ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 12-10000512-0000
DATE: 20130402
BETWEEN:
HER MAJESTY THE QUEEN
– and –
JOHN UMENWOKE
Defendant
Robert Wright, for the Crown
Pius Okoronkwo, for the Defendant
HEARD: March 11-14, 2013
SPIES J.
Overview
[1] The defendant John Umenwoke is charged with defrauding Liquid Capital Exchange Corporation (“Liquid Capital”) of a sum of monies exceeding $5,000, between April 1, 2009 and May 5, 2009, contrary to section 380(1)(a) of the Criminal Code. He reelected trial by judge alone and pleaded not guilty to the charge.
[2] Liquid Capital is in the factoring business and funds accounts receivables of corporations. If Liquid Capital is satisfied, after conducting their due diligence, that their requirements are met they typically advance in the range of 75-85% of the amount of the receivables to the corporation. The receivables are then paid directly to them and when they are collected by Liquid Capital they remit the amount collected less their fees. Their fee averages between 2.5-3.5% for the first thirty days with the percentage charged increasing thereafter.
The Issues
[3] In this case Liquid Capital advanced $75,650.60 in U.S. currency to Unified Solution Providers Inc. (“Unified”) in April 2009, based on information purporting to come from the 95% owner of Unified, Solomon Idiaraba, and on the strength of receivables owing from a company in Ghana, Wifysom Computers Tech. Ltd. (“Wifysom”).
[4] The position of the Crown is that Mr. Umenwoke perpetrated a fraud on Liquid Capital in two ways: 1) by impersonating as Mr. Idiaraba and creating and signing documents in his name which led to credit checks of that person rather than Mr. Umenwoke and 2) holding out Mr. Idiaraba as a 95% shareholder of Unified when in fact the company was incorporated and 100% owned by his former girlfriend, Kealeboga Mokgwathi and held by her for Mr. Umenwoke. It is alleged that as a result of his deceit the funds were advanced by Liquid Capital and that Mr. Umenwoke received most of those funds. Liquid Capital never recovered any of the money that it advanced and as such was deprived of $75,650.60 US.
[5] At the outset of the trial, Mr. Wright sought to introduce a statement made by Mr. Umenwoke to police at the time of his arrest but that application was dismissed; see R. v. Umenwoke, 2013 ONSC 1554. At trial, Mr. Wright called two representatives from Liquid Capital who dealt with the person they believed to be Solomon Idiaraba. They subsequently concluded that the person they dealt with was in fact the defendant John Umenwoke. The Crown also called Karen Carenkorieczny, a representative from the Toronto Dominion Bank who explained the bank records for Unified and Ms. Mokgwathi. Mr. Umenwoke did not testify and no other evidence was called in his defence.
[6] Mr. Okoronkwo challenged the credibility and reliability of all of the witnesses called by the Crown, save for the bank representative. Mr. Umenwoke’s defence is that there was no deceit and that Mr. Idiaraba is the majority shareholder of Unified, that Mr. Idiaraba was at the meetings with Liquid Capital, that Mr. Umenwoke was the supplier, on behalf of Unified, of computer equipment to Wifysom and that it was for this reason that Mr. Umenwoke received some of the funds advanced by Liquid Capital.
[7] As Mr. Wright submitted, the essential factual issue is whether or not Mr. Umenwoke misrepresented himself both in person and in documents that he signed to Liquid Capital as Solomon Idiaraba.
[8] Neither Mr. Wright nor Mr. Okoronkwo provided any law in support of their positions. The law, however, as to what constitutes the offence of fraud is settled. I have considered the following cases.
[9] In R. v. Théroux, 1993 SCC, [1993] 2 S.C.R. 5, McLachlin J. for the court stated at paragraphs 16 and 17:
Speaking of the actus reus of this offence, Dickson J. (as he then was) set out the following principles in Olan [1978 SCC, [1978] 2 S.C.R. 1175 at page 150, paraphrase]:
(i) the offence has two elements: dishonest act and deprivation;
(ii) the dishonest act is established by proof of deceit, falsehood or “other fraudulent means”;
(iii) the element of deprivation is established by proof of detriment, prejudice, or risk of prejudice to the economic interests of the victim, caused by the dishonest act.
