Court Information
Ontario Court of Justice
Date: October 12, 2017
Court File No.: 16-A8964
Parties
Between:
Her Majesty the Queen
— And —
Christina O'Shea
Before: Justice Marlyse Dumel
Heard on: June 6-8, 2017
Trial Decision: June 28, 2017
Reasons for Sentencing Released: October 12, 2017
Counsel
Mr. H. Shouldice — counsel for the Crown
Mr. M. Rowe — counsel for the defendant, Christina O'Shea
Decision
DUMEL J.:
Introduction
[1] On June 28, 2017, after a three day trial, I found Ms. Christina O'Shea (Ms. O'Shea) guilty of fraud pursuant to section 380(1)(a) of the Criminal Code. She defrauded her employer Branham Group and/or B.G. Labs of nearly $200,000 (CDN) while working as the Chief Financial Officer for the company.
Summary of the Facts
[2] Ms. O'Shea was hired by Branham Group's CEO on November 17, 2008. She was relieved from her duties in November 2010. As the Chief Financial Officer, she had signing authority, was responsible for managing cash flow, managing the relationship with the bank HSBC, and report on any issue relating to finance.
[3] Between December 8, 2009 and August 9, 2010, Ms. O'Shea wrote 16 fraudulent cheques to herself totalling $83,322.68 and 38 fraudulent cheques to her spouse Ms. Kim Haybrecker totalling $110,169.90. The cheques totalling $193,492.58, were drawn from the Branham Group account and were deposited in an account jointly held by Ms. O'Shea and Ms. Haybrecker.
[4] Branham had a review system in place to verify expenses. Mr. Gudbranson, Branham's CEO, would meet with Ms. O'Shea every few weeks and review cheques she had written. He would initial the cheque to indicate that he had reviewed it. The fraudulent cheques did not have his initials nor did he recognize them.
[5] His evidence was that his review of the cheque focused on who the cheque was written to and for what. He was not focused on whether the cheques were in numerical sequence or not and did not notice gaps in numerical sequence when reviewing them.
[6] Under Ms. O'Shea's watch, Branham Group was unable to make payroll for the first time in its history and source deductions fell into arrears resulting in a lien put on the business account at HSBC.
Who is Christina O'Shea?
[7] Ms. O'Shea is a 47 year old American with permanent resident status. She holds two degrees; a bachelor's degree in psychology and a bachelor's degree in business. She is currently supported by the Ontario Disability Support Program (ODSP).
[8] She was born with hydrocephalus and required a procedure to reduce the build-up of fluids in her brain. At age 13, she was sexually assaulted by a soccer coach. She was later assaulted for her sexual orientation, requiring hospitalization.
[9] Sometime in 2000-2001 she met her wife online and moved to Canada to be with her and a son from a previous relationship. Her wife was ill so she provided for the family on her own, working very long days. At some point in 2007, she became involved with another woman because she felt that she and her wife were growing apart. She was also involved in a near fatal car accident that resulted in a concussion in 2010. She reports, it is around that time that her life began to unravel.
[10] In 2012, she was admitted to a crisis bed at Rothwell Heights Residence after she was found wandering the street. She was eventually diagnosed with bi-polar disorder, major depression, hydrocephalus and celiac disease.
[11] On September 10, 2012, she was convicted for fraud over for which she received a 6 month conditional sentence. The timeframe for this fraud is August to October 2011. She defrauded her then employer of $68,000 of which $22,000 were recovered.
[12] It is unclear what she did with the money in this case and no restitution has been made.
Impact on the Victims
[13] Donna Leith-Gudbranson and Wayne Gudbranson's written statements were filed with the Court and they each addressed the Court.
[14] Ms. Leith-Gudbranson shared how the fraud impacted her family, her marriage, their finances and each of them individually. She spoke about having to use money from her mother's estate to pay for increasingly large credit card bills as a result of the Branham Group accounts being empty.
[15] She also told the Court that her husband shared thoughts of suicide with her. Their credit score is the lowest ever and she indicates that at 57, while friends are retiring and travelling, she's looking for work to pay the bills. They struggle monthly to make ends meet and to put their children through university.
[16] Mr. Gudbranson indicated that he felt like committing suicide and that one day on his way home from Toronto he aimed for an overpass cement wall and turned the car away in the last seconds.
[17] He has felt shame, is no longer the jovial trusting person he used to be. He now suffers from vertigo, brought on by extreme stress.
