CITATION: R. v. Pusey, 2016 ONSC 635
COURT FILE NO.: 13-70000071-0000
DATE: 20160201
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HER MAJESTY THE QUEEN
– and –
MARK PUSEY
John Scutt, for the Crown
Paula Seymour, for Mr. Pusey
HEARD: November 12, 13, 16, 17, 18, 19, 20, 2015
r.f. goldstein j.
REASONS FOR JUDGMENT
[1] The Fred Victor Centre operates group homes, shelters, and hostels. It provides services for indigent and marginalized people. FVC is a large organization. It does good and important work in Toronto.
[2] Mark Pusey was a staff director at FVC. He worked there from 2004 until 2010. He was the Director of Fundraising and Communications. Later his job title was changed to Director of Fundraising and Media Relations.
[3] FVC has a strict Code of Conduct. The Code of Conduct forbids employees from profiting from their employment. In the summer of 2010 two senior staff of FVC made a startling discovery. They discovered that two companies associated with Mr. Pusey had billed FVC thousands of dollars. They could not find evidence that these two companies did any real work. An investigation ensued. Mr. Pusey was suspended. He later resigned, although it is obvious that he resigned to avoid being fired.
[4] Mr. Pusey testified that these two companies were indeed his. He said, however, that they were part of an above-board, legitimate arrangement with Mark Aston. Mark Aston was the executive director of the Fred Victor Centre. Mr. Pusey said that he used the two companies to hire subcontractors for cash who would work cheap. He testified that there was no fraud or dishonesty. He said that it was all in pursuit of saving money for Fred Victor Centre and obtaining higher donation levels.
[5] Mr. Pusey is now charged with defrauding the Fred Victor Centre. Did he commit fraud? Or did he engage in legitimate business transactions? As will shortly become obvious, I do not believe Mr. Pusey and his evidence does not leave me in a state of reasonable doubt. For the reasons that follow, I find him guilty of fraud.
FACTS
[6] Throughout these reasons I will refer to the Fred Victor Centre and FVC interchangeably. They both mean the same thing.
[7] FVC is a registered charity. It was founded in 1894. It concentrates on social services. The FVC provides services to the most marginalized people in our society. The FVC works with people who are homeless and live in extreme poverty. FVC also works with people – often the same people – who have mental health issues. The FVC assists them in finding housing and shelter, and helps people to rebuild their lives.
[8] The activities and operations of the Fred Victor Centre are funded under a variety of funding envelopes. A combination of municipal, provincial, and federal governments provide the majority of the funds. The Fred Victor Centre also relies on private donations. FVC’s books and records, including the donation records, are fully audited each year.
[9] Mr. Pusey was hired by FVC in 2004 as director of fundraising and media relations. He held that position until August 16, 2010, when he was suspended.
[10] In the summer of 2010, the fundraising department consisted of two people: Leah Cayabyab and Mr. Pusey. Jane Truemner, who was director of communications in the summer of 2010, testified that Ms. Cayabyab approached her about a disturbing matter. Ms. Cayabyab was very upset about an invoice from a company called Acire. Ms. Truemner immediately brought the matter to the attention of Jane Eastwood. Ms. Eastwood was acting executive director as Mr. Aston was on vacation. Ms. Truemner and Ms. Eastwood began to make inquiries. They discovered payments to Acire and payments to another unknown company, FWG. They were extremely concerned. The pulled cheques and invoices from the finance department. They discovered that the companies appeared to have billed for the same work, and that the work had, in fact, been done by a paid staff member, another subcontractor, or a volunteer. Mark Pusey had signed all of the cheque requisitions. They found at least some associations between Mr. Pusey and the two companies. They discovered that the cheques were cashed at a Toronto Dominion Bank near the Fred Victor Centre.
[11] Ms. Eastwood and Ms. Truemner told Mr. Aston what they had discovered when Mr. Aston returned from vacation. Mr. Aston immediately called in a lawyer to conduct an investigation. Ms. Truemner and Ms. Eastwood then went through Mr. Pusey’s office. They kept those documents that they deemed necessary for continuing to run the fundraising department and shredded the rest. They returned Mr. Pusey’s personal effects to him. They took his work laptop computer. The hard drive was mirrored and the contents of the drive were placed on the Fred Victor Centre server. Ms. Eastwood examined the contents in detail. The laptop has been preserved at the FVC.
[12] Mr. Aston, as executive director, had responsibility for the day-to-day operation of the Fred Victor Centre. He reported to the charity’s Board of Directors. As executive director he in turn supervised staff directors. Staff directors ran a department. Mr. Pusey, Ms. Eastwood, and Ms. Truemner, for example, were staff directors.
[13] Invoices are at the heart of this case. Invoices from companies or contractors who did work for the Fred Victor Centre would go to the responsible staff director who had contracted for the work. That staff director would ensure that the work was within his or her budget and that the work had been done. The responsible staff director would then create a cheque requisition and initial the invoice. The cheque requisition would go to the finance department. The finance department would cut a cheque. The package – including the invoice, the cheque requisition, and the draft cheque – would go to two people with signing authority. Two staff directors were required to sign for amounts below a certain threshold; Mr. Aston or a member of the Board was required to sign for amounts above that threshold. The two staff directors would check to make sure that the backup documents matched the cheque. They would then each sign the cheque. The authorized signers were not responsible to double-check that the work was done. That would have been impossible given the volume of cheques. The system depended on the staff director creating the cheque requisition for that. There was a roster of staff directors who took turns signing cheques.
[14] Between September 23 2008 and July 16 2010, FWG issued 25 invoices to the Fred Victor Centre. Mr. Pusey caused the Fred Victor Centre to make payments on those 25 invoices. Between February 12 2009 and June 29 2010 Acire issued 19 invoices to the Fred Victor Centre. Mr. Pusey caused the Fred Victor Centre to make payments on those 19 invoices. A total of $115,094.00 was paid out to Acire and FWG.
