ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 12-40000668-0000
DATE: 20130626
BETWEEN:
HER MAJESTY THE QUEEN
– and –
JACK SINGER
Defendant
Kathy Nedelkopoulos, for the Crown
Alan Gold, for the Defendant
HEARD: March 28 and April 25, 2013
HAINEY J.
REASONS FOR SENTENCE
Overview
[1] Jack Singer was charged with fraud and theft of money of a value exceeding $5,000. He was tried by me without a jury. He was found guilty of both charges.
Circumstances of the Offences
[2] The charges arise from renovation work performed by his company, Stay in Place Renovations Inc., on Mrs. Kennis Heath’s house located in Willowdale in the City of Toronto. In the latter part of 2008, Mrs. Heath entered into three contracts with Mr. Singer’s company in which she agreed to pay a total of $322,927.50 for the work listed in the contracts. She paid Mr. Singer’s company a total of $301,900.00. None of this money has been returned to her and the work contracted for has never been completed.
[3] At the time Mrs. Heath was 76 years old and lived alone in her home, which she had owned for almost thirty years. The house was a one and a half storey home of approximately 1,000 square feet. It had been built in the 1940’s and was essentially in its original condition. Mrs. Heath was an avid gardener and quite handy and resourceful around her house. She suffers from bipolar disorder as a result of which her financial advisor restricted her from withdrawing more than $1,000 a month from her savings account.
[4] Approximately three months after Mrs. Heath entered into the contracts with Mr. Singer’s company, her mental health severely deteriorated and she was admitted to the psychiatric department at Sunnybrook Hospital. She has never returned to her home and is currently living in a nursing home and suffering from dementia. She was unable to testify at trial.
[5] Mrs. Heath withdrew the money she paid to Mr. Singer’s company from her savings account. She also obtained some of the funds from her RRSP’s and her RRIF’s, which resulted in an income tax liability of almost $80,000.
[6] I found that much of the work specified in the contracts was not necessary, was not fully completed or was not done at all. The work that was completed had serious deficiencies. The amount agreed to be paid by Mrs. Heath constituted a gross overcharge in excess of the fair market value of the work to be performed and Mr. Singer failed to return to her money owing in respect of work not performed but paid for by her.
[7] I found that in comparison to industry standards Mr. Singer grossly overcharged Mrs. Heath for the services he contracted to provide and did, in fact, provide. I concluded that Mr. Singer knew he was taking advantage of Mrs. Heath and that he had not been honest with her and had defrauded her out of the bulk of her life savings. I found him guilty of having defrauded her of money of a value exceeding $5,000.
[8] I also found that Mr. Singer had no right to keep a good deal of the money Mrs. Heath had paid to him because he did not complete any of the work specified in the three contracts. I rejected Mr. Singer’s explanation that he was waiting to hear from Mrs. Heath’s son and to sit down with his lawyer to work things out. I concluded that Mr. Singer had received over $300,000.00 from Mrs. Heath, did not complete any of the work she had contracted with him to perform and left her home in an almost uninhabitable condition. Having found that he kept her money fraudulently and without colour of right, I also found him guilty of theft of money of a value exceeding $5,000.
Material on Sentencing Hearing
[9] I was provided with the following material:
• A Pre-Sentence Report concerning Mr. Singer dated December 3, 2012.
• A Victim Impact Statement from Mrs. Heath’s son, Brian Heath.
• A letter from Mrs. Heath’s financial advisor setting out the amounts withdrawn by her to pay Mr. Singer and the tax and other financial consequences of having done so.
• Four character reference letters from Estelle Richmond, Jennifer Goodman, Joanne Glickman and Richard Krangle.
• A report concerning Mr. Singer from the Raxlen Clinic dated March 26, 2013.
The Offences
[10] The offences that Mr. Singer has been convicted of carry the following sentences:
• Count Number 1 - Fraud contrary to section 380 (1) (a) of the Criminal Code carries a maximum sentence of 14 years’ imprisonment.
• Count Number 2 – Theft contrary to section 334 (a) of the Criminal Code carries a maximum sentence of 10 years’ imprisonment.
Position of the Parties
[11] Ms. Nedelkopoulos submits that a prison term in the range of three and a half to four and a half years is the appropriate sentence. In addition, she seeks a stand-alone restitution order under section 738 of the Criminal Code in the amount of $315,342.50. She seeks the same sentence in respect of both convictions to be served concurrently, and submits that the theft conviction should not be conditionally stayed as a result of the principle in R. v. Kienapple.
[12] Mr. Gold submits that the appropriate sentence to impose is a prison term in the high end of the reformatory range. He also concedes that a stand-alone restitution order is appropriate, but submits it should be in an amount between $100,000 and $150,000. Mr. Gold also maintains that the conviction for theft should be conditionally stayed on the R. v. Kienapple principle, which prevents multiple convictions arising from the same conduct. He submits that Mr. Singer’s conduct in overcharging Mrs. Heath and not returning the overcharge to her involves only one delict and, therefore, the theft conviction should be conditionally stayed.
