ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 13-50000194-0000

DATE: 20140211

BETWEEN:

HER MAJESTY THE QUEEN

– and –

Larry Hardiman
Defendant

Andrea MacGillivray, for the Crown

Mary Cremer, for the Defendant

Goldstein J.

REASONS FOR SENTENCE

1. Overview

[1] On December 20, 2013 I convicted Larry Hardiman of the following offences:

Count 1: Theft of property of a value over $5000 from Kelly Rainville, including furniture, artwork, paintings, and other property contrary to s. 334(a) of the Criminal Code;

Count 2: Possession of property (including furniture, artwork, paintings, and other property) of a value over $5000 obtained by crime, contrary to s. 355(a) of the Criminal Code;

Count 3: Extortion of Kelly Rainville by threatening not to return her property, contrary to s. 346(1.1)(b) of the Criminal Code;

Count 4: Intimidating Kelly Rainville with the intent to deprive her of her property, contrary to s. 423(1)(d) of the Criminal Code;

Count 7: Possession of instruments intended for use in forging or falsifying credit cards, contrary to s. 342.01(1)(b) of the Criminal Code;

Count 8: Possesion of instruments, devices, apparatuses, material or things that had been used or were adapted to be used to commit forgery, contrary to s. 368.1 of the Criminal Code;

Count 10: Fraudulent possession of credit card data that would enable a person to use a Visa credit card, contrary to s. 342(3)(a) of the Criminal Code;

Count 11: Fraudulent possession of credit card data that would enable a person to use a MasterCard credit card, contrary to s. 342(3)(a) of the Criminal Code;

Count 12: Fraudulent possession of credit card data that would enable a person to use an American Express credit card, contrary to s. 342(3)(a) of the Criminal Code;

Count 13: Fraudulent use of credit card data that would enable a person to use a Visa credit card, contrary to s. 342(3)(a) of the Criminal Code;

Count 14: Fraudulent use of credit card data that would enable a person to use a MasterCard credit card, contrary to s. 342(3)(a) of the Criminal Code;

Count 15: Fraudulent use of credit card data that would enable a person to use an American Express credit card, contrary to s. 342(3)(a) of the Criminal Code;

Count 16: Forging or falsifying credit cards, contrary to s. 342(1)(e) of the Criminal Code;

Count 17: Forging false documents, namely gift cards, with the intent that they be acted upon as genuine, contrary to s. 367(a) of the Criminal Code.

[2] Mr. Hardiman now comes before me for sentencing.

2. The Facts

(a) Circumstances of the offence

[3] In the fall of 2011 Kelly Rainville hired Phillip Welsch to move and store furniture, artwork, and objets d’art. Ms. Rainville was moving property from her townhouse to a storage facility in Barrie. Mr. Welsch’s plan was to move Ms. Rainville’s property over the course of several weekends in the fall of 2011. Although some of the property was moved directly from Ms. Rainville’s townhouse to the facility in Barrie, some was also stored temporarily in lockers at All-Canadian Self-Storage on Lakeshore Boulevard. It was stored there temporarily because there was not enough time on weekends to move all of the property to Barrie.

[4] Mr. Welsch hired Mr. Hardiman to assist with the move. His job was to drive a rental van in order to move items from Ms. Rainville’s townhouse to the storage locker on Lakeshore, to do light duties such as packing, and to build wooden packing crates. Mr. Hardiman was also instructed by Mr. Welsch to rent a temporary locker at All-Canadian Self-Storage, which he did. Mr. Hardiman ensured that he was the only person authorized to enter the lockers. Justin Welsch placed high security locks on the storage lockers. Those locks were later cut and replaced.

[5] Ms. Rainville recorded a conversation dated October 27, 2011. It was a conversation between her and Mr. Hardiman. Mr. Hardiman admitted that he had some of her property, that he had moved some, and that he required $6000 for his expenses. I found that during that conversation Mr. Hardiman committed the offence of extortion. I found as well that Mr. Hardiman committed offences involving theft over $5000, possession of property obtained by crime, and intimidation in relation to Ms. Rainville and her property.

