WARNING

The court hearing this matter directs that the following notice be attached to the file:

A non-publication and non-broadcast order in this proceeding has been issued under subsection 539(1) of the Criminal Code. This subsection and subsection 539(3) of the Criminal Code, which is concerned with the consequence of failure to comply with an order made under subsection (1), read as follows:

539. Order restricting publication of evidence taken at preliminary inquiry.— (1) Prior to the commencement of the taking of evidence at a preliminary inquiry, the justice holding the inquiry

(a) may, if application therefor is made by the prosecutor, and

(b) shall, if application therefor is made by any of the accused,

make an order directing that the evidence taken at the inquiry shall not be published in any document or broadcast or transmitted in any way before such time as, in respect of each of the accused,

(c) he or she is discharged, or

(d) if he or she is ordered to stand trial, the trial is ended.

(3) Failure to comply with order.— Every one who fails to comply with an order made pursuant to subsection (1) is guilty of an offence punishable on summary conviction.

Court Information

Ontario Court of Justice

Date: 2013-09-24

Court File No.: Halton 10-2977-01

Between:

Her Majesty the Queen

— And —

Jun-Chul Chung, Kenneth Chung and Kathleen Chung

Before: Justice L.M. Baldwin

Heard on: November 6, 8, 14, 19, 20, 22, 26, 27, 2012; January 21, February 4, 5, 6, 7, May 2, 6, 7, 8, 15, 16, 17, 29, 2013

Reasons for Judgment released on: September 24, 2013

Counsel

David King — counsel for the Crown

Louis Silver — counsel for the accused Kenneth Chung

Jacqueline An — counsel for the accused Jun-Chul Chung

James Silver — counsel for the accused Kathleen Chung

BALDWIN J.:

Charges Sought

[1] The Crown seeks committal on seven counts worded as follows:

(1) That, during the eight-month period last, past and ending on February 6, 2004, at the City of Burlington, Jun-Chul Chung and Kenneth Chung did steal lottery tickets, the property of persons unknown, of a value not exceeding $5,000.00, contrary to section 334(b) of the Criminal Code of Canada; and

(2) That, during the eight-month period last, past and ending on February 6, 2004, at the City of Burlington, Jun-Chul Chung and Kenneth Chung did possess property to wit: lottery tickets, of a value not exceeding $5,000.00, knowing that the said property had been obtained by the commission in Canada of an offence punishable by indictment, contrary to section 354(1)(a) of the Criminal Code of Canada; and

(3) That, on or about the 22nd day of December, 2003, at the City of Burlington, Jun-Chul Chung and Kenneth Chung did steal a Lotto Super 7 lottery ticket, the property of persons unknown, of a value not exceeding $5,000.00, contrary to section 334(b) of the Criminal Code of Canada; and

(4) That, between the 22nd day of December, 2003, and the 5th day of February 2004, at the City of Burlington and elsewhere in the Province of Ontario, Jun-Chul Chung, Kenneth Chung and Kathleen Chung did have in their possession property to wit: a Lotto Super 7 ticket, of a value not exceeding $5,000.00, knowing that the property was obtained by the commission in Canada of an offence punishable by indictment, contrary to section 354(1)(a) of the Criminal Code of Canada; and

(5) That, between the 22nd day of December 2003, and the 30th day of December 2004, at the City of Burlington and elsewhere in the Province of Ontario, Jun-Chul Chung, Kenneth Chung and Kathleen Chung did by deceit, falsehood or other fraudulent means, defraud the Ontario Lottery and Gaming Corporation of the sum of $12.5 million, by claiming that a stolen lottery ticket was the property of Kathleen Chung, contrary to section 380(1) of the Criminal Code of Canada; and

(6) That, between the 30th day of December 2004, and the 27th day of September 2010, at the Town of Oakville and elsewhere in the Province of Ontario, Jun-Chul Chung, Kenneth Chung and Kathleen Chung did have in their possession property to wit: all or part of the sum of $12.5 million and property purchased with all or part of the sum of $12.5 million, knowing that the money and property were obtained by the commission in Canada of an indictable offence, contrary to section 354(1)(a) of the Criminal Code of Canada; and

(7) That, between the 30th day of December 2004, and the 27th day of September 2010, at the Town of Oakville and elsewhere in the Province of Ontario, Jun-Chul Chung, Kenneth Chung and Kathleen Chung, did use, transfer the possession of or otherwise deal with proceeds of property to wit: all or part of the sum of $12.5 million, with intent to conceal or convert the proceeds, knowing that those proceeds were obtained as a result of the commission in Canada of the designated offence of fraud, contrary to section 462.31(1)(a) of the Criminal Code of Canada.

Background

[2] Jun-Chul Chung is the father of Kenneth and Kathleen Chung. During the period in question, Kenneth Chung was the manager of the Variety Plus store located at 3500 Dundas Street in Burlington, Ontario. Both Kenneth Chung and Jun-Chul Chung worked in the store.

[3] On Friday December 19th, 2003, four Super 7 tickets were purchased together at 'That's Entertainment', a store in St. Catharines Ontario. These four tickets were validated at the Variety Plus store in Burlington on the Monday morning of December 22nd, 2003. Those tickets generated five free play tickets for the Friday December 26th, 2003 draw.

[4] On Saturday December 27, 2003, one of the Super 7 free play Lottery tickets was validated at the Variety Plus store in Burlington. This ticket was the $12.5 million winner.

[5] None of the other four tickets generated on December 22nd, 2003 were validated at the Variety Plus store. Instead, two of the free play tickets were validated December 27th at 'Avondale Lakeshore' in St. Catharines. Approximately 20 minutes later, two of the other tickets were validated at 'JC Foods' also located on Lakeshore Street in St. Catharines.

[6] On February 5, 2004, Kathleen Chung presented the ticket validated at the 'Variety Plus' store to the Ontario Lottery and Gaming Corporation claiming that the ticket was hers.

[7] On December 30, 2004, the Lottery Corporation paid her the prize money.

[8] In March of 2007, André Marin, Ombudsman of Ontario, released a Report entitled "A Game of Trust" which was an investigation into the Ontario Lottery and Gaming Corporation's Protection of the Public from Fraud and Theft. That Report was filed as an Exhibit at this preliminary hearing to provide context and narrative with the respect to the evidence called.

[9] At paragraph 74 of this Report, there is reference to this case as follows:

But the most shocking story involved the sister of a convenience store manager in Burlington, whose parents also worked in the store, who presented a winning Super 7 free play ticket for $12,500,000. At first, the woman called the Prize Office and claimed she was calling on behalf of her brother who "owned" the ticket. At the Prize Office she said she was not affiliated with a retailer. She denied that the ticket belonged to her brother, and explained that she had previously said this to protect her privacy. She could not provide information to confirm when the winning free play ticket was generated, nor could she even prove she was in the city where the original ticket was purchased. A Statutory Declaration was prepared in which she stated she did not have a brother and was not connected to any retailer in any manner. The Corporation then discovered that she had the same last name as the retailer who had generated the free play ticket, and he confirmed she was his sister. Confronted with this, she again stated she was trying to protect her family's privacy. Incredibly, despite all this, the Corporation paid her the $12.5 million after the ticket expired.

[10] In paragraphs 76 through to 79, the Ombudsman Report states as follows:

It appears that 2004 was a banner year for controversial insider prize claims. It is mind-boggling that the Corporation actually paid out millions of dollars in the circumstances it did. The ludicrousness of this did not escape all Corporate officials. On August 8, 2004, one manager prepared an executive briefing on the situation. He noted that the purpose of the briefing was to:

1. Ensure the Executives are aware of current and past practices associated with prize payments;
2. Highlight circumstances where we believe tickets may have been stolen from unsuspecting consumers;
3. Seek direction for future payment/policy decisions.

