ONTARIO COURT OF JUSTICE DATE: 2023 08 15 COURT FILE No.: 20-45000411 Metro North, Toronto Region
BETWEEN:
HIS MAJESTY THE KING
— AND —
Yuan-Hung LO
Before Justice Cidalia C.G. Faria
Heard on September 9, December 14, 16, 2021, January 6, November 8, 2022, July 11, 2023 Reasons for Judgment released on August 15, 2023
Counsel: Scott Pearl............................................................................................ counsel for the Crown Donna Pledge..................................................... counsel for the accused Yuan-Hung LO
Faria J.:
I. OVERVIEW
[1] Yuan-Hung Lo [1] is charged with Fraud Over $5000, and three counts of Possession of Property Over $5000 contrary to ss. 380(1) (a) and 354(1) of the Criminal Code.
[2] Mr. Lo elected to proceed before me, and the trial began on September 9, 2021. For several reasons, it did not complete until submissions were heard on July 11, 2023.
[3] The Crown called the complainant and filed an Agreed Statement of Facts.
[4] Mr. Lo testified in his own defence and filed several exhibits.
[5] The allegations stem from the summer of 2018 when Pamela Kahler, formerly Pamela Metford, became romantically involved with a man she met online named “Bedrick Domek”. During their short relationship she lent him money for various reasons. She specifically handed over three bank drafts as directed by him, to a young man in the lobby of 250 Consumers Road in Toronto. The young man was Yuan-Hung Lo.
[6] There was no Bedrick Domek. She was defrauded of $181,000.
II. Admissions
[7] The parties filed an Agreed Statement of Facts where in Mr. Lo agrees: [2]
i. He received 3 bank drafts on 3 separate occasions from a female unknown to him, meeting her each time at 250 Consumers Road in North York. ii. On July 19, 2018, he received a bank draft in the amount of $100,000 made payable to him from the unknown female after he told her a code, after which they had no conversation. Appendix A is an image of that draft. iii. He deposited the draft into his TD business bank account (5250177/0500) that same day, which is registered under his name and that of his company IJN Trading Company. iv. On July 25, 2018, he received a bank draft in the amount of $56,000 from the same female after he told her a code. Appendix B is an image of that draft. He had no further conversation with her. He deposited the draft into his TD Bank account (5250177/0500) that same day. v. On August 9, 2018, he received a bank draft in the amount of $25,000 payable to IJN Trading Company, from the same female, after he gave her a code. They had no further conversation. Appendix C is an image of that draft. He deposited the draft into his TD Bank account (5250177/0500) that same day.
III. Issue
[8] The only issue to be determined is whether the Crown has proven beyond a reasonable doubt that Mr. Lo knew he was participating in a fraud and that he knew the bank drafts he received from Ms. Kahler were obtained by an offence punishable by indictment.
IV. Position of the Parties
[9] The Crown submitted Mr. Lo was defrauding the complainant when he accepted the 3 bank drafts from her as he knew there was no Bedrick Domek. In the alternative, the Crown submitted Mr. Lo was wilfully blind during his involvement in the business deal he described and is thus criminally liable for the charges.
[10] The Defence submitted the court should accept Mr. Lo’s testimony that he thought he was involved in a legitimate business deal and was unaware Ms. Kahler was being defrauded. In the alternative, Counsel submits Mr. Lo’s evidence, at minimum raises a reasonable doubt as to his knowledge of the fraud. In either case, he should be acquitted of all charges.
V. Legal Principles
i. General Principles
[11] As in every criminal case, Mr. Lo is presumed innocent. The onus rests on the Crown to prove the essential elements of each offence beyond a reasonable doubt. The onus never shifts. Reasonable doubt is a doubt based on reason and common sense which must be logically based upon the evidence or lack of evidence. [3]
ii. Elements of the Offence
[12] The Crown is required to prove both the actus reus, and the mens rea of the charges, beyond a reasonable doubt, specifically that Mr. Lo:
i. performed a prohibited act, be it an act of deceit, a falsehood, or some other fraudulent means; and ii. there was a deprivation, caused by the prohibited act, which consisted of actual loss or the placing of the victim’s pecuniary interests at risk.
and that he had:
i. the subjective knowledge of the prohibited act; and ii. the subjective knowledge that the prohibited act could have as a consequence the deprivation of Ms. Kahler’s pecuniary interest (or put it at risk).
