of the evidence and submissions at trial – are adequate both to explain the result and to permit effective appellate review.

[26] The second concern raised by the brevity of the trial judge's reasons at the third stage of W.(D.) is whether the trial judge based his findings of guilt on inferences invited by the trial Crown counsel (not counsel on this appeal) that are legally controversial. The Agreed Statement of Facts stipulated that the appellant had travelled between Canada and the United States, on trips of short duration, 36 times between January 2011 and February 2014. Of those 36 trips, 13 trips featured a same day departure and return. The Agreement Statement of Facts further stipulated that the appellant's average yearly income (as reported on his tax returns for 2008 to 2012) was $34,912. However, between 2009 and February 2014, the appellant had made over $2 million in payments to his various credit cards. In her closing submissions, the trial Crown suggested that the appellant's travel patterns were consistent with him acting as an illegal courier and that his credit card payments suggested he had an undeclared source of income. She suggested that this evidence supported the inference that the appellant was knowingly transporting property obtained by crime. The reasoning she invited depends on the inference that the appellant had engaged in illegal activity on other occasions and used criminal proceeds to make his credit card payments, and that this past criminal conduct shows that he knew he was transporting criminal proceeds when arrested. The Crown needed to bring an application to use this presumptively inadmissible reasoning, but had not done so. Had the trial judge applied this reasoning he would have erred.

[27] However, upon a review of the transcripts of proceedings, it is clear that the trial judge was alive to the potential dangers associated with this evidence. The trial judge not only expressed scepticism as to the import of this evidence during the trial Crown's closing submissions, but also said to defence counsel "I don't need […] to hear about that" when defence counsel started reply submissions on the appellant's travel history, and told defence counsel not to "worry about" trial Crown's submissions on the credit card transactions.

[28] In light of the submissions at trial, and the back and forth between counsel and the trial judge, we are satisfied that the trial judge did not base his finding of guilt on legally controversial inferences.

The Sentence Appeal

[29] We also disagree that the 4 year custodial sentence imposed was manifestly unfit. We see no error of fact or error in principle that would justify appellate intervention in this case.

[30] The appellant argues the trial judge erred in rejecting the appellant was a mere courier which, had this submission be accepted below, would have been a mitigating factor. We disagree. The trial judge's finding that the appellant was not a mere courier was amply supported by the record.

[31] Contrary to the appellant's submission on appeal, the record also strongly supports the trial judge's finding that the appellant was motivated by profit and was aware that he was transporting money obtained from drug tracking.

[32] The trial judge identified and applied the principles set out in R v. Rosenfeld, 2009 ONCA 307, 94 O.R. (2d) 641. He noted that the primary sentencing objectives were deterrence and denunciation. He considered the relevant similarities and differences between Rosenfeld and the case at bar. Again, we see no error in principle that could justify intervention with the sentence imposed.

Disposition

[33] The appeal from conviction is dismissed. Leave to appeal sentence is allowed but the appeal from sentence is dismissed.

"C.W. Hourigan J.A."

"David M. Paciocco J.A."

"A Harvison Young J.A."