COURT FILE NO.: 72/11

DATE: 20120209

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

HER MAJESTY THE QUEEN

– and –

SHAWN SLATTERY

Defendant

Ken Lockhart, for the Crown

Taro Inoue, for the Defendant

HEARD: November 28,29,30; December 1,2,5,6, 2011; January 16,17,18,19,20, 2012

J. WILSON J.

REASONS FOR JUDGMENT

The charges

[1] Shawn Slattery is charged in counts one to three in the indictment with fraud over $5000.00 against Direct Personnel and Human Resources Inc. (Direct Personnel), knowingly using forged documents including payroll drafts and company cash receipts, and with knowingly making false documents by signing cash receipts with forged signatures intending that they be acted upon as genuine contrary to sections 380(1)(a), 368(1.1)(a) and 367(a) of the Criminal Code.

[2] The defence does not dispute that a fraud occurred at Direct Personnel. The issue is whether the Crown has proved beyond a reasonable doubt the identity of Mr. Slattery as the perpetuator of the fraud. The fraud occurred between November 2006 and July 2008.

[3] It is alleged by the Crown that the defendant kept former employees on the payroll of Direct Management who were no longer working there, as was confirmed by the time sheets prepared by the defendant. The fraud was not discovered until the time sheets were located in the defendant’s home office in July 2008. The payroll was prepared including the former employees who were to be paid in cash. It is alleged that the defendant kept the cash and that he forged the signature of former employees on the cash receipts. The Crown asserts that there is a total of 463 fraudulent transactions involving a total loss to Direct Personnel of $194,373.18. Mr. Slattery is alleged to have received a total of $160,627.00 in cash, taking into account compulsory payroll deductions.

[4] It is the defence position that the fraud could have been committed by others and that the identity of Mr. Slattery as the person responsible for the fraud has not been proved by the Crown beyond a reasonable doubt. It is the Crown’s submission that the evidence is overwhelming that it was Mr. Slattery who perpetuated the fraud.

[5] The defendant is also charged in counts 4 and 5 with knowingly making false documents in 2006 on the letterhead of Direct Personnel purportedly signed by Erson Goncalves, as if theywere genuine, intending that they be acted upon contrary to sections 368(1.1)(a) and 367(a) of the Criminal Code. These documents were provided by Mr. Slattery to his conditional sentence supervisor as the defendant needed proof of specifics of employment by the terms of his house arrest to allow him to leave his home. It is alleged that Mr. Slattery used the forged documents not to work, but to facilitate personal activities.

[6] It is the defence position that the documents provided by the defendant to his conditional sentence supervisor were signed by his wife, Ericka Goncalves, with the knowledge and verbal authorization of Erson Goncalves.

[7] It is the Crown position that Ericka Goncalves and Erson Goncalves knew nothing of these forged documents, until these documents were located in the defendant’s home office in July, 2008 along with the business records that confirmed the fraud alleged in counts 1 to 3. The original documentation with Mr. Goncalves’ forged signature was subsequently located by the police in Mr. Slattery’s conditional sentence supervisor’s file.

The witnesses at this trial and overview of the evidence

Crown witnesses

[8] Mr. Goncalves, was a shareholder in Direct Personnel, along with the defendant. Mr. Goncalves was the main Crown witness. He discovered the allegations of fraud after the defendant and Ericka Goncalves, his daughter, separated. Documents of Direct Personnel including 98 missing time sheets confirming the fraud were located by Ms. Goncalves in the defendant’s home office.

[9] Ericka Goncalves testified about locating the documents in the former matrimonial home. She also testified about their lifestyle during the marriage until the separation.

[10] Mr. Goncalves organized and cross-referenced the time sheets with the payroll drafts in his possession. The documents did not match. He interviewed four of the former employees who were on the payroll but not on the time sheets during the period of the fraud. These four witnesses testified at the trial and confirmed that their signatures were forged and that they had not worked at Direct Personnel during the periods in question. The police located two other former employees who also testified to the same effect.

[11] Mr. Cory Shiels, a supervisor for Direct Personnel at the Waste Management plant during the period of the fraud also testified about how Direct Personnel functioned at Waste Management.

[12] Michelle Sorrinto, Mr. Slattery’s girlfriend, also testified. She and Mr. Slattery shared a condominium and lived together beginning in 2006 for a period of four and a half years.

[13] Mr. Ben Grant, Mr. Slattery’s conditional sentence supervisor in 2005 testified in relation to charges 4 and 5. He confirmed that documents bearing the allegedly forged signature of Mr. Goncalves were provided to him by the defendant supposedly to facilitate work.

Defence witnesses

[14] Mr. Slattery testified that it was Mr. Goncalves who prepared the time sheets during the period of the fraud, and he simply checked them for accuracy. Mr. Slattery confirmed that he would prepare the payroll draft for the Waste Management line employees from the time sheets, and that he would email the payroll draft to Mr. Goncalves for completion. He denied ever receiving any cash earmarked for former employees and denied forging the signatures on the cash receipts. He intimated, without directly accusing him, that Mr. Goncalves was the person responsible for the fraud. Alternatively, he suggested that a series of accounting errors might have occurred, caused by Mr. Goncalves.

[15] Mr. Steve Adams, a former manager at Waste Management and a friend of Mr. Slattery, testified about the procedures used by Waste Management and Direct Personnel, particularly the billing procedures, up until October 2006, when Direct Personnel was being operated from rental premises. He confirmed that Mr. Goncalves was the primary contact person for all accounting and office matters. He left Waste Management in October 2006 and had no information about procedures in place during the period of the fraud when Mr. Slattery and Mr. Goncalves carried out their respective functions from their home offices.

[16] Mr. Stuart Wiles, a friend of Mr. Slattery who worked as a driver, and briefly as a supervisor for Direct Personnel, also testified. He confirmed that the weekly punch cards were taken to the Direct Personnel’s office on Monday for processing. Mr. Wiles was a day shift supervisor for a few months. He testified about procedures that were in place until the summer of 2006, when he was terminated for sleeping on the job. Again, Mr. Wiles had no information about the procedures in place during the period of the fraud.

[17] Mr. William McClossan was also called by the defence. He was a fork lift operator and employee of Waste Management who worked briefly for Direct Personnel to earn extra cash. He noticed on his documentation a reporting of excess earnings that he had neither earned nor received. He reported the problem to management of both Direct Personnel and Waste Management. He signed a statement at the request of Mr. Goncalves, but suggested at trial that aspects of his statement were not true, and that he had been manipulated and lied to by Mr. Goncalves in order to blame the defendant for the accounting errors.

Similar fact application

[18] On November 26, 2003 Mr. Slattery was charged with perpetrating fraud against Nu-way Personnel in September 2002. He pleaded guilty to this charge on February 3, 2005 and received an 18 month conditional sentence followed by 12 months probation.

[19] The facts that are conceded at the time of the guilty plea are relied upon by the Crown in a similar fact application brought at the outset of this trial. The Crown seeks to rely on this evidence to assist in proving the identity of Mr. Slattery as the perpetrator of the fraud in this case.

[20] The defence conceded the similar fact application at the beginning of the trial before any evidence was called. In submissions however, the defence argued that the facts of this case and the facts underpinning the earlier guilty plea of fraud are not sufficiently similar to meet the test of admissibility of similar fact evidence confirmed in R. v. Handy (2002), 2002 SCC 56, 164 C.C.C.(3rd) 481, and that to consider the facts in relation to the earlier guilty plea would involve prohibited inferences of propensity due to the differences in the facts. Although clearly a concession was made at the opening of trial, I will consider the similar fact application after reviewing the evidence in this case.

The factual chronology and identification of facts in dispute

[21] Shawn Slattery married the daughter of Erson Goncalves, Ms. Ericka Goncalves in 2000. They separated in May 2008 when Ms. Goncalves discovered that Mr. Slattery had a girlfriend.

[22] The separation was initially amicable and collaborative, focusing on the two children, until the fraud allegations surfaced in August 2008.

[23] The matrimonial dispute became acrimonious, and is still not resolved. Ms. Goncalves acknowledged that she has an interest in the outcome of this trial as it would affect the ongoing family law proceeding. Mr. Goncalves acknowledged that he was angry and disappointed in the defendant.

[24] In 2003, Mr. Slattery was out of work and Mr. Goncalves had left his employment with IBM, and was looking for an investment. Mr. Slattery suggested that he and Mr. Goncalves start a personnel business as Mr. Slattery had experience in human resources and with employment agencies.

[25] It was not clear from the evidence when Mr. Goncalves decided to go into business with Mr. Slattery, whether Mr. Goncalves and Ms. Goncalves were aware of Mr. Slattery’s criminal convictions in the past. It would not have been appropriate to call this evidence until Mr. Slattery decided whether or not he would testify.

[26] Mr. Goncalves testified that he liked Mr. Slattery before they started the business, that he was a nice person who treated the family “okay”, and that as a son in law he trusted Mr. Slattery. However, he no longer feels that he can trust him, that Mr. Slattery tried to destroy the family, and that “so many stuff show up, including his past”.

[27] On June 2, 2003 Mr. Slattery and Mr. Goncalves incorporated Direct Peronnel with each holding 50% of the shares.

[28] Direct Personnel is an employment agency that provided temporary employees to companies needing unskilled labour. Direct Personnel provided its clients with labourers for a fixed price per hour, which included a premium from the amount actually paid by Direct Personnel to its employees. The client paid Direct Personnel for the time worked by Direct Personnel employees. Direct Personnel paid its employees. Many of the employees of Direct Personnel came from the islands, and did not have social insurance numbers to work in Canada. Many of the Direct Personnel employees were paid in cash, with the required deductions being made for Revenue Canada, with the employees signing cash receipts for any income received.

[29] Mr. Slattery met Mr. Steve Adams, a manager at Waste Management, through bowling. The biggest customer of Direct Personnel quickly became Waste Management which is a large recycling plant located in Brampton.

[30] The fraud allegations in counts 1 to 3 are with respect to former employees of Direct Personnel who had worked at the Waste Management recycling plant. The fraud is upon Direct Personnel, not Waste Management.

[31] Direct Personnel carried on business from 2003 to September 2006 in two different rental premises. The defendant and Mr. Goncalves frequently worked together at the rental premises of Direct Personnel to administer the business and prepare all relevant paperwork based upon their agreed upon division of responsibility. No known irregularities occurred during this period.

[32] The division of responsibility from the beginning was that Mr. Slattery would look after generating new business, and would assume responsibility for day to day operations at Waste Management. Mr. Goncalves assumed responsibility for all of the banking, including preparation of payroll each week which consisted of cheques and cash in accordance with the payroll draft. He also looked after compliance issues and the preparation of material for the accountant for the financial statements.

[33] Mr. Goncalves testified that from the beginning Mr. Slattery prepared the time sheets and payroll draft for the Waste Management line employees. Mr. Goncalves assumed responsibility for time sheets and payroll for all of the other Direct Personnel clients, and as well the Direct Personnel office workers, drivers and supervisors. Mr. Goncalves added this information to the payroll draft provided by Mr. Slattery for the Waste Management line workers. Mr. Goncalves was more in charge of the office, and Mr. Slattery was more in charge of operations at Waste Management and new business.

[34] Mr. Goncalves testified that from 2003 to 2006 while Direct Personnel functioned from rental premises, Mr. Slattery had regularly provided both the payroll draft and the time sheets for the Direct Personnel employees working the line at Waste Management to Mr. Goncalves.

