Court Information
Ontario Court of Justice
Date: June 12, 2017
Brampton Court File Nos.: 13-12774, 13-11230, 14-2751
Parties
Between:
Her Majesty the Queen
— and —
Salvatore Formusa
Before the Court
Justice: Patrice F. Band
Counsel:
- Mr. C. Walsh — counsel for the Public Prosecution Service of Canada ("PPSC")
- Mr. P. Cooper — counsel for the defendant Mr. Formusa
Reasons for Judgment
I. Introduction
[1] Late in the summer of 2013, Mr. Formusa and his co-accused, Richard Avanes and Drago Jankovic, were charged with offences relating to the importation from Panama of a shipment of automotive tire-changing machines in which 50 kg of cocaine had been concealed. The shipment arrived in Halifax on August 10. It was detained and inspected by officers of the Canadian Border Services Agency (CBSA). They found cocaine inside the metal legs of some of the machines and notified the RCMP. The RCMP conducted an investigation that included surveillance, intercepts of Mr. Formusa's cell phone, search warrants of his and Mr. Avanes' residences, seizure and analysis of their Blackberries and a "controlled delivery" of the shipment. The shipment was delivered to a warehouse in Vaughan on Sunday, August 25. Mr. Formusa and Mr. Avanes were arrested at that location while they were in the process of unloading the crates and boxes from the shipping container.
[2] During the trial, Mr. Avanes entered guilty pleas in a different courthouse. I know little about that, except that the parties saw fit to advise me that the resolution included his involvement with the shipment in this case. Later, Mr. Jankovic and Mr. Formusa sought directed verdicts of acquittals on all counts. I granted Mr. Jankovic's application but denied Mr. Formusa's.
[3] Mr. Formusa testified in his own defence. On April 10, 2017, I declared him not guilty of the charges against him, with reasons to follow. These are my reasons. They should be read in conjunction with my reasons relating to the directed verdict application, the admissibility of the "electronic brief," the admissibility of documents pertaining to Mr. Jankovic's travel history, the voluntariness of Mr. Formusa's statement to police and his unsuccessful s. 11(b) Charter application.
[4] While I draw from each of these, I rely most heavily on my reasons concerning the directed verdict applications. They provide a comprehensive review of the facts of the Crown's case. In the course of their final submissions, the parties advised me that my presentation of the facts was correct, with one exception. I adopt those findings for the purposes of these reasons.
II. Issue
[5] At the outset, this trial was relatively complex. It involved three co-accused who were charged with conspiracy and other offences in relation to the importation of a large quantity of cocaine from Panama to Ontario, via Jamaica and Halifax. It also raised difficult evidentiary issues.
[6] At the end, however, the only real remaining issue is whether the Crown has proved beyond a reasonable doubt that Mr. Formusa knew that the shipment contained illegal drugs. Mr. Formusa testified and denied having had such knowledge; rather, he claimed to have been duped or "conned" by one or both of his co-accused. Therefore, the matter boils down to an assessment of Mr. Formusa's credibility and the application of the W.(D.) analytical framework.
III. Position of the Parties
[7] On behalf of the PPSC, Mr. Walsh submits that Mr. Formusa's testimony is incredible and should be rejected in its entirety. The intercepted telephone conversations and other communications show that Mr. Formusa was deceitful with Mr. Jankovic as well as the customs broker. Mr. Formusa also lied to the officer-in-charge about his relationship with Mr. Avanes, his role in the importation of the shipment and his knowledge of its contents (both legitimate and illicit). He adds that Mr. Formusa lied to the court during his testimony – about his finances, his success as a businessman and the timing of his relationship with Mr. Avanes – all in order to distance himself from Mr. Avanes and from the fact that he knew about the contents of the shipment. This, it is submitted, undermines Mr. Formusa's innocent explanation in the face of evidence that, "taken cumulatively, leads inescapably to the conclusion that Mr. Formusa knew about the cocaine in the shipment."
