ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CRIMJ(P) 975/15 DATE: 20160610

B E T W E E N:

HER MAJESTY THE QUEEN C. Presswood, for the Crown

- and -

HABEEB AMJAD-BUTT A. Farooq, for the Defence

HEARD: April 25, 2016, at Brampton

REASONS FOR JUDGMENT

André J.

[1] On November 14, 2013, Toronto Police Services (“TPS”) Constable Luigi Trovats stopped Mr. Zeeshan Baz (“Mr. Baz”), the driver of a motor vehicle, and arrested him on a matter unrelated to these proceedings. A subsequent search of Mr. Baz’s vehicle revealed fifteen fraudulent debit and credit cards, which had all been obtained at a Bank of Montreal (“BMO”) branch in Malton. A BMO investigation later revealed that Mr. Amjad-Butt (“Mr. Butt”), a financial manager at the bank, had opened a number of accounts for Mr. Baz. The police charged Mr. Butt with the offences of fraud and conspiracy to commit fraud. The Crown submits that Mr. Butt’s guilt of the offences of fraud and conspiracy to commit fraud is the only rational inference that can be drawn from the evidence. The defence submits that Mr. Butt is simply the victim of a devious scheme perpetrated by Mr. Baz, who defrauded the Bank of Montreal the sum of $68,000.

SUMMARY OF THE EVIDENCE

[2] Joanna Szramek, a thirteen year veteran investigator, conducted an investigation of the bank’s internal records and surveillance system after receiving information from the TPS regarding the alleged fraudulent activity. She discovered that between October 10, 2012 and November 13, 2013, Mr. Butt opened 41 accounts. Video surveillance captured Mr. Baz attending the BMO branch where Mr. Butt worked on October 16 and attending at Mr. Butt’s office. While there, Mr. Butt opened four accounts in the names of Hamid Nakvi, Ghazala Rashid, and Zeeshan Mir. The two accounts opened in the name of Ghazala Rashid had an address of 3442 Angel Pass Drive, Mississauga, while that of Hamid Nakvi had an address of 155 Market Street, Unit 501, Hamilton, Ontario.

[3] Ms. Szramek explained that typically, a client is issued a credit card when he or she opens an account. The offer of a credit card is the bank’s welcome offer to new clients. A review of the accounts opened by Mr. Butt disclosed that with respect to many of the accounts, the alleged fraudster or fraudsters electronically deposited a fraudulent cheque in the account and proceeded to withdraw an amount of money from the accounts. Furthermore, the fraudulently issued credit cards were used in a number of transactions, with the BMO unable to be compensated for the expenses incurred through use of the credit cards.

[4] Mr. Butt also opened an account on October 9, 2013 for a company called Mirbaz Trends Inc. whose given owners were Zeeshan Baz, Maliz Usman Baz and Amina-Mir Baz.

[5] Mr. Butt opened two accounts on June 12, 2013 in the name of Zaheer Shah. A 2013 withdrawal slip for one of these accounts was found in Mr. Baz’s car.

[6] The TPS also recovered debit and credit cards issued by Mr. Butt to Mr. Baz on May 31, 2013, when the latter opened two accounts in the name of Jamal Akram.

[7] On May 9, 2013, Mr. Baz opened an account in the name of Emraan Khaan. Video surveillance captured Mr. Baz entering Mr. Butt’s BMO office that day. On November 13, 2013, Mr. Butt made a telephone call to his colleagues in the credit card department and requested that the credit card issued to Mr. Khaan be unlocked to enable the user to conduct business with the credit card. Mr. Baz was present in Mr. Butt’s office during the call. Another individual, Mr. Fariz Khan, arrived at the branch and subsequently left in Mr. Baz’s company. The TPS recovered the credit card issued in Mr. Emraan Khaan’s name in Mr. Baz’s vehicle.

[8] The officer testified that she was aware that bank employees have opened accounts for persons who were not physically present at the bank when the account was opened. She could not say whether or not the person in whose name a credit card was issued later attended at the bank to sign the appropriate documents.

MR. BUTT’S EVIDENCE

[9] Mr. Butt testified that as a Financial Services Manager (“FSM”) at the BMO he was pressured into meeting certain performance targets. He was responsible for “feeding the branch” with revenue-generating business by “selling” open accounts, credit cards, lines of credit and mutual funds. He was required to meet a target of selling 66 credit cards annually. Failure to meet these targets over successive quarters could result in demotion, or worse, loss of a job.

