Court File and Parties
COURT FILE: CRIMJ(P) 2005/12 DATE: 2016 06 02 ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
HER MAJESTY THE QUEEN A. C. Waite, for the Crown
- and -
SUKHRAJ ATWAL R. Boggs, for the Defence
HEARD: October 26, November 18, December 16, 2015 and February 16, March 21, June 2, 2016 at Brampton
REASONS FOR SENTENCE
HILL J.
INTRODUCTION
[1] After a trial, Sukhraj Atwal was convicted of forgery and fraud. It falls to be determined the fit sentence for these crimes.
FACTUAL OVERVIEW
[2] As the factual circumstances of the offences were extensively reviewed in the court’s reasons for judgment finding the offender guilty (2015 ONSC 4425), only summary reference is necessary. [3] The offender was retained as the external bookkeeper/accountant for a large corporation, Star Plastics Inc. [4] In an 8-week period in 2006, 97 cheques of Star Plastics Inc., totalling in excess of one million dollars, were issued with the forged signature of the company’s vice president. [5] Count #2 of the indictment, the forgery count, pleaded a forgery allegation relating to 84 of those cheques as described in trial exhibit #2A totalling $819,776.52. In finding the offender guilty of forgery, the court found as a fact that the offender forged those cheques without the authority of the company owner or the vice president whose signature she affixed to the corporate cheques. The factual record, having particular regard to timing, system and the identity of the payees on the relevant cheques, establishes beyond a reasonable doubt that the offender was responsible for the forgery of the additional 13 cheques listed in trial exhibit #12 totalling a further $195,954.51. [6] It was expressly agreed at trial that a number of the payees on the forged cheques had a direct connection to the offender including her own businesses (i.e. 1629262 Ontario Inc. and Leader Plating) or to commercial enterprises to which she was linked. As to the remaining cheques not directly linked to the offender, on the totality of the evidence at trial including acceptance of the evidence of the owner of Star Plastics, the forgeries, the rejection of Ms. Atwal’s submission that she had authority to receive the relevant monies, and the finding of a systemic pattern of dishonest behaviour on the part of the offender, the court finds as a fact that the offender was the intended beneficiary of $1,015,731.03 misappropriated from her employer by deceptive conduct. [7] On discovery of the apparent fraud, the victimized corporation reported the matter to the police. Various financial institutions were quickly contacted resulting in a number of the forged cheques not being processed. In the result, the actual loss to Star Plastics was $645,301.16. [8] At trial, the court heard evidence relating to bank accounts for some of the offender’s businesses which received funds defrauded from Star Plastics as well as evidence relating to the financial health of those business (see partial summary at paras. 45 to 48, 108-109). [9] In its reasons for judgment, at para. 116, the court reached this conclusion:
On the totality of the evidence, including consideration of evidence arguably favourable to the defence, the prosecution has established beyond a reasonable doubt that, without the knowledge or participation of Jasvir Dhami, Sukhraj Atwal forged 97 Star Plastics’ cheques and negotiated or attempted to negotiate those instruments to her personal benefit, without any actual or promised benefit to the corporation or its shareholder, thereby defrauding Star Plastics as alleged. Under financial pressures, and abusing her position of trust, the accused in effect resorted to using Star Plastics as a personal bank to satisfy her own needs.
VICTIM IMPACT EVIDENCE
[10] In his trial evidence, and as recorded in the victim impact statement of the owner of Star Plastics, the fraud imperilled the company’s continued viability with the significant loss occurring during a period of capital expansion by the corporation. [11] Insofar as civil proceedings relating to the offender’s misappropriation, at trial, Mr. Boggs recalled that judgment in the amount of about $700,000 was recovered against the offender. Counsel further submitted that at the time of this trial, two bank accounts related to the offender, totalling approximately $30,000, remained frozen by court order. [12] The September 2, 2015 Victim Impact Statement filed on behalf of Star Plastics described a “direct fraud loss of about $750,000.00” and legal fees of about $250,000.00 referable to related civil proceedings.
