ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CR/13/30000/113/0000
DATE: 20140304
B E T W E E N:
HER MAJESTY THE QUEEN
- and -
Sun-ming chan and Kwok (Tom) Leung
Rita Koehle, for the Applicant
Vanessa Christie for the Defendant, Sun-Ming Chan
Domenic Basile for the Defendant, Kwok (Tom) Leung
HEARD: February 27, 2014
KELLY J.
reasons for SENTENCE
[1] The defendants, Mr. Sun-Ming Chan and Mr. Kwok (Tom) Leung, pleaded guilty to a number of offences regarding the charging of a criminal interest rate. In essence, they charged the victims interest on loans for an effective annual interest rate of 520%[^1]. Further, they pleaded guilty to extortion[^2] and Mr. Chan pleaded guilty to possession of proceeds of crime[^3]. Both come before me now for sentencing.
[2] The real issue in this matter is the nature of the sentence to be imposed. Crown Counsel seeks a custodial sentence of 2 years less 1 day and probation. Counsel for Messrs. Chan and Leung submit that a conditional sentence is appropriate.
[3] Despite the significant criminal nature of these offences, I will impose conditional sentences. Mr. Chan will be subject to a conditional sentence of 2 years less 1 day. Mr. Leung will be subject to a conditional sentence for 18 months. Additional orders of forfeiture, DNA and a fine of $84,000 will be imposed as set out below. Mr. Chan has already made restitution to one of the victims and I take that into account in imposing these sentences.
The Facts
[4] The background giving rise to the pleas was provided by way of a lengthy Agreed Statement of Facts. I have not reproduced the entirety of the statement but I refer to the facts that give context to my reasons for sentence:
a. The accused men, Messrs. Chan and Leung were in the loan sharking business. Their practice was to run an ad in the Sing Tao Chinese newspaper. The borrowers were required to provide their contact information as well as leave their passport behind as collateral.
b. The interest rate charged by Messrs. Chan and Leung was 520% per year and was collected as follows: immediately upon delivery of the loan, 10% was deducted from the funds advanced. For example, if the loan was for $5,000, only $4,500 was advanced and the other $500 was kept as the first interest payment. Thereafter, interest was to be paid on the entire amount of the loan at a rate of 10% per week and payments were to be made every 7 days.
c. If the borrower was late on a payment, the penalty was an additional $100 per day. When they couldn’t pay, the borrowers were threatened and/or assaulted. None of the 10% weekly payments ever went towards reducing the principle amount, as that had to be paid in addition to the weekly payments.
Mr. P.M.
d. Mr. P.M. borrowed $5,000 from Mr. Leung. Mr. P.M. estimates that he paid approximately $4,000 in interest and paid off $1,000 of the principle before he became unable to make any more payments. He went into hiding from Mr. Leung, changing both his address and his telephone number to avoid being found.
e. Three years later, in 2010, Mr. P.M. ran into Mr. Leung on the street. Mr. Leung told Mr. P.M. that he wanted his money back. At that time, Mr. P.M. was in a better financial situation and agreed to repay the principle. Mr. P.M. made an initial payment of $1,000, after which he learned from police that Mr. Leung had been arrested. With respect to Mr. P.M., no threats or violence were used against him.
Mr. T.M.S.S.
f. In the summer of 2010, Mr. T.M.S.S. found himself in financial straits when he needed funds to pay his lawyer. He also required funds for his father who was ill. Mr. T.M.S.S. borrowed $5,000 from Messrs. Chan and Leung on the abovementioned terms.
g. Mr. T.M.S.S. initially made the weekly payments. In November of 2010 he received a call from either Mr. Chan or Mr. Leung advising that they had had some dealings with the police, but that didn’t mean that he didn’t have to pay. They would contact him for his next payment. Thereafter, Mr. T.M.S.S. decided it was time to stop paying and he did not pick up any more calls from them, although they left at least 10 messages indicating that he had to call them and “you know who’s calling you”. M. T.M.S.S. was later contacted by police and provided a statement.