[10] At the time of the alleged incidents, Mr. Butt was struggling to meet his targets. He worked approximately twelve hours daily. He met approximately 15-20 persons daily but sometimes the numbers doubled to between 30 and 40. He was then meeting with clients for 5-10 minutes when he should have been meeting with them for an hour. He opened more than 400 accounts as an FSM.

[11] With respect to the transactions he conducted with Mr. Baz, Mr. Butt testified that he downloaded the documents to open the accounts and issue the credit cards found in Mr. Baz’s possession. He stated that the customers named in the documents attended at the bank on a later date and signed back-dated documents. Doing this violated the bank’s guidelines but was a common practice among bank employees.

[12] He maintained that he never believed that the documents presented to him by Mr. Baz were fraudulent, neither did he give Mr. Baz a credit card other than one issued in his name. He never gave a bank card to someone whose name was not on the card.

[13] Furthermore, the decision to issue a client a credit card was made by the bank’s credit department, not by him. Many of the persons in whose name the credit cards were issued had already provided their information to the bank and had received a customer welfare offer (“CWO”). These customers were automatically issued a credit card.

[14] Mr. Butt conceded that he was not supposed to be dealing with another client on the telephone in the presence of another client. However, many FSMs did this regularly.

[15] He made the call regarding Emraan Khaan in Mr. Baz’s presence because of the large number of clients he had to deal with.

[16] Mr. Butt maintained that he did not know Mr. Baz very well but was confronted with surveillance showing Mr. Baz entering the bank and Mr. Butt leaving the bank with Mr. Baz an hour later. He agreed that Mr. Baz spent a considerable amount of time with him on October 16, 2013 when he opened two accounts in the names of Rashid and Nakvi. However, Mr. Butt insisted that the person named Rashid later came and signed the account documents.

[17] Mr. Butt testified that he knew Mr. Hameed Tariq, who was his father’s tenant. He admitted that Mr. Tariq opened a number of accounts in other people’s names but not in his own name. He admitted, when confronted with video surveillance, that Mr. Tariq attended at the bank on October 9 and 19, 2013, to open accounts in the names of third parties. However, he denied that he received any money from Mr. Tariq for opening the accounts.

[18] He also admitted that both Mr. Baz and Mr. Tariq were in his office on October 22, 2013 and that Mr. Tariq opened another account on October 7, 2013 in the name of Akram.

[19] Mr. Butt denied that he ever told Mr. Baz or Mr. Tariq what documents they needed to open an account or that he gave Mr. Baz debit cards in the name of anyone other than Mr. Baz.

NIDA SAEED’S (“MS. SAEED”) EVIDENCE

[20] Ms. Saeed worked as an FSM with Mr. Butt for approximately nine months. She described him as a family friend and mentor.

[21] She stated that the bank exerted a great deal of pressure on FSMs to generate revenue for the bank by “selling” credit instruments and accounts to clients. There were instances when clients asked her to open accounts for persons who were not in the office. However, she never did so in the absence of a client, although she knew FSMs who had done so. She also asked clients for referrals.

[22] Ms. Saeed also had occasion to come to the bank and sign an application which was backdated to the date when the system printed the documents. The bank’s policy indicated that applications should be signed on the date they were processed but that policy was more honoured in the breach than in the practice.

CROWN’S SUBMISSIONS

[23] The Crown submits that: (1) It defies common sense that Mr. Butt hardly knew Mr. Baz given that he received information about third parties from Mr. Baz on October 16, November 7 and November 13, 2013. (2) The call made by Mr. Butt in Mr. Baz’s presence on November 13, 2013, constitutes the smoking gun that Mr. Butt was acting in concert with Mr. Baz. The very next day Mr. Baz was found in possession of fraudulent identification with Mr. Khan’s name. (3) Mr. Baz had debit cards for all accounts opened up by Mr. Butt. (4) Mr. Tariq did a transaction with Mr. Butt on November 6, 2013. The transaction receipt was found in Mr. Baz’s vehicle on November 14, 2013. (5) On November 13, 2013, Mr. Butt unblocked a fraudulent card for Mr. Baz.

[24] The above constitutes cogent evidence of Mr. Butt’s involvement in fraudulent activity and a criminal conspiracy between Mr. Butt, Mr. Baz and Mr. Tariq.