[35] This practice of Mr. Slattery providing all the documentation including the time sheets to Mr. Goncalves continued to September 2006 when Direct Personnel, including Mr. Slattery and Mr. Goncalves, worked in the shared rental premises where all office work took place. Mr. Goncalves would compare and cross-check the names appearing on the payroll draft and the time sheets to ensure that they matched.

[36] In September 2006, Mr. Slattery and Mr. Goncalves decided that they did not need the expense of a rented office, and they began conducting the work of Direct Personnel from their homes. Each had an office in their home. Mr. Goncalves lived in Etobicoke, in Toronto, and Mr. Slattery lived in Bolton, Ontario.

[37] The fraud against Direct Personnel began after Mr. Slattery and Mr. Goncalves decided to carry on their respective responsibilities and paperwork for Direct Personal from their homes. The fraudulent transactions began in November 2006 and continued until July 2008.

[38] After the change in the office arrangement, Mr. Slattery and Mr. Goncalves would complete their respective paperwork for Direct Personnel in their homes, and would communicate with each other by email and telephone.

[39] During the period relating to the fraud was perpetrated, Mr. Goncalves testified that he only received the payroll draft from Mr. Slattery for the Waste Management line workers each week by email. Mr. Goncalves testified that he did not see copies of the time sheets submitted by Mr. Slattery to Waste Management for approval, despite frequent requests for them.

[40] Mr. Goncalves testified that he did not see the 98 time sheets prepared by Mr. Slattery for the period of the fraud until these documents were located in late July 2008 by Ericka Goncalves in Mr. Slattery’s home office and garage after the separation of Mr. Slattery and Ms. Goncalves.

[41] By 2006, Waste Management was hiring between 70 and up to 90 employees from Direct Personnel for each of their day and afternoon shifts. These employees comprised 80% to 90% of Direct Personnel’s business.

[42] There is no allegation that there was any fraud perpetuated against Waste Management. Waste Management had in place effective systems of checks and balances to ensure the accuracy of the Direct Personnel time sheets prepared from the employees punch card, which formed the basis of invoices billed to Waste Management.

[43] The Crown alleges that the mechanism of the fraud upon Direct Personnel was simple.

[44] Mr. Slattery included additional names of former Direct Personnel employees in the payroll draft prepared by him and forwarded by him by email to Mr. Goncalves. These individuals were all to be paid in cash. Most of the former employees involved in the fraud had no social insurance number and were on the afternoon shift.

[45] The payroll draft would result in cash envelopes being prepared by Mr. Goncalves for these former employees. As confirmed by the time sheets later discovered in Mr. Slattery’s home office, these employees did not actually work for Direct Personnel for the weeks in question.

[46] After the change to home offices, Mr. Slattery continued the role in Direct Personnel of recruiting and hiring new staff, sales to new clients, and problem solving when issues arose at Waste Management relating to Direct Personnel employees.

[47] Mr. Goncalves continued his role assuming complete responsibility for all Direct Personnel clients, other than Waste Management. This included preparing the time sheets and invoicing for these smaller clients, and adding these names to the payroll draft.

[48] From his home office, Mr. Goncalves continued the office work for Direct Personnel including the accounting compliance, assistance with the financial statements and banking issues. As well, Mr. Goncalves prepared all of the pay cheques and cash envelopes for all Direct Personnel employees including the workers at Waste Management.

[49] Ms. Ericka Goncalves testified that during their marriage, Mr. Slattery would attend at the Waste Management site regularly on Sunday evenings to organize the punch cards for the Direct Personnel employees to check in the next day. He would fill in the cards at home before attending at the Waste Management site. Often she would wait in the car while he was doing this.

[50] During the period relating to the fraud, the Direct Personnel supervisor for the shift would punch in the employees for the shift as they arrived at the plant. The punch cards recorded hours worked for each employee for a five day period. The Direct Personnel supervisor would cross reference the number of Direct Personnel employees with the punch cards to ensure accuracy.

[51] A Waste Management staff member would independently double check and verify the punch card total with the number of Direct Personnel employees. This procedure which probably began in 2007 was confirmed the Cory Shiels. At the end of the shift the Direct Personnel supervisor would punch out the Direct Personnel employees.

[52] Each week, time sheets would be prepared from the punch cards, summarizing the list of Direct Personnel employees and the number of hours worked for each employee.

[53] It is disputed who prepared the time sheets for the Waste Management line workers during the period when the fraud was perpetrated. The issue of who prepared the time sheets is a very relevant fact to the fraud allegations.

[54] It was the evidence of Mr. Goncalves that after they began working from their home offices, Mr. Slattery continued to prepare the time sheets for the Waste Management line workers from the weekly punch cards as he had in the past. The draft time sheets were sent by Mr. Slattery with the punch cards to Waste Management for approval. The time sheets were checked by Waste Management personnel and cross-referenced with the punch cards for each employee to ensure accuracy before the time sheets were approved.

[55] It was the evidence of Mr. Slattery that Mr. Goncalves prepared the first draft of the time sheets from the punch cards for the Direct Personnel employees working the line at Waste Management. Mr. Slattery did not dispute that draft time sheets were located in his home office contaning his handwriting.

[56] It was his evidence that after receipt of the draft time sheet from Mr. Goncalves by email, he would print out the draft time sheet and independently check each entry for accuracy by telephone, with Mr. Goncalves double checking every entry against the punch cards which Mr. Slattery said were in Mr. Goncalves’ possession. Mr. Slattery testified that this double checking was necessary as Mr. Goncalves made many errors on the time sheets. Only after the procedure of double checking line by line was complete, would the time sheets be submitted to Waste Management for approval.

[57] The approved time sheets formed the basis of the invoices to Waste Management.

[58] It was the evidence of Mr. Goncalves that Mr. Slattery would prepare the invoices for Waste Management during the period when the fraud was perpetrated. This is confirmed in the email trail in Exhibit 7 [pages 2, 3, 7, 8, 9, 12, 13, 15, 17, 18, 20, 22, 24, 26, 28, 30, 33, 35, 39, 40, 43, 45, 48, 53, 55, 56, 57, 59, 60, 61, 62, 65, 66, 69, 70, 72].

[59] It is not disputed that Mr. Slattery prepared the weekly payroll draft summaries for Direct Personnel employees working on the line at Waste Management from the approved time sheets, and that he forwarded the payroll draft to Mr. Goncalves each week. Mr. Goncalves in turn added components that he was responsible for to the payroll draft before he prepared the payroll. There are many emails in Exhibit 7 confirming this procedure.

[60] With respect to the payroll draft, Mr. Goncalves made three additions to the payroll draft received from Mr. Slattery. These three additions included:

▪ Adding transportation costs or equipment costs to Waste Management line workers to the payroll draft that had been forwarded to him by Mr. Slattery for the Direct Personnel line employees working at Waste Managment. The supervisors and drivers would provide this information to Mr. Goncalves each week.

▪ Adding the names and hours worked of the Direct Personnel drivers and supervisors and office staff as well as the names of Mr. Slattery and himself to the payroll draft.

▪ Adding the names of the other clients of Direct Personnel and the hours worked by Direct Personnel employees for these other clients.

[61] The defence points out that the Crown did not call any evidence from any Waste Management employees about billing practices during the period relating to the fraud, and did not attempt to locate the signed copies of the time sheets from Waste Management. In my view this viva voce evidence is not necessary to confirm the role Mr. Slattery played in light of the documentation, particularly Exhibit 7, which confirms the various emails sent by Mr. Slattery confirming his role in the billing cycle.

[62] As well, the defence points out, the Crown has only the draft time sheets, not the final approved copies. The approved time sheets formed the basis of the invoices to Waste Management, as it was the practice of Waste Management to sign approval on the time sheets. The documents located in Mr. Slattery’s home office do not include the signatures of Waste Management.

[63] I note that even though the Crown did not have available the signed time sheets as approved by Waste Managment during the period of the fraud, the invoices are prepared from the time sheets. The invoices during the period of the fraud matched and reflected the 98 draft time sheets located in Mr. Slattery’s home office containing Mr. Slattery’s handwriting. I conclude therefore that the draft time sheets located in Mr. Slattery’s home office were accurate and underpinned the invoices to Waste Management.

[64] Mr. Slattery did not dispute that he prepared the payroll draft for the Direct Personnel employees working the line at Waste Management. Mr. Slattery recorded in the payroll draft the names of Direct Personnel employees who had worked at Waste Management and their corresponding hours of work from the approved time sheets.

[65] When the fraud began initially in November 2006 it involved only one former employee- Mr. Kevin Crocker. By 2007 the number of former employees who did not work but were included in the payroll draft had increased to a maximum of ten former employees.

[66] During the period of the fraud, there were 70 to 90 Direct Personnel employees working on each shift. Mr. Goncalves testified that he would do the payroll from the payroll draft, dividing the payroll into day and afternoon shifts.

[67] For any employee who was paid in cash, Mr. Goncalves prepared an envelope which included the cash, along with the summary of deductions made. Each employee who was paid by cash was required by the supervisor distributing the envelopes to sign an acknowledgement for the cash received. The payroll was prepared for each shift in order in accordance with the names as they appear on payroll draft, and secured by elastic for each of the two shifts.

[68] I note on the payroll draft that the names of the former phantom employees appear very early on the list of Direct Personnel employees. The names of the former employees appearing early on the payroll list presumably facilitated the location of the cash envelopes for the former employees.

[69] Most of the former employees who are part of the alleged fraud appear to work the afternoon shift, with the exception of Kevin Crocker, at the beginning, and Ester Roberts.

[70] Mr. Goncalves testified that on Fridays during the period relating to the fraud, Mr. Slattery would pick up the payroll from Mr. Goncalves’ home office and would deliver the payroll to Waste Management.

[71] Cory Shiels testified that the payroll for the day and afternoon shifts would be delivered by one of the drivers, either Murray Slattery, the defendant’s father, Norm McRath, Erson Goncalves or Shawn Slattery. The payroll would be placed in a secure locker of Direct Personnel until it was distributed to the employees.

[72] The supervisors gave out the payroll to the workers on their shift. The day shift was from 6:00 a.m. to 3:00 p.m. The afternoon shift was from 4:00 p.m. to midnight. I accept the evidence of Linette Simon that generally the payroll was handed out towards the end of each shift after the second break to ensure that the workers completed their Friday shift. [Exhibit 25, page 83]. She was the only witness who testified as to when the payroll was distributed. Her evidence makes sense.

[73] I note that Mr. Shiels worked the afternoon shift and generally arrived at the Waste Management site between 3:00 p.m. and 3:30 p.m. Clearly the payroll was delivered to Waste Management before Mr. Shiels was in attendance at the site and therefore, I question whether he would know who delivered the payroll. On occasion, towards the end of the period of the fraud, Mr. Shiels worked both shifts and would have knowledge of who delivered the payroll. He testified that the drivers would bring the payroll to the Waste Management site 75% to 80% of the time, and that Mr. Slattery would bring the payroll to the site 20% to 25% of the time. Mr. Shiels confirmed that he had no knowledge of whether the drivers picked up the payroll from Mr. Goncalves’ office.

