COURT FILE NO.: CrimJ (F) 1681/12

DATE: 2013/02/ 01

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Her Majesty the Queen

v.

Tan Tien NGUYEN

BEFORE: Ricchetti, J.

COUNSEL: F. Alibhai, R. McGuirl, Counsel for the Crown

R. Barrs, Counsel for the Defence

HEARD: November 21, 22, 23, 26, 28, 29, 2012 and December 3, 18, 2012.

JUdgment

CONTENTS

THE CHARGES. 1

AGREED FACTS. 1

THE VIVA VOCE EVIDENCE.. 1

THE FACTS: 2

THE PERSONS/ENTITIES. 2

THE POLICE INVESTIGATION – PROJECT MO-NEO.. 3

THE VEHICLES ASSOCIATED WITH MR. NGUYEN AND ASGS. 3

THE PROPERTIES ASSOCIATED WITH MR. NGUYEN.. 4

1000 DUNDAS STREET, MISSISSAUGA – ASGS BUSINESS. 4

244 ISABELLA AVENUE, MISSISSAUGA.. 8

GHOST OWNERSHIP OF PROPERTIES ASSOCIATED WITH MR. NGUYEN.. 9

THE POLICE INVESTIGATION.. 17

RESTRAINT AND MANAGEMENT ORDERS. 26

ARREST ON OCTOBER 7, 2009. 27

SEARCH AND SEIZURE AT 244 ISABELLA AVENUE – OCT. 7, 2009. 27

SEARCH AND SEIZURE AT 1000 DUNDAS STREET EAST (ASGS) – OCT. 7, 2009. 28

SEARCH AND SEIZURE OF THE DORAL BOAT. 28

THE FINANCIAL INVESTIGATION EXPERT EVIDENCE.. 29

MARIHUANA GROW OPERATIONS EXPERT EVIDENCE.. 32

THE EVIDENCE OF MR. NGUYEN.. 40

THE CREDIBILITY OF MR. NGUYEN.. 46

ANALYSIS ON COUNTS #1 - #4. 50

The Respective Positions. 50

The Law on Conspiracy. 51

The Law on Aiding and Abetting. 56

Circumstantial Evidence. 57

What the Crown must prove. 58

The Defence. 59

The Legal Products for Sale Defence Submission. 64

Conclusion Count #2. 65

Conclusion Count #1. 65

Conclusion Count #3. 66

Conclusion Count #4. 67

ANALYSIS ON THE MONEY LAUNDERING COUNT (Count #5) 67

The Crown’s theory of liability. 68

Ghost Ownership of certain properties. 70

Funds to purchase the ghost ownership properties. 71

Conclusion on Money Laundering. 73

THE CHARGES

[1] Tan Tien Nguyen ("Mr. Nguyen") is charged with the following offences:

Count #1: during the 120 days preceding October 6, 2009, conspiring with Son Van Nguyen and other persons to commit the offence of possession of a Controlled Substance (marihuana) for the purpose of trafficking (s. 465(1)(c) of the Code);

Count #2: during the 120 days preceding October 6, 2009, conspiring with Son Van Nguyen and other persons to commit the offence of production of a Controlled Substance (marihuana) (s. 465(1) (c) of the Code);

Count #3: during the 120 days preceding October 6, 2009, committed the offence of possession for the purpose of trafficking a Controlled Substance (marihuana) (s. 5(3) (a) of the Controlled Drugs and Substances Act);

Count #4: during the 120 days preceding October 6, 2009, committed the offence of production of a Controlled Substance (marihuana) (s. 7(1) of the Controlled Drugs and Substances Act); and

Count #5: Between August 6, 2004 and October 6, 2009 did use of currency with intent to conceal or convert the currency knowing or believing that it had been obtained as a result of an offence under s. 7 (1) of the Controlled Drugs and Substances Act (s. 462.31(2)(a) of the Code)

AGREED FACTS

[2] At the commencement of trial, counsel agreed that Exhibits 1 through 9 contained the Agreed Statement of Facts and supporting documentation, all of which was admissible as evidence without further proof.

THE VIVA VOCE EVIDENCE

[3] The Crown called the following witnesses:

i. Constable Leanne Rivers (file manager and surveillance);

ii. Constable Kory Keeping (surveillance and warrant officer);

iii. Constable Kirkpatrick (surveillance officer and execution of warrant/arrest);

iv. Mr. David Malamed (expert in investigation and forensic accounting);

v. Detective Constable Dwayne King (lead investigator); and

vi. Detective Constable Barry Smith (expert on marihuana grow operations);

[4] The Defence called Mr. Nguyen.

THE FACTS:

THE PERSONS/ENTITIES

[5] Mr. Nguyen was the owner and operator of All Seasons Garden Supply ("ASGS") located at 1000 Dundas Street East in Mississauga, Ontario. Mr. Nguyen directed the operations and sole employee, Son Van Nguyen ("Son Van") of ASGS.

[6] In November 2003, Mr. Nguyen incorporated 1594382 Ontario Inc. (“Ont. Inc.”) for the purpose of carrying on the ASGS business. The incorporation was done for tax purposes. Mr. Nguyen was the president and a 50% shareholder of Ont. Inc. Mr. Nguyen’s common law spouse was the other 50% shareholder. However, the incorporation did not cause any real change in the business operations, the signage or the control by Mr. Nguyen over the operations of ASGS.

[7] Ha Thu Tran was Mr. Nguyen’s common law spouse (“Tran”) and she assisted in ASGS' operations.

[8] During the 120 days proceeding October 6, 2009, ASGS had one employee, Son Van. Son Van was involved in dealing with customers, the physical labour, loading and unloading vehicles, disposing of waste into the dumpster, and using ASGS’ vehicles for business purposes.

[9] Messrs. Woolfson & Woolfson is a law firm that acted for Mr. Nguyen, during the relevant period, in connection with his real estate transactions.

THE POLICE INVESTIGATION – PROJECT MO-NEO

[10] The police commenced surveillance of Mr. Nguyen and ASGS in June 2010. From June 2010 until October 7, 2010 the police conducted surveillance on various dates. The surveillance observed what occurred at ASGS, 244 Isabella Ave, followed ASGS customers and followed deliveries by the ASGS delivery van.

THE VEHICLES ASSOCIATED WITH MR. NGUYEN AND ASGS

[11] Tran owned a 2002 white Dodge Caravan that was used by Son Van for ASGS business (“Caravan”). The Caravan was also used by ASGS’ customers to transport their purchased products. When the customers used the Caravan, they would leave their vehicles at ASGS, drive the Caravan to their home, return the Caravan to ASGS and pick up their vehicle. There was no visible company name on the Caravan.

[12] Mr. Nguyen owned a black Dodge Ram pickup truck sometimes used in the ASGS business (“Ram Pickup”).

[13] Mr. Nguyen owned a 2003 Toyota Tundra (“Toyota Tundra”).

[14] Mr. Nguyen owned a BMW X5 which was generally driven by Tran. (“BMW X5”) The BMW X5 was purchased by Mr. Nguyen in 2004 for approximately $111,000. Mr. Nguyen made a down payment of approximately $71,000 and the balance was financed through BMW Canada.

[15] Mr. Nguyen owned a 2003 Harley Davidson motorcycle and a 2009 Yamaha motorcycle.

[16] There were several old vehicles on ASGS’ property which were broken down and abandoned. These were also owned by Mr. Nguyen.

THE PROPERTIES ASSOCIATED WITH MR. NGUYEN

[17] The following properties are relevant to this matter:

i. 1000 Dundas Street East, Mississauga;

ii. 244 Isabella Avenue, Mississauga, Ontario (Mr. Nguyen’s personal residence post-2006);

iii. 1466 Bancroft Drive, Mississauga, Ontario;

iv. 39 Red Maple Drive, Brampton, Ontario;

v. 7 Giza Crescent, Brampton, Ontario;

vi. 22 Deerglen Drive, Brampton, Ontario;

vii. 33 Sheepberry Terrace, Brampton, Ontario;

viii. 2024 Grosvenor Street, Oakville, Ontario (Mr. Nguyen’s personal residence prior to 2006); and

ix. 2 Carrie Crescent, Brampton, Ontario.

1000 DUNDAS STREET, MISSISSAUGA – ASGS BUSINESS

[18] This property is an approximately one acre lot on the south side of Dundas Street East in Mississauga. What follows is a description of the state of the Property at the time it was under surveillance.

[19] There was a large sign near the Dundas Street East roadway that read: All Seasons Indoor Gardening Greenhouse Supplies 1000 Dundas St. East. (the “Property”)

[20] There was a front gate that served as the entrance to the Property. When locked, it prevented vehicular access to the customer parking area.

[21] Once in the customer parking area, there was an inner fence around the building. This inner fence had a gate that could be locked. The customer parking was located outside this inner fence. The main entrance to the building was some 15 to 20 feet within this inner fence.

[22] Once a vehicle entered the driveway to the Property, there are no signs to identify it as the ASGS business described in the large sign on Dundas St.

[23] There is a large building on the Property. The front of the building faced west (it does not face Dundas St.). The main entrance consisted of a glass enclosure of some six glass panels across, two of which were doors. There were no signs on the building.

[24] The condition of the exterior entrance area to the building was extremely poor. There were weeds growing near the entrance. The paint on the building was peeling off. It was dirty. It would not be an inviting place for customers. The photographs also show used skids outside the building. There were also several abandoned vehicles in the area. It is hard to imagine this as an operating commercial establishment.

[25] There was a rental dumpster at the rear of the Property. It was located some 150 feet past the rear of the building.

[26] Inside the building there was an area that contained shelving and products for sale. Some products were hanging from the ceiling. Other products were just piled up on the floor in the aisles. The condition of the interior of the store was also dirty and not well maintained. There were no signs on the shelves identifying items for sale. There were no signs showing the prices of the products. Most, if not all, of the products, did not have price tags on them. Mr. Nguyen testified he put small white circle patches with the price on the products. However, no prices were pointed out by Mr. Nguyen in the photographs and none are readily apparent in any of the numerous photographs made exhibits. What is significant is that, if a customer bought a product from ASGS and took it home, there would be nothing on the product identifying it had been purchased at ASGS.

[27] At times, Mr. Nguyen parked his motorcycle inside the building in the customer area. Mr. Nguyen’s Seadoo was also seen parked in the same area. ASGS also had a forklift, used in its business operations, and this was also at times parked in the same area. It is unusual to find motorcycles or Seadoos parked in the public or customer area in a gardening supply store.

[28] During the days the police conducted surveillance on ASGS, the police did not see any commercial vehicles with company logos arrive at ASGS for delivery or pickup.

[29] During the days the police conducted surveillance at ASGS, the police did not observe any "sale signs" or other promotional materials regarding products for sale at ASGS.

[30] The police found no other materials that would indicate ASGS was a typical store, with advertising materials, printed bags, written receipts or anything which had ASGS’ name on it.

[31] There were no live plants for sale at ASGS. This is highly unusual for a gardening supply store. Mr. Nguyen attempted to explain that he had some decorative plants he would sell if some customer wanted to buy them. A not very credible explanation.

[32] Mr. Nguyen has no documentation regarding the names or addresses of any customers. All ASGS customers paid in cash. There were no credit card or interact receipts. There were no sales receipts found at ASGS.

[33] The only reasonable inference to be drawn from the manner which ASGS carried on business is that Mr. Nguyen made a clear and deliberate decision to carry on business in a manner that would prevent any records or evidence that would identify his customer’s names or addresses, what products the customers bought or that the products had come from ASGS.

[34] ASGS’ customers came from as far away as Montreal, Leamington, Kitchener and St. Catharines. ASGS also supplied fertilizer and other products overseas as far away as England. It is not obvious why these customers would come the long distances for “garden supplies”, particularly since the overseas customers incurred substantial shipping costs for shipments that, documentation indicates, included fertilizers that weighed “tons”. When asked why his customers came from such distances, Mr. Nguyen had no real and credible answer – “possible comes to store for chemicals can’t find at other places” but then there was no credible response as to what unique products were available at ASGS.

[35] When ASGS’ customers used the Caravan to take their purchases home, there was no record kept of the name of the customer, how to get a hold of the customer if ASGS needed the return of the Caravan, nor any record of the customer’s driver’s license. It would be very unusual for a business not to record some of this information before allowing a customer to use a company vehicle. This is another example where Mr. Nguyen operated the business in a manner so as not to record his customer’s names or keep any records that could tie the customers to ASGS. There was simply no record kept of who ASGS’ customers were.

[36] Son Van was paid cash by Mr. Nguyen. There were no written records of who the prior ASGS employees were. All employees were paid cash. The result was no employee records.

[37] When the police entered ASGS on October 7, 2009, they searched for any business records on the Property. Very few business records could be found at ASGS or at Mr. Nguyen’s home. The only reasonable conclusion is that ASGS kept little or no business records.

[38] Around 2005, Mr. Nguyen considered creating a multiple unit commercial project on the Property. There are documents before the Court such as the Phase 1 Environmental study and drawings that were prepared over the course of the next three years in furtherance of this possible development. However, the plans were never implemented and the development never proceeded to fruition.

244 ISABELLA AVENUE, MISSISSAUGA

[39] This is a large home in a desirable area of Mississauga. It was the personal residence of Mr. Nguyen.

[40] It was purchased in March 2006 for $1,050,000. Woolfson & Woolfson acted for Mr. Nguyen in this purchase transaction.

[41] Mr. Nguyen provided a $50,000 deposit. A mortgage of $600,000 was registered against the property. The balance of $400,000 was paid by Mr. Nguyen.

[42] The amounts paid by Mr. Nguyen are suspicious. There were a number of bank drafts used by Mr. Nguyen to purchase the Isabella Avenue property. These include:

• One bank draft from RBC in Leamington, Ontario ($35,000). Mr. Nguyen tried to explain that one of the bank drafts (the one from Leamington) was from a customer (one of a number of customers in Leamington) – but he could not remember the name of the customer and did not offer an explanation why a customer would pay him by way of a bank draft. Leamington is approximately 350 kilometres from Mississauga;

• Two bank drafts from Scotiabank in Toronto at Spadina and Dundas ($58,500 and $26,500);

• One bank draft from Scotiabank in Agincourt ($346,000);

• One bank draft from BMO in Agincourt ($9,000) ;

• One bank draft from BMO in Mississauga ($5,000);

• One bank draft from RBC on College Street in Toronto ($15,000);

• One bank draft from CIBC in Mississauga ($15,000);

• One bank draft from RBC in Mississauga ($10,000); and

• One bank draft from a different branch of the RBC in Mississauga ($20,000).

All of the above bank drafts were either payable to Mr. Nguyen or payable to Woolfson & Woolfson. In all cases, it is impossible to identify the source of the funds because of the nature of a bank draft. There was no evidence as to why there were so many bank drafts or why they came from different banks.