The Kienapple Issue
[13] I agree with Mr. Gold that there is the same factual and legal nexus between the fraud and theft convictions and they arise from the same delict or illegal conduct. I disagree with Crown counsel that the two offences involve different conduct on the part of Mr. Singer committed on different dates. In my view, the two convictions are precluded under the Kienapple principle and accordingly the theft conviction is conditionally stayed.
Principles of Sentencing
[14] The fundamental purpose of sentencing, as set out in s. 718 of the Criminal Code, is to “contribute to respect for the law and the maintenance of a just, peaceful and safe society” by the imposition of sentences that give effect to one or more of the following objectives: denouncing unlawful conduct, deterring the offender and others from committing crimes, separating offenders from society, where necessary, assisting in the rehabilitation of the offender, providing reparations for harm done to the victim or to the community and promoting a sense of responsibility in the offender. Section 718.1 of the Code requires that any sentence imposed must be proportionate to the gravity of the offence and the responsibility of the offender.
Circumstances of Mr. Singer
[15] I turn first to the circumstances of Mr. Singer.
[16] He is 61 years old. He was 56 years old when the offences were committed. Although he does not have a criminal record, approximately two years ago two of Mr. Singer’s other companies pleaded guilty to an offence under the Consumer Protection Act, 2002 in relation to a renovation contract in the $30,000 to $40,000 range. The companies were ordered to pay approximately $10,000 in restitution and each was fined $2,500. These fines have not been paid.
[17] Mr. Singer lives with his wife of forty years and has two adult children both of whom have medical problems.
[18] He left high school after Grade 10 to help his mother with their family business. Throughout his life he has been involved in a number of different businesses, although, he has primarily been involved in the home renovation business for many years.
[19] The character letters from his sister and two nieces suggest that he is well regarded by and has the support of his immediate family.
[20] He suffers from bipolar disorder for which he receives medication.
Aggravating and Mitigating Factors
[21] I am required by section 718.2 of the Criminal Code to impose a sentence taking into account any relevant aggravating or mitigating circumstances relating to the offence or the offender.
Aggravating Factors
[22] This case has the following aggravating factors:
a) Mrs. Heath was an elderly and extremely vulnerable individual.
b) Mr. Singer deliberately took advantage of her trust and preyed upon her vulnerability.
c) He defrauded her out of most of her life savings and left her with a tax liability of almost $80,000.
d) He was aware of Mrs. Heath’s health problems and used them to his advantage.
e) He left her home in an almost uninhabitable condition.
f) He had a callous and cavalier attitude toward Mrs. Heath.
g) There has been no restitution made of the over $300,000 she paid to him.
h) He has not shown any remorse for his conduct.
i) Although he does not have a criminal record, two of his companies pleaded guilty to an offence under the Consumer Protection Act, 2002 in relation to another renovation contract.
Mitigating Factors
[23] This case has the following mitigating factors:
a) Mr. Singer has a medical disability. He suffers from bipolar disorder and requires medication.
b) He appears to have a stable and supportive family relationship.
Sentences Imposed in Similar Fraud Cases
[24] Section 718.2(b) of the Criminal Code requires me to also consider the sentences imposed on similar offenders for similar offences committed in similar circumstances. Counsel referred me to a number of cases, some of which I will refer to.
[25] In R. v. Kralik, [2006] B.C.J. No. 1979, Justice Wedge of the British Columbia Supreme Court sentenced Mr. Kralik to four and a half years’ imprisonment as a result of a fraud conviction arising from very similar circumstances to this case. Mr. Kralik defrauded a 78 year old vulnerable woman of over $200,000 in relation to home renovations. He had previously been convicted in California of a similar pattern of conduct and had received a sentence of over three years’ imprisonment there. Justice Wedge reviewed a number of other similar cases in which sentences in the range of three to four years’ imprisonment were imposed. One of the cases reviewed by him was the Ontario Court of Appeal’s decision in R. v. Nicols, 2001 5680 (ON CA), [2001] O.J. No. 3220, in which the Court of Appeal reduced to four years the sentence imposed upon a 29 year old first offender who had defrauded an 82 year old woman of $200,000. The Court of Appeal stressed the importance of the need to deter and denounce those who prey on the elderly and vulnerable.
[26] Crown counsel relies on the Kralik decision and the cases cited in Justice Wedge’s Reasons for Sentence in support of her position that the appropriate range of sentence in this case is between three and a half to four and a half years’ imprisonment.
[27] Mr. Gold provided me with a number of other decisions in which sentences in the range of between eighteen months to two years less a day imprisonment were imposed for fraud convictions in somewhat similar circumstances.