The e-mail referred to…win claims in which the lawful status of the bearer of the tickets was unclear, and ended with a number of recommendations to address these circumstances, including encouraging customers to sign their lottery tickets, installing ticket-checking devices for consumers at the retail level, changing the music played through the terminals when a major winning ticket is validated (to allow for instant communication between the customer and the Customer Excellence Centre).

This same official continued to express concern about the series of suspicious cases and to champion increased security measures to ward against retailer fraud. In an e-mail of Sept. 1, 2004, he set out detailed concerns regarding the case of the $12.5 million claim. He noted that:

Redemption activity at this retailer suggests that a pattern may exist demonstrating that retailer systematically collects free play tickets from unsuspecting customers.

On the same day, he also expressed concern about this issue in an e-mail to the new Chief Executive Officer, referring to the case and noting: 'it still rots my socks.' The Chief Executive Officer was sympathetic, noting in his e-mail response: 'I used to have issue gaming licences to companies or individuals that I just knew with absolute certainty were dirty. I just couldn't prove it. Sometimes you hold your nose'…."

[11] Following the release of the Ombudsman's Report, the OPP begin investigating Kathleen Chung's $12.5 million dollar lottery win.

[12] On November 27, 2007, the CBC produced show "The Fifth Estate" was aired entitled "Twice Lucky". The DVD of this show was marked as Exhibit #11 at this preliminary hearing. Further background information is contained therein.

[13] On the 22nd of September 2010, the informations before this Court were sworn charging Jun-Chul Chung, Kenneth Chung and Kathleen Chung with possession of stolen property to wit, a Super 7 Lottery Ticket; fraud in the amount of $12.5 million dollars of The Ontario Lottery and Gaming Corporation; possession of the proceeds of crime and money laundering.

[14] Jun-Chul Chung and Kenneth Chung are further charged with theft of the winning Super 7 Lottery ticket, and counts of theft and possession relating to other free play Lottery tickets.

[15] The evidence of 22 witnesses was presented in this matter. There were 26 exhibits filed. Exhibit #1 is a USB Thumb Drive containing hundreds, if not thousands, of pages of documents.

Crown's Position on Proposed Counts for Committal 1 through 7

(Note: The following content appears in the Crown's written submissions received June 7, 2013 on pages 6 through to 25. The Table of who the jury could infer was on-shift at "Variety Plus" when split tickets were stolen and then when the stolen tickets were validated appearing as Tab B in the Crown's submission, appears as Appendix 'A' to these reasons.)

Proposed Count 1 – Theft of Free Play Tickets

In order for the court to commit on this count, there must be some evidence that, during the relevant timeframe, at the City of Burlington:

• lottery tickets were taken;
• the tickets were taken without colour of right;
• Jun-Chul Chung committed some of the thefts himself or was a party to the thefts; and
• Kenneth Chung committed some of the thefts himself or was a party to the thefts.

Evidence that lottery tickets were taken:

The trier of fact in this case could draw a reasonable inference that the tickets listed in Exhibit 16 were stolen at Variety Plus. The evidence discloses the following pattern:

(1) a lottery ticket is validated at Variety Plus; (2) the lottery ticket wins two "free play" tickets; (3) one of those free play tickets is validated at Variety Plus, almost always on the Saturday after the draw; and (4) the other free play ticket is validated at a different time and place.

A logical inference from this pattern is that one of the free play tickets left the store with the lottery player and that the second ticket stayed in the store. One inference that logically flows from that conclusion is that the store clerk who validated the ticket kept one of the free play tickets. In his evidence, Rick Guzzo explained how this could happen. The store clerk could, for example, delay responding to the "prompt" on the terminal (as to whether the winner wanted to add Encore to the free ticket) until after the customer had left the store or at least left the area of the lottery terminal. There was also ample evidence at the preliminary hearing about the ease with which retailers could steal tickets in 2003 and 2004.

While it is possible that all of the lottery players involved got both of their free play tickets and then came back and checked one at Variety Plus on Saturday morning and then checked the other at a different location (often in a different town) at a different time (sometimes days later), common sense says that scenario is highly unlikely.

That potential innocent explanation for this pattern does not make sense, but at this stage the court is not even concerned with potential innocent explanations. The court's only concern is whether the inference urged by the Crown – that the second ticket was stolen by someone in Variety Plus and kept in that store – is a reasonable one. It is the Crown's submission that, not only is the inference reasonable, but it is the most likely explanation for the pattern shown in Exhibit 16.

Evidence that the tickets were taken without colour of right:

While one could speculate that all of the customers involved in the 30 "split ticket" incidents outlined in Exhibit 16 gave one of their free play tickets to the store clerk, a properly instructed jury would be able to use its common sense and life experience to conclude that 30 customers did not give one of their two free play tickets to the store clerk at Variety Plus.

Evidence that Jun-Chul Chung and Kenneth Chung were involved in the thefts:

There are two sources for this evidence: (1) the hours of work for Jun-Chul Chung and Kenneth Chung as told to people in the OLG prize office on February 10th, 2004; and (2) Exhibit 16 (and the related viva voce evidence of Rick Guzzo).

OLG employee Emilio Molinaro testified regarding discussions with the Chungs on February 10th, 2004 about their hours of work at Variety Plus. In relation to Jun-Chul Chung, he testified:

Jay [Jun-Chul] Chung stated that the store is open seven days a week and he works from 6:00 a.m. to 10:00 p.m. – or, sorry, 6:00 a.m. to 10:00 a.m. He stated that his wife and son also work at the store, but Kathleen does not work at the store. [1]

In relation to Kenneth Chung, he testified:

Kenneth Chung stated that he's the manager of Variety Plus since June 2003 and he works seven days a week and he works from 12:00 p.m. to 10:00 p.m. [2]

In her evidence, OLG employee Kathy Pittman Feltham testified that during the conversation on February 10th, 2004, Kathleen Chung, Jun-Chul Chung and Kenneth Chung were all present. [3] It appears from her testimony that Kathleen Chung told her:

… Kenneth Chung had managed the store since June 2003, and he generally works Monday to Sunday, noon to 10:30 and his father will work the morning shift, six a.m. to noon. [4]

Given that all three of the Chungs were present for this interview and there's no evidence that Kenneth Chung or Jun-Chul Chung interjected to correct Kathleen Chung's statement of their hours of work, a properly instructed jury could conclude that Kenneth Chung and Jun-Chul Chung adopted what Kathleen Chung said. While there appears to be a two-hour difference regarding Jun-Chul Chung's working hours between what Emilio Molinaro reported and what Kathy Pittman Feltham said, a properly instructed jury could accept that Jun-Chul Chung worked until noon. The jury could do this by rejecting that part of Mr. Molinaro's evidence that conflicts with this conclusion and by applying their common sense, noting that Mr. Molinaro's evidence leaves a two-hour gap in the schedule.

The table at Appendix "A" of these submissions combines the data in Exhibit 16 with the hours of work given by Jun-Chul Chung and Kenneth Chung to show who would have been on-shift when tickets were stolen and when those stolen tickets were validated. [5]

Based on the data from Exhibit 16 and their statements as to their working hours, a jury could infer that tickets were stolen by both Jun-Chul Chung and Kenneth Chung. With the exception of one attempt by Kenneth Chung to validate a ticket before the draw had actually happened [6], after June 2003 it appears that Jun-Chul Chung validated the stolen tickets and always did so on the Saturday after the draw. [7]

From this evidence, a jury could reasonably infer that Jun-Chul Chung and Kenneth Chung were involved in a joint venture to steal free play lottery tickets because there is evidence that:

• split ticket thefts were committed by both Jun-Chul Chung and Kenneth Chung; and
• almost always it was Jun-Chul Chung who validated the stolen tickets, even those taken when Kenneth Chung was working.

