Court Information

Ontario Court of Justice

Date: January 9, 2015

Court File No.: Halton 10-3308

Parties

Between:

Her Majesty the Queen

— AND —

Herbert Adams

Before: Justice R.J. LeDressay

Sentencing Submissions heard on: December 10, 2014

Reasons for Sentence released on: January 9, 2015

Counsel

A. Khoorshed — counsel for the Crown

A. Furgiuele — counsel for the defendant Herbert Adams

Judgment

Introduction and Facts

[1] After a lengthy trial, Herbert Adams was found guilty, on August 14, 2014, of four counts of fraud over $5,000 contrary to s. 380(1)(a) of the Criminal Code of Canada.

[2] Count number one involved the defrauding of the shareholders of Majestic Supply Company, and counts two, three and four involved the defrauding of specific named persons. Count number two involves John and Claudia Lynch, count number three involves Laurene Rogers and count number four involves Harold Elke.

[3] Written reasons for Judgment in this case were provided on August 13, 2014. Details regarding the facts with respect to these four offences are included in those reasons and therefore won't be repeated here. In brief, the fraud charges consisted of Mr. Adams dishonestly misleading shareholders to entice them to invest in Majestic and Mr. Adams either deliberately or recklessly breaching significant provisions of the Ontario Securities Act, in order to further his objective of obtaining investment funds from the public. As noted in the judgment, the total amount of the fraud involving the shareholders of Majestic was difficult to ascertain with certainty, but a total of $5.3 million was invested by the shareholders and none of these funds were recovered. The loss for Mr. and Mrs. Lynch was $250,000. The loss for Laurene Rogers was $35,000. The loss for Harold Elke was $96,000. None of these funds were recovered either.

[4] It was clear from the evidence, including Herbert Adams' own evidence, that the proceeds of crime that went into the hands of Mr. Adams were as follows:

• $228,400 from the sale of Adams' personal Majestic holdings;
• $250,000 from the sale of Adams' Majestic shares held in trust by Asseltine;
• $462,500 from the sale of Adams' Majestic shares held in trust by Brown;
• $519,544 from Adams' share of Suncastle's Majestic share sales;
• $150,000 from Adams' half of the shares sold by CBK which were in trust for Adams.

[5] The total amount was $1,610,444. This amount was confirmed by Mr. Adams during his evidence on December 16, 2013 at pp.69-82 of the transcript. This amount was not disputed by the defence.

[6] The maximum for the offence of Fraud Over $5000 is a term of imprisonment not exceeding fourteen years. It is important to note that there is now a minimum penalty of two years in jail for frauds exceeding $1 million as per Section 380(1.1) of the Criminal Code. However, at the time these offences were committed, that section of the Criminal Code was not yet in force and effect, so there was no minimum period of incarceration for frauds of this nature. Mr. Adams is entitled to be sentenced as the law was at the time these offences were committed.

Sentencing Positions of the Crown and the Defence

[7] In this case the Crown seeks a sentence in the range of seven years in the penitentiary.

[8] The Crown also seeks a fine in lieu of forfeiture in the amount of $1,610,444. The Crown submits that Mr. Adams should be given a reasonable time to pay the fine in lieu of forfeiture following his release from prison and the Crown submits that three years is the appropriate time. The Crown further submits that as the amount of the fine in lieu of forfeiture is in excess of $1 million that the Criminal Code sets a range of five to ten years jail upon failure to pay the fine instead of forfeiture. The Crown further submits that the jail time in default for Mr. Adams ought to be in the range of seven years jail.

[9] The Crown also seeks a restitution order in the amount of $5.3 million.

[10] In addition, the Crown seeks two ancillary orders.

[11] First, pursuant to s.743.21 the Crown seeks an order prohibiting Mr. Adams, while Mr. Adams is incarcerated, from contacting persons who were witnesses at the trial and / or were the victims of these offences.

[12] Secondly, the Crown seeks an order for the taking of a sample of Mr. Adams' DNA for the national DNA databank.

[13] The offender submits that a period of incarceration of two years imprisonment is the appropriate custodial sanction for the charges.