[6] On November 7, 2011 the police executed search warrants for a storage unit rented by Mr. Hardiman and at Mr. Hardiman’s apartment. The police found what I can only describe as small factories for fabricating fraudulent credit cards, gift cards, and identification. Those “factories” were found in both locations. The police found machines used for the production of fraudulent credit cards. They found computers, embossers, printers, stampers and other credit card production paraphernalia. The police also found hundreds of blank or partially finished credit cards, false identification with Mr. Hardiman’s picture and assumed names, identification documents in the name of other people, and “how to” books for making fake identification. The police found templates on the computers for making forged credit cards and government identification. Lists of credit card numbers from around the world, none of which was legally associated to Mr. Hardiman, were found on the computers. Emails were recovered that referenced false documents, such as phone bills, which were used to fraudulently access credit.

(b) Circumstances of the offender

[7] Mr. Hardiman is almost 60 years old. At the time of the offences he lived with his wife at 160 The Esplanade. He has no employment record to speak of. According to Ms. Cremer, Mr. Hardiman’s counsel, he and his wife had resided there for 9 years at the time of the offences. For the majority of the time since he met his wife they have supported themselves on disability support. As well, 160 The Esplanade is a cooperative building for people suffering from disabilities. I am told that in August 2013 Mr. Hardiman moved out from the building rather than have his wife removed, as the Board of the cooperative had determined that he could no longer reside there. Since August 2013 Mr. Hardiman has had no contact with his wife. He has lived in a series of temporary residences and found some work as a maintenance man, for which his employer has provided a positive letter of support.

[8] Although there was some attempt to portray Mr. Hardiman’s decision to move out as a selfless decision to preserve his wife’s ability to stay in assisted housing, I am sceptical. That said, I have no evidence to the contrary and I am prepared to assume that the information is accurate.

[9] Mr. Hardiman does have a significant criminal record with entries dating back to 1975 and then a gap until convictions for possession of instruments used to commit forgery and fraud over $5000 in 2003, for which he received a sentence of 30 days with credit for 4 months and 15 days of pretrial custody. In 2007 Mr. Hardiman was convicted of aggravated identity theft in the United States for which he received a sentence of 24 months. In 2012 Mr. Hardiman was convicted of uttering a forged document for which he received a sentence of 9 days in light of 6 days of pretrial custody with a forfeiture order.

(c) Impact on the victim and the community

[10] There is no question that the victim of the extortion and theft, Ms. Rainville, suffered some anxiety and trauma over her loss of property. She said in her evidence that she wanted to sell her paintings and vases because she was upset and did not want them to do this to her again. She said that she found out that much of her artwork and property was not worth nearly as much as she had believed.

[11] I am inclined, however, to believe that Ms. Rainville is far more upset over the fact that her property is worth less than she thought than she is over Mr. Hardiman’s crimes. I do not wish to minimize the trauma that is experienced by any victim of extortion. I would not go quite so far as to say that she shed crocodile tears, but I found a certain amount of artifice to her demonstrations of upset. Extortion is a serious crime, and it must be treated seriously, but I found Ms. Rainville’s reaction to be exaggerated and overwrought in relation to the harm. I note that she did not file a victim-impact statement. Furthermore, for the reasons that I note below, I am not convinced that her missing property is entirely of Mr. Hardiman’s doing.

[12] On the other hand, the Bank of Montreal suffered a deprivation of $4793.00 and the Royal Bank suffered a deprivation of $18000.00. More importantly, the impact of credit card fraud and identity theft on the community is enormous. It is financially serious, undermines the foundations of the economy, and is insidious because people assume that it is victimless when, in fact, we all pay.

3. Legal Parameters

[13] The wide range of offences committed by Mr. Hardiman carry a wide range of penalties:

Count 1: Theft over $5000 contrary to s. 334(a) of the Criminal Code: maximum penalty of ten years.

Count 2: Possession of property over $5000 obtained by crime, contrary to s. 355(a) of the Criminal Code: maximum penalty of ten years.

Count 3: Extortion contrary to s. 364(1.1)(b) of the Criminal Code: maximum penalty of life imprisonment.

Count 4: Intimidation with the intent to deprive property contrary to s. 423(1)(d) of the Criminal Code: maximum penalty of five years imprisonment.

Count 7: Possession of instruments intended for use in forging or falsifying credit cards, contrary to s. 342.01(1)(b) of the Criminal Code: maximum penalty of ten years.

Count 8: Possession of instruments, devices, apparatuses, material or things that had been used or were adapted to be used to commit forgery, contrary to s. 368.1 of the Criminal Code: maximum penalty of 14 years.