Viewed as a joint venture, Kenneth Chung aided or abetted every theft by Jun-Chul Chung and Jun-Chul Chung aided or abetted every theft by Kenneth Chung.

Even if this is not viewed as a joint venture, Jun-Chul Chung should be committed to stand trial for theft based on all of the tickets stolen while he was on shift. Similarly, Kenneth Chung should be committed to stand trial for theft based on all of the tickets stolen while he was on shift. However, the joint venture inference is relevant to some of the counts that follow in relation to the $12.5-million winning ticket.

Proposed Count 2 – Possession of the Stolen Tickets

The evidence of possession flows directly from the evidence of theft. Viewed individually, every time an accused person stole a lottery ticket, he was then in possession of property obtained by crime. Viewed as a joint venture, each accused person on this count was in possession of all of the tickets stolen as part of the scheme.

Either way, it is the Crown's submission that a properly instructed jury could find Jun-Chul Chung and Kenneth Chung guilty of the ticket thefts and therefore could find each of them guilty of possession of the stolen tickets.

Counts Relating to the $12.5-Million Winning Ticket

Evidence of theft:

The evidence that this ticket was stolen is similar to the other split ticket thefts. Based on OLG's computer records, Rick Guzzo testified that four tickets were purchased together at That's Entertainment in St. Catharines on December 19th, 2003. These four tickets were validated at Variety Plus on the morning of December 22nd, 2003. Those tickets are labelled as A, B, C and D in the large chart he produced (Exhibit 14). Those tickets generated five free play tickets, labelled A1, A2, B1, C1 and D1. A2 was the $12.5-million winner, validated on December 27th, 2003 at Variety Plus in Burlington. None of the other tickets generated on December 22nd were validated at Variety Plus. Instead, C1 and D1 were validated on December 27th at Avondale Lakeshore in St. Catharines. About 20 minutes later, A1 and B1 were validated at JC Foods, also on Lakeshore Street in St. Catharines.

It can be reasonably inferred that the same person validated C1, D1, A1 and B1 because tickets related to those validations ended up together on January 3rd, 2004. The evidence of this is contained in Exhibit 14. That is:

• when C1 was validated on December 27th, it generated a free-play ticket, C2, and C2 was validated at Avondale Lakeshore on January 3rd, 2004;
• when C1 was validated on December 27th, another ticket, BG3, was also validated and it produced a free-play ticket, BG4, which was validated along with C2 at Avondale Lakeshore on January 3rd, 2004;
• when A1 and B1 were validated on December 27th, another ticket, J, was also validated and it produced two free play tickets, J1 and J2; and
• J1 and J2 were validated with C2 and BG4 on January 3rd, 2004 at Avondale Lakeshore.

In other words, C1 and D1 were validated, along with other tickets, at one location on December 27th and A1 and B1 were validated, along with other tickets, down the street a short time later. Free-play tickets generated from both sets of tickets ended up being validated together on January 3rd, 2004. It is reasonable to infer that the person who validated the C1/D1 set of tickets on December 27th was the same person who validated the A1/B1 set of tickets a short time later – that's why tickets won from both validations end up being checked together on January 3rd.

Based on this evidence, a jury could reasonably infer that four of the five winning tickets from the validation at Variety Plus on December 22nd, 2003 went with one person to St. Catharines while the other ticket (the free play that ultimately won $12.5 million) remained in the Variety Plus store. This inference is strengthened by the evidence that two other stolen split tickets (x2 and y2 in Exhibit 16 and the table at Exhibit "A") were also validated at Variety Plus on the morning of December 27th, 2003.

Based on this evidence, a properly instructed jury could infer that the free play ticket that won the $12.5-million jackpot was stolen at Variety Plus on December 22nd, 2003.

Evidence that Jun-Chul Chung was part of the theft:

The stolen ticket was generated at approximately 7:40 a.m., a time when, by his own admission to OLG, Jun-Chul Chung would have been working. Therefore, a properly instructed jury could reasonably infer that Jun-Chul Chung stole the ticket.

Evidence that Kenneth Chung was part of the theft:

The Crown submits that a properly instructed jury could reasonably infer that Kenneth Chung was a party to his father's theft of the ticket because:

• on his own admission, Kenneth Chung managed Variety Plus, the store where at least 30 split ticket thefts happened;
• some of the split ticket thefts happened when Kenneth Chung was working and some of them happened when his father was working;
• after June 2003, no matter who was working when the split ticket theft happened, the stolen tickets were always validated on Saturday morning when Jun-Chul Chung was working, from which a jury could conclude that Kenneth Chung and his father worked together on a scheme to regularly steal tickets at Variety Plus;
• the scheme was ongoing during the week this ticket was stolen (two other "split tickets" were checked on December 27th in addition to the $12.5-million winner);
• Kenneth Chung is directly connected to a split-ticket theft from the same week, specifically the "y2" ticket (in Exhibit 16 and the table at Appendix "A"), as there was an attempt to validate that ticket at 17:52 on December 22nd, 2003, a time when, by his own admission, Kenneth Chung would have been working (y2 was properly validated on the morning of December 27th); and
• if Kenneth Chung and Jun-Chul Chung worked together to regularly steal tickets at Variety Plus, then Kenneth Chung aided or abetted all of Jun-Chul Chung's lottery ticket thefts (and vice versa).

Therefore, it is submitted that Kenneth Chung should be committed to stand trial, along with his father, for the theft of the winning ticket.

Conclusion regarding theft of the winning ticket:

In summary, the following reasonable inferences arise from the evidence:

• that there was an ongoing scheme at Variety Plus to steal free play tickets;
• that the $12.5-million winner was a stolen free play ticket;
• that both Jun-Chul Chung and Kenneth Chung stole free play tickets and that they worked together in this scheme;
• the free play that turned out to be the $12.5-million winner was stolen at a time when Jun-Chul Chung would have been on shift; and
• given the evidence of a scheme between Kenneth Chung and his father to steal lottery tickets and the evidence that this stolen free play ticket was part of that scheme, Kenneth Chung is a party to the theft of that ticket (by aiding or abetting his father in the thefts, as per ss. 21(1)(b) and (c) of the Criminal Code).

Proposed Count 4 – Possession of the Stolen Ticket that Ultimately Won

Evidence regarding Jun-Chul Chung and Kenneth Chung:

For the court to commit on this count, the Crown is required to call some evidence that the $12.5-million winning ticket was obtained by the commission, in Canada, of an offence. That evidence is outlined above in relation to the theft count. By the same reasoning, Jun-Chul Chung should be committed to stand trial for possessing the stolen ticket – the inference is that he had it in his hand when, and after, he stole it. For Kenneth Chung, the evidence that he was part of the scheme to steal these tickets means that he aided his father's theft and his father's possession of the stolen ticket. For the same reasons that he should stand trial on the theft count, Kenneth Chung should be committed to stand trial on this count.

Evidence regarding Kathleen Chung:

In relation to Kathleen Chung, there can be no dispute that she possessed the stolen ticket, as she ultimately turned it in and received $12.5 million. The only issue is whether she knew, or was wilfully blind, as to whether the ticket was obtained by the commission of an offence.

