SUPERIOR COURT OF JUSTICE

HER MAJESTY THE QUEEN

V.

CAROL ANNE BANDIERA

R E A S O N S F O R S E N T E N C E

BEFORE THE HONOURABLE JUSTICE G.M. MULLIGAN

on August 20, 2012, at BARRIE, Ontario

APPEARENCES:

K. Hull Counsel for the Crown

A. McLeod Counsel for Carol Anne Bandiera

MONDAY, AUGUST 20, 2012

R E A S O N S F O R S E N T E N C E

MULLIGAN, J (Orally:)

Carol Anne Bandiera pleaded guilty to one count of theft, contrary to Section 334(a) of the Criminal Code of Canada, in that she stole funds, the property of Felice and Sylvana Battista, of a value exceeding $5,000.00.

At the time the plea was entered, the Crown brought an application for a Gardener Hearing, to introduce aggravating facts pursuant to Section 723 of the Code. After a hearing at which both the Crown and defence called evidence, there was a finding that the Crown had proved aggravating facts. The essence of those facts were that Carol Anne Bandiera, as bookkeeper for the complainants Felice and Sylvana Battista, and their group of companies, stole G.S.T. H.S.T. refund cheques totalling at least $332,198.53. This theft took place over a number of years, including the period 2005 to 2009. As the self-employed bookkeeper for the Battistas, she had complete control of the G.S.T. file for their companies. From the records supplied to her, she completed and remitted G.S.T. H.S.T. refund request forms to Canada Revenue Agency. Those refunds came to her and she deposited them to her own account without providing any records of these receipts to the Battistas or their accountants.

In addition to these aggravating facts, the offender pleaded guilty to theft of a cheque for $62,847.62 in 2010. This cheque represented a refund of money owing to one of the Battistas' companies from one of their suppliers.

The Offender

As part of the sentencing hearing, an Electronic Monitoring Report and a Pre-Sentence Report was filed. Ms Bandiera has no previous record. Her Pre-Sentence Report is generally positive. She is 66 years of age. She self-reported to the probation officer that she had a difficult family life growing up. She left her parents’ home at age 17. She has two daughters, who are now adults, from her first marriage. A subsequent marriage ended in divorce, and her third marriage ended in a separation. Her third husband passed away in 1998. Both her adult daughters worked for her for a while in the bookkeeping business. She now resides at the home of her oldest daughter and her family. She is estranged from her other daughter, who also got into legal difficulties with respect to fraudulent activity while employed by the offender.

As a result of her theft from the victims, the bank has frozen some of her assets and she is subject to lawsuits by the bank and the victims. The bank has repossessed her home and she has filed a consumer proposal with respect to her creditors.

She completed high school and an accounting course at a community college, and has been employed steadily ever since as a bookkeeper.

She worked as a bookkeeper for the victims’ group of companies from 1990 until 2007 as an independent contractor. She also retained other bookkeeping clients as well. She acknowledged in the Pre-Sentence Report that she was well paid by the Battistas.

She is currently employed by Dev-Con Inc. as a bookkeeper. She has had a long connection with this company and maintained this company as one of her accounts while she was working at the Battistas’. The Pre-Sentence Report notes that she is very highly regarded by the principals of Dev-Con Inc., who are aware of this criminal conviction. As the author of the report states:

Mr. Deverell is aware of the subject’s involvement with the courts and although this lends to a trust factor, he has no concerns with the subject maintaining her employment. He indicates that a full time position at Dev-Con remains available to the subject regardless of the disposition she is now adjudged.

The Pre-Sentence Report notes that Ms Bandiera reports that she is humiliated, embarrassed, and ashamed of her actions, and she reported to the probation officer that during this period of theft, she was coping with mental health issues regarding her daughter and the victimization of [deleted due to partial publication ban].

In the Pre-Sentence Report, the author notes the impact on the victims and states:

Ms Battista notes that because she was working long hours to resolve and remedy the aftermath of the subject’s offence, it took away time she could have been spending with her ailing father. The victim indicates that she now has difficulty trusting employees and she still feels taken by the subject. Mr. Battista notes that the subject’s unlawful behaviour caused significant strain on his family, his businesses, and his employees.