DEFENCE’S SUBMISSIONS

[25] The defence submits the following: (1) There is no evidence when and how the conspiracy took place. (2) The evidence, at its highest, establishes that Mr. Baz and Mr. Tariq took advantage of Mr. Butt. (3) Ms. Saeed confirmed that the BMO’s rules and policies were routinely broken by its employees in an effort to generate sales. (4) The CWO permitted Mr. Butt to process credit cards for named applicants without questioning Mr. Baz or Mr. Tariq. Thirteen of the 41 transactions had pre-established credit histories which did not require Mr. Butt to conduct any inquiry into the authenticity of the information presented to him. (5) There is no evidence that Mr. Butt benefitted financially or otherwise from the alleged fraudulent transactions.

APPLICABLE LEGAL PRINCIPLES

[26] In conspiracy cases, the important inquiry is not about the acts done in pursuit of the agreement, but whether there was, in fact, a common agreement in the first place to which the acts are referable and to which the alleged conspirators were privy: see Papalia v. R; R. v. Cotroni, [1979] 2 S.C.R. 256, at 276-277; R. v. Root, 2008 ONCA 869, at para. 67.

[27] In R. v. J.F., 2013 SCC 12, at para. 43, the Supreme Court of Canada noted that:

Party liability should be restricted to conduct that aids or abets the formation of the agreement that comprises the essence of the crime of conspiracy. In all other cases, a conviction for conspiracy will not be absent proof of membership in the conspiracy.

[28] The Court proceeded to note that:

[A]greement is a central element to the offence of conspiracy. Conversely, an act done in furtherance of the unlawful object is not an element of the offence of conspiracy. Although such acts can serve as circumstantial evidence to support the existence of a conspiracy, they are not themselves a component of the actus reus of conspiracy.

[29] Finally, at para. 45:

Aiding or abetting the furtherance of the unlawful object does not establish aiding or abetting the principal with any element of the offence of conspiracy. It cannot ground party liability for conspiracy.

[30] The essential elements of the offence of fraud are: (1) that Mr. Butt deprived the BMO of a sum of money; (2) that Mr. Butt’s deceit, falsehood or other fraudulent means caused the deprivation; (3) that Mr. Butt intended to defraud the BMO; and (4) that the value of the property BMO was deprived of, exceeded $5,000.

ANALYSIS

[31] The Crown’s case against Mr. Butt is based on circumstantial evidence and as such is governed by the principle enunciated in Hodge’s case (1838), 2 Lew C.C. 227; 168 E.R. 1136, that in order to find Mr. Butt guilty of either offence, I must be satisfied beyond a reasonable doubt that his guilt is the only rational conclusion I can draw from the evidence. In making that determination, I am also required to apply the following principles regarding Mr. Butt’s testimony: (1) If I believe his testimony that he was not involved in any fraudulent activity with Mr. Baz and Mr. Tariq, I should acquit. (2) If I disbelieve Mr. Butt’s testimony but nevertheless find that it is capable of raising a reasonable doubt in the Crown’s case, I should acquit. (3) Even if I disbelieve Mr. Butt and find that his evidence is incapable of raising a reasonable doubt, I must still be satisfied of his guilt beyond a reasonable doubt based on the totality of the evidence that I accept in order to convict.

[32] Turning to the charge of fraud over, Crown counsel must prove each of the essential elements of this offence beyond a reasonable doubt. There is no question that on account of opening the forty-one accounts on behalf of Mr. Baz and Mr. Tariq, Mr. Butt deprived BMO of the sum of $68,000. The fundamental questions regarding this charge are whether Mr. Butt’s alleged deceit caused the deprivation and whether Mr. Butt intended to defraud the BMO.

[33] Did Mr. Butt act deceitfully when he opened the accounts in question? He has testified that he did not. He indicated that he hardly knew Mr. Baz; that the pressure on FSMs caused him to open accounts and issue credit cards without having the intended cardholder present and that he made the call on November 13, 2013 with Mr. Baz present because of the pressures of work, rather than because of any conspiracy between Mr. Baz and himself.

[34] Mr. Butt’s testimony that he hardly knew Mr. Baz defies common sense. Mr. Baz visited Mr. Butt at his office on numerous occasions. On one occasion, he remained there for approximately one hour. On another occasion, he is seen leaving the bank with Mr. Baz. Mr. Butt was sufficiently familiar with Mr. Baz that he called the bank’s credit card department to lift a block placed on a credit card issued in the name of Emraan Khaan, which was found to be in Mr. Baz’s possession by the TPS the very next day.