A jury could logically infer that, before putting Kathleen Chung forward as the "winner" of the $12.5 million, the other two people involved – Jun-Chul Chung and Kenneth Chung – would have told her that the ticket was stolen and that was why she had to lie to OLG.

Even if that inference were not open to a properly instructed jury, Kathleen Chung's behaviour demonstrates that she was at least wilfully blind to the fact that the ticket was not legitimately obtained. This is a reasonable inference from the various lies that she told to OLG. The first lie, of course, is that the ticket belonged to her. Based on the evidence outlined above, a jury could reasonably infer that the winning ticket was stolen. In addition to lying about her ownership of the ticket, during the February 5th, 2004 interview, she lied about being related to Kenneth Chung.

As well, a properly instructed jury could conclude that Kathleen Chung lied about what happened on the day that the winning ticket was validated. According to ITMIR data, the winning ticket was validated at Variety Plus in Burlington at 9:27 a.m. on Saturday, December 27th, 2003. Kathleen Chung's story to OLG was essentially that she was in the store in Burlington with her father, validated the ticket, found out she was a winner, stayed at the store (in her car) for a while, and then went home.

Bank records from the Royal Bank show a deposit at 9:37 a.m. into her account at the branch at 3100 Winston Churchill Boulevard, Mississauga. Based on the evidence of Aklima Rojan, a jury could reasonably conclude that this deposit was made on December 27th, 2003 at 9:37 a.m. Given that the account in question belongs to Kathleen Chung, there is a reasonable inference that she made the deposit.

In addition to the evidence that Kathleen Chung was at the Royal Bank at 9:37 a.m., cellular telephone records also put her in the Cooksville area of Mississauga at 9:49 a.m., as testified to by Don Calpito from Telus. The cellular telephone in question – 416-898-8460 – was apparently obtained by Jun-Chul Chung but Kathleen Chung was listed as the user. The billing address for that phone, current at the time the records were obtained, was Kathleen Chung's residence at 3421 Lakeshore Road West, Oakville (as per the records, which are part of the electronic documents, Exhibit 1 in the "Telus Records" file in the "TelephoneEvidence" folder). Additional evidence that this is Kathleen Chung's cellular phone is based on her own admission – it's the phone number that appears on the back of the winning ticket (which is part of Exhibit 1 in the "TicketsandDocumentsForPrizeClaim" file on the KathyPittman folder).

Both the Royal Bank evidence and the cellular telephone evidence lead to the reasonable inference that Kathleen Chung lied to OLG when she told them about validating the winning ticket. Furthermore, Kathleen Chung said in her first OLG interview that she had never been to St. Catharines. [8] Given that the ticket that resulted in the winning ticket was purchased in St. Catharines, if the jury accepts Kathleen Chung was being truthful when she said she'd never been there, then she cannot possibly be the true winner of the $12.5 million.

The Crown submits that a jury would have no difficulty concluding that Kathleen Chung lied to OLG. A reasonable inference from the evidence that she lied to OLG is that she knew that the ticket was stolen or she was at least wilfully blind to that fact, otherwise why would she be attending OLG acting as if this ticket were her own? While there may be other inferences available on the evidence, one reasonable inference is that she lied to OLG because she knew, or was wilfully blind to the fact, that she had not legitimately come into possession of this ticket.

On that basis, therefore, the Crown submits that Kathleen Chung should be committed to stand trial, along with her father and brother, on the charge of possession of the stolen lottery ticket.

Proposed Count 5 – Fraud on the OLG

The essence of fraud is that someone obtains (or attempts to obtain) money (or other property) by deceit (or falsehood or other fraudulent means). In this case, the Crown submits that Kathleen Chung lied to OLG and, as a result, OLG ultimately paid her the $12.5-million prize money.

Evidence implicating Kathleen Chung:

As noted above, a properly instructed jury could conclude that Kathleen Chung lied to OLG about the circumstances surrounding her possession of the winning ticket. As already noted, a jury could also reasonably conclude that the $12.5-million winning ticket was stolen.

Based on common sense (and the evidence of OLG witnesses like former CEO Duncan Brown), a properly instructed jury could conclude that OLG would not have paid the prize money had Kathleen Chung told the truth about the source of the ticket.

Even if Kathleen Chung did not know the exact details of where the winning ticket came from, there is ample evidence, as outlined above, that she lied to OLG. Those lies contributed to OLG eventually paying her $12.5 million to which she was not entitled.

Evidence implicating Jun-Chul Chung:

As already outlined, a jury could reasonably conclude that the theft of this ticket and the claim of this prize was the result of a scheme engaged in by Jun-Chul Chung and Kenneth Chung to steal split tickets. This evidence alone is sufficient to commit them to stand trial on the fraud charge. Even if this specific ticket theft is isolated from the rest, the evidence that Jun-Chul Chung personally stole the ticket leads to the logical conclusion that he put Kathleen Chung up to making the false claim to OLG.

There is additional evidence of his involvement in the fraud after the theft of the ticket. Jun-Chul Chung attended OLG on two occasions (February 10th and 25th, 2004) and supported Kathleen Chung's story about the events at Variety Plus on the morning of December 27th, 2003. Based on the cellular telephone evidence and the Royal Bank evidence, a properly instructed jury could find that Kathleen Chung was not at Variety Plus when the winning ticket was validated. Therefore, Jun-Chul Chung lied to OLG about that.

Again, Kathleen Chung's lies, supported by Jun-Chul Chung's lies, led to OLG ultimately paying Kathleen Chung a prize to which she was not entitled. Jun-Chul Chung, therefore, aided Kathleen Chung in defrauding OLG.

The Crown submits that on either basis – Kathleen Chung's claim was the culmination of a scheme by Jun-Chul Chung and Kenneth Chung to steal free-play lottery tickets or Jun-Chul Chung specifically lied to OLG about Kathleen Chung's claim – Jun-Chul Chung should be committed to stand trial for defrauding OLG.

Evidence implicating Kenneth Chung:

If the jury accepts the reasonable inference that both Kenneth Chung and Jun-Chul Chung engaged in an ongoing scheme to steal free play lottery tickets, then Kathleen Chung's visit to OLG to claim the $12.5-million prize is the natural culmination of that scheme. In those circumstances, Kenneth Chung should be committed to stand trial on the fraud count, even if he did nothing to assist Kathleen Chung throughout the OLG process.

Additionally, there is evidence that he did assist Kathleen Chung during the OLG process. On the first day that his sister went to OLG, February 5th, 2004, Kenneth Chung had two conversations with Kathy Pittman Feltham. In the first conversation, when he admitted to being Kathleen's brother, he attempted to assist Kathleen Chung by telling Ms. Pittman Feltham that she lied (about him being her brother) in order to protect him. [9] In a second conversation that day, after Kathleen Chung had left the prize office, Kenneth Chung called OLG to see what the next steps in the process would be. [10]

Finally, Kenneth Chung is also implicated in the fraud based on his conduct after the money was received. As outlined more fully later in these submissions, all three of the accused persons moved the lottery proceeds through various accounts in a manner suggesting that they were trying to hide the source of the funds.

The Crown submits that Kenneth Chung should be committed to stand trial for fraud on the basis that the $12.5-million claim was the natural end of the scheme that he engaged in, with his father, to steal free-play tickets. Furthermore, he assisted his sister as the matter proceeded through OLG and he was involved in an attempt to hide the proceeds of the lottery win after the money was received.

Proposed Count 6 – Possession of Property Obtained by Crime

Committal on this count, against all three accused persons, flows from committal on the fraud count and from the evidence of what happened to the money after the prize was won. All three, at times, had possession of the prize money or some part of it, as evidenced by Aaron Chan. The money went through various accounts and at times Kathleen Chung, Kenneth Chung and Jun-Chul Chung had signing authority (either individually or with others) on those accounts.

