Court File and Parties

Ontario Court of Justice

Date: 2017-04-07

Court File No.: Central East Region: Oshawa 16-33970

Between:

Her Majesty the Queen

— AND —

Zarmoon Nisha Inshanalli

Before: Justice Peter C. West

Heard on: July 20, 2016 and March 16, 2017

Reasons for Judgment released on: April 7, 2017

Counsel

Mr. D. Park — Counsel for the Crown

Mr. L. Sabsay — Counsel for the Defendant Zarmoon Nisha Inshanalli

Judgment

WEST J.:

Facts and Guilty Plea

[1] On July 20, 2016, Ms. Inshanalli pled guilty to a charge of fraud over $5,000, contrary to s. 380(1)(a) and breach of probation, contrary to s. 733.1(1)(a) of the Criminal Code.

[2] The matter had been pre-tried before me in June 2016, and the matter was adjourned by counsel to obtain instructions. On the date of the guilty plea I was advised that Ms. Inshanalli had made a payment of $54,000 to the victim, WSC Corporation Coppinwood Golf Club, as restitution. It was unknown if Ms. Inshanalli would be able to make any further restitution, although it was requested sentencing be adjourned so that a psychiatric report could be prepared and to see whether Ms. Inshanalli could make any further restitution payments.

[3] Ms. Inshanalli has a prior criminal record for similar offences. Her criminal record was marked as Exhibit 1.

[4] Sentencing was ultimately scheduled for March 17, 2017. A presentence report was prepared and filed as Exhibit 2. Mr. Sabsay provided a psychiatric report from Dr. Julian Gojer, dated March 16, 2017, which was marked as Exhibit 3.

Details of the Fraud

[5] Ms. Inshanalli worked for the victim from April 2014 until January 2016 when her employment was terminated as a result of the discovery of her fraudulent conduct. Between May 1, 2014 and January 20, 2016, she fraudulently wrote a total of 134 unauthorized cheques, in amounts ranging from $1,456.00 to $5,839.28 payable to Nisha Inshanalli and deposited into three bank accounts belonging to Zarmoon Nisha Inshanalli. Ms. Inshanalli worked as a bookkeeper/controller for the victim corporation. On 125 of these cheques Ms. Inshanalli forged Gerard Waslens' signature.

Personal Circumstances

[6] Ms. Inshanalli is currently 62 years of age. She is married to Raffiq Inshanalli and they have one son, age 33, who resides with them in Brampton. Apparently Ms. Inshanalli's husband and son are the only ones aware of her convictions for fraud over. She last worked for the victim corporation and has not been employed since her termination.

Criminal Record

[7] She has a criminal record involving similar breach of trust fraud/theft offences. Her first conviction was on May 13, 2004, in Newmarket, where she stole $750,000 from her employer, 407 ETR. She received a two year less a day conditional sentence and two years' probation. She engaged in similar behaviour from 2010 to 2012 when she stole $141,000 from her employer, Sherwood Innovations. Once again she worked in a bookkeeping/accounting role. On September 14, 2012, she pled guilty to fraud over x 3 and fraud under x 2. She was sentenced to an eighteen month conditional sentence to be followed by two years' probation. One of the conditions of probation was she was not to be employed in an accounting or bookkeeping position.

Personal Hardship

[8] I was advised by defence counsel that while Ms. Inshanalli was on bail, her father took ill in Guyana and ultimately died. She was unable to attend Guyana when he became ill and was hospitalized and was also unable to attend his funeral.

Sentencing Principles

Fundamental Purpose of Sentencing

[9] Under s. 718 of the Criminal Code, the fundamental purpose of sentencing is to contribute to respect for the law and the maintenance of a just, peaceful and safe society by imposing a just sanction. Any sanction imposed must be the result of a fair and balanced consideration of the need to:

• Denounce the unlawful conduct;
• Deter the offender, and others, from committing such an offence;
• Separate the offender from society, where necessary;
• Assist in the rehabilitation of the offender;
• Provide reparation for harm done to "victims", or the community; and
• Provide a sense of responsibility in the offender, while acknowledging the harm done to the "victims" and the community.

Proportionality and Aggravating Factors

[10] Section 718.1 of the Criminal Code requires the sentence to be proportionate to the offence and the degree of the offender's responsibility. Under s. 718.2(a)(iii) provides where the accused abused a position of trust in relation to the victim it is deemed to be an aggravating circumstance. Section 718.2(b) to (e) provide sentences should be similar to sentences imposed for similar offenders for similar offences committed in similar circumstances; an offender is not to be deprived of his or her liberty if less restrictive sanctions may be appropriate in the circumstances of the case; and all available sanctions other than imprisonment that are reasonable in the circumstances must be considered for all offenders.

