R. v. Pennock, 2025 ONCJ 8

Ontario Court of Justice

Date: 2025-01-08
Court File No.: BRAMPTON 21-16233

Between:

His Majesty the King
— and —
Darren Pennock

Before Justice S. Caponecchia

Guilty Plea: May 17, 2024
Sentencing Submissions: November 29, 2024
Reasons for Sentence: January 8, 2025

Counsel:

• G. Gill, counsel for the Crown
• M. Murphy, counsel for Mr. D. Pennock

Introduction

[1] Mr. Pennock pleaded guilty to one count of fraud, breach of trust, and six counts of uttering a forged document. Briefly stated, the facts are that over a 7-year period while he was employed as the Chief Executive Officer for the John Howard Society of Peel, he misappropriated $327,045.00.

Position of the Parties

[2] The Crown seeks a sentence of two years less a day jail, followed by three years’ probation.
[3] The Defence submits that a conditional sentence of imprisonment to be served in the community is a fit and appropriate sentence.

Circumstances of the Offence

[4] Mr. Pennock was employed by the John Howard Society as their CEO starting in November 2012. He oversaw an annual budget of three million dollars. In August 2019 it was discovered that Mr. Pennock’s work credit card had a very high balance. The organization commenced an investigation into the defendant’s expense claims and discovered irregularities. Mr. Pennock’s employment was terminated in September 2019. Professionals were hired to conduct a forensic analysis and the loss was discovered. Mr. Pennock was charged on October 19, 2021.
[5] The following is a summary of unauthorized expenses paid for using the organization's funds that the defendant personally benefited from over the 7-year period of his employment:
a) Gift cards - $40,895.61
b) Legal fees - $35,438.44
c) Storage fees - $1,466.10
d) Travel, meals, entertainment - $159,375.89
e) Bell iPhone - $812.75
f) Rogers invoice - $764.35
g) Tangible Expenses/Assets - $63,859.87
h) Retirement gift cards - $950.56
i) Vacation Pay Claim - $23,076.89.

[6] The investigation also revealed that Mr. Pennock forged the signature of a member of the Board of Directors on six different occasions between December 7, 2015 and December 2, 2017.

Background of the Offender

[7] Mr. Pennock is currently 53 years old.
[8] He was raised in Mississauga. His mother was a teacher who did not return to her work after she had two children, Mr. Pennock and his sister. Mr. Pennock describes his father as hardworking and his upbringing as fantastic. His childhood included cottage time in the summer, time spent together as a family and more than one trip to Florida.
[9] Mr. Pennock’s parents separated when he was either 10 or 12, after his father’s business failed. After his parents separated, he moved with his mother and sister to a smaller home, and they lived a more modest life. His mother returned to teaching when Mr. Pennock was in high school. He subsequently came to learn that his father’s drinking was a problem in his parents’ marriage, and he supported his father through some rehabilitative programs. His father died unexpectedly in his 40s.
[10] Following high school, Mr. Pennock completed a program over 7 years and became a fully certified pilot. He worked in the field between 1999-2001. In 2001 he started a related business and sold it to his partner in 2007. He worked as an air traffic controller between 2008-2012, following which he was hired by the John Howard Society. He earned $125,000 a year as the CEO for the John Howard Society.
[11] Mr. Pennock is currently unemployed. His future goals include obtaining his certification in Project Management. Since 2022 he has spent time volunteering 3-4 hours each Saturday at a cat rescue center with his current wife.
[12] In 1996, at the age of 26, Mr. Pennock married his first wife. He met her while working at a yacht club. They had two sons, currently aged 22 and 24. Mr. Pennock divorced after 18 years of marriage in 2014. He remarried a high school friend in 2021, at the age of 51. He resides with his second wife in a home they jointly own. His wife works.
[13] Mr. Pennock enjoys the love and support of his current wife, mother, both children and sister, who all have positive things to say about him. His family members and longtime friend were all shocked to learn of the offences before the court. They all know him as a supportive father, son and partner.
[14] Mr. Pennock’s background includes two battles with cancer: the first before he committed the offences, the second after he was terminated from his employment with the John Howard Society. He was first diagnosed with Follicular Lymphoma Stage 1 in January 2010, while married to his first wife. He responded well to treatment and was in remission when the couple divorced in 2014. In 2020 he was diagnosed with Stage 2 of the same disease. He was involved with his second wife at the time his cancer returned. He is currently in remission and continues to experience some residual effects from his last treatment, including pain in his spine and problems with sleeping.
[15] Mr. Pennock described to the author of the Pre-Sentence Report that when he committed the offences between 2012 – 2019 he was in a “dark” place emotionally due to his health issues. He attributed his crimes to stupidity, lack of judgment and a sense that the “clock was ticking on his life span.”
[16] Mr. Pennock has no history of mental health issues or substance abuse. He engaged in 8-10 sessions of counseling between 2013 and 2014, when he was going through his separation with his first wife. On May 2, 2024 he sent an email seeking to engage some counselling services through an employee assistance program.

