SUPERIOR COURT OF JUSTICE

Court of Appeal No. C56902

HER MAJESTY THE QUEEN

v

TONY ANTHONY MACDONALD

REASONS FOR SENTENCE

Before THE HONOURABLE JUSTICE G. M. MULLIGAN

On March 12, 2013, at OSHAWA, Ontario

APPEARANCES:

N. Young Counsel for the Crown at Sentence

S. Fraser Counsel for T. MacDonald at Sentence

TUESDAY MARCH 12, 2013:

UPON RESUMING:

REASONS FOR SENTENCE

MULLIGAN J. (Orally):

After a jury trial, which concluded October the 25th, 2012, Tony Anthony MacDonald was found guilty of one count of fraud over five thousand dollars, section 380(1)(a) of the Criminal Code of Canada. The jury found Mr. MacDonald not guilty of a further count using a forged document, under section 368(1) of the Criminal Code. A sentencing hearing was set for December the 21st for sentencing submissions and a Pre-sentence Report. Prior to that hearing, the offender changed counsel and on consent, the sentencing hearing was adjourned to February the 8th, 2013, and proceeded on that day. A Pre-sentence Report was filed and the Crown also filed a Victim Impact Statement.

The jury heard evidence that the offender had a casual relationship with the victim, Brad Connors. They knew each other because their children attended same Christian school. Mr. Connors was in the trucking business and had a number of contacts in that industry. Mr. MacDonald also had some contacts with truckers. His employment at that time consisted of assisting truckers with financial arrangements to refinance or finance their trucks. Mr. MacDonald had some knowledge about a publicly traded company, Dynamic Fuel Systems Inc. The evidence indicated that he gave Mr. Connors the impression that he owned a number of shares in this company and the parties entered into a share purchase agreement whereby Mr. MacDonald agreed to sell a substantial number of his shares to Mr. Connors for fifty thousand dollars. Mr. Connors was an unsophisticated investor. His due diligence consisted of confirming that there was such a company, that it was publicly traded and that the shares had a certain value. He entered into the agreement and gave Mr. MacDonald fifty thousand dollars, which he drew on his line of credit, according to his testimony in cross-examination. Mr. MacDonald immediately deposited these funds into his own account, paid a number of his personal bills immediately and within a month had used up all of these funds. The jury heard evidence that in fact, Mr. MacDonald had no shares in this publicly traded company, had never had shares in this company and did not acquire any shares after receiving these funds.

Mr. MacDonald did not disclose these facts to Mr. Connors either before, during or after the funds were delivered. The offender and the victim continued to work together to develop a project which was thought to provide fuel economy to truckers who purchased and added a certain piece of new technology to their truck engines. Mr. Connors’ evidence was that eventually he realized there were no shares, but he thought he could recoup the money by continuing to work with Mr. MacDonald. Eventually, Mr. Connors reported the matter to the police and the above noted charges were laid. Substantially all of the funds remain unpaid to Mr. Connors. Mr. Connors acknowledged receiving twenty-five hundred dollars when he pressed Mr. MacDonald and a further sum of about eighteen hundred dollars. The balance of forty-five thousand, seven hundred remains unpaid.

THE OFFENDER:

The Pre-sentence Report indicates that Mr. MacDonald is 45 years old. He completed grade 12 and attended a community college program. He has been married for 22 years and he and his spouse have three children. Unfortunately, his wife, Melissa had a serious car accident in 2005, and is unable to work and suffers from a number of medical issues including lupus, scleroderma and fibromyalgia. She depends on medication and the support of Mr. MacDonald for many aspects of daily living. Her condition is not recent development it existed prior to the fraud in question. Their oldest child is in college and they have two children attending high school, living at home.

Mr. MacDonald has had a number of jobs over the years and for the seven years prior to this incident, was involved with E.T. Financial assisting truckers to get loans from private lenders. The Pre-sentence Report indicates he is currently working at Eagleson Transportation. His employer knows about his current involvement with the criminal justice system and finds that Mr. MacDonald is a valuable employee.

Mr. MacDonald has expressed in the Pre-sentence Report that he believes he has an addictive personality. At one time, he abused the drug Fentanyl, but stopped that abuse and began attending at Narcotics Anonymous. He expresses that he has been clean for 16 months. The report notes that he had a gambling addiction in 1993/94. He lost a considerable amount of money, but has not gambled since. His wife was aware of his gambling problem and stood by him. The Pre-sentence Report indicates that Mr. MacDonald suffers from ADHD and has a bipolar disorder, which was diagnosed in 2006. He takes Concerta, Paxil and Seroquel for his disorders under the supervision of his family doctor.