Coupled with this evidence of possession is the evidence outlined above regarding the fraud on OLG and the events leading up to the fraud. Based on this evidence, a properly instructed jury could conclude that all three of the accused persons knew (or were wilfully blind to the fact) that the source of this money was a stolen lottery ticket.

For these reasons, the Crown submits that all three accused persons should be committed to stand trial for possession of property obtained by crime in relation to the $12.5 million and any property that was purchased with that money.

Proposed Count 7 – Laundering Proceeds of Crime

In order to commit the accused persons to stand trial on this count there must be some evidence that:

• they used, transferred the possession of or otherwise dealt with proceeds;
• the proceeds came from the commission in Canada of a designated offence;
• they knew (or believed) that the money came from the commission in Canada of a designated offence; and
• they dealt with the money with the intent to conceal or convert the proceeds.

Dealing with, etc. proceeds:

Forensic accountant Aaron Chan testified in detail about the movement of the $12.5 million that Kathleen Chung collected from OLG. Ultimately, a large portion of it ended up in a trust, described more fully below. On its way to that trust, the money passed through accounts controlled by Kathleen Chung, Kenneth Chung and Jun-Chul Chung. Sometimes the accused person in question was the sole signing authority on the accounts; sometimes more than one person had signing authority. Based on this evidence, a properly instructed jury could conclude that all three accused persons used, transferred or otherwise dealt with the $12.5 million, or part thereof.

The proceeds came from the commission in Canada of a designated offence:

"Designated offence" for the purposes of Part XII.2 of the Criminal Code as defined in s. 462.3(1), includes:

any offence that may be prosecuted as an indictable offence under this or any other Act of Parliament, other than an indictable offence prescribed by regulation…

The relevant Regulation is SOR/2002-63, which has been amended several times. The Regulation has never excluded indictable offences under the Criminal Code from the "designated offence" definition. Rather, it has only excluded indictable offences under some other Acts of Parliament from being "designated offences".

In this case, as already explained above, a properly instructed jury could find that a fraud was committed on OLG and the $12.5 million was the result of the fraud, which is obviously an offence that may be prosecuted as an indictable offence. Therefore, a properly instructed jury could conclude that the $12.5 million came from the commission in Canada of a designated offence.

Knowledge of the source of the funds:

As previously outlined, the Crown submits that a properly instructed jury could conclude that all three accused persons were involved in offences related to the stolen lottery ticket. Specifically, a properly instructed jury could conclude that all three accused persons were guilty of defrauding OLG of $12.5 million. In that case, all three accused persons would know that the money in question had been obtained by the commission in Canada of a designated offence.

Intent to conceal or convert:

The Crown submits that a properly instructed jury could conclude that the money in the Hi Ok Chung Trust came from the lottery winnings and that the creation of the trust was an attempt to conceal the true source of those funds and make it look like the money had come from somewhere else.

Forensic accountant Aaron Chan testified that the money in the Hi Ok Chung Trust came from the OLG funds. [11] According to the Hi Ok Chung Trust formation documents, the purported source of the funds in the Hi Ok Chung Trust was money transferred from Korea by Hi Ok Chung. [12] Essentially, it was made to appear that Jun-Chul Chung's sister had settled approximately $9.5 million on the trust for the benefit of her brother and other family members. Jun-Chul Chung had the sole signing authority on the account containing the supposed trust monies. In reality, the evidence is that this money did not come from a sister in Korea, but came from the OLG prize money.

A properly instructed jury could conclude that this was an attempt to "clean" the fraudulently obtained prize money – i.e. to make it look like it had come from a family member in Korea instead of from its true source.

Conclusion:

The Crown submits that a properly instructed jury could conclude:

• that Jun-Chul Chung, Kenneth Chung and Kathleen Chung all knew that the $12.5 million from OLG was fraudulently obtained;
• that the money passed through accounts controlled (sometimes individually, sometimes with another person) by each of Jun-Chul Chung, Kenneth Chung and Kathleen Chung;
• that the ultimate destination of the bulk of the money was the Hi Ok Chung Trust;
• that it was made to appear as if the money in the Hi Ok Chung Trust had come from a legitimate source; and
• that the money in the Hi Ok Chung Trust came from the fraudulently obtained OLG winnings.

Therefore, the Crown submits that a properly instructed jury could find Jun-Chul Chung, Kenneth Chung and Kathleen Chung guilty of the money laundering count.

Overall Conclusion:

The Crown submits that Jun-Chul Chung and Kenneth Chung should be committed to stand trial on Counts 1 through 3 in the proposed indictment. Furthermore, the Crown submits that Jun-Chul Chung, Kenneth Chung and Kathleen Chung should be committed to stand trial on Counts 4 through 7 of the proposed indictment.

Joint Defence Position

[16] The defence filed a joint factum with the Court which was received on July 16, 2013.

[17] It is the position of the defence that there is insufficient evidence to commit Jun-Chul Chung, Kenneth Chung or Kathleen Chung for trial on any offence.

[18] It is the position of the defence that the Crown has failed to meet its onus and has presented no evidence on which a reasonable, properly instructed jury could find that tickets were stolen.

[19] The defence submit that in the absence of expert evidence to show the play patterns or redemption patterns of lottery gamers, there is insufficient evidence to show that when a player goes to a store and wins two free tickets, the player would somehow leave with only one free ticket.

[20] They submit that the OLG (formerly the OLGC) computer records do not show that players have somehow been denied one of their two free play tickets – only, at its highest, that players may have received one free play ticket that derived from their original ticket and another free play ticket that may have derived from some other ticket.

[21] The defence submit that, in cross-examination of witness Richard Guzzo, the evidence is that a player would not be able to discern where their free play ticket originated from. (Transcript February 7. 2013, p. 68 – 69)

[22] The defence submit that based on the computer analytics in this case, the Court cannot conclude that on multiple occasions lottery players simply walked away from free tickets, from their winnings, from what they were due. "This is a conclusion that defies logic and reason, and is not one that is available from the evidence."

[23] The defence submit that in the absence of any evidence to fill this gap in reasoning, the only logical inference is that players who were entitled to free play tickets obtained free play tickets, only perhaps not the ones that truly emanated from their own originating tickets. "This does not found an inference that store clerks were stealing the tickets, but rather that players were unwittingly not getting the tickets that flowed from their own originating tickets."

[24] The defence submit that the Crown has not called evidence to show that split tickets are a unique phenomenon. The defence cite the 'Deloitte Report' which showed that during the period they reviewed, they identified 21,336,386 free ticket pairs that printed separately as part of a two free play win, of which 464,621 were subsequently validated at a separate retail device location. The defence submit that split tickets appears to be quite common. They refer to Exhibit #14 which shows that the sister tickets to the winning ticket in this case were validated at different stores – two were validated on December 22, 2003 at Avondale and two tickets were validated at JC Foods. (Note: There is an error in the defence submissions at paragraph 13; the date I have underlined should be December 27, 2003 - Reference Exhibit #12)

[25] "The Crown argues that a split ticket validation allows an inference of theft. This position conflates the concept of reasonable inference and speculation. Clearly given that the tickets are not identifiable on their face as deriving from a particular source ticket no theft can be established in fact. Given that the inference of theft would defy what can be understood as the logical human behaviour of a lottery player to obtain their duly acquired winnings, no theft can be established by way of an appeal to ordinary human behaviour."

[26] The defence submit that it bears mentioning that there is no complainant who says that they were deprived of their free ticket. Dan Campbell, the OLG's deemed true winner, did not say that he was deprived of the ticket – only that he frequented shops in the areas in question.