[13] If Mr. Lo had knowledge of the fraud, knowledge in regard to the possession of the property would follow.
iii. Wilful Blindness
[14] As the Crown raised the issue of wilful blindness, the legal concept can be articulated as follows:
[21] Wilful blindness does not define the mens rea required for particular offences. Rather, it can substitute for actual knowledge whenever knowledge is a component of the mens rea. The doctrine of wilful blindness imputes knowledge to an accused whose suspicion is aroused to the point where he or she sees the need for further inquiries, but deliberately chooses not to make those inquires. See Sansregret v. The Queen, [1985] 1 S.C.R. 570, and R. v. Jorgensen, [1995] 4 S.C.R. 55. As Sopinka J. succinctly put it in Jorgensen (at para. 103), “[a] finding of wilful blindness involves an affirmative answer to the question: Did the accused shut his eyes because he knew or strongly suspected that looking would fix him with knowledge?”
[22] ….wilful blindness arises where a person who has become aware of the need for some inquiry declines to make the inquiry because he does not wish to know the truth. He would prefer to remain ignorant.
[23] …A court can properly find wilful blindness only where it can almost be said that the defendant actually knew. He suspected the fact; he realized its probability; but he refrained from obtaining the final confirmation because he wanted in the event to be able to deny knowledge. This, and this alone, is wilful blindness. It requires in effect a finding that the defendant intended to cheat the administration of justice. [Emphasis in original. Criminal Law: The General Part (2nd ed. 1961), at p. 159 (cited in Sansregret, at p. 586).) [4] :
iv. Credibility and Reliability
[15] As both parties testified at trial, their credibility and reliability must be determined. Credibility relates to whether a witness is speaking the truth as she/he/they believes it to be. Reliability relates to the actual accuracy of the testimony. The ability to observe, recall, and recount the events must be assessed. A credible witness may give unreliable evidence [5]. There is a distinction between a finding of credibility and proof beyond a reasonable doubt [6]. The credibility and reliability of a witness must be “tested in the light of all the other evidence presented”. [7]
[16] In assessing each witness’ testimonial account, I must consider its internal consistency; its consistency with previous accounts; the significance of any inconsistencies; a witnesses’ interest in the outcome of the case if any; and whether an account is inherently logical.
[17] To assess reliability, I must consider the circumstances of the observer, the recollection of events over time, the intentional or unintentional tainting by other sources of information; a witness’ mental capabilities and limitations if any; their level of sophistication, and to a lesser degree the witness’ testimonial demeanor to name a few. Inconsistencies must be addressed. [8]
[18] As I assess the evidence, I am mindful I may accept some, none, or all, of each witness’ account, and I must consider the totality of the evidence to determine if each element of each offence is proven beyond a reasonable doubt, and in its totally if the charge has been so proven.
[19] The leading applicable case on credibility and guiding my analysis provides the following test: [9]
i. First, if I accept Mr. Lo’s testimony, I must acquit him. ii. Second, even if I do not accept Mr. Lo’s testimony, if it leaves me with a reasonable doubt, I must acquit him. iii. Third, even if Mr. Lo’s testimony does not raise a reasonable doubt, I have to consider all of the evidence to satisfy myself that the Crown has met its high burden and proven beyond a reasonable doubt all of the essential elements of the offence.
[20] In assessing competing evidence, I cannot compare each account and decide which account I believe. [10] I can believe or disbelieve a witness, but still be left with a reasonable doubt after considering all the evidence. Moreover, I can accept some, all, or none of a witness’ evidence. Frailties and/or inconsistencies in a witness’ evidence do not necessarily mean their evidence should be rejected.
VI. Evidence
i. Pamela Kahler
[21] Ms. Kahler testified she met a man on an online dating website and became romantically involved with him. She lent him hundreds of thousands of dollars believing she was helping him get through a business deal in Brazil. It was all a sham. This is how it unfolded.
[22] She testified that:
- In late June 2018, she met “Bedrick Domek” online. Their romantic relationship grew through text messaging and phone calls.