[28] In R. v. Mastromonaco, [2002] O.J. No. 4612, Valin J. imposed a sentence of 21 months’ imprisonment and a restitution order upon a 51 year old with a minor criminal record who had defrauded an elderly couple of $70,000. In R. v. Gasparetto, [2008] O.J. No. 3840, Spies J. imposed a conditional sentence of eighteen months, followed by three years’ probation and a restitution order upon a 47 year old first offender who defrauded two victims of approximately $200,000. Conditional sentences of two years less a day plus probation and restitution orders were imposed in R. v. Maskwa, [2013] S.C.J. No. 8 and R. v. Cassettari, [2010] B.C.J. No. 1367, both of which were cases involving fraud convictions in relation to significant amounts of money and breaches of trust by the offenders. Other than Mastromonaco, these cases do not involve elderly and vulnerable victims like Mrs. Heath.
Analysis
Term of Custodial Sentence
[29] I agree with both counsel that the imposition of a custodial sentence is clearly called for in this case. I also agree with Crown counsel that in cases such as this denunciation and deterrence are the most important factors in arriving at a fit and appropriate sentence and that the aggravating factors in this case significantly outweigh the mitigating factors. Mr. Singer’s conduct towards Mrs. Heath was most egregious. She was an elderly and vulnerable person and he deliberately preyed upon her and defrauded her of her life savings. His conduct was despicable and he has demonstrated no remorse for it. He treated Mrs. Heath in a callous and inhumane manner.
[30] In this regard the assessment contained in the Pre-Sentence Report is telling. While he appeared to cooperate with the preparation of the report, there are the following concerns:
• The subject expressed no remorse for his actions.
• He identifies himself as the victim.
• He questions the validity of the charges before the court.
[31] The devastating impact of Mr. Singer’s conduct on Mrs. Heath is also an aggravating factor. Although he cannot be held responsible for her deteriorated mental condition, he destroyed her home and left her living in almost uninhabitable conditions for her final months there. Her son, Brian Heath’s, Victim Impact Statement refers to this as follows:
… Her home and garden were her pride and joy. … On August 13, 2008, my mother’s life was turned upside down and will never be the same. It’s difficult to gauge the mental anguish and trauma my mother had to endure as her home was destroyed.
If Jack had never entered my mother’s life, how better off would my mother’s life have been? Destroying her home and completely stealing her life savings. Emotionally my mother could not return to the home that she loved. …
[32] There are few mitigating circumstances. Although Mr. Singer does not have a criminal record, I do not consider him to be the same as a first offender because of the previous guilty pleas involving another renovation contract by two of his companies under the Consumer Protection Act, 2002. However, he has not been incarcerated before and I must consider the overarching principle of restraint in arriving at an appropriate sentence to impose. I am also of the view that his bipolar condition is a factor that I must take into account as is his seemingly stable and supportive family situation.
[33] I find the decision of Justice Casey Hill in R. v. Williams, 2007 13949 (ON SC), [2007] O.J. No. 1604, helpful. In Williams, Justice Hill imposed a sentence of eighteen months’ imprisonment and a restitution order upon Ms. Williams who had been convicted of fraud after a trial. Ms. Williams embezzled $195,000 from her school board employer. Justice Hill found that the fraud was premeditated and large-scale involving breaches of trust of a prolonged duration. Ms. Williams had expressed no remorse and had not acknowledged her wrongdoing. Further, no restitution had been made. Justice Hill observed that in such cases deterrence is the most important factor in sentencing and rehabilitation becomes a secondary factor. He also concluded that significant custodial sentences are warranted in such cases. He noted that although appellate jurisprudence provides general framework guidelines to assist trial judges attain consistency, the imposition of a fit and just sentence is a discretionary and highly individualized exercise. The Crown sought a three year penitentiary sentence, however, Justice Hill concluded that a penitentiary term was not necessary to effect the necessary measure of deterrence and denunciation.
[34] I am of a similar view with respect to the fit and appropriate sentence to impose upon Mr. Singer. While there is no question that his egregious conduct warrants a significant custodial sentence to underscore the importance of deterrence and denunciation, I am of the view that a penitentiary term is not necessary. A custodial term of two years less one day will achieve this objective provided that it is coupled with a stand–alone restitution order under section 738 of the Criminal Code.
Restitution Order
[35] As I have already indicated, counsel agree that I should make a restitution order requiring Mr. Singer to repay Mrs. Heath the money she lost as a result of his fraud. They disagree on what that amount should be. Crown counsel submits that the restitution order should be in the amount of $315,342.50. Mr. Gold submits it should be $100,000 to $150,000.
[36] Section 738 (1) (a) of the Code authorizes the making of a restitution order requiring an offender to make restitution to a victim of the replacement value of the property lost due to the commission of the offence. The amount to be paid cannot exceed the replacement value of the property lost less the value of any property returned to the victim.