[74] After distributing the payroll, the signed cash receipts were retained by the supervisor, placed in the payroll envelope and then placed in the Direct Personnel secure locker. The supervisors prepared a summary each week of safety equipment charges applicable to the employees.

[75] The defence does not dispute that Mr. Slattery had the opportunity to intervene and obtain the cash, but argues that others, including the supervisors or Mr.Goncalves, also had the opportunity to intercede.

[76] On pay day, the Crown alleges that Mr. Slattery would intervene by picking up the payroll from Mr. Goncalves, removing the cash envelopes for the former employees, and forging the signature of these employees on the cash receipts. If the payroll was picked up from Mr. Goncalves’ home and delivered by a driver to the Waste Management site, the cheques and cash envelopes were placed in the secure locker before they were distributed to the workers. The Crown alleges that Mr. Slattery would intervene and remove the cash envelopes and forge the signature for the former employees before the payroll was distributed by the supervisors towards the end of the shift. The dayshift ended at 3:00 p.m. The afternoon shift began at 4:00 p.m. and finished at midnight.

[77] Mr. Shiels testified that Mr. Goncalves would attend Waste Management regularly on Mondays to pick up the signed cash receipts from the Friday before, and any information about transportation and safety equipment costs from the secure Direct Personnel locker.

[78] Mr. Shiels confirmed that Ray Miazga was fired from his position as supervisor of the day shift in April 2007 when it was discovered that he had been keeping final vacation pay cheques prepared for Direct Personnel employees working the line at Waste Management. Mr. Shiels noticed the vacation cheques were missing and reported the problem to Mr. Goncalves.

[79] It is confirmed by the payroll draft documentation that Ray Miazga left Direct Personnel in late April 2007.

[80] Although Mr. Miazga was clearly defrauding the company and Direct Personnel employees, the mechanism of the fraud is different from the fraud allegations in this case, and the fraud continued for 15 months after Mr. Miazga was fired. The defence did not argue that Mr. Miazga was responsible for the fraud in this case.

[81] Mr. Shiels confirmed that he was suspected, without justification, of being involved in some sort of illegal activity, and that the procedures at Waste Management changed to ensure that the Waste Management supervisor would confirm the punch cards and would require each employee to sign their name. The Waste Management staff would verify the workers, and would cross-check the names with the Direct Personnel supervisor. If there was a discrepancy, it would be corrected there and then.

[82] Cory Shiels confirmed that he had nothing to do with preparation of the time sheets or verification of the time sheets. That was “not his job”. Mr. Wiles, who worked as a supervisor prior to the fraud also confirmed that the supervisor had nothing to do with time sheets, invoices or payroll drafts. He did not recognize any of these documents.

Presence of extra workers at the Waste Management site

[83] Mr. Shiels confirmed that Waste Management hired its temporary workers from various agencies, not just Direct Personnel. Direct Personnel was always trying to increase the numbers of employees it provided to Waste Management.

[84] Mr. Shiels confirmed that it was frowned upon if Direct Personnel was short – that is, the number of employees that showed up for work was less than the number of employees that Waste Management wanted from Direct Personnel.

[85] In the beginning, if Direct Personnel was short, the supervisor would have to arrange for another standby employee to attend at the last minute. The system of having employees on standby did not work very well, and caused stress and disorganization.

[86] To avoid this recurring problem, and to expand the number of employees that Direct Personnel was supplying to Waste Management compared to the competition, Direct Personnel would regularly arrange for additional Direct Personnel employees to attend the Waste Management site in excess of the number of employees requested by Waste Management.

[87] These extra workers would fill places if a Direct Personnel employee did not show up for work, to ensure that the Direct Personnel quota of workers was filled. Often the other agencies that supplied workers to Waste Management would have employees that did not show up for work. The Direct Personnel extra workers would be used to fill these gaps for other agencies. Over time, this mechanism of supplying extra employees resulted in an increase in the number of employees allocated to Direct Personnel.

[88] On occasion there would be extra workers that would not be required to fill in for absentee workers.

[89] It was the practice of Direct Personnel to allow these extra workers to complete the shift and be paid. If a worker showed up for work, but was not called upon to work, Direct Personnel was required to pay a minimum of 4 hours. The worker in fact completed his or her eight hour shift. Waste Management was happy with this arrangement, as on occasion it was not required to pay for the extra employee.

[90] During the trial, emphasis by the defence was placed upon this practice of providing extra workers to ensure the Direct Personnel quota of employees was met, as an explanation why there may not be perfect symmetry between the time sheets, and the payroll draft, without the difference or discrepancy being evidence of a fraud.

[91] The defence argued that an extra Direct Personnel employee would not appear on the time sheets, as the time sheets were for the people requested by Waste Management from Direct Personnel, as well as the Direct Personnel employees replacing missing individuals from other agencies. If Direct Personnel had too many extras, this individual would be paid by Direct Personnel, but not by Waste Management.

[92] The defence acknowledged that these extra employees actually worked and would have punch cards. Steve Adams confirmed that the punch cards for any of the extra Direct Personnel workers that actually worked, but were in excess of the Direct Personnel’s quota and could not fill missing workers from other agencies were returned to the office of Direct Personnel to keep track of the extra individuals that were to be paid by Direct Personnel.

[93] I conclude that the presence of extra Direct Personnel employees on site to ensure that Direct Personnel’s quota was not short does not explain the fraud in this case. Clearly the employees who testified confirmed that they had not worked during the period in question and that their signatures had been forged.

[94] If extra employees worked for Direct Personnel in excess of the Direct Personnel quota and if they were paid in cash, the cash receipt signatures should match the signatures of the employees in question on their application form.

[95] As well, in accordance with Mr. Adam’s evidence, if there were extra workers provided by Direct Personnel that were not to be paid for by Waste Management, Mr. Goncalves, would receive the punch cards each week for any extra workers in excess of the Direct Personnel allocation to verify that the employee should be paid, but that Waste Management was not responsible for the payment. Mr. Goncalves was not questioned about receiving punch cards for the extra employees.

Unexplained losses

[96] Direct Personnel began business in 2003 and by 2006, it was profitable. The financial statements disclosed increasing net income each year.

[97] However, during the period of the fraud in 2007 and 2008, Direct Personnel began losing increasing amounts of money despite providing an increasing number of employees to Waste Management and maintaining the other smaller clients. In 2007 the business lost $26,440.00 and in 2008 the losses increased to $110,849.00.

[98] Mr. Goncalves testified that he began suspecting in early 2008 that someone might be stealing from the company. It made no sense that whilst the Direct Personnel business was growing, the company was losing money after having shown a clear profit in 2006.

Change in procedures for preparing time sheets

[99] Beginning on July 5, 2008 Waste Management began preparing the time sheets from the Direct Personnel punch cards. Evidence of this change in the last three time sheets located in the home office of Mr. Slattery, which show a different font used by Waste Management in preparing the time sheets. The time sheets after July 5, 2008 also contained the signature of a Waste Management manager.

[100] Until the change in routine, Mr. Slattery had prepared the time sheets accurately from the punch cards. The change in procedure had no effect upon the fraud. The fraud continued until the end of July 2008. This is because the fraud occurred not in the preparation of accurate time sheets, but in the addition by Mr. Slattery of the names of former phantom employees who no longer worked for Waste Management when he prepared the payroll draft.

Evidence of lifestyle

[101] The evidence of Mr. Slattery was that his earnings from Direct Personnel were between $40,000.00 and $50,000.00 annually. As well, a vehicle and car expenses were provided, along with a vacation once a year.

[102] In 2005 Mr. Slattery and Ms. Goncalves moved to a larger home. In mid 2006 they purchased a cottage in Muskoka. Mr. Slattery testified that they rented the cottage to defray costs, but I note that this suggestion was not made to Ms. Goncalves in cross-examination.

[103] In 2006, according to Ms. Sorrinto, Mr. Slattery moved into a condominium with her. Presumably, Mr. Slattery incurred some extra expense as a result of this relationship.

[104] In October 2007 Ms. Goncalves went on maternity receiving $700.00 per month. Before this she had worked for Doubletree earning about $40,000.00 annually.

[105] Mr. Slattery looked after the finances during the marriage. Ms. Goncalves worked, and looked after the house and children. She testified that she was never aware of any financial difficulties.

[106] Ms. Goncalves leased a BMW SUV vehicle at the time of separation. Mr. Slattery purchased a property in Barrie with Shane Clausen. Direct Personnel also purchased a rental property for approximately $400,000.00. The down payment of $100,000.00 came from the business.

[107] I find that the lifestyle enjoyed could not be paid for based upon the earnings of Mr. Slattery and Ms. Goncalves, particularly when she went on maternity leave in October 2007.

[108] Ms. Goncalves testified that during the marriage, after Mr. Slattery began working from his home office, Mr. Slattery would arrive regularly on Fridays with large quantities of cash that he kept in a shoe box on his side of the walk-in closet. Ms. Goncalves testified that Mr. Slattery advised her that he had opened an underground poker club, and that this cash came from the poker club to provide extra money to run the household.

[109] Mr. Slattery denied that he told Ms. Goncalves that he ran an underground poker club, but did confirm that he played poker with his friends, and that the money in the shoebox was his poker fund. He testified that the minimum poker bank roll was $2000.00. At times he testified he would have up to $4000.00. Mr. Slattery testified that he was a good poker player and that he earned more than he lost.

The separation of Mr. Slattery and Ms. Goncalves and the location of documents

[110] In April 2008 the couple separated. Ms. Goncalves testified that she found credit card receipts relating to Ms. Sorrinto and confronted Mr. Slattery. According to Ms. Goncalves, the presence of another woman was the cause of the break up. Mr. Slattery testified that he and Ms. Goncalves had not been compatible for some time, and that they both decided to separate.

[111] Ms. Goncalves remained in the matrimonial home after the separation. In late July 2008 she was preparing to list the home for sale. On July 30, 2008 she located documents with the Direct Personnel logo in Mr. Slattery’s home office in the basement. She telephoned her father to advise him.

[112] The next day Mr. Goncalves attended at the home with Mr. Slattery’s brother in law to help with the organization of the house, and to pick up the Direct Personnel documents.

[113] Mr. Goncalves confirmed that the documents located in the home office of Mr. Slattery included the 98 time sheets with Mr. Slattery’s writing on them that Mr. Goncalves had been asking for since September 2006.

[114] Also interspersed with the time sheets located in Mr. Slattery’s home office were the documents filed in this proceeding as Exhibit 8a that give rise to the charges 4 and 5.

[115] Mr. Goncalves testified that he had never seen either the time sheets, or the Exhibit 8a documents before.

[116] Other documents of Direct Personnel, as well as tax returns from previous years of Ms. Goncalves that had never been forwarded to Revenue Canada were located in the garage.

[117] In light of the matrimonial situation, and upon the advice of the company accountant, Mr. Slattery resigned from Direct Personnel as a shareholder and officer on July 30, 2008, but continued to work as an employee of Direct Personnel. Mr. Slattery was facing garnishment proceedings with respect to tax arrears from a previous business and did not want the company to be garnished.

[118] On September 28, 2008, Mr. Goncalves met with Mr. Slattery at a Tim Hortons, and advised Mr. Slattery of his findings that he had defrauded Direct Personnel. Mr. Goncalves gave Mr. Slattery a letter of termination. Mr. Slattery contested Mr. Goncalves’ accusations, and there was a physical altercation. There is a dispute between Mr. Slattery and Mr. Goncalves about who assaulted who.