[8] For his part, Mr. Cooper argues that the prosecution's case fails to prove Mr. Formusa's guilt. He also relies on W.(D.), and cautions against shifting the burden of proof to Mr. Formusa by asking whether his evidence "might reasonably true."
IV. Characterization of the Prosecution's Case
[9] The prosecution presented a very strong case. Mr. Formusa personally took care of creating a corporation of which he was the sole shareholder, of placing the order for the machines, of sending monies to pay for them and of retaining and directing a customs broker to see that the shipment was delivered to him.
[10] But the evidence of Mr. Formusa's knowledge about the cocaine is circumstantial. I would not describe it as inescapably or necessarily leading one to conclude that he had the requisite knowledge. There are a number of reasons for this:
Mr. Formusa had a history of engaging in "side businesses" to earn extra money.
Whether in his own name or not, through his lengthy career in the food industry, Mr. Formusa had experience with the importation of commercial goods into Canada.
While he had known Mr. Jankovic for many years (off and on), they were not close.
There is no evidence that Mr. Formusa knew Mr. Avanes prior to June 2013.
Mr. Formusa took no steps to conceal his identity from the vendor or the customs broker.
Until a few days prior to the delivery, Mr. Formusa had arranged to have the shipment delivered to his place of work, where he also resided in a trailer.
Unlike Mr. Avanes, there is no evidence that Mr. Formusa referred to cocaine – explicitly or in code – with his co-accused or anyone else or that he was a party to any such communication.
When advised that the container was being inspected by the CBSA in Halifax, and contrary to his demeanour during his statement to the officer-in-charge, Mr. Formusa does not appear particularly stressed or concerned.
There is no evidence that Mr. Formusa had any connection to the warehouse prior to the day of his arrest.
The Ziploc bag containing traces of powder cocaine (and Mr. Avanes' fingerprints) within a prior shipment of tire-changing machinery at the warehouse was in a closed crate when Mr. Formusa was there on August 25.
Not all of the crates in the shipment at issue contained drugs. But they were numbered. As they unloaded them, there is no evidence that Mr. Formusa and Mr. Avanes organized them for quick access to the drugs.
None of the boxes had been opened when the RCMP took control of the scene.
The evidence of an apparent financial motive was significantly undermined.
While Mr. Formusa controlled the shipment as its importer (albeit indirectly), he had custody of it for only one hour, and that was with Mr. Avanes on August 25.
V. Credibility of Mr. Formusa - Generally
[11] Mr. Formusa is a man in his late 50s with no criminal record. He adamantly denied knowing that the shipment contained illicit drugs. He believes that he was "conned" by one or both of his co-accused, who betrayed him. He acknowledged lying to the officer-in-charge, being deceitful with Mr. Jankovic and appearing deceitful in relation to the phone number of the business shortly before the delivery. As one would expect, he provided explanations for doing so, which I discuss below. He also testified about his history of engaging in "side businesses" to complement the income he derived from his work at the Food Terminal, as well as his considerable (albeit non-liquid) personal net worth.
[12] I cannot say that I believed Mr. Formusa's evidence such that he would be entitled to an acquittal based on prong one of W.(D.). For some of the reasons Mr. Walsh points to, I find Mr. Formusa's credibility to be highly questionable. However, I do not reject it in its entirety. Having viewed it in the context of the prosecution's case, Mr. Formusa's testimony has left me with a reasonable doubt that he knew the shipment contained cocaine. To explain why, I propose to reflect on the credibility concerns that Mr. Walsh pointed to. While I share some of those concerns, I see many of them differently.
VI. Analysis – Mr. Formusa's Credibility
1. Mr. Formusa's Lies to the Officer-in-Charge
[13] Mr. Formusa lied to the officer-in-charge in important ways. He said he had only met Mr. Avanes once or twice. He also denied any knowledge of the contents of the boxes. He explained that, having been arrested and advised of the reasons why, he came to the conclusion that one or both of his co-accused were criminals who had "conned" him. He was also very frightened. So, he decided to try to distance himself from the whole affair.