The author notes that she has taken some responsibility for her actions and has sought out professional counselling. She began counselling in May of 2011, and has attended eight sessions with her psychologist.

The author of the Pre-Sentence Report concludes with this recommendation:

The subject is assessed as being a suitable candidate for community supervision should the court deem it appropriate as part of the disposition. Based on the information gathered for the purpose of this report, considerations for conditions requiring the subject to refrain from contact with the victims and their businesses, maintain employment, and pay restitution would prove beneficial in the community oriented management of the subject’s identified risks.

Victim Impact Statement

A Victim Impact Statement was filed by Sylvana Battista. She and her husband Felice Battista are shareholders of the Battista group of companies, the victims with respect to this theft. Her statement sets out the impact it has had on her life and her family life. She concludes by stating:

As a result, I have been reduced to someone who can only be described as indefinitely injured, mentally and emotionally, which cannot be undone. Preparing this statement has made me feel disgusted that someone can do this to another individual. I feel I was betrayed, conned, manipulated and taken as a fool because of the trust I placed in this individual.

Aggravating Factors

I am going to review the aggravating circumstances. I am satisfied that Ms Bandiera was in a position of trust with respect to the victims. She was their bookkeeper for over 17 years. The Criminal Code requires a court to take such circumstances into consideration. Section 718.2 states:

A court that imposes sentence shall take into consideration the following principles;

(a) a sentence should be increased or reduced to account for any relevant aggravating or mitigating circumstances relating to the offence or the offender, and, without limiting the generality of the foregoing,

(iii) evidence that the offender, in committing the offence, abused a position of trust or authority in relation to the victim.

Ms Bandiera was an experienced bookkeeper. The victims placed a great deal of trust in her. They allowed her to work independently from her own home.

The theft was much more than a crime of opportunity. It was a calculated and continuous series of thefts over several years. Because of her position of trust and her complete control over the G.S.T. H.S.T. file, it was very difficult for the victims to realize the extent of the increasing theft year over year. Although the offender has offered to make a small monthly restitution payment, she has not made any repayments to date.

Mitigating factors

Ms Bandiera has no previous criminal record. She has a continuous work history since finishing college and continues to be employed. She has received a positive letter of support from her current employer, who is aware of her predicament. Ms Bandiera entered a plea of guilty with respect to one theft from her employer. However, it should be noted that the Crown was required to conduct a Gardiner Hearing with respect to the G.S.T. H.S.T. cheques stolen over a number of years as an aggravating fact. Ms. Bandiera has taken some responsibility for her actions and has begun a series of counselling sessions with her psychologist. She has also offered to make a small monthly restitution payment from her current income.

Principles of sentencing

Parliament has now codified many former common law sentencing principles in the Criminal Code of Canada. Section 718 describes the fundamental purpose of sentencing to be “To contribute along with crime prevention initiatives, to respect for the law and in maintenance of a just, peaceful and safe society by imposing just sanctions.”

The Code sets out six objectives for sentencing judges to consider: to denounce unlawful conduct; to deter the offender and others from committing offences; to separate offenders from society where necessary; to assist in the rehabilitation of offenders; to provide reparations for harm done to victims or to the community; and finally, to promote a sense of responsibility in offenders and acknowledge the harm done to victims and the community.

The Position For the Crown

The Crown acknowledges the Pre-Sentence Report, the plea of guilty, and other mitigating factors. The Crown submits that a period of incarceration of four to six months is required in this case, followed by a period of probation. The Crown stresses the general deterrence principle of sentencing as more fully discussed in R. v. Bogart (2002) 2002 CanLII 41073 (ON CA), 167 C.C.C. (3d) 390. The Crown also submits that there should be a restitution order and an order requiring the offender to inform present or future employers of her conviction.