Counts 4 and 5- Creating and using forged documents

The Documents found in the Conditional Sentence Supervisor’s file

[119] Dispersed between the 98 weeks of time sheets located in Mr. Slattery’s home office were three letters marked as Exhibit 8a. The letters were on Direct Personnel letterhead in the name of Mr. Goncalves bearing a signature that Mr. Goncalves. The letters were marked “To Whom it may concern” and were dated August 14, 2006, August 14, 2006 and September 22, 2006.

[120] The originals of these documents, along with other documents bearing the signature of Mr. Goncalves were ultimately located by the police in the file of Mr. Ben Grant. He was the conditional sentence supervisor overseeing Mr. Slattery and his compliance with the terms of a conditional sentence for house arrest and probation related to a conviction in 2005.

[121] These documents explained to the conditional sentence supervisor that Mr. Slattery had business to conduct in Ottawa on a specific day, or that he had to work on a Saturday for Quebec Core, or that he had to play horseshoes at a location where Direct Personal provided sponsorship.

[122] Mr. Goncalves testified that he had never seen the documents in Exhibit 8a before, had no knowledge of these documents, that the signature on the document that was signed was not his. Further, he confirmed that Direct Personnel never had a client in Ottawa.

[123] Mr. Slattery testified that these documents were prepared with the knowledge and consent of Mr. Goncalves, and that Ericka Goncalves signed these documents after reviewing them by telephone with her father and after receiving permission from Mr. Goncalves for her to sign them on his behalf.

[124] Ericka Goncalves denied ever signing the documents on behalf of her father. The suggestion was never made to Mr. Goncalves by defence counsel that he had authorized Ericka Goncalves to sign these documents on his behalf.

Counts 1 to 3: Discovery of fraud and forgery relating to Direct Personnel

[125] Although Mr. Goncalves requested copies of the time sheets after September 2006 when he and Mr. Slattery began functioning from their home offices, he confirmed that he was “family” with Mr. Slattery and did not insist on their production. He confirms now that he feels “stupid”.

[126] Mr. Goncalves testified that it was not until he had access to the time sheets located in Mr. Slattery’s home office in late July, 2008 that the concern about potential fraud crystallized.

[127] Mr. Goncalves cross-referenced the 98 time sheets found in Mr. Slattery’s former home office with the payroll drafts and invoices. The names on the time sheets and payroll drafts did not match. The payroll drafts that Mr. Slattery had provided to Mr. Goncalves for the Direct Personnel employees working the line at Waste Management for payment by cheque or cash contained additional names that did not appear on the time sheets.

[128] As Mr. Goncalves suspected that Mr. Slattery had defrauded Direct Personnel, beginning in August 2008 Mr. Goncalves began his “investigation”.

The evidence of former Direct Personnel employees

[129] Part of Mr. Goncalves’ investigation included contacting some of the individuals whom he could find whose names appeared on the payroll drafts, but did not appear on the time sheets. His goal was to determine whether they had worked for Direct Personnel during the period of time that their names appeared on the payroll draft.

[130] From cross-referencing the documentary records, he found that the names of 14 individuals whose names appeared on the payroll draft prepared by Mr. Slattery, but did not appear on the time sheets.

[131] Mr. Goncalves and the police were unable to locate all of the 14 individuals in question.

[132] Six of the individuals whose names appeared on the payroll draft, but not on the time sheets, testified at the trial. Mr. Goncalves had located and interviewed four of these individuals, and two were located and interviewed by the police.

[133] One individual testified at the preliminary hearing, but did not testify at the trial as she was not available. Her preliminary hearing transcript was filed on consent.

[134] Four of the individuals were deported after the fraud occurred and were not available to testify. One of the individuals who had been deported on October 29, 2007 continued to receive cash payments until July 18, 2008.

[135] Three other individuals were never located.

The evidence of the former Direct Personnel employees

Kevin Crocker

[136] Mr. Goncalves testified that he met with Mr. Crocker after he complained about receiving a T4 prepared by Direct Personnel and sent to Mr. Crocker’s address for periods of time when Mr. Crocker was not working for Direct Personnel.

[137] Kevin Crocker had received a T4 in February 2008 for income that he had supposedly earned from Direct Personnel for the taxation year 2007. He had worked for Direct Personnel at Waste Management operating a fork lift for a brief period of time in October to late November 2006 when he was terminated by Waste Management. Thereafter, he testified that he never worked again for Direct Personnel.

[138] After he received the T4 slip for income allegedly earned in 2007, he went to the police to seek advice. The police advised him to get in touch with a person from Direct Personnel. Mr. Crocker testified that he did not contact Direct Personnel as he had no phone number. Mr. Goncalves testified that he was contacted by Mr. Crocker about a T4 received from Direct Personnel for periods of time when he was not working there.

[139] Mr. Crocker appears in the Direct Personnel payroll draft records as working as a fork lift operator from November, 2006 until February 1, 2008. In Mr. Crocker’s testimony he denied that he was working at Waste Management after the end of November 2006, and denied that the 65 signatures that appeared in Exhibit 5(e) acknowledging cash received for the period November 24 , 2006 to February 1, 2008 were his.

[140] Mr. Crocker’s name was the sole extra employee’s name used in the fraud, beginning for the pay date of November 24, 2006 until March, 2007.

Gemma Browne

[141] Beginning March 23, 2007, an additional name - Gemma Browne - appeared on the payroll draft but not on the time sheets. Ms. Browne did not testify as she was not located by either the police or Mr. Goncalves. There is no record of Ms. Browne being deported.

[142] Ms. Browne signed an application form for employment with Direct Personnel on February 27, 2006. She appears on the payroll drafts but not on the time sheets for the period from March 22, 2007 until June 6, 2008. The signatures for the cash receipts during this period bear no resemblance to the signature on the application form, and are not at all internally consistent.

[143] Thereafter, beginning March 29, 2007 two additional names appeared on the payroll draft prepared by Mr. Slattery, but not on the time sheets. These two additional individuals Ms. Lynette Simon and Ms Quinta Jacaobs did not testify at the trial, but Ms. Lynette Simon testified at the preliminary hearing.

Quinta Jacobs

[144] Ms.Quinta Jacobs signed an application form for employment with Direct Personnel on January 8, 2006. Her name does not appear on the time sheets but does appear on the payroll drafts beginning March 29, 2007 until June 6, 2008. The signatures on the cash receipts do not resemble the signature on the application form, and are not internally consistent.

Lynette Simon

[145] Ms. Lynette Simon testified at the preliminary hearing and her transcript was filed on consent at the trial as Ms. Simon was not available to testify at the trial.

[146] The name Lynette Simon appears on the pay date dated March 29, 2007. Her name continued to appear each week until the pay date of April 4, 2008.

[147] Ms. Simon confirmed that she had not worked for Direct Personnel during this period, and that the signatures on the cash receipts was not hers and did not match her signature on her application to work for Direct Personnel.

Christine Isigi

[148] Beginning April 13, 2007 another name - Christine Isigi - appears on the payroll draft prepared by Mr. Slattery to bring the number of phantom former employees to 5.

[149] Ms. Isigi testified at the trial that she worked for Direct Personnel at the Waste Management facility for three months, from December 2006 until March 24, 2007. She authorized a friend of hers to sign the last cash receipt on her behalf. She did not work for Direct Personnel after that date. She worked as a school teacher, which was her training.

[150] She testified that she was contacted by Mr. Goncalves and that she met with him to review documents. Ms. Isigi appears as an afternoon employee on the payroll draft working for Direct Personnel from the April 13, 2007 pay date to the pay date July 11, 2008. She confirmed that the signatures for the cash receipts contained in Exhibit 5(g) were not hers, and that she “wrote a letter to say it was not my signature”. [ Exhibit 17, written 14/2/2009]

[151] While she was working for Direct Personnel she had retained documentation during the period of her employment. She provided a copy of the cash receipts that she acknowledged contained her signature. These documents are filed as Exhibit 18. These signatures appear to be the same as the signature that Ms. Isigi acknowledges is hers upon her job application form found at tab 1 of Exhibit 5(g).

[152] Ms. Isigi confirms that the number of signatures appearing in Exhibit 5(g) at tabs 2 and 3 were not hers. From my review of the signatures in Exhibit 18, and those that appear in Exhibit 5(g) tabs 2 and 3 the signatures bear no resemblance to each other.

[153] Defence counsel suggested during argument that Mr. Goncalves may well have written the statement filed as Exhibit 17 rather than Ms. Isigi, as he suggests that there are similarities in the handwriting that appears in Exhibit 17, and a note written by Mr. Goncalves after he spoke to Ms. Sorintino. I do not observe similarities in a comparison of the writing. I also accept the evidence of both Ms. Isigi and Mr. Goncalves, that Ms. Isigi prepared Exhibit 17 in her own handwriting, using her own words.

Corine Lavia

[154] The list of the same 5 individuals continues to appear on the payroll draft prepared by Mr. Slattery, but not on the time sheets until the pay date of June 22, 2007, when another name – Corine Lavia - is added.

[155] It is an admitted fact that Corine Lavia was deported from Canada on October 29, 2007. However, her name continued to appear on the payroll draft prepared by Mr. Slattery until the pay date of May 23, 2008, with a signature in her name for cash received during this period.

[156] These same six names continue to appear in the payroll drafts prepared by Mr. Slattery, but not on the time sheets until the pay date of August 31, 2007. After this pay date another name is added to the payroll draft that does not appear on the time sheets.

Paula Rodney

[157] The new addition to the list of phantom former employees is Paula Rodney, bringing the number receiving cash payments to seven.

[158] Ms. Rodney testified at trial. She was located by the police and was not interviewed by Mr. Goncalves.

[159] Ms. Rodney came to Canada six years ago from St. Vincent. She worked at Waste Management for Direct Personnel from May 2006 to July or August 2007 when she was fired from Waste Management after a fight with another employee.

[160] Ms. Rodney confirmed that the cash receipt signed for the pay date September 7, 2007 was not hers. Further, she confirmed that that all signatures on the cash receipts weekly thereafter to the pay day January 11, 2008 were not her signature, that she had not received the cash, and that she did not work for Direct Personnel at Waste Management or at any other facility during that period.

Esther Roberts

[161] For the pay day dated November 16, 2007 to January 11, 2008 another name is added to the payroll draft that does not appear on the time sheets. The name of Esther Roberts appears, bringing the number of phantom employees to eight. She did not testify at trial and there is no information that she was deported.

[162] She signed an application form. The signature is legible but the date is not. I note that the signatures on the cash receipts beginning for the pay day September 21, 2007 continuing to January 11, 2008 bear no resemblance whatsoever to Ms. Roberts signature on the employment application.

Bernand Arzu

[163] On pay day January 4, 2008 two other names are added to the list that appears on the payroll draft for the period in question, but not on the time sheets.

[164] The first is Bernard Arzu, who did not testify as he was deported from Canada on August 28, 2008. Mr. Arzu appears on the payroll drafts from pay day January 4, 2008 to June 6, 2008.

[165] Mr. Arzu signed an application form on October 1, 2007. From my observation, the signature on the application form and the signature on the cash receipts is not the same signature.

William McCrossan

[166] The second name that appears on pay day January 4, 2008 is William McCrossan who did testify at the trial.