[18] The financial repercussions of the theft were far-reaching and they continue to keep digging themselves out of the hole.
Crown Position
[20] The Crown submits this is a large scale breach of trust and that deterrence and denunciation are the paramount principles. The Crown seeks a period of custody of two years and a stand-alone restitution order in the amount of $100,000.
Defence Position
[21] Defence counsel submits this conviction should be treated as a first conviction, that a conditional sentence of 18 – 22 months is appropriate in the circumstances and that no restitution order should be granted. He agrees denunciation and deterrence are paramount and adds that a conditional sentence can be crafted to address these two sentencing principles and urges the Court to also consider rehabilitation and Ms. O'Shea's particular circumstances. These includes her health challenges, the fact that she may be facing immigration consequences and the fact that Ottawa Police was investigating this fraud in 2011 and did not lay charges until 2016. He argues the passage of time affected her ability to defend herself. Finally, he submits this should be treated as a first conviction as it pre-dates the 2011 conviction.
Analysis
[22] Section 742.1 of the Criminal Code was amended in 2012 barring a conditional sentence for frauds over $5,000. The conviction in this case pre-dates the amendments such that a conditional sentence is an available disposition.
[24] In support of its position the Crown relies on the Ontario Court of Appeal decisions in R. v. Dobis, 58 O.R. (3d) 536, R. v. Suhr, 2002 O.J. No. 4315, and R. v. Silva, 2015 ONCA 301.
[25] In Dobis, the Crown appealed the imposition of a conditional sentence for a large scale fraud involving over $2,000,000. The fraud was committed by a senior employee of a mid-size family company. He pled guilty. The trial judge imposed a conditional sentence of two years less a day and 18 months' probation. The Crown sought the imposition of a penitentiary term or in the alternative a variation of the conditional sentence to a custodial sentence.
[26] The Court reviewed a number of cases and found that fraud cases where a reformatory sentence was upheld had significant mitigating or differentiating factors that weren't present in Dobis.
[27] The Court found there is a real need to emphasize deterrence and denunciation in the case of large scale frauds committed by persons in trust with devastating consequences for their victims.
[28] The Ontario Court of Appeal found that a three year sentence was the appropriate disposition in that case.
[29] In Suhr, a Bell employee entered a guilty plea to a $100,000 fraud. He appealed his sentence; six months imprisonment followed by 18 months' probation. The Ontario Court of Appeal found no error in the trial judge's conclusion that denunciation and deterrence would not significantly be addressed by a conditional sentence.
[30] In Silva, the Ontario Court of Appeal upheld a 10 month custodial sentence in the case of a $300,000 fraud. The appellant defrauded her employer over a period of 14 months, she reported the fraud and pled guilty. The Court found the sentence imposed very lenient and rejected the appellant's argument that her circumstances warranted the imposition of a conditional sentence.
[31] The binding cases relied on by defence are R. v. Gibb, 2014 ONSC 5316, R. v. Gasparetto, and R. v. Montoya, 2015 ONCA 786.
[32] In Gibb, the Court imposed a conditional sentence on two offenders who defrauded a couple of $100,000. One of the two offenders, Grigorovsky, was friends with the couple and he introduced the other offender, Gibb, to Mr. & Mrs. Puglias. The impact of the fraud was significant on the Puglias. They were of limited means and on the verge of retirement and found themselves having to start saving for retirement again in light of the loss. Mr. Puglias also suffered from sleep loss, nightmares and considered suicide. The offenders were convicted after trial.
[33] The Crown sought a sentence of three to four years. Counsel for Gibb sought a sentence of six to 12 months and counsel for Grigorovsky sought a conditional sentence in the range of 18 months to two years less a day.
[34] At paragraph 51, the Court considered the availability of a conditional sentence for offences where the paramount sentencing objectives are denunciation and deterrence. Citing R. v. Proulx, 2000 SCC 5 at paras 99-100, the Court finds that a conditional sentence can achieve the principles of denunciation and deterrence as effectively as incarceration.
[35] The Court, in Gibb, found that the imposition of a conditional sentence with strict terms was appropriate in part because the amount of the fraud in that case did not amount to a large-scale fraud.
[36] In Gasparetto, the offender entered a guilty plea to one count of fraud over $5,000. She defrauded two business associates of $190,500. The Court found that one of the victims was a vulnerable victim and the fraud jeopardized his retirement. A section 21 report was ordered and included a provisional diagnosis of panic disorder and obsessive compulsive disorder.
