Court File and Parties

Court: Ontario Court of Justice

Date: March 2, 2017

Court File No.: Ottawa 12-30469, 13-20007

Between:

Her Majesty the Queen

— AND —

Klaus Nielsen

Before: Justice Heather Perkins-McVey

Reasons for Sentence released on: March 2nd, 2017

Counsel

For the Crown: M. Boyce

For the Federal Crown: R. Sonley and S. Fitzpatrick

For the Defendant, Klaus Nielsen: S. Friedman

Endorsement

Introduction and Charges

[1] This is the decision in the sentencing hearing of Dr. Klaus Nielsen. The accused, Klaus Nielsen, entered pleas of guilt to 11 charges in total. He pled guilty to one count of breach of trust, contrary to section 122 of the Criminal Code in connection with his commercialization of the brucellosis diagnostic test kits which was a patent owned by the Canadian Food Inspection Agency where he had been employed.

[2] This offence spans the time period of September 2004 to October 2010 when he had been dismissed from his position.

[3] He also pled guilty to ten charges arising from the events of October the 24th of 2012. These offences are of a regulatory nature and include offences under the Human Pathogens and Toxins Act, the Export and Import Permits Act, and the Transportation of Dangerous Goods Act.

Facts Regarding the Arrest and Regulatory Offences

[4] These charges stem from the accused's arrest of October the 24th, 2012 when Dr. Nielsen was arrested as he headed to the Ottawa airport en route to China with 17 vials of brucella bacteria packed in a thermos of ice inside a child's lunch bag in his carryon luggage. The brucella bacteria and the disease it causes, brucellosis, can infect people and animals such as sheep, cattle, goats and pigs.

[5] Although Canada eradicated brucellosis in the 1980s, it is still a disease that plagues many developing countries. Transportation of brucella, which is classified as a Risk Group 3 Human Pathogen, in this manner, did not comply with the safety and security requirements as regulated for this class of substances.

[6] As set out in the agreed statement of fact, "He concealed the pathogen in his luggage in a manner that would not have caused an innocent third party to exercise caution with its contents and, in so doing, showed a wanton and reckless disregard for public safety." These actions are also in contravention of the Export and Import Permits Act which controls the export of brucella and other similarly classified substances.

[7] The agreed statement of fact filed as Exhibit 6 is in excess of 70 pages long. I will not begin to quote all of the agreed statement of fact, but it is an exhibit of the public statement of the agreed statement of facts in this matter.

Background: Peace River Biotechnology Company

[8] According to those agreed statement of facts, Dr. Nielsen, along with a Chinese-born female colleague, Wei Ling Yu, who is currently at large, set up a company in 2006 called Peace River Biotechnology Company, hereinafter known as PRBC, to manufacture and sell brucellosis diagnostic kits at a lower cost. The agreed statement of facts also states that Dr. Nielsen met with foreign officials regarding brucellosis and was involved in the development of these brucellosis test kits until 2010 through PRBC, the company set up in China.

[9] These test kits were using intellectual property owned by the CFIA. In fact, Dr. Nielsen had been part of a group who had helped develop the process when he was an employee of the CFIA. Dr. Nielsen and Ms. Yu were, in fact, fired from the CFIA in January 2011 when Diachemix, a company holding commercialization rights for this patent, complained.

Victim Impact and Financial Loss

[10] This company, Diachemix, in their victim impact statement filed as Exhibit 9, alleged they lost significant revenue because they had to drastically cut the price of their own kits from 85 cents to 50 cents in order to remain competitive with the PRBC. Diachemix said they had to reduce the normal 90 percent mark-up on their own test kits. They alleged they lost over $10 million in revenue, but this amount has not been proven, and nor does the Crown seek to do so.

[11] I do accept that Diachemix did suffer a loss of revenue as a result of the competition from PRBC and that Dr. Nielsen and Ms. Yu, through this company, manufactured these low cost kits in China in contravention of the commercial patent. Ironically, however, although Diachemix had to reduce their astronomically high 90 percent mark-up, the net effect was to significantly reduce the cost of these kits overall and allowed some of the poorer developing countries where the threat of brucellosis remains a huge problem, to have greater access to those kits.

[12] The Crown concedes that there is no evidence that Dr. Nielsen received any money or received any profit at all from PRBC. The Crown relies on an unsigned profit-sharing agreement but concedes there is no proof it was ever signed or agreed to by Dr. Nielsen.

Character Evidence and Letters of Support

[13] On behalf of Dr. Nielsen, nearly two dozen letters of support from fellow experts, former colleagues and family members were filed. Those letters indicate that Dr. Nielsen is considered a leading expert in the field of animal brucellosis and indeed had spent most of his career with CFIA working to eliminate the risk and spread of brucella infection.

[14] The letters describe the accused as a dedicated, altruistic and respected scientist who has always put the health of people and animals first. Dr. Nielsen's son provided a letter suggesting that "His intention has always been to help people through science" and that his father believes, "Some scientific knowledge should be made available for the greater good."