Counts 10, 11, and 12: Fraudulent possession of credit card data that would enable a person to use a credit card, contrary to s. 342(3)(a) of the Criminal Code: maximum penalty of ten years per count.

Counts 13, 14, and 15: Fraudulent use of credit card data that would enable a person to use a credit card, contrary to s. 342(3)(a) of the Criminal Code: maximum penalty of maximum penalty of ten years per count.

Count 16: Forging or falsifying credit cards, contrary to s. 342(1)(e) of the Criminal Code: maximum penalty of ten years.

Count 17: Forging false documents with the intent that they be acted upon as genuine, contrary to s. 367(a) of the Criminal Code: maximum penalty of ten years.

4. Positions of the Crown and Defense

[14] Ms. Cremer’s position is that Mr. Hardiman should be sentenced to a period of incarceration of 2-3 years. Ms. MacGillivray’s position on behalf of the Crown is that the appropriate global range of sentence is 4-6 years.

5. Case Law

[15] The cases reveal a wide range of sentences none which are exactly on point.

[16] In R. v. Okubadejo, [2008] O.J. No. 5416 (Sup.Ct.) the accused was convicted after a trial of several offences relating to the possession of machinery to commit forgery, possession of three forged credit cards, and possession of credit card data. There was no evidence of actual loss. The offender had one previous conviction for forgery and one previous conviction for possession of a forged credit card. After a review of the surprisingly scant authorities, my colleague Spies J. determined that a global sentence of three and one half years was appropriate.

[17] In R. v. Senthilkumar, [2007] O.J. No. 4681 (C.J.), a case referred to by Spies J., the accused pleaded guilty to possession of credit card data. He also pleaded guilty to the possession of machines for counterfeiting cash and forging credit cards. The police seized pinhole cameras used to obtain PIN numbers used by individuals at ATM machines. The police also seized false government identification, blank credit and debit cards, and a startling amount of counterfeit cash. The sentencing judge, Atwood J. of the Ontario Court of Justice, attributed $1.4 million of counterfeit $20 and $50 bills to the offender. After discussing the economic harm engendered by these offences, Atwood J. imposed a sentence of 3 years and two months, after giving the offender credit for three months of pre-trial custody. Significantly, Atwood J. indicated that in his view a sentence of six to seven years would have been appropriate after trial.

[18] In some respects Senthilkumar is of limited use because the most serious aspect of the crime was the enormous amount of forged currency that was recovered. Nonetheless, the decision provides a useful review of cases. Crown counsel also referred me to R. v. Bliss, [1995] O.J. No. 5002 (Gen.Div.), a case referred to in Senthilkumar. The offenders in that case received substantial penitentiary sentences (seven years and five years in total) but I find that case to be of limited use given that it involved millions of counterfeit currency.

[19] Ms. Cremer referred me to cases from the Ontario Court of Justice and the courts of other provinces. In R. v. Sritharan, [2009] O.J. No. 4952 (C.J.) the offender pleaded guilty to 32 charges relating to the production and use of fraudulent debit and credit cards. He was a youthful offender, only 18, who was a small cog in a large and sophisticated fraud machine. The organization installed overlay devices designed to steal information from the magnetic strips on credit and debit cards. The offender was caught installing such devices. The total loss to one of the banks was over $200,000.00. The defence suggested that the offender’s share of the profits was $20,000.00 to $25,000.00. Nakatsuru J. very carefully reviewed the personal circumstances and the availability of a conditional sentence. After his detailed and thorough analysis he concluded that a conditional sentence of 23 months was appropriate.

[20] As Nakatsuru J. pointed out, Sritharan represents the low end of the range. Given that he was a youthful offender at the lower echelon of a sophisticated criminal organization his position is somewhat different from Mr. Hardiman’s. He also pleaded guilty well before trial. I was referred to R. v. Pechterski, [2007] O.J. No. 4449 (C.J.). In that case the youthful offender committed offences very similar to those in Sritharan. M. Green J. determined that a 12 month conditional sentence was appropriate.

[21] In R. v. Sagoo, 2010 ABCA 29, [2010] A.J. No. 74, 474 A.R. 190 (C.A.) the Alberta Court of Appeal indicated that the appropriate range for a first offender who pleaded guilty and was at the lower echelon of a criminal organization producing and using fraudulent credit cards was 15 to 24 months and imposed a sentence of 15 months. See also: R. v. Dhillon, [2010] A.J. No. 73 (C.A.).