[37] On the sentencing date, the offender had begun to participate in a weekly counselling program and had only completed a few sessions.
[38] The Court imposed a conditional sentence in order to allow the offender to keep her job and to continue counselling because discontinuing her counselling at such an early stage could have a detrimental effect on her emotional state.
[39] In support of his argument that a restitution order should not be granted, defence counsel relies on the Court of Appeal's decision in Montoya. This was a sentence appeal in which the Appellant challenged the restitution portion of the sentence on the basis that the trial judge did not consider her ability to pay contrary to decisions of the Court. The appeal was dismissed.
[40] In this case, I find that neither a suspended sentence nor a penitentiary sentence are appropriate. I am satisfied that a sentence of two years or less is appropriate and that the sentencing principles set out in section 718 to 718.2 can be met by such a sentence.
[41] The question then becomes what is the appropriate sentence?
[42] The principles of denunciation and deterrence are paramount in cases of large-scale frauds such as this one. See Dobis supra, Suhr supra and Silva supra.
[43] At para 51 of Gibb supra, the Court considers the availability of a conditional sentence for offences for which denunciation and deterrence are paramount:
[51] As to the availability of a conditional sentence for offences where the paramount sentencing objectives are denunciation or deterrence, Iacobucci J. made reference to the comments of Lamer C. J. in R. v. Proulx, 2000 SCC 5, at paras. 99-100, [2000] 1 S.C.R. 61, where he described how the conditional sentence incorporates traditionally punitive goals of sentencing while also providing an opportunity to further the goals of restorative justice:
99 The conditional sentence facilitates the achievement of both of Parliament's objectives. It affords the sentencing judge the opportunity to craft a sentence with appropriate conditions that can lead to the rehabilitation of the offender, reparations to the community, and the promotion of a sense of responsibility in ways that jail cannot. However, it is also a punitive sanction. Indeed, it is the punitive aspect of a conditional sentence that distinguishes it from probation. As discussed above, it was not Parliament's intention that offenders who would otherwise have gone to jail for up to two years less a day now be given probation or some equivalent thereof.
100 Thus, a conditional sentence can achieve both punitive and restorative objectives. To the extent that both punitive and restorative objectives can be achieved in a given case, a conditional sentence is likely a better sanction than incarceration. Where the need for punishment is particularly pressing, and there is little opportunity to achieve any restorative objectives, incarceration will likely be the more attractive sanction. However, even where restorative objectives cannot be readily satisfied, a conditional sentence will be preferable to incarceration in cases where a conditional sentence can achieve the objectives of denunciation and deterrence as effectively as incarceration. This follows from the principle of restraint in s. 718.2(d) and (e), which militates in favour of alternatives to incarceration where appropriate in the circumstances.
[44] In Dobis supra the Court finds that a conditional sentence is available for a large scale fraud and considers when a custodial sentence will be appropriate at paras 50-54:
[50] However, it is also clear that certain offences will usually lead to custodial sentences. As expressed by Lamer C.J.C. in Proulx, at p. 117 S.C.R., p. 494 C.C.C.:
[T]here may be circumstances in which the need for deterrence will warrant incarceration. This will depend in part on whether the offence is one in which the effects of incarceration are likely to have a real deterrent effect . . .
[51] This court has said repeatedly that general deterrence is central to the sentencing process in cases involving large-scale frauds with serious consequences for the victims: see McEachern, Bertram, Gray and Holden, supra. Importantly, the court has said the same thing since the introduction of the conditional sentencing regime. Conditional sentences have been rejected in large-scale fraud cases such as Pierce, supra, and Ruhland, supra, and commented on adversely in the leading Ontario case dealing with conditional sentences, R. v. Wismayer (1997), 33 O.R. (3d) 225, 115 C.C.C. (3d) 18 (C.A.).
[52] In Pierce, Finlayson J.A. observed, at p. 337 O.R., p. 40 C.C.C.:
I would . . . refuse the application to permit the appellant to serve the sentence in the community. The abuse of a position of trust or authority in relation to a victim is an express aggravating circumstance set out in the sentencing guidelines under s. 718.2. This factor has traditionally drawn a severe custodial term even with first offenders.
(Emphasis added)
[53] In Wismayer, Rosenberg J.A. said, at p. 243 O.R., p. 38 C.C.C.:
General deterrence, as the principal objective animating the refusal to impose a conditional sentence, should be reserved for those offences that are likely to be affected by a general deterrent effect. Large-scale, well-planned fraud by persons in positions of trust, such as the accused in R. v. Pierce, would seem to be one of those offences.