[15] As in any case, the court must be wary when accepting character letters from family members, ones who understandably are biased towards an accused. Secondly, the court, in the absence of direct testimony from the accused, cannot accept for their truth, these comments from family members about what was purported to be the motivation of the accused and I will not consider that.

[16] The accused did not testify, however, filed as Exhibit 12 is a letter to the court from the accused. In this letter, Dr. Nielsen does not reveal any specific motivation for his actions.

Pre-Sentence Report and Accused's Statement

[17] In the pre-sentence report filed as Exhibit 8, the accused indicates that there was no criminal intent to his actions, rather, that the offences were committed out of ignorance. He contends he was unaware the information he was sharing consisted of a violation of licence agreements and constituted a breach of trust. He also contends that he thought the biological matter he was travelling with was dead and that, hence, he thought this method of transport was in accordance with the law. He claims that only later did he discover that the sample contained live matter and, thus, should have been transported differently.

[18] In his letter to the court, Dr. Nielsen takes full responsibility for his actions. He said, "I know my actions were wrong even if I justified them to myself at the time." He goes on to say:

"I know my actions have embarrassed the Canadian government and, by extension, my hard-working and dedicated colleagues. I know now that I should have addressed all issues within the procedures and protocols at CFIA. I should not have contravened the internal code of conduct that I was aware of and agreed to follow. I take full responsibility for my actions. I can now see that my conduct was a clear conflict of interest because of my involvement with PRBTC while being employed at CFIA. My actions were not taken to cause embarrassment to CFIA or the Government of Canada. I am aware that the transport regulations govern these bacteria and I know that I chose to disregard them. I was obviously wrong about the viability of the bacteria and, as a result, I could have put others at risk. This was not my intent and I apologize for doing this. I feel a deep regret for causing the Government of Canada embarrassment and I am profoundly sorry for my actions."

Expert Evidence Regarding Viability of Bacteria

[19] In response to Dr. Nielsen's statement that he thought the bacteria was dead, the Crown, Federal Crown, Mr. Sonley, sought to call expert evidence from Dr. Kim Antonation, A-N-T-O-N-A-T-I-O-N, and a Gardiner Hearing was held. Dr. Antonation's expertise in the area of diagnostic bacteriology was conceded. She gave evidence about the processing methods used when dealing with live and dead brucella bacteria. She said there is no need to preserve dead bacteria and that its value is limited only to being used as part of control experiments.

[20] Dr. Antonation examined in detail the photos of the vials seized from Dr. Nielsen that are shown in Exhibit 14. She was involved in triaging the seized vials in Ottawa at the time of Dr. Nielsen's arrest and later examined them at the lab in Winnipeg. She said that there would have been no need to store dead bacteria in the manner shown and nor had she seen dead bacteria stored in that manner.

[21] Dr. Antonation confirmed that there was live bacteria in vials three and six of those seized and that the manner of their packaging and the attempt at preservation with ice suggested that the person packing them knew it was live bacteria and there would have been no need for ice or the manner of the packaging if it had been dead. She, of course, does not know where the vials were prepared or their country of origin or who prepared them, nor can the Crown prove that or are they seeking to prove that. Without question, though, these vials were in possession of the accused.

[22] In cross-examination under questioning, Dr. Antonation said that the bacteria grew so successfully that she doubts any attempt had been made to kill it. She said you would have to be really amateur not to have been able to kill this bacteria.

[23] The Crown argues, given the evidence of Dr. Antonation, that the Crown has established beyond a reasonable doubt that Dr. Nielsen, with his level of knowledge and expertise, would have known that the two vials likely contained live bacteria. The Crown sought to call this expert evidence to rebut the statements made by Dr. Nielsen in the pre-sentence report and in Exhibit 12, his statement to the court. The Crown argues that the defence has not established on balance that Dr. Nielsen thought it was dead as a mitigating factor.

[24] Having considered all of the evidence of Dr. Antonation, I must agree that the accused with his expertise, and given the manner the vials were packaged, and given that they were packed on ice, suggests that Dr. Nielsen should have known it was a live bacteria he was travelling with and taken steps to ensure it was properly transported. That the accused thought the bacteria was not viable will not be considered as a mitigating factor. As the accused stated himself in Exhibit 12, "I am aware that the transport regulations govern these bacteria and I know that I chose to disregard them."

Personal Circumstances of the Accused

[25] Dr. Nielsen is, without doubt, an accomplished scientist who is or was recognized as an expert in the field of animal brucellosis. He is now 72 years of age and suffers from some significant health issues. Dr. Nielsen's medical records are filed at tab 25 of the exhibit before the court of the character letters. Most particularly, as a result of ulcerative colitis, he has had to have a permanent ileostomy which necessitated the removal of his large bowel and rectum. As result, he requires a strictly regimented diet and a clean environment when dealing with his ileostomy and colostomy bag. He also takes three types of blood pressure medication and suffers from osteoarthritis and other knee problems.