[15] When cheques were issued, they would be kept at the reception area. They would be signed for in a book. Unfortunately, only one of these books was available for trial. The book shows that during those times when a cheque was issued to FWG or Acire Mark Pusey picked it up.
ANALYSIS
[16] The essential elements of the crime of fraud are very simple. The Crown must prove, beyond a reasonable doubt, that Mr. Pusey:
• Deprived the Fred Victor Centre of something valuable or placed the economic interests of the Fred Victor Centre at risk of deprivation; and,
• Did so dishonestly.
[17] See: R. v. Olan, 1978 9 (SCC), [1978] 2 S.C.R. 1175; R. v. Theroux, 1993 134 (SCC), [1993] 2 S.C.R. 5; R. v. Zlatic, 1993 135 (SCC), [1993] 2 S.C.R. 29.
[18] Mr. Pusey has provided a detailed explanation. Do I believe him? If I do, that is the end of the matter and I must find him not guilty. Even if I do not believe him, if his evidence leaves me in a state of reasonable doubt I must acquit: R. v. W.(D.), 1991 93 (SCC), [1991] 1 S.C.R. 742. I am aware that I must determine whether the evidence as a whole leaves me in a state of reasonable doubt.
[19] As is common in fraud cases, many of the basic facts are not in dispute. It is not disputed that Mr. Pusey requisitioned cheques to pay two companies, Acire and FWG. It is not disputed that Mr. Pusey was the principal behind those two companies. It is not disputed that the cheques were deposited into the Acire and FWG bank accounts. It is not disputed that Mr. Pusey controlled those two bank accounts. There are other basic facts, however, which are in dispute. I will go through them as I go through the evidence in detail.
[20] I will deal with the evidence first by examining the defence theory. I will then analyze each important category of evidence. I will not attempt to deal with all of the evidence. Rather, I will analyze the key points. Thus, my analysis will unfold in this way:
(a) Did Mr. Pusey Use FWG and Acire To Save Fred Victor Centre money?
(b) Were There Signed Contracts Between Fred Victor Centre and Mr. Pusey’s Companies?
(c) Was There A High Net Worth Campaign Or Prospect Mailing?
(d) Did FWG and Acire Actually Do Any Legitimate Work?
(e) Was There A Corporate Research Project?
(f) Who Picked Up Cheques For Acire and FWG?
(g) Was There A Conspiracy To Frame Mr. Pusey?
[21] I will deal with each of these issues in turn:
(a) Did Mr. Pusey Use FWG and Acire To Save Fred Victor Centre Money?
[22] Mr. Pusey testified that FWG and Acire were his companies. His evidence was that he used the two companies in order to save the FVC money. His basic explanation was that FWG and Acire billed FVC for work done by a network of subcontractors he knew. These subcontractors had day jobs where they were paid regular salaries. They would do FVC work on the side. There was, he said, a tax advantage because these subcontractors would be paid in cash. In other words, he was aware that these subcontractors would not pay taxes on this income. He mentioned Emily Stover, Andy Lee, Mohanish Ghandoor, Paula Bowles, and Monica Hughes.
[23] Mr. Pusey said that FWG or Acire would bill FVC for the work done by these subcontractors. FWG or Acire would receive a cheque. He then deposited the cheque in the FWG account and transferred it to his own account. He said he used his own account to pay cash to this network of subcontractors. He said that Mr. Aston was well aware of the scheme. He said that there was evidence of work done by his cash subcontractors in his office at FVC, such as the high net worth newsletter. He also said that there are documents that were removed from his laptop computer and the FVC server.
[24] There are no documents to back up the defence theory, other than the so-called contracts between FVC and Acire and FWG. These so-called contracts were signed by Mr. Pusey and Mr. Aston, at least according to Mr. Pusey. I will deal with the alleged removal of documents and the alteration of Mr. Pusey’s laptop computer later in these reasons in more detail but for now suffice it to say that I reject any notion of a conspiracy to frame Mr. Pusey.
[25] The basic premise of Mr. Pusey’s explanation is, frankly, absurd. In essence, he said that FVC was party to a tax evasion and money laundering scheme. He also said that the scheme was discussed with Mr. Aston. He said Mr. Aston approved of the scheme. In the absence of highly compelling evidence – and there is none – I simply do not accept that the senior management of a large and reputable charity that is highly dependent on government financing would engage in a tax evasion and money laundering scheme to save what must have amounted to only a tiny amount of money in the overall budget. There is also not a shred of evidence – except from Mr. Pusey’s testimony and no one else’s – to support that. Furthermore, some of the examples clearly show that real subcontractors actually charged less than Acire and FWG.
[26] Furthermore, Mr. Pusey clearly violated the FVC Code of Conduct by using FWG and Acire in this way. The Code of Conduct – which Mr. Pusey acknowledged in December 2007, shortly after the revised policy was promulgated – forbade conflicts of interest and required employees to declare conflicts of interest. Mr. Pusey’s use of FWG and Acire was an obvious violation of the Code. Mr. Pusey was well aware that it was an obvious violation. That is corroborated by the definition of “fraud” found on his laptop computer. I did not believe Mr. Pusey when he said that Mr. Aston indicated to him that there was no conflict of interest. I also did not believe Mr. Pusey when he said that he has no idea how the “fraud” definition file got on his computer. I find as a fact that he did research on the point. I accept Mr. Aston’s evidence that he would never have accepted doing business with Mr. Pusey’s companies.
[27] I saw absolutely nothing in Mr. Aston’s evidence that would lead me to think that he would knowingly jeopardize the reputation of the Fred Victor Centre, or his own, by engaging in a scheme that had as its object tax evasion by a group of unknown people. How on earth would Mr. Aston have explained that to the Board of Directors if an audit of the payments to Acire and FWG took place? Furthermore, if it was proper and above-board, then why didn’t Mr. Aston simply tell Ms. Eastwood and Ms. Truemner? Why hire a lawyer to conduct an investigation? What if Mr. Pusey decided to produce the so-called original contracts? How would that have looked?