[167] Mr. McCrossan was called to testify on behalf of the defence.

[168] He was an employee of Waste Management handling heavy equipment, who worked for a few weeks over the Christmas period in 2007 for Direct Personnel at the Waste Management site to supplement his income. Mr. McCrossan testified that he noticed that his cheque showing his earnings year to date for Direct Personnel was significantly in excess of the approximately $535.00 extra cash that he had earned. It showed some amount closer to $2000.00 to $3000.00.

[169] Mr. McCrossan’s name appears as a line worker for the pay date January 4, 2008 for the pay period December 23 to 29, 2007, and for three other pay periods that he testified he had not worked, and that his signature on the cash receipt was not his.

[170] The signature on the forged cash receipt is signed “William McCrossan”. Mr. McCrossan signs his signature “Billy McCrossan”. I observe that the signatures on the cash receipts do not match the signature on the application signed by Mr. McCrossan.

[171] After discovering the discrepancy in his earning, William McCrossan went to the management of Waste Management. He was concerned that perhaps Direct Personnel was overcharging Waste Management. Mr. Goncalves was on vacation when Mr. McCrossan discovered the error. Mr. McCrossan spoke to the defendant, who suggested that the mix up may be with another worker, William Ball.

[172] Mr. McCrossan met with Mr. Goncalves. Mr. Goncalves told him that his daughter had found some papers and asked him to review some documents including the cash receipts signed William McCrossan. Mr. McCrossan prepared a statement at the request of Mr. Goncalves on October 15, 2008.

[173] The statement filed as Exhibit 29 in his handwriting states as follows:

To whom it may concern. Im a work management employ. To make a little extra money my employer let me work some extra hours through the temp angencie (Direct Personal. After a couple of cheques, they started to pay me in cash. After a while I noticed they had me down as I worked more hours & made more money, witch I didn’t work. I let Shawn Slattery no. He told me he messed up & don’t tell Erson Ho about this & we can work something out. I told my full time employer right away, then called Erson to let him no. Erson reviewed my case to find out I only made $535.50 (59 hours). With a remainder of $2,295.10 with signitures that are not mine. This should be corrected & taken off my t-4.

William T. McCrossan

Billy McCrossan

[174] Mr. McCrossan now says aspects of his statement are not true and that Mr. Goncalves had encouraged him to “implement” Shawn [Slattery]. In cross-examination he said that Mr. Goncalves “sort of implemented [Mr. Slattery] and that Mr. Goncalves needed to show it was not him”. Mr. Goncalves said that he needed the statement to work things out with Revenue Canada. Mr. Goncalves also said that he was looking after his two grandchildren.

[175] Mr. McCrossan testified at the trial that Mr. Slattery did not say that he messed up, that he should not to tell Erson Goncalves, and that they could work something out.

[176] For reasons that I will outline in my findings of credibility, I do not accept this evidence. All of the other evidence of Mr. McCrossan confirms the perpetration of the fraud.

Maria John

[177] Maria John testified that she came to Canada from St Vincent in July 2002, obtained a work permit in 2008, and became a permanent resident in Canada in 2009.

[178] Ms. John worked for Direct Personnel as a line worker during the period relating to the fraud from September 2006 to July 2008.

[179] For a period of time before she had her work permit, she worked for Direct Personnel at the Waste Management facility and was told by Shawn Slattery to use the work name Odile Nangabatu. Initially she was paid by cheque in the name Odile Nangabatu. She would give her pay cheque to her friend Jesse who looked after cashing the cheque. He in turn would give her the cash.

[180] In 2008 Ms. John received her work permit. She was told by Shawn Slattery to continue to use her work name Odile Nangabatu to punch in her time sheet, but that she would be paid in her own name, Maria John. Thereafter, Ms. John testified that she was always paid by cheque in her own name, Maria John. Once she received cheques in her own name she would cash them without Jesse’s involvement. She testified that she never was paid cash.

[181] During the period February 22, 2008 to July 15, 2008 after Ms. John had obtained her work permit, both names Maria John and Odile Nangabatu appear on the payroll draft. Only the name Odile Nangabatu appears on the time sheet. During this period that both Maria John and Odile Nangabatu appear on the payroll draft, both were paid by Direct Personnel. In the payroll draft it is recorded that Ms. John is paid by cheque, and Ms. Nangabatu is paid in cash.

[182] Ms. John acknowledged that she continued to punch in her time card as Odile Nangabatu, but denied that she ever received any of the cash recorded in the 25 cash receipts reflected in Exhibit 5(k). She denied that she ever signed for cash using the name Odile Nangabatu. She confirmed that she received her pay cheque in her name, Maria John.

[183] Mr. Goncalves testified that in July 2008, on one occasion, he was present when the day shift payroll was paid out. After all the employees had been paid, there was one cash envelope left in the name of Odile Nangabatu. He asked where she was and was told by other employees that she was outside. When he tried to give her the cash envelope bearing the name Odile Nangabatu, Ms. John confirmed that she had already been paid by cheque in her name, Maria John.

[184] Mr. Goncalves obtained a statement from Ms. John confirming her evidence.

Indira Gustave

[185] Ms. Gustave was located by the police. She confirmed that she worked for Direct Personnel at the Waste Management facility for one month beginning in February 2008 and that she did not work thereafter. She had a bad skin rash reaction to the work conditions. She confirmed that she did not work for Direct Personnel at Waste Management from June 20, 2008 to July 15, 2008 and that the signatures on the cash receipts were not hers.

Christabelle Cato

[186] Christobelle Cato was deported May 31 2011. Her name appears on the payroll draft, but not on the time sheets for the pay periods between April 25 2008 until June 6 2008.

[187] She signed an application for employment on February 10, 2006. The signatures upon the cash receipts appear different from the signature that appears on the application form, and are not internally consistent.

Mabel Borwne (Browne)

[188] Mabel Browne was deported October 13, 2011. Her name appears on the payroll draft, but not on the time sheets from June 20, 2008 to July 11 2008. She signed an application for employment with Direct Personnel on November 19, 2006 that is in printing signed Mable Borwne. The signatures on the cash receipts are very different from the printed signature, and not internally consistent.

Evidence called by the defence

Mr. Steve Adams

[189] Mr. Steve Adams, a former manager at Waste Management testified for the defence. He left the employment of Waste Management in October 2006, and therefore could not comment on the billing practices and routines during the period relating to the fraud from November 2006 to July 2008 after Mr. Goncalves and Mr. Slattery began completing their work from their home offices.

[190] Mr. Adams was a friend of Mr. Slattery, whom he knew from bowling, but was generally a credible witness. I accept Mr. Adams’ evidence of the routines in place while he was at Waste Management for the approval of time sheets to completion of the invoicing process. I find he underestimated Mr. Slattery’s involvement in the routines at Waste Management and I note that Mr. Slattery’s name was never included in any of the pick-up or delivery of the accounting documents, which does not accord with the evidence of either Mr. Goncalves or Cory Shiels.

[191] The Direct Personnel supervisors would punch in the punch cards for the Direct Personnel employees and assign them to one of the recycling lines. A Waste Management supervisor would double check the number of punch cards against the number of employees. At the end of the week the punch cards would be collected by the Direct Personnel supervisor and given to Waste Management. The punch cards would be picked up on Monday by Direct Personnel by either a driver or Mr. Goncalves and taken to the Direct Personnel rented offices for the preparation of the time sheets.

[192] The time sheets were then delivered back to Waste Management and approved by a signature of a Waste Management supervisor. If Waste Management discovered an error on the time sheet that would affect the payroll, they would call Erson Goncalves at the Direct Personnel office to make the correction over the phone to ensure that the payroll was correct, as Mr. Goncalves prepared the payroll. The type of errors discovered were in relation to number of hours worked. It would be rare to have a person’s name on the time sheet with no corresponding punch card, and similarly it would be rare to have a punch card without the person’s name appearing on a time sheet.

[193] On Monday afternoon or Tuesday morning the time sheets, after being approved by Waste Management, would be picked up by Mr. Goncalves so he could take them back to the office to prepare the invoices. The invoices were generally provided to Waste Management by Mr. Goncalves, or by the driver. Once the invoices were approved, payment was arranged by a Visa authorization.

[194] Waste Management would keep the punch cards, except punch cards for any extra Direct Personnel employees who worked but were not to be paid for by Waste Management.

[195] Mr. Adams testified that when Direct Personnel supplied extra people so as not to be short, for 75% to 80% of the time Waste Management was able to utilize them.

[196] The payroll was brought to the Waste Management site on Fridays, and the distribution of the payroll was at the end of the shift or when the employees were leaving the site. The payroll was, according to Mr. Adams, never distributed when the workers were on the line.

Evidence of Stuart Wiles

[197] Mr. Wiles worked as a driver for Direct Personnel and briefly as a supervisor at the new Waste Management site until he was terminated for sleeping on the job in the summer of 2006. He confirmed that he would receive a call from either Mr. Goncalves or Mr. Steve Adams with instructions to take the punch cards to “Erson’s office”- which was the Direct Personnel office where both Mr. Goncalves and Mr. Slattery worked. He confirmed that the office was upstairs, and that he would take the documents to the office on Mondays on most weeks. Mr. Slattery’s mother worked in the office for Direct Personnel at that time. Mr. Wiles had no familiarity with time sheets, payroll drafts or invoices. He also testified that on Mondays Mr. Goncalves would pick up the punch cards, the equipment list to be charged to employees, and the stubs that employees had signed for cash receipts or cheques from the payroll from the week before.

[198] Mr. Wiles confirmed that he had briefly worked for Quebec Core and that Mr. Slattery also worked there. This was during the period while he was working as a driver for Direct Personnel, and while he was waiting for a supervisor job with Direct Personnel to open up.

Similar fact application

[199] In February 2005 Mr. Slattery pleaded guilty to fraud against his former employer, Nu-Way Personnel. The facts admitted to be true at that hearing are as follows:

MR. PRATT: Your Honour, the accused was working at the time of these offences for a personnel company called Nu-Way here in Brampton, the business being on County Court Boulevard. The accused was responsible for securing accounts with various companies that would come to Nu-Way for personnel needs. One of the such, one such company was Unicity, which was an account that was being supervised by the accused on behalf of Nu-Way. Unicity had received several invoices for employees that had apparently worked for them but did not recognize the names and so a complaint was lodged with Nu-Way. Nu-Way looked into it and the internal investigation revealed that during a period between August 4th and September 22nd of 2002, the accused had doctored, so to speak, the time sheets of Unicity using identification of previous Nu-Way employees and submitting them as legitimate to payroll. Payroll of Nu-City would then cut cheques to these employees. These cheques would then be taken by the accused and deposited to one of his own personal bank accounts. With respect to the – the amounts and the individuals whose names were used, I can advise specifically that there was an employee named Carol Carr, and that’s C-A-R-O-L C-A-R-R, and Karminder Khela, K-H-E-L-A. The grand total of cheques cashed in their name, improperly or fraudulently, was approximately $3,795.00. Police became involved and ultimately examined the bank records of the accused and determined that, in fact, the cheques had been put into one of three accounts in his name. On the 13th of November of 2003, police located the accused at his new place of business, he having been terminated from Nu-Way some time prior to that, and there placed him under arrest. Those are the allegations. It’s my understanding that Nu-Way has been reimbursed for its losses by its bank.

THE COURT: Are those facts admitted?