1. General Principles of Sentencing

[17] Sentencing is a highly individualized process. A delicate balancing of the various sentencing principles and objectives is called for, in line with the overriding principle that a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender. [R. v. Suter, 2018 SCC 34, at para. 4]
[18] Section 718 of the Criminal Code states that the fundamental purpose of sentencing is to contribute to respect for the law and the maintenance of a just, peaceful, and safe society. This is to be achieved by imposing sentences that have, among other objectives, the objectives of:

• separating offenders from society, where necessary;
• denouncing unlawful conduct;
• general deterrence;
• rehabilitation; and
• promoting of a sense of responsibility in offenders, and acknowledgment of the harm done to victims or to the community.

2. Aggravating and Mitigating Factors

[19] Section 718.2 (a) of the Criminal Code indicates that a sentence should be increased or reduced to account for any relevant aggravating or mitigating circumstances relating to the offence or the offender.
[20] There are two mitigating factors in this case:

1. Mr. Pennock’s guilty plea. I accept that his guilty plea reflects his remorse and regret. He also wrote a letter of apology to the John Howard Society. By pleading guilty he has also spared the witnesses the ordeal of having to testify in court. He has also saved the taxpayers the time and expense of a multi-day trial in one of the busiest jurisdictions in this country.
2. Mr. Pennock made restitution. To do so, he took out a second mortgage on the house he jointly owns with his current wife. His wife now shares the liability that he incurred. The restitution was finalized on May 24, 2024, a week after his guilty plea, a year after a civil default judgment was made against him and his wife on May 11, 2023. After the civil judgment was paid, the legal restrictions ordered against the couple’s property were lifted on July 8, 2024.

[21] Turning next to the aggravating factors:

1. Mr. Pennock has a 1990 conviction for possession of a credit card obtained by crime. He was 20 years old at the time. He received a suspended sentence. This aggravating factor is of little to no weight given the passage of time.
2. Mr. Pennock’s actions were not isolated in nature. They took place over multiple years and involved repeated deceitful conduct.
3. The offender did not voluntarily stop committing the offences. He ceased committing the offences because his employment was terminated.
4. Mr. Pennock’s actions were not impulsive. His actions were calculated and required a concerted effort of manipulation of his co-workers and paperwork to conceal his conduct from his colleagues and the Board of Directors.
5. Mr. Pennock stole from an employer. He was the CEO, entrusted with the wellbeing of the organization. The offences involve a serious breach of trust, a statutory aggravating factor: s. 718.2 (a)(iii). His employer, the John Howard Society of Peel, is a non-profit charitable organization. The organization serves the most vulnerable and underprivileged members of the community. It does not have deep pockets. Mr. Pennock knew the organization depends on donations, volunteers and staff who were paid a modest income, unlike Mr. Pennock.
6. Mr. Pennock stole money out of greed. He used the funds to pay his personal expenses, including but not limited to his legal fees, a storage facility, cell phone and dining out. He used it to support his lifestyle notwithstanding he was being paid a good living wage, $125,000/yr.
7. The total amount of money Mr. Pennock defrauded from the John Howard Society was significant, $327,045.00. He forged multiple signatures to do so.
8. Finally, the impact on the victims. Section 718.2 (a)(iii.1) of the Criminal Code explicitly provides that a court shall take into consideration evidence that the offence had a significant impact on the victim. The victims in this case include the members of the community who benefit from the services the John Howard Society provides. Every dollar Mr. Pennock stole over the years was money that he took away from the most in need: the underhoused, persons suffering from addiction, the mentally ill, and individuals who are food insecure. The victims include the co-workers he deceived and who he betrayed. The rippling effects of Mr. Pennock’s offences were articulately set out by three individuals who presented victim impact statements.