- Domek told her he was going to Brazil to complete a big $3.8 million U.S. deal involving the buying and selling of high-end cars. While in Brazil, he called her “at least once a day”. He told her there was a problem as the cars were being impounded, but he wasn’t worried – he got his bank to authorize a $150,000 overdraft. He sent her “proof” of that authorization. This, however, was not enough, and he became increasingly distraught and desperate because he could lose the cars and his business.
- She couldn’t sleep with worry. Then it occurred to her, since she had her deceased husband’s life insurance and money from a home they had sold, she could help him. She offered to help. Domek accepted the offer.
- Domek provided her with identification and documentation, told her he would pay her back as soon as the deal closed and proceeded to direct her to make a bank draft to “Yuan-Hung Lo”, meet a friend of his doing him a favour at 250 Consumers Road on July 19, 2018, the friend would have a “code” and she should hand over a $100,000 Canadian bank draft.
- She did just that.
- Then Domek needed more money because he needed two licences not one to get the cars out of impound. Ms. Kahler followed the same instructions. She went to 250 Consumers Rd and handed over a bank draft for $56,000 to the same young, well-dressed, polite Asian man after he gave her a “code” on July 25, 2018.
- A lawyer then called her from Brazil telling her Domek had been in a car accident driving to Rio de Janeiro. Domek had gone to the hospital but was now in jail because he had hit two people. More money was needed to get him out of jail.
- She made a $25,000 bank draft to “IJN Trading Company” and went to the same location, received a code, and handed over the bank draft to the same person who had picked up her other two bank drafts for Domek.
- After the jail incident, she got a call that Domek had been carjacked and needed more money. She had run out of money, and communication with the lawyer and Domek was dwindling.
- She became concerned and went to the address in Mississauga Domek had told her he lived at. She learned it was a rooming house not owned by Domek. There was no lawyer at the Brazilian firm. The Brazilian hotel did not have Bedrick Domek staying there. The Canadian-Brazilian consulate had no record of the passport number she provided them. All the documents she was provided “were completely fake.” She had “lent” Domek over $400,000 and “Domek” did not exist.
[23] In cross-examination, Ms. Kahler:
- Confirmed she never met Domek. She only spoke to him on the phone. He had a “European” (“Czech”) accent which was “not similar at all” to that of Mr. Lo who she gave the bank drafts to.
- She had provided additional bank drafts [11] in varying amounts to two Ontario corporations, and deposited money into bank accounts [12], for the benefit of who she believed to be Domek. She listed these amounts in a Statement of Claim [13] suing Mr. Lo, his company, other companies, and other individuals.
- She did not remember the details of what these varying amounts of money were for.
ii. Yuan-Hung Lo
[24] Mr. Lo was 31 in the summer of 2018. He testified in-chief for two days and was cross-examined for another two days over a period of almost a year.
[25] Mr. Lo testified:
- He started his own business in 2017 under the company name IJN Trading Company and did import/export. He was also a member of commercial associations in the Taiwanese community.
- He met a man named Benny Kumar (Kumar) in October 2017. Kumar called him, saying he had his business card from a previous meeting. Mr. Lo does not remember having met him before. They met at Aroma Coffee at 250 Consumers Road where Mr. Lo had an office, to discuss business, sales connections in Asian business markets, and referrals.
- In February 2018, he met a woman, Lily Wang, (Wang) at a Trade Show, who was involved in the cosmetic and beauty business.
- Wang called him at the end of May 2018 saying she was going to close her business and asking if he knew of anyone who would buy her equipment. He thought of Kumar. He called Kumar to tell him about Wang’s equipment for sale.
- All three met at Aroma Coffee to discuss the deal. They made a list of the equipment to be bought and sold, exchanged phone numbers, and decided to communicate via WeChat. [14] As they left the meeting, Mr. Lo and Wang agreed Mr. Lo would collect 5% commission on the deal [15].
- At the end of June, Wang contacted Mr. Lo telling him she had to go back to China and asking him to deal with the matter. They met on July 10, 2018, and prepared an invoice listing the equipment she was selling to Kumar for $205,000 which included a $5000 commission for Mr. Lo that Wang would pay so Kumar could feel he got a deal. [16]
- The next day, July 11, 2018, Mr. Lo met with Kumar and had him sign the invoice. Mr. Lo took a picture of Kumar’s photo identification, his Permanent Resident Card, [17] and sent the signed copy of the invoice to Wang with the photo of the identification.