MR. HARRIS: They are, Your Honour.

[200] The defence argues that the facts in the Nu-Way fraud and the facts of this case are not strikingly similar. The Nu-Way incident involves stealing cheques, not cash, Mr. Slattery was an employee of Nu-Way, not an owner. The Nu-Way fraud involved doctoring the time sheets, whereas in this case it is alleged by the crown that Mr. Slattery doctored the payroll draft, and that the time sheets prepared by him and submitted to Waste Management were accurate.

[201] Notwithstanding the admission made by the defence at the opening of trial, I conclude that it would not be appropriate in the facts of this case to allow similar fact evidence to assist in proving the identity of Mr. Slattery as the person who perpetuated the fraud at Direct Personnel.

[202] Ms. Goncalves has admitted to having an interest in the outcome of this proceeding in the outstanding matrimonial proceeding.

[203] I agree with the submissions of the Crown that the only two individuals that could have perpetuated the fraud were Mr. Slattery or Mr. Goncalves. Any other suggestion by the defence is fanciful and is not grounded in any way in the evidence.

[204] In the context of an ongoing matrimonial dispute, and the fact that Mr. Slattery and Mr. Goncalves are related by marriage, additional caution should apply in considering a similar fact application. In this particular context, the evidence and credibility of each witness should be critically considered without the benefit of the admission of the similar fact evidence to prove identity.

[205] I conclude that the issue of identity must be proved by the Crown beyond a reasonable doubt based upon the evidence at this trial, without the benefit of similar fact evidence. Therefore, notwithstanding the apparent admission made by the defence at the opening of the trial, the similar fact application is denied.

Discovery during the trial of other documents in the possession of Mr. Goncalves that had not been disclosed and were located in Mr. Slattery’s garage

[206] Prior to the commencement of this trial, the Crown had done an admirable job of organizing and binding the numerous documents in a logical manner. However, during the trial, I asked for original documentation to be filed, as some of the photocopies had been cut off or were not legible.

[207] Mr. Goncalves arrived at the court house after his evidence had been completed with the boxes of original Direct Personnel documents for filing.

[208] When the Crown reviewed the contents of the boxes, additional Direct Personnel documents that had not been disclosed to the defence were found.

[209] Mr. Goncalves was recalled to the stand and testified that he had provided photocopies of all of the documents in all of the boxes to the police when he first reported the fraud to them in November 2008. The contents of the boxes that had not been disclosed to the defence were the additional documents located by Mr. Goncalves and Mr. Slattery’s brother in law in Mr. Slattery’s garage.

[210] I accept that Mr. Goncalves disclosed all of the documents to the police, but that a box of documents must have been lost by the police, probably when the file was transferred to the officer with original carriage of the file, to the officer presently in charge of the file. There was some sloppiness on the part of the police, but there could be no real prejudice to Mr. Slattery as these business records were known to Mr. Slattery as they were found at his home.

[211] I granted an adjournment to allow defence counsel to review all of the documents and to consider their position.

[212] Defence sought a stay of proceedings, which I denied.

[213] As the discovery of the documents came at the end of the Crown’s case, I was inclined to rule that the documents should not be admitted at that stage of the proceedings, unless the documents were admitted at the request of and with the consent of the defence.

[214] I made it clear that defence counsel could not pick and choose which documents it wished to rely upon.

[215] After having an opportunity to review its position, the defence counsel withdrew their application contesting the admissibility of the documents, on the condition that there would be an adjournment to allow the defence to prepare, and on the condition that Mr. Goncalves would be recalled to be questioned about the additional documentation. The trial was then adjourned to a date acceptable to the defence.

[216] Mr. Goncalves was recalled to give evidence about these documents on January 17, 2012. Mr. Goncalves testified that all of the additional records were business records prepared in the ordinary course of business. The defence had the opportunity to cross-examine Mr. Goncalves once again on these documents.

[217] All of the original business records were filed as exhibits, and the crown organized and cross referenced the documentation recently disclosed filed as Exhibit 19.

Findings of credibility of Crown witnesses

Mr. Erson Goncalves

[218] Mr. Goncalves was a well organized, totally credible witness. English is his second language, and at times he had difficulty understanding the questions. Once he understood the question, he answered without hesitation in a straight forward manner.

[219] I accept his evidence as proving beyond a reasonable doubt that during the period of the fraud, Mr. Slattery prepared the time sheets from his home office. In spite of numerous requests for the time sheets, Mr. Goncalves was provided only with the payroll draft prepared by Mr. Slattery during the period relating to the fraud. Mr. Goncalves trusted Mr. Slattery as a family member and did not insist on the production of these documents.

[220] Mr. Goncalves had an accounting background. Once he had the 98 time sheets located in Mr. Slattery’s home office, he approached the problem of the discrepancy between the time sheets and the payroll draft in a rational manner. He did not jump immediately to the conclusion that Mr. Slattery had perpetrated a fraud on Direct Personnel. Mr. Slattery continued in the employment of Direct Personnel.

[221] After cross-referencing the payroll draft and the time sheets, Mr. Goncalves met with four former employees at a Tim Hortons and showed them the cash receipts which purported to contain their signatures. I accept as proved beyond a reasonable doubt that the statements obtained by the individuals were written in their own hand and used their own language. They denied that they worked for Direct Personnel during the period of the fraud, and confirmed that the signatures appearing on the cash receipts were forgeries.

[222] For the reasons outlined in the findings of credibity of Mr. McClossan, I do not accept the suggestion that Mr. Goncalves pressured Mr. McClossan to include any facts in his statement that were not true. Mr. Goncalves is a quiet spoken, respectful, polite man. The suggestion that Mr. McClossan could be pushed around to say anything he did not wish to say does not accord with what I observed of Mr. McClossan’s colourful comportment in the witness box.

[223] Mr. Goncalves testified on four occasions during the trial. His evidence was consistent throughout and made sense.

[224] Mr. Goncalves testified when he initially gave his evidence as a Crown witness. He testified again to confirm that he had given all available documentation to the police when he reported the fraud to the police when the additional original documentation was discovered. He testified about the additional documentation and was cross-examined by the defence. As well, I allowed the application of the defence over the objection of the Crown to recall Mr. Goncalves to cross-examine Mr. Goncalves with respect to any Brown and Dunn issues that the Crown was relying upon.

[225] When Mr. Goncalves was recalled at the request of the defence, Mr. Goncalves had no preparation whatsoever for the questions he was asked. He was credible in his obvious confusion about the suggestions made by the defence.

[226] I take into account the context of the matrimonial proceedings in making my findings of credibility.

[227] The veiled suggestion by the defence that Mr. Goncalves perpetrated this fraud beginning in 2006, then reported it to the police to implicate Mr. Slattery due to the matrimonial situation in 2008, is ludicrous. Mr. Slattery confirmed that initially when the parties separated, until these allegations surfaced, the approach between Mr. Slattery and Ms. Goncalves toward the matrimonial dispute was collaborative. It was only when these fraud allegations surfaced after discovery of the time sheets, that the matrimonial proceeding became acrimonious. This is not surprising.

[228] Mr. Goncalves’ evidence is logical, internally consistent, makes sense and is corroborated by the available documentation. Although Mr. Goncalves no longer likes or respects Mr. Slattery after discovering these allegations, he did not appear in any way vindictive. He was disappointed and felt stupid that his trust had been so significantly breached. I conclude without hesitation that he is an honest, credible witness.

Ms. Ericka Goncalves

[229] Erika Goncalves was also a credible, straight forward witness. She provided evidence as to the lifestyle enjoyed by the family prior to separation. Her evidence about large rolls of cash appearing regularly allegedly from poker was confirmed in general by Mr. Slattery. He stated that his minimum poker fund was $2000.00.

[230] Ms. Goncalves also provided evidence about locating documents bearing the Direct Personnel logo in late July 2008 when she was preparing the home for sale. Locating these documents was not disputed by the defence.

[231] Ms. Goncalves denied the defence suggestion that she had signed Mr. Goncalves’ signature to the documents located with the time sheets, and ultimately located by the police in the file of Mr. Ben Grant, Mr. Slattery’s conditional sentence supervisor. Two of the three documents found in the conditional supervisors file were dated in 2006 while Mr. Slattery and Mr. Goncalves were both working at the shared office. During this time Mr. Slattery and Mr. Goncalves saw each other frequently and they each performed their responsibilities for preparing Direct Personnel paperwork at one location. It made no sense to require Ms. Goncalves to sign documents on her father’s behalf for two of the three documents located, as Mr. Slattery and Mr. Goncalves saw each other frequently.

[232] I note that the defence evidence that she had discussed the contents of these documents with her father by telephone, and that he had authorized her to sign them on his behalf, was never suggested to her.

[233] I accept her evidence that she did not sign the documents on behalf of Mr. Goncalves found in Exhibit 8a or in the file of the conditional supervisor as proven by the Crown beyond a reasonable doubt.

[234] Ms. Goncalves appeared as a somewhat naive, traditional wife, who trusted Mr. Slattery’s explanations about how he spent his time. Mr. Slattery was responsible for organizing the family finances, while she worked, and looked after the children and the home.

[235] She candidly acknowledged that she had an interest in the outcome of this criminal proceeding, as the matrimonial issues are still unresolved. Although she admitted to this conflict of interest, I find that her evidence given at this trial was credible, internally consistent made sense and was fair. I conclude that her evidence given at this trial was truthful.

Mr. Ben Grant

[236] The evidence of Mr. Ben Grant, Mr. Slattery’s conditional sentence supervisor was not challenged by the defence, and I accept the credible evidence of Mr. Grant as proved beyond a reasonable doubt.

Evidence of former Direct Personnel employees

[237] I find the evidence of the five former Direct Personnel employees who testified for the Crown to be credible, truthful witnesses, and their evidence was not challenged by the defence.

[238] These immigrant women were all hard workers, trying to make their way in Canada to support their children and to make a life for themselves. They expressed a variety of emotions during their testimony. They were consistently angry and incredulous that their signatures had been forged and cash taken as they looked at page after page of forged signatures. One witness was obviously very nervous about testifying although she now has a work permit to work in Canada. Another witness was particularly angry at Direct Personnel for knowingly hiring illegal workers, yet making the required deductions from their weekly cash payments.

[239] Four of the fourteen individuals that the Crown alleges were involved in the fraud have been deported. The police and Mr. Goncalves were unable to locate three others whose names the crown alleges were used by Mr. Slattery in the fraud.

[240] Clearly those who came to Canada and sought work, particular those without a social insurance number, were incredibly vulnerable, and not likely to complain about a discrepancy in their T4 income.

Findings of credibility of defence witnesses

Willliam McCrossan.

[241] I observe that Mr. McCrossan was a colourful, animated witness who was obviously very angry with Mr. Goncalves for involving him in this matter. He seemed to think that he was providing the primary evidence of fraud against Mr. Slattery, whom he liked.

[242] Mr. McCrossan testified that he had experienced a period when he was not working as a result of problems with alcohol and marital problems. When the police came to investigate, he was starting afresh at Waste Management at a job that was important to him. The management at Waste Management had been very supportive during his period of difficulties. There were rumours at Waste Management that it was the testimony of Mr. McCrossan that was the key evidence against the defendant.

[243] When the police attended the Waste Management site, the detective told Mr. McCrossan that he would not be a good witness.