Rejection of Revenge Principle

[11] It should be emphasized that these sentencing principles do not include a principle of revenge. Offenders are not incarcerated for the purpose of establishing an equivalence between the loss of the victims and the sanction imposed by the Court. Rather, the Court is required to recognize the inherent worth and dignity of the offender and, having balanced the principles provided by the Criminal Code, determine a fit sentence in the circumstances of the case. This is our tradition in Canada, a tradition which has a long and respected history both in Canada and other free and democratic societies throughout the world.

General Deterrence in Large-Scale Fraud

[12] However, in cases of major large-scale frauds, general deterrence is the most important sentencing principle. There is also a need to emphasize denunciation in the case of large-scale frauds committed by persons in positions of trust with devastating consequences for their victims. Mitigating factors and rehabilitation become secondary. See R. v. Bogart (2002), 167 C.C.C. (3d) 390 (Ont. C.A.) at paras. 29-31, leave to appeal to S.C.C. refused, [2003] 1 S.C.R. vi; R. v. Dobis (2002), 58 O.R. (3d) 536 (Ont. C.A.) at para. 42; R. v. Drabinsky and Gottlieb, 2011 ONCA 582, at paras. 160, 173, application for leave to appeal refused [2011] S.C.C.A. No. 491.

[13] In R. v. McEachern (1978), 42 C.C.C. (2d) 189 (Ont. C.A.), Howland C.J.O. stated at p. 191, that "the most important principle in sentencing a person who holds a position of trust is that of general deterrence."

[14] In R. v. Bertram and Wood (1990), 40 O.A.C. 317, the Ontario Court of Appeal 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.]

See also Drabinsky, supra, at para. 160.

Sentencing Range for Large-Scale Fraud

[15] In my view, having regard to the circumstances, outlined above, surrounding the commission of Ms. Inshanalli's crime of fraud and Ms. Inshanalli's criminal record for two previous instances of breach of trust, the imposition of a penitentiary sentence is required. Both counsel have submitted that a sentence in the penitentiary is appropriate. Most of the factors discussed above have been held by the Ontario Court of Appeal to require a penitentiary sentence. The Crown argues the appropriate sentence is between 3 and 5 years in the penitentiary. Mr. Sabsay submits a penitentiary sentence of 2 years is the appropriate sentence.

[16] In R. v. Gray (L.V.) et al. (1995), 76 O.A.C. 387 at 398-99, Carthy J.A. again stressed the need for general deterrence in fraud cases:

…there are few crimes where the aspect of deterrence is more significant. It is not a crime of impulse and is of a type that is normally committed by a person who is knowledgeable and should be aware of the consequences. That awareness comes from sentences given to others.

[17] In Dobis, supra, at para. 36, MacPherson J.A. thoroughly reviewed the sentences imposed for large-scale frauds. His review shows that ordinarily these frauds merit a penitentiary sentence in the range of three to six years (see also R. v. McGill, 2016 ONCA 139, at paras. 13-17 (4 years); R. v. Khachatourov and Keznick, 2014 ONCA 464, at para. 39 (4 years); R. v. Witen, 2014 ONCA 694, at paras. 1, 25 (leave to appeal refused [2015] S.C.C.A. No. 287) (3 years); R. v. Maxwell, 2014 ONCA 316, at para. 5 (4 years); R. v. Dwyer, 2013 ONCA 34, at para. 12 (3 ½ years); R. v. Drakes and Brewster, 2009 ONCA 560, at paras. 24-6 (leave to appeal refused, [2009] S.C.C.A. No. 381) (5 years and 4 years)). Cases which fall in the lower part of the range or below the range generally involve significant mitigating circumstances such as a serious medical illness or where full restitution has been made by the offender.

Aggravating Circumstances

[18] The aggravated circumstances of Ms. Inshanalli's criminal conduct are manifestly apparent including:

(1) Ms. Inshanalli has been convicted of breach of trust frauds on two previously occasions, on May 13, 2004 and on September 14, 2012. The amounts of those frauds according to Dr. Gojer's report were $750,000 during her employment with ETR 407 and $141,000 from her employer Sherwood Innovations.

(2) The fraud committed by Ms. Inshanalli was planned and deliberate and not transactions of a spontaneous character or on account of a momentary lapse of judgment.