[28] I note that friendly or neutral witnesses who might have corroborated Mr. Pusey’s story contradicted him.
[29] Mr. Pusey said that he was a full partner in the companies with his cousin, Brian Whittaker. They ran the companies together. After Mr. Pusey left FVC the companies were continued under the guise of Heathwood Consulting. Brian Whittaker testified that he had never heard of FWG or Acire. He said he had some minor involvement in Heathwood Consulting. He said he had a 3% or 5% interest. He could not remember the amount. He testified that it never came to anything. He also said that he was not an expert on charities. He said he gave Mr. Pusey some advice regarding financing. I find that Brian Whittaker did no work for FVC. He was not involved in a “corporate research project”. He may have briefly done some volunteer work, but that was the extent of it.
[30] The registered address of FWG was 30 Panama Court, Suite 203, Toronto. That is the residence of Donald Whittaker. Donald Whittaker is Brian Whittaker’s father and Mr. Pusey’s uncle. He had no knowledge of FWG. He said that the address is just 30 Panama Court, and that there is no suite number. He never received any mail for FWG. Brian Whittaker also had no knowledge of Acire or FWG using 30 Panama Court.
[31] The registered address of Acire was 42 Timbercreek Drive, Toronto. That was the address of Mr. Pusey’s parents. One interesting note is that Acire is Erica spelled backwards. Erica is the name of Mr. Pusey’s partner and mother of his child. Mr. Pusey denied that there was any connection.
[32] I find that Mr. Pusey used the addresses of Panama Court and Timbercreek in order to hide the fact that he was the true principal behind the companies. There was no need to use those addresses if the arrangement with FVC was above-board. I reject Mr. Pusey’s evidence on this point. It does not leave me in a state of reasonable doubt. I accept the evidence of Donald Whittaker, Brian Whittaker, and Milton Pusey. They testified honestly, notwithstanding their close family connection to Mr. Pusey.
[33] Mr. Pusey testified that his home address and that of his family members would have been well known to Mr. Aston, Ms. Truemner, Ms. Eastwood, and other senior staff at FVC. Some of his relatives had done volunteer work or attended a gala, he said, which would have meant that their home addresses were known.
[34] I rather doubt that. It may be that some staff members knew the addresses of other staff members. Mr. Pusey testified that there had been social events at his home. That is all the more reason why he would have used the addresses of his relatives. It is a rather fanciful notion that Mr. Aston, for example, running a large and diverse organization with many employees, would know the home address of Mr. Pusey’s uncle.
[35] Emily Stover testified. She testified that she did volunteer work. She denied taking cash on the side from Mr. Pusey. She also denied picking up cheques at FVC for Mr. Pusey. Andy Lee testified that he did both volunteer work and paid work. Indeed, there is an invoice (about which more, later) where he billed for work he did, and noted other work that he donated. He was paid directly by FVC for this work. He denied taking cash on the side for other work from Mr. Pusey. Mr. Lee and Ms. Stover appeared bewildered when it was suggested to them that they had accepted cash for their work. Their evidence, that they had not, was obviously true.
[36] I also note that the banking evidence does nothing to assist Mr. Pusey. In fact, it undermines his evidence. There is no doubt that cheques were deposited into the FWG and Acire accounts. There is no evidence that any other funds went into those accounts. Although there were occasional cash withdrawals from the accounts, there is no evidence that cash was withdrawn for the purpose of paying cash subcontractors. In contrast, there is plenty of evidence that the funds were transferred into Mr. Pusey’s personal accounts, and used to pay his bills. There are no receipts from any of these subcontractors to show that they had been paid. I suppose it would not be unusual if they really were being paid cash – but how does that explain Mr. Pusey’s failure to keep any records whatsoever? How was he supposed to know who to pay and how much? Mr. Pusey testified that he was very well organized, but his organizational skills failed him time and again when it came to exculpatory evidence that might have been available.
[37] I turn now to the so-called contracts between FVC and Acire and FWG.
(b) Were There Signed Contracts Between Fred Victor Centre and Mr. Pusey’s Companies?
[38] Mr. Pusey testified that there were contracts between the FVC and his companies, Acire and FWG. These were consulting contracts. They showed that Mark Aston approved the strategy of hiring contractors for cash in order to save FVC money. These contracts, he said, were initially drafted on Mr. Aston’s computer. He said he and Mr. Aston each signed a copy. There were also two later original renewals. Thus, there would have been four originals in Mr. Pusey’s desk as of August 16, 2010.
[39] Ms. Eastwood and Ms. Truemner testified that they did not find any Acire or FWG documents in Mr. Pusey’s office in August 2010. The defence theory is that Ms. Eastwood and Ms. Truemner were part of a conspiracy to frame Mr. Pusey, which is why they would have disposed of these documents. The implication of the defence theory is that Ms. Eastwood and Ms. Truemner found the original contracts in Mr. Pusey’s office and then destroyed them.
[40] Mr. Pusey came forward to this court with two documents. He said that they supported his defence. One purports to be a contract between FVC and FWG dated September 10, 2008. The other purports to be a draft contract dated January 28, 2009 between FVC and Acire.
[41] The contract between FVC and FWG is a copy. It bears the signatures of Mr. Aston and Mr. Pusey. The contract states that FVC would retain FWG for fundraising and communications. The contract further indicates that FWG would work with FVC staff on “High Net Worth Individual Giving Initiatives”, “Corporate Research”, and “Special Projects As Required”.
[42] The contract clearly bears Mr. Aston’s signature. Jane Eastwood testified that she found an electronic version of Mr. Aston’s signature in two folders on Mr. Pusey’s laptop computer and on a thumb drive found in Mr. Pusey’s office. Mr. Aston testified that this contract was a fake. He denied signing it.