[43] Mr. Nguyen also gave Woolfson & Woolfson cash ($7,300) for the purchase of this property.

[44] In arranging the mortgage for the Isabella property, Mr. Nguyen executed a sworn declaration he was not a “spouse” despite a common law spouse relationship with Tran since 1998 and having several children in that relationship.

[45] During the course of Mr. Nguyen’s examination in chief, he testified he used approximately $417,000 from the sale of his Grosvenor Street property to purchase the Isabella Street property. When it was suggested, in cross examination, that he had not sold the Grosvenor property before buying the Isabella property, Mr. Nguyen denied it. However, eventually, Mr. Nguyen admitted the Isabella property closed before the Grosvenor property had been sold and closed (October 2006). Therefore, Mr. Nguyen could not have used proceeds from his Grosvenor property to buy the Isabella property. Upon realizing that his evidence was inconsistent, Mr. Nguyen then testified the money came from ASGS.

GHOST OWNERSHIP OF PROPERTIES ASSOCIATED WITH MR. NGUYEN

[46] Ghost ownership describes the situation where an individual is the real owner of a property but that individual is not a registered owner on title. Instead, title is held by another person for that individual.

[47] Numerous documents relating to the following properties were found in Mr. Nguyen’s residence at 244 Isabella Avenue and/or at ASGS. As part of its investigation, the police then obtained a search warrant to obtain copies of the real estate files at the offices of Woolfson & Woolfson.

[48] The following properties are significant in that:

a) the properties are connected to Mr. Nguyen through family relationships or a friend and eventually, by receipt of the net proceeds of sale when the properties were sold;

b) five of these properties are known to have housed marihuana grow operation at some point in time:

i. 1466 Bancroft Drive, Mississauga -- 1285 plants seized in Nov. 2005;

ii. 2024 Grosvenor Street, Oakville – 280 plants seized in Nov. 2002;

iii. 39 Red Maple Drive, Brampton -- 495 plants seized in Apr. 2004;

iv. 2 Carrie Crescent, Brampton – 1321 plants seized in Dec. 2007; and

v. 22 Deerglen Drive, Brampton – Hydro by-pass found after property sold.

c) the legal work for the sale and purchase of each property was done by Mr. Nguyen’s lawyers, Woolfson & Woolfson;

d) Mr. Nguyen received the net proceeds of the sale of each property below, despite not being the registered owner. The sale proceeds from the following properties totalled $540,672.06:

i. 1466 Bancroft Drive, Mississauga - $179,444.24;

ii. 39 Red Maple Drive, Brampton - $137,898.28;

iii. 33 Sheepberry Terrace, Brampton - $84,811.91;

iv. 7 Giza Crescent, Brampton - $112,992.07; and

v. 22 Deerglen Drive, Brampton - $25,525.56.

1466 Bancroft Drive, Mississauga (Mr. Nguyen’s spouse’s sister and sister in law)

[49] This property was bought in February 2005 by Huong Tran. Huong Tran is the older sister of Tran, Mr. Nguyen’s common law spouse. Mr. Nguyen referred to Huong Tran as his “sister in law”.

[50] Woolfson & Woolfson acted on the purchase of this property.

[51] Huong Tran’s husband is Son Thanh Nguyen. Son Thanh Nguyen also owned the Sheepberry property referred to below.

[52] During the period of time that Huong Tran was the registered owner of the property, on November 18^th, 2005, members of the Peel Regional Police executed a search warrant at this property. The police discovered a fully operational marihuana grow operation. Police located and seized 1285 marihuana plants in various stages of growth. When Mr. Nguyen was asked whether Huong Tran lived there at the time of the marihuana grow op, he said he did not know.

[53] Huong Tran was also arrested in May 2006 for operating a marihuana grow operation at 3194 Huxley Drive, Mississauga where 326 marihuana plants were found by the police.

[54] As can be seen from the above facts, Huong Tran had several connections with marijuana grow operations.

[55] Huong Tran sold the property at 1466 Bancroft Drive in June 2008 for $517,500 to Bich Ly. Bich Ly is Mr. Nguyen’s brother’s wife. A real estate broker (Royal Lepage) was used to facilitate this transaction and a substantial commission was paid for this transfer. The net proceeds of sale was $179,444,24.

[56] Mr. Nguyen received $179,444.24 into his personal bank account on July 3, 2008.

[57] The documents found at 244 Isabella Avenue pertaining to 1466 Bancroft Drive include:

• Tax bills for June and July 2006;

• The mortgage discharge documentation in 2007 and copies of a number of cheques payable to Woolfson & Woolfson around the same period of time as the mortgage was discharged;

• Woolfson & Woolfson’s reporting letter and all purchase related documentation with respect to Huong Tran’s purchase in 2005;

• Woolfson & Woolfson’s reporting letter with respect to Huong Tran’s sale to Bich Ly;

• A direction from Huong Tran that the net proceeds be paid to Mr. Nguyen; and

• Tax notices in June 2008 which is after the sale to Bich Ly.

7 Giza Crescent, Brampton (Mr. Nguyen’s spouse’s brother in law)

[58] In November 2004, Hau Hoa Thi Dao purchased this property for $388,000. Woolfson & Woolfson acted on the transaction.

[59] Hau Hoa Thi Dao is Tran’s brother’s (Bang Tran) wife.

[60] In February 2006 this property was sold by Hau Hoa Thi Dao. Woolfson & Woolfson acted on the transaction.

[61] Hau Hoa Thi Dao directed the net proceeds of $112,992.07 to Mr. Nguyen. These monies were deposited into Mr. Nguyen’s personal account.

[62] The documents found at 244 Isabella Avenue pertaining to this property include:

• Reporting letter and transfer documents, including mortgage, insurance and tax certificates relating to Hau Hoa Thi Dao’s purchase in November 2004;

• Reporting letter of Woolfson & Woolfson with respect to the sale by Hau Hoa Thi Dao in February 2006. It is noteworthy that the letter, while addressed to Miss Dao did not contain any address for the recipient;

• Tax certificate and other documentation relating to this property in 2004;

• The title insurance for this property; and

• Mortgage Statement for this property.

33 Sheepberry Terrace, Brampton (Mr. Nguyen’s spouse’s brother in law)

[63] In June 2006 this property was sold by Son Thanh Nguyen for $435,000.00. Son Thanh Nguyen is Tran’s brother in law.

[64] The documents found at 244 Isabella Avenue pertaining to this property include:

• The reporting letter and land transfer documents. It is noteworthy there is no address for the recipient on the reporting letter from Woolfson & Woolfson;

• Hydro bills for 2006 and 2009 which included a hydro notice cancelling hydro service in May 2009, (which is years after the property has been sold by Son Thanh Nguyen), the 2009 bill was paid and a notation of payment of the 2009 bill was made on the 2006 Hydro bill; and

• Tax bills for the same period.

[65] Mr. Nguyen received the net proceeds of sale in the amount of $84,811.91 from Son Thanh Nguyen’s sale in June 2006;

22 Deerglen Drive, Brampton (Mr. Nguyen’s friend)

[66] Prior to November 2006, the registered owner of this property was Binh Pham.

[67] Mr. Pham is a friend of Mr. Nguyen who lived at the same apartment complex Mr. Nguyen had lived at Hurontario Street.

[68] In November 2006 this property was sold by Binh Pham for $393,000.

[69] The net proceeds of the sale of $25,525.56 was paid to Mr. Nguyen.

[70] After this property had been sold, a “hydro bypass” was found in the property. A hydro bypass is used to bypass the hydro meter to avoid showing unusual or excessive hydro usage. A hydro bypass is commonly used in marihuana grow operations to avoid detection by the police.

[71] The documents found at ASGS’ pertaining to this property include:

• Revenue Canada notice of registration of a Certificate for GST arrears;

• Gas bills for October 2006 (one was specifically addressed to Binh Pham at ASGS’ address);

• A reporting letter from Woolfson & Woolfson with all the supporting sale documentation. This letter was addressed to ASGS’ Property; and

• The direction from Binh Pham directing the net proceeds of sale to Mr. Nguyen being $25,525.56.

[72] Mr. Nguyen testified that Mr. Pham had come to him because of his financial difficulties seeking help. Mr. Nguyen suggested Mr. Pham sell the property. The property was eventually sold. It is unusual that, Mr. Pham a person apparently in financial difficulty, directed the entire net proceeds of sale to Mr. Nguyen. Mr. Nguyen testified that the net proceeds were given to Mr. Nguyen as a loan. There is no documentation to show it was a loan. I do not accept Mr. Nguyen’s evidence on this issue.

2 Carrie Crescent, Brampton (Mr. Nguyen’s spouse’s partner)

[73] In March 2007 this property was purchased by Khampheet Souaykoummane. Woolfson & Woolfson acted on this transaction.

[74] Ms. Souaykoummane is a friend and partner of Tran, Mr. Nguyen’s spouse. Mr. Nguyen was somewhat evasive about the exact relationship between Ms. Souaykoummane and Tran. However, the documentation shows that Tran and Ms. Souaykoummane were partners in “Mississauga Garden Supplies Inc.”

[75] While this property was owned by Ms. Souaykoummane, on December 18, 2007, the Peel Regional Police executed a search warrant at this property. The officers discovered a fully-functioning marihuana grow operation in various stages of development. 1321 plants were seized. A hydro by-pass was also discovered in the basement of the residence.

[76] Bills associated with this property were located at ASGS addressed to Khampheet Souaykoummane.

[77] Ms. Souaykoummane sold this property in February 2009. Woolfson & Woolfson acted on the sale of this property.

[78] The documents found at 244 Isabella Avenue pertaining to this property include:

• copies of the negotiations for the sale of this property such as offer sign-backs and a vendor disclosure statement which stated:

“The seller acknowledges that during a portion of the time that he/she has owned the property it has been used for the manufacture of illegal substances and that the property has been repaired and retrofitted in accordance with the City of Brampton “Order to Comply” property standard bylaw #`04-96 ....”

• the closing documents for the sale of the property in 2009.

[79] The documents found at ASGS’ Property pertaining to this property include:

• the reporting letter with respect to the sale of this property;

• various bills with respect to this property, including:

i. Tax bills for 2008 (the year before the property was sold) and various notifications of outstanding arrears;

ii. Tax bill for 2007;

iii. A notice of past due from the Water Department at Peel for 2008;

iv. A number of gas bills in 2008; and

v. Hydro bill for 2008;

• A 2008 demand letter from the mortgagee;

• Copies of bank drafts payable to Judith Woolfson at Woolfson & Woolfson;

• The closing documents with respect to Ms. Souaykoummane’s purchase in 2007 including the reporting letter from Woolfson & Woolfson; and

• When the mortgage on this property went into arrears in 2008, an email from Woolfson & Woolfson dealing with the arrears was faxed to ASGS’s fax number. Shortly thereafter, two bank drafts from two banks were made payable to Judith Woolfson to deal with the mortgage arrears. Copies of these band drafts were found at ASGS’ Property. Mr. Nguyen admitted he was involved in providing these bank drafts.

[80] When asked why he would have these documents, there was no credible response from Mr. Nguyen.

2024 Grosvenor Street, Oakville (Mr Nguyen’s brother)

[81] From January 2002 until October 2004 this property was registered in the name of Minh Tien Nguyen – a person with a number of drug related offences. The purchase price shown on the records was $345,000.

[82] Minh Tien Nguyen is Mr. Nguyen’s older brother.

[83] On November 5, 2002 the Halton Regional Police executed a search warrant at this property. A large sophisticated marihuana grow operation was located in the basement. A total of 280 marihuana plants were seized. A hydro by-pass was also located on the residence. Approximately $40,000 worth of hydroponics equipment was found in the residence.

[84] Mr. Nguyen testified he was not sure whether his brother was arrested for the marihuana grow operation. Mr. Nguyen denied even knowing where his brother was living at the time.

[85] Mr. Nguyen agreed to buy this property from his brother for the same price his brother had bought the property a year and a half earlier and he became the registered owner on October 2004. Mr. Nguyen and his brother used a real estate agent for the sale and purchase of this property. There was no explanation as to why a real estate agent (and payment of a significant commission) was used when it was a transferred between brothers.

[86] Woolfson & Woolfson were Mr. Nguyen’s lawyers for the purchase of this property.

[87] This property was sold by Mr. Nguyen in October 2006. Woolfson & Woolfson acted on the sale of this property.

39 Red Maple Drive, Brampton (Mr. Nguyen’s spouse’s niece)

[88] Diem Thi Thu Nguyen bought the property in November 2003 for $353,000. There is no evidence of any connection between Mr. Nguyen and Diem Thi Thu Nguyen.

[89] Dung Phuong Tran purchased this property from Diem Thi Thu Nguyen in January 2005 for $0 (a title change permitted in circumstances such as a transfer to a family member or to a beneficial owner). Dung Phuong Tran is Mr. Nguyen’s spouse’s niece. Given the lack of consideration shown on the title documentation, there is a serious question whether Diem Thi Thu was just another nominee owner of this property who had no real beneficial interest in this property.

[90] On April 23, 2004, Peel Regional Police executed a search warrant at this property. The police located and seized 495 marihuana plants in various stages of growth. Hydroponic growing equipment was also located throughout the residence. During the search, police found a hole in the building’s foundation that contained wiring that by-passed the hydro meter.

[91] Duong Phuong Tran sold this property in June 2005 for $424,000.

[92] Upon its sale this property Mr. Nguyen received $137,898.28 being the net proceeds of the sale of this property.

[93] The documents found at 244 Isabella Avenue pertaining to this property include:

• Listing agreement for Dung Phuong Tran’s sale in 2005;

• Copies of the Agreement and purchase for Dung Phuong Tran’s sale in 2005.

[94] Woolfson & Woolfson acted in connection with the sale of this property in 2005.

THE POLICE INVESTIGATION

[95] In June 15, 2009, the police commenced their investigation into ASGS. Surveillance and search warrants were carried out on various dates over the course of the 4-5 months culminating in the arrest of Mr. Nguyen on October 7, 2009.

[96] Mr. Nguyen, Tran and Son Van were seen at ASGS on numerous occasions between June 15, 2009 and the latter part of September, 2009.

The Garbage Bags /Loading and Unloading at ASGS

[97] In virtually all cases, whenever a customer purchased products at ASGS, the customer received the products as follows:

a) The products, regardless of their size, including large bags of soil (some 3 feet by 18 inches by 18 inches) were placed in large black garbage bags or, on rare occasions, in cardboard boxes;

b) the customer’s vehicle would back up to the front doors of the building which would nearly, completely block the front doors into the building. This made it very difficult for anyone outside to see what had been purchased and put into the garbage bags; and

c) the large black garbage bags were loaded into the customer’s vehicle.

[98] The same process was used for products going into the Caravan for delivery.