[14] The offender is not opposed to the fine in lieu of forfeiture in the amount of $1,610,444 as requested by the Crown. The defence, however, submits that Mr. Adam's should be given six years to pay the fine in lieu of forfeiture. The defence also submits that the default term in lieu of imprisonment should be five years.

[15] The offender also contests the restitution amount of $5.3 million. The defence submits that this amount should be the same amount as the fine in lieu of forfeiture, which is $1,610,444. In addition, the defence submits that, whatever amount is ordered in terms of restitution, that the court make a further order stating that the restitution order shall take priority over payment of the fine in lieu of forfeiture ordered herein and that the fine in lieu of forfeiture shall be reduced by any amount paid pursuant to the restitution order. In addition, the defence submits that the restitution order should be reduced by the amount paid by Mr. Adams towards the disgorgement amount ordered by the Ontario Securities Commission of $516,000 which was meant to go to the third party victims.

[16] The defence also opposes an order for the taking of a sample of Mr. Adams' DNA for the national DNA databank.

Fundamental Purposes and Principles of Sentence

[17] In R. v. Porter and Osbourne, Dec. 23, 2014 (OCJ) Justice Harris noted the following.

The fundamental purpose and principles of sentencing are set out in sections 718 to 718.2 of the Criminal Code.

The fundamental purpose of sentencing as expressed in section 718 is to contribute to respect for the law, the maintenance of a just, peaceful and safe society by imposing just sanctions that have one or more of the objectives of denunciation; deterring the offender and other persons from committing offences; separating offenders from society, where necessary; assisting in rehabilitating offenders; providing reparation for harm done to victims or to the community; and promoting a sense of responsibility in offenders, and acknowledgment of the harm done to victims and to the community.

The relevance and relative importance of each of these objectives will vary according to the nature of the crime and the circumstances of the offender. See: R. v. Hamilton, [2004] O.J. No. 3252 (Ont. C.A.) at para. 102; R. v. Lyons, [1987] 2 S.C.R. 309 (S.C.C.) at para. 26; R. v. Morrisey, 2000 SCC 39, [2000] S.C.J. No. 39 (S.C.C.) at para. 46.

The fundamental principle of sentencing is that the punishment should be proportionate to the gravity of the offence and the degree of responsibility of the offender. The punishment should fit the crime. There is no single fit sentence for any particular offence. See: Criminal Code, section 718.1.

Doherty J.A. of the Ontario Court of Appeal stated in R. v. Hamilton that:

The "gravity of the offence" refers to the seriousness of the offence in a generic sense as reflected by the potential penalty imposed by Parliament and any specific features of the commission of the crime which may tend to increase or decrease the harm or risk of harm to the community occasioned by the offence.

He went on to state that:

The "degree of responsibility of the offender" refers to the offender's culpability as reflected in the essential substantive elements of the offence - especially the fault component - and any specific aspects of the offender's conduct or background that tend to increase or decrease the offender's personal responsibility for the crime.

He then quoted Rosenberg J.A. who had previously described the proportionality requirement in R. v. Priest:

The principle of proportionality is rooted in notions of fairness and justice. For the sentencing court to do justice to the particular offender, the sentence imposed must reflect the seriousness of the offence, the degree of culpability of the offender, and the harm occasioned by the offence. The court must have regard to the aggravating and mitigating factors in the particular case. Careful adherence to the proportionality principle ensures that this offender is not unjustly dealt with for the sake of the common good.

Proportionality is the fundamental principle of sentencing, but it is not the only principle to be considered.

I must specifically consider section 718.2(d) which provides that "an offender should not be deprived of liberty if less restrictive sanctions may be appropriate in the circumstances".

I must also consider the impact of section 718.2(e) which provides that "... all available sanctions other than imprisonment that are reasonable in the circumstances should be considered for all offenders."