[27] "In the case at bar, where the evidence shows that split tickets are not an unusual phenomenon, that players receive tickets that are indiscernible on their face as deriving from someone else's tickets, and there is no evidence to suggest that lottery players might walk away from their winnings, it is respectfully submitted that a conclusion that the storekeepers were stealing tickets falls into the realm of impermissible conjecture and speculation."

[28] The defence submits the post-facto behaviour with respect to the contrary stories at the time of the redemption of the ticket, and the post-facto movement of the money after the prize was paid out cannot be used as part of the circumstantial evidence to conclude that the thefts occurred.

[29] "Given the complete absence of evidence from which a reasonable jury, acting on proper instructions and without relying on impermissible speculation and conjecture, could find that thefts occurred, Kathleen Chung's conduct on making the claim and the subsequent movement of the monies over the years is irrelevant in the assessment of whether an offence was committed in this case."

Crown's Reply Submissions

(Note: The following content appears in the Crown's Reply Submissions received on July 22, 2013.)

1. The defence submits that theft of one of the free tickets is not a reasonable inference from the "split ticket" scenario – the situation where an original ticket wins two free tickets and those tickets are validated at different times and different locations.

2. The defence makes the following arguments in support of this submission:

   a. the "mix up" scenario, where one winner walks away while his free tickets are printing, another free ticket winner happens to walk up in the interim, validate a ticket that wins at least one free play and the resulting free tickets are all given to the winners, but they're mixed up (paragraph 9);

   b. the argument that it defies common sense that lottery winners would simply walk away from their free tickets (paragraph 11); and

   c. the argument that, based on the Deloitte Report, "split tickets" are a "quite common" scenario (paragraph 13).

3. To accept the "mix up" scenario would require the court to choose between competing inferences – mix up versus theft – which a preliminary hearing justice is specifically precluded from doing. Even if one were weighing competing inferences, the "mix up" scenario requires a very specific set of events to occur. First, a lottery player has to present a ticket that wins two free plays. While that ticket is being validated, the lottery player has to walk away from the store clerk. A second lottery player has to then walk up to the clerk while the first player is away. That second player has to be playing the same game (Super 7 as opposed to, for example, 6/49 or Pro-line) as the first player and has to win at least one free ticket on that game. The store clerk then has to put all of the winning tickets somewhere where they get mixed up and that this doesn't get noticed by the second player (but maybe he, too, has walked away to wander through the store).

4. Additionally, in re-examination (on February 7th, 2013), Rick Guzzo went through the records from the terminal at Variety Plus on December 22nd, 2003 during the timeframe that the $12.5-million winning ticket was generated. In that case, there were no other Super 7 free play winners proximate in time to the free play that ultimately won the $12.5-million jackpot. Therefore, the "mix up" scenario makes no sense in relation to the $12.5-million winner.

5. The second argument – that it defies logic that winners walk away from their winnings – is an argument that serves to defeat the "mix up" argument. After all, the "mix up" argument relies on lottery winners walking away from the store clerk while their tickets are being validated and being so disinterested in their potential winnings that they're away from the terminal long enough for another player to validate his or her tickets. And the second player has to be so disinterested in what's happening that he doesn't notice the mix-up.

6. The main fallacy in this argument is that it's missing one word. It does not defy logic that a lottery winner would walk away from his rightful winnings. It does defy logic that a lottery winner would knowingly walk away from his rightful winnings. Based on the evidence of Rick Guzzo, in 2003 a lottery winner who trusted a store clerk would have to depend on the store clerk being honest enough to tell him what his rightful winnings were.

7. The final argument – that the Deloitte Report supports an inference that the split-ticket scenario is quite common – is also fundamentally flawed. [13] The raw number – 464,621 – does not speak to how common something is. What's telling is how often it happens – which is 2.18% of the time. Far from being common, this is quite an uncommon event.

8. But the defence "split ticket" argument ignores the fundamental part of the split ticket evidence. The fact that two free plays resulting from the same ticket are checked at different times and places is relatively rare and gives one pause. However, the inference of theft by the store clerk depends on one other factor – that one of the "split tickets" is checked in the same store where the ticket that generated the free plays was validated. [14] The reasonable inference is that one ticket left the store with the winner and that the other ticket was kept by the store clerk. This inference is further strengthened by the evidence that all the split tickets for a given Super 7 draw were checked in Variety Plus around the same time, i.e. on the Saturday morning after the draw.

The Law with Respect to the Test for Committal

[30] In this case, there is direct evidence in relation to some elements of the offences, but the evidence regarding other elements is circumstantial as discussed in both the Crown's and the joint defence factums.

[31] The jurisprudence regarding committal for trial is summarized in Justice Hill's decision in R. v. Foster. The general rule is that a preliminary inquiry judge does not weigh evidence, but that rule is "narrowly modified" when circumstantial evidence is adduced. In those cases, the court engages in a "limited weighing" of the evidence only to assess the "reasonableness of the inferences to be drawn from the circumstantial evidence" [at para. 31(9)]

The court must not speculate or draw unreasonable inferences [at para. 31(12)], but it must be remembered that a "reasonable and logical inference to be drawn from circumstantial evidence need not be an easy one to draw or indeed the most obvious and compelling inference". [at para. 31(13)]

[32] In R. v. Foster, Justice Hill thoroughly canvasses the function of the Preliminary Hearing Court from pages 9 through to 11 as I have summarized below.

[33] In forming an opinion as to the evidence's sufficiency to justify committal, the justice exercises a discretionary, but constrained assessment of the evidence. The whole of the admissible evidence is to be considered.

[34] If there is sufficient evidence upon which a reasonable and properly instructed jury could find guilt, the preliminary hearing judge must commit to trial: R. v. Arcuri (2001), 2001 SCC 54, 157 C.C.C. (3d) 21 (S.C.C.) at 31. This committal test is the same whether the evidence is direct or circumstantial: Arcuri, at 31, 36; R. v. Monteleone (1987), 35 C.C.C. (3d) 193 (S.C.C.) at 198.

[35] The preliminary hearing judge is obliged to determine whether there is some evidence reasonably supporting the existence of each of the elements of the offence charged – even if only a scintilla of evidence, provided it registers in the scales as any evidence at all within the Sheppard test 2002 SCC 26, [2002] 1 S.C.R. 869.

[36] To be logically relevant, an item of evidence does not have to establish on any standard, the truth or falsity of a fact in issue – "there is no minimum probative value required for evidence to be relevant": R. v. Arp (1999), 129 C.C.C. (3d) 321 (S.C.C.) at 338.

[37] As a general rule, it is not open to a preliminary inquiry judge to assess the quality, credibility and reliability of evidence: R. v. Deschamplain (2005), 2004 SCC 76, 196 C.C.C. (3d) 1 (S.C.C) at 9. In other words, the preliminary inquiry is not a forum for litigating the merits of the case against the accused. Where more than one inference can be drawn from the evidence, only the inferences that favour the Crown are to be considered.

[38] In circumstantial evidence cases, there may exist not one, but a range or field of reasonable inferences which may be drawn. The ultimate determination as to whether an available reasonable inference ought to be drawn is for the trier of fact – a judge is not to make "determinative factual inferences": R. v. Arp, at 353. In other words, a preliminary inquiry justice acts in excess of jurisdiction where he or she chooses from among competing or alternative reasonable inferences. A preliminary hearing court is not to apply the rule in Hodge's Case to determine whether a reasonable inference is consistent with guilt and inconsistent with any other rational explanation.