Mr. V.L.
h. In 2008, Mr. V.L. came to be in a serious financial situation as a result of his wife having to undergo treatment for cancer. She did not have the assistance of OHIP, as she was not a Canadian citizen. In addition, Mr. V.L. suffered a heart attack, as a result of the strain of his wife’s illness and his declining financial situation. While he was on sick leave from the Toronto Transit Commission, there was a clerical error for his sick pay and he was not paid for a period of time, causing his financial situation to worsen considerably.
i. In December 2008, Mr. V.L.’s wife passed away from cancer. He was unable to return to work. He had a small daughter to care for and his entire financial situation collapsed. He lost his house to a power of sale.
j. Mr. V.L. became aware of the ad placed by Mr. Chan in the Sing Tao newspaper. Mr. V.L. borrowed $5,000. Over the next year, Mr. V.L. made the interest payments of $500.00 per week plus the late payments, which sometimes brought the total up to $800- $1,000.
k. Once Mr. V.L. was again being fully paid for his employment at the TTC, he moved into a rental condominium. He was evicted in the summer of 2010 because the bulk of his pay was going to Messrs. Chan and Leung. Mr. V.L.’s car was repossessed and his cell phone was disconnected due to failure to make payments.
l. In the summer of 2010, Mr. V.L. decided that he would go into hiding. Since he had been evicted and did not have a cell phone, he thought Messrs. Chan and Leung would have no way of locating him. He also believed that because he had already paid Messrs. Chan and Leung at least 6 times of what the original loan had been, i.e. over $30,000, he felt that he should not have to pay anything further.
m. As his financial situation improved, Mr. V.L. was able to rent a basement apartment and get a new cell phone. In early October of 2010, Mr. V.L. received a call on his new telephone number from Mr. Chan. Mr. V.L. agreed to meet with Mr. Chan since he had his little girl living with him and he couldn’t risk Mr. Chan coming to the door. They agreed to meet at a nearby McDonald’s.
n. Mr. Chan advised Mr. V.L. that because they had to look for him, he now owed them $8,500; that he had one week to pay; that he could make an initial payment of $3,500 and then pay the remaining $5,000.
o. Even though Mr. V.L. told Mr. Chan that he didn’t have that kind of money, Mr. Chan said he didn’t care. At the end of this meeting, Mr. Chan offered to drive Mr. V.L. home, and when Mr. V.L. declined, Mr. Chan stated, “Really, I really can drive you home. Actually, I already know where you live, so don’t worry about it.”
p. One week after this meeting, Mr. V.L. met with Messrs. Chan and Leung. They started to ask Mr. V.L. about the money and when he said he really had no money at all, Mr. Chan punched him in the face.
q. On October 31st, 2010, when Mr. V.L. was unable to secure any funds to pay Messrs. Chan and Leung, he decided to go to the police. He provided a videotaped statement. He advised that he was to meet them at the McDonald’s restaurant in Scarborough to make the $10,000 payment. As a result, an Asian police officer put on the Mr. V.L.’s hat and coat and drove his car to the arranged meeting place. Messrs. Leung and Chan were arrested.
r. A debt list with approximately 74 names and amounts to be collected each date, for a weekly total of over $10,000, (not including the $10,000 that Mr. V.L. was expected to pay on that date) were found in the car. Both Messrs. Leung and Chan had funds on their persons: Mr. Chan had $13,000 in cash and Mr. Leung had over $2,300 in cash. A bank draft for $9,500 in the name of Kwok Leung was found in the glove box of the motor vehicle in which he was travelling.
[5] With these facts in mind, I will turn to the analysis.
Analysis
[6] Section 718 of the Criminal Code sets out the purposes of sentencing. The main objectives for consideration in a case like this are to denounce the conduct and to deter other individuals from engaging in similar conduct in the future. The public must be protected from such criminal acts in order to maintain confidence.
[7] Bearing the purposes of sentencing in mind, I must also take into consideration the following:
i. that a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances; and
ii. an offender should not be deprived of liberty if less restrictive sanctions are appropriate.[^4]
[8] Due to the date of these offences, a conditional sentence is available. While Crown Counsel does not support the imposition of a conditional sentence, she does agree that a conditional sentence is not illegal in the circumstances.
[9] Crown Counsel made compelling arguments as to why a jail sentence is appropriate. She provided the Court with several cases in support of her position.
[10] In the case of R. v. Finamore,[^5] the British Columbia Court of Appeal imposed a sentence of 1 year in custody. In that particular case, Messrs. Romano and Finamore advanced $4,000 to Mr. Price. They took a promissory note for $5,000 payable in 30 days. Some $30,000 was actually paid on the note. For six months, Mr. Finamore attempted to collect his portion of the debt. He used threats of violence to do so.
[11] In R. v. Shen,[^6] Mr. Shen received a sentence of four years’ imprisonment and was prohibited from possessing firearms for life. Another person had loaned the complainant $10,000 in cash at an interest rate of 10% per week. Mr. Shen was to collect the loan and did so using threats of violence. Mr. Shen did not have a criminal record.
[12] In R. v. Li,[^7] the Alberta Court of Appeal upheld a sentence of 2.5 years following a conviction for extortion. Mr. Li, over a period of 1.5 years, made several threats to the complainant, the complainant’s wife and their child. These threats included bodily harm and even death. These threats emanated from a gambling debt or possibly a business loan.