Position of the Defence

It is the position of the defence that a conditional sentence consisting of house arrest subject to the offender’s ability to travel to her place of employment daily followed by a lengthy period of probation, supported by electronic monitoring would be a fit sentence for this offender. Defence counsel points to the offender’s lack of criminal record, plea of guilty, and family and financial difficulties as a fallout from her criminal activity. As previously noted, the offender has accepted some responsibility for her actions and has commenced counselling. She has lost her home and is living with her daughter. She has maintained gainful employment. It is submitted that the offender is prepared to pay $200.00 a month as part of a restitution order. Defence counsel submits that a conditional sentence would allow the offender to continue her employment with her current employer, which would enable her to meet her financial obligations, including those that may be arranged through the consumer proposal with her creditors.

Consideration of a Conditional Sentence

After considering the aggravating and mitigating factors here, I am satisfied that a reformatory sentence would be an appropriate sentence for an offence such as this. Under those circumstances, I am satisfied that a conditional sentence can be considered. The issue is whether a conditional sentence is an appropriate sentence involving a breach of trust and the theft of a very significant amount of money over a number of years, even if the offender is a first offender who entered a guilty plea.

The Supreme Court of Canada provided guidance with respect to courts considering a conditional sentence in R. v. Proulx, [2001] S.C.R. 61. The Court indicated that any offences involving a reformatory term will attract a consideration of a conditional sentence. However, as Chief Justice Lamer stated for the Court at page 494:

There 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.

General Deterrence

In R. v. McKinnon, 2005 ABCA 8, [2005] A.J. No. 12, Justice Côté speaking for the Alberta Court of Appeal, spoke of the effect of general deterrence in the context of bookkeepers who may consider stealing from their employer. As the Court stated at paragraphs 60 and 61:

But embezzlement from an employer is rarely a matter of sudden irretrievable impulse or passion, the way that many assaults may be. These crimes were quite the opposite. Bookkeepers and others in a position of trust are not society’s outcasts, unemployed, starving, very young, congenitally impulsive, incapable of planning ahead or seeing the consequences of their acts, nor ignorant of business, law, and society. That is because no employer would knowingly hire an unfit person as a bookkeeper or custodian of significant amounts of cash, and such a person would not keep such a job more than three days if somehow hired. By definition, a bookkeeper has a paying job. Bookkeepers have to be intelligent people, skilled in planning and thinking ahead, and they understand money and general business. Their necessary skills mean that they fully understand the prevailing Canadian mores, and have everything to gain or lose by adhering to them.

Someone who is mature and capable of planning ahead, and is tempted to steal money, will roughly calculate the odds. If jail is unlikely, and there is any chance to escape a criminal conviction, then embezzlement looks like an attractive business proposition. That is even more so if large sums can be stolen. Restitution is no deterrent, because it basically makes the offender break even.

It is clear to me from reviewing of a number of Ontario Court of Appeal cases that general deterrence takes on significance for offenders such as Ms Bandiera. In R. v. Pierce (1997) 1997 CanLII 3020 (ON CA), 114 C.C.C. (3d), 23, Justice Finlayson speaking for the Court, stated at page 37:

What the authorities make clear is that the purpose of incarcerating these offenders is not to protect the community from any danger posed by the particular offender, but to protect the community from the danger posed by those who may be inclined to engage in similar conduct. ... The point was succinctly stated by Lamer J., sitting as a member of the Quebec Superior Court in R. v. Viger and I quote:

There will also be a danger to the community if the sentence imposed is not of a nature to deter others from conduct analogous to that ... of the accused.

In Pierce, the offender was the controller of the victim. She had fraudulently signed 42 cheques for a value of $270,000.00.

In R. v. Wismayer (1997) 115 C.C.C. (3d) 22, Justice Rosenberg for the Court of Appeal extensively reviewed general deterrence in the context of conditional sentences. The Court expressed the view that incarceration should be used with restraint when the justification is general deterrence. However, as the Court stated at page 38:

General deterrence, as the principle 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 a position of trust, such as the accused in R. v. Pierce would seem to be one of those offences. Even then, however, I would not want to lay down as a general rule that a conditional sentence is never or even rarely available. Each case will have to be determined on its own merits.