THE OFFENDER
[13] The offender is 54 years of age. She has no prior criminal record. [14] The offender married in 1983. She currently has two adult sons. The offender divorced in 2009. [15] Following schooling, the offender received her Certified General Accountant designation and became a self-employed accountant/bookkeeper commencing in 1992. [16] The Presentence Report (PSR) states that:
The offender provided the write with a list of friends and/or associates as collateral sources for the purpose of preparing this report. Efforts to contact some of the sources for input into this report were not successful. Her current bail surety expressed that he did not wish to be interviewed as collateral source, but took the writer’s contact information.
The offender reports that as a result of her divorce in 2009 she “lost everything” but she now feels financially comfortable. She reported financial obligations in the amount of $4000.00 in credit card debt. She also reports household expenses of about $3050.00 monthly.
[17] Currently the offender is employed for a couple of mortgage brokers assisting individuals with their mortgage applications. She earns approximately $7000 monthly. [18] Ms. Atwal regularly attends her church where she also performs volunteer work. [19] The PSR further reports that the offender:
“. . . stated that she accepts “responsibility for facilitating the offence” and she “regrets getting involved with the offence””.
THE RESTITUTION ISSUE
[20] In written sentencing submissions before the court on October 26, 2015, the offender submitted that:
There is also two [bank] accounts that were seized: One for approximately $12,000 and another with a remaining balance of approximately $19,000. This money was apparently obtained by Mr. Dhami through civil litigation.
$31,000.00 has been frozen by the bank. This represents about 5% of the total fraud. Ms. Atwal says she can make $1,000.00 payments monthly.
[21] The parties jointly submitted that in sentencing the offender the court should order that any monies seized and frozen in civil proceedings, and subject to an outstanding court order, should be released to Star Plastics by way of partial restitution. [22] With the court describing the details of the offender’s assets and of the degree of civil action recovery by Star Plastics as “murky”, the sentencing hearing was adjourned to November 18, 2015. [23] In a November 13, 2015 email to the court, sent with Mr. Bogg’s consent, Mr. Waite informed the court that Mr. Dhami and Star Plastics’ civil counsel were unaware of any monies frozen or seized from the offender for the benefit of the victim. Mr. Boggs had been unable to verify information relating to the frozen accounts because the financial institutions had archived the relevant account information. [24] The Superior Court of Justice (SCJ) Trial Coordinator forwarded a letter to counsel on November 16 to indicate that sentencing would not occur on December 16 as the court “requires clarification of the issues of any civil judgment pertaining to the funds defrauded from Star Plastics as well as the details relating to Ms. Atwal’s bank accounts as described to the Court on October 26, 2015”. [25] On November 18, the court adjourned the sentencing to December 16, instructing counsel to acquire and provide accurate and detailed information. The court raised the technical issue of the July 2015 amendment to the Criminal Code (s. 737.1(2)) requiring notice to a victim of the right to apply to the court for restitution. Mr. Dhami was present in court on this date. Mr. Waite spoke of obtaining a detailed summary from Star Plastics’ civil counsel for disclosure to the defence. Counsel also indicated that he had the “new” form for a restitution claim. Mr. Boggs indicated that he would draft an Order relating to the archived bank records. [26] On December 16, Mr. Waite confirmed that no restitution had been made by the offender and, to the knowledge of the Crown, no bank accounts had been seized to the benefit of Star Plastics. Crown counsel submitted as fact that Star Plastics’ recovery against the Royal Bank of Canada relating to certain of the forged cheques was $100,000. Counsel indicated that he could obtain documentary evidence relating to this. The defence reported that there was as yet no information from the relevant financial institutions but that, if it was not forthcoming by mid-January 2016, Orders would be drafted for the court to sign to compel production of the desired account information. Crown counsel informed the court that after discussions with Mr. Dhami, the Crown was not going to make a formal application for restitution. [27] On the February 16, 2016 return date, the court signed the production orders and adjourned the case to March 21. [28] On March 21, Mr. Boggs indicated that after serving the Orders certain documentation had been received. As of September 2015, a suspended Bank of Montreal bank account related to the offender had a balance of about $10,000.00. An Italian Credit Union account had a balance of $22,028.00. The Crown intended to investigate further as to whether any other claims existed respecting those monies. With an invitation to file relevant material in advance, the case was adjourned to today’s date for final submissions on the restitution issue with a direction to the parties to file an Agreed Statement of Facts in advance incorporating the necessary information.