[43] The file lists from Mr. Pusey’s laptop computer were entered into evidence. The file properties show that a .jpeg file on Mr. Pusey’s laptop computer named “Mark Aston’s Signature” has a “Created” date of December-05-08 and a “Modified” date of December-18-09. A .jpeg file on Mr. Pusey’s laptop computer named “MarksSignature Cropped” has a “Created” date of December-18-09 and a “Modified” date of December-11-08. The thumb drive found in Mr. Pusey’s office has a “Created” date of December-18-09. I conclude that Mr. Aston’s signature was uploaded to Mr. Pusey’s laptop in 2008 or 2009. The three Mark Aston signatures appear to be identical.
[44] The electronic signature taken from Mr. Pusey’s computer has an area of shading on it. That shading does not exist on the signature on the contract dated September 2008 document.
[45] A report from the Centre of Forensic Sciences indicates that the signature on the contract superimposes a reduced copy of the electronic version of the signature. The examiner states that the two signatures originate from the same source signature within the limits of practical certainty. In other words, the electronic version of Mr. Aston’s signature found on Mr. Pusey’s laptop is the same signature as that found on the “contract” between FCV and FWG. The report also indicates that it is possible to remove the shading by repeated photocopying.
[46] It is impossible to say whether the electronic version of Mr. Aston’s signature on the laptop is the origin of the signature on the document, or whether the signature on the “contract” is the origin of the electronic version of the signature.
[47] The Crown theory is that Mr. Pusey had an electronic copy of Mr. Aston’s signature (or scanned a document with Mr. Aston’s signature) onto his computer. He kept an electronic copy. After Mr. Pusey was suspended from FVC he created the September 8, 2010 contract as an exculpatory document. He superimposed Mr. Aston’s signature on it.
[48] The defence theory is that someone removed the original contracts from Mr. Pusey’s desk in December 2009 and scanned Mr. Aston’s signature. This person then uploaded the signature onto Mr. Pusey’s laptop computer, and on the thumb drive found in his office. That occurred some eight months before Mr. Pusey was suspended, and all without Mr. Pusey’s knowledge. Mr. Pusey testified that he had no idea how the electronic signature was uploaded onto his laptop. He testified that anyone would have been able to sign into his laptop as the passwords were kept by Leah Cayabyab and widely available.
[49] I simply do not accept the defence theory. I cannot think of any reason why some unidentified person would randomly take a particular contract from Mr. Pusey’s desk, scan the signature, and then upload it into two file folders on Mr. Pusey’s laptop computer and onto a thumb drive. If it was part of the conspiracy against Mr. Pusey, then it happened months in advance of the crystallization of that conspiracy. The defence theory defies sense. It is inconsistent with the forensic evidence. It is inconsistent with the bulk of the documentary evidence. It is inconsistent with the evidence of the other witnesses – all of whom, in contrast to Mr. Pusey, were credible.
[50] The Crown theory is obviously correct on this point. I therefore find that the Mark Aston signature on the so-called contract dated September 10 2008 was superimposed from the digital signature on Mr. Pusey’s computer. It is very clear from an examination of the signatures – even as a layman – that the signature on the so-called contract and the electronic signature found on Mr. Pusey’s laptop computer and the thumb drive in his office are identical: R. v. Malovoisin, [2006] O.J. No. 3931, 2006 CarswellOnt 5971 (C.A.). I completely accept Mr. Aston’s vehement denial that he signed the “contract”.
[51] Mr. Aston testified that it would not have been unusual for Mr. Pusey to have a copy of his signature for legitimate business purposes. I reject Mr. Pusey’s evidence that he has no idea how the signature got onto his laptop. It is obvious that he uploaded it.
[52] The evidence is clear that the so-called contract between FWG and FVC is a fake. So is the draft contract between Acire and FVC. Regrettably, by putting forward a document with a forged signature and presenting it as a legitimate contract Mr. Pusey has attempted a fraud on this Court.
[53] I turn now to the next aspect of the evidence, the so-called high net worth campaign.
(c) Was There A High Net Worth Campaign Or Prospect Mailing?
[54] Mr. Pusey testified that he created and implemented a high net worth campaign. He said that most of the efforts he made through Acire and FWG were directed towards high net worth donors. A newsletter for high net worth donors was created under his supervision. He said that his subcontractors put together the newsletter. These subcontractors were engaged and paid through FWG and Acire. He testified that Mark Aston was well aware of what he was doing and approved of it.
[55] I accept that there may have discussions of a high net worth campaign. There is some evidence to suggest that Mr. Pusey did discuss high net worth donors with Mr. Aston, and possibly with Ms. Truemner. I note that in the admin team minutes of April 13, 2010, there was mention of “the” newsletter. There was no mention of a second newsletter, or that there might have been more than one newsletter.
[56] I did not, however, believe Mr. Pusey when he said that there was a second newsletter. There is no evidence whatsoever to support his assertion. Nobody ever saw such a newsletter – except Mr. Pusey. Mr. Aston, the executive director, said that he was not aware of a newsletter. It is inconceivable that the executive director would not have known that there was a newsletter specifically created for high net-worth donors. Jane Eastwood did not see any copies of a second newsletter in Mr. Pusey’s office when she searched it. She did not see any copies or evidence of a second newsletter on Mr. Pusey’s computer. There was no physical evidence found. If this newsletter was so important for high net worth donors, how is it that nobody knew about it?
[57] Mr. Pusey testified that there were copies of the high net-worth newsletter in his office before he was suspended from FVC. He said that there was a box of these newsletters in his office before he went on vacation.