[18] The last two paragraphs in the quoted case refer to the principle of restraint. The principle of restraint was noted in R. v. Batisse 2009 ONCA 114, 2009 O.J. No. 452, when the Ontario Court of Appeal indicated the following at paragraph 32:

First, it is an important consideration because the appellant was a first offender. As such, the restraint principle requires that the sentencing judge consider all sanctions apart from incarceration and where, as here, incarceration must be imposed, the term should be as short as possible and tailored to the individual circumstances of the accused: see R. v. Priest (1996), 30 O.R. (3d) 538, at p. 545, 110 C.C.C. (3d) 289 (C.A.).

[19] Finally, it should be noted that in R. v. Drakes 2009 ONCA 560 (leave to appeal denied 2009 SCCA 381), the Ontario Court of Appeal indicated that there is a real need to emphasize denunciation and general deterrence in large-scale frauds when the court said the following at paragraph 26:

[26] We agree with and underline this passage from the trial judge's reasons for sentence:

There is a real need to emphasize denunciation and general deterrence in the realm of large-scale frauds with devastating consequences for their victims. There is a real need to warn individuals currently involved in such scams, and those devising new ones, that substantial penitentiary sentences will follow this type of crime, to say nothing about the serious disgrace to them and everyone connected with them.

[20] In R. v. Bogart, [2002] O.J. No. 3039 (Ont.C.A.) held that:

This court has affirmed that in cases of large-scale fraud committed by a person in a position of trust, the most important sentencing principle is general deterrence. Mitigating factors and even rehabilitation become secondary. In R. v. Bertram and Wood (1990), 40 O.A.C. 317, this court observed that most major frauds are committed - as this one was - by well-educated persons of previous good character. Thus the court held at p. 319,

The sentences in such cases are not really concerned with rehabilitation. Instead, they are concerned with general deterrence and with warning such persons that substantial penitentiary sentences will follow this type of crime, to say nothing of the serious disgrace to them and everyone connected with them and their probable financial ruin. [Emphasis added.]

[21] It is clear from section 380.1(1) and from the case law that, because of the nature of these offences, the principles of general deterrence and denunciation are the paramount principles of sentencing that must be applied and they shall be given primary consideration in determining the ultimate sentence. However, all of the principles of sentence set out in s. 718 to s. 718.2 of the Criminal Code must be taken into consideration and applied accordingly. As noted by the Ontario Court of Appeal in both R. v. Folino (2005), 77 O.R. (3rd) 641 and in R. v. El-Jamel 2010 ONCA 575, [2010] O.J. No. 3737, the sentencing judge must not overemphasize the punitive sentencing objectives of denunciation and general deterrence and fail to consider the restorative objectives of rehabilitation, reparations and promotion of a sense of responsibility.

The Aggravating Factors

[22] The Criminal Code sets out the aggravating circumstances in fraud cases which must be considered by the court.

S.380.1 (1) Without limiting the generality of section 718.2, where a court imposes a sentence for an offence referred to in section 380, 382, 382.1 or 400, it shall consider the following as aggravating circumstances:

(a) the magnitude, complexity, duration or degree of planning of the fraud committed was significant;

(b) the offence adversely affected, or had the potential to adversely affect, the stability of the Canadian economy or financial system or any financial market in Canada or investor confidence in such a financial market;

(c) the offence involved a large number of victims;

(c.1) the offence had a significant impact on the victims given their personal circumstances including their age, health and financial situation;

(d) in committing the offence, the offender took advantage of the high regard in which the offender was held in the community;

(e) the offender did not comply with a licensing requirement, or professional standard, that is normally applicable to the activity or conduct that forms the subject-matter of the offence; and

(f) the offender concealed or destroyed records related to the fraud or to the disbursement of the proceeds of the fraud

(1.1) Without limiting the generality of section 718.2, when a court imposes a sentence for an offence referred to in section 382, 382.1 or 400, it shall also consider as an aggravating circumstance the fact that the value of the fraud committed exceeded one million dollars.

Non-mitigating factors

(2) When a court imposes a sentence for an offence referred to in section 380, 382, 382.1 or 400, it shall not consider as mitigating circumstances the offender's employment, employment skills or status or reputation in the community if those circumstances were relevant to, contributed to, or were used in the commission of the offence.