POSITIONS OF THE PARTIES RESPECTING IMPRISONMENT
The Prosecution
[29] On behalf of the Crown, Mr. Waite submitted that general deterrence was the paramount sentencing consideration in this case of what was described as a large-scale fraud. It was submitted that the relevant authorities support a sentence of imprisonment in the range of three to five years. [30] As aggravating circumstances, counsel emphasized in particular the breach of trust, the number of dishonest transactions, the quantum of the loss, and the lack of voluntary cessation of the fraud. [31] Mr. Waite submitted that there is an absence of exceptional mitigating circumstances including the lack of a guilty plea, only qualified remorse expressed to the PSR author, and the lack of voluntary restitution.
The Defence
[32] While recognizing that the fraud identified by the court occasioned substantial loss in a breach of trust context, Mr. Boggs submitted that a fit sentence would be a conditional sentence of imprisonment having regard to two unique features of the case, which it is said temper the need to impose a sentence with a heavily deterrent quality - delay and the role of Jasvir Dhami. [33] It was submitted that with an arrest in 2009, three years after the fraud, and a trial in 2015, the offender has endured nine years of stress, uncertainty, reputation loss, and negative impact upon her employment opportunities. She lost her businesses. The delay itself was penal in its effect upon the defender. [34] Mr. Boggs submitted that Mr. Dhami was “not an innocent victim” - he did not have “clean hands”. It is said that through his pre-mid-August 2006 loans to the offender at exorbitant interest rates, part of a tax avoidance scheme on his part, he took advantage of the offender. Knowing the offender’s businesses were in need of financial assistance, Mr. Dhami’s short-term loans at usurious interest rates meant that he had a hand in worsening her financial situation to a point of such desperation that she embarked on a relatively unsophisticated fraud to meet her financial obligations including to Mr. Dhami. [35] It was submitted that the offender has a positive PSR and, in the over nine years since the offences, a stressful time for the offender, her behaviour is without criticism – specific deterrence is not an issue in this “one off” resort to criminality. A conditional sentence would facilitate ongoing restitution to the victim. [36] Mr. Boggs submitted that if the court was unpersuaded that a conditional sentence of imprisonment was appropriate, that a sentence of two years’ incarceration should be considered.
POSITIONS OF THE PARTIES RESPECTING RESTITUTION
[37] On today’s date, no documents were again filed by either party respecting restitution. Since the last appearance, Crown counsel had confirmed that a bank account of Leader Plating (Italian Canadian Savings and Credit Union (ICSCU): Acc. #7212-472) was frozen by order of the court in a civil action by Star Plastics to recover monies lost in the fraud. This information differs from information provided earlier to the court. The civil action has been effectively discontinued with the principals of Star Plastics disinclined to spend more money in a recovery process in that action or in seeking to fund the collection costs inevitably following upon the making of a s. 738 Criminal Code restitution order. The balance in this account is approximately $23,000.00. [38] Mr. Boggs submitted that the court ought to consider ordering restitution of the monies in the ICSCU bank account as well as the approximately $10,000.00 held in one of 3 BMO bank accounts related to the offender (Amlez International – 2-1484155; 1629262 Ontario Incorporated – 2411-1123-990; Taste of Glass Giftware Inc. – 0002-1481-843). It was submitted that these monies, totalling about $33,000.00 or about 5% of the overall actual loss, would serve to provide some reparation to the victim and should serve to inform the nature of the sentence to be imposed and its duration. [39] In terms of the availability of the remainder of the proceeds of the fraud to support a present ability to pay restitution, Mr. Boggs informed the court that the monies were dissipated in the offender’s losing efforts to “bailout” her businesses and accordingly unavailable for repayment to Star Plastics.
THE OFFENDER’S SECTION 726 ALLOCUTION STATEMENT
[40] Ms. Atwal personally provided this statement to the court when provided an opportunity to do so:
I would like to apologize for the victims’ loss. Sorry for the harm to the company and potential harm to the employees.