[58] There are only two possibilities regarding the second newsletter: either it was a secret, or it did not exist. I understand that there is no legal burden on Mr. Pusey to prove anything, but there is simply no evidence to corroborate his assertions about a second newsletter – and plenty of evidence to suggest that there was no such newsletter. I find that it did not exist. Ms. Eastwood and Ms. Truemner did not find a box of high net-worth newsletters in his office because there was no such newsletter. Mr. Pusey’s evidence on this point is not credible, and it is not plausible. It does not leave me in a state of reasonable doubt.
[59] It is the same with the prospect mailings. Mr. Pusey testified that he created and implemented a mailing to new donation prospects. He said that he used Acire and FWG to engage subcontractors to do this work. There are certainly cheque requisitions that show FWG and Acire were paid for prospect mailings. Mr. Aston testified that FVC stopped doing prospect mailings in around 2006 because they were expensive and produced few results. Nobody else was aware of a prospect mailing. Ms. Truemner and Ms. Eastwood certainly found no documentary evidence to support the notion of a prospect mailing in Mr. Pusey’s office. There was no evidence of a prospect mailing on Mr. Pusey’s laptop computer. I find that there was no prospect mailing.
(d) Did FWG or Acire Actually Do Any Legitimate Work?
[60] It does not matter whether or not FWG or Acire actually did any work. As long as the economic interests of the Fred Victor Centre were placed at risk, and that Mr. Pusey used deceit or dishonesty, that is enough. A conviction for fraud depends not on whether the victim loses money, but on whether the victim’s economic interests are placed at risk through dishonesty or deceit. Thus, even if FWG or Acire actually did legitimate work, a conviction could still follow because of Mr. Pusey’s deceit in hiding his involvement with FWG and Acire.
[61] Having said that, however, I have no hesitation in finding that neither FWG nor Acire did any legitimate work for the Fred Victor Centre. I also find that FWG and Acire invoiced for work that was done by others. The others were either volunteers who donated time, legitimate consultants, or paid staff members. I reject Mr. Pusey’s evidence that his so-called network of subcontractors did work on behalf of FVC. I will point to three examples: the work done by Andy Lee for the wine and cheese tasting event, work done by Emily Stover as a volunteer, and the work done by Michelle Fisher for direct mailings and thank-you letters.
[62] On May 7, 2010 Acire invoiced $2035.00 for materials relating to the 2010 Wine and Cheese Tasting & Art Event. That invoices included marketing materials, as well as “Concept Development, Graphic Layout/Design”. On April 23, 2010 FWG invoiced $855.00 for “Wine and Cheese Tasting Marketing Materials – Concept Development, Graphic Design/Layout”. Mr. Pusey said that it had to do with the high net worth campaign. He also explained that each company did different aspects of the wine and cheese event. Although he provided an explanation as to how that worked, I must confess that I am at a total loss to understand it.
[63] On August 18, 2010, sphere22 studio, Andy Lee’s company, submitted an invoice to the Fred Victor Centre for $750.00. That invoice included some paid design work that he did. The invoice also included donated services for which he did not charge. The description in his invoice was “2010 Fred Victor wine and Cheese Event Program Design”. Mr. Lee denied taking cash. I accept his evidence. I do not believe Mr. Pusey on this point. I have no difficulty finding that the Acire and FWG invoices are false and that these companies did no work. In contrast, I find that Andy Lee actually did work for FVC and donated his time.
[64] On March 24, 2009 FWG submitted an invoice to FVC for $3,777.00. The invoice indicated that FWG did website development, “Special thank-you Letter Development”, and prepared “Gala Communications Marketing Material”. Mr. Pusey testified that Emily Stover did that work. Mr. Pusey signed the cheque requisition on March 25, 2009. A cheque for $3,777.00 was issued on March 26, 2009. Mr. Pusey deposited the cheque in the FWG bank account on March 26, 2009 and transferred it to his personal account on the same day. He testified that he transferred the money to his personal account so that he could pay his subcontractors in cash. He said it was easier just to transfer it to his own account. He did not like carrying that kind of cash around with him and he did not like carrying the FWG bank card around with him. Ms. Stover testified that she did not accept cash. She was a volunteer. I accept Ms. Stover’s evidence. I do not believe Mr. Pusey’s evidence that she took cash in this way. Her evidence makes sense. As I said earlier, Ms. Stover was bewildered and confused when it was put to her that she was paid in cash. In any event, Mr. Pusey’s evidence on this point is implausible.
[65] On June 30, 2009 Acire Creative Group invoiced FVC for $275.00. The invoice indicated that it was for a T-Shirt design for the Acura Run. Jane Truemner testified that Mr. Pusey had started a charitable run. Mr. Pusey testified that Emily Stover did the design work for the T-shirt. Mr. Pusey signed the cheque requisition on July 9, 2009. The cheque was made out to Acire Creative Group. It was dated July 9, 2009. It was deposited on July 13, 2009. Mr. Pusey testified that Emily Stover picked up the cheque on his behalf. Ms. Stover denied it. I accept that Ms. Stover did some design work for the T-shirt, as she testified. I also believe her evidence that she did not accept cash and that she did not pick up cheques for Mr. Pusey (about which more, later).
[66] Michelle Fisher is a freelance marketing and communications consultant and a writer. Mr. Pusey contacted her in 2008 and she did some work on a direct mail campaign. She also did work on thank-you letters for the 2008 gala sponsors and ticket buyers. She invoiced FVC for that work. She charged FVC a reduced rate. She testified that she reduced her rates for charities. Ms. Fisher submitted several invoices that were duplicated by FWG or Acire. I will point to just a few examples.
[67] Ms. Fisher submitted an invoice dated April 20, 2009 to the attention of Mr. Pusey. She charged $1155.00, including HST, for the FVC Spring Direct Mail Campaign, including “interviews with Mark Aston and FVC Client”. Samples of her work were submitted into evidence. FWG submitted an invoice for $2825.00 dated 02/20/09 for “Spring 2009 Direct Response House Mailing – Interview & Letter Writing”. The cheque for $2825.00 was deposited into the FWG account. Mr. Pusey testified that there was a direct response mailing as part of the high net worth campaign. There is no evidence of a direct response mailing or a high net worth campaign other than Mr. Pusey’s testimony. There was no evidence of any such documents found in his office. There is no evidence that someone other than Ms. Fisher did any interviewing or letter writing. Mr. Aston, Ms. Truemner, and Ms. Eastwood were unaware of such a campaign. I reject Mr. Pusey’s evidence on this point.