[99] What is highly unusual is that the process is deliberately secretive, designed to make it difficult for anyone to see what was being loaded into the vehicles. With very few exceptions, the police did not observe any purchases from ASGS leave the premises unless they were in black garbage bags. At no time did the police see or find any bags or products with a name or logo that would identify the products as having been purchased at ASGS.

[100] Why is this manner of loading significant? Constable Smith testified that having product from a grow op supplier put into black garbage bags is very common. Constable Smith testified that, when the customer gets to the grow op location, such as a residence or even a commercial building, it would be suspicious to neighbours and onlookers to see someone carry numerous bags of soil, fertilizer and hundreds of plastic pots INTO the house or building. By placing the product in large garbage bags the buyer ensures that anyone observing the unloading would not see these types of products being brought into the building.

[101] In addition to this secretive manner of loading products into customer vehicles, quite often, customers of ASGS would return black garbage bags for the disposal as waste. These garbage bags would be taken to ASGS’ dumpster, usually by Son Van, and put into the dumpster.

[102] Why is this significant? Constable Smith testified that one of the difficulties marihuana grow operators face is the disposal of waste soil, pots and other waste, all of which smells of marihuana. Once soil has been used to grow marihuana plants, the soil is toxic from the chemicals applied during the growing period, and thus a grow operator generates a great deal of “scrap soil”. For the same reason a marihuana grow operator does not want neighbours and onlookers to see them carrying into the premises many bags of soil, fertilizer and pots, the marihuana grow operator does not want to be seen to be carrying out of the building large quantities of soil and pots smelling of marihuana and throwing these into the garbage. Hence, the use of black garbage bags.

[103] In addition to being seen, the waste by-products have a strong smell of marihuana. Anyone walking by the garbage left at the building might notice the smell of marihuana with the result the marihuana grow operation could be discovered. By having a safe place to dispose of marihuana grow op waste is a service and significant benefit to the marihuana grow operator.

The Dumpster

[104] ASGS had a rental dumpster in the rear of the Property.

[105] It was common for ASGS customers to bring back waste in garbage bags to ASGS for disposal into the dumpster.

[106] This regular activity of customers returning black garbage bags (in many cases full of scrap soil) for disposal at ASGS resulted in the police obtaining a search warrant to carry out “dumpster dive” searches of the dumpster.

[107] The results of the police dumpster dives were as follows:

June 25, 2009 – Dumpster Dive

[108] On June 23, 2009, a green van came to ASGS. Son Van took the van and drove it to the rear of ASGS and emptied the van of garbage bags and growing pots into the dumpster

[109] In the early hours of June 25, 2009 the police searched the dumpster at the rear of ASGS.

[110] Several black garbage bags full of scrap soil were located in the dumpster and a number of used pots were found piled up beside the dumpster.

July 2, 2009 – Dumpster Dive

[111] On July 1, 2009 a customer arrived in a vehicle at ASGS. Son Van was seen driving the customer’s vehicle to the dumpster and unloading garbage bags from a customer’s vehicle into the dumpster.

[112] The police again searched the dumpster at the rear of ASGS.

[113] Again, black garbage bags full of scrap soil were located in the dumpster.

July 7, 2009 – Dumpster Dive

[114] On July 7, 2009, a customer arrived at ASGS with a blue van. Son Van took the customer’s van to the dumpster and unloaded garbage bags and cardboard boxes into the dumpster.

[115] Later that night on July 7, 2009, the police again searched the dumpster at the rear of ASGS.

[116] The police found garbage bags filled with scrap soil. Some contained “shake” or discarded waste marihuana plant stems and leaves.

July 8, 2009 – Dumpster Dive

[117] On July 8, 2009, a black van arrived at ASGS. Some product was unloaded by Son Van with the forklift truck and driven to the back of the Property where the dumpster is located.

[118] Later that same day, Son Van returned to ASGS with the Toyota Tundra. Son Van drove the Toyota Tundra to the dumpster and unloaded plants and garbage bags.

[119] Again, the police searched the dumpster that evening. The police found a bag near the top of the dumpster which had marihuana stalks in it. There was a strong smell of marihuana in and around the dumpster.

August 24, 2009 – Dumpster Dive

[120] The police again searched the ASGS dumpster finding black garbage bags containing scrap soil.

Summary

[121] In each inspection of the dumpster, the police found scrap soil in black garbage bags. The police also found marihuana stems and leaves in black garbage bags in the dumpster, and observed a strong smell of marihuana emanating from the dumpster. The police also found used black plastic pots piled up next to the dumpster. This was the systematic disposal of customer’s garbage at ASGS.

ASGS Customers with Marihuana Grow Operations

[122] The police followed a number of ASGS customers after they purchased products at ASGS.

[123] A number of these customers were themselves running marihuana grow operations and purchased product from ASGS for use in their operations. The actual products the customers purchased were not seen or known, given the method of placing the products in garbage bags and loading them into the customer's vehicles.

[124] Over a six-week period, four marihuana grow operations were discovered by the police at the homes of ASGS' customers after having purchased "greenhouse" products at ASGS. The estimated street value of the marihuana seized in these four marihuana grow operations was $11,655,550. The details are set out below.

June 16, 2009 - 215 Pine Valley Drive, Kitchener

[125] On June 16, 2009 a customer arrived in his vehicle and was observed purchasing products at ASGS. Son Van placed the products into the trunk of the vehicle.

[126] When the customer left ASGS, the customer was followed by the police to 215 Pine Valley Drive, Kitchener.

[127] On Wednesday September 16^th 2009 a search warrant was executed at 215 Pine Valley Drive, Kitchener. A marihuana grow operation, consisting of 609 plants in all stages of growth, was found in the basement of the residence. One and one half pounds of dry marihuana was found in a freezer. Several thousand dollars of grow equipment were also seized. The estimated street value of marihuana seized was $682,080.00.

[128] Electrical timer-boards, ballasts, shades, high intensity lights similar to those available at ASGS were found at this property.

June 17, 2009 - 23 Humbolt Crescent, Brampton

[129] On June 17, 2009 a customer came to ASGS in a van. The customer backed up his vehicle to the building's front doors. Mr. Nguyen placed a number of products into black garbage bags and then placed them into the customer’s van. Mr. Nguyen also placed some black pots into black garbage bags and also loaded them into the van.

[130] The customer drove to 23 Humbolt Crescent, Brampton. The black bags were unloaded into the garage at the location.

[131] On July 15^th 2009 a warrant was executed at 23 Humbolt Crescent, Brampton.

[132] The police discovered an operating marihuana grow operation with 1545 marihuana plants at all stages of growth, 657.50 grams of dry marihuana packaged in clear plastic bags, and a hydro bypass. Several thousand dollars worth of grow equipment were also seized. The estimated street value of the marihuana seized was $1,743,550.00.

[133] Products similar to those sold at ASGS were found on this property. In particular the photographs show numerous ballasts, shades and high intensity lights similar to those seized at ASGS.

July 13, 2009 - 9697 Saint-Laurent Blvd, Montreal

[134] On July 13^th 2009 Son Van loaded the ASGS Caravan with boxes and black or green garbage bags.

[135] Son Van then drove to Green Garden Supplies. Son Van placed several black garbage bags and two boxes into the ASGS Caravan.

[136] During the drive along Hwy #401, Son Van was stopped. Son Van told the police he was transporting lamps. Son Van lied to the police saying that he did not know the “owner”. Son Van also lied to the police that he was going to contact the owner of the van and they would have somebody meet him and pick up the lamps. The Caravan was searched and 24 boxes of growing equipment, lights and fertilizer was located in the green garbage bags.

[137] Son Van then drove the Caravan to a Burger King located at the intersection of Boulevard Saint-Laurent and Boulevard Cremazie, Montreal Quebec. Son Van met with Simon On and Jin Pin Zhou at the Burger King. Son Van turned over the Caravan to Mr. On and Mr. Zhou who drove the Caravan to 9697 Boulevard Saint-Laurent, a large industrial unit.

[138] The boxes and bags from the Caravan were unloaded. The Caravan was driven back to Son Van at the Burger King. Son Van got back into the Caravan and drove it home, returning the Caravan to ASGS the next day.

[139] On July 22, 2009, the Quebec police executed a search warrant on 9697 Boulevard Saint-Laurent. The police found a large marihuana grow operation. The seizure totalled 7764 marihuana plants at all stages of growth. Tens of thousands of dollars of grow equipment were also seized. The estimated street value of the marihuana seized was $8,675,520.00. Mr. On and Mr. Zhou, along with others, were arrested.

[140] Products similar to those sold at ASGS were found on the property. In particular, the police found electrical timer-boards, ballasts, shades, high intensity lights similar to those seized at ASGS.

[141] Constable Smith, testified that, this highly unusual delivery method, is a typical delivery to a marihuana grow operation since the marihuana grow operators do not want the supplier to know their exact location.

[142] When Mr. Nguyen was asked about this incident, his evidence was inconsistent. In chief Mr. Nguyen testified he did not know about the delivery before he received the Crown disclosure. With respect to his knowledge that Son Van had taken the ASGS Caravan for a delivery to Montreal, Mr. Nguyen testified he did not know about it but that he felt frustrated “that day” because he did not know what was happening. In cross examination, despite being asked on several occasions if he could recall that day, Mr. Nguyen said he could not remember it. He could not explain what he had meant when he had said he was frustrated “that day”. He could not explain why he would not have had any questions or concerns upon discovering that Son Van, his only employee, had left ASGS with the only ASGS vehicle, without informing Mr. Nguyen where he had gone or how long he would be gone.

August 2, 2009 - 86 Richeliu Drive, St. Catharines

[143] The police obtained judicial authorization to electronically track the Caravan. On August 2, 2009, the Caravan was tracked by the police to 86 Richelieu Drive in St. Catharines. The Caravan remained in St. Catharines overnight.

[144] On August 18^th 2009, a search warrant was executed at 86 Richelieu Drive, St. Catharines. It was a marihuana grow operation. The police found and seized 495 marihuana plants at various stages of growth. Approximately one pound of dried marihuana was found in a fridge. Several thousand dollars of grow equipment was also seized. The estimated street value of marihuana seized was $554,400.00.

[145] Again, Mr. Nguyen testified he did not know that Son Van or a customer had driven the ASGS Caravan to St. Catharines, or that the ASGS Caravan was not returned until the next day. It is difficult to accept that Mr. Nguyen would not know where the Caravan was and when it would be returned. Minutes later Mr. Nguyen testified he could remember that date, and a customer had borrowed the Caravan and told him he would bring it back in an hour or two. Mr. Nguyen testified he did not know where the customer was going.

Undercover Officers at ASGS

[146] Undercover police officers went into ASGS on several occasions.

June 22, 2009 – Undercover officer at ASGS

[147] On June 22, 2009 an undercover police officer went into ASGS. She observed that the condition of the premises was dirty, not well maintained, and that there were no customers.

[148] There were two males in store - Mr. Nguyen and Son Van. The two men appeared nervous. She asked Mr. Nguyen how much a timer would cost. Mr. Nguyen appeared to make up an answer of $10 and asked her to go to Home Depot or Canadian Tire telling her “they sell it there”. It was clear to the officer that the two males did not want her to purchase a timer at ASGS. The officer left.

August 26, 2009 and September 10, 2009 – Undercover officer in ASGS

[149] Undercover officers attended at ASGS. One of the officers described a problem with spider mites. Tran recommended fogging and a spray pesticide. The officer bought the items.

[150] The officer returned on September 10, 2009 and again spoke to Tran. He told her of the problems he had had with his marihuana plants (referring to them as spider miters). Tran spoke to Son Van in a foreign language. Son Van asked the officer whether he sprayed the plants with the lights on or off. When the officer said “on”, he was told it was better to spray the plants with the lights off. Son Van asked the officer whether the plants had buds on them. When the officer said yes, Son Van said that it was difficult to get rid of the mites at that time.

[151] The officer asked Son Van if he could introduce him to someone who sells clones (small marihuana plants for growing) or if Son Van could help him. Son Van said “they do not sell them here and they only sell the supplies for them.” “Cloning” is significant in marihuana grow operations since it is only the female plant which is grown and cloned as it has the highest concentration of THC, the psychoactive ingredient.

RESTRAINT AND MANAGEMENT ORDERS

[152] On October 5^th, 2009, Justice J. McMahon of the Ontario Superior Court signed a Restraint and Management Order pursuant to ss. 462.33 and 462.331 of the Criminal Code and a Special Search Warrant pursuant to s. 462.32(1) of the Criminal Code for the following properties:

• 244 Isabella Street, City of Mississauga

• 1000 Dundas Street, City of Mississauga

• Scotiabank account number 91082 04720 26, registered to Tan Tien NGUYEN

• Bank of Montreal account number 3954 3059 795, registered to Tan Tien NGUYEN

• 2002 Dodge Caravan motor vehicle, bearing vehicle identification number (“VIN”) 2B4GP44R02R670101

• 2003 Harley Davidson motorcycle, bearing VIN 5HD1BW113Y020553

• 1992 GMC Safari, bearing VIN 1GKDM15Z7NB546734

• 2003 Toyota Tundra, bearing VIN 5TBBT48103S349044

• 2005 BMW X5, bearing VIN 5UXFA93515LE82147

• 2007 Dodge Ram, bearing VIN 3D7MX49C27G728495

ARREST ON OCTOBER 7, 2009

[153] Mr. Nguyen was arrested on October 7, 2009.

SEARCH AND SEIZURE AT 244 ISABELLA AVENUE – OCT. 7, 2009

[154] The police attended on October 7, 2009. A number of items were seized.

[155] The home was describes as having luxury furnishings. Some of these luxury items included:

• 6 unopened bottles of liquor valued at $2,400 each;

• 3 Rolex watches: one silver, one gold and one platinum with diamonds;

• Many expensive clothes in bags, some of which were new clothes that still had the price tags on them;

• Large screen televisions, expensive stereo equipment, Speaker wires with a purchase value of $3,000;

• Two motorcycles;

• One woman’s diamond ring (with an appraisal for $43,000);

• One sea doo;

• Two all terrain vehicles (one Honda and one Polaris); and

• Receipts showing significant payments in cash. For example, Mr. Nguyen bought a spa for $11,610. He placed a down payment of $600 and paid the balance of $11,010 in cash.

[156] Mr. Nguyen testified he did not have expensive things. He could not remember owning two of the three watches, one made of gold and one made of platinum and decorated with diamonds, or anything about the $43,000 woman’s ring. Mr. Nguyen could not provide a reasonable or credible explanation for the expensive items found in his home.

[157] It is important to note that the police found no ASGS business records at 244 Isabella Avenue. This is significant because, except for very few old documents found on a computer relating to oversea shipments made years earlier, no other business records were found at ASGS either.