[37] As no money has been returned to Mrs. Heath, the dispute over the amount of the restitution order arises from the calculation of the amount of Mrs. Heath’s loss resulting from Mr. Singer’s fraud.
[38] Crown counsel calculates her loss as follows:
• The total amount of money paid to Mr. Singer by Mrs. Heath of $301,900 less Mr. Rudy Molder’s estimate of the value of the work performed on the house by Mr. Singer’s company of $67,750 plus GST of $8,807.50. This amounts to $225,342.50. To this amount she submits that I should add $80,000 for Mrs. Heath’s tax liability and $10,000 for the cost of Mr. Molder’s inspection report for a total of $315,342.50. She argues that these amounts constitute Mrs. Heath’s loss resulting from Mr. Singer’s fraud.
[39] Mr. Gold calculates her loss as follows:
• At paragraph 66 of my judgment I concluded that Mr. Molder’s estimate of the value of the work actually performed on her house and the cost of completing the work under the contracts of $88,000 was accurate and reliable. At the following paragraph of my judgment I found that a mark-up for profit of 50% was in accordance with industry standards in Toronto. Accordingly, Mr. Gold submits that one way of calculating Mrs. Heath’s loss is to deduct $132,000 (which is Mr. Molder’s estimate of $88,000 with a 50% mark-up for profit) from the amount paid to Mr. Singer of $301,900. This results in a loss of $168,900. He also suggests that paragraphs 68-70 of my judgment justify an even lower amount in the $100,000 to $150,000 range.
• Mr. Gold further submits that the Crown’s inclusion of Mrs. Heath’s $80,000 tax liability and the $10,000 cost of Mr. Molder’s inspection report should not be included in a restitution order as they do not form any part of the property obtained by Mr. Singer from the offence of fraud. He argues that while these amounts might properly be the subject of civil damages, they ought not to be included in a restitution order under section 738 of the Code. In his submission the starting point for the Crown’s request for a restitution order should be $225,342.50 although he submits that this amount ignores Mr. Singer’s right to charge a mark-up for profit.
[40] I did not quantify the exact amount of Mr. Singer’s overcharge of Mrs. Heath in my judgment. I concluded that on any of the calculations available on the evidence before me, it was a gross overcharge compared to industry standards. I agree with Crown counsel that the correct starting point for the calculation of the overcharge is the total amount paid to Mr. Singer by Mrs. Heath of $301,900. I also agree that the value of the work performed by Mr. Singer’s company on her house was $67,750. This amount includes a 25% mark-up for profit. I agree with Mr. Gold that I concluded that a 50% mark-up for profit in the Toronto area was within industry standards. Adjusting Mr. Molder’s estimate of the value of the work performed to reflect a 50% mark-up for profit results in an amount of approximately $76,219. I find that this was the value of the work performed by Mr. Singer’s company on Mrs. Heath’s house including a 50% mark-up for profit. The GST on this amount would have been $9,908. Therefore the value of the work performed including GST was $86,127. The total amount paid by her less this amount equals $215,773. This is the correct amount of Mr. Singer’s overcharge of Mrs. Heath. I do not agree with Mr. Gold’s submission that the amount should be lower as a result of my comments at paragraphs 68-70 of my judgment as the calculations I referred to in those paragraphs were all based upon Mr. Singer’s evidence, which I did not accept. Further, I agree with Mr. Gold that the amount of Mrs. Heath’s tax liability and the cost of Mr. Molder’s inspection report are not properly the subject matter of a restitution order because they are not part of the property lost as a result of Mr. Singer’s commission of the offence of fraud within the meaning of section 738 (1) (a) of the Criminal Code.
[41] The amount of the loss that should be included in a restitution order is $215,773. Although normally I would have to consider Mr. Singer’s ability to pay before making a restitution order, in this case it is not necessary as Mr. Gold has advised me that there are sufficient assets belonging to Mr. Singer that have been frozen by the Crown pursuant to the Civil Remedies Act, 2001 to satisfy a restitution order in this amount.
Sentence
[42] For all of the reasons I have outlined I am imposing the following sentence upon you Mr. Singer:
On Count Number 1 for the conviction of defrauding Mrs. Heath of money in excess of $5,000 contrary to section 380 (1) (a) of the Criminal Code, I sentence you to a term of imprisonment for a period of two years less one day. I am also making a restitution order under section 738 of the Criminal Code in the amount $215,773 and you are thereby ordered to pay to Mrs. Ennis Heath $215,773.
HAINEY J.
Released: June 26, 2013
COURT FILE NO.: 12-40000668-0000
DATE: 20130626
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HER MAJESTY THE QUEEN
- and -
JACK SINGER
Defendant
REASONS FOR SENTENCE
HAINEY J.
Released: June 26, 2013