[68] Ms. Fisher submitted an invoice dated July 18, 2009 to the attention of Mr. Pusey. She charged “$420.00, including HST, for “Thank-you letters for Spring DM Appeal Donors & An Evening of Wine & Cheese participants”. Samples of her work were submitted into evidence. FWG submitted an invoice dated 7/1/2009 for “3 Wine & Cheese Tasting Event Special Thank You Letters”. FWG charged $1,210.00 for 11 hours of work. The cheque for $1,210.00 was deposited into the FWG account. Ms. Fisher testified that 11 hours seemed like rather a lot of time. She only spent 4 hours on her thank you-letters. Mr. Pusey testified that the Michelle Fisher letters were different from the letters invoiced by FWG. They were for donations made at the event, he testified. There is no evidence of any such thank you letters other than Mr. Pusey’s testimony. There is no evidence that any draft or signed thank-you letters were found in his office. It was apparent to me that Mr. Pusey was improvising under cross-examination, as he frequently did. Why would he cause FVC to pay one of his FWG “subcontractors” more money than he caused FVC to pay Ms. Fisher for essentially the same work? The whole point of his scheme, supposedly, was to save the Fred Victor Centre money. Again, I reject his evidence on this point.
[69] Speaking of dancing around in cross-examination, I digress to note that this aspect of Mr. Pusey’s testimony was also an example of his highly selective memory. Mr. Pusey was able to remember things in startling detail when it suited him. For example, in looking at the donation records he could remember the names of individual donors and individual donations. In contrast, he could not remember the names of the clients of Acire and FWG prior to his work at the FVC. He could not remember contact information for any of his subcontractors.
[70] I turn back to the invoices.
[71] Ms. Fisher submitted an invoice dated April 27, 2010 to the attention of Mr. Pusey. She charged $1260.00, including HST, for the “Spring Direct Mail Appeal” including “Four client interviews, writing of direct mail letter and lift 12 hours”. A sample of her work was submitted into evidence. Acire submitted an invoice dated 2/8/10 for “Spring Direct Mail Appeal – Overall Concept Development, Research for appeal package”. Acire charged $1470.00 for the work. Mr. Pusey testified that this was a different spring direct mail appeal involving high net worth donors. He said that the work had been done by either Paula Bowles or Monique Hughes. I reject his evidence. There is no evidence that there was a high net worth campaign, as I have already mentioned.
[72] Mr. Pusey frequently mentioned that his subcontractors were Monique Hughes, Paula Bowles, Deepak Kalia, Mohanish Gondour, Emily Stover, and Andy Lee. In cross-examination, Mr. Pusey said that his contact information for these people (other than Emily Stover and Andy Lee) was no longer valid.
[73] Jane Truemner testified in cross-examination that she had never heard of Paula Bowles, Mohanish Ghandoor, or Monique Hughes. Mark Aston testified in cross-examination that he had never heard of Paula Bowles or Deepak Khalia. No other Crown witness was cross-examined about any of Mr. Pusey’s sub-contractors.
[74] It seems very strange that the trail of the four people who might have corroborated Mr. Pusey’s version of events has gone cold. Mr. Pusey testified that his former counsel had been in contact with them, but, somehow, that information is no longer available or no longer valid. Mr. Pusey acknowledged that he had provided the names to Detective Radford, the officer-in-charge of the case. Detective Radford pulled some photographs from the Ministry of Transportation database but Mr. Pusey said that none of the photographs matched the missing sub-contractors.
[75] In contrast, the three people who might have corroborated the subcontractor aspect of Mr. Pusey’s story have all denied it. As I have noted, Emily Stover and Andy Lee seemed bewildered and confused by the suggestion that they had received under-the-table payments. They denied it. Mr. Aston strongly denied that he approved of the scheme.
[76] I pause to note one other point about the work done: FWG and Acire did not ever charge HST to the Fred Victor Centre. Not a single invoice contains such a charge. In contrast, the invoices from Andy Lee and Michelle Fisher charge HST. Mr. Pusey was not asked about this in cross-examination (no doubt because there was already plenty of material upon which to cross-examine). I find this most interesting because, as a registered charity, FVC would have been entitled to a refund of HST that it paid out. If FWG and Acire were legitimate entities doing legitimate work, a charge for HST should have appeared on the invoices. I suspect that if Mr. Pusey were actually filing HST returns then he would have caused FWG and Acire to charge HST. I think the inference is there to be drawn that he was not, in fact, filing HST returns which means that FWG and Acire were not being run in a legitimate manner. Because he was not cross-examined on the point (although I raised it in submissions) I hesitate to draw that inference against him. That said, the HST issue does nothing to assist him, and there is plenty of evidence (beside the HST point) to find that Acire and FWG were not legitimate businesses.
(e) Was There A Corporate Research Project?
[77] FWG submitted an invoice for $3125.00 dated 12/09/09 for “Corporate Research Project – Final Invoice”. Mr. Pusey testified that Mohanish Ghandoor did this work. Jane Truemner testified that she asked Mr. Pusey about this invoice because there was an expense code that related back to the capital campaign. Mr. Pusey told her that the code was an error. She asked him about the corporate research project because she had never heard of it and it seemed like a lot of money when FVC could easily find information about donations from corporate sources. Mr. Pusey told her that it was in-depth research conducted by Brian Whittaker. Mr. Whittaker, he said, was an expert. Ms. Truemner asked if she could go to any presentations that were given about it. Mr. Pusey told her she could. She was never invited to a presentation on the project and never heard another word about it. As I have noted, Brian Whittaker denied having anything to do with a corporate research project.