[26] His physician, Dr. Rabb, indicates that Dr. Nielsen must maintain a strict routine of diet, exercise and medication and the ability to deal with abnormal problems as soon as possible. A list of his medication and required equipment and supplies required on a weekly basis to care for his ileostomy is set out as Exhibit 16.

[27] In his letter to the court, Dr. Nielsen indicates as a result of being charged he has lost everything. He lost his position, his reputation, the respect of his colleagues. He suffered significant financial loss in earnings and severance. Dr. Nielsen also states that being charged and subject to the media attention has had a severe psychological impact leading to depression over an extended period of time.

[28] Dr. Nielsen is described as somebody for whom any criminal behaviour is completely out of character. Dr. Nielsen has also made reparation to the community through the volunteer work he has done at the Agape Food Bank and Soup Kitchen. Since 2013, Dr. Nielsen has done approximately 1500 hours of community service as indicated by Exhibit 15 and as updated verbally by defence counsel.

[29] As indicated, there is a pre-sentence report which was considered by the court. The pre-sentence report is very positive. The probation officer indicates that there are no identifiable areas where Dr. Nielsen needs treatment or counselling in order to reduce the risk of recidivism or to enhance community safety. Probation, it is said, however, could assist with the monitoring of task-oriented conditions such as community service or house arrest or curfew.

Sentencing Principles and Framework

[30] Both the unusual and somewhat puzzling facts of this case and Dr. Nielsen's otherwise stellar reputation make the determination of what is a fit and appropriate sentence a difficult one. Sentencing is always a delicate case-by-case specific exercise. The individualistic nature of the sentencing process and the myriad of principles to be balanced has been described as being closer to an art than a science.

[31] The case-specific nature of the sentencing inquiry is reflected in the proportionality requirement described as the fundamental principle of sentence codified in section 718.1 of the Criminal Code. Section 718.1 states, and I quote:

[32] The sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.

[33] The gravity of the offence refers to the seriousness of the offence in a general sense as reflected by the potential penalty and the aggravating or mitigating factors which may reflect the risk of harm to the community. In this case, under section 718.2, there is a statutorily determined aggravating factor that the accused abused a position of trust.

[34] In Regina v. Priest, [1996] 30 O.R. (3d) 538 at pages 546 and 547, Justice Rosenberg described the proportionality requirement in this way, and I quote:

"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 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 and careful adherence to the proportionality principle ensures that this offender is not unjustly dealt with for the sake of the common good."

[35] Although proportionality is the fundamental principle of sentencing, it is not the only principle which must be considered. Under section 718.2(b) to (e), parity, totality and restraint must also be considered.

[36] Lastly, in addition to balancing and considering the principles of sentence, sentences must promote one or more of the objectives identified in section 718 of the Criminal Code which are to denounce unlawful conduct, to deter the offender and other persons from committing offences known as general and specific deterrence, to separate offenders from society where necessary and to assist in rehabilitating offenders, to provide reparation for the harm done to victims or the community, and lastly, to promote a sense of responsibility in offenders and acknowledgement of the harm done to the victim and the community. How much emphasis a court places on any one of these objectives will vary in accordance with the nature of the crime and the circumstances of the accused.

Crown's Position

[37] In this matter, the Provincial Crown seeks a three-year penitentiary sentence for the offence of breach of trust contrary to section 122 of the Criminal Code. It should be noted that this offence carries a maximum five-year sentence on conviction. There is no minimum sentence. The Provincial Crown argues that the predominant sentencing principle in a case such as this must be general deterrence and denunciation of the conduct.

[38] The Federal Crown who prosecuted the regulatory offences seeks a two-year penitentiary sentence to be served consecutively to the sentence for breach of trust and relies on the same sentencing principles to be given consideration, given the potential risk of harm by the improper transport of the brucella bacteria.

Defence Position

[39] On behalf of the accused, defence counsel argues that a conditional jail sentence should be imposed given the mitigating factors, which include Dr. Nielsen's otherwise good character, low risk of re-offence, his plea of guilt, savings of court time, and relies on Dr. Nielsen's medical condition which requires strict diet, routine and the need for a particularly sterile environment to allow him to care for his colostomy bag and supplies.

[40] Defence counsel argues that a conditional sentence of the maximum duration of two years less a day, the entirety of which would be under house arrest, would address the principles of general deterrence and denunciation and would advance the required punitive element. He also suggests that Dr. Nielsen be required to do significant community service hours, as he has shown his ability to do so in the past at the Agape Food Bank. He has shown his ability to make reparation to the community.

Issues to be Determined

[41] The issues to be determined by this court are the appropriate length of sentence which is proportionate to the unique facts and the circumstances of the offender. Further, once the length of sentence is determined, I must address whether a conditional sentence of incarceration is available or whether it would be consistent with the fundamental purpose and principles of sentence set out in section 718 to 718.2.