The author of the Presentence Report indicates that, “The subject does not take responsibility for the situation that brought him before the court.”

I have already heard from Mr. MacDonald today about his expression of remorse today.

The author of the Presentence Report concludes with the following recommendations,

“The subject is seen as suitable for community supervision. Should the Court agree the following conditions are respectfully recommended.”

1. Report as required.

2. Attend for counselling as recommended by your probation officer and sign releases allowing your probation officer to monitor your progress.

3. Compensation to the victim in a manner to be determined by the Court.

4. Not to associate or communicate directly or indirectly with Brad Connors.

5. Not to invest or accept cash for investment for anyone, other than himself for the period of probation.

6. Complete community service hours at the discretion of the Court.

Mr. MacDonald has a previous criminal record. In 1997, he was convicted of theft over one thousand dollars and the penalty was a suspended sentence and twelve months probation. There are no other entries since that conviction.

VICTIM IMPACT STATEMENT:

A Victim Impact Statement was filed by the Crown from the victim, Brad Connors and his spouse, Laura Connors. Mr. Connors’ statement sets out the impact that this fraud has had on his life. As he states in the report,

“The actions of Tony MacDonald have greatly affected my life. Before the fraud, I was a trusting, empathetic person, believing the best in everyone. I am no longer able to trust anyone like before. My family has also endured emotional loss since the crime was committed. They too, have become distrustful of many people. The emotional loss has affected us within our family, as well. Due to the enormous financial struggles we are facing to pay back the money that was stolen, we are constantly juggling our resources to pay the bills to survive. This has affected our interpersonal relationships having to go without. The guilt and shame of putting my family through this ordeal has affected me as well. Many days, I feel bad for the decision I made and for causing my family additional hardships.”

Laura Connors also filed a Victim Impact Statement. As to the financial and emotional impact, she stated,

“The money that was stolen is going to take us years to pay back. It put a great deal of financial strain on us. It was so stressful wondering how we were going to manage financially. Our marriage suffered at this time, as we were both physically and mentally exhausted.”

I now turn to aggravating factors.

AGGRAVATING FACTORS:

There are a number of aggravating factors for the Court to consider:

(i) Although Mr. MacDonald was not in a position of trust in the traditional sense, he did breach the trust that had been developed between he and Mr. Connors to convince Mr. Connors that he owned shares and that he would sell them. Clearly, he had no shares, nor did he attempt to acquire any to honour his commitment to Mr. Connors.

(ii) The crime was clearly motivated by greed. Mr. MacDonald used the funds for his own purposes by paying his own bills and exhausted this amount within a month of the fraud being committed.

(iii) Although dated, Mr. MacDonald does have a previous criminal record for a similar offence. He received a suspended sentence and a period of probation, so the offence now before the Court was not his first involvement with the criminal justice system.

(iv) Mr. MacDonald has not paid Mr. Connors’ back any further sums and the forty-five thousand seven hundred remains unpaid.

(v) The crime involved some pre-meditation and planning. Mr. MacDonald took Mr. Connors into his confidence and convinced him not only that he had these shares to sell, but these shares were likely to go up in value because Mr. MacDonald was working with this company to develop new technology to save truckers on fuel consumption costs.

MITIGATING FACTORS:

There are a number of mitigating factors that also have to be considered here.

(i) Mr. MacDonald has a good work history. He is currently employed and has the support of his employer.

(ii) Mr. MacDonald has a strong family relationship and the support of his wife and children. His wife is highly dependent on him due to her own medical difficulties. He also provides support for his three children and there seems to be a strong family bond.

(iii) Mr. MacDonald has medical issues, including bipolar disorder, however, he appears to be under doctor’s care and taking the medication as prescribed.

(iv) Although he has a previous drug addiction, he appears to have taken positive steps to control this aspect of his life. He attends Narcotics Anonymous, submits to voluntary monthly urine tests, and indicates that he has been clean for 16 months. He does not appear to have any problem with alcohol abuse.

PRINCIPLES OF SENTENCING:

Parliament has now codified many former common law sentencing principles in the Criminal Code of Canada. Section 718 describes the fundamental purpose of sentencing to be,

“To contribute along with crime prevention initiatives, to respect for the law and the maintenance of a just, peaceful and safe society by imposing just sanctions.”

The Code sets out six objectives for sentencing judges to consider,

(i) To denounce unlawful conduct;

(ii) To deter the offender and others from committing offences;

(iii) To separate offenders from society where necessary;

(iv) To assist in the rehabilitation of offenders;

(v) To provide reparations for harm done to victims or the community;

(vi) To promote a sense of responsibility of offenders and acknowledge the harm done to victims and the community.