SEARCH AND SEIZURE AT 1000 DUNDAS STREET EAST (ASGS) – OCT. 7, 2009

[158] The police searched the premises of ASGS on October 7, 2009. A number of items were seized during the course of this search. A complete list of what was located at ASGS is found at Exhibit 6, Tab 27, p. 1221.

SEARCH AND SEIZURE OF THE DORAL BOAT

[159] In 2006, Mr. Nguyen purchased a 30-foot boat for $208,000. He paid a $10,000 deposit. When Mr. Nguyen picked up the boat he made a further payment of $100,228 in cash and $98,050 by money order. Mr. Nguyen testified that he paid cash because he had cash available, and because the vendor said he would get a “good price” if he paid cash. This explanation makes little sense. In particular because Mr. Nguyen received a receipt for the full amount he paid for the boat, including the cash and Mr. Nguyen paid GST and PST on the full price of the boat, including the portion of the cash purchase price.

[160] This purchase was made in a year where Mr. Nguyen’s reported income had decreased dramatically. When asked about this, Mr. Nguyen said “no comment”. When Mr. Nguyen was cross examined on whether he had cash in 2006 that was not shown in the ASGS books, his response was, again, “no comment”.

[161] The police seized this boat at the Port Credit Marina. Six rolled marihuana cigarettes were found in a storage tube behind the captain’s chair. Mr. Nguyen denied knowing that the marihuana was behind the captain’s chair but admitted his suppliers smoked marihuana on the dock but not on his boat.

THE FINANCIAL INVESTIGATION EXPERT EVIDENCE

[162] The police investigation included obtaining and reviewing financial documentation for Mr. Nguyen, Tran and ASGS.

[163] The investigation did not reveal any other sources of legitimate income, besides ASGS, for Mr. Nguyen or Tran. Investigation into the Lottery and Gaming Commissions disclosed no winnings reported or claimed by Mr. Nguyen or Tran. No other sources of income were suggested by Mr. Nguyen during his evidence except $50,000 that he testified he won betting on a soccer match (which evidence I do not accept).

[164] The Agreed Facts included documentation disclosed by Revenue Canada which showed:

a) Mr. Nguyen’s reported income for the noted years was as follows:

2000 - $31, 593

2001 - $44, 814

2002 - $21, 794

2003 - $13, 239

2004 - $76, 275

2005 - $51, 604

2006 - $73, 625

2007 - $28, 211

2008 - $28,000

2009 - $29,500

b) Tran’s reported income for the noted years was as follows:

2000 - $37, 052

2001 - $30, 000

2002 - $10, 000

2003 - $5, 000

2004 - $3, 500

2005 - $40, 000

2006 - $12, 500

2007 - $12, 458

2008 - $18,000

2009 - $26,086

c) ASGS’ income tax returns as disclosed by Revenue Canada show the following:

July 1, 2004 to June 30, 2005 Net income $48,649 (before taxes)

July 1, 2005 to June 30, 2006 Net Income $48,649 (before taxes)

July 1, 2006 to June 30, 2007 Net income -$9,540 (before taxes)

[165] It is clear from the documents seized by the police, including those obtained from the banks: much of the money paid by Mr. Nguyen was done through bank drafts which provided no source information of the funds. As set out above, Mr. Nguyen obtained bank drafts from numerous different bank branches. It is also clear that Mr. Nguyen made many large payments in cash.

[166] At the time of Mr. Nguyen’s arrest, just a few of Mr. Nguyen’s fixed monthly expenses greatly exceeded his reported income:

-monthly mortgage payment for 244 Isabella with Scotia Bank for $3,387.87;

• monthly car loan payment with BMW Canada for $678.00;

• monthly car loan payment with Chrysler Financial for $933.00; and

• Estimated monthly private school tuition of $1,325.

This list does not include other living expenses and does not include other significant expenses such as property taxes, insurance, utilities and maintenance.

[167] The police located three money orders payable to Mr. Nguyen in March 2006 that totalled $123,000. There is no other evidence regarding the source of this money.

[168] The financial records were provided to Mr. David Malamed, CA, IFA, CPA, CFF, CFE, CFI. Mr. Malamed’s expertise is financial forensics analysis. His qualifications as an expert were not challenged by the defence at trial.

[169] Mr. Malamed examined the banking information, asset reports, tax returns and correspondence of Mr. Nguyen and Tran. Mr. Malamed reviewed the available bank account information, categorized the transactions based on description and supporting documentation, and summarized the known source and use of the funds. Mr. Malamed reviewed the available supporting documentation relating to the acquisition of assets by Mr. Nguyen and Tran for the period October 2005 to October 2009 (the “Period of Review”). Mr. Malamed then calculated the net worth of Mr. Nguyen and Tran at the beginning and end of the Period of Review.

[170] Mr. Malamed’s written expert report was included in the Agreed Facts. Mr. Malamed also gave viva voce expert evidence at trial.

[171] Mr. Malamed opined that the financial records disclosed:

i. The reported income of Mr. Nguyen and Tran between 2006 and 2009 was approximately $228,000;

ii. During the same period, their net worth increased by at least approximately $982,000;

iii. During the period October 2005 to October 2009, approximately $2,904,124 was deposited into the bank accounts of Mr. Nguyen, Tran and ASGS and approximately $3,100,000 was withdrawn; and

iv. During the period October 2005 to October 2009, approximately $969,524 was deposited into the bank account of ASGS and approximately $$976,251 was withdrawn.

[172] Although Mr. Nguyen had some money, perhaps $50,000 when he arrived in Canada in 1996, much of this was spent on his prior business. Tran may have received some money from her family in Vietnam, but this does not account for the large amount of money received and spent during the Period of Review.

[173] Mr. Nguyen testified at trial that he made approximately $2,000,000 profit, between 2001 to 2009, on $7-8 million dollars gross sales at ASGS (both domestic and foreign customers). This evidence is inconsistent with the gross income Mr. Nguyen reported for himself, Tran or ASGS. This evidence is also inconsistent with his earlier evidence that he had $7-8 million dollars of domestic and foreign sales for 2001 to 2009. This would suggest that he made little or no sales in 2006 to 2009. However, Mr. Malamed found that approximately $3,000,000 went through Mr. Nguyen, Tran and ASGS' bank accounts during this same period.

[174] It is noteworthy that there was no evidence as to the source or destination of the large amount of money going through these bank accounts.

MARIHUANA GROW OPERATIONS EXPERT EVIDENCE

[175] Detective Constable Barry Smith, a licensed electrician and expert on marihuana grow operations, provided a written report (as part of the Agreed Facts) and gave evidence at trial. Constable Smith was qualified with respect to four areas: production of cannabis marijuana, trafficking in marijuana, indoor marijuana set-ups, including the electrical work required, and the marijuana production and trafficking industry generally, including commercial facilities. Again, the defence did not challenge Constable Smith’s expertise.

[176] D.C. Smith testified that there are several significant concerns for marihuana grow operators:

i. Covert operation: To protect themselves from discovery through their increased demand for hydro utilities, marihuana grow operators will either steal the electricity, or, if the grow operation is large in size, the operation will be run only at night. This allows growers to operate more covertly because there are fewer utility crews at night, and it restricts the electrical load of the grow operation to time when there is minimal demand and thus a lower risk of causing failure to the electrical distribution system by overloading it.

ii. Avoid neighbours’ detection: Marihuana grow operators do not want their neighbours to know what they were doing. They try to minimize daytime activities at the grow operations to avoid meeting their neighbours and reduce the chance their neighbours could identify them if the marihuana grow operation is discovered.

iii. Reduce odour: Marihuana grow operators try to reduce the smell from their operation to minimize the risk of the neighbours smelling marihuana around the house and calling the police.

‘They go at great lengths to filter the air that’s being expelled outside of the house by means of filtering systems, ionizers, carbon filters; they try to take the smell of cannabis marijuana out of the air before expelling it, and then they try to expel it at the highest point, most likely the attic or second floor, where they can -- the air can be expelled to the outside without anybody noticing the smell and -- and possibly reporting it.’

iv. Secrecy: Marihuana grow operators need to maintain secrecy about their operation for obvious reasons.

‘they will try to keep anybody that knows about the operation to a minimum. In any cannabis horticulture book that is - that is written, there’s points made in there to keep the number of people that know about what you’re doing to an extreme minimal… it lowers the - the risk of the police becoming aware, or anything else.’

v. One-stop shop: One-stop shops help Marihuana grow operators to keep the number of people who know about the marihuana grow operation to a minimum.

‘ A ‘one-stop shop’ is a business where a grow operator can either attend or, if he knows them, call; they can call in a -- a complete order to establish a marijuana grow operation and through that person or business they can have a -all the equipment that they require to operate a - an indoor marijuana grow operation installed.

Most of these businesses…work off not only supply but they have installers, they have …everything that’s needed through that one… business or that one person that they deal with…if the - if the grower is in production and needs supplies, he makes a call. The supplier loads up a van; they will drive it to a - a prearranged location – Timmy’s, a plaza lot – the delivery person gets out of the van, the grower gets into the van, he drives that van to the grow operation; he can unload what he’s ordered and then he’ll load up the garbage back in the van. And - and that way the garbage isn’t out at the curb because they’re well aware we’ll go around and do garbage pick-ups. And it either gets done that way, or they’ll drive somewhere to dump it, either a dumpster behind an industrial building, the side of the road – I’ve seen them everywhere so - but that is one method of getting rid of it.’

[177] Constable Smith described how marihuana grow operators use filters and ionizers to eliminate the smell of marihuana from their operations. He also explained that the exhaust from the operations would be expelled as high as possible. Both these methods would reduce the ability of a neighbour or passer-by to smell marihuana.

[178] Constable Smith also described as common a delivery method used by one-stop shop proprietors to deliver goods to grow operations. He described how the delivery person would drive to a designated location, exit the delivery vehicle, and wait at the location like a plaza while the “customers” take the delivery vehicle. The customers then drop off the products and return the vehicle to the delivery person. This avoids the delivery person knowing where the marihuana grow operation is located. This description matches exactly the delivery method ASGS used to deliver the goods to Mr. Zhou and Mr. On on July 13, 2009.

[179] Constable Smith was provided the photographs of the contents at ASGS on October 7, 2009. Constable Smith opined that, of the items he observed:

1. ASGS stocked all items required for an indoor marihuana grow operation. This included:

(i) ballasts;

(ii) timer panel boards;

(iii) furnace blowers;

(iv) ionizer

(v) light shades; and

(vi) fertilizer, soil, pots, etc

1. In addition, many of the used items sold at ASGS are in a used condition and are similar to the type used in marihuana grow operations:

(i) used ballasts;

(ii) used timer panel boards;

(iii) used furnace blowers; and

(iv) used ionizer

[180] Constable Smith described the common practice of recycling equipment from old marihuana grow operations. It is quite common for persons to go into a marihuana grow operation after the police have left and retrieve everything possible to re-use the products and supplies in another grow operation. In fact, there are “crews” that do this.

[181] In Constable Smith’s expert opinion, ASGS may have been supplying products for legitimate gardening purposes but appeared to have available and sell all the products and supplies, new and used, necessary for and routinely seen in marihuana growing operations.

One Stop Shop

[182] Found inside ASGS were numerous exhaust blowers, PH testers, bags of soil, charcoal filters, ballasts, submersible pumps, bulbs, ballasts, shrouds, circulating fans, vent collars, circuit breakers, etc…

[183] Constable Smith testified that, given all the products available at ASGS, ASGS could be described as a one stop shop for marihuana grow operators.

Pre-Fabricated electrical Timer-boards

[184] A very large number of prefabricated electrical timer-boards were found at ASGS. These time-boards are composed of a timer, with several 120 and 220 volt outlets. These timer-boards allow 120 volt and 220 volt electrical equipment to be connected and controlled by the timer. This electrical configuration does not conform to Electrical Code requirements and is dangerous. Some of the timer-boards found at ASGS were clearly used. These timer-boards would make the installation in a new marihuana grow operation easier.

[185] Constable Smith testified that the 240 volt outlets permits the marihuana grow operators to use heavy usage equipment, such as the powerful lighting used in marihuana grow operations, but to reduce energy consumption and thereby, reduce detection. Fans and other products would be plugged into the 120 volt outlets.

[186] Mr. Nguyen’s response to questions about these electrical timer-boards was very evasive. At one point he suggested that, virtually identical, electrical timer-boards were not similar because on one panel one of the electrical sockets was a four plug not a two plug. At other times Mr. Nguyen suggested the vendors of the parts for the timer boards were different. Mr. Nguyen did everything to avoid admitting the obvious - the timer-boards at ASGS were, in all material respects, similar to the timer boards found at the marihuana grow operations.

[187] Mr. Nguyen testified he sold timers (i.e. without the back wooden board and without the attached electrical outlets on two different voltages). However, when the undercover officer went to ASGS looking to buy a timer, they were essentially told to shop elsewhere.

[188] Constable Smith testified he has only seen such electrical timer-boards in marihuana grow operations. The evidence at pg. 341 (Boulevard Saint-Laurent) and pg. 747 (215 Pine Valley Kitchener) of the Agreed Facts shows similar electrical timer-boards used in marihuana grow operations.

Ballasts and Reflector Shades

[189] Marihuana plants grown indoors require high intensity lighting. These high intensity lights require ballasts for operation. The ballasts wear out and need to be replaced with new or refurbished ballasts. As ballasts are contained in new electrical equipment, suppliers of the equipment usually have a small number of used ballasts on hand.

[190] Very large quantities of used ballasts were found at ASGS, including an area where ballasts were refurbished and could be resold. An electrical wholesaler would typically only stock 2-6 of these types of ballasts.

[191] Mr. Nguyen did everything he could to avoid admitting the ballasts at ASGS were similar to those found at the marihuana grow operations.

[192] At the marihuana grow operations raided by the police in connection with Operation, Mo Neo, many had similar ballasts, some connected and some simply available for replacement when the ballasts burnt out. An illustration of how they are used in marihuana grow operations can be seen at page 688 of the Agreed Facts.

[193] Constable Smith testified the ballasts are necessary in marihuana grow operations and, what was found at ASGS, was consistent with a supplier to marihuana grow operations.

[194] In order to evenly distribute the lighting over a larger number of plants, reflector shades are typically used by marihuana grow operations. A number and different types of reflector shades were found at ASGS. There were many shades on display hanging from the ceiling of the ASGS customer area.

Carbon Filters / Ionizer

[195] Constable Smith testified that marihuana grow operators use either large air filters or ionizers to eliminate the marihuana odour from the exhausted air. He does not normally see ionizers in greenhouses.

‘Ionizers are very strictly regulated in their use…they’re used to remove smells, bad smells out of areas. For example I usually use it if a dead body’s been found in a house, they will come in and they will use these to -- for a period of time to remove that smell of that dead body out of the house. But it’s very strictly regulated now in their use.’