[42] Both the Crown and defence have provided me with authorities to support their respective sentencing positions. There is no case quite like this. There is no case directly on point, nor have I been provided with any case law under the specific regulatory provisions before me.

Statutory Maximums and Regulatory Framework

[43] Under the Export and Import Permits Act, a conviction for an indictable offence carries a fine and/or a maximum jail sentence of ten years. Under section 19(3) of the Act, the court is to consider the nature and value of the exported or transferred goods.

[44] Under section 55 of the Human Pathogens and Toxins Act, which constitutes the majority of the offences before the court, the Act indicates that every person who contravenes subsection 6 and who shows a wanton or reckless disregard for the health or safety of others and, as a result, creates a risk to the health or safety of the public, is guilty of an indictable offence and is liable to a term of imprisonment of not more than five years.

[45] Dr. Nielsen also pled guilty under the Transportation of Dangerous Goods Act which requires a Risk Group 3 pathogen to be stored in a certified container with specific markings. Such markings would signal to an official or baggage handler or anyone dealing with the substance that the contents should be handled with the utmost care.

Nature of Brucellosis

[46] As stated on page 16 of the agreed statement of facts, brucellosis is a disease that primarily affects animals such as cattle, goats, sheep and pigs. It is a bacterial disease that lives in the reproductive system of animals and produces abortions in female animals. The disease can be transmitted from animals to humans through the consumption of meat and dairy products from infected animals. It is also said that veterinarians, employees in the meat industry and people tied to occupational exposure of infected animals may be at risk of contracting the disease.

[47] In this case, all of the regulatory offences involve the attempted transport of the 17 vials found in the carryon luggage of Dr. Nielsen at the time of his arrest on October the 24th, 2012.

Case Law on Breach of Trust

[48] Most of the sentencing decisions provided regarding the breach of trust charge are cases of fraud or theft of large amounts of money. In the case before me, the Crown cannot establish that Dr. Nielsen received any money and nor does it seek to prove any specific loss to Diachemix caused when they had to reduce their unusual high mark-up from 85 cents to 50 cents per unit.

[49] A conviction for breach of trust does not necessarily require proof of a benefit accruing to the offender as stated in Regina v. Lawson, [2001] O.J. No. 1562 at paragraph 41, and I quote:

[50] It ordinarily involves pursuit of a private interest inconsistent with the expectations and profile of the office as defined by the employer.

[51] Accordingly, the Court held that breach of trust is a broken obligation associated with the position that can manifest in economic prejudice to the employer, breach of privacy or breach of duty.

[52] In Regina v. Lawson, the Court held that a term of imprisonment of 16 months to be served conditionally would adequately reflect the principles of denunciation and general deterrence.

Comparative Case Law: Regina v. McCarthy

[53] In Regina v. McCarthy, [2008] O.J. 5365, a decision of the Ontario Superior Court, the accused was charged regarding the public trading of shares, two counts of fraud against Southbridge Capital in respect of a loan in the amount of 1.5 million, and another fraud pertaining to a loan guarantee of $1.5 million also. The accused's motivation in that case was to keep the company, of which he was the president, afloat.

[54] The company made products for the visually impaired. The accused did not receive any personal benefit from his actions and he was not motivated by greed. The accused was 65, had no prior record. He was on bail for 2.5 years without issue. The accused had many reference letters describing his good character. The Crown in that case sought 18 to 30 months jail.

[55] The court held that the central issues were the deterrence of others and whether the facts presented exceptional circumstances that warranted the imposition of a conditional sentence. After weighing the aggravating and mitigating factors, the court imposed a conditional sentence of two years less one day to be followed by a one-year period of probation.

[56] The court found that this sentence met the objectives of general deterrence and denunciation. The reasons listed for imposing the conditional sentence in that case were:

(1) "No personal gain from the fraud;

(2) The accused had made a lifelong commitment to helping the visually impaired;

(3) The crime did not have a horrific effect on the victims;

(4) That the accused played a lesser role than the co-accused; and

(5) The accused had a history of public service and had the support of friends and family and;

(6) The accused was at a low risk to reoffend and posed no risk to the public."

Comparative Case Law: Regina v. Lavigne

[57] I was also provided with the decision of Regina v. Lavigne, [2011] O.J. 2757, ONSC. In that case, the accused was a senator of the Canadian government, appointed by the Canadian government. He was found to have committed fraud and a breach of trust by a public official. The senator had submitted 54 false claims of reimbursement and used his government-paid employee to do work on his personal property. The accused benefitted by approximately $10,000.

[58] The court held that specific deterrence was not at issue because the accused had resigned and there was a lot of public stigma attached to the offence. The offence was found to be motivated by greed. The accused received a six-month jail sentence on the count of fraud and a six-month conditional sentence for breach of trust.

Comparative Case Law: Regina v. S.W.