In R. v. Bogart (2002), 2002 CanLII 41073 (ON CA), 167 C.C.C. (3d) 390, a case relied on by the Crown, the offender was a doctor who pleaded guilty to defrauding O.H.I.P. of close to one million dollars. The Court of Appeal allowed the Crown’s appeal of the conditional sentence and imposed a jail sentence of 18 months. In rejecting a conditional sentence, the Court considered five factors that, when taken collectively, indicated a jail term was required. As the Court stated at paragraph 396:

They are the seriousness of the offence, the respondent’s moral blameworthiness, the need for general deterrence, sentences in previous cases of large-scale fraud, and the ineffectiveness of a conditional sentence in this case.

In that case the Court found that the offence was serious because the fraud took place over several years and amounted to close to one million dollars. The Court noted that the respondent’s fraud was an egregious breach of trust. The Court cited the importance of general deterrence and reviewed the principles of Wismayer and Pierce. The Court found that a conditional sentence would be ineffective in this case because the offender, the doctor would be able to continue to practice medicine from his home even while serving the conditional sentence. As such the Court noted: “ A conditional sentence in this case sends the wrong message about health care fraud both to practitioners and the public at large.”

In R. v. Dobis (2002), 2002 CanLII 32815 (ON CA), 163 C.C.C (3d) 259, Justice MacPherson for the Court of Appeal reviewed a number of large scale fraud cases. In Dobis the Court found a conditional sentence manifestly unfit in a case where the offender had committed a breach of trust over 3 years resulting in a theft of $286,636.00, together with a fraud resulting in the company’s loss of 1.9 million dollars.

Justice MacPherson summed up the principles applicable at page 51:

The 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, Wood, Gray and Holden.

And, Justice MacPherson continued,

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 such as Peirce and Ruhlend, and commented on adversely in leading Ontario case dealing with conditional sentences.

I am satisfied that a conditional sentence is not an appropriate sentence for this offender with respect to this offence. In coming to this conclusion I have considered the five factors set out in R. v. Bogart as follows:

(i) Seriousness of the Offence

The amount taken over an extensive period of time was close to $395,000.00. In my view this was a large scale theft by a trusted bookkeeper.

(ii) The Offender’s Moral Blameworthiness

The offender’s theft amounted to an egregious breach of trust committed over an extended period of time. The Battistas paid her well and placed their trust in her.

(iii) General deterrence

General deterrence is important in this case. Others who may be in a similar position require a warning that reformatory and even penitentiary sentences will follow this type of crime.

(iv) Sentences in Previous Cases of Large-Scale Fraud

It is clear that well planned theft or fraud conducted over an extensive period of time will

attract a sentence of incarceration absent special circumstances. Those special circumstances often include re-payment of the amount taken, ill health of the offender, or advanced age of the offender. In my view, no such special circumstances exist here.

(v) Ineffectiveness

A conditional sentence would be ineffective in this case. In my view, allowing the offender to leave her home to go to work each day and remain at home at other times amounts to very few restrictions on her liberty and would send the wrong message to the community about this type of offence. The principle of general deterrence, so important for offences such as this, would be rendered meaningless.

Ms. Bandiera, please stand. I am satisfied that a fit sentence is a period of five months incarceration, followed by a period of two years probation. Terms of probation will be that you report to your probation officer upon your release and as directed thereafter, and take such counselling programs as may be directed by your probation officer.

In addition, the following ancillary orders will apply. There should be no contact with Felice Battista or Sylvana Battista during your period of incarceration or probation. Next, you are required to notify your present and future bookkeeping employers of your criminal record during your period of probation.

In addition, there will be a restitution order in two parts. Part 1 - $62,847.62 to the C.I.B.C. subject to a reduction for any amounts which the C.I.B.C. may have already recovered from you. Number two, sum of $332,192.53 to the Battistas’ group of companies.

…WHEREUPTON THIS MATTER CONCLUDED…