[196] When the police entered the ASGS Property in October 2009, ASGS had:

• A large number of new, large carbon air filters; and

• one very large, used ionizer. Constable Smith testified there is no other realistic use for an ionizer as large as the one found in ASGS other than to use it in a marihuana grow operation.

Ventilation/ Used furnace fans

[197] Marihuana grow operations require good ventilation to control heat, humidity and carbon dioxide levels for optimum plant growing. This is accomplished in a number of ways, including fans and blowers. Furnace recirculation fans can provide the necessary circulation.

[198] A large number of used furnace recirculation fans were found at ASGS. They were located in the aisles in front of the shelving with other products. The location of the used furnace recirculation fans suggested they were for customers to see and buy them and not to being stripped for parts as Mr. Nguyen suggested in his evidence.

[199] Constable Smith testified that has only seen these used furnace recirculation fans in marihuana grow operations or when they are actually used to replace a broken furnace recirculation fan.

Shredder

[200] A shredder was found at ASGS. This product is used to shred the leaves and stocks of small plants. This particular shredder would only shred light materials. The shredder renders these light materials it into a finely-ground substance for subsequent use. The shredder can also facilitate disposal of unneeded parts of marihuana plants.

[201] Constable Smith testified he has only seen this type of shredder in marihuana grow operations and that it is used to shred the leaves and stocks of the marihuana plants during plant trimming and after harvest. He stated that legitimate greenhouses would usually have wood chippers that could handle larger materials for break down.

Electromagnetic Switch (Contactors)

[202] Electromagnetic switches were located at ASGS. These electrical switches or contactors are used to activate and deactivate large electrical loads. Marihuana grow operations typically bypass hydro electricity to avoid detection. One of the police investigative techniques is to shut down electricity going into a property through the hydro meter. If after doing so, the power to the building is not entirely shut down, the police know that a hydro by-pass has been installed and will suspect it might be a marihuana grow operation. To counteract this investigative technique, marihuana grow operations often use an electromagnetic switch or contactor to shut down the entire operation’s electricity usage when power is shut down through the hydro meter.

[203] Constable Smith has only seen this type of electromagnetic switch in marihuana grow operations. The wiring of this switch does not meet Electrical Code.

Electrical Wiring/ Circuit Panels

[204] There was a great deal of heavy wiring and used wiring found at ASGS. In addition, used circuit panels were also found at ASGS. Both of these items could be used to wire a marihuana grow operation.

Used Ductwork

[205] A significant amount of new and used metal ductwork was found at ASGS along with a number of used furnace blowers. These items could be used to ventilate a marihuana grow operation.

Conclusion

[206] Constable Smith concluded that a number of products found at ASGS would not be found at a commercial garden retailer. More importantly, many products had been modified, some illegally, making then inappropriate for general sale, and, in some cases, only appropriate for use in marihuana grow operations.

[207] Constable Smith concluded that, in his opinion, ASGS was knowingly “supplying products for legitimate growing purposes, but the business was also supplying the commercial indoor marihuana growing industry.” I accept the evidence of Constable Smith. It is both credible and reliable.

THE EVIDENCE OF MR. NGUYEN

[208] Mr. Nguyen came to Canada in 1996. He met Tran in 1998. They were not married in a religious or civil ceremony but have lived common law since then and have several children.

[209] Mr. Nguyen and Tran may have brought some limited amount of money from Vietnam but, I am satisfied these monies are not significant to these proceedings as the amount was limited, it was many years ago, and it was invested into Mr. Nguyen’s prior business in the late 1990’s. This money could not account for Mr. Nguyen’s lifestyle, and the expenses and assets he accumulated prior to October 7, 2009.

[210] Mr. Nguyen had no experience in hydroponics or indoor gardening prior to starting his first gardening store in 1999. Tran also had no prior experience in a gardening store.

[211] In the late 1990’s, Mr. Nguyen and Tran rented an apartment at 2247 Hurontario Street, Mississauga. Mr. Nguyen opened a small store on 25 – 1105 Queensway East, Mississauga. Shortly thereafter, Mr. Nguyen rented and opened another small hydroponics store in Scarborough.

[212] On October 26, 2001 Mr. Nguyen bought the ASGS property at 1000 Dundas Street East, Mississauga for $840,000. $550,000 of this amount was financed through the Business Development Bank of Canada. The balance of $290,000 was paid by Mr. Nguyen. Mr. Nguyen closed his stores on Queensway East and in Scarborough and conducted his business operations solely out of ASGS.

[213] Mr. Nguyen testified that ASGS only sold new products. When cross examined on the extensive and numerous used products found at ASGS on October 7, 2010, Mr. Nguyen attempted to explain this away by saying the used products were there because they were to be disassembled and sold for scrap. There was no evidence of disassembly or selling of scrap on the ASGS Property. I do not accept this evidence for the reasons set out below.

[214] Starting in 2003 Mr. Nguyen sold products overseas, particularly to four to five customers in England. This continued until about 2007 or 2008. There is no evidence why these foreign sales stopped in 2007 or 2008.

[215] In 2004, Mr. Nguyen moved out of the apartment on Hurontario Street and bought a home on 2024 Grosvenor Street, Oakville.

[216] At the end of 2004 or early in 2005, Mr. Nguyen incorporated ASGS.

[217] Mr. Nguyen described a development proposal for the Property that he began to explore in about 2005. The development project was not carried out prior to Mr. Nguyen’s arrest in October 2009. Mr. Nguyen testified that the monies given to him from the sale of real estate properties were investments by the sellers in this development project. There were no papers evidencing such investments by any of these persons. Mr. Nguyen could not even credibly state details of the alleged investor’s entitlement in the development project. The monies Mr. Nguyen received went into his personal bank account and not the ASGS business account. Mr. Nguyen did not return the monies when the development project had not come to fruition for at least 3 years. I do not accept that the monies Mr. Nguyen received from the net proceeds of the sale of various properties (described above) was for the investment in the development project.

[218] Mr. Nguyen also testified that the net sale proceeds from 22 Deerglen Drive were given to him by a friend as a loan. Again, there were no documents to evidence this loan. There was no evidence of or even a suggestion of repayment over the next three plus years. It is not credible that this friend, who Mr. Nguyen testified was in financial difficulties, would have “loaned” all the proceeds of sale to Mr. Nguyen. I do not accept Mr. Nguyen received these monies as a loan.

[219] The Financial Expert determined that Mr. Nguyen’s net worth in 2005 was $495,000. When he was cross examined on whether this was accurate, Mr. Nguyen gave evasive answers that it “may or may not” be his net worth but eventually admitted that there are no documents which would show a different net worth.

[220] In 2006 Mr. Nguyen purchased the residence at 244 Isabella Avenue. Interestingly, Mr. Nguyen appeared to have gone to great lengths to provide the mortgagee/bank with a sworn affidavit that he did not have a spouse. This was confirmed later that year when the mortgagee questioned Mr. Nguyen’s common law relationship with Tran. However, Mr. Nguyen again falsely confirmed that Tran was not his spouse. Like many other areas, when pressed on these false statements, Mr. Nguyen would refer to having signed many documents – an attempt to suggest he did not know or read all the documents he signed or that it was the fault of others the documentation was wrong since the persons who prepared them knew he had a “spouse”.

[221] ASGS had two other employees in 2009 but they did not work for ASGS very long and ASGS had no employment records. The employees were paid cash. Son Van was the only ASGS employee from June 2009 to October 2009. He too was paid cash and there are no employment records regarding him. Mr. Nguyen saw nothing wrong with the lack of business records.

[222] Mr. Nguyen testified that Son Van would make deliveries from store to store. Son Van did not make deliveries to customers’ homes. The customers took the Caravan and made the delivery themselves. When asked whether this was because Mr. Nguyen did not want to know the locations of his customers, Mr. Nguyen responded that they were busy at ASGS. This response made little sense.

[223] Mr. Nguyen testified he never asked the customers what they needed the ASGS products for. He denied that Son Van would have asked his customers because Son Van was “timid and shy”.

[224] When cross examined on where Mr. Nguyen thought Son Van had gone with the Caravan on July 13, 2009 (the trip to Montreal), Mr. Nguyen became extremely evasive. He said he could not remember that day even though he had previously said he was very frustrated that day since he did not know what was going on. Mr. Nguyen said that he did not even ask Son Van the next day where he had been for the previous day with the Caravan. Mr. Nguyen testified he did not know Son Van had gone to Montreal until he received the Crown disclosure. Mr. Nguyen’s explanation makes no sense

[225] Mr. Nguyen stated he made $2 million profit on $7-8 million in domestic and foreign sales between 2001 and 2009. However, what financial records available do not support this evidence.

[226] Mr. Nguyen agreed that retaining business records was important and stated that the ASGS business records were at 1000 Dundas Street East when the police raided the premises on October 7, 2009. The implication was that the police have destroyed, lost or failed to find and retrieve the ASGS business documents. However, the police did not find any significant business records pertaining to ASGS’ business at either ASGS or 244 Isabella Ave. There is no reason the police would have destroyed the ASGS business records and then spent considerable time and effort to obtain financial information from various third parties to recreate Mr. Nguyen’s financial position. I do not accept Mr. Nguyen’s evidence.

[227] Mr. Nguyen’s evidence with respect to the use of the ASGS dumpster was very evasive and inconsistent:

• When asked about the dumpster, Mr. Nguyen agreed he let some customers throw some garbage from their vehicles into the dumpster. However, Mr. Nguyen vehemently denied that customers’ soil and pots were thrown into the dumpster;

• Mr. Nguyen was confronted with evidence that on several occasions the police observed that ASGS customers would come to ASGS with garbage in their vehicle, and Son Van would drive it to the dumpster and throw out the garbage into the dumpster. When Son Van returned, the customer would get into their vehicle and drive away. In other words, the sole purpose of the customer’s trip to ASGS was to throw away garbage in the store’s dumpster. Despite the fact these observations were included in the Agreed Facts, Mr. Nguyen said he did not believe this occurred;

• Mr. Nguyen agreed that ASGS’ operation would not generate scrap soil, and there would be no reason to find scrap soil in the dumpster. This evidence is completely inconsistent with the police’s observations that numerous garbage bags full of scrap soil were found in the dumpster;

• At one point Mr. Nguyen suggested third parties may have thrown waste into the dumpster. There is no other evidence supporting this statement;

• When confronted with the police observations on June 23, 2009 that Son Van had emptied a customer’s van of bags contained soil and growing pots (an agreed fact at para. 53), Mr. Nguyen suggested that the observations were not true, that he had nothing to do with those garbage bags, or that he was even at the store that date;

• When the cross examination continued and Mr. Nguyen was asked about the police’s discovery of garbage bags of soil and pots in the dumpster, Mr. Nguyen retreated to a “no comment” answer. Further still, when confronted with the “Agreed Facts”, Mr. Nguyen then admitted what the police observed might have happened, but he had nothing to do with it; and

[228] At many times throughout the testimony of Mr. Nguyen, he would change his evidence to whatever he thought would serve him best.

[229] Dealing with the items in ASGS on October 7, 2009 when the police searched and seized many of the used products at ASGS, Mr. Nguyen:

• Denied that the used products were for sale, notwithstanding that many of these used products were in the customer area. Mr Nguyen’s suggestion that the used products were there for dismantling and selling for scrap is not believable as there was no evidence any of the products being dismantled;

• Denied that some products (like the Ionizer) were used products. In the case of the Ionizer, he suggested the rust was on it because it had been tested and put on display. This explanation made no sense;

• When questioned about the ionizer, Mr. Nguyen described it as an “air booster” rather than its real purpose – to eliminate odours from air. Mr. Nguyen’s explanation that it was a new ionizer, only on consignment, makes no sense at all. It was used. The sole purpose of the ionizer is to take odours out of the air;

• When questioned about the used HVAC ductwork, Mr. Nguyen admitted the products were used. His only explanation was that he got the product from some other store that was closing down. His explanation for having this type of product at ASGS makes no sense; and

• When questioned about the used furnace fans, Mr. Nguyen admitted the fans were used but testified the motors were to be removed and sold as scrap metal. This activity of selling scrap materials was not a part of ASGS’ “gardening” business. The problem is that there were many, many used furnace fans at ASGS and there was no evidence of any being disassembled or sold for scrap. When asked this question in cross examination, there was no answer from Mr. Nguyen. Mr. Nguyen’s explanation makes no sense.

[230] Mr. Nguyen described the business operations at ASGS. Essentially, Mr. Nguyen agreed the business practices employed by him at ASGS were such that there was no or little paper trail.

[231] In short, Mr. Nguyen’s evidence was often evasive, difficult to follow, inconsistent, unresponsive and, in most cases, simply not reasonable or credible. Mr. Nguyen was clearly making up answers as he was testifying which, at times, was inconsistent with his prior evidence of just minutes earlier.

THE CREDIBILITY OF MR. NGUYEN

[232] I have no hesitation concluding that I do not believe Mr. Nguyen and do not accept Mr. Nguyen’s evidence. It is not reliable.

[233] Let me provide some key examples as to why Mr. Nguyen’s evidence is rejected in its entirety.

ASGS sold used Products

[234] Mr. Nguyen denied selling used products at ASGS. However, it was very clear from what the police discovered at the ASGS Property that Mr. Nguyen was selling used products such as furnace blowers, wiring, timer-boards, ballasts, ionizer and HVAC metal pipes.

ASGS sold Marihuana Grow Operation Products

[235] Mr. Nguyen denied he sold marihuana grow operation products. Mr. Nguyen went to great lengths to deny this allegation. However, it is clear that much of what he sold was clearly focussed and solely for marihuana growing operations. For example:

• There is no other reason for Mr. Nguyen to have used electrical timer-boards at ASGS – and there were many of them;

• There is no other reason Mr. Nguyen would have all the used electrical wiring and electrical circuit panels. It is highly questionable why a “garden supply” shop would have such items;

• There is no other reason Mr. Nguyen would have used HVAC ductwork. It is highly questionable why a “garden supply” shop would have such items;

• There is no other reason Mr. Nguyen would have the very large number of used ballasts to refurbish and re-sell;

• There is no other reason Mr. Nguyen would have a very large ionizer – whose sole purpose is to remove odours from the air. It is highly questionable why a “garden supply” shop would have such an item;

• There is no other reason Mr. Nguyen would have an electromagnetic switch (the contactor). It is highly questionable why a “garden supply” shop would have such an item;

• Mr. Nguyen had a shredder of the type normally used in marihuana grow operations;

• Mr Nguyen had large number of carbon filters which are typically used to remove odours from the air; and

• Mr. Nguyen had numerous reflector shades on display for sale. Many shades can be seen hanging from the ceiling in the photos of the ASGS premises. These reflector shades are used in large quantities by marihuana grow operations, and can be seen in the police photographs of marihuana grow operations.