[59] Given the medical condition of the accused and age of the accused, defence also relies on Regina v. S.W., [1998] O.J. 2867 ONCA. This accused was convicted of three counts of indecent acts that occurred 20 and 30 years before. His conviction appeal was unsuccessful but his nine-month jail sentence was converted on appeal to a conditional sentence because he was 68, had serious medical problems, his wife was dependent upon him, and he was not seen as a danger to the community.

Crown's Comparative Case Law: Regina v. Chan

[60] Both Crown Attorneys, also provided me with their books of authority. In the case of Regina v. Chan, 2012 ABPC 272, [2012] A.J. No. 1023, the accused sold securities when he was not authorized to do so. He did not file the necessary prospectus. The amount sold totalled $1.1 million. He pled guilty to five counts under the Securities Act.

[61] The court found that the most important principles of sentence were denunciation and deterrence followed by rehabilitation. The court at paragraph 33 referred to Regina v. Kreft, 2006 ABPC 258, [2006] 407 A.R. 376 to emphasize that in cases of regulatory offences, the focus is on protecting the public interests, in comparison to individual interests, and the penalties imposed for these offences need to reflect the severity of potential consequences that can flow from the offence, not just the actual harm. The accused was sentenced to jail for three years and ordered to pay restitution. The reasons reflected the amount of the fraud and that his actions were on the high end of the spectrum of moral blameworthiness.

Crown's Comparative Case Law: Regina v. Buffalo Airways Limited

[62] I was also provided with the decision of Regina v. Buffalo Airways Limited, [2014] N.W.T.J. No. 76 which involved three violations of the Transportation of Dangerous Goods regulations. In that case, there was no harm done but there was a potential for serious harm to people and the environment. The lack of safety markings served as another potential risk of harm to those handlers of the goods who would not be aware of the potential dangerousness of the substance. This case refers to other decisions involving the transportation of dangerous goods. In all cases, deterrent fines were imposed.

Crown's Comparative Case Law: Regina v. Idanall Korner Ranch Limited

[63] In Regina v. Idanall Korner Ranch Limited, [2006] S.J. No. 356, the appellants were convicted of eight counts under the Health of Animals Act and the Health of Animals Regulations for the handling of elk and obstructing inspectors after an outbreak of chronic wasting disease. The trial judge imposed a fine of $69,000. The accused appealed.

[64] The Court began by outlining that the Act under which the appellants were charged was a public welfare offence which meant that the principle of deterrence must be emphasized.

Crown's Comparative Case Law: Regina v. Mathur

[65] In Regina v. Mathur, [2010] O.J. No. 1778, the accused was a government employee with the Industrial Research Assistance Program at the National Research Council which provided grants to companies. The accused referred work to two companies with his wife's name which was considered a benefit to him and a contravention against the public confidence. He was convicted of a fraud contrary to section 121(1)(c) of the Criminal Code and breach of trust by a public officer. He was sentenced to six months jail with 100 hours of community service. This sentence was upheld on appeal.

Crown's Comparative Case Law: Regina v. Lall

[66] I was also provided with Regina v. Lall, [2007] O.J. No. 5213, a decision of the Superior Court of Justice. In that case, the accused had defrauded the Government of Canada of $143,000 while working as an auditor for the Canada Revenue Agency. The accused pled guilty to one count of fraud and one count of breach of trust. The Crown sought four years; the accused sought a conditional sentence of six to nine months.

[67] The court said that general deterrence required a jail sentence of 18 months as the breach of trust was sophisticated, well-planned and benefitted the accused. The court held that a conditional sentence would be inconsistent with the purposes and principles of sentence.

Crown's Comparative Case Law: Regina v. Coffin

[68] I also note that in Regina v. Coffin which is a case arising from the sponsorship scandal where $1.5 million was misappropriated, in that case, it was found that the accused's actions undermined the confidence in the Canadian government, and the Quebec Court of Appeal upheld a conviction of 18 months.

Analysis of Case Law

[69] As previously indicated, although each of the cases provided by both the Crown and defence are helpful in their statements of the principles of sentence and how courts have considered generally these types of offences, there is no case factually on point. I do accept from the case law provided that in cases involving a breach of trust against the government and the breach of regulatory offences meant to protect the public welfare, that general deterrence and denunciation must be the predominant sentencing principle reflected in any sentence imposed.

Mitigating Factors

[70] In determining the appropriate sentence, I take into account the following mitigation factors in this case before me. The accused comes before the court with no prior criminal record. The accused has entered pleas of guilt and demonstrated high levels of remorse. This plea of guilt is particularly mitigating given the complexity of the matter and given the time and resources it would have taken had this matter proceeded to trial.

[71] The accused takes responsibility for his actions and expresses remorse for the pain inflicted on his family, the effect his actions have had on colleagues at the CFIA, and truly regrets any embarrassment caused to the Government of Canada.

[72] The accused is now 72. He has been married for 51 years, he has two adult children and grandchildren who clearly support and love him. The accused is highly educated, a world renowned scientist in the area of the brucella bacteria. He has a PhD from the University of Glasgow and has worked to eradicate brucellosis around the world.