… “other fraudulent means” in the third category is determined objectively, by reference to what a reasonable person would consider to be a dishonest act.
[10] In R. v. Zlatic, 1993 SCC, [1993] 2 S.C.R. 29, McLachlin J. held at paragraph 32 that:
The dishonesty of “other fraudulent means” has, at its heart, the wrongful use of something in which another person has an interest, in such a manner that this other’s interest is extinguished or put at risk. A use is “wrongful” in this context if it constitutes conduct which reasonable decent persons would consider dishonest and unscrupulous.
[11] In Théroux, McLachlin J. also stated at paragraph 24 that:
[T]he proper focus in determining the mens rea of fraud is to ask whether the accused intentionally committed the prohibited acts (deceit, falsehood, or other dishonest act) knowing or desiring the consequences proscribed by the offence (deprivation, including the risk of deprivation). The personal feeling of the accused about the morality or honesty of the act or its consequences is no more relevant to the analysis than is the accused’s awareness that the particular acts undertaken constitute a criminal offence.
[12] In order to establish Mr. Umenwoke is guilty of the charge of fraud contrary to section 380(1)(a) of the Criminal Code, in applying this law and considering the elements of the offence as outlined in a standard jury charge, the Crown must prove beyond a reasonable doubt that:
(a) that Mr. Umenwoke deprived Liquid Capital of something of value;
(b) that Mr. Umenwoke’s deceit, falsehood or other fraudulent means caused the deprivation;
(c) that Mr. Umenwoke intended to defraud Liquid Capital; and
(d) that the value of the property exceeded $5,000.
The Evidence and Preliminary Findings of Fact
*The Arrest of John Umenwoke*
[13] I will start with the arrest of Mr. Umenwoke as it provides reliable evidence as to his address and telephone number one year after the alleged fraud. Mr. Umenwoke turned himself in for his arrest on April 6, 2010 after being asked to do so by Detective Entwistle. On arrest he identified himself as John Umenwoke and he brought identification including a driver’s licence and other personal documents that confirmed this identity. Detective Entwistle testified that at the time of his arrest there were no documents found on Mr. Umenwoke that were not in his name. Of course, if Mr. Umenwoke did commit this offence I would not expect him to bring identification in the name of Solomon Idiaraba to the police station.
[14] The identification documents provided by Mr. Umenwoke to Detective Entwistle were as follows:
• Social Insurance Card - Social Insurance # (“SIN”) is 541 239 812.
• Ontario Health Card - The copy is not clear but part of the address for Mr. Umenwoke is stated to be 50 Tuxedo Court, # 1211, Scarborough (“Tuxedo Court address”).
• University Health Network (“UHN”) Card with the Tuxedo Court address and a phone number of 416-283-7037.
• TD Canada Trust Business Access Card with the number 589297.
• A Costco membership card for John Umenwoke, Computer Reboot Services.
• A few of the cards have the signature “John Umenwoke” which I presume is the actual signature of Mr. Umenwoke.
[15] Detective Entwistle testified that he did numerous checks on computer databases for the name Solomon Idiaraba and did not have any success using his name and date of birth. He could not recall if he saw the name on his Google internet search but stated that there was no driver’s licence in that name and nothing was found in his police checks.
[16] When Detective Entwistle placed Mr. Umenwoke under arrest he filled out a Record of Arrest form. His practice is to base the information in this form on identification provided or he asks the individual. In this case he was provided with identification but testified that he needed to ask Mr. Umenwoke for his phone number. He was not asked if he saw the imprint of a phone number on the UHN card. Detective Entwistle testified that he was given the number 647-501-6765 by Mr. Umenwoke. I accept this evidence which was not challenged. This is significant as this number is found in the bank records for Unified and other documents provided to Liquid Capital. The inescapable conclusion is that this phone number was at least one of the phone numbers Mr. Umenwoke had at the material time.
(continues exactly as in the source text…)
SPIES J.
Released: April 2, 2013
Edited reasons released: May 21, 2013
COURT FILE NO.: 12-10000512-0000
DATE: 20130402
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HER MAJESTY THE QUEEN
- and -
JOHN UMENWOKE
Defendant
REASONS FOR JUDGMENT
SPIES J.
Released: April 2, 2013