The Lack of ASGS’ business records

[236] Mr. Nguyen initially suggested that the ASGS business records were in a computer was seized by the police. When this issue arose during the trial, the police returned the original computer. When Mr. Nguyen’s evidence continued, his position shifted. Now, he suggested that the business records were at ASGS but that when he returned to ASGS (after his bail release condition was varied more than a year later), the records had been left at ASGS but had been destroyed.

[237] It is clear there were little or no business records for ASGS. This was done deliberately by Mr. Nguyen to avoid leaving a paper trail of what he was selling and to whom he was selling his products. This practice included:

• All sales were cash;

• Keeping nothing which would show customers names;

• Keeping nothing which would show employee names;

• Not keeping records which would show exactly what was sold and when;

• Not recording any information regarding customers including when customers using the Caravan; and

• Not having Son Van make deliveries to customers with the Caravan.

[238] Mr. Nguyen’s evidence in this regard was false.

The Dumpster service for ASGS’ customers

[239] Mr. Nguyen’s denied that customers regularly used his dumpster to dispose of waste from marihuana grow operations. However, his evidence was inconsistent and contradictory. More importantly, it is clear from the police surveillance that customers regularly used ASGS’ dumpster, and that customers sometimes came to ASGS simply to dispose of their waste, and that waste contained scrap soil and marihuana debris.

[240] Mr. Nguyen’s evidence is simply false.

The Black Garbage Bags to hide the contents

[241] Mr. Nguyen denied there was anything secretive in the manner that customers’ purchased products were bagged and loaded. Mr. Nguyen’s evidence was evasive or non-responsive when confronted with photos showing him loading black garbage bags into a customer’s vehicle that was followed by the police to a marihuana grow operation.

[242] There is no doubt that the manner of loading, and the use of black garbage bags used for virtually all products, was secretive and meant to obscure what was bought, what was loaded into a customer’s vehicle and what would be unloaded at the customer’s residence.

[243] Mr. Nguyen testified that the products might be dirty, and that the black bags were to protect the customer’s vehicles. This simply does not explain the fact that Mr. Nguyen took steps to insure that no one could see the process of loading customers’ purchases into their vehicles. Virtually all products, regardless of size or weight, were placed into garbage bags and then placed into the customer’s vehicle that had been backed up close to the front door of ASGS.

[244] I reject Mr. Nguyen’s evidence on this point. The use of the garbage bags was done deliberately by Mr. Nguyen to avoid having the products seen.

The Deliberate Lack of knowledge of Customer names and locations of Marijuana Grow Operations

[245] Mr. Nguyen testified that, although Son Van was his only employee and the Caravan the only ASGS delivery vehicle, he did not know about Son Van’s deliveries to Montreal or St. Catharines. Son Van and the Caravan were missing for many hours, but Mr. Nguyen didn’t notice their absence, nor did he ask questions after Son Van returned the next day. This makes little sense.

[246] Equally important, Mr. Nguyen’s evidence on this issue was inconsistent and constantly changing. It was simply not credible or reliable.

The “ghost ownership” homes, many with connections to marihuana grow operations

[247] Mr. Nguyen denied any “ghost ownership” interest in the properties referred to above. However, in light of the following facts, Mr. Nguyen’s denial makes no sense:

• Woolfson & Woolfson, his real estate lawyers were involved in all these acquisitions and disposal;

• Mr. Nguyen had acquisition and disposition related documents regarding these properties in his possession;

• All but one of the registered owners of these properties were related to Mr. Nguyen. The remaining person was a friend of his;

• Mr. Nguyen possessed many other documents regarding these properties which one would expect would be held by the owner such as bills, offers, payment documents etc.;

• Mr. Nguyen received all the net sale proceeds of the ghost ownership properties described above;

• The net sale proceeds went into Mr. Nguyen’s personal bank account;

• Mr. Nguyen’s explanation that these monies were for an investment into his development project is not credible for the reasons set out above;

• Mr. Nguyen’s explanation that one of the transactions involved was a loan to him is not credible for the reasons set out above; and

• A large number of the ghost ownership properties had some connection with “marihuana grow operations”.

ANALYSIS ON COUNTS #1 - #4

The Respective Positions

[248] On the conspiracy counts (counts #1 and 2), the Crown’s theory is that Mr. Nguyen conspired with Son Van and the persons purchasing products or using the services at ASGS to aid and abet the marihuana grow operators in their marihuana grow operations by supplying them with products and services which would facilitate the production of marihuana (count #2) and possession of marihuana for the purpose of trafficking (count #1).

[249] With respect to counts #3 and #4, the Crown’s theory is that Mr. Nguyen aided and abetted marihuana grow operators in their marihuana grow operations by supplying them with products and services which would facilitate the production of marihuana (count #4) and possession of marihuana for the purpose of trafficking (count #3).

[250] The factual foundation on all the counts is essentially the same.

[251] The fact the indictment alleges Mr. Nguyen’s involvement as principal, but the Crown’s theory is that Mr. Nguyen aided and abetted the commission of the offence, does not prevent a conviction on these counts in the indictment. The Court of Appeal in R. v. Hall (1984), 12 C.C.C. (3d) 93 stated:

Under s. 21 of the Code there is no distinction in law between the liability of the actual perpetrator of the offence and one who is a party to the offence by aiding another to commit it. An aider or abettor may be charged and convicted as a principal. An indictment or information charging an accused with the commission of an offence simpliciter will support a conviction based on the accused's participation in the commission of the offence as an aider or abettor. It is unnecessary in the charge to allege that the accused aided or abetted another to commit the offence. See R. v. Harder (1956), 114 C.C.C. 129; R. v. Halmo (1941), 76 C.C.C. 116.

In R. v. Harder, supra, Fauteux J. said at p. 150:

In this state of the law, an aider and abettor may be indicted as principal simpliciter. It follows that such an indictment, valid in law, must therefore be construed not-as was done in the Court below-as exclusively charging an accused as having in fact actually committed the offence charged, but as having in the eyes of the law committed it.

[252] Essentially, the Defence position is that:

i. the Crown has not established beyond a reasonable doubt that Mr. Nguyen conspired with others and that he knew or intended that his products and services were intended for marihuana grow operators in their marihuana grow operations for the production of marihuana or possession of marihuana for purpose of trafficking; and

ii. it is not an offence for Mr. Nguyen to sell products which are legal for sale in Canada.

The Law on Conspiracy

[253] A conspiracy is an agreement between two or more persons to do an unlawful act. Formal proof of such an agreement is not required. It is generally inferred from the conduct - the acts and declarations - of the parties viewed, not in isolation, but in light of all the surrounding circumstances.

[254] There must be (1) an intention to agree, (2) the completion of an agreement, and (3) a common design. See R. v. Root, 2008 ONCA 869

[255] The actus reas of conspiracy is entering into the agreement. The Crown must also prove the mens rea of the conspiracy, namely, an intention to agree and the intention to put the agreement into effect. See R. v. O’Brien, [1954] S.C.R. 666.

[256] The law on evidential issues relating to conspiracy is succinctly set out in Watts, Manual of Criminal Evidence, 2012 at section 27.11:

Statements made and acts done by a person engaged in a common unlawful design are admissible against all persons acting in concert if the declarations were made

i. while the common unlawful design was ongoing; and

ii. in furtherance of the common unlawful design.

The rationale that underlies the exception is that each member of the common unlawful design has an implied authority to speak or act in furtherance of their common enterprise.

The exception applies equally to declarations and acts. It may be invoked in prosecutions for the preliminary or inchoate crime of conspiracy, as well as for substantive offences alleged to have been committed in concert. The actor or declarant need not have been charged, a fortiori on trial in the proceedings in which the acts/declarations are tendered in evidence. The acts or deliberations are directly admissible in respect of the actor or declarant.

Several steps must be followed before the rule may be invoked. The trier of fact must first be satisfied beyond a reasonable doubt that the common unlawful design alleged, in fact existed. Without such proof, each accused must be found not guilty. Where the trier of fact is satisfied beyond a reasonable doubt that the alleged common unlawful design existed, the trier of fact must determine whether, based upon evidence of an accused's own acts or declarations, the accused was probably a member or participant in the common unlawful design. Without such proof, the accused whose probable membership has not been established must be found not guilty.

Where the trier of fact is satisfied that an accused was probably a member or participant in the common unlawful design, on the basis of the accused's own acts or declarations, in determining whether the accused's guilt has been proven beyond a reasonable doubt, the trier of fact may consider the acts or declarations of other likely participants in furtherance of the common unlawful design.

The trier of fact should be instructed that probable guilt is not sufficient to satisfy P's burden. There should be further direction that merely because P may rely on the acts or declarations of others to complete proof of its case, does not mean that a conviction of D must follow.

[257] To be admissible against another alleged co-conspirator, the acts or declarations of a fellow co-conspirator must be in furtherance of the common unlawful object, not mere narratives of past events. The “in furtherance” requirement is met where the act or declaration is made for the purpose of advancing the objects of the design, or as a step in furtherance of it. R. v. Lynch (1978), 40 C.C.C. (2d) 7 (Ont. C.A.)

[258] A multi-step process on the admissibility of hearsay evidence of co-conspirators was described by the Supreme Court in R. v. Carter, [1982] 1 S.C.R. 938,:

Step #1 - on all the evidence, has the Crown established beyond a reasonable doubt that the conspiracy existed;

Step #2 - IF the Crown has established the proof required in Step #1 – has the Crown established, using only the evidence directly admissible against the accused, on the balance of probabilities that the accused is a member of the conspiracy; and

Step #3 – IF the Crown has established the proof required in Steps #1 and #2 – then hearsay evidence of the co-conspirators in furtherance of the conspiracy, may be admissible against the accused.

Has the Crown established a conspiracy beyond a reasonable doubt?

[259] I am persuaded the Crown has met the burden beyond a reasonable doubt that a conspiracy existed with respect to the supply of products and services to facilitate or assist in the production of marihuana grow operations.

[260] The central facts in support of this conclusion include:

a) ASGS sold products in a secretive and clandestine manner which included:

• products were sold in a manner that ensured that ASGS, Mr. Nguyen and Son Van would not record the names of the customers or know the location of the customer's premises;

• customers were permitted to use the Caravan for deliveries without leaving their names or providing any identification;

• the manner in which deliveries were made including the delivery made by Son Van to Montreal, his denial that he knew where he was going, that he didn’t know the owner and would be contacted by the owner;

• sales were only completed by cash which would not generate a paper trail to customers;

• only very limited or no business and employee records were kept; and

• all purchased products were placed into non-descript garbage bags, even for the most innocuous or benign products, into customer vehicles which had backed up to the front entrance to ASGS;

b) During the course of the four month police investigation, the police chose to follow a number of customers who had purchased products from ASGS, with the result that four marihuana grow operations were discovered by the police;

c) Customers came from long distances, in some cases hundreds of kilometres, to buy products at ASGS;

d) The services provided to ASGS’ customers permitted them to dispose of their waste into the ASGS dumpster (waste that smelled of marihuana and contained marihuana plant parts). In some cases, customers came to ASGS solely to dispose of their waste;

e) The conversation with the undercover police officer where, it was clear the officers were speaking of marihuana plant clones, Son Van understood marihuana plants were being discussed, and Son Van told the police officers that they didn’t sell clones but sold “supplies for them”;

f) A very large amount of the used products for sale at ASGS were clearly meant for, and in some cases solely for use in, marihuana grow operations; and

g) ASGS was not operated as a normal retail garden supply center. There were no signs advising customers where the entrance was; no hours of operation displayed; no for sale signs; no prices on the shelves or even visible on the products; the store was dirty and unkempt; and on some days a motorcycle and a sea-doo were parked in the customer area. It was clear to the undercover officers that ASGS had no interest in selling garden supplies to the general public and would prefer that they go elsewhere.

[261] The only conclusion to be drawn from the above facts is the existence of a conspiracy to supply marihuana grow operations, in a clandestine, no-names basis, no-questions asked basis, to provide delivery assistance where needed without the need to disclose the identity of the customer or the location of the marihuana grow operation and to assist in marihuana grow operation waste disposal.

[262] I am satisfied the Crown has met the onus on it beyond a reasonable doubt.

Based solely on evidence admissible against Mr. Nguyen, has the Crown established, on a balance of probabilities, that Mr. Nguyen was a member of the conspiracy?

[263] There is overwhelming evidence Mr. Nguyen was a member of the conspiracy. This evidence includes:

a) Mr. Nguyen was the owner and operator of ASGS. He was responsible for acquisition and possession of the products described above, all of which could be used in marihuana grow operations and some of which could only be used in marihuana grow operations;

b) Mr. Nguyen was observed dealing directly with ASGS customers, would place products into black garbage bags and helped load the garbage bags into customer vehicles;

c) Mr. Nguyen did not keep business records, including employee records which would make any police investigation into the business or customers difficult if not impossible;

d) Mr. Nguyen knowingly permitted the Caravan to be used by customers, sometimes out of town or overnight, without leaving their name or contact information;

e) The Caravan or customers were followed to residences on a number of occasions and four residences were found to contain marihuana grow operations, including: 23 Humboldt Crescent, Brampton; 9697 Saint-Laurent Blvd., Montreal; 86 Richelieu Drive, St. Chatharines; and 215 Pine Valley Drive, Kitchener;

f) Mr. Nguyen only permitted cash sales so that he would not have a record of the names of the customers;

g) Mr. Nguyen had family ties to a number of properties that, at some time in their past, had been used as marihuana grow operations; and

h) Mr. Nguyen permitted customers to deposit waste from their marihuana grow operations into the dumpster;

[264] The Crown has established on a balance of probabilities that Mr. Nguyen was a member of the conspiracy.