Record of proceedings

(3) The court shall cause to be stated in the record the aggravating and mitigating circumstances it took into account when determining the sentence.

[23] In this case the circumstances set out in Sections 380.1(1a), (c), (c.1), and (e) clearly apply to the facts of this case.

[24] Section 380.1(1)(a) indicates that the magnitude, complexity, duration or degree of planning of the fraud committed was significant. In this case the offences committed by Mr. Adams were well-planned. They took place over a lengthy period of time. Numerous lies were told to a multitude of people who were the victims of these offences. In addition, the two corporations were set up and manipulated in a manner that made detection of the siphoning of money difficult to ascertain.

[25] Section 380.1(1)(c) indicates that it is an aggravating circumstance if the offence involved a large number of victims. Clearly in this case a large number of victims, well in excess of 100, were involved and they suffered substantial losses.

[26] Section 380.1(c.1) indicates that is an aggravating circumstance if the offence had a significant impact on the victims given their personal circumstances including their age, health, and financial situation. From the evidence provided at trial and the victim impact statements, it is clear that a number of the victims suffered significant financial losses and that their financial security and in particular their retirement income was severely affected. A number of the victims were close to retirement age and were relying on the funds that they invested and lost for their retirement or their children's education.

[27] Section 380.1(1)(e) indicates that it is an aggravating factor if the offender did not comply with the licensing requirement and professional standard that is normally applicable to the activity or conduct that forms the subject matter of the offence.

[28] In this case there was a specific finding that Mr. Adams deliberately, or at the very least recklessly, breached the Ontario Securities Act and that the thwarting of these protective measures lead directly to the investors' loss of funds. As noted in the judgment, the Ontario Securities Act regulations were put into place to prevent exactly what happened here, which is to prevent unscrupulous business persons making false claims about business and or not making full, frank and fair disclosure about a company to fairly and honestly allow potential investors to make an informed decision as to whether or not to invest their money in such a company.

The Mitigating Factors

[29] The mitigating circumstances that must be taken into consideration are as follows. Mr. Adams is 66 years of age with a date of birth July 2, 1948. He has no previous criminal record.

[30] The presentence report is positive. It describes the Mr. Adams' upbringing as tumultuous. His father reportedly struggled with alcohol and was physically abusive to both Mr. Adams and to Mr. Adams' mother. His father was described as being extremely explosive when he drank. Mr. Adams left home at the age of 16 as his parents could no longer support him and he could no longer bear to witness the domestic violence which occurred in his house. Both of Mr. Adams' parents are now deceased.

[31] Mr. Adams left school after completing grade 9 in order to support his family after his father became ill. His employment is detailed in the presentence report and it appears that he has always been gainfully employed.

[32] Mr. Adams married for the first time at the age of 17 and that relationship lasted 7 or 8 years. There were no children of this relationship.

[33] Mr. Adams remarried in his late 20s and there were two children of this relationship. They are his son Chadwick Adams who is now 31 and his daughter, who is now 29. This second marriage lasted 26 years but then ended approximately 12 years ago in a very bitter divorce.

[34] Mr. Adams married for a third time in his mid-fifties. His wife was an Iranian surgeon and as she was not able to practice medicine in Canada, she decided to return to Iran.

[35] Mr. Adams maintains an amicable relationship with his son Chadwick, but has no contact with his daughter. At tab 6 of the defence material there is a letter from his son indicating that Mr. Adams is a good father and role model in how he looks after others despite his own personal difficulties.

[36] The presentence report also discloses that for the past seven years Mr. Adams has been residing with an elderly man, Mr. Arthur Dancy. There is a letter in the defence materials from Mr. Dancy. He is 89 years old and he is a retired high school teacher. Mr. Adams acts as Mr. Dancy's primary caregiver and Mr. Dancy, according to his letter, has come to depend on Mr. Adams completely. Mr. Dancy is bedridden and unable to travel and he requires help to do even the simplest task like getting dressed, making a meal, doing laundry, making his bed, buying groceries and making sure he takes the proper medicines. Mr. Dancy describes Mr. Adams as a caring, trustworthy, compassionate individual always putting everyone first.