ANALYSIS
[41] The fundamental principle of sentencing is that the sentence imposed be proportionate to the gravity of the offence and the degree of responsibility of the offender: Criminal Code, s. 718.1; R. v. Lacasse, 2015 SCC 64, [2015] 3 S.C.R. 1089, at para. 12; R. v. Clouthier, 2016 ONCA 197, at para. 53. [42] There was little in the way of controversy between the parties as to the applicable legal principles. Having summarized many of these overarching considerations in R. v. Cunsolo, 2012 ONSC 114, (affd 2014 ONCA 364); and, in R. v. Williams, [2007] O.J. No. 1604 (S.C.J.), an overview will suffice here:
(1) “Fraud over $5,000 is a serious offence”: R. v. Bogart (2002), 167 C.C.C. (3d) 390 (Ont. C.A.), at p. 396, leave to appeal refused [2002] S.C.C.A. No. 398. (2) When sentencing for fraud involving substantial dishonesty, the principles of general deterrence and denunciation merit paramount consideration: R. v. Drabinsky and Gottlieb, 2011 ONCA 582, at paras. 160, 173, application for leave to appeal refused [2011] S.C.C.A. No. 491. (3) General deterrence tends to have greater impact in the case of embezzlement-type crimes, whether fraud or theft – criminal conduct where persons “usually plan and deliberate about it to some extent”: R. v. Dobis (2002), 163 C.C.C. (3d) 259 (Ont. C.A.), at pp. 272-3; R. v. Wismayer (1997), 115 C.C.C. (3d) 18 (Ont. C.A.), at p. 38; R. v. Gray (1995), 76 O.A.C. 387 (C.A.), at pp. 398-9 (leave to appeal refused, [1995] S.C.C.A. No. 116); R. v. McKinnon, 2005 ABCA 8, [2005] A.J. No. 12 (C.A.), at para. 60; R. v. Hoy, [1998] B.C.J. No. 1649 (C.A.), at para. 6; R. v. Reid, 2004 YKCA 4, [2004] Y.J. No. 3 (C.A.), at para. 13. Put differently, “law-abiding persons, with good employment records and families...are the ones most likely to be deterred by the threat of severe penalties”: R. v. Proulx (2000), 2000 SCC 5, 140 C.C.C. (3d) 449 (S.C.C.), at 503; see also Drabinsky, at para. 160. (4) “[A] sentence of six years is within the correct range of sentences for major frauds” and sentences in the 3 to 5-year range are common: Dobis, at p. 271; R. v. McGill, 2016 ONCA 139, at paras. 13-17; R. v. Khatchatourov and Keznick, 2014 ONCA 464, at para. 39; R. v. Witen, 2014 ONCA 694, at paras. 1, 25 (leave to appeal refused [2015] S.C.C.A. No. 287); R. v. Maxwell, 2014 ONCA 316, at para. 5; R. v. Dwyer, 2013 ONCA 34, at para. 12; R. v. Drakes, 2009 ONCA 560, at paras. 24-6 (leave to appeal refused, [2009] S.C.C.A. No. 381); R. v. Bertram, [1990] O.J. No. 2013 (C.A.), at p. 3; R. v. Wilson, [2003] O.J. No. 1047 (C.A.), at para. 5. The Dobis decision, at p. 273, includes at the lower end of “large-scale frauds”, the McEachern case ((1978), 42 C.C.C. (2d) 189 (Ont. C.A.)) involving $87,000 and the fraud in Pierce ((1997), 114 C.C.C. (3d) 23 (Ont. C.A.)) (leave to appeal refused, [1997] S.C.C.A. No. 225)) in the amount of $270,000, while a $200,000 defalcation was described by Juriansz J. (as he then was) as a large-scale fraud in R. v. Robinson, [2003] O.J. No. 4722 (S.C.J.), at paras. 4, 11. (5) The current s. 380(1.1) of the Criminal Code carries a mandatory minimum term of imprisonment of two years where the subject matter of the fraud exceeds $1,000,000. That provision is inapplicable here because the offender’s crime preceded passage of this Code amendment. While recognizing that “custodial sentences are the norm in cases of large-scale fraud” (R. v. Gour, 2014 ONCA 51, at para. 11), even where the offender is a first-time offender (R. v. Fratia, 2015 ONCA 460, at para. 6), and that “the jurisprudence of [the Ontario Court of Appeal] indicates that conditional sentences are not appropriate in cases involving convictions for large-scale frauds” where “penitentiary sentences are typically imposed in such cases” (Cunsolo (OCA), at para. 53) and are “rarely imposed in cases involving a breach of trust” (R. v. Silva, 2015 ONCA 301, at para. 4), the sentencing option of a conditional sentence was available when this fraud was perpetrated. Such a disposition has not been excluded from consideration in the past in breach of trust fraud cases; Dobis, at p. 273 and as discussed in R. v. Bunn (2000), 2000 SCC 9, 140 C.C.C. (3d) 505 (S.C.C.); R. v. Fiorilli, 2015 ONCA 328, at para. 6 (leave to appeal refused [2015] S.C.C.A. No. 261); R. v. Montoya, 2015 ONCA 786, at paras. 