[14] Mr. Walsh submits that Mr. Formusa did so because he knew all along that the shipment contained drugs and was trying to minimize his exposure. He also argued that if Mr. Formusa truly believed that the shipment was benign, he would have had no reason to accept the officer-in-charge's word that it contained cocaine.
[15] I agree that Mr. Formusa's lies to police are suspicious. But I accept that he was frightened and nervous. That comes across when one watches his statements. I reject the Crown's argument that, if truly innocent, Mr. Formusa should have disbelieved and challenged the officer-in-charge's assertion. While it is true that Mr. Formusa did not hear Mr. Avanes being advised of the reasons for his arrest, I see no reason why a man in his 50s with no criminal record would disbelieve an officer after the rather dramatic take-down to which he had been subjected. Owing to his experience, Mr. Formusa was aware that drugs are sometimes smuggled into Canada within shipments of otherwise legitimate goods. In those circumstances, accepting the officer's word does not seem a great stretch. As a result, I cannot dismiss the notion that Mr. Formusa lied to distance himself from the real culprits as opposed to doing so to conceal his own knowing involvement.
2. Indications that Mr. Formusa was involved in an irregular business
[16] Mr. Walsh points to a number of concerns that can be grouped together as evidence that Mr. Formusa knew he was involved in an irregular business endeavour. Some can also be seen as evidence of deceitfulness in their own right.
[17] Mr. Formusa testified that he met Mr. Jankovic, a truck driver, when he was working at the Food Terminal for an eight year period prior to 2005. The two were reacquainted in 2011, when Mr. Formusa returned to work there for his brother. Between 2011 and 2013, they saw each other several times a week and had coffee. They talked about various things, including family. Also, Mr. Formusa met Mr. Jankovic's son. But Mr. Formusa explained that the relationship was no more than that of acquaintances. In the spring of 2013, Mr. Jankovic proposed the machine importation "side business." He thought Mr. Formusa would be a good partner because of his experience with importation. He told Mr. Formusa there was good profit to be made. Mr. Formusa believed that, as a truck driver who knew many mechanics, Mr. Jankovic was a good potential partner for such a business. He did not want to provide any of his own money and was not asked to. They would share the profit equally, and Mr. Formusa's share would come as a result of his work. Mr. Jankovic would take care of sales. If things went well, they would engage in similar endeavours again.
[18] Mr. Jankovic came to see Mr. Formusa in late May 2013, and the two went to the bank together to provide payment to the vendor in Panama. Mr. Jankovic provided cash to Mr. Formusa twice that day. Mr. Formusa caused the payments to be sent through an account he had opened for that purpose. Only he was a signatory on it.
[19] According to Mr. Formusa, it was not until "shortly after the goods were loaded" that he met Mr. Avanes. Mr. Jankovic introduced him as a third partner at a restaurant. This initially took Mr. Formusa by surprise and made him uneasy. However, he and Mr. Avanes got along well, and discussed their mutual interest in exporting cars to South America. This was another possible "side business" for Mr. Formusa. By the end of the meal, Mr. Formusa felt at ease with Mr. Avanes.
[20] After the shipment was detained for inspection in Halifax, Mr. Avanes told Mr. Formusa that some people were "scared now" and that they were "in a fucking wacko." Mr. Formusa testified that he understood this to refer to potential customers who were unhappy with the delays.
[21] On the wire-taps, as early as August 16, Mr. Formusa was deceitful with Mr. Jankovic by providing him with false or incomplete information as to the date and location of the arrival of the shipment. He appears to do so at the behest of Mr. Avanes, who also told him to redirect the shipment to the warehouse at 100 Bass Pro Mills. Mr. Formusa told Mr. Avanes that he would "play a little stupid" with Mr. Jankovic.