(3) The total fraud was in the amount of $463,824.42, which qualifies as a large-scale breach of trust fraud.

(4) The fraud was committed over the period from May 1, 2014 until January 20, 2016, when the fraud was discovered by her employers. This was a large scale fraud committed over a significant, extended period of time.

(5) Ms. Inshanalli was in a position of trust and used her position to write herself 134 fraudulent cheques (a statutory aggravating factor pursuant to s. 718.2(a)(iii) of the Code).

(6) She did not stop her criminal behaviour of her own volition, rather, her fraudulent behaviour did not stop until her employer discovered her fraud and terminated her employment.

(7) While this may not have been a sophisticated and complex scheme of stealing from her employer as seen in other large scale frauds, Ms. Inshanalli used her knowledge of the company's accounting practices to effectively prevent her fraud from coming to light for almost two years.

(8) Ms. Inshanalli was on probation from March 14, 2014 to March 14, 2016, which prohibited her from being employed in a bookkeeping or accounting position where she had authority over the money of another person. She commenced her fraudulent activity about two months after her 18 month conditional sentence ended and her probation period commenced.

(9) Ms. Inshanalli's excuse to Dr. Gojer for once again becoming prey to her gambling addiction was because of pressure she felt from her co-workers to attend the Blue Heron Casino, which was a short drive from her employment. In my view, her attendance at this casino knowing of her addiction is an aggravating circumstance.

Mitigating Circumstances

[19] There are mitigating circumstances to be considered in the balance, which include:

(1) Ms. Inshanalli pled guilty to the fraud over charge, which reflects remorse and her acceptance of responsibility for her criminal behaviour. Ms. Inshanalli also addressed the court during her sentencing telling me, while crying, "I'm really sorry for what I did."

(2) Ms. Inshanalli has made $54,000 of restitution, leaving $409,824.42 outstanding; however, it should be noted that the corporation she worked for, WSC Corporation Coppinwood Golf Club, brought an ex parte application for a Mareva Order, which froze her assets in four bank accounts, collectively amounting to $75,500. I was advised by Mr. Sabsay that $54,000 of this amount was released to the victim as partial restitution.

(3) Ms. Inshanalli has a gambling addiction, which she received treatment and counselling from Centre for Addiction and Mental Health after her first conviction, as part of her conditional sentence and probation. She apparently regularly saw a psychiatrist and counsellor from CAMH. After her second conviction she once again was involved in counselling through Addiction Counselling Services for gambling addiction. (See Dr. Gojer's report, Exhibit 3, p 4 and PSR, Exhibit 2, pp. 4-5.)

Limited Mitigation for Gambling Addiction

[20] It is my view that Ms. Inshanalli's gambling addiction does not have the mitigating impact it would otherwise have for a first offender. Ms. Inshanalli received two periods of counselling and treatment for her gambling addiction yet while she was receiving treatment and counselling after her second conviction she was committing this serious breach of trust fraud. In fact, her breach of trust was committed throughout her probationary period.

[21] What further compounds this is her decision to seek employment in a bookkeeping and accounting position knowing her conditional sentence and probation conditions prohibited her from taking such a position. She did not become involved in gambling for approximately six years after her first conviction but commenced gambling again in 2010, which once again led her to steal from her employer. A further aggravating circumstance in this case is her decision to go with her co-workers to the Blue Heron Casino, knowing she had a serious gambling addiction, which had resulted in two previous large-scale breach of trust frauds and once again she succumbed to gambling and defrauding her employer.

[22] In my view the above circumstances greatly reduce any mitigation to be given respecting her addiction to gambling. Dr. Gojer's report does not contain any psychological tests which would support a psychiatric diagnosis of pathological gambling. No evidence was provided to support Ms. Inshanalli's claim she gambled all of the money she defrauded her employer of at the Blue Heron Casino. At its highest Dr. Gojer's diagnosis appears to be based solely on the self-report by Ms. Inshanalli as to her gambling activities.

Victim Impact

[23] The victim of Ms. Inshanalli's fraud did not provide a victim impact statement (VIS) to the Crown, although one was requested. It is frankly not surprising that WSC Corporation Coppinwood Golf Club did not provide a VIS given that prior to the charges being laid by the police, they commenced ex parte civil proceedings, in March 2016, and froze all of Ms. Inshanalli's assets in an attempt to recover some of their losses. It became clear as a result of those proceedings that only a very small portion of restitution would be forthcoming. I was advised by Mr. Sabsay, he will advise the victim's civil counsel that a free standing restitution order for the balance of the loss was part of the expected sentence to be imposed on Ms. Inshanalli. Given the significant amount of restitution remaining, over $400,000, I draw the reasonable inference this loss would have had a deleterious impact on the victim.