[73] The accused has always been employed until his dismissal from CFIA as a result of an internal investigation and these charges. His dismissal has had a significant effect on him.

[74] The accused has no identifiable drug or alcohol issues. There is no evidence that the accused had any financial gain, either directly or indirectly. The accused is not shown as having any financial interests in the company and nor did he have any legal entitlement to funds from that company.

[75] The accused has lost everything as a result of these charges and convictions, lost his personal and professional reputation. The accused is otherwise a law-abiding citizen. Any criminal behaviour is completely out of character. Collateral sources describe him as honest, considerate and the sort of person you can trust completely.

[76] By all accounts, the risk of recidivism is very low. The accused is seen as posing no risk to the community and clearly has been specifically deterred.

[77] The accused has done significant volunteer work and as indicated through documentation and the update of the counsel, he has done approximately 1500 hours of volunteer work at the food bank and soup kitchen and is seen by that organization as a trusted and valuable source of support to that agency.

[78] The accused has provided 25 letters which describe the accused in favourable terms in all aspects of his life. The pre-sentence report is very positive. There are no identifiable areas of treatment that are required to either reduce the risk of recidivism or enhance community safety.

[79] The accused has provided a letter from his doctor, Dr. Rabb, outlining a number of significant medical issues he suffers from as a result of the ulcerative colitis, which caused him to have a permanent ileostomy and a total proctocolectomy which is the removal of large bowel and rectum. As a result, he is to follow a strict diet and medication regime. He has back pain due to osteoarthritis, has had knee replacements and may require further surgery. The doctor states that the accused's quality of life requires a strict routine and a very restricted diet, medication and access to medical care and treatment.

Aggravating Factors

[80] There are also a number of aggravating factors:

(1) Under section 718, a breach of trust is statutorily deemed to be an aggravating factor on sentence;

(2) The duration of the breach of trust must also be an aggravating factor. The breach of trust in this case went on for a period of approximately five years. There are emails in the agreed statement of facts at paragraph 89(b) that support evidence that discussions regarding this scheme began in December 2005 and continued until October 2012 when he was dismissed. Even after an internal investigation and his dismissal, he continued his involvement with this competitor test kit company until he was stopped and arrested in 2012 with the vials of brucellosis bacteria in the thermos bag packed with ice in his carryon luggage;

(3) There was a degree of planning and sophistication to these acts. The accused used code words and language to continue the deception in his emails. The motive was to promote the use of Chinese test kits which would have had the effect of diverting customers away from using the Canadian product. Both Dr. Nielsen and the co-accused used government property to start their own business. As a public servant, he was entrusted with advancing the public good. His acts of working with the competitor to the Canadian corporation supported the breach of trust. At page 20, paragraph 6 of the agreed statement of fact, there is evidence that seven shipments were made from September 2005 to June 2010 of materials belonging to CFIA being sent to China. There is also evidence at paragraph 40 of the agreed statement of facts being that PRBTC test kits were being purchased using CFIA funds, costing $4,470;

(4) Dr. Nielsen had connections to the international community which he gained as a result of his reputation as a leading scientist. There is evidence that he utilized those contacts and involved himself in what could be seen as facilitating the development of international contracts for this competitor company. (See paragraph 59, email of July 2nd, 2011) There are emails from Dr. Nielsen in the agreed statement of facts which clearly show that he was at least somewhat involved in the business aspects of this competitor company and that he took steps to facilitate the marketing of test kits. Examples are at paragraph 60(a), paragraph 61, paragraph 71 and 72 of the agreed statement of facts;

(5) I accept that Ms. Yu was the driving force of the business. It was she who provided the names and locations of where new contracts could be formulated, but Dr. Nielsen was the brucellosis expert and his knowledge and contacts were important and necessary to ensure the success of this competitor corporation;

(6) The accused had signed a confidentiality agreement regarding the production of the antigen. This was not contained in the patent. I'm referring to paragraph 83 of the agreed statement of facts. This was a highly guarded trade secret that people would have paid for. His utilization of that information considered to be confidential for use in a commercial, competitive business, increases the moral blameworthiness of this accused;

(7) Further, as a result of the accused and Ms. Yu's actions, it may be perceived that working with CFIA comes with a risk, that Canada cannot protect their international property. This is supported from the victim impact statement of Mr. Combs from Diachemix and paragraph 81 of the agreed statement of fact that this American company who held the commercial rights of the Canadian patent wouldn't do business with CFIA again. Dr. Nielsen's actions shook the confidence of those international relationships;

(8) The accused also pled guilty to a number of regulatory offences. These regulations are enacted to protect the public welfare. The offence sections and the penalties must reflect the potential harm from a breach of those acts. The potential harm from this bacteria are set out in Exhibit 3 and Exhibit 3(a).