[35] In my view, this evidence establishes conclusively that Mr. Baz was much more than just a passing acquaintance of Mr. Butt. He clearly knew him very well given that Mr. Baz visited him on a number of occasions to open accounts in the names of third parties. Surely, Mr. Butt would not engage in that activity with someone he hardly knew. For these reasons, I disbelieve Mr. Butt’s evidence regarding his lack of knowledge of Mr. Baz and I find that it cannot reasonably be true.

[36] There is no question that pressures on FSMs at BMO caused many of Mr. Baz’s colleagues to cut corners or violate bank policies regarding the opening of accounts. However, given the information received from Mr. Baz and Mr. Tariq, Mr. Butt knew that the information given to him regarding the identity of the credit card holders was fraudulent.

[37] For example, two accounts opened in the names of Ayesha Ghani and Zeeshan Mir Baz had identical addresses. Similarly, an account opened in the name of Ghazala Rashid, on October 16, 2013, had the same address as that opened on November 7, 2013 and November 13, 2013. The same applies to an account opened on October 16, 2013, in the name of Zeeshan Mir, which are two of the given names of Mr. Baz. Another account opened on June 3, 2013, has the names of Mir Baz, two of the given names of Mr. Baz, with a different address. It is simply inconceivable that Mr. Butt would have been unaware that Mr. Baz was opening accounts in names of “persons” whose names were derived from his own.

[38] The explanation given by Mr. Butt concerning the pressures of work does not explain why Mr. Baz managed to open these accounts without raising any suspicions in Mr. Butt’s mind. Indeed, the only rational conclusion to be drawn from this evidence is that not only did Mr. Butt know of Mr. Baz’s fraudulent activity but he was a willing participant.

[39] The evidence regarding Mr. Butt’s interaction with Mr. Baz on November 13, 2013 confirms this conclusion. Mr. Butt met Mr. Baz in his BMO office. Mr. Butt made a call seeking to remove the block placed on a BMO card issued to Mr. Emraan Khaan. Mr. Butt testified that he made the call in Mr. Baz’s presence because of the sheer volume of meetings he had with his clients. He also testified that he never gave Mr. Baz a bank card which was issued in someone else’s name.

[40] However, the fraudulent documents found in Mr. Baz’s vehicle the very next day lead me to conclude that Mr. Butt’s evidence is unworthy of belief and is incapable of raising a reasonable doubt. Among the documents recovered from Mr. Baz were a series of Government of Canada identification cards with Mr. Baz’s photograph. Each card contained different names including Jamal Akram, Peter Songhar, Farooq Abli, Jawad Akhtar, Mansoor Hasan, Shakel Ali and significantly, Emraan Khaan. Furthermore, the TPS recovered a number of BMO Mastercards in Mr. Baz’s care in the names of Jamal Akram, Imam Mustafa, Shakeel Ali, Bahrooz Ahmed and Emraan Khaan. It is simply inconceivable that Mr. Butt did not know that Mr. Baz had opened accounts and had received BMO credit cards under a number of fictitious names.

[41] For the above reasons, I find that the Crown has proven beyond a reasonable doubt that Mr. Butt defrauded the BMO as alleged in the indictment.

CHARGE OF CONSPIRACY TO COMMIT FRAUD

[42] Has the Crown proven beyond a reasonable doubt that Mr. Butt engaged in conduct that aided or abetted the formation of the agreement that comprises the essence of the alleged conspiracy?

[43] In answering this question, I remind myself that acts done in furtherance of the unlawful offence may constitute circumstantial evidence of the existence of a conspiracy, even though they are not themselves a component of the actus reus of conspiracy.

[44] In this case, Mr. Butt’s conduct constitutes evidence of an agreement to defraud the BMO. He was the lynchpin who opened the accounts and issued the credit cards to Mr. Baz and Mr. Tariq. The only rational inference to be drawn from the evidence is that he had formed an agreement with Mr. Baz wherein he would open accounts and issue credit cards to Mr. Baz in fictitious names. Mr. Baz would then fraudulently use the cards in transactions for which he would not be financially accountable. The only thing which Mr. Baz and Mr. Butt did not count on was the fact that Mr. Baz would be arrested and found in possession of the bogus ID and credit cards.

CONCLUSION

[45] The Crown has proven Mr. Butt’s guilt on both charges beyond a reasonable doubt.

André J.

Released: June 10, 2016

COURT FILE NO.: CRIMJ(P) 975/15 DATE: 20160610 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: HER MAJESTY THE QUEEN - and – HABEEB AMJAD-BUTT REASONS FOR JUDGMENT André J. Released: June 10, 2016