First, Kara Hart. She is the current CEO of the John Howard Society. She described how programming suffered during the time Mr. Pennock misappropriated funds. The organization's reputation also suffered. Miss Hart continues to work to build back trust with members of the community on whom the organization relies. Funders no longer consider the organization a safe place to donate funds. Mr. Pennock’s crimes also had a negative impact on staff. The morale of their modestly paid staff members suffered. Mr. Pennock’s actions planted seeds of distrust amongst the leadership team. Feelings of anger, betrayal and shame linger to this day.

Second, the court heard from Donna Murray. Miss Murray recently retired from the JHS after 38 years of service. During her tenure she was responsible for overseeing the finances for the Peel chapter of the JHS. She feels Mr. Pennock took advantage of her trusting nature. She described how the defendant lied and deceived her repeatedly when she went to him to discuss financial irregularities. He made her feel stupid and gullible. His actions impacted her self-confidence and caused her to question her judgment. She had to live through the time-consuming ordeal of an audit with an outside firm. She lived with the fear that suspicion might be placed on her. She was afraid that her professional reputation could be irreparably damaged. The impact of the workload, along with her anxiety ever since Mr. Pennock left the organization five years ago has been enormous. The enormity of Mr. Pennock’s crimes, while under her watch, played a part in her decision to retire. She now questions her trust in mankind.

Third, Kathryn Lynch. She described the impact of the offences on her as a taxpayer, donor to the JHS and a former employee of the organization. Kathryn Lynch began working for the JHS in 1982, when she administered the Bail Supervision Program. When she retired in 2018, Mr. Pennock was the CEO, and she was the Peel Branch Manager. She feels shame for having played a part in Mr. Pennock joining the organization in 2012. She continues to blame herself for ignoring various red flags over the years. She explained that she overlooked them and accepted Mr. Pennock’s explanations because of the close trusting relationship she had with Mr. Pennock. She feels he took advantage of her trust repeatedly. Upon her retirement after 35 years of service, she was given a gift certificate. When she went to use it, she discovered it had no value. She later learned that Mr. Pennock used the gift certificate for himself.

3. Gravity of the Offence and Degree of Responsibility

[22] Section 718.1 of the Criminal Code states that any sentence imposed must be proportionate to the gravity of the offence and the degree of responsibility of the offender.
[23] The offences are serious. Mr. Pennock’s crimes were repeated and calculated. Mr. Pennock abused a position of trust to take money from a nonprofit charitable organization. He took money designated to help the most disadvantaged members of the community to support his lifestyle instead. Notwithstanding that he returned the stolen funds five years after he was terminated, his crimes had a real impact on the organization’s ability to deliver services during the years he misappropriated the funds. He damaged the organization’s reputation and eroded the confidence of donors and other stakeholders on whose funding the organization relies. His actions had a lasting emotional impact on the people he deceived to commit his crimes and on the overall morale of the staff.
[24] Mr. Pennock’s degree of responsibility is high. He single-handedly perpetrated the offences with no assistance from anyone else. When he committed the offences, he was a mature, educated individual earning a good income. He was involved in a happy relationship with his second wife. He enjoyed the privilege of home ownership and had close relationships with his family members. His cancer was in remission. When faced with the anxiety of a future recurrence of cancer and the possibility of an early mortality, he chose to take from others less fortunate than himself to support his lifestyle choices.

4. Case Law

[25] Section 718.2 (b) of the Criminal Code states that a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances.
[26] I have reviewed the case law relied upon by each party to support their positions. The cases relied upon by the defense in which conditional sentences were imposed involved different offenders:

• R. v. Label, 2018 ONCJ 748: the offender stole from his employer to support a gambling addiction. The loss to the company, after an insurance claim, was $27,480.29.
• R. v. Curreri and L.L., 2017 ONSC 5662: the offenders committed frauds involving properties owned by Mr. Curreri’s father. This case did not involve a breach of trust (para 75, 98).
• R. v. Gibb and Petros, 2014 ONSC 5316: The offenders defrauded their elderly friends of $100,000. The offence was described as a fraudulent commercial transaction that did not involve a breach of trust (para 52).
• R. v. Umenwoke, 2013 ONSC 4496: The offender impersonated someone to exact a $75,650 U.S. fraud on a financial institution (para 4). This was not a typical breach of trust case (para 47).