[22] Mr. Formusa testified that he had noticed tension growing between Mr. Avanes and Mr. Jankovic. He agreed that he had, in effect, taken Mr. Avanes' side and had done as he asked. He explained that Mr. Jankovic had been unreliable with him as well, and that his goal was to get the goods to the customers as soon as possible so that profits could be made and reinvested. He has always seen things through.
[23] When Mr. Formusa told the customs broker to redirect the shipment to the warehouse, they asked him for a business name and phone number for that location. He told them "Drago Motors" but did not provide them with a phone number. He then asked Mr. Avanes if he should give them "a B.S. number." He testified that he did so because he did not know of a number to give the broker at that time.
[24] Mr. Walsh argues that it does not make sense that Mr. Formusa would have set himself up as the only signatory on the bank account if Mr. Jankovic was the only one who was responsible for financing. In this regard, I note that the evidence is clear – from bank records and CRA filings – that Mr. Formusa was not in a position to advance thousands of dollars at that time. I believe him that Mr. Jankovic did so. It also seems to me that, based on the evidence, the roles in this endeavour were neither so clear cut nor so sophisticated as to suggest that Mr. Jankovic would necessarily be a signatory to the bank account used to wire money to the vendor, or expect to be.
[25] Mr. Walsh argues that it is illogical that Mr. Formusa would take Mr. Avanes' side after knowing him for such a brief period as compared to his relationship with Mr. Jankovic. I tend to agree. However, I accept that neither of the two were close friends of his. Also, it is apparent that Mr. Jankovic had been in Europe at the relevant time and was not reliably attending to Mr. Formusa's communications. I am also of the view that Mr. Formusa appears to be someone who wants to please others and avoid conflict. That is apparent in some of the intercepted telephone conversations with the customs broker and others. It is also apparent in his statements to the officer-in-charge.
[26] I also agree with Mr. Walsh that the issue of the B.S. number, the "customers" who were "scared" and "wacko" about the inspection – and Mr. Formusa's rather thin explanations concerning them – are problematic. That said, it must be kept in mind that he never tried to conceal or withdraw his contact information from the customs broker. I also note that he did not know Mr. Avanes very well and that there is no evidence that he had any interaction with the people Mr. Avanes was referring to.
[27] Mr. Walsh also points to evidence of electronic communication between Mr. Avanes and Mr. Formusa as early as June 12, 2013 – that is, a few weeks prior to the shipment being loaded. Mr. Formusa's testimony to the contrary, Mr. Walsh submits, was designed to undermine the inference that he knew about the cocaine. How could the cocaine have gotten into the shipment without Mr. Formusa's knowledge if Mr. Avanes was involved prior to the loading of the goods?
[28] Mr. Formusa explained that his memory was not perfect and that he was unsure of certain details. He also added that he had not met Mr. Avanes prior to the loading of the shipment.
[29] I agree that this is suspicious. However, I remind myself that these events took place several years ago, and that at issue is a period of three weeks. I also note that the Crown's argument does not account for the possibility that Mr. Jankovic and Mr. Avanes were complicit with one another at the material time. And, of course, there is no burden on Mr. Formusa to disprove knowledge.
[30] As I consider these issues, I note that Mr. Formusa had a history of engaging in small-scale "side businesses." The "electronic brief" contains evidence that he was involved in the purchase and resale of cars. His uncontradicted testimony also described a deal he made for the purchase and resale of a quantity of couches, which he stored in his brother's warehouse. Those enterprises did not necessarily operate like "conventional" businesses, but I do not doubt that they existed.
3. Mr. Formusa exaggerated his business acumen, finances and experience
[31] Mr. Walsh argues that, by describing business ventures he engaged in with his brothers or alone, Mr. Formusa exaggerated his success as a businessman and that he did so to undermine the potential power of a financial motive for his crimes.