[37] It should be noted that in R. v. Macdonald, [1997] S.J. No. 117, the Saskatchewan Court of Appeal in sentencing an offender who was the principle financial supporter and caregiver for her family noted that because of the offender's family's dependence upon her and because she was an Aboriginal living in a small isolated Aboriginal community where she will have to live with her criminal history that she deserved a reduced sentence.

[38] Similarly in R. v. Top, [2008] O.J. No. 1766 ONSC, the court found that because the offender had a young family that relied heavily on his presence and that his children were in their critical formative years with the lives revolving around him that this was a mitigating factor in sentence.

[39] Therefore, the established fact that Mr. Adams has been the primary caregiver for an elderly gentleman for over three years and that he will not be able to continue this while incarcerated is a mitigating factor to be considered.

[40] Mr. Adams does not have any issues with substance use or other addictions including alcohol.

[41] However, Mr. Adams does have a myriad of his own health issues, both physical and emotional. He takes a series of medications for type 2 diabetes, cholesterol issues, irregular heartbeat, high blood pressure, neuropathic pain, depression, migraines, physical pain, an anticoagulant and a water pill. He uses a machine to treat sleep apnea. Further, he suffers from fibromyalgia. He has had two surgeries on his back, including a spinal fusion and he lives with physical pain on a regular basis. Tab 7 of the defence materials is a letter from Mr Adams' physician, Dr. David Yanover. The letter confirms the medical conditions as described and the doctor concludes that Mr. Adams has serious and complicated medical concerns.

[42] With respect to Mr. Adams' age and his medical condition the defence made clear in submissions that they were not submitting that the prison system could not accommodate Mr. Adams. However the defence submitted that the Ontario Court of Appeal in R. v. Duncan [2005] O.J. No. 4804, indicated that the sentence in that case reflected a consideration of the appellant's age (78), and his medical condition and that these were mitigating factors properly considered by the court. The defence submits that the finding in the Duncan case is applicable in Mr. Adams circumstances.

[43] Mr. Adams is currently unemployed and is supported by a fixed income, which are two pensions. However, those pensions are being garnished by 20% due to unpaid taxes. Mr. Adams has estimated his total debt at $1.6 million, largely due to sanctions imposed by the Ontario Security Commission.

[44] There are numerous letters of reference regarding Mr. Adams as part of the defence materials. All the people that wrote reference letters were aware of his convictions in this case. The letters all speak very positively of Mr. Adams and described him as being kind and generous to those around him.

[45] It was submitted in mitigation on behalf of Mr. Adams that the frauds before the court are different from frauds that are motivated by pure greed and that the moral culpability is somewhat diminished as Mr. Adams' company was attempting to achieve something when these frauds occurred. Reference was made to paragraph 69 of the judgment which reads as follows:

[69] The evidence in this case clearly establishes that without any viable product to bring to the marketplace Majestic was doomed to fail as a business. The ideas they had could have been profitable if they had actually worked and been available in a timely manner but no one at this company had anywhere near the technical knowledge required to invent the systems the company envisioned. Vision, without knowledge and expertise to implement it, is worthless. It was only a matter of time before the money ran out and the new investors dried up such that Majestic went bankrupt. That is precisely what happened in early 2008. All of the investors lost all of the money they invested in Majestic.

[46] Crown counsel took exception to this and submitted that Mr. Adams moral blameworthiness was at the top end. This submission was based on the amount of planning and deliberation that was involved. In addition, the fraud resulted in the victims losing their life savings and sometimes their retirement pension incomes and that Mr. Adams knew people were relying on the money they invested for those purposes. As such, these frauds had a lasting significant impact on the victims. In addition, the Crown disputed that Mr. Adams was trying to make the company work in the sense that Adams was fleecing his own company. The Crown made reference to paragraph 1108 of the judgment which reads as follows:

[1108] In addition, Adams violated the Ontario Securities Act by selling off his secondary shares in Majestic and by selling shares at $1.00 per share. The selling of secondary shares, without notice, was essentially Adams bailing out on his own company, while still soliciting investments. The share price was also clearly a situation that resulted in incoming investors being immediately diluted out. Mr. De Souza explained the inherent dishonesty that is involved in both of these situations.