[22] The Crown referred me to R. v. Saumier, 2008 BCCA 473, [2008] B.C.J. No. 2305, 261 B.C.A.C. 272 (C.A.). In that case, the offender was found guilty by a jury of extortion, and pleaded guilty to two offences relating to firearms. The offender, a drug dealer, had extorted one of his clients into giving him a car. The offender was known to the victim to carry guns and had shown him a gun. The trial judge sentenced the offender to three years for the extortion and two years and six months, respectively, concurrent on the firearms charges. He reduced the sentence by 18 months to reflect pre-trial custody. The B.C. Court of Appeal agreed that three years was a fit sentence for the extortion offence.

[23] In R. v. Coates, [2002] O.J. No. 5871 (Sup.Ct.) the offenders were associates of the Hell’s Angels who used their known association with that criminal organization as a threat to the victim. No actual violence was used. The offenders, who had criminal records of varying severity, received sentences of five years and three years, respectively.

6. Mitigating and Aggravating Factors

[24] The main aggravating factor in the credit card fraud enterprise is the size, scale, and sophistication of the criminal scheme. The fact that Mr. Hardiman has a criminal record for similar offences is also highly aggravating. It is obvious, despite convictions and jail sentences, including a sentence of two years in the United States, that he has failed to learn his lesson. I am certain that absent the sure knowledge that an even greater sentence will swiftly follow new convictions that he will continue to commit further offences.

[25] I accept that some of Ms. Rainville’s property has not been recovered. As Ms. Cremer rightly points out, however, it is difficult to tell whether some of her property went missing because it was taken by Mr. Hardiman or because it was lost during the course of the removal from the Barrie storage facility. As I noted in my judgment, Mr. Hardiman left some property with a friend and that property was subsequently returned. Mr. Hardiman, as I noted, has taken no steps to return the property or tell anyone where it can be found.

[26] There is no question that Mr. Hardiman is guilty of theft and possession of property obtained by crime but that does not mean that I accepted beyond a reasonable doubt that he still had possession of Ms. Rainville’s missing property or knew where it was. He may well, but I am not prepared to accept it as a fact for sentencing purposes beyond a reasonable doubt given that Mr. Welsch and Ms. Rainville were not credible witnesses. In other words, I do not accept it as an aggravating factor that Mr. Hardiman still has possession of some of Ms. Rainville’s property, or knowledge of its whereabouts. That said, the fact that the victim exaggerated the impact of the offence does not constitute a mitigating factor, either.

[27] In my view, the main mitigating factor is that Mr. Hardiman has lately taken steps to straighten out his life. He has found a part-time job and it appears that he has been doing well. He appears to be using some of the skills that he possesses in doing small repairs and maintenance. I certainly hope that he puts these skills to work when he is released.

7. Principles of Sentencing

[28] The critical principles of sentencing are set out in the Criminal Code and the case law and need not be repeated here. In my view, the most important principles are general and specific deterrence. Extortion is a crime of greed (at least in this case) that involves planning and some degree of sophistication, notwithstanding that Mr. Hardiman essentially took advantage of a target of opportunity. General deterrence is called for in relation to this offence.

[29] The credit card and forgery related offences also call for a stiff sentence in order to deter future fraudsters. These offences are quintessentially ones of greed. They require sophistication, capital investment, and significant technical knowledge. People who commit these offences obviously have skills that could otherwise be used productively, rather than for criminal purposes.

[30] Mr. Hardiman himself clearly requires specific deterrence. This is not his first brush with the law in terms of these types of offences. He has shown that jail sentences have not, to this point, deterred him from the same or similar offences.

[31] I do not wish to discount the possibility of rehabilitation, grim though the prospects appear for Mr. Hardiman. He obviously had some skills, although there is little evidence (until recently) that he has ever used them for anything other than criminal activity. As well, although he will be over 60 when he emerges from prison, he still has potentially productive years ahead of him. He will need to be productive in order to pay off the restitution orders and to support himself, and his wife if she will have him back. Thus, I give some weight to his prospects for rehabilitation.