[13] In R. v. Duong,[^8] the Alberta Court of Appeal upheld a sentence of three years’ imprisonment for extortion and 9 months concurrent for assault. The Court held that Mr. Duong was a participant, along with others, that ended in the victim of extortion being beaten. The Court held that there was a “gang approach” to a preconceived plan of extortion to collect the debt “properly owing to those collecting”.
[14] In the case of R. v. Lindsay, 2009 ONCA 532, Messrs. Lindsay and Bonner appealed their convictions for extortion and extortion for the benefit of a criminal organization. Mr. Lindsay appealed his sentence of 4 years and 4 months. The Ontario Court of Appeal dismissed their appeals. The defendants were members of the Hells Angels Motorcycle Club. On a particular date, they went to the home of a dealer in black market satellite television equipment. They demanded that he pay them $75,000 to cover an alleged debt. They threatened the victim with bodily harm.
[15] Equally compelling are the cases provided by the defendants.
[16] In R. v. Romolo, 2002 MBCA 66, the Manitoba Court of Appeal imposed a sentence of 2 years less 1 day. Mr. Romolo was co-accused in an offence of extortion. The victim had failed to pay a debt of $22,000 on time for a quantity of marijuana provided to him. The co-accused threatened the victim with a .357 magnum Smith and Wesson revolver.
[17] In R. v. Piamonte,[^11] Mr. Piamonte pleaded guilty to one count of extortion, along with 11 counts of various offences: including possession for the purposes of trafficking, possession of counterfeit bank notes, careless storage of ammunition, unlawful confinement, uttering threats and breach of recognizance of bail.
[18] With respect to the extortion, Mr. Piamonte suspected two of his acquaintances had stolen counterfeit money from him so he recruited two colleagues to act as enforcers in interrogating and extorting money from the acquaintances. They threatened injury, interrogated them with respect to the counterfeit money, and suggested that actual money had to be paid to the offender and his colleagues. During this time, Mr. Piamonte handled a gun. He was sentenced to a 22 month conditional sentence.
[19] The cases relied upon by both counsel demonstrate that sentencing is not an exact science. As Doherty J. noted in R. v. Hamilton, 2004 5549 (ON CA):
Sentencing is a very human process. Most attempts to describe the proper judicial approach to sentencing are as close to the actual process as a paint by numbers landscape is to the real thing. The fixing of a fit sentence is the product of the combined effects of the circumstances of the specific offence and unique attributes of the specific offender.
[20] It is my view that a conditional sentence can address denunciation and general deterrence as Rosenberg J.A. stated in R. v. Wismayer:[^13]
… it is wrong to consider a conditional sentence order as a lenient sentence. The offender will serve the total sentence under conditions that restrict the offender’s liberty, often by requiring that the sentence be served as a form of house arrest and by requiring community service. The offender is also under the constant threat of imprisonment should he or she violate the conditions. As Rousseau-Houle J.A.[^14] put it, the sentence of imprisonment is like a sword of Damocles over the offender. In some ways the conditional sentence order can be a much heavier sentence than a brief sentence from which the offender will be paroled after one third has been served. Accordingly, I cannot accept that a conditional sentence of imprisonment is unavailable where the paramount consideration is denunciation of the offender’s conduct.
[Footnote added]
[21] In coming to the conclusion that a conditional sentence is appropriate, I have considered the following aggravating and mitigating factors.
The Aggravating Factors
[22] The aggravating factors are as follows:
a. The facts giving rise to these offences are abhorrent. Messrs. Chan and Leung preyed on the weak and needy.
b. Mr. T.M.S.S. paid $30,000 of interest on the $5,000 loan. He lost wages due to the stress he experienced and his loss of focus.
c. Mr. P.M. experienced depression and fear of not being able to pay back the loan at crippling interest rates. He was worried for his family.
d. Particularly troubling is the treatment of Mr. V.L.. It is, without doubt, chilling. It turned his life upside down. He expressed a loss of self-esteem and was afraid. They threatened to track him down at work so he did not go. Due to his absences from work, he lost his permanent employment with the TTC. Further, he lost personal property, including his vehicle that got re-possessed. He moved to hotels and disconnected his communication devices to hide from them. He had to take loans from family.
e. These offences were premeditated, sophisticated and required a great deal of planning. The criminal acts were committed over a long period of time.
f. This “business” operated for approximately 5-10 years. It had an office, it published newspaper advertisements, it hired people to make threats and used violence when the monies were not repaid. They targeted their own people.
g. A debt list found on Mr. Leung indicated that they were currently collecting from 74 victims and based on the content of this list, they were collecting approximately $10,000 that week.
h. Mr. Chan’s banking records showed that he had $1.2 million going through his bank accounts for the five years prior, but his Income Tax Act return showed that he had no income. This was so despite the fact that he lived in a million dollar house, drove a Porsche and a Honda Pilot and had accumulated RESP’s for his children as well as other savings.