[47] Both the submissions of the Crown and the defence must be considered and both submissions have a degree of merit. I accept that Mr. Adams was hoping that the company would ultimately be successful, notwithstanding how unrealistic this hope was in the circumstances, but in the meantime he was also bailing out on his own company and obtaining funds for himself at the expense of the shareholders. I would assign the moral blameworthiness in this case at the moderate to high end and therefore consider it to be more of an aggravating factor than a mitigating factor.

Range of Sentence

[48] Both counsel provided me with a number of cases involving significant fraud in order to establish a range of sentence. The cases indicate that sentences range from conditional sentences in exceptional cases to reformatory sentences in some cases but that penitentiary sentences are regularly imposed for large-scale frauds. See R. v. Fiorilli 2014 ONSC 1117 at paragraph 12.

[49] However, the case that is most persuasive in terms of the range of sentence is the relatively recent case of R. v. Drakes, supra, from the Ontario Court of Appeal with leave to appeal to the Supreme Court of Canada denied. The court made clear in that decision that substantial penitentiary sentences are appropriate for large scale frauds. In that case the Ontario Court of Appeal upheld sentences of four and five years for two offenders involved in large scale frauds. The amount of the fraud in the Drakes case was not articulated by the court in its sentence decision but from the rendition of the factual scenario it does not appear that the amount involved was as significant as the amount in this case.

[50] Other recent cases like R. v. Drabinsky 2011 ONCA 582, [2011] O.J. No. 4022, ONCA, leave to appeal to the Supreme Court of Canada dismissed 2011 SCCA No 491 and R. v. Maxwell 2014 ONCA 316, [2014] O.J. No. 1921 ONCA also establish significant benchmarks for the range of sentence appropriate in large-scale frauds.

[51] In Drabinsky the Ontario Court of Appeal imposed a sentence of five years for a large scale premeditated fraud. This sentence was imposed notwithstanding that there was no evidence to support any finding of economic loss to the victims and the court did not find that the failure of the company and the resulting losses were attributable to the fraud. The court also found that the business was not a scam and that the fraud had not been motivated by pure greed. Finally, like Mr. Adams, Drabinsky was disabled and had significant health issues.

[52] In R. v. Maxwell 2014 ONCA 316, [2014] O.J. No. 1921 the Ontario Court of Appeal upheld a four year sentence for a fraud of $375,000 that involved several transactions and took place over the period of one month. The offender in this case had a dated but related record but the fraud was not nearly as complex or damaging as this case. The court reiterated that the controlling sentencing principles included denunciation, deterrence and, secondarily rehabilitation.

[53] The Crown submits that these two cases are benchmarks for this case because the facts in these two cases are less serious than the the facts involving the offences in the case before the court. These cases also reiterate the clearly establish principle that general deterrence and denunciation are the paramount considerations in large scale frauds like this case. Of course, as noted previously, all of the principles of sentence set out in s.718 to 718.2 must be considered in deciding an appropriate sentence.

[54] In addition, it is important to note that each case must be decided on its own unique set of facts and circumstances.

[55] It was acknowledged by the defence that the principles of general deterrence and denunciation were the paramount principles of sentence that must be applied in this case. The defence also acknowledged that rehabilitation carries less weight in this case because of Mr. Adams age. However, the defence submits that Mr. Adams age and health issues factor into consideration when applying the proportionality principle. The defence submission is that this justifies a reduced sentence and that a two year period of incarceration is appropriate for someone in Mr. Adams circumstances as it would be a very strong sanction for him for these offences. While this submission has some merit and will be considered in deciding the ultimate sentence it does not justify a reduction to a minimum penitentiary sentence in this case.

[56] The aggravating and mitigating factors noted must also be considered. There are a number of statutory aggravating factors present in this case that move it into the more serious end of the spectrum for crimes of this nature. While mitigating factors are also present they are not as significant and a noted by the Court of Appeal they become "secondary" in cases of large-scale fraud.