- On July 19, 2018, Kumar contacted Mr. Lo to say he was sending someone to drop off a cheque at 250 Consumers Road. He gave him a 3 or 4 digit code to provide the person before getting the money for Wang’s equipment. He was unaware of what arrangements had been made to transfer the equipment.
- Mr. Lo went to the lobby of the building, approached a woman, and asked if she was Kumar’s employee [18]. She was “unfriendly” and asked if he had the code. He provided it. She handed him the bank draft. He looked at it, the amount was incorrect, it was only $100,000. He did not notice the name of Pamela Medford on the bank draft. He deposited the money into his business account.
- Mr. Lo contacted Kumar to tell him the amount was not what they had agreed upon. Kumar told him he had a cash flow problem and would pay the remaining amount in a few days.
- Mr. Lo contacted Wang and told her what happened. She complained and instructed him to make two cheques to two different people whose names she provided in the amounts of $55,000 and $35,000. He did so the next day, July 10, 2018. The remaining $10,000 was to be his commission.
- On July 21, 2018, Wang sent a “middle-aged man, 50-60” years old to pick up the cheques. Wang confirmed the cheques were picked up.
- On July 25, 2018, Kumar again contacted Mr. Lo and told him that someone would be dropping off a cheque. He provided another code of digits. In the lobby, Mr. Lo met the same woman as before, gave her the code and received a bank draft. Again, the amount was incorrect, it was only for $56,000. He contacted Kumar who was not picking up the phone. Mr. Lo deposited the money in his account and told Wang the situation.
- Wang became angry. She told him he would have to pay the balance. She instructed him to make a $40,000 cheque and get $16,000 in cash. He made a cheque out to the name she provided and went to several banks, but could only withdraw $10,000 in cash.
- Mr. Lo told Wang her $40,000 was ready but did not tell her about the cash problem. He contacted Kumar and angrily told him he was being put in a bad position and gave him a deadline for the balance of the invoice. Kumar apologized and said he would pay.
- On the morning of July 27, 2018, Kumar arrived with $19,000 in cash apologizing that he was still short. It would be the last time Mr. Lo saw Kumar him in person.
- The man who picked up Wang’s first 2 cheques returned to pick up the $40,000 cheque, the $10,000 cash Mr. Lo had withdrawn, the $19,000 cash Kumar provided, and $8,000 Mr. Lo had in his office ($77,000).
- On July 27, 2018, Mr. Lo had paid Wang $167,000, but was still $23,000 short.
- On August 9, 2018, Kumar called to say someone would drop off the final payment and gave him another code. Mr. Lo again met the same woman in the lobby of 250 Consumers Road to receive a bank draft for $25,000, the correct amount. He deposited the bank draft into his account and contacted Wang to tell her he had the money. She provided him with a name to make a $23,000 cheque to. Again, the same man came to pick up Wang’s cheque.
[26] Mr. Lo testified that was the end of the deal. Or so he thought, until October 2019, when he was contacted by police on his way to Algonquin Park. He was told to come to the station. He did. He was arrested and charged with the offences before the court.
[27] Mr. Lo testified he also received a Statement of Claim and has cross-claimed. He testified he hired a private investigator to find Benny Kumar to no avail. He believes Lily Wang is in China and she will not respond to him when he reaches out to her via WeChat.
[28] He tried to obtain his WeChat conversations but was unable to. He sold his old phone and bought a new one in January 2019, 4 months after the end of the deal, and 10 months before his arrest. The WeChat data was not stored in the cloud, and so was not transferred to his new device. [19]
[29] During cross-examination, and re-examination, Mr. Lo:
- Explained all the deposits and withdrawals in his bank records.
- Testified when he first opened his business, in 2015, he worked from home and used a rental box as an address. In 2017, he started the import/export business. He moved into a friend’s office at 250 Consumers Road for a few months. His business was mostly small cash jobs.