POSITION OF THE CROWN:

It is the Crown’s position that a fit and proper sentence for this offender would be a period of incarceration of 14 to 18 months, and a conditional sentence under those circumstances is not appropriate. The Crown also submits that there should be a two year period of probation with conditions and a restitution order.

The Crown provided a casebook containing a number of cases whereby courts had rejected a conditional sentence for fraud and a custodial sentence of incarceration was imposed on offenders.

In R. v. Faulkner, the Ontario Court of Appeal upheld a custodial sentence for a fraud of thirty-five thousand dollars. The offender was a homecare provider who took advantage of an elderly couple.

In R. v. Moran, the Ontario Court of Appeal upheld a 12 month incarceration sentence for a first offender. The offence involved the theft of a hundred and twenty thousand dollars in cash from an armoured car company, her former employer.

In R. v. Maillis the Court of Appeal dismissed the appeal of a nine month custodial sentence for a theft of fraud under five thousand dollars. The offender had an extensive criminal record for similar offences.

In R. v. Collins, the Court of Appeal was asked to overturn the sentence of 16 months incarceration and substitute a conditional sentence of imprisonment for a welfare fraud of about ninety-six thousand dollars. The Court of Appeal rejected the conditional sentence submission, but reduced the custodial term and stated at paragraph 40,

“I have reluctantly concluded that this is not an appropriate case for a conditional sentence of imprisonment. The offence was too serious and the need for general deterrence and denunciation overwhelming. However, the Gladu-Principles mandate of consideration of the least intrusive punishment consistent with the appropriate objectives.”

In reducing the sentence the Court continued at paragraph 41,

“There are other factors at play as well, including the long period of release on bail, the lack of criminal record, and the appellant’s service to the community.”

In submissions, the Crown stressed that Mr. MacDonald’s behaviour amounted to a “confidence scheme”. He built up a friendship with Mr. Connors and exploited that friendship for his personal gain. He received fifty thousand dollars and Mr. Connors’ trusted that he would receive shares in accordance with the written agreement between the parties, so, the conduct amounts to a breach of trust flowing out of this friendship. The Crown stresses that this was a pre-meditated scheme and the principle of general deterrence is paramount here, and the mitigating factors are not sufficient to overcome the requirement for a period of incarceration. The Crown points out in submissions that the offender’s wife’s health issues existed prior to the offence and he knew or ought to have known the consequences of his actions, especially in view of his previous contact with the criminal justice system.

POSITION OF THE DEFENCE:

The position of the defence is that a conditional sentence of 12 to 18 months with house arrest for 12 months and less restrictive conditions thereafter would be a fit sentence. The defence does not oppose a period of two years probation on terms and does not oppose a stand alone compensation order.

The defence stresses the health difficulties of the defendant’s wife and the support he provides for her activities of daily living. The defence filed a letter from the family doctor indicating his role with both the offender and the offender’s spouse.

The defence filed a casebook in support of its position. In R. v. Kirk, the Ontario Court of Appeal substituted a nine month custodial sentence for a conditional sentence for a general contractor convicted of fraud. However, as the Court noted at paragraph 23,

“The relationship between the parties was strictly commercial. This does not detract from the criminality of Mr. Kirk’s behaviour, but the facts do not support a finding of “breach of trust” as an aggravating circumstances.”

In R. v. Callender, Justice Baltman imposed a nine month conditional sentence on a first offender who, with other individuals, committed a fraud on a bank of two hundred and eighty thousand dollars. However, it appears that Justice Baltman placed considerable weight on the fact that the offender had no previous record as she stated at paragraph 17,

“On the final question of whether a conditional sentence would be consistent with the fundamental principles of sentencing, as this is a first offence, I believe the general principles of denunciation and deterrence are satisfied without incarceration, provided that reasonable conditions are attached.”

In R. v. Hayes the Court of Appeal did not interfere with an 18 month conditional sentence together with a restitution order for an offender who had no previous record.

In R. v. Robinson, Justice Juriansz imposed a 20 month conditional sentence. The Court noted as an aggravating factor a breach of trust, planning and deliberation and prolonged conduct, but noted as a mitigating factor that this was a first offence and the offender was suffering from depression and exceptional personal circumstances.

In R. v. Bunn The Supreme Court of Canada reviewed a sentence imposed on a lawyer who was convicted of six counts of breach of trust and sentenced to two years incarceration by the trial judge. The lawyer was also suspended and disbarred from practice. The Court of Appeal imposed a conditional sentence of two years less a day and that sentence was not interfered with by the Supreme Court of Canada. When considering the mitigating factors the Court noted,

“Moreover, the Court of Appeal noted important mitigating circumstances in this case. The respondent was the sole provider and caregiver for both his wife, who suffered from multiple sclerosis and had been confined in a wheel chair for years, and their teenage daughter.