The Sentence and The Ancillary Orders

[57] In the totality of these circumstances considering all of the principles of sentence and the particular aggravating and mitigating factors in this case an appropriate custodial sentence for the fraud charges is five and one-half years in a penitentiary. The five and one-half year sentence will be on count one, and on counts two, three and four, the sentence will be two years concurrent.

[58] There will be an order for a fine in lieu of forfeiture pursuant to section 462.37(1) and section 462.37(3), in the amount of $1,610,444.

[59] Section 462.37(4) indicates that when the fine is in excess of $1 million and there is failure to pay the fine that the appropriate range of incarceration in default of payment of the fine is from five to ten years jail. The case law indicates that Mr. Adams should be given a reasonable time to pay the fine in lieu of forfeiture following his release from prison. Taking into consideration the amount, Mr. Adams' present financial circumstances, and health condition, as well as his age and the period of incarceration that must be served, a reasonable period of time for him to pay the fine in lieu of forfeiture is six years from the date of his release from prison.

[60] The jail time in default of payment of this fine in lieu of forfeiture will be six years incarceration.

[61] In addition, there will be a restitution order in the amount of $5.3 million. Mr Adams was the creator of these companies and he was clearly the directing mind and will behind the decisions made. While he did not directly receive all of the investor funds obtained he indirectly benefited from these funds by their use in these companies. While I also recognize that others may have received some benefit from these funds it was Mr. Adams who was the driving force responsible for obtaining this funds through illegal means. Therefore, Mr. Adams is responsible for full restitution.

[62] The restitution order will include a further court order indicating that the restitution order shall take priority over payment of the fine in lieu of forfeiture ordered herein. The fine in lieu of forfeiture shall be reduced by any amount paid to the restitution order. Also, any money paid towards the disgorgement order, ordered by the Ontario Securities Commission will also be counted towards the restitution order and towards the fine in lieu of forfeiture.

[63] There will be an order pursuant to s.743.21 prohibiting Mr. Adams from having contact, while Mr. Adams is in custody, with: Steven Bishop, Noel Shahnazarian, Carlo Toscano, Paul Socholotiuk, Homeric Arvanitis, Dale Hicks, Tom Yaworski, John Lynch, Laurene Rogers, Harold Elke, Jeff Hinchey, Gordon Russell, Douglas Paul, Glen Boles, Reginald Rudko, Mark Bilocerkowec, Tom Minnett, Paul De Souza, John Dow, Thomas Brown, William Stark, Daniel Le Blanc and Harold Elke.

[64] Finally the offence of fraud is a secondary designated offence pursuant to s. 487.04 of the Criminal Code. The section reads as follows:

"secondary designated offence" means an offence, other than a primary designated offence, that is

(a) an offence under this Act that may be prosecuted by indictment — or, for section 487.051 to apply, is prosecuted by indictment — for which the maximum punishment is imprisonment for five years or more,

[65] The test is whether or not a sample for the purpose of forensic DNA analysis should be taken is set out in the Criminal Code at Section 487.051. That section reads as follows:

(3) The court may, on application by the prosecutor and if it is satisfied that it is in the best interests of the administration of justice to do so, make such an order in Form 5.04 in relation to

(a) a person who is found not criminally responsible on account of mental disorder for an offence committed at any time, including before June 30, 2000, if that offence is a designated offence when the finding is made; or

(b) a person who is convicted, discharged under section 730 or found guilty under the Youth Criminal Justice Act or the Young Offenders Act, of an offence committed at any time, including before June 30, 2000, if that offence is a secondary designated offence when the person is sentenced or discharged.

In deciding whether to make the order, the court shall consider the person's criminal record, whether they were previously found not criminally responsible on account of mental disorder for a designated offence, the nature of the offence, the circumstances surrounding its commission and the impact such an order would have on the person's privacy and security of the person and shall give reasons for its decision.