[32] I disagree with Mr. Walsh's characterization of Mr. Formusa's evidence in this regard. Mr. Formusa readily acknowledged (in-chief and in cross-examination) that he had been involved in a number of failures or business difficulties. For instance, a successful business he helped run for 15 years had to be sold because of the difficult real estate market in the early 90s. A grocery store venture in a building he purchased with his brothers in Innisfil closed because it was not successful. He continues to pay debt in relation to that property. Sales in his "side business" involving couches appear to have been lackluster as well.
[33] Mr. Formusa agreed that he was living in a small trailer near his brother's cold storage facility and earning $1,000 per week working there. He was in debt in relation to income property. He had cashed in his life insurance and RRSPs, and had no savings. He told the officer-in-charge that the cash in his pocket was his "life's savings." Yet, he described this as a "little cash flow crisis" and denied being someone who needed money quickly. Mr. Walsh argues that Mr. Formusa's testimony was again designed to undermine any financial motive for his crimes.
[34] While it is true that Mr. Formusa's lifestyle appears to have been very spartan, I note that his testimony as to his joint ownership with his brothers of a number of pieces of valuable real estate points to fairly considerable holdings. That testimony was uncontradicted. I accept that Mr. Formusa was "house poor." This does, in fact, tend to undermine a potential financial motive.
[35] According to Mr. Formusa, the value he added to the partnership with Mr. Jankovic was his experience in importing goods into Canada. However, as Mr. Walsh points out, Mr. Formusa opened his account with the customs brokerage as a new client, and was required to provide references. This, according to Mr. Walsh, undermines Mr. Formusa's testimony.
[36] For decades, Mr. Formusa has been involved in the fruit and vegetable business, including many years at the Food Terminal, which acts as a hub from which imported produce is made available to wholesalers and retailers. Whether he did so in his own name or on behalf of a business entity, I accept that he was experienced in the importation of goods into the country.
VII. Do the Quantity and Value of the Cocaine undermine the "Dupe" Defence?
[37] Mr. Walsh argued that I should apply the inference that a criminal organization would not entrust the importation of a shipment containing such a quantity of valuable drugs to a person who did not have knowledge of its true contents. That inference is available here, as in other importation and trafficking cases. But the strength of that inference varies according to the circumstances of a given case. Those can include the extent to which the accused was in direct control or physical possession of the illicit substance. In view of all the circumstances of this case, the inference is not of sufficient strength to tip the scales in favour of the prosecution.
VIII. Conclusion
[38] This was a very close case and Mr. Walsh's arguments were compelling. But having reviewed Mr. Formusa's testimony in the context of the evidence as a whole, I was not persuaded to reject it. His evidence left me in a state of reasonable doubt as to his knowledge of the true contents of the shipment. As knowledge is an essential element of each of the charges, Mr. Formusa is entitled to an acquittal on all counts.
Released: June 12, 2017
Justice Patrice F. Band
Footnotes
[1] The parties agreed that the cocaine was worth approximately $2,000,000.00.
[2] The address of the warehouse is 100 Bass Pro Mills.
[3] These can be found at: [2015] O.J. No. 5618, [2016] O.J. No. 3235, [2016] O.J. No 3236, [2017] O.J. No. 1757 and [2017] O.J. No. 1758.
[4] Mr. Formusa created the relevant numbered company prior to completing the order for the machine parts.
[5] So did the PPSC, in its written submissions.
[6] R. v. W.(D.) (1991), 63 CCC (3d) 397 (S.C.C.).
[7] See R. v. Rattray, 2007 ONCA 164, [2007] O.J. No. 884 at para. 13 (C.A.).
[8] I accept the Crown's argument, based on the exhibits, that the shipment was loaded on or about July 4.
[9] For a summary of principles applicable to the proof of unlawful possession of illicit drugs or contraband, see: R. v. Ukwuaba, 2015 ONSC 2953, [2015] O.J. No. 2349 at para. 101 (S.C.J.).