1, 14; R. v. Stewart, 2014 ONCA 715; R. v. Burkart (2006), 2006 BCCA 446, 214 C.C.C. (3d) 226 (B.C.C.A.); R. v. Gauthier (1998), 131 C.C.C. (3d) 177 (P.E.I.C.A.); R. v. Steeves and Connors (2005), 2005 NBCA 85, 200 C.C.C. (3d) 282 (N.B.C.A.); R. v. Robinson, [2003] O.J. No. 4722 (S.C.J.); R. v. Tulloch, [2002] O.J. No. 5446 (S.C.J.). While a conditional sentence, with properly tailored punitive conditions, can effect a measure of general deterrence and denunciation, many of these cases where a conditional sentence was appropriate involved pleas of guilt and/or certain exceptional mitigating circumstances. [43] The aggravating circumstances of the offender’s crimes are manifestly apparent including:
(1) the offences of fraud and forgery were planned and deliberate crimes not transactions of a spontaneous character or on account of a momentary lapse of judgment (2) after years of earned trust from her employers, the offender secured authorized access to Star Plastics’ cheques during her role of preparing accounts payable – in this “insider” position, the offender abused the trust of her employer through her dishonest conduct (a statutory aggravating factor pursuant to s. 718.2(a)(iii) of the Criminal Code) (3) the criminality continued for a period of weeks with dozens of forgeries and fraudulent cheques executed to the offender’s benefit (4) when the presence of Mr. Bishop’s signature was discovered on cheques unrelated to legitimate Star Plastics’ expenses, suspicion turned to this innocent individual however briefly – at trial, there was a suggestion that Jasvir Dhami forged the relevant cheques, a submission rejected by the court (5) the offender’s dishonesty resulted in a fraud of over one million dollars of risked loss to Star Plastics with an actual loss of $645,301.16, which imperilled the victim company’s continued viability (6) whether or not described as a sophisticated looting of the victim company, it is apparent that the offender carefully thought out the scheme, for example by creating Leader Plating to deceptively mirror the identity of a legitimate supplier to Star Plastics (7) the offender was caught – she did not terminate her criminal conduct on her own.
[44] In the balance, in mitigation, these factors fall to be considered:
(1) Ms. Atwal is a 54-year-old first offender (2) the offender’s criminality has resulted in negative stigma and the diminishment of reputation as well as loss of business opportunity (3) there is a generally positive PSR.
[45] Of course, in a large-scale fraud involving abuse of trust, the previous good character of the offender as a mitigating factor is blunted by the contextual reality that generally only a person of unblemished character can achieve a position of trust allowing them to handle someone else’s financial affairs. [46] While delay can be a relevant consideration in sentencing (Fiorilli, at para. 5), its significance is very much dependent on the particular facts. Where an offender is on bail not under onerous conditions, delay may be deserving of relatively little weight: R. v. R.S., [2005] O.J. No. 5181 (C.A.), at para. 3. All of the causes of the delay are not before the court. No s. 11(b) Charter application was brought at any point. In the Ontario Court of Justice, the offender was initially represented by Mr. A. Awan. On March 16, 2012, a defence application brought to adjourn the April 13, 2012 preliminary inquiry was denied by Atwood J. because the case was years’ old. Then about a month later (April 10, 2012), the offender discharged Mr. Awan resulting in his application to be removed from the record and a companion application to adjourn the preliminary inquiry. Once committed for trial, the offender began to appear in this court with a new counsel, Mr. R. Tomovski. A September 16, 2013 trial date was set on a ‘with or without counsel’ basis as Mr. Tomovski had not been fully retained for trial. On June 21, 2013, nearly a year after the case entered the SCJ and several remand appearances, Durno J. endorsed the indictment to read:
Mr. Tomovski is not retained for trial and is unavailable for trial. Ms. Atwal does not wish to apply for Legal Aid. Trial date remains with or without counsel.