Nature and Risk of Brucellosis

[81] This is a highly contagious zoonosis which particularly affects cows but has the potential of being destructive to humans. It is a disease in humans that can be difficult to diagnose and often responds poorly to antibiotics. Often, extreme psychosis and depression can occur.

[82] Given the manner of transport in the thermos inside a lunchbox without proper labels, baggage handlers, airline personnel and other passengers were at potential risk given the lack of labelling. If somebody had been diagnosed, it might have been difficult to determine what ailment they were suffering from. Without question, there would have been significant risk, which is why there are strict regulations when dealing with this type of substance.

Continued Involvement After Dismissal

[83] Another factor is that the accused was terminated from CFIA January the 12th of 2011 as a result of an internal investigation regarding conflict of interest and involvement with this competitor corporation, yet despite this dismissal, he is found 22 months later on October the 24th, 2012 with 17 vials, two of which were found to contain live virus.

[84] I agree that we have no evidence of the source or origin of that virus, but the very fact of it being in his possession 22 months after leaving CFIA and he was about to board a flight to China where the competitor company was found, leads to the conclusion that he had it in his possession for the purposes of continuing to work and further the interests of that corporation. Although there is no evidence of him gaining anything financially from the corporation, there was a potential for same. His actions of October the 24th, 2012 suggest he had not abandoned that opportunity as he was clearly embarking on that flight in furtherance of that business.

[85] Given the expert evidence of Dr. Antonation, I accept the virus was packed, although negligently and improperly, it was packed in a way meant to preserve a viable bacteria. There would have been no purpose in preserving a dead bacteria in ice or using the type of packaging shown in the exhibit. The accused ought to have known and taken steps to ensure the vials were transported in accordance with the regulations and ought to have taken steps to inform himself whether or not he was transporting a live or dead bacteria.

Conclusion on Sentencing Principles

[86] In conclusion, this has been a very challenging sentencing hearing. There are many unique facts which takes this case out of the ordinary. It is also a tragic case of an extraordinary man, a scientist who made decisions in his conduct that breached the trust of his employer of 30 years and acted contrary to the public good. He has fallen far from grace.

[87] There is no evidence he received any financial gain either directly or indirectly but that is not a required element. There are, however, acts of dishonesty towards his employer, such as his use of code names and coded language, which suggests a degree of planning to carry out the subterfuge over the five-year period. This, of course, adds to his degree of moral blameworthiness.

[88] Dr. Nielsen was not involved in any attempted bribery of international officials, although there is evidence that Ms. Yu may have been, and I do not consider that as an aggravating fact in any way against Dr. Nielsen. Ms. Yu, of course, remains at large, and although there is a warrant in the first instance against her, she has not been committed of any criminal offence and remains with the presumption of innocence.

Accused's Background and Accomplishments

[89] Dr. Nielsen's education, personal and professional background, is exemplary. He holds a PhD from the University of Glasgow and has spent much of his career studying and working to eradicate the brucella disease or the brucellosis disease. He is the author of many publications in relation to the brucellosis disease. He is the author of books and journal articles. He has given over 308 presentations to learning societies and has written 208 manuscripts to trade journals.

[90] He is a 72-year-old man with significant health issues including a permanent ileostomy bag. He has been married for over 50 years and is a father and grandfather. He gives back to his community, but he is also a man who has committed a breach of trust and a man who has put others at serious potential risk through his recklessness and the improper packaging and transport of the brucella bacteria vials without the necessary permits and identification or required packaging. He admits if the flight had been delayed or redirected or if the hand luggage had been handled or disturbed by others, that there was a potential risk of harm.

Nature of the Offence

[91] It must be stated, however, that despite initial media sensation, I do not see this as a bioterrorism offence. Nor do I find that Dr. Nielsen intentionally put the public at risk.

[92] His plea represents his recklessness, his non-compliance with the required precautions designed to protect the health and safety of the public against the risks posed by that of the activity.

[93] This is a case of a man who had been dismissed from his employment. He carried the vials, I find, for the purposes of carrying on the business, not for any bioterrorism or to intentionally put others at risk, but certainly through Dr. Nielsen's expertise, he should have known better.

Sentencing Principles for Public Welfare Offences

[94] Having regard to the legislative objective of the Human Pathogens and Toxins Act and the objectives of the Export and Import Permits Act, which are to protect the public health and safety, general deterrence and denunciation must be the predominant sentencing principle which determines the matter.

[95] The Ontario Court of Appeal addresses deterrence and public welfare offences in Regina v. Cotton Felts Limited, [1982] 2 C.C.C. (3d) 287 noting that deterrence is:

"....particularly applicable to public welfare offences where it is essential for the proper functioning of our society for citizens at large to expect that basic rules are established and particularly enforced to protect the physical, economic and social welfare of the public."