[27] The cases relied upon by the Crown do not include an important mitigating feature present in this case, the return of stolen funds.
[28] Neither counsel referred the court to any sentencing cases involving a theft or fraud from a charitable organization by an employee. In the case of R. v. Bracegirdle, 2004 ABCA 252, the Alberta Court of Appeal overturned a conditional sentence and substituted a sentence of two years less a day jail for an offender who stole from the Cystic Fibrosis Society during their employment. The defendant was the general and financial manager of the Society in Edmonton, who stole $175,463 from the organization over the course of over five years. The Society discovered that its precarious financial position had been caused by the offender’s thefts. The defendant pleaded guilty but had not made restitution.
[29] The overarching principles in the case law submitted to the court include the following:
a) Both before and after Parliament’s introduction of conditional sentences, cases of large-scale fraud by persons in a position of trust have typically resulted in substantial jail sentences in the range of three to five years. Even where mitigating considerations have reduced the sentence to the reformatory range, a jail term, not a sentence served in the community, has usually been imposed; [R. v. Bogart, 2002 ONCA 41073, para. 36]
b) General deterrence and denunciation are primary sentencing objectives when sentencing offenders for abusing a position of trust and defrauding an employer. It is only where there are exceptional mitigating circumstances that a significant fraud with breach of trust would warrant a conditional sentence; [R. v. Wilson, 2016 ONCA 888, para. 8]
c) Conditional sentences are available even in cases where deterrence and denunciation are the paramount sentencing objectives. [R. v. Sureskumar, 2023 ONCA 705, para. 46; R. v. Wells, 2000 SCC 10] The difference between imprisonment in jail and a conditional sentence of imprisonment to be served in the community is often the presence or absence of exceptional mitigating circumstances. [R. v. Dobis, 2002 ONCA 32815, para. 54]
d) The Ontario Court of Appeal has recognized that individuals who perpetrate frauds are usually seen in the community as solid, responsible and law-abiding citizens. Often, they suffer personal and financial ruin as a result of the exposure of their frauds. Those factors cannot, however, alone justify any departure from a range. The offender's prior good character and standing in the community are to some extent the tools by which they commit and sustain frauds over lengthy time periods. Considerable personal hardship, if not ruin, is virtually inevitable upon exposure of one's involvement in these kinds of frauds. It cannot be regarded as the kind of unusual circumstance meriting departure from a range. [R. v. Drabinsky, 2011 ONCA 582, para. 167]

5. The Principle of Restraint and Conditional Sentences

[30] Section 718.2(d) states that an offender should not be deprived of liberty, if less restrictive sanctions may be appropriate in the circumstances.
[31] Section 718.2(e) states that all available sanctions, other than imprisonment, which are reasonable in the circumstances and consistent with the harm done to victims or to the community should be considered for all offenders, with particular attention to the circumstances of Aboriginal offenders.
[32] In this case, the parties agree that a conditional sentence is an available sentence given the Crown is seeking a sentence of two years less a day jail. Therefore, I will first give careful consideration to whether one should be imposed. In determining whether a conditional period of imprisonment is appropriate, two main questions must be answered.
[33] The first is whether the imposition of a conditional period of imprisonment to be served in the community would endanger the safety of the community. Danger to the public is evaluated by reference to the risk of re-offence, and the gravity of the danger in the event of a re-offence. [R. v. Knoblauch, 2000 SCC 58, para. 26]
[34] In this case Mr. Pennock committed multiple serious offences over a prolonged period while holding a position of trust. He is a 53-year-old, educated and highly capable individual. He is currently unemployed but has a longstanding history of steady employment before he was let go for committing the offences before the court. He has a lot of family support in the community. Overall, I conclude that he does not currently constitute a danger to the public.
[35] Turning to the second issue. Is a conditional sentence consistent with the fundamental principles of sentencing set out in the Criminal Code? In some instances, a conditional sentence with sufficiently onerous conditions can achieve the objectives of denunciation and general deterrence. [R. v. Proulx, [2001] SCR 61, paras. 22, 30, 35-37, 41, 66-67, 102-107] In other circumstances the need for denunciation is so pressing that incarceration will be the only suitable way in which to express society's condemnation of the offender's conduct. The same is true of deterrence, there may be circumstances in which the need for deterrence will warrant incarceration. The Supreme Court of Canada in Proulx explained:

Where punitive objectives such as denunciation and deterrence are particularly pressing, such as cases in which there are aggravating circumstances, incarceration will generally be the preferable sanction. This may be so notwithstanding the fact that restorative goals might be achieved by a conditional sentence.