[47] Ultimately, Mr. Boggs was retained to defend the case and a re-election to a judge-alone trial was made on June 19, 2014 with a March 30, 2015 trial date set on consent of the parties. There has been about an 11-month delay since judgment in this case, time largely taken up by a 1-month adjournment on account of defence counsel’s illness and delay in the offender clarifying the status of her existing assets said to have been frozen by court order. [48] Undoubtedly there has been some institutional and Crown delay as well. That said, in the present case, it cannot be concluded that there has been significant material delay. The offender’s bail conditions were not especially restrictive. Undoubtedly, the delay will also be a relevant facto to those considering the offender’s parole eligibility. The fact of delay from offence to sentencing, despite its duration, is of minimal mitigating impact on sentence in this case. [49] The pre-mid-August, 2006 loans advanced to the offender by Mr. Dhami through Star Plastics were intended as short-term loans to the offender from which Dhami intended to profit by not only the interest charged but also by circumventing return payment to the company by payment to him and his wife personally. I reject the Crown’s submission on sentencing that the pre-mid-August, 2006 payments to the offender were simply out-and-back non-loan book entries. [50] While the loans may have assisted the financial circumstances of the offender and her business interests, her agreement to the interest rates in effect presented a formidable challenge to her capacity to repay the monies. That said, resort to multiple forgeries, the creation of the artifice of Leader Plating, and the systematic plundering of Star Plastic’s bank account cannot be excused or seen as a matter of shared blame with Mr. Dhami. The offender was an intelligent person familiar with finance. She made choices. We have not heard from the offender as to the ultimate destiny and uses of the monies fraudulently obtained from the victimized corporation. [51] “A plea of guilty is an important mitigating factor”: R. v. Spencer (2004), 72 O.R. (3d) 47 (Ont. C.A.), at para. 38, leave to appeal refused [2005] S.C.C.A. No. 4. Where an offender maintains her innocence, she “cannot rely on remorse or an acknowledgement of harm to the victim” to reduce her sentence: R. v. Araya, 2015 ONCA 854, at para. 31 (conviction appeal allowed 2015 SCC 11, [2015] 1 S.C.R. 581). A sentencing court may take into account in the exercise of its sentencing discretion, not as an aggravating feature of sentencing, but as the absence of a factor entitling sentence reduction, and as relevant to whether restorative objectives can be satisfied in a particular case, an offender’s lack of remorse and acceptance of responsibility for his or her crime: R. v. Proulx, 2000 SCC 5, [2000] 1 S.C.R. 61, at para. 113; R. v. Valle-Quintero (2002), 169 C.C.C. (3d) 140 (Ont. C.A.), at p. 164; R. v. A. (K.) (1999), 137 C.C.C. (3d) 554 (Ont. C.A.), at p. 570; R. v. Valentini (1999), 132 C.C.C. (3d) 262 (Ont. C.A.), at paras. 81-3. [52] Ms. Atwal very deliberately committed forgery and fraud. These were calculated offences of dishonesty over nearly a two-month period calculated to strip funds from Star Plastics by means she believed would not be detected. On any account, this was a large-scale fraud involving a serious breach of trust. [53] Accepting that, despite the lack of a guilty plea or any unequivocal acceptance of responsibility, specific deterrence may not be overly relevant given the offender’s behaviour since the offences, nevertheless, a sentence proportionate to the gravity of the offences and meaningfully linked to the principle of general deterrence requires the imposition of a penitentiary sentence. A conditional sentence of imprisonment, in substance and duration, would be entirely unfit in all the circumstances. [54] Taking into account all of the circumstances including delay, the offender’s financial circumstances at the time of her crimes, and the limited restitution to be imposed, on the conviction for fraud, the offender will be sentenced to three years’ imprisonment. On the forgery count, a sentence of nine months’ imprisonment is appropriate. Having regard to the totality principle, the sentences are to run concurrently. [55] This court addressed in some detail the governing principles implicated by the exercise of discretion to impose a s. 738 restitution order in Cunsolo, at paras. 42-46 (affd 2014 ONCA 364, at para. 54). Such orders are designed “to provide reparations for harm done to victims” (Criminal Code, s. 718(e)), to specifically deter (Shi, at para. 14), and to deprive the offender of the illegally-obtained monies (R. v. Wa, 2015 ONCA 117, at para. 11). [56] A factor, but not necessarily a determinative factor, is the ability of an offender to pay restitution: Criminal Code, s. 739.1; Cunsolo (SCJ), at paras. 43 (9) (10), 44; Montoya, at paras. 14-15. At para. 12 of the Wa decision, the court stated:
When determining whether to impose a restitution order, the sentencing judge must consider the offender’s ability to pay. However, where the circumstances of the offence are particularly egregious, such as where a breach of trust is involved, a restitution order may be imposed even if there does not appear to be any likelihood of repayment: R. v. Castro, 2010 ONCA 718, 102 O.R. (3d) 609, at para. 28.