[244] Mr McCrossan acknowledged that he became very agitated when the police came to investigate these fraud allegations while he was working a shift at Waste Management. He felt that Mr. Goncalves had lied to him and manipulated him to give the statement referred to in paragraph 153 herein.

[245] I do not accept the suggestion of Mr. McCrossan that Mr. Goncalves did anything proactive to encourage Mr. McCrossan to implicate [implement] Mr. Slattery. It was obvious to me that Mr. McCrossan marches to his own drummer. I conclude that the polite, mild mannered Mr. Goncalves would not be able to pressure Mr. McCrossan into saying anything he did not want to say. Mr. Goncalves may well have said that Mr. Slattery made an error and that it was necessary to investigate and rectify matters with Revenue Canada. I find that Mr. McCrossan wrote out his statement on his own without any pressure from Mr. Goncalves, and that it was truthful, to the best of the recollection of Mr. McCrossan at the time it was made.

[246] Considered as a whole, Mr. McCrossan’s evidence confirms the fraud, and does not undermine Mr. Goncalves’ credibility.

Mr. Steve Adams

[247] I found Mr. Adams generally to be a credible witness, although his friendship with Mr. Slattery may have resulted in an exaggeration of the involvement of Mr. Goncalves, and a minimalization of the role of Mr. Slattery in the accounting and payroll matters prior to the fraud and the separation of the offices. I note that his evidence of this point conflicts with Cory Shiels and Mr. Stuart Wiles. In any event, it is clear that Mr. Adams could not testify about who did what after he left the employment of Waste Management in October 2006 and the fraud began in November 2006.

[248] I accept the evidence of Mr. Adams about procedures in general, and the practice of sometimes having extra employees furnished by Direct Personnel to avoid being short. As he confirmed, 75% to 80% of the time there were not extra employees furnished that could not be placed and paid by Waste Managment. His evidence confirms that providing extra employees could not possibly account for the magnitude of the fraud. He also confirmed that if there were extra employees furnished to Waste Management in excess of the Waste Management quota that could not be placed, that the punch cards for these extra employees would be returned to Direct Personnel as their names would not appear on the time sheets.

Mr. Stuart Wiles

[249] I accept the evidence of Mr. Wiles, and again note that he was terminated from his employment with Direct Personnel in the summer of 2006 while Direct Personnel was being run from a shared office where both Mr. Slattery and Mr. Goncalves worked. His evidence is not particularly relevant or helpful to the time frame of the fraud.

Mr. Slattery

[250] I must consider the evidence and the credibility of Mr. Slattery in light of the principles of R. v. W.D. (1991), 1991 CanLII 93 (SCC), 63 C.C.C. (3d) 397 at para 28 (S.C.C). R. v. W.D. directs that if I believe the evidence of Mr. Slattery, I must acquit. Even if I do not believe the evidence of Mr. Slattery but I am left in reasonable doubt by it, I must acquit. Finally, even if I am not left in doubt by the evidence of Mr. Slattery, I must ask myself whether, on the basis of the evidence which I do accept, I am convinced beyond a reasonable doubt by that evidence of the guilt of Mr. Slattery.

[251] I conclude that where the evidence of Mr. Slattery conflicts with Mr. Goncalves or with Ericka Goncalves, without hesitation I reject the evidence of Mr. Slattery, and I accept as proved by the Crown beyond a reasonable doubt the evidence of Mr. Goncalves and Ms. Ericka Goncalves.

[252] I conclude that the evidence of Mr. Slattery, even though not believable, does not raise a reasonable doubt that it was Mr. Slattery that committed the fraud at Direct Personnel.

[253] I conclude that considering all of the evidence as a whole, including all evidence called by both the Crown and the defence, that the Crown has proved beyond a reasonable doubt all of the elements of fraud, including proving beyond a reasonable doubt the identity of Mr. Slattery as the person who perpetrated the fraud.

[254] I find as proved beyond a reasonable doubt that it was Mr. Slattery, not Mr.Goncalves that prepared the time sheets for the Direct Personnel line employees working at Waste Management from September 2006 to July 5 2008 when Waste Management began preparing the time sheets from the punch cards.

[255] Clearly Mr. Slattery assumed responsibility for overseeing the supervision and the paperwork for the Direct Personnel line workers at Waste Management. He acknowledged that he prepared the payroll draft each week for the Direct Personnel line workers at Waste Management from the time sheets.

[256] I accept as proved beyond a reasonable doubt that the 98 time sheets relevant to the period of the fraud were located by Ms. Ericka Goncalves in Mr. Slattery’s home office at the end of July 2008. He cannot deny involvement in the preparation of the time sheets as his handwriting appears upon each of the draft time sheet during the period relating to the fraud.

[257] His explanation for how and why his writing appears on the draft time sheets makes no sense.

[258] I do not accept Mr. Slattery’s evidence that it was Mr. Goncalves that prepared the first draft of the time sheets from the punch cards then forwarded them to him by email for detailed review conducted on a line by line basis by telephone. Mr. Slattery’s suggestion that he reviewed by telephone and checked off each name on the time sheet with Mr. Goncalves reviewing each punch card is incredibly inefficient. At the height of the operation this could be a review of up to 180 names for both shifts. He stated he did this as Mr. Goncalves had difficulty preparing the time sheets and made many errors.

[259] To the contrary, the evidence at this trial was that Mr. Goncalves was responsible for the accounting in the office and that he was the person who paid close attention to detail.

[260] The division of responsibility between Mr. Slattery and Mr. Goncalves was practical and made sense. Mr. Goncalves looked after all aspects of the smaller Direct Personnel clients, and all of the other payroll and financial compliance matters. Mr. Slattery looked after developing new business and all aspects of the Waste Management client, apart from the preparation of the payroll.

[261] It was clear from the evidence of Mr. Slattery that he had an intimate knowledge of how the Waste Management/Direct Personnel time sheet process functioned. I conclude that he had this detailed knowledge because he was responsible for the entire process.

[262] I accept the evidence of Ms. Gonzales that each Sunday Mr. Slattery would attend Waste Management to organize the punch cards for the Direct Personnel employees working at Waste Management for the following week.

[263] Mr. Slattery supervised the supervisors and was the hands on person if there were issues or problems at Waste Management. He knew who was working each week. He then prepared the time sheets from the punch cards at the beginning of the following week, and sought approval from Waste Management for the time sheets.

[264] I conclude that Mr. Slattery’s handwriting appears all over the 98 time sheets relevant to the period of the fraud located in his home office because it was his responsibility to prepare them.

[265] I accept as proved beyond a reasonable doubt that Mr. Goncalves asked for the time sheets after they began working from their home offices in September 2006, but did not insist. Mr. Goncalves began his “investigation” of his suspicions of wrongdoing only after Ms. Goncalves located the time sheets in late July, 2008 in Mr. Slattery’s home office.

[266] Mr. Slattery would then prepare the payroll draft for the Waste Management employees from the approved time sheets. The payroll draft was forwarded to Mr. Goncalves for completion.

[267] It was not clear from the viva voce evidence whether Mr. Slattery or Mr. Goncalves prepared the invoices to Waste Management. Mr. Slattery acknowledged that he prepared some of the invoices to Waste Management from the approved time sheets. He was clearly knowledgeable about the $10,000.00 limit for the Visa authorizations, which was the method of payment by Waste Management.

[268] The email trail in Exhibit 7 confirms that Mr. Slattery prepared the invoices to Waste Management and that he would advise Mr. Gonvalves when the Visa payment authorization was given by Waste Management for payment of specific invoices.

[269] I observe that Mr. Slattery’s evidence was riddled with problems. He spoke with authority and knowledge when he was on safe ground. I noticed that his demeanor changed dramatically when I concluded that he was not telling the truth. He spoke more loudly. He developed a red rash at the back of his neck. His body language spoke volumes. When questioned about particulars relating to the fraud, he went from being knowledgeable to his answers becoming evasive, and non-responsive to the question asked. When pressed, his memory and knowledge of detail evaporated. He frequently answered that he could not recall.

[270] It was clear from the evidence that during the period relating to the fraud that Ms. Goncalves and Mr. Slattery lived beyond their means, particularly in light of Ms. Goncalves being on maternity leave beginning in October 2007. The amount that Mr. Slattery admits was his minimum poker fund of $2000.00 per week kept in a shoebox closely coincidentally resembled the figures of the total fraud each week as the fraud escalated in accordance with the calculation in the compendium prepared by the crown.

[271] Mr. Slattery made a telling error during his evidence concerning the spelling of the name Kevin Crocker. Mr. Crocker was on the phantom payroll for the longest period of time of any of the employees’ names involved in the fraud. On all of the forged cash receipts the signature appears as “Kevin Croker” instead of “Crocker”. During his cross-examination when asked to spell Kevin Crocker, he spelled it Kevin K or C Croker. When asked to sign the signatures of the 15 employees involved in the fraud, he signed the name “Kevin Croker”-again misspelled.

Counts 1 to 3

[272] Before outlining my conclusions I remind myself of the principles outlined in WD, the presumption of innocence, that the burden of proof is always upon the crown and never shifts, and the meaning of reasonable doubt.

[273] Shawn Slattery is charged with counts one to three in the indictment with fraud over $5000.00 against Direct Personnel and Human Resources Inc. (Direct Personnel), knowingly using forged documents including payroll drafts and company cash receipts, and with knowingly making false documents by signing cash receipts with forged signatures intending that they be acted upon as genuine contrary to sections 380(1)(a), 368(1.1)(a) and 367(a) of the Criminal Code.

[274] Sections 380(1)(a), 368(1.1)(a) and 367(a) of the Criminal Code provide:

380. (1) Everyone who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,

(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars

368. (1) Everyone commits an offence who, knowing or believing that a document is forged,

(a) uses, deals with or acts on it as if it were genuine;

(b) causes or attempts to cause any person to use, deal with or act on it as if it were genuine;

(c) transfers, sells or offers to sell it or makes it available, to any person, knowing that or being reckless as to whether an offence will be committed under paragraph (a) or (b); or

(d) possesses it with intent to commit an offence under any of paragraphs (a) to (c).

Punishment

(1.1) Everyone who commits an offence under subsection (1)

(a) is guilty of an indictable offence and liable to imprisonment for a term of not more than 10 years

367. Everyone who commits forgery

(a) is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years

[275] The decision in R. v. Theroux 1993 CanLII 134 (SCC), [1993] S.C.J. No 42 (S.C.C.) confirms the elements that must be proved by the Crown beyond a reasonable doubt to prove fraud in accordance with section 380(1)(a) of the Criminal Code.

[276] The actus reus of fraud is established by proof of a prohibited act, be it an act of deceit, falsehood or other fraudulent means, and by proof of deprivation caused by the prohibited act. What constitutes a falsehood or a deceitful act for the purpose of the actus reus is judged on the objective facts. As well, the actus reus of fraud by "other fraudulent means" is determined objectively, by reference to what a reasonable person would consider to be a dishonest act.

[277] The mens rea of fraud is established by proof of subjective knowledge of the prohibited act, and by proof of subjective knowledge that the performance of the prohibited act could have as a consequence the deprivation of another which may consist in knowledge that the victim's pecuniary interests are put at risk. In certain cases, the subjective knowledge of the risk of deprivation may be inferred from the act itself, barring some explanation casting doubt on such inference.