8. Ancillary Orders

[32] There will be a restitution order in the amount of $18,000.00 to the Royal Bank of Canada, and a restitution order of $4,793.00 to the Bank of Montreal.

[33] Given that extortion is a primary designated offence, there will be a mandatory order for the taking of Mr. Hardiman’s DNA.

[34] There will be a forfeiture order in relation to property seized by the Toronto Police Service from Mr. Hardiman’s storage locker and apartment.

9. Final Decision

[35] This case does not raise straightforward sentencing issues because of the mix of offences. Extortion is an extraordinarily serious crime, which is reflected by the maximum penalty of life imprisonment. The credit card and fraud-like offences carry lesser penalties (although still very significant ones) but in this case the credit card factories uncovered by the police were large, sophisticated, and potentially very dangerous to the economic health of the community. Both counsel presented positions that were reasonable and supportable in both the case law and the facts.

[36] Regarding the offences in relation to Ms. Rainville and her artwork, as I have emphasized extortion is always an extremely serious offence. This extortion and theft, however, fall towards the less serious end of the spectrum. The amounts involved were small, especially in relation to the value of the art. The extortion did not involve weapons, violence, or threats of violence. The victim, although she undoubtedly suffered, exaggerated the effects. As I have stated, however, her lack of sincerity is not a mitigating factor that assists Mr. Hardiman. It is simply not as aggravating as it could have been had the offence had a greater real impact on Ms. Rainville.

[37] It must be emphasized that the offences in relation to falsified or forged credits cards are not victimless crimes. It is true that the banks, which are large institutions, will reimburse customers for losses as a result of the actions of fraudsters like Mr. Hardiman. That, however, is not the point. As financial intermediaries, banks occupy a critical position in the economy. One does not need expert evidence to know that credit card fraud is insidious and harmful. It is tempting to think that the only people harmed are plutocrats who run the banks, but the truth is that we all pay when this crime is committed. Everyone in the economy has to use the financial system. The people who really pay are bus drivers, nurses, teachers, and factory workers. In other words, regular people who make their livings honestly are victimized through higher bank fees, insurance premiums, and taxes. Economic criminals, who are prepared to wreak havoc on the lives of individuals and on the general economy purely for the sake of their own greed, and have the skills to use their powers for good rather than ill, should not be treated gently.

[38] Were it not for the principle of totality, separate sentences of five years for the credit card fraud offences and two years less a day for the extortion and theft offences would be appropriate. That would take into account the seriousness of the combined offences, as well as Mr. Hardiman’s highly aggravating criminal record, and slight prospects for rehabilitation. A sentence of seven years would, however, offend the totality principle in these circumstances. In my view, a global sentence of five years is appropriate. This reduction as a result of the totality principle also takes account of the one month of pre-trial custody served by Mr. Hardiman. Thus, five years will be imposed in relation to the most serious credit card offences. Concurrent sentences of two years will be imposed in relation to the other credit card offences. A sentence of two years less a day in relation to the extortion offence will be imposed, concurrent to the most serious of the credit card offences. Concurrent sentences of 12 months will be imposed in relation to the other offences related to Ms. Rainville and her property.

[39] Thus, the sentences will be:

Count 7 (Possession of instruments intended for use in forging or falsifying credit cards): Five years.

Count 8 (Possession of instruments, devices, apparatuses, material or things that had been used or were adapted to be used to commit forgery): five years, concurrent to Count 7.

Counts 10, 11, and 12 (Fraudulent possession of credit card data that would enable a person to use a credit card): two years on each count, each concurrent to count 7.

Counts 13, 14, and 15 (Fraudulent use of credit card data that would enable a person to use a credit card): two years on each count, each concurrent to count 7.

Count 16 (Forging or falsifying credit cards): five years, concurrent to count 7.

Count 17 (Forging false documents with the intent that they be acted upon as genuine): five years, concurrent to count 7.

Count 1 (Theft over $5000): 12 months, concurrent to count 7.

Count 2 (Possession of property over $5000 obtained by crime): 12 months, concurrent to count 7.

Count 3 (Extortion): two years less a day, concurrent to count 7.

Count 4 (Intimidation with the intent to deprive property): 12 months, concurrent to count 7.

[40] As noted, there will also be a forfeiture order, a DNA order, and restitution orders.

[41] I thank both counsel for their very professional approach to this matter.

Goldstein J.

Released: February 11, 2014