[66] In R. v. Hendry (2001), 57 O.R. (3d) 475 the Ontario Court of Appeal indicated the following concerning these provisions at paragraphs 17 and 18:

[17] In R. v. Briggs, Weiler J.A. dealt with many of the issues that may arise in interpreting s. 487.051(1)(b) and s. 487.052. In particular, she held as follows:

(1) Whether or not there is evidence at the scene of the crime of which the offender was convicted that would likely yield a DNA profile of the perpetrator is not necessarily a relevant consideration.

(2) The phrase "best interests of the administration of justice" does not import as a prerequisite to making the order that there be reasonable and probable grounds to believe a further offence will be committed.

(3) The state interest in obtaining a DNA profile from an offender is not simply law enforcement by making it possible to detect further crimes committed by this offender. Rather, the provisions have much broader purposes including the following:

1. Deter potential repeat offenders;
2. Promote the safety of the community;
3. Detect when a serial offender is at work;
4. Assist in the solving of "cold" crimes;
5. Streamline investigations; and
6. Most importantly, assist the innocent by early exclusion for investigative suspicion or in exonerating those who have been wrongfully convicted.

(4) Provisions in the Criminal Code and the DNA Identification Act restricting the use that can be made of the DNA profile and protecting against improper use of the information offer significant protection of the offender's privacy.

(5) The procedures for seizures of bodily substances authorized by the provisions are of short duration and involve no, or minimal, discomfort. There is a minimal intrusion with no unacceptable affront to human dignity.

(6) A person convicted of a crime has a lesser expectation of privacy.

(7) The trial judge is entitled to look at the offender's entire record, not just the crimes that may be designated offences.

[18] I would summarize the effect of these holdings as follows. In balancing the offender's right to privacy and security of the person against the state interests in obtaining the offender's DNA profile, the court must consider the following. The legislation offers significant protections against misuse of the DNA profile information, thus minimizing an improper intrusion into the offender's privacy. Having been convicted of a designated offence, the offender already has a reduced expectation of privacy. In the ordinary case of an adult offender the procedures for taking the sample have no, or at worst, a minimal impact on the security of the person. Thus, in the case of an ordinary adult offender there are important state interests served by the DNA data bank and few reasons based on privacy and security of the person for refusing to make the order.

[67] In Hendry the court concluded the following at paragraph 22:

[22] I agree with Weiler J.A.'s analysis in Briggs and with the importance of collecting DNA profiles for the salutary purposes she identifies. The courts must nevertheless keep in mind the distinction between routine fingerprinting and DNA profiling. This distinction is highlighted by the fact that under s. 487.051(3) and s. 487.052(2) the court is required to give reasons for making the DNA order. That said, and leaving aside other considerations, I would expect that in most cases the balance would be struck in favour of making the order under s. 487.051(1)(b) or s. 487.052, as the case may be.

[68] It should also be noted that subsequent to the Hendry decision being released leave to appeal the Briggs decision to the Supreme Court of Canada was refused. See: Leave to appeal to S.C.C. refused [2002] 2 S.C.R. v, 162 C.C.C. (3d) vi, 165 O.A.C. 45 n, 91 C.R.R. (2d) 187 n, 292 N.R. 193 n.

[69] In this case Mr. Adams does not have any previous record. He has never been found not criminally responsible on account of mental disorder for a designated offence. However, the facts of these offences are very serious. The dishonesty took place over a significant period of time and on multiple occasions. It involved numerous victims and a loss of money in the millions of dollars. The case law is clear that there are important state interests served by the DNA databank. The case law also makes clear that in considering an application pursuant to this section that the court must consider that "the legislation offers significant protections against misuse of the DNA profile information, thus minimizing an improper intrusion into the offender's privacy. Having been convicted of a designated offence, the offender already has a reduced expectation of privacy. In the ordinary case of an adult offender the procedures for taking the sample have no, or at worst, a minimal impact on the security of the person."

[70] In this particular case, balancing the necessary interests as noted, there will be an order for the taking of a sample for the purposes of forensic DNA analysis.

Released: January 9, 2015

Signed: "Justice R.J. LeDressay"