The evidence of Son Van is admissible against Mr. Nguyen

[265] As a result, the evidence of the actions and words of Son Van in furtherance of the conspiracy, are admissible as evidence against Mr. Nguyen. This evidence includes:

a) Son Van was seen in a secretive manner loading ASGS’s products into black garbage bags and placing them into customer vehicles, was observed unloading garbage bags of scrap soil and used pots into the ASGS dumpster, a dumpster which smelled of marihuana. Some of the surveillance includes:

• On July 17^th, 2009, Son Van was observed exiting the parking lot of ASGS in the Mr. Nguyen’s Dodge pick-up. He returned 2 ½ hours later and was observed emptying large white garbage bags into the garbage bin;

• On June 23^rd, 2009, a green van pulled into the lot of ASGS. Son Van exited ASGS and entered the driver’s seat. Son Van drove the vehicle to the dumpster. Son Van was observed throwing garbage bags, soil and growing pots into the dumpster;

• On July 1^st, 2009, a Burgundy Pontiac Grand Prix drove into the parking lot at ASGS. Son Van got into the Pontiac Grand Prix and drove it to the dumpster. Son Van removed garbage bags from the trunk of the vehicle and put them into the dumpster;

• On July 7^th, 2009, a blue Dodge Caravan pulled into the parking-lot of ASGS. The male driver spoke with Son Van and pulled the car to the rear of ASGS. Son Van unloaded the contents of the vehicle into the dumpster; and

• On July 8^th, 2009, Son Van backed Mr. Nguyen’s Toyota Tundra up to the dumpster at ASGS. Son Van threw plants and garbage bags into the dumpster.

b) Son Van was seen returning to ASGS, driving Mr. Nguyen’s vehicles with garbage bags filled with waste, and dumping them into the ASGS dumpster;

c) On July 13^th, 2009, when Son Van delivered product to Montreal, he was stopped on the way by the OPP. When Son Van was asked what he was transporting, he replied: “lamps”. Son Van lied to the police that he did not know where he was going, lied that he was to contact the owner of the van and they would have somebody meet him and pick up the lamps. When asked if he knew the owner, Son Van lied to the police when he said “no”; lied that that he just responded to an ad in the paper. Son Van continued on his way to Montreal. Son Van met with two males at a Burger King, let them take the Caravan to make the final delivery while he remained at the Burger King. The two males drove the Caravan 9697 Boulevard Saint-Laurent, a marihuana grow operation and unloaded the products. The Caravan was eventually returned to Son Van at the Burger King who then returned to Mississauga;

d) Son Van’s discussion with the undercover officer. When considered in the context of the rest of the evidence, it is clear that Son Van is referring to marihuana plants and how to get rid of mites. Det. Leung asked if Son Van could introduce him to someone who sells marihuana clones or if Son Van could help him. Son Van advised that they don’t sell them here and they only sell the supplies “for them”; and

e) Son Van made it clear to the undercover officer that the products for sale at ASGS were not for the general public.

[266] I am satisfied that these actions of Son Van were in furtherance of the conspiracy.

[267] As a result, the above evidence of Son Van’s actions is admissible evidence against Mr. Nguyen.

The Law on Aiding and Abetting

[268] Section 21 of the Criminal Code defines ‘aiding and abetting’ as:

(1) Every one is a party to an offence who

(a) actually commits it;

(b) does or omits to do anything for the purpose of aiding any person to commit it; or

(c) abets any person in committing it.

(2) Where two or more persons form an intention in common to carry out an unlawful purpose and to assist each other therein and any one of them, in carrying out the common purpose, commits an offence, each of them who knew or ought to have known that the commission of the offence would be a probable consequence of carrying out the common purpose is a party to that offence.

[269] The Court of Appeal in R. v. Simon, 2010 ONCA 754 at para 37 confirmed that this provision of the Code abolished the common law distinction between principals and secondary parties. It renders all who participate in an offence in any manner described by this section as a party to the offence.

[270] Aiding and abetting are two separate concepts, each of which may be applicable to make a person liable as a party to the offence. The distinction was described by the court in R. v. Briscoe, 2010 SCC 13 at para 14:

The actus reus of aiding or abetting is doing (or, in some circumstances, omitting to do) something that assists or encourages the perpetrator to commit the offence. While it is common to speak of aiding and abetting together, the two concepts are distinct, and liability can flow from either one. Broadly speaking, “[t]o aid under s. 21(1)(b) means to assist or help the actor. . . . To abet within the meaning of s. 21(1)(c) includes encouraging, instigating, promoting or procuring the crime to be committed”: R. v. Greyeyes, [1997] 2 S.C.R. 825, at para. 26.

[271] The actus reas of aiding and abetting is providing help, promoting, facilitating or bringing about the accomplishment of any criminal offence by another. The mens rea of aiding and abetting consists of two elements; an intention to help the principal and knowledge of the principal’s intention. The degree of knowledge required to find that an accused has aided and abetted in the commission of an offence was described in R. v. Dooley, 2009 ONCA 910 at paras. 117 and 118:

Liability as an aider and abetter has both a conduct component and a culpable mental state component. Both components tie the accessory’s liability for the substantive crime to the actual commission of that crime by another. Accessorial liability is not inchoate.

The Crown must prove that the alleged aider or abetter acted “for the purpose “of aiding or abetting – meaning that they acted with the intention of aiding or abetting the perpetrator in the commission of the crime. This requirement can only be met if the aider or abetter has knowledge of the crime that the perpetrator intends to commit. Without that knowledge, the alleged aider or abetter cannot act "for the purpose" of aiding or abetting the perpetrator in the commission of the crime.

Circumstantial Evidence

[272] There is no direct evidence in this case regarding Mr. Nguyen’s knowledge or intention.

[273] There are certain principles applicable where the Crown seeks to rely on proof by circumstantial evidence:

• The trier of fact must consider the entire evidence together, not each item separately. R. v. Stewart, [1977] 2 S.C.R. 748;

• The Crown must satisfy the trier of fact beyond a reasonable doubt that the accused’s guilt is the only reasonable inference to be drawn from the proven facts R. v. Elmosri (1985), 23 C.C.C. (3d) 503 (Ont. C.A.); and

• Knowledge may be proven by circumstantial evidence. R. v. Badiuk (1929), 51 C.C.C. 417 (Man. C.A.)

What the Crown must prove

[274] The Crown must prove the following beyond a reasonable doubt:

a) On the conspiracy to aid and abet counts, that Mr. Nguyen:

• intended to enter into an agreement with others to aid and abet marihuana grow operators’ production and possession of marihuana for the purpose of trafficking by supplying them with a one stop shop for purchasing marihuana grow operation products, in a clandestine, no-names basis, no-questions asked basis, to provide delivery assistance where needed without the need to disclose the identity of the customer or the location of the marihuana grow operation and to provide waste disposal assistance from the customer’s marihuana grow operations (“the Products and Services”);

• did enter into the above agreement; and

• intended to put the above agreement into effect.

b) On the aiding and abetting counts, Mr. Nguyen:

• Knew he was helping or facilitating marihuana grow operators in the their marihuana grow operations by supplying Products and Services;

• intended to help or facilitate marihuana grow operators in their marihuana grow operations by supplying them with the Products and Services; and

• did help or facilitate the marihuana grow operations by providing the Products and Services.

[275] The above can be broken down into the following questions:

(i) Did Mr. Nguyen know he was supplying the Products and Services to persons for marihuana grow operations?

(ii) Did Mr. Nguyen intend to supply the Products and Services to persons for marihuana grow operations?

(iii) Did Mr. Nguyen enter into an agreement with Son Van and others to supply the Products and Services to persons for marihuana grow operations?

(iv) Did Mr. Nguyen carry out the agreement to supply the Products and Services to persons for marihuana grow operations?

(v) Did Mr. Nguyen know the supply of Products and Services to marihuana grow operators would help or assist the marihuana grow operations?

(vi) Did Mr. Nguyen’s supply of Products and Services help or facilitate the marihuana grow operations?

The Defence

[276] Mr. Nguyen’s evidence is that he did not enter into an agreement with anyone, that he did not know or intend that the Products and Services were provided to marihuana grow operators and he did not know the Products and Services would aid and abet marihuana grow operators in the production of marihuana or the possession of marihuana for the purpose of trafficking.

[277] For the reasons set out above, I do not believe Mr. Nguyen and therefore, reject his evidence in its entirety.

[278] Mr. Nguyen’s evidence that he did not enter into an agreement with anyone, that he did not know or intend that the Products and Services be provided to persons for marihuana grow operations and he did not know the Products and Services would aid and abet the marihuana grow operation's production of marihuana or the possession of marihuana for the purpose of trafficking does not leave me with any reasonable doubt as to these issues.

[279] The remaining issue to be determined is whether the Crown has established all of the essential elements of the offences beyond a reasonable doubt.

Has the Crown proven beyond a reasonable doubt that Mr. Nguyen knew he was supplying Products and Services to persons for marihuana grow operations?

[280] I am satisfied the only reasonable inference that can be drawn from the facts of this case is that Mr. Nguyen knew he was providing Products and Services to persons for their marihuana grow operation, and that the Products would be used in their marihuana grow operations for the production and possession of marihuana for the purpose of trafficking. The more significant facts include:

a) Mr. Nguyen had a large inventory for sale of products which could, and in many cases could only, be used in marihuana grow operations;

b) Mr. Nguyen sold products which could, and in many cases only, be used in marihuana grow operations;

c) Having sufficient marihuana grow operation products to be a “one stop shop” for marihuana grow operators;

d) Nr. Nguyen’s business practices at ASGS were designed to assist persons in their marihuana grow operations to remain anonymous, assist in keeping the number of persons knowing about their marihuana grow operations to a minimum and assist in avoiding discovery by the police. This included:

• customers having anonymity in their purchases by using cash only;

• clandestine loading of the products through the use of garbage bags and backing up to the front door;

• clandestine delivery of their products using the Caravan without customers providing their names or disclosing their destination to Mr. Nguyen;

• clandestine delivery of their products through the use of the delivery method used by Son Van on the July 13, 2009 delivery to Montreal;

• permitting customers to dispose of waste from their marihuana grow operations into the dumpster and thereby avoiding detection at or near the marihuana grow operations; and

• ensuring that ASGS was not a commercial retail establishment which would attract a large number of the public.

c) During the police surveillance period, consistent with Mr. Nguyen's knowledge that the persons he was supplying were acquiring products for their marihuana grow operations, the police discovered four customers operating marihuana grow operations. The fact the police discovery of the marihuana grow operations occurred a few weeks after the person purchased products is immaterial since the marihuana grow operations used products such as were for sale at ASGS, were well-developed and contained marihuana plants in all stages of growth. These marihuana grow operations didn't materialize within the few weeks that the products had been purchased at ASGS; and

d) Son Van, Mr. Nguyen’s only employee, made it clear to the undercover officers that ASGS did not sell marihuana plants but sold products for marihuana grow operations;

[281] The only reasonable inference to be drawn from the facts of this case is that Mr Nguyen knew he was providing Products and Services to persons for their marihuana grow operations.

Has the Crown established beyond a reasonable doubt that Mr. Nguyen intended to supply the Products and Services to persons for marihuana grow operations?

[282] The evidence demonstrates that Mr. Nguyen had:

• considerable inventory of products at ASGS some of which were clearly for and could only be used for marihuana grow operations. These products were available for sale to over the approximately 4 month surveillance period;

• accumulated this inventory over time;

• established the clandestine business practices described above for some time;

• established the “garbage service” for marihuana grow operators for some time;

[283] The only reasonable inference to be drawn is that Mr. Nguyen intended to provide Products and Services to persons for marihuana grow operations.

[284] I am satisfied the Crown has established beyond a reasonable doubt that Mr. Nguyen intended to provide Products and Services to marihuana grow operators.

Has the Crown established beyond a reasonable doubt that Mr. Nugyen intended to and entered into an agreement with Son Van and others to supply the Products and Services to person for marihuana grow operations?

[285] At a minimum, there existed an agreement between Mr. Nguyen and Son Van to provide the Products and Services to person for marihuana grow operations. The facts supporting this included:

• Son Van was an employee directed by Mr. Nguyen;

• Son Van assisted in carrying out some of the clandestine business practices described above;

• Son Van described to the undercover officer that they (meaning ASGS) didn’t sell plants but sold products for marihuana grow operations;

• Son Van and Mr. Nguyen both were involved in the clandestine loading of products into garbage bags and into customer vehicles;

• Son Van and Mr. Nguyen dealt with customers;

• Son Van used Mr. Nguyen’s vehicles at times to transport bags and dispose of them into the dumpster;

• Mr. Nguyen would be present when customers returned to dispose of their waste from marihuana grow operations and appeared to direct Son Van to dispose of the waste in the dumpster;

• Son Van used customer’s vehicles to dispose of garbage bags into the dumpster;

• There was a strong marihuana odour in the garbage bags and pots Son Van disposed of into the dumpster;

• Son Van was involved in the July 13, 2009 delivery to Montreal, carrying a significant amount of ASGS products, denied he knew Mr. Nguyen and delivered the products in a highly clandestine manner indicative of supplying marihuana grow operators; and

• Son Van accepted cash for his salary.

[286] Having found that Mr. Nguyen knew and intended to supply persons for marihuana grow operations with the Products and Services and the above establishing Son Van, the only ASGS employee taking instructions from Mr. Nguyen, knew and intended to supply the Products and Services to person for marihuana grow operations, the only reasonable inference to be drawn is that Mr. Nguyen and Son Van were parties to an agreement to provide the Products and Services to the persons for marihuana grow operations.

[287] However, the evidence goes beyond just an agreement between Mr. Nguyen and Son Van. It also demonstrates that the persons who attended at ASGS to purchase products were a party to the agreement.

[288] The evidence which demonstrates this includes:

• The customers knew where to go for a one stop shop for marihuana grow operations;

• The customers always paid cash;

• The customers had their purchases placed into garbage bags, however innocuous the products were, before loading into their vehicles;

• The customers used the Caravan without being providing any identification or means for ASGS to contact them;

• Customers came from a long distance to purchase the "garden" products at ASGS; and

• The customers knew about and brought their marihuana grow operation waste to ASGS for disposal in the dumpster, sometimes attending at ASGS solely for that purpose.

[289] There is no question the customers of ASGS were “in on it” and parties to the agreement that Products and Services would be provided by Mr. Nguyen to persons for marihuana grow operations.

[290] I am satisfied the Crown has established beyond a reasonable doubt that Mr. Nguyen was a party to the agreement with Son Van and others to provide the Products and Services to persons for marihuana grow operationss.

Has the Crown established beyond a reasonable doubt that Mr. Nguyen did carry out the agreement to supply the Products and Services to persons for marihuana grow operations?

[291] The evidence is uncontroverted that Mr. Nguyen, through ASGS, did carry out the agreement to provide the Products and Services to persons for their marihuana grow operations as this was clearly observed by the police officers during their surveillance.

[292] The Crown has established beyond a reasonable doubt that Mr. Nguyen did carry out the agreement to supply the Products and Services to persons for marihuana grow operations.

Has the Crown established beyond a reasonable doubt that Mr. Nguyen’s supply of Products and Services helped or facilitated the marihuana grow operators produce and possess marihuana for the purpose of trafficking?

[293] It is beyond doubt that Mr. Nguyen's supply of Products and Services helped or facilitated the marihuana grow operations. He did so in many ways:

• It helped avoid detection by the police;

• It helped marihuana grow operators purchase products with the minimum number of persons knowing of their location or operations – the benefit of the one stop shop;

• The products were directly used in the marihuana grow operations to grow marihuana;

• It helped the marihuana grow operators dispose of their marihuana grow operation waste; and

• It helped marihuana grow operators with ready-made products such as the timer boards and the purchase of used products needed for marihuana grow operations.