The Mitigating Factors
[23] There are some mitigating factors that are applicable to both Messrs. Chan and Leung. Those include the following:
a. There was a plea of guilt that prevented the necessity of the victims having to testify at trial.
b. The plea of guilt saved the Court significant time in a period where court resources are limited. In fact, the court time saved was three weeks.
c. The plea of guilt provided certainty of result and is considered to be a sign of remorse.
[24] I find the following to be the mitigating factors with respect to Mr. Chan:
a. Mr. Chan is 49 years of age and these offences represent the first entries on his criminal record.
b. He was born in Hong Kong and he came to Canada when he was approximately 9 years of age. He is a Canadian citizen. His parents and three siblings live in the Toronto area.
c. Mr. Chan was married until these criminal charges came to fruition. He currently has a son who attends the University of Toronto and a daughter that is in high school.
d. He appears to have the support of members of his community.
e. Mr. Chan wrote a letter to the Court in support of this sentencing proceeding. He advised the Court that he is self-employed. He is a driver who provides services to the elderly. He also drives people to their places of employment, the airport and for sightseeing purposes.
f. Friends have described Mr. Chan as caring, kind and honest.
g. Relatives have described Mr. Chan as “hardworking” and “family oriented”. He will also help “those in need”. He puts family “first”.
h. Mr. Chan has made full restitution to Mr. V.L. ($30,000). It appears that further restitution may be made to the other victims from the monies seized on arrest and from the forfeiture of items, including a Porsche motor vehicle.
i. Mr. Chan is ordered to pay a fine of $84,000. Should Mr. Chan fail to pay the fine, he will be incarcerated for 22 months.
j. Mr. Chan has been on a strict form of bail for over three years. He has spent approximately 6 days in presentence custody.
[25] I find the following to be the mitigating factors regarding Mr. Leung:
a. Mr. Leung is 48 years of age. These are the first entries on his criminal record.
b. Mr. Leung was born in Hong Kong and came to Canada in 1980. He is divorced. He has no children and he lives with his brother.
c. It appears that Mr. Leung is currently employed working for Thai Elephant seven days a week from 5 p.m. to 11 p.m. He also works on a part time basis for Angie’s Beauty and Slimfit Clinic from 10 a.m. to 4 p.m.
d. Mr. Leung suffers some medical illnesses.
e. Although it does not appear that Mr. Leung, himself, exacted any violence on the victims, he was present. Therefore he is a party to such acts.
f. Mr. Leung has been subject to strict terms of bail since his release.
What is the Fit Sentence?
[26] Although the offences are atrocious, I do not find that either Messrs. Chan or Leung would endanger the safety of his community if either serves a conditional sentence.
[27] Of greatest significance is that Mr. V.L. is being paid $30,000 by way of restitution from Mr. Chan. Such a payment is being made “up front”. This, at the very least, will restore Mr. V.L. to the status quo (i.e. the position he was in before this crime.) Further, Mr. Chan will forfeit significant items and pay a sizeable fine which distinguishes this case from most others. Mr. Chan will serve 22 months in custody should he fail to pay the fine within 5 years.
[28] I am also satisfied that a conditional sentence would adequately denounce the conduct of the defendants and deter other persons from committing this type of offence. As the Supreme Court stated in R. v. Proulx, 2000 SCC 5, a conditional sentence can still provide significant denunciation and deterrence, particularly when onerous conditions are imposed.
Mr. Chan
[29] Mr. Chan will be subject to a conditional sentence order for 2 years less 1 day. The conditions imposed will be as follows:
a. House arrest for the entirety of the sentence. The exceptions will be for employment, medical and religious purposes as well as to attend to personal needs on each Friday from 1:00 p.m. to 5:00 p.m.
b. The statutory terms, which include the following:
i. keep the peace and be of good behaviour;
ii. appear before the Court when required to do so by the Court;
iii. report within two working days in person to a supervisor and thereafter report when required by the supervisor in the manner directed by the supervisor;
iv. remain within the Province of Ontario unless written permission to go outside the Province is obtained from the Court or the supervisor; and
v. notify the supervisor in advance of any change of name or address and promptly notify the supervisor of any change in employment or occupation.