[39] With circumstantial evidence, the Crown will call evidence of facts and submit that an inference may reasonably be drawn from the primary facts to fill in the gap between the primary fact and the fact to be proved.

[40] Whether the inference is a reasonable one to draw usually involves an application of human experience and common sense. The inferences to be drawn will depend on the nature of the primary fact, the fact that is sought to be inferred from it, the position of the parties, and the totality of the evidence.

[41] Circumstantial inferences are ones which can be reasonably and logically drawn from a fact or group of facts established by the evidence.

[42] A trier of fact cannot be invited to draw speculative or unreasonable inferences. The process of drawing inferences from evidence is not, however, the same as speculating even where the circumstances permit an educated guess.

Analysis

[43] I accept the position advanced by the Crown.

[44] They have called evidence sufficient for committal to stand trial on the 7 counts as proposed.

[45] The evidence in support of those counts was stated in their written factum material and summarized in chart form, which appears as Appendix "B" to these reasons for committal.

[46] The testimony of Rick Guzzo, presently the manager of the data analysis support team for the OLG, was heard over the course of 3 days (Feb, 5, 6, 7, 2013) and comprises 315 pages of transcript.

[47] Using computer print-out data pertaining to the Indexed Transaction Master Inquiry Report (ITMIR), he provided information with respect to the transaction surrounding the purchase of the lottery tickets in question, including the place of purchase, the time of purchase and all details surrounding same.

[48] Mr. Guzzo's evidence addressed 3 areas: the purchase and redemption of the $12.5 million winning ticket; the purchase and redemption of at least 30 other split tickets; the purchase and redemption profile of the deemed winner, Dan Campbell. (Note: The Crown has not asked this Court to adjudicate the issue of whether there is sufficient evidence for a properly instructed jury to reasonably conclude that Daniel Campbell was the rightful owner of the ticket. The Crown has given notice that, should the accused persons be committed to trial, the Crown, under the authority of s. 574(1)(b) of the Criminal Code, will draft the indictment naming Daniel Campbell as the victim.)

[49] Mr. Guzzo's evidence provides the facts to link Jun-Chul Chung and Kenneth Chung to split-ticket thefts and possession of those stolen tickets. I find that there is a very small gap, more like a sliver, between the primary facts he has presented to the Court in following the trail of the various lottery tickets and the fact to be proved – which is theft and possession of free play lottery tickets. His evidence provides the same link with respect to Kathleen Chung's possession of a stolen lottery ticket. This evidence also links all the accused persons to the fraud count.

[50] I would be in error in my role as a preliminary hearing judge, to factor in the alternate 'ticket mix-up' theory argued by the defence in their joint factum. It is not my function to choose from among competing or alternative (allegedly) reasonable inferences – that is the function of the trier of fact.

[51] I reject the joint defence submission that the inferences the Crown has asked to be drawn in this case are speculative or unreasonable ones. I reject the defence submission that expert evidence was required before this Court could draw reasonable inferences in this matter. The Crown has presented a very strong case.

[52] The same comments apply to the possession of property obtained by crime and money laundering counts. Based on the evidence of Senior Forensic Accountant Aaron Chan, which has been reviewed above in the Crown's factum material, the circumstances of the extraordinary movement of the prize money after it was obtained is sufficient to commit all 3 accused persons to trial.

Conclusion

[53] Jun-Chul Chung, Kenneth Chung and Kathleen Chung are committed to stand trial on the 7 counts proposed by the Crown.

Released: September 24, 2013

Signed: "Justice L.M. BALDWIN"

APPENDIX "A"

Table of Who the Jury Could Infer Was On-Shift When Split Tickets Were Stolen and When the Stolen Tickets Were Validated

Ticket "letter" from Ex. 16	Time original ticket validated at Variety Plus	Person on shift	Date/time split ticket validated at Variety Plus	Person on shift
a	12:54	Kenneth Chung	a2 - 21 June 2003 16:52	Kenneth Chung
			a3 (won from split ticket a2) - 28 June 2003 15:22	Kenneth Chung
b	17:33	Kenneth Chung	b2 - 12 July 2003 08:51	Jun-Chul Chung
c	11:10	Jun-Chul Chung	c1 - 26 July 2003 10:30	Jun-Chul Chung
			c3 (won from split ticket c1) - 02 Aug 2003 07:20:09	Jun-Chul Chung
d	13:29	Kenneth Chung	d2 - 26 July 2003 10:02	Jun-Chul Chung
e	09:02	Jun-Chul Chung	e2 - 02 Aug 2003 07:21	Jun-Chul Chung
f	10:36	Jun-Chul Chung	f2 - 09 Aug 2003 08:08	Jun-Chul Chung
			f3 (won from split ticket f2) - 16 Aug 2003 09:16	Jun-Chul Chung
g	07:50	Jun-Chul Chung	g2 - 09 Aug 2003 08:06	Jun-Chul Chung
h	12:16	Kenneth Chung	h1 - 23 Aug 2003 07:33	Jun-Chul Chung
i	07:40	Jun-Chul Chung	i2 - 23 Aug 2003 07:34	Jun-Chul Chung
j	17:48	Kenneth Chung	j2 - 06 Sept 2003 06:58	Jun-Chul Chung
			j3 (won from split ticket j2) - 13 Sept 2003 08:17	Jun-Chul Chung
k	11:04	Jun-Chul Chung	k2 - 06 Sept 2003 06:58	Jun-Chul Chung
l	11:59	Jun-Chul Chung	l2 - 06 Sept 2003 06:58	Jun-Chul Chung
m	08:29	Jun-Chul Chung	m2 - 20 Sept 2003 7:47	Jun-Chul Chung
n	19:40	Kenneth Chung	n2 - 04 Oct 2003 08:01	Jun-Chul Chung
o	09:39	Jun-Chul Chung	o2 - 04 Oct 2003 08:01	Jun-Chul Chung
p	10:36	Jun-Chul Chung	p2 - 04 Oct 2003 08:06	Jun-Chul Chung
q	11:22	Jun-Chul Chung	q2 - 11 Oct 2003 08:00	Jun-Chul Chung
r	12:37	Kenneth Chung	r2 - 11 Oct 2003 08:00	Jun-Chul Chung
s	13:53	Kenneth Chung	s2 - 11 Oct 2003 7:59	Jun-Chul Chung
t	15:56	Kenneth Chung	t2 - 11 Oct 2003 7:55	Jun-Chul Chung
u	09:43	Jun-Chul Chung	u2 - 11 Oct 2003 08:16	Jun-Chul Chung
v	11:53	Jun-Chul Chung	v2 - 18 Oct 2003 07:31	Jun-Chul Chung
			v3 (won from split ticket v2) - 25 Oct 2003 07:56	Jun-Chul Chung
w	12:02	Kenneth Chung	w2 - 06 Dec 2003 07:48	Jun-Chul Chung
x	11:15	Jun-Chul Chung	x2 - 27 Dec 2003 09:27	Jun-Chul Chung
y	11:58	Jun-Chul Chung	y2 - 22 Dec 2003 17:52 (attempted, but this is before the draw)	Kenneth Chung
			y2 - 27 Dec 2003 09:49	Jun-Chul Chung
z	15:22	Kenneth Chung	z2 - 03 Jan 2004 07:33	Jun-Chul Chung
			z3 (won from split ticket z2) - 10 Jan 2004 08:43	Jun-Chul Chung
aa	07:36	Jun-Chul Chung	aa2 - 24 Jan 2004 07:32	Jun-Chul Chung
ab	07:24	Jun-Chul Chung	ab2 - 24 Jan 2004 07:30	Jun-Chul Chung
			ab3 (won from split ticket ab2) - 31 Jan 2004 07:42	Jun-Chul Chung
			ab4 (won from ab3) - 07 Feb 2004 10:14	Jun-Chul Chung
ac	10:07	Jun-Chul Chung	ac2 - 31 Jan 2004 7:44	Jun-Chul Chung
ad	11:08	Jun-Chul Chung	ad1 - 14 Feb 2004 07:24	Jun-Chul Chung