[294] I am satisfied the Products and Services provided by Mr. Nguyen, in the manner he provided them, was of significant help or assistance to the marihuana grow operations and facilitated the production and possession of marihuana for the purpose of trafficking.

The Legal Products for Sale Defence Submission

[295] Let me deal with one other submission by Defence counsel.

[296] The Defence submits that Mr. Nguyen cannot be guilty of the offences since the products sold at ASGS are legal products for sale to the public. I reject this submission. First it entirely disregards the services provided by Mr. Nguyen to persons for their marihuana grow operations. Even if all of the products were for sale legally (I note some were not as they did not meet Electrical Code), when the Crown establishes beyond a reasonable doubt that a person sells a product to a third party with:

i. knowledge the product will be used in the commission of an offence;

ii. is intended by the third party to use in the commission of an offence;

iii. the product assists or facilitates the commission of the offence,

the person selling the product is a secondary participant in the offence. In other words, actus and mens reas of that person in the aiding and abetting the commission of the offence (as set out in Dooley supra) has been established.

[297] The Defence suggests that Mr. Nguyen’s sale of products at ASGS was no different than sale of products by a retailer such as Home Depot. I disagree. There are several significant differences:

• a great deal of the products for sale by ASGS were used products;

• some of the products for sale at ASGS did not comply with the Electrical Code and were dangerous;

• the products are not sold by a retailer such as Home Depot with the knowledge and intention the purchased products will be used in the commission of a criminal offence; and

• retailers such as Home Depot do not facilitate the disposal of evidence of the illegal use of those products.

[298] There is no merit to this argument.

Conclusion Count #2

[299] Mr. Nguyen is guilty on Count #2 (conspiracy to aid and abet the production of marihuana).

Conclusion Count #1

[300] Let me now deal with whether the Crown has established that Mr. Nguyen conspired to aid and abet the possession of marihuana for the purpose of trafficking.

[301] It is necessary to recall that the value of the marihuana discovered at the four marihuana grow operations exceeded $11 million dollars. Further several packages of cut and dried marihuana were also found at two of the locations.

[302] Each of the four marihuana grow operations were very large and clearly did not produce marihuana solely for personal use.

[303] It is clear that the amount of products sold by Mr. Nguyen to the marihuana grow operators (and in particular the Caravan full of products delivered to Montreal), was significant and not for the purpose of growing a small number of marihuana plants, but rather large marihuana grow operations involving the production of large quantities of marihuana.

[304] The only reasonable inference to be drawn is that Mr. Nguyen knew his participation in the agreement would aid and abet the marihuana grow operators to, upon production, possess large quantities of marihuana beyond marihuana for personal use.

[305] Mr. Nguyen is guilty on Count #1 (conspiracy to aid and abet the possession of marihuana for the purpose of trafficking).

Conclusion Count #3

[306] As stated above, an accused may be convicted as a secondary participant to an offence despite the fact the indictment alleges the accused as a principal.

[307] Even without the evidence of Son Van’s actions in furtherance of the conspiracy set out above, I am satisfied beyond a reasonable doubt of Mr. Nguyen’s knowledge and intention that the sale of the Products and Services, would help or facilitate persons in their marihuana grow operations in the production and possession of marihuana for the purpose of trafficking. Mr. Nguyen did so for the obvious and clear motivation, making profit on the sale of the products.

[308] Mr. Nguyen’s actions actually resulted in assisting and facilitating the production of large quantities of marihuana. That is the purpose of the products he sold – to help in the production of large quantities of marihuana. The successful result of Mr. Nguyen’s assistance to these marihuana grow operators can be seen from the four locations of ASGS customers where the police discovered large marihuana grow operations.

[309] The only reasonable inference to be drawn is that Mr. Nguyen knew that the supply of the Products and Services to the marihuana grow operators would result in the production and possession of large quantities of marihuana for the purpose of trafficking.

[310] Mr. Nguyen is guilty of Count # 3 (aiding and abetting possession of marihuana for the purpose of trafficking).

Conclusion Count #4

[311] Even without the evidence of Son Van’s actions in furtherance of the conspiracy set out above, I am satisfied beyond a reasonable doubt of Mr. Nguyen’s knowledge and intention that the sale of the Products and Services, would help or facilitate marihuana grow operationss in the production and possession of marihuana.

[312] Mr. Nguyen’s actions actually resulted in assisting and facilitating the production of large quantities of marihuana, as can be clearly seen from the four locations of ASGS customers where the police discovered large marihuana grow operations.

[313] Mr. Nguyen is guilty on Count #4 (aiding and abetting the production of marihuana).

ANALYSIS ON THE MONEY LAUNDERING COUNT (Count #5)

[314] The offence of money laundering is defined in the Criminal Code as:

462.31 (1) Every one commits an offence who uses, transfers the possession of, sends or delivers to any person or place, transports, transmits, alters, disposes of or otherwise deals with, in any manner and by any means, any property or any proceeds of any property with intent to conceal or convert that property or those proceeds, knowing or believing that all or a part of that property or of those proceeds was obtained or derived directly or indirectly as a result of

(a) the commission in Canada of a designated offence; or

(b) an act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence.

[315] The offence has three essential elements:

a. dealing with property or proceeds of crime in almost any manner or any means imaginable, including sending, delivering, transferring, altering, disposing, using, etc…;

b. having an intent to conceal or convert the property or proceeds; and

c. knowing or believing that all or part of the property or proceeds was obtained directly or indirectly, as a result of the commission of a designated offence.

[316] The mens rea for the laundering of proceeds of crime involves belief or knowledge that the proceeds were derived from the commission of a crime. See R. v. Tejani (Ont. C.A.).

[317] The Crown must prove that the accused knew the derivation of the proceeds laundered by reference to the type of crime, but not the specifics of their origin. In other words, the Crown need not prove the accused knew the precise details of the designated offence from which the proceeds are derived. In Tejan at para 36::

I do not agree with the appellant's submission. Immediately following this passage, the trial judge correctly stated that "The mens rea of laundering consists of both the intent to either conceal or convert the property and the knowledge that the property is proceeds of an offence under ss. 4, 5 or 6 of Narcotic Control Act." In the passage the appellant relies on, the trial judge simply indicated, correctly in my opinion, that the Crown did not have to prove the appellant knew what specific narcotics were trafficked or how the trafficking was carried out. In other words, although the Crown was required to prove that the appellant believed Debellis' money was derived from the commission of an offence under s. 4 or s. 5 of the Act, it was not required to prove that the appellant knew or had any belief about the details of the offence. The trial judge was aware of what the Crown was required to prove and found that it had done so.

The Crown’s theory of liability

[318] The Crown’s theory of liability is:

The accused laundered the proceeds of the crime (of production of marihuana) and/or the properties used in the production of marihuana through the sale of the homes used to produce the marihuana and the accumulation of assets through his business. The business was used to aid and abet the production of marihuana and any profits derived therefrom can be considered proceeds of crime.

A conviction on this ground can be achieved in either of four methods.

i. The accused transferred the proceeds of marihuana production by converting the proceeds into the profits of the sale of the properties that contained the grow operations. The accused directed these proceeds of sale into his own account. The accused knew or believed the proceeds derived directly or indirectly from the production of marihuana; or

ii. The accused disposed or transferred the proceeds of marihuana production by concealing the profits of sale. The concealing was effected by transferring the money from the nominee owner to the accused. The accused knew or believed the proceeds derived directly or indirectly from the production of marihuana; or

iii. The accused disposed of property (the homes themselves) by converting the property into profits of sale. The accused knew or believed the proceeds derived directly or indirectly from the production of marihuana; or

iv. The accused used or transferred the proceeds of crime (of production of marihuana) by converting or concealing those proceeds into the purchase of homes, vehicles and luxury items.

Conclusion on Money-Laundering Charge

The Crown does not need to prove the accused were involved in the production of marihuana that occurred in the 4 residences. The Crown need only prove that the accused knew or believed that the proceeds were obtained or derived from the commission of a designated offence.

In this case, it is irrefutable that the accused received the proceeds of sale from some of these properties. It is irrefutable that a marihuana grow operation occurred within the properties during the period which is reflected in the documents they possessed.

In addition, the wealth increase between 2005 to 2009 of $982,110.01 and the asset accumulation during this period and before, when compared to the income declared, reveals proceeds of crime were used to purchase these assets. The proceeds were then concealed by the purchase of legitimate assets.

When situated within the context of the on-going retailing of marihuana grow equipment and the subsequent residential grow operations discovered during this investigation, the Court should be satisfied that the accused knew or believed the proceeds of sale from these properties were the proceeds of the crime of production of marihuana and that the accused used proceeds of crime to purchase various homes, vehicles and luxury items.

[319] Each of the Crown’s theories relies on the following:

a) The “proceeds” was from the production of marihuana; and

b) The conversion was converting the proceeds of marihuana production to net proceeds of sale of the ghost ownership properties.

[320] It is important to note that the Crown is not alleging that monies generated from ASGS’ business of supplying products to marihuana grow operations was converted either into the proceeds of sale of the ghost ownership properties or otherwise. The Crown’s theory is “proceeds from the production of marihuana” were used to purchase of the ghost ownership properties and the receipt of the net proceeds of sale of the ghost ownership properties was the “conversion”.

Ghost Ownership of certain properties

[321] The Crown submits it has established Mr. Nguyen was the “real” or beneficial owner of the following properties:

• 1466 Bancroft Drive, Mississauga, Ontario;

• 39 Red Maple Drive, Brampton, Ontario;

• 7 Giza Crescent, Brampton, Ontario;

• 22 Deerglen Drive, Brampton, Ontario;

• 33 Sheepberry Terrace, Brampton, Ontario; and

• 2 Carrie Crescent, Brampton, Ontario.

(collectively the “ghost ownership properties”)

[322] I do not accept Mr. Nguyen’s evidence that he had no interest in the ghost ownership properties. Mr. Nguyen’s evidence does not leave me with a reasonable doubt that he had no interest in the ghost ownership properties.

[323] I am satisfied beyond a reasonable doubt that Mr. Nguyen was the real owner of the ghost ownership properties. The overwhelming evidence includes:

• The title to each but one of the ghost ownership properties was held by family members. The remaining title was held by a friend of Mr. Nguyen;

• Five of the ghost ownership properties had been used as a marihuana grow operation, four of which were found by the police to have existing marihuana grow operations and one a hydro bypass;

• The real estate transactions were handled by Woolfson & Woolfson, Mr. Nguyen’s real estate lawyer;

• Mr. Nguyen had possession of many documents relating to the ghost ownership properties including reporting letters, bills, and offers for sale;

• In some cases, some of the documents relating to the ghost ownership properties were addressed to ASGS’ address or were blank;

• In at least one case, Mr. Nguyen made payments, through bank drafts, to creditors relating to one of the ghost ownership properties; and

• Mr. Nguyen received all the net proceeds of sale when the ghost ownership properties were sold. These monies went into Mr. Nguyen’s personal bank account.

[324] I accept that Mr. Nguyen was the real or “ghost owner” of the ghost ownership properties. I accept that Mr. Nguyen received, for his sole personal benefit, the net proceeds of sale of these properties.

Funds to purchase the ghost ownership properties

[325] Next, the Crown submits that Mr. Nguyen had no legitimate source of funds to purchase the ghost ownership properties.

[326] The Crown points to certain facts (which are not in dispute and which I accept):

a) Except for ASGS, Mr. Nguyen had no other legitimate sources of income;

b) The income over the years from ASGS could not account for sufficient funds to purchase this number of homes and maintain the lifestyle of Mr. Nguyen;

c) Mr. Nguyen’s net worth increased by approximately $1,000,000 from October 2005 to October 2009 during a period where the combined reported income of Mr. Nguyen and Tran was $228,294; and

d) Between October 2005 and October 2009 Mr. Nguyen had over $3,000,000 go through his and his wife’s bank accounts.

[327] Mr. Nguyen testified he earned profit of approximately $2,000,000 from ASGS between 2001 and 2009. However, there are no documents supporting this evidence. Mr. Nguyen, Tran or ASGS did not report this level of profitability. I do not accept Mr. Nguyen's evidence on this point.

[328] I am satisfied Mr. Nguyen accumulated substantial and valuable assets, well beyond anything which was reported by ASGS.

Has the Crown established that Mr. Nguyen was involved in the production of marihuana and used proceeds from the production of marihuana to buy the ghost ownership properties?

[329] I am satisfied beyond a reasonable doubt that the Crown has established Mr. Nguyen was involved in the production of marihuana at the ghost ownership properties. The evidence includes:

a) Mr. Nguyen was a one stop shop supplier of marihuana growing operations products in 2009. Some of the products found at the ghost ownership properties was similar to the products found at ASGS in October 2009. Some of the evidence clearly suggested that the ASGS business of supplying marihuana grow operations had continued for years – such as the supply of tons of fertilizer and other products from Mississauga to England;

b) As I found above, these properties were, in reality, properties of Mr. Nguyen; and

c) Mr. Nguyen’s financial ability to buy the ghost ownership properties cannot be explained by his sole source of income – ASGS.

[330] While it is highly likely that the purchase of the ghost ownership properties utilized some or all of monies Mr. Nguyen may have made from the production of marihuana, in my view, it would be speculation to find that any or all of the purchase monies used to buy the ghost ownership properties came from the proceeds of the production of marihuana.

[331] There is simply a lack of clear and cogent evidence Mr. Nguyen made or used any proceeds from the production of marihuana to buy the ghost ownership properties.

[332] It is likely that not all profits of ASGS were reported by Mr. Nguyen. That would certainly account for Mr. Nguyen's lifestyle and asset accumulation. Therefore, it is highly possible that substantial or all of the monies Mr. Nguyen used to purchase the ghost ownership properties came from ASGS’s unreported sales and profits of selling marihuana grow operation products, both domestically and internationally, over the years and not necessarily from the proceeds of the production of marihuana - an essential element of the Crown's case.

[333] Having failed to establish beyond a reasonable doubt that proceeds from the production of marihuana were used to purchase the ghost ownership properties, the Crown cannot establish that Mr. Nguyen “converted” the proceeds of production of marihuana into the net proceeds of sale of the ghost ownership properties.

[334] I am not persuaded that the only reasonable inference to be drawn is that Mr. Nguyen made money in the production of marihuana and used that money to purchase one of more of the ghost ownership properties.

Conclusion on Money Laundering

[335] I am not persuaded that the Crown has established Mr. Nguyen money laundered the proceeds from the sale of the production of marihuana.

[336] There will be an acquittal on count #5.

Ricchetti, J.

Date: February 1, 2013

COURT FILE NO.: CrimJ (F) 1681/12

DATE: 2013/02/ 01

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Her Majesty the Queen

• and –

Tan Tien NGUYEN

JUDGMENT

Ricchetti J.

Released: February 1, 2013