[78] I find that there was no corporate research project. The invoice is a fraud.
(f) Who Picked Up Cheques For Acire and FWG?
[79] That brings me to the question of who picked up cheques on behalf of FWG and Acire. After June 30, 2009, all of the cheque requisitions named Emily Stover as the person picking up cheques on behalf of Acire. One cheque requisition for a cheque to FWG named Emily Stover on July 10, 2009. All of the other cheque requisitions for FWG named Brian Whittaker as the person picking up the cheques. Mr. Pusey testified that Ms. Stover picked up cheques on his behalf from the FVC on five or six occasions.
[80] Both Mr. Whittaker and Ms. Stover testified that they never picked up cheques from FVC. Both Mr. Whittaker and Ms. Stover testified that they never heard of Acire or FWG.
[81] There is no evidence that Ms. Stover actually picked up these cheques. The cheque pick-up register has an example of a cheques made out to FWG and Acire and picked up by Mark Pusey.
[82] I do not accept that Ms. Stover picked up any cheques on behalf of Mr. Pusey. I accept her evidence. I reject Mr. Pusey’s evidence on this point. His evidence makes no sense. Mr. Pusey indicated that there was no policy against FVC paying cash to anyone. If that was the case, then why not have cash requisitioned for Ms. Stover since she was coming in to pick up cheques in any event? Why go through the ruse of having a cheque made out to Acire?
[83] Furthermore, why have Ms. Stover pick up cheques at all on behalf of Mr. Pusey? After all, Mr. Pusey worked there – and she did not. I do not understand the point of having Ms. Stover make a special trip to the offices of the FVC to pick up a cheque on behalf of someone who was there anyway.
[84] Leaving aside the fact that Ms. Stover specifically denied it, I will give some concrete examples of why Ms. Stover quite obviously did not pick up cheques on behalf of Mr. Pusey.
[85] On December 18, 2009 Acire invoiced FVC $1540.00. Mr. Pusey testified that Paula Bowles and Monique Hughes did this work. Mr. Pusey signed a cheque requisition on December 29, 2009. The finance department issued the cheque December 30, 2009. The cheque was deposited into the Acire account on December 31, 2009. The funds were transferred into Mr. Pusey’s personal account on the same day. The chain of events leads to some questions which answer themselves: why did Ms. Stover pick up a cheque on behalf of Acire when she did not do the work, and was not getting any of the cash? Why did Ms. Stover go to FVC and deposit it to the Acire account on the same day when Mr. Pusey worked there? Was he on vacation so Ms. Stover did him a favour? If that was the case, why couldn’t the cheque wait until Mr. Pusey was back from vacation? Or did Ms. Stover pick up the cheque and walk down the hall to Mr. Pusey’s office to give it to him so that he could deposit it?
[86] Two further examples put nails in the coffin of assertion by Mr. Pusey that Ms. Stover picked up cheques and was paid in cash. The first nail is this: on February 8, 2010 Acire invoiced FVC $1,470.00 for the Spring 2010 Direct Mail appeal. Mr. Pusey testified that Monique Hughes or Paula Bowles did the work. Mr. Pusey signed the cheque requisition on February 23, 2010. Ms. Stover is noted as the pick-up person. FVC issued a cheque dated March 3, 2010. The cheque was deposited into the Acire account on the same day, March 3, 2010. The funds were immediately transferred into Mr. Pusey’s personal account. Somebody obviously picked up and deposited that cheque on the same day. Why would Mr. Pusey have Ms. Stover pick up a cheque from his office on the same day that he was going to the bank? There was no evidence that Mr. Pusey was not in his office that day. It was never suggested to Ms. Stover that she not only picked up the cheque but also deposited it. I infer that Mr. Pusey picked up the cheque and deposited it and Ms. Stover was not involved.
[87] The second nail is this: The same thing occurred with an invoice dated May 7, 2010 for $2035.00. Emily Stover was listed as the pick-up person. Mr. Pusey requisitioned the cheque on June 8, 2010. On June 11, 2010 the cheque was issued, deposited in the Acire account, and transferred into Mr. Pusey’s personal account. Again, why would Emily Stover have been involved in that process when it all took place on the same day? Why would she pick it up and give it to Mr. Pusey if he worked at FVC? Again, it was never suggested to her that she not only picked up the cheque but also deposited it.
[88] As for Mr. Whittaker, he was working as an investment advisor during this time period. No doubt he was rather busy, so it seems unlikely that he found time to pick up cheques for his cousin from his cousin’s workplace. Furthermore, he was living in Montreal for at least part of this time.
[89] I therefore find that Mr. Pusey used Ms. Stover’s name and Mr. Whittaker’s name on the cheque requisition forms as a ruse. The idea was to hide his own involvement in Acire and FWG.
[90] I turn now to the question of a conspiracy.
(g) Was There A Conspiracy To Frame Mr. Pusey?
[91] The defence theory is that there was a conspiracy to frame Mr. Pusey among the senior leadership of the FVC. In order for the defence theory to be correct, the presence of incriminating documents and the absence of exculpatory documents must be explained away. The conspiracy included the destruction of exculpatory documents in Mr. Pusey’s office and the erasing of exculpatory documents from the FVC server and Mr. Pusey’s laptop. The conspiracy also included changing codes on the donation records kept by the FVC. It is not clear to me if the alleged conspiracy also included Emily Stover and Andy Lee.
[92] In his evidence Mr. Pusey did not come out and say that there was a conspiracy against him. I asked Ms. Seymour directly and she confirmed that this was the defence theory.
[93] I will go through the key aspects of this conspiracy. As will become rapidly apparent, I find that there was no conspiracy to frame Mr. Pusey.
Did Someone Alter Mr. Pusey’s Laptop Computer Or Erase Documents From The FVC Server?