[30] The conditional sentence for Mr. Chan will be apportioned as follows:
Count
Date
Charge
Sentence
4
April 1, 2009-October 31, 2010
Charging a criminal interest rate contrary to s. 347(1) of the Criminal Code. Victim: Mr. V.L..
6 months less 1 day conditional sentence consecutive to count 5
5
April 1, 2009-October 31, 2010
Extortion contrary to s. 346(1) of the Criminal Code. Victim: Mr. V.L..
18 months conditional sentence
8
October 31, 2010
Possession of proceeds of crime contrary to s. 354(1) of the Criminal Code.
3 months conditional sentence concurrent to count 5
11
January 1, 2010-November 30, 2010
Charging a criminal interest rate contrary to s. 347(1) of the Criminal Code. Victim: T.M.S.S..
6 months less 1 day conditional sentence concurrent to count 5
[31] Thereafter Mr. Chan will be placed on probation for three years with the statutory terms in addition to performing 180 hours of community service during the first 18 months. During the entirety of the conditional sentence order and the probation order, Mr. Chan shall have no contact direct or indirect with Messrs. P.M., T.M.S.S., V.L. and K.S.C..
[32] Mr. Chan is also subject to the following:
a. A fine of $84,000 in lieu of forfeiture of proceeds of crime with five years to pay. If he fails to pay the fine in five years, he will be subject to a term of imprisonment of 22 months.
b. A forfeiture order for the monies seized during his arrest, his Porsche and his Honda Pilot.
Mr. Leung
[33] Mr. Leung will be subject to a conditional sentence order for 18 months. The conditions imposed will be as follows:
a. House arrest for the entirety of the sentence. The exceptions will be for employment, medical and religious purposes as well as to attend to personal needs on each Thursday from 1:00 p.m. to 5:00 p.m.
b. The statutory terms, which include the following:
i. keep the peace and be of good behaviour;
ii. appear before the Court when required to do so by the Court;
iii. report within two working days in person to a supervisor and thereafter report when required by the supervisor in the manner directed by the supervisor;
iv. remain within the Province of Ontario unless written permission to go outside the Province is obtained from the Court or the supervisor; and
v. notify the supervisor in advance of any change of name or address and promptly notify the supervisor of any change in employment or occupation.
[34] The conditional sentence for Mr. Leung will be apportioned as follows:
Count
Date
Charge
Sentence
4
April 1, 2009-October 31, 2010
Charging a criminal interest rate contrary to s. 347(1) of the Criminal Code. Victim: Mr. V.L..
6 months conditional sentence consecutive to count 5
5
April 1, 2009-October 31, 2010
Extortion contrary to s. 346(1) of the Criminal Code. Victim: Mr. V.L..
12 months conditional sentence
11
January 1, 2010-November 30, 2010
Charging a criminal interest rate contrary to s. 347(1) of the Criminal Code. Victim: T.M.S.S..
6 months less 1 day conditional sentence concurrent to count 5
[35] Mr. Leung will be placed on probation for three years with the statutory terms in addition to performing 180 hours of community service during the first 18 months. During the entirety of the conditional sentence order and the probation order, Mr. Leung shall have no contact direct or indirect with Messrs. P.M., T.M.S.S., V.L. and K.S.C..
[36] Mr. Leung will also be subject to a free-standing restitution order in the amount of $14,000 payable to Mr. T.M.S.S..
[37] Messrs Chan and Leung will also be subject to the following ancillary orders: DNA; forfeiture of all items seized; and a section 109 order preventing them from possessing weapons for life.
Kelly J.
Released: March 4, 2014
COURT FILE NO.: CR/13/30000/113/0000
DATE: 20140304
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HER MAJESTY THE QUEEN
- and -
Sun-ming chan and Kwok (Tom) Leung
REASONS FOR SENTENCE
Kelly J.
Released: March 4, 2014
[^1]: Contrary to s. 347(1) of the Criminal Code
[^2]: Contrary to s. 346(1) of the Criminal Code
[^3]: Contrary to s. 354(1) of the Criminal Code
[^4]: See: ss. 718.2(b),(c) and (d) of the Criminal Code, R.S.C., 1985, c. C-46
[^5]: [1981] B.C.J. No. 403 (C.A.)
[^6]: [1995] O.J. No. 2992 (Gen.Div.)
[^7]: [1996] A.J. No. 617 (C.A.)
[^8]: [1995] A.J. No. 528 (C.A.)
[^11]: [2006] O.J. No. 2814 (Sup. Ct.)
[^13]: (1997) 115 C.C.C. (3d) (C.A.) at pp. 39-40
[^14]: R. v. Maheu, [1997] A.Q. No. 277 (C.A.)