(Emphasis added)
[54] The respondent abused a position of trust in relation to a victim, his employer. He committed a large-scale well-planned fraud. Moreover, there are none of the extreme personal mitigating circumstances that were central to the decisions to impose conditional sentences in two large-scale fraud cases, Underys, supra ("the many mitigating circumstances of the offender": para. 4), and Bunn, supra ("The respondent was the sole provider and caregiver for both his wife, who suffered from multiple sclerosis and had been confined to a wheelchair for years, and their teenage daughter": p. 198 S.C.R., p. 517 C.C.C.). Accordingly, the imposition of a conditional sentence in the circumstances of this case was also manifestly unfit.
[45] Sentencing is an individualized process that involves a delicate balancing of the various sentencing principles and the offender before the Court.
[46] In this case there are a number of aggravating factors:
i. This was a breach of trust;
ii. This was a large-scale fraud totalling $193,492.58;
iii. This was not a single impulsive act but repeated acts over two years involving numerous fraudulent cheques;
iv. The impact on the victims was significant and devastating.
[47] The mitigating factors:
i. She is a first-time offender (at the time of the offence she had no convictions)
[48] Ms. O'Shea is an educated woman who holds two university degrees. Mention was made in the PSR of her desire to seek further training or education. The PSR speaks of the many ways in which she contributes through volunteer work at the assisted living facility where she lives.
[49] There has been no restitution to date.
[50] Ms. O'Shea suffers from numerous medical conditions; she suffers from hydrocephalus and celiac disease and has been diagnosed with bipolar disorder and major depression. I note that she has been living in a structured environment for the past five years and is stable. A period of incarceration would be difficult for her. However, I do not find her medical situation constitutes exceptional circumstances warranting the imposition of a conditional sentence for this large-scale fraud given all of the aggravating factors.
[51] Mr. Rowe argued there could be immigration consequence for Ms. O'Shea. His argument was that a six month sentence exposes her to deportation. He suggested a conditional sentence may have a different impact but offered no case law in support of that position. As a sentencing judge I can take into account the collateral impact of immigration consequences if this does not take the sentence out of the appropriate range. In this case, the appropriate sentence far exceeds a sentence that would reduce the immigration jeopardy. I note also that if she were to face deportation, it would be to the United States.
[52] I conclude that the appropriate disposition in this case is one of real jail. While it will be more difficult for Ms. O'Shea than someone who does not have her medical diagnoses, I find this factor warrants a reduction of the time in custody.
Final Disposition
[53] Ms. O'Shea would you please stand?
[54] You are sentenced to a custodial term of 18 months.
[55] Once you have completed the custodial portion of your sentence you will be subject to an 18 month probation order. These are the terms:
Keep the peace and be of good behaviour;
Appear before the Court when required to do so by the Court;
Report within two business days of your release and in person, to a probation officer and, thereafter, report to the probation officer when required by the probation officer and in the manner directed by the probation officer;
Notify your probation officer in advance of any change of name or address and promptly notify the supervisor of any change of employment or occupation;
Continue to take medication as prescribed;
Attend all counselling and programming as recommended by your Probation Officer;
Sign any consent forms for your Probation Officer to monitor the counselling;
Perform 150 hours of community service work. The work is to commence within 30 days of the date of commencement of this Order and shall be completed at a rate of not less than 10 hours per month in consecutive months and shall be completed to the satisfaction of the supervisor or designate, of this Order. You shall provide the supervisor with proof of attendance and completion of community service assignments;
Make reasonable efforts to find and maintain suitable full time employment;
Do not have any contact with Wayne Gudbranson, Donna Leith-Gudbranson or anyone employed by Branham Group or B.G. Labs;
You are prohibited from seeking, obtaining or continuing any employment, or becoming or being a volunteer in any capacity that involves having authority over the real property money or valuable security of another person.
[56] With respect to the restitution order, I have considered Ms. O'Shea's ability to pay. It is clear from the pre-sentence report that she is resourceful. Although she is not currently working, and may find it difficult to find employment, she is educated and has the tools to seek and maintain gainful employment. For this reason, there will also be a restitution order in the amount of $100,000 in favour of Branham Group and/or B.G. Labs pursuant to section 738 of the Criminal Code. I ask that the Crown ensure that notice of this restitution order is given to both complainants as required by section 741.1 of the Criminal Code.
Released: October 12, 2017
Signed: Justice Marlyse Dumel