[278] Where the conduct and knowledge required by these definitions are established, the accused is guilty whether he actually intended the deprivation or was reckless as to whether it would occur.

[279] The defence does not dispute that a fraud occurred at Direct Personnel. The issue is whether the Crown has proved beyond a reasonable doubt the identity of Mr. Slattery as the perpetuator of the fraud.

[280] The suggestion made by defence counsel during argument that it could have been one of the supervisors who perpetrated the fraud is not supported by the evidence. Admittedly, the supervisors had access to the Direct Personnel locker and were responsible for handing out the payroll. Conceivably the supervisors could have intervened and taken the cash envelopes and forged signatures. However, they could not have perpetrated the fraud with the discrepancy between the names that appeared on the time sheets, and on payroll. It was clear by the evidence of Mr. Wiles and Mr. Shiels that neither had any idea about the internal processing of the accounts. When questioned about what went on the time sheets, Mr. Shiels said “I have no idea what was put on these. It was not my job”. I note as well, that the suggestion that it may have been Mr. Shiels that committed the fraud was never put to him by the defence.

[281] From the facts of this case, I conclude as proved beyond a reasonable doubt that the only two individuals that had the ability to perpetrate the fraud were Mr. Goncalves or Mr. Slattery.

[282] I have rejected the similar fact application as a means to assist the Crown in proving the identity of Mr. Slattery as the person who perpetrated the fraud. However, I may consider the fact that Mr. Slattery has a lengthy criminal record of offences of dishonesty beginning in 2002, including theft from the mail, five counts of theft of credit cards, fraud under $5000, and breach of trust by a public officer. In 2005 Mr. Slattery pleaded guilty of fraud over $5000.00. I may consider these criminal convictions for the limited purpose of assessing Mr. Slattery’s credibility. I may only use the fact, number and nature of these convictions to help me to decide how much or little I believe and rely upon the testimony of Mr. Slattery in deciding this case.

[283] I found Mr. Slattery to be a totally incredible, unreliable witness who was prepared to say anything that may assist him. When there is a discrepancy between the evidence of Mr. Slattery and Mr. Goncalves, or Ms. Ericka Goncalves, without hesitation I accept the evidence of the credible crown witnesses as proving facts beyond a reasonable doubt. Applying the test in WD I conclude that the crown has proved the fraud and forgery outlined in counts 1 to 3 beyond a reasonable doubt.

[284] I conclude for the reasons that I have outlined, and based upon my findings of credibility, that the Crown has proved beyond a reasonable doubt that it was Mr. Slattery that prepared the time sheets from the punch cards and submitted the time sheets to Waste Management for approval.

[285] Mr. Goncalves, in spite of numerous requests, did not see the time sheets until July 2008 when Ms. Goncalves located some documentation in Mr. Slattery’s home office with the Direct Personnel name.

[286] The fraud did not occur in the preparation of the time sheets. Waste Management had a careful system of checks and balances both when the employees were punched in and also to verify the accuracy of the time sheets prepared by Mr. Slattery from the punch cards.

[287] The fraud occurred when Mr. Slattery prepared the payroll draft for the employees whose names legitimately appeared on the time sheets for Waste Management. He simply added to the payroll draft the names of the former phantom employees that did not work during the week in question, and whose names did not appear on the time sheets. He became bolder as the fraud went undetected. The fraud began with one employee, and at its height involved ten phantom employees on the payroll.

[288] Mr. Goncalves would each week prepare the payroll for those working at Waste Management, as well as the phantom former employees. The names of the former employees involved in the fraud generally worked in the afternoon shift, and were all paid in cash, with the exception of Kevin Crocker. The names of the phantom employees appeared early in the payroll draft list, so that the envelopes of cash would be easy to locate.

[289] I find as proved beyond a reasonable doubt that Mr. Slattery would either pick up the payroll from Mr. Goncalves’ home, and remove the cash envelopes and forge the signatures for former employees, or he would attend the Waste Management site and remove the cash envelopes of the phantom employees from the secure locker and would forge the cash receipts. He had ample time and opportunity to intervene before the end of either the day or afternoon shift.

[290] The identify of Mr. Slattery as the person who perpetuated the fraud is the only inference that may be drawn from facts that I have found have been proved beyond a reasonable doubt.

[291] I conclude that the Crown has proved beyond a reasonable doubt that Mr. Slattery knowingly used forged payroll drafts to include the names of former employees, knowing that they were no longer working at Direct Personnel. Mr. Goncalves, relying upon the forged payroll draft would prepare payments for these phantom employees. Mr. Slattery would intervene, take the cash envelopes and forge the signature of these employees upon the cash receipt intending that they be acted upon as genuine contrary to sections 380(1)(a), 368(1.1)(a) and 367(a) of the Criminal Code. Mr. Slattery shall therefore be found guilty of counts 1 to 3.

Quantum of the Fraud

[292] Clearly, in accordance with the compendium prepared by the Crown there is evidence proving beyond a reasonable doubt fraud against Direct Personnel in the total amounts of $77,671.64 based upon the evidence of the former employees who testified at trial.

[293] As well there is proof beyond a reasonable doubt of fraud in the further sum of $8,275.23 for notional payments to Corine Lavia, who was deported on October 29, 2007 but who continued to receive cash payments until July 18, 2008.

[294] The evidence of Lynette Simon taken from her preliminary hearing transcript confirms beyond a reasonable doubt further fraudulent payments in the amount of $15,811.13. The evidence of Maria John, when double payments were processed for the same person adds a further sum of $8392.89 to the fraudulent losses to Direct Personnel proved beyond a reasonable doubt. [I note that in the summary prepared by the crown he calculated the fraudulent double payments as $4,076.31. In fact the total of the fraudulent double payments totals $8392.89.]

[295] These figures total $110,148.89.

[296] In addition there are further payments that are alleged by the Crown to be fraud against Direct Personnel made to former employees who were deported or could not be located by either Mr. Goncalves or the police totaling an additional sum of $84,224.29.

[297] The Crown alleges that the same fraudulent scheme was used with respect to these former employees, although the Crown concedes that in certain instances the documentation is not complete, where the time sheets and payroll drafts for the period are missing.

[298] The evidence of fraud in these instances is that the cash receipt signatures do not match the signatures on the application for employment. I conclude that the absence of documentation for the purpose of a criminal trial is not sufficient to prove beyond a reasonable doubt that these were fraudulent transactions in the context of a criminal trial.

[299] As well, it is possible, though not likely, that the individuals who were deported or could not be found, with the exception of Corine Lavia, could have been extra employees that did work at Waste Management but did not appear on the time sheets as they were “extras”. Extras who worked still had to be paid by Direct Personnel and were properly included in the payroll. Obviously such a scenario could not apply to Corine Lavia, as she continued as a phantom employee receiving cash payments after she had been deported. Therefore clearly she could not have been an extra employee who worked.

[300] However I confirm that the civil standard of proof of the further fraudulent losses in the amount of $84,224.29 for this group of employees is amply met. Clearly, in all probability, fraud using the same method as proved by the viva voce evidence of the former employees occurred.

[301] For the reasons outlined, I conclude that the Crown has proved beyond a reasonable doubt that Mr. Slattery perpetrated a fraud upon Direct Personnel beginning in November 2006 up to and including July 2008. The amount of the fraud against Direct Personnel that has been proved beyond a reasonable doubt is in the amount of $110,148.89. I conclude that the balance of the fraud has been unquestionably proved on a balance of probabilities.

Counts 4 and 5

[302] The defendant is also charged in counts 4 and 5 with knowingly making false documents in 2006 on the letterhead of Direct Personnel signed by Erson Goncalves as if they were genuine intending that they be acted upon contrary to sections 368(1.1)(a) and 367(a) of the Criminal Code. These documents were provided by Mr. Slattery to his conditional sentence supervisor as the defendant needed proof of specifics of employment by the terms of his house arrest for him to leave his home. It is alleged that he used the forged documents not to work, but for personal activities.

[303] Section 368(1.1)(a) and section 367(a) are outlined in para 254.

[304] The defence does not dispute that if Mr. Slattery prepared, signed and provided these documents to his conditional sentence supervisor without the knowledge and consent of Mr. Goncalves, that the requisite elements of knowingly making false documents intending that they be acted upon in Counts 4 and 5 have been met.

[305] I accept the evidence as proved beyond a reasonable doubt that Mr. Goncalves saw for the first time the letters marked as Exhibit 8a on Direct Personnel letterhead addressed “to whom it may concern” that were found when the time sheets were located. He clearly did not sign these documents.

[306] I conclude that the Crown has proved beyond a reasonable doubt that Ms. Goncalves did not sign these documents a located in Mr. Slattery’s home office on behalf of and with the authorization of Mr.Goncalves.

[307] I find that the crown has proved beyond a reasonable doubt, that Mr. Slattery prepared the documents, and forged the signature of Mr. Goncalves without his knowledge or consent.

[308] The police put two and two together and traced similar [not all identical] documents that were located in the file of Mr. Ben Grant, Mr. Slattery’s conditional sentence supervisor. Exhibits 8b and 8c were located in Mr. Grant’s file.

[309] Mr. Goncalves confirmed that none of the documents found either in Mr. Slattery’s home office or in the file of Mr. Grant were prepared by him, or that they bore his signature, or that he had any knowledge of these documents until they were discovered in Mr. Slattery’s home office.

[310] I accept the evidence of Erika Goncalves as proved beyond a reasonable doubt that she did not sign the documents located in Mr. Grant’s file on behalf of her father.

[311] I note that the dates of all of these documents were prepared when Mr. Goncalves and Mr. Slattery shared a rental office for Direct Personnel. I conclude that they saw each other frequently, and with the exception of the document dated November 9, 2006. Mr. Slattery’s explanation that Ms. Goncalves signed the documents for convenience as they lived so far apart makes no sense.

[312] The first document dated August 14, 2006 concerns a client in Ottawa. I accept Mr. Goncalves’ evidence that Direct Personnel never had a client in Ottawa. It also seems odd that Mr. Slattery and a work crew of 7 would be staying at the Marriott Hotel. Ms. Goncalves confirmed that she was invited to a wedding in Ottawa that summer and this appears to be a likely explanation for the trip to Ottawa and the forged letter provided to Mr.Grant.

[313] One of the documents found in Mr. Grant’s file seeks permission for Mr. Slattery to work a shift for Quebec Core World in Etobicoke on November 12, 2006. Mr. Goncalves testified that Quebec Core was no longer a client of Direct Personnel at this time. The payroll draft confirms that Quebec Core was no longer a client by November 2006. Mr. Slattery insisted that he had worked the shift in question, which is not supported by the documents.

[314] I conclude that the Crown has proved beyond a reasonable doubt that Mr. Slattery forged the documents that were found in the file of Mr. Grant and signed Mr. Goncalves’ signature without his knowledge or consent, not for the purpose of work, but to allow Mr. Slattery to pursue other personnel pursuits.

[315] Therefore I find Mr. Slattery guilty of counts 4 and 5.

J. Wilson J.

Released: February 9 , 2012

COURT FILE NO.: 72/11

DATE: 201202--

ONTARIO

SUPERIOR COURT OF JUSTICE

HER MAJESTY THE QUEEN

– and –

SHAWN SLATTERY

Defendant

REASONS FOR JUDGMENT

J. Wilson J.

Released: February 9, 2012