[94] Mr. Pusey said that he has examined the mirror image of his work laptop. He said that a great number of documents have ceased to exist. He does not know how that happened. He also said that he never had an electronic copy of Mr. Aston’s signature. He does not know how it got on his computer.
[95] I have already explained why I reject the notion that some unidentified person secretly scanned Mr. Aston’s signature from the contracts and stored it in two different places on Mr. Pusey’s laptop computer and on a memory stick. I simply do not believe that the map drive and the laptop computer were altered. I do not believe that someone removed exculpatory documents from his computer. For example, Ms. Eastwood, who went through the map drive, could not possibly have known the nature of Mr. Pusey’s future defence. How would she have known that Mr. Pusey would claim that there was a high net-worth campaign and that there were selective documents supporting that claim? Or the corporate research material? I find that there was no such material and nothing was removed.
Did someone remove documents from Mr. Pusey’s office?
[96] For the same reasons, I do not accept that someone deliberately removed exculpatory documents from Mr. Pusey’s office. I focus on his assertion that someone removed the “contracts” with Mr. Aston, and copies of the high net worth newsletters.
[97] Mr. Pusey testified that the original contracts were in his desk. Ms. Truemner and Ms. Eastwood testified that they did not find any contracts. They were both looking for Acire and FWG documents. They did find some, and turned those over to the police. Those documents were entered into evidence. It would take a great leap of logic to find that those two executives found these contracts in the summer of 2010 and somehow understood that they would be important to Mr. Pusey’s defence in the fall of 2015. Surely they would have drawn these contracts to Mr. Aston’s attention. Mr. Aston then could have cleared up the whole matter by explaining that he approved of everything Mr. Pusey did. He did not.
[98] It is the same with the high net worth newsletter. Mr. Pusey testified that there had been a box of these newsletters in his office. Ms. Truemner and Ms. Eastwood found no newsletters. None of Mr. Aston, Ms. Truemner, or Ms. Eastwood knew about a high net worth newsletter. There was no evidence that any such newsletter was ever produced or that any high net worth donor received one. No such documents were removed.
Did Someone Alter the Codes On The Donation Reports?
[99] Mr. Pusey testified that the prospect mailing or high net worth campaigns conducted by FWG and Acire generated donations that did not appear on the fundraising reports. FVC produced these reports at the request of the defence. Mr. Pusey said that many donations were incorrectly coded. He indicated that when the donations were received, they were properly coded by him or by people in his department. He said that the codes have since been changed. He pointed to donations in 2008, 2009, and 2010. He said that he was required to pull the donation reports from time to time. He would check them for accuracy. For some reason, he testified, the donation reports were correct when he worked there but the donation reports that were produced by the FVC are incorrect.
[100] He pointed to his own donations. He donated on a monthly basis to FVC. He made payroll deductions each month that added up to just over $1000 per year. He said that he should have been coded as a high net-worth donor. Indeed, he said that when he received the donation reports in 2010, his donations were correctly coded. The codes that have been entered on the recently disclosed reports are entered incorrectly, he said, because he is not identified as a high net-worth donor. He said that there is no record at all of his donations in 2009.
[101] I do not accept Mr. Pusey’s testimony. Ms. Truemner testified in reply that nobody at FVC had changed any donation codes. Given that neither she nor anyone else at FVC were aware of Mr. Pusey’s high net-worth campaign, it seems probable that there were no high net worth codes in 2008, 2009 and 2010. Furthermore, as Ms. Truemner pointed out, donations are fully audited each year. The donation reports are sent to the auditors annually. It would be inconceivable, she said, for someone to go in and change the codes.
[102] Even if Ms. Truemner had not testified, I would be hard-pressed to accept Mr. Pusey’s evidence on this point. That would have meant that the conspirators drilled down to an incredibly granular level just to frame him. Changing entire categories of codes that have already been audited seems like a lot of work for that purpose. Furthermore, it would expose Ms. Truemner and possibly others to great risk. Altering the codes after they have been audited seems to me a lot like fraud or forgery, both serious criminal offences. Given that there is no evidence a high net worth campaign even existed, and given the basic implausibility of Mr. Pusey’s evidence on this point I simply do not believe him.
Conclusions Regarding The Conspiracy To Frame Mr. Pusey
[103] Mr. Pusey has not been the victim of an elaborate attempt to frame him. There is no evidence to support that, other than Mr. Pusey’s own incredible testimony. The key forensic evidence involving Mr. Aston’s signature completely discredits the notion of a conspiracy.
[104] In any event, as is apparent from these reasons I find that Mr. Pusey’s evidence is a tissue of lies and he is not worthy of belief. Although a criminal trial is not a credibility contest, I note that if I were to accept the defence theory I would have to reject the evidence of every single other witness in this case, including witnesses with no interest in the outcome. I would also have to reject the evidence of his cousin, his uncle, and his father. I would also have to accept documents that are obviously fraudulent as accurate, and reject documents that are obviously accurate as fraudulent.
[105] Furthermore, a conspiracy to what end? The only possible explanation for a conspiracy among the senior management is that it was to cover up Mr. Aston’s involvement in the fraud. Mr. Pusey’s central point was that there was no fraud. If Mr. Aston were covering up his involvement in the fraud, that cover-up would undermine Mr. Pusey’s central point. That is very clearly why the conspiracy allegation is absurd. There was no conspiracy. The only person engaging in criminal behaviour was Mr. Pusey.
DISPOSITION
[106] At the end of the day, this was a simple case of employee theft and fraud. I find Mr. Pusey guilty.
R.F. Goldstein J.
Released: February 1, 2016
CITATION: R. v. Pusey, 2016 ONSC 635
COURT FILE NO.: 13-70000071-0000
DATE: 20160201
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HER MAJESTY THE QUEEN
– and –
MARK PUSEY
REASONS FOR JUDGMENT
R.F. Goldstein J.