[96] In determining this case, I am guided by the decision of Regina v. Yadegari, [2011] ONCA 287. This accused was convicted of nine counts of attempting to export two pressure transducers to Iran which were suitable for use in commercial applications and in the processing of uranium enrichment. One count – he was convicted of one count under the Export/Import Act for the transfer of restricted goods without a permit. That accused had no prior record. He was 39 years of age with a young son. The accused received a 20-month jail sentence. This sentence was upheld by the Ontario Court of Appeal who restated the need for deterrence in dealing with public welfare offences.

[97] Cases involving breach of trust also direct the principles of general deterrence and denunciation be given predominance. The facts of this case and the statutory legislative objective involved, Dr. Nielsen's five-year period during which he worked with others to develop competitor test kits in China while continuing his role as a public servant in a position of trust, are all factors.

[98] I also take into account the gravity of the offence and the potential public risk and agree that denunciation must be given significant weight in addition to general deterrence.

[99] Dr. Nielsen's personal circumstances and lack of criminal record and low risk of re-offence temper or balance that weight, and I am mindful of the Supreme Court of Canada in Regina v. Nasogaluak at paragraphs 41 and 42 wherein the court pronounced the necessity of proportionality as a pillar of retaining a constitutional dimension which serves as a limiting or restraining function in sentence.

Sentencing Positions

[100] In this matter, the Crown urges a five-year sentence and the defence seeks a conditional sentence of two years less a day plus potential for probation. Both counsel argue their proposed sentence addresses general deterrence and denunciation.

Decision on Conditional Sentence

[101] I have carefully considered and – I will candidly admit – agonized over whether to impose a conditional sentence. I recognize that jail will be very difficult for Dr. Nielsen, difficult because of his medical needs and difficult because of his age and personal background. That being said, albeit with a heavy heart, I have decided against ordering a conditional sentence because I am not satisfied that a sentence, a conditional sentence, would be consistent with the fundamental purpose and principles of sentence as required by section 742.1 of the Criminal Code.

[102] While I fully accept that conditional sentences can satisfy the sentencing principles of denunciation and deterrence, the suitability of such a disposition must be assessed bearing in mind the particular facts of each case. As noted in Regina v. Proulx – and I have read this decision more than once over the past few weeks – in Regina v. Proulx, it is noted that while setting onerous conditions including restrictions of liberty and extending the duration of the sentence to make it longer than a jail sentence that would normally be imposed will typically satisfy the principles of denunciation and deterrence, I have not been persuaded that allowing Dr. Nielsen to serve his sentence in the community, even under the strictest conditions, can achieve what is required under the law for the two sets of charges before the court.

[103] As stated, this is not a decision made lightly and not without concern for the risks associated with sending this man to jail with the health issues he suffers where he will associate with offenders who may be convicted of serious violent offences.

Sentence Imposed

[104] In the final analysis, I conclude, bearing in mind the mitigating factors and the aggravating factors previously set out, I further have considered the principle of totality, and when I consider all of those principles of sentence in an attempt to balance and determine a fair sentence, I have decided the sentence that will be imposed today is a total sentence of two years.

[105] There will be a two-year sentence on the criminal breach of trust contrary to section 122. I will grant the Crown's request that there is an order under section 743.21 prohibiting contact with the co-accused who remains at large, Ms. Wei Ling Yu, while Dr. Nielsen is in custody.

[106] There will be a two-year concurrent jail sentence on all of the human pathogen counts except I believe count maybe six or seven – Madam Clerk, you are going to have to advise me – which is the count of failing to inform the Minister.

CLERK REGISTRAR: It will be count six, Your Honour.

THE COURT: Count six, count six, as I understand it, is a section under which the maximum jail sentence is one of three months, and on that count I impose a three-month concurrent sentence. Under the Export and Import Permits Act and the Transportation of Dangerous Goods Act, there will be a two-year concurrent jail sentence. So the total jail sentence is one of two years.

Recommendation to Correctional Services

[107] In addition, Madam Clerk, I am going to make a recommendation to Correctional Services of Canada under the following – with the following statement: I make a strong recommendation that correctional authorities take the utmost care to ensure that the accused's medical needs are met and he is referred for medical care and supervision.

Victim Fine Surcharge

[108] As it pertains to the victim fine surcharges, I didn't hear submissions. They all pre-date the amendments to the Criminal Code. Any submissions to make?

MR. FRIEDMAN: I would ask that Your Honour waive the victim fine surcharge given Dr. Nielsen's dismissal from his employment and his lack of earning capacity.

MR. BOYCE: I take no position, Your Honour.

MR. FITZPATRICK: No position, Your Honour.

THE COURT:

[109] I am going to waive all of the victim fine surcharges in this matter. The only thing I can say to you, Dr. Nielsen, is from today you put this behind you, and I am sure that the correctional authorities will review my decision carefully in determining how you should be classified and dealt with. Thank you, counsel, all counsel, for your time consideration in this matter. I appreciated receiving the voluminous case books and other materials and I have attempted to consider them in my decision today. Thank you.

Released: March 2, 2017

Signed: Justice Heather Perkins-McVey