- The friend, Jimmy Hsu (Hsu), was the husband of a friend he met in 2015 during a Ma-jong game. Hsu lent him a van, let him use his office without paying rent from March 2018 to October 2018 (except for one month) and lent him money for living expenses while his business was struggling. Hsu made a “handsome income” and was very generous.
- Most, if not all, of Mr. Lo’s $10,000 commission was e-transferred to Hsu to pay off debts. In fact, Mr. Lo went into overdraft.
- Hsu told Mr. Lo he was a cardiologist and worked at two different hospitals. He also had a side car sales/insurance business and once needed Mr. Lo to receive Pay Pal payments for him. Jimmy Hsu does exist.
VII. Analysis
[30] Both Ms. Kahler and Mr. Lo tell quite an elaborate tale.
[31] Ms. Kahler provided a general narrative, but was “fuzzy” on most of details, such as timing, sequence, and specifics of any kind. She was honest enough to repeatedly say so. She relied on documents put to her both during her examination-in-chief and in cross-examination for the particulars of the allegations. Her reliability was weak, but the exhibits filed proved that she did provide Mr. Lo with 3 bank drafts totalling $181,000.
[32] Ms. Kahler was credible about meeting a man online, becoming romantically involved with him, lending him over $400,000 during a virtual relationship that lasted less than three months, only to learn the man did not exist and she had been defrauded.
[33] However, her evidence is not helpful to the determination of the issue, which is whether Mr. Lo knowingly participated in the fraud and knowingly took her bank drafts aware of their illegitimately obtained journey.
[34] Mr. Lo does not dispute the complainant was defrauded, or that she gave him three bank drafts in the said amounts. His evidence is that he had no idea he was involved in a fraud at all.
[35] Just as one could raise an eyebrow at how long it would take Ms. Kahler to suspect the veracity of the financial straits her new virtual boyfriend was in, and his odd instructions on how to get the loans to him, but still accept she was unwittingly defrauded – the same could be said of Mr. Lo’s narrative.
[36] He testified he brokered a deal that would make him $10,000 for doing very little. Wang trusted him to receive and disburse $200,000 regarding spa equipment he never saw. He created an invoice stating he would receive $205,000 from Kumar but had no similar invoice documenting he would have to give the money to Wang.
[37] He was given codes to obtain three bank drafts from a strange woman, and on two occasions the amounts were incorrect. Neither Kumar’s name nor his company name were on the bank drafts. He was given people’s names, and made out cheques to them, and provided these cheques to an unknown man who came to pick them up for Wang who was apparently in China.
[38] These are odd business practices. However, Mr. Lo either provided or tried to provide at every turn, information, and documentation to substantiate his evidence. He provided viable and logical explanations, even if they were naïve at times. He was not shaken on any point, nor was he inconsistent at any point.
[39] He admitted he had never acted as a “middleman” “for both sides” before. He had never received a commission such as this one, and this was the first such deal with a “rare large amount.” He admitted he was not that “professional”, though he tried to be.
[40] When confronted with omissions on his invoice, such as not including a payment due date, or format of payment, or why he did not include the full commission amount, or make another invoice between him and Wang, Mr. Lo admitted he was “lazy” and did not want to make the deal “complicated”. He was honest about not appreciating tax implications. He thought it was Wang who was vulnerable because he was the one receiving the funds. He knew nothing about the transfer of the equipment because he did not want to be part of that transaction.
[41] Mr. Lo was a young, inexperienced, and unsophisticated businessman. The names on the bank drafts were his and that of his company, and he deposited them into his own bank account.
[42] There is no direct evidence of any act of deceit, falsehood, or some other fraudulent act Mr. Lo performed.
[43] The evidence is circumstantial. The crown’s evidence can lead to an inference of a guilty act. But, Mr. Lo’s evidence leads to an inference he was unwittingly involved in someone else’s deceitful acts and falsehoods.
[44] There is also no direct evidence of Mr. Lo’s knowledge of the fraud perpetuated on Ms. Kahler.
[45] The Crown’s evidence can lead to an inference he knew. But Mr. Lo’s testimony is direct evidence he did not know.
[46] Mr. Lo’s thorough and relatively consistent evidence about what he thought, and why he thought it, his lack of experience, his having met each person under what appeared to be legitimate circumstances, his understanding of his reputation in his community, his efforts to document his business, his belief it was Wang who was the vulnerable party, all made some sense.