APPENDIX "B"

Summary of Evidence and Arguments by Count

Count	Evidence and Argument
(1) Theft of split tickets generally	Evidence: - OLG computer records, Exhibit 16 (split ticket thefts), and the evidence of Rick Guzzo - statements to OLG personnel about the working hours of Jun-Chul Chung and Kenneth Chung as compared with the timing of the split ticket thefts and the timing of the validation of the stolen tickets Argument: - theft by the store clerk is a logical inference from this pattern: Ticket 1 is validated in Variety Plus and wins two free play tickets, 1a and 1b, then 1b is validated at Variety Plus on the Saturday after the draw, but 1a is validated in another location (quite often another city) at a different time (quite often on a different date) - the evidence shows a pattern of both Jun-Chul Chung and Kenneth Chung stealing free-play tickets, which are then checked on Saturday mornings by Jun-Chul Chung - this suggests their thefts of tickets were part of a joint venture
(2) Possession of stolen split tickets	Same evidence and argument as for split ticket thefts.
(3) Theft of the ticket that ultimately wins $12.5 million	Evidence: - OLG computer records and the evidence of Rick Guzzo regarding when and where the ticket was validated that generated the free play (that went on to win $12.5 million) - re Jun-Chul Chung, what he told OLG re his working hours - post-offence conduct of Jun-Chul Chung, specifically his lies to OLG about the day the ticket was validated (outlined under Count 5 (fraud)) - re Kenneth Chung, the split ticket theft evidence outlined above Argument: - the logical inference from the split ticket theft pattern and the hours of work evidence is that Jun-Chul Chung stole this ticket - additionally, evidence that Jun-Chul Chung lied to OLG about the events surrounding the validation of this ticket supports the inference that this ticket was stolen - the evidence outlined above that Kenneth Chung and his father engaged in a scheme to steal free play tickets means that Kenneth Chung aided or abetted his father in the theft of this ticket
(4) Possession of the stolen ticket that ultimately wins $12.5 million	Evidence re Kathleen Chung: - her physical possession of the ticket - her lies to OLG regarding, for example, the morning the ticket was validated (outlined in more detail under Count 5 (fraud)) Argument re Kathleen Chung: - one reasonable inference to explain why she lied to OLG is that she knew the ticket was stolen (or otherwise obtained by crime) or she was wilfully blind to that fact For Jun-Chul Chung and Kenneth Chung, the same evidence and argument supporting committal for theft of the ticket (Count 3).
(5) Defrauding OLG of $12.5 million	Evidence: - re Kathleen Chung, evidence that she lied to OLG, in particular about the morning the ticket was validated (for example, cell phone and Royal Bank evidence that puts her in Mississauga at a time when she says she was in Burlington at Variety Plus) - re Jun-Chul Chung, the evidence of the split ticket thefts, the theft of this ticket and his statements to OLG supporting Kathleen Chung's false story - re Kenneth Chung, the evidence of the split ticket thefts and his statements to OLG in support of Kathleen Chung - re all accused, their post-offence conduct in attempting to move the bulk of the proceeds so that it would appear the money came from a relative in Korea, not from the OLG prize money (outlined under Count 7 (money laundering)) Argument: - Kathleen Chung's lies to OLG, supported by her father and brother, led to OLG paying her money to which she was not entitled - additionally re Jun-Chul Chung and Kenneth Chung, there is a logical inference that Kathleen Chung's claim was the natural result of their ongoing scheme to steal split tickets
(6) Possession of the proceeds of the $12.5-million fraud	Evidence: - forensic accountant Aaron Chan, supported by banking records, that the money passed through various accounts and that each of the accused persons had control, sometimes individually and sometimes with another person, of at least some of those accounts Argument: - as noted under the fraud count, the funds were obtained by fraud, each accused knew that and each accused at some point had possession of at least some of the fraudulently obtained money
(7) Laundering the proceeds of crime	Evidence: - forensic accountant Aaron Chan, supported by banking records, that the money passed through various accounts and that each of the accused persons had control, sometimes individually and sometimes with another person, of at least some of those accounts - forensic accountant Aaron Chan, supported by banking records, that the bulk of the OLG funds ended up in the Hi Ok Chung Trust - evidence through Aaron Chan that it was made to appear that the source of funds in the Hi Ok Chung Trust was Jun-Chul Chung's sister in Korea Argument: - for reasons outlined above, all three accused persons knew that the money was obtained by fraud - all three accused persons, at various times in various accounts, had control over at least some of the money - most of the money ended up in the Hi Ok Chung Trust - there was an attempt to make it appear that the Hi Ok Chung Trust money came from a legitimate source as opposed to the fraudulently obtained prize money - the logical inference is that this was done in an attempt to "clean" the money, i.e. make it look like it was from a legitimate source

Footnotes

[1] Transcript of Proceedings, November 26th, 2012, Page 18, Lines 5 to 9.

[2] Transcript of Proceedings, November 26th, 2012, Page 18, Lines 11 to 13.

[3] Transcript of Proceedings, November 27th, 2012, Page 34, Lines 4 to 21.

[4] Transcript of Proceedings, November 27th, 2012, Page 39, Line 30 to Page 40, Line 6.

[5] The table assumes working hours of 6:00 a.m. to noon for Jun-Chul Chung and noon to 10:30 p.m. for Kenneth Chung. If a third person worked between 10:00 a.m. and noon, it would only lead to the conclusion that this other person was also part of Jun-Chul Chung and Kenneth Chung's scheme to steal lottery tickets.

[6] The ticket labelled "y2" in Exhibit 16 and the table at Appendix "A".

[7] As per Exhibit 16, the split ticket thefts occurred on various days of the week, but (after June 2003) the stolen tickets were always validated at Variety Plus on Saturdays. The day of the week appears in Exhibit 16 but was not included in the table at Appendix "A" because of formatting considerations and because (after June 2003) they were always validated on the Saturday after the draw (except for the "y2" attempted validation before the draw had actually happened, although y2 was later properly validated on the Saturday morning after the draw, the same Saturday as the $12.5-million winner).

[8] Transcript of Proceedings, November 27th, 2012, Page 23, Lines 27 to 30.

[9] Transcript of Proceedings, November 27th, 2012, Page 27, Lines 11 to 17.

[10] Transcript of Proceedings, November 27th, 2012, Page 30, Lines 23 to 25.

[11] Transcript of Proceedings, November 20th, 2012, Page 50, Lines 1 to 4.

[12] This is contained in a letter from Redway and Butler that is one of the electronic documents in Exhibit 1. It is also reviewed in detail in the evidence of Aaron Chan: see Transcript of Proceedings, November 20th, 2012, Page 36, Line 8 to Page 38, Line 11.

[13] There is a fundamental issue as to whether the Deloitte Report is evidence of the truth of its contents. There certainly was no agreement while I was the Crown that the report was admissible for its truth (versus simply for the fact that it was a document acted on by some of the witnesses). However, given the report is favourable to the Crown, if the defence wishes it to be part of the evidence, the Crown has no objection.

[14] This inference is noted in the Deloitte Report (as is the frequency with which this happened at Variety Plus), but that report is not required in order for the court to draw the reasonable inference that the second free ticket never left the store.