[57] In a fraud case, “[a]n important consideration in deciding whether and in what amount a restitution order should be made is the determination of what happened to the money”: R. v. Solleveld, 2014 ONCA 418, at para. 44. Where the evidence at trial or in a sentencing hearing does not establish where the proceeds of an offender’s fraud ended up, then the court, in considering the ability-to-pay issue, may appropriately look to the offender for some answer as to the ultimate destiny of the monies fraudulently obtained. These authorities highlight this subject:
In Johnson and Castro, the Alberta and Ontario Courts of Appeal respectively held that, in the context of a restitution order, past receipt of ill-gotten gains places a burden on the offender to explain where they have gone.
(emphasis of original)
(R. v. Topp, 2011 SCC 43, at para. 38)
… when assessing ability to pay a restitution order, the court may consider what disclosure has been made respecting where the money is or has gone. In fraud cases, bald assertions by offenders that they have no ability to make restitution are entitled to little weight when the offender has not explained where all of the stolen assets have gone: Castro, at para. 34. This consideration applies in the present case. Despite being an accountant, the appellant has been vague about what happened to over $1 million of the stolen money, and he has failed to provide detailed records or an explanation of the money’s use.
I do not accept this submission. Both defence counsel did make submissions on their clients’ ability to pay a restitution order in their sentencing submissions. The trial judge acknowledged their respective positions about their clients’ financial circumstances, but did not accept that there was an inability to pay. He noted that the appellants were still relatively young, with time to work for the money to pay the order, and that Mr. Khatchatourov’s business was doing well. He also took into account, appropriately, that the appellants had offered no explanation of what happened to the money that had been illegally obtained.
The appellant took a great deal of money … It needs to be recalled that the appellant has offered no explanation of what happened to the money in the period from her theft/fraud to the charges being laid.
(R. v. Fagan, 2013 ONCA 32, at para. 11)
See also Castro, at para. 40; Cunsolo (SCJ), at paras. 44-46; R. v. Johnson, 2010 ABCA 392, at paras. 23-24. [58] Since the commission of the fraud in 2006, the offender has made no restitution to Star Plastics. Although earning $7,000/mon., the offender has not, prior to sentencing, made any restitution from her current ability to pay. With the Crown not disputing the unavailability of the proceeds of the fraud for restitution purposes, an order of restitution effectively matching the funds of the earlier-described bank accounts is appropriate.
CONCLUSION
[59] Convictions entered on both counts. [60] On count #1, 3 years’ imprisonment is imposed. [61] On count #2, 9 months’ imprisonment is imposed to be served concurrently. [62] A s. 738 Criminal Code restitution order is imposed in the amount of $35,000.00 to the benefit of Star Plastics Incorporated.
Hill J.
DATE: June 2, 2016
COURT FILE: CRIMJ(P) 2005/12 DATE: 2016 06 02 ONTARIO SUPERIOR COURT OF JUSTICE RE: R. v. SUKHRAJ ATWAL COUNSEL: C. Waite, for the Crown R. Boggs, for the Defence REASONS FOR SENTENCE Hill J. DATE: June 2, 2016