[47] The Crown submits that if Mr. Lo did not “know” he was involved in a fraud, he was “wilfully blind” to such involvement.
[48] I disagree. Mr. Lo’s evidence, and in particular, his conscientiousness in creating an invoice, his insistence on obtaining photo identification from Kumar, and his photographing and keeping the identification, demonstrate efforts to be diligent in his business transactions.
[49] Mr. Lo admitted he thought it odd that a woman was coming to deliver Kumar’s payments, that he had no recollection of meeting Kumar prior to his first call, that he did not do regular business with people of Middle Eastern descent, and that there was something strange about Hsu.
[50] However, there is no indication Mr. Lo refrained from asking questions in order to deny knowledge.
[51] He did ask Kumar why the amounts were not correct. Trouble with cash flow is a reasonable explanation. He did not ask about who he was writing cheques to, but given Wang was in China, it would not be an unusual for her to have someone pick up the funds and they be directed to different people as she was wrapping up business in Canada.
[52] There is insufficient evidence upon which to find that Mr. Lo was suspicious to the point where he saw the need for further inquiry, and deliberately chose not to make those inquiries. Knowledge can not be imputed in these circumstances.
[53] In addition, Mr. Lo testified: “I’m feeling at this moment, I’m targeted because I lacked professional knowledge.” “I am a person who has a good reputation in Taiwan communities. So I have good reputation there’s no way for me to run away. I think she trapped me in receiving the money”.
[54] To some extent, this may very well be true.
[55] As a result, Mr. Lo’s evidence does raise a reasonable doubt as to whether he was knowingly participating in a fraud and in possession of the property illegally obtained.
VIII. Conclusion
[56] I do not find the Crown has proven each element of the charges beyond a reasonable doubt.
[57] Mr. Lo, I find you not guilty of all four offences with which you are charged.
Released: August 15, 2023 Signed: Justice Cidalia C.G. Faria
[1] Yuan-Hung Lo, is also known as Jack Lo [2] Exhibit 1: Agreed Statement of Fact, September 9, 2021. [3] R. v. Lifchus, [1997] 3 S.C.R. 320. [4] R. v. Briscoe, 2010 SCC 13 at paras. 21-23. [5] R. v. Morrissey, [1995] O.J. No. 639 (C.A.) at para 33; R v. H.C., 2009 ONCA 56, [2009] O.J. No. 214 (C.A.) at para 41. [6] R. v. J.J.R.D., [2006] O.J. No. 4749 (C.A.) at para 47; R v. J.W., [2014] O.J. No. 1979 (C.A.) at para 26. [7] R. v. Stewart, [1994] O.J. No. 811 (C.A.) at para 27. [8] R. v. Francois, [1994] 2 S.C.R. 827 (S.C.C.) at para. 14. [9] R. v. W.D. (1991), 63 CCC (3d) 397 (S.C.C.) 1 [10] R. v. Esquivel-Benitez, 2020 ONCA 160 [11] Exhibits: 2A, 2B, 2C, 2D, 2E, and 2F, all copies of those bank drafts in the amounts of $50,000 three times, $35,000 once, $52,000 once, and $16,960. [12] Exhibit 4A and 4B: Receipts for cash deposits in the amounts of $1500, $6100, and $8500. [13] Exhibit 9: Statement of Claim, SCJ, CV-20-00635206-0000, January 28, 2020, and Statement of Defence and Cross Claim dated March 26, 2020, and Third Party Claim, dated May 7, 2020. [14] WeChat is a communications application. [15] The deal would be for $200,000 Wang would get $190,000, and he would get $10,000. [16] Exhibit 7: IJN Trading Company Invoice, July 10, 2018, [17] Exhibit 8: Copy of Benny Kumar Permanent Resident Card with ID# and Date of Birth. [18] The rule of Brown v Dunn was not complied with on this point, as Ms. Kahler was never cross-examined if the man she met asked her if she was Benny Kumar’s employee. As a result, the weight of this particular point is attenuated. [19] Exhibit 10: Email from Telus, January 24, 2019, regarding new phone order.