[36] In R. v. Killam (1999), 1999 ONCA 2489, 126 O.A.C. 281 Justice Doherty first observed that a conditional sentence does not, generally speaking, have the same denunciatory effect as a period of imprisonment. Incarceration remains the most formidable denunciatory weapon in the sentencing arsenal. [R. v. Killam, 1999 ONCA 2489, para. 13]
[37] More recently the Supreme Court of Canada, albeit in a different context, stated that conditional sentences generally indicate less serious criminality than jail terms. [Tran v. Canada (Public Safety and Emergency Preparedness), 2017 SCC 50, para. 28]
[38] In R. v. Macintyre-Syrette, 2018 ONCA 706, at para. 19, the Ontario Court of Appeal indicated that there are circumstances in which the need for denunciation and deterrence is such that incarceration is the only suitable way to express society's condemnation of the offender's conduct.
[39] I am satisfied this is one of those cases. A conditional sentence would not be consistent with the fundamental principles of sentencing. It would fail to adequately reflect the principles of deterrence and denunciation. A conditional sentence would also not be proportionate to the nature and gravity of the offences he committed. Mr. Pennock’s moral blameworthiness is high, and his offences are grave. He used his position of trust as CEO to defraud a significant amount of money from a charitable organization that serves the most disadvantaged members of society. He misappropriated funds repeatedly, over an extended period out of greed, to support his lifestyle. He only stopped because he was detected. I am not satisfied that there are any exceptional mitigating circumstances which warrant the imposition of a conditional sentence. While Mr. Pennock returned the funds he misappropriated five years after he was terminated, four years after he was charged and a year after a civil judgment placed restrictions on the home he owns with his wife, the impact of his offences extends well beyond the money he stole. The rippling effects of his acts persist to this day. While jail may not be called for to satisfy the principles of specific deterrence or rehabilitation in Mr. Pennock’s case, jail is called for to meet the principles of general deterrence, denunciation and to hold him accountable for the harm he caused.
[40] My conclusion is that only a sentence of imprisonment in this case could properly give effect to the fundamental principles of sentencing.

6. The Appropriate Length of Sentence in this Case

[41] Having determined a conditional sentence is not appropriate in Mr. Pennock’s case, I will next turn to the appropriate length of a custodial sentence.
[42] As the case law demonstrates, there is no binding range of sentence for fraud from an employer in the amount of $327,045.00 and that has been repaid prior to sentencing.
[43] Deterrence and denunciation are the primary sentencing objectives in a case such as this one. It is difficult to overstate the seriousness of the offences.
[44] I must also give some weight to the principle of restraint, given Mr. Pennock has tried to right his wrong by paying back the money he stole.
[45] In all the circumstances of this case I am satisfied that a fit and appropriate sentence for the fraud charge is 12 months jail, followed by three years’ probation. This sentence is proportionate to both the gravity of the offence and Mr. Pennock’s moral blameworthiness. It also does not extinguish his prospects for rehabilitation or reintegration into society.
[46] Having regard to the principle of totality, I sentence Mr. Pennock to a concurrent sentence of 12 months’ jail on the remaining counts.
[47] In addition to the statutory probation conditions which apply, Mr. Pennock is ordered to:

• report to a probation officer within 48 hours of his release and thereafter as required and comply with all directions received from his probation officer;
• attend and participate in any counselling or treatment sessions arranged or recommended by your probation officer; and
• sign any releases that permit your probation officer to monitor your counselling or treatment;
• abstain from communicating directly or indirectly with any employee or volunteer at the John Howard Society of Peel except through a lawyer;
• do not seek any employment with a charitable organization;
• do not engage in any volunteer work that involves you handling funds;
• you shall disclose your criminal record to any employer or business partner.

Released: January 8, 2025
Signed: Justice S. Caponecchia