Analysis and Sentencing Decision

[24] Ms. Inshanalli very deliberately committed fraud and forgery over an extended period of time, 20 months. Her fraudulent behaviour was deliberate and calculated, knowing she was again stealing to feed her gambling addiction. She did not seek out assistance from her psychiatrist or counsellor and, in fact, committed the fraud while she was undergoing her counselling and treatment. As I have indicated, this is her third conviction for a large-scale fraud involving a serious breach of trust.

[25] As I have indicated above the paramount sentencing principles in a large-scale fraud involving a breach of trust are deterrence and denunciation. In this case specific deterrence is an important sentencing principle that must be addressed by the sentence imposed. Ms. Inshanalli has two prior convictions for large-scale frauds involving a breach of trust where she received conditional sentences. In my view, the previous sentences imposed on Ms. Inshanalli did not have the effect of specifically deterring her from engaging in the identical behaviour bringing her once again into conflict with the law. Her behaviour is further compounded by her breach of a condition of her probation prohibiting her from obtaining employment in an accounting or bookkeeping position.

[26] Further, as indicated in R. v. Drabinsky, supra, at para. 162, the length of the jail sentence not only recognizes the principles of general and specific deterrence, it also is "driven by the need to publically denounce the [accused's] criminal conduct. The length of the sentence is reflective of the appropriate level of denunciation."

[27] This will be Ms. Inshanalli's first sentence involving "real" jail. Taking into account all of the above circumstances, both mitigating and aggravating, it is my view a proportionate sentence to the gravity of the offences and meaningfully linked to the principles of general and specific deterrence and which reflects society's denunciation for large-scale frauds involving serious breaches of trust, requires a penitentiary sentence of three and a half years. It is my view anything less will not properly address those sentencing principles.

Credit for Bail Conditions

[28] Mr. Sabsay submitted I should take into account as a mitigating circumstances the stringent bail conditions Ms. Inshanalli has been subject to for approximately one year, which involved house arrest pursuant to the principles set out in R. v. Downes, [2006] O.J. No. 555 (Ont. C.A.). The Crown argues Ms. Inshanalli's house arrest condition was not particularly onerous given she was permitted out of her residence when she was in the company of her surety, her husband, or anyone her surety approved of. No evidence was led before me as to the impact or prejudice suffered by Ms. Inshanalli as a result of the house arrest provision in her bail, other than to indicate she was unable to travel to Guyana when her father became ill or attend his funeral when he died. No evidence was led that a request was made to the Crown to allow Ms. Inshanalli to travel for either of those purposes.

[29] However, I do take into account, to a lesser degree, the mitigating circumstance of Ms. Inshanalli's stringent bail conditions, which to a large extent were similar to the conditions of a conditional sentence, in determining an appropriate sentence for the breach of probation charge she pled guilty to. As I have indicated already, it is a serious aggravating circumstance that despite a condition of probation prohibiting Ms. Inshanalli from working in an accounting or bookkeeping position she sought out and obtained such employment. If she had not breached this condition the victim would not have suffered the substantial loss they did.

Sentence for Breach of Probation

[30] It is my view this breach of a court order that was designed to prevent Ms. Inshanalli from having any authority over another person's money is quite serious and should be dealt with separately from the fraud itself. The Crown proceeded by way of indictment on this charge as a result of the fraud over charge being on the same information. In my opinion an appropriate sentence for this offence, taking into account the serious nature of the breach, is three months in jail and I am reducing that amount by two months as credit for the stringent bail conditions Ms. Inshanalli was subject to for the past year. This leaves one month in jail, which is to be served consecutive to the three and half years I have imposed on the fraud over. The breach of probation charge should be dealt with separately from the fraud over charge.

Ancillary Orders

[31] In addition, Ms. Inshanalli will be subject to a prohibition order under s. 380.2(1) for 10 years, which prohibits her, anywhere in Canada, from seeking, obtaining or continuing any employment or becoming or being a volunteer in any capacity that involves her having authority over the real property, money or valuable security of another person.

[32] Further, I am making a free-standing restitution order, in favour of WSC Coppinwood Golf Club, in the amount of $409,824.42, pursuant to s. 738(1)(a) of the Criminal Code.

Released: April 7, 2017

Signed: Justice Peter C. West