However, the Court also noted at paragraph 23,

“Turning to a consideration of the principles of sentencing. the Court of Appeal reasonably concluded that the ruin and humiliation that Mr. Bunn had brought down upon himself and his family, together with the loss of his professional status, could provide sufficient denunciation and deterrence when coupled with a conditional sentence less a day with house arrest.”

CONSIDERATION OF A CONDITIONAL SENTENCE:

After considering the aggravating and mitigating factors here, I am satisfied that a reformatory sentence would be an appropriate sentence for an offence such as this. Under those circumstances, I am satisfied that a conditional sentence can be considered. The issue is whether a conditional sentence is an appropriate sentence involving a fraud of this magnitude.

As the casebooks filed by the Crown and defence indicate, sentencing is a very individualized process requiring a consideration of the aggravating and mitigating circumstances and the fundamental principles surrounding the consideration and use of a conditional sentence.

The Supreme Court of Canada provided guidance with respect to a court considering a conditional sentence in R. v. Proulx. The Court indicated that any offences involving a reformatory term will attract a consideration of a conditional sentence. However, as Chief Justice Lamar stated for the Court at page 494,

“There may be circumstances in which the need for deterrence will warrant incarceration. This will depend in part on whether the offence is one in which the effects of incarceration are likely to have a real deterrent effect.”

The fraud involved in this case was a single incident involving fifty thousand dollars. Although this may not qualify as a large scale fraud, as found by the Court of Appeal in other cases such as R. v. Pierce, R. v. Wismayer, R. v. Bogart or R. v. Dobis, the amount is large when viewed through the lens of the victim and his family. The cases above cited, strongly indicate that in the cased of fraud and especially large scale fraud, general deterrence is a significant consideration as a sentencing principle. The principles of general deterrence were addressed by the Court of Appeal in R. v. Pierce. As Justice Finlayson stated for the Court at page 37,

“What the authorities make clear is that the purpose of incarcerating these offenders is not to protect the community from any danger posed by the particular offender, but to protect the community from the danger imposed by those that may be inclined to engage in similar conduct … The point was succinctly stated by Justice Lamar sitting as a member of the Quebec Superior Court in R. v. Viger, and I quote:” (and here I am still referring to the quotation from Justice Finlayson), “There will also be a danger in the community if the sentence imposed is not of a nature to deter others from conduct analogous to that of the accused.”

So, I am satisfied that a conditional sentence is not an appropriate sentence for this offender with respect to this offence. In coming to this conclusion, I have considered the following factors,

(i) Seriousness of the offence

The amount taken was fifty thousand dollars based on a brazen lie that the offender had shares in a publicly traded company when he did not. Mr. MacDonald gained the confidence of Mr. Connors and by taking fifty thousand dollars for shares that he did not have, breached the trust that was shown to him.

(ii) The offender’s moral blameworthiness

The offender took advantage of the trust that Mr. Connors placed in him based on the assurances he made about the shares, and he has showed no insight into the consequences of his actions on the victim until his comments before the Court today.

(iii) Previous record

Although Mr. MacDonald’s record is dated it was for a similar offence. He received a suspended sentence which was followed by a period of probation.

(iv) General deterrence

General deterrence is important in this case. Others who may be in a similar position require a warning that a reformatory sentence or, in some cases even, a penitentiary sentence will be warranted following this type of crime.

(v) Ineffectiveness

A conditional sentence would be ineffective in this case when all of the above factors are considered. It would send the wrong message to the community about this type of offence. This is especially so for an individual who is not a first offender and previously received the benefit of a suspended sentence and probation. The principle of general deterrence, so important for offences such as this, would be rendered meaningless.

Mr. MacDonald, please stand. You previously received a suspended sentence and a period probation. It is apparent to me that a short sharp sentence is required to bring home to you the gravity of this offence. I am satisfied that a fit sentence is a period of incarceration of six months due to be served in the reformatory, followed by a period of two years probation. The terms of probation will be that you report to your probation officer on your release and as directed thereafter, and take such counselling programs as may be directed by your probation officer. During these periods there will be no contact order with Brad Connors or Laura Connors. Further, you are required to stay at least 200 metres away from their place of residence or employment.

In addition there should be a stand-alone restitution order that you pay the sum of forty-five thousand seven hundred dollars to Brad Connors as a stand alone compensation order pursuant to section 725(1) of the Criminal Code of Canada.

So, Mr. MacDonald good luck to you. And that completes my sentencing.

MATTER ADJOURNED