COURT FILE NO.: 141/13

DATE: 2018-04-09

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

HER MAJESTY THE QUEEN

– and –

JUN-CHUL CHUNG, KENNETH CHUNG and KATHLEEN CHUNG

David King, for the Crown

Jacqueline An, for Jun-Chul Chung

Susan von Achten, for Kenneth Chung

Simon King, for Kathleen Chung

HEARD: January 22 – 25, 26, 29 & 30, 2018 and February 1 & 2, 2018

REASONS FOR JUDGMENT

GRAY J.

[1] This case arises out of a Super 7 lottery that was conducted by the Ontario Lottery and Gaming Corporation (“OLG”) on December 26, 2003. The winning ticket was worth $12.5 million. It was apparently won by Kathleen Chung, and she was ultimately paid that sum by OLG.

[2] It is now contended that Kathleen Chung was not the rightful holder of the winning ticket. It is alleged that the winning ticket was improperly acquired through an unlawful scheme perpetrated by Jun-Chul Chung and Kenneth Chung, and the funds were unlawfully obtained by all three of them when they knew they were not entitled to them.

[3] It is further alleged that steps have been taken to hide the true source of the funds.

Background

[4] There are seven counts:

a) Count 1 – It is alleged that Jun-Chul Chung and Kenneth Chung stole lottery tickets during an eight-month period ending on February 6, 2004;

b) Count 2 – It is alleged that Jun-Chul Chung and Kenneth Chung were in possession of the lottery tickets referred to in Count 1;

c) Count 3 – It is alleged that Jun-Chul Chung and Kenneth Chung stole a winning Super 7 lottery ticket, said to be the property of Daniel Campbell;

d) Count 4 – It is alleged that Jun-Chul Chung, Kenneth Chung and Kathleen Chung possessed the winning Super 7 lottery ticket, knowing that it was obtained by the commission of an indictable offence;

e) Count 5 – It is alleged that Jun-Chul Chung, Kenneth Chung and Kathleen Chung did, by deceit, falsehood or other fraudulent means, defraud OLG of the sum of $12.5 million;

f) Count 6 – It is alleged that Jun-Chul Chung, Kenneth Chung and Kathleen Chung possessed all or part of the sum of $12.5 million, and property purchased with it, knowing that the money and property were obtained by the commission of an indictable offence;

g) Count 7 – It is alleged that Jun-Chul Chung, Kenneth Chung and Kathleen Chung used or transferred or otherwise dealt with all or part of the $12.5 million, with intent to conceal or convert the proceeds, knowing that they were obtained as a result of the commission of a designated offence.

[5] Kenneth Chung and Kathleen Chung are the children of Jun-Chul Chung.

[6] At the times material to the charges, Kenneth Chung was the operator of a variety store at 3500 Dundas Street in Burlington. The store was called “Variety Plus”. His father, Jun-Chul Chung, regularly worked in the store. On occasion, his mother worked in the store.

[7] Evidence was given, which I will describe in more detail later, that Jun-Chul Chung regularly worked in the store from 6:00 a.m. or 7:00 a.m. until at least 10:00 a.m. each day. It is unclear as to whether he also worked from 10:00 a.m. until noon.

[8] Kenneth Chung worked each day from noon until 10:00 or 10:30 p.m.

[9] Kathleen Chung did not work at the store.

[10] During the times relevant to the charges, Kenneth Chung was a registered agent for OLG, and could sell and validate lottery tickets for lottery games conducted by OLG. In the store was a lottery terminal which was connected to OLG’s central computer system. Through that terminal, lottery tickets could be sold, and if a customer wished to determine whether a particular lottery ticket was or was not a winner, it could be done by presenting the ticket to the cashier, who would run the ticket through the terminal. If the ticket was a winner, in any respect, a form of musical jingle would be played.

[11] One of the lottery games that was played at the relevant time was “Super 7”. A person playing the game could purchase a ticket known as a “quick pick”, that is, a ticket whose numbers would be generated by the computer, or the customer could select the numbers himself or herself. Depending on the combination of numbers on the ticket, various amounts could be won, if the ticket was a winner. The winning amounts could be anywhere from $10 up to the amount of the grand prize, which in the case before the court, was $12.5 million. If the winning amounts were relatively small, they could be paid by the store clerk, but if the amount was large, it had to be claimed through the head office of OLG.

[12] The purchaser of a Super 7 ticket could also, by paying an additional $1, play in a further lottery game known as “Encore”.

[13] In addition to potential monetary winnings, the purchaser of a Super 7 lottery ticket could also potentially win one or more free tickets. Sometimes a free ticket would automatically come with an Encore wager included. However, sometimes Encore would not be included and, in such a case, the customer would be asked whether he or she wished to purchase Encore. In order to close off that transaction for the customer, it would be necessary for the clerk to record whether Encore had or had not been purchased with the free ticket. Until the clerk did so, the transaction would not be closed.

[14] It should be noted that at the time relevant to the charges, namely, in 2003 and 2004, the winning musical jingle would be played if the customer won something, but there would be no indication as to whether the customer was only a winner in one respect or more than one. Particularly, there would be no difference in the musical jingle whether the customer was the winner of one free ticket or two free tickets.

[15] It would not be uncommon, if the customer had won two free tickets, that one of the free tickets would automatically come with Encore included, while the other ticket would not.

[16] Before getting into the details of the evidence as it relates to the particular charges before the court, I should note that sometime after those transactions took place, and ultimately Kathleen Chung was paid $12.5 million, there developed some controversy over the way in which OLG was administering its lottery games. One Bob Edmonds alleged that he had won a prize of $250,000, but that his winning ticket had been stolen by a clerk at a variety store. After some litigation, OLG eventually admitted that Mr. Edmonds was the true winner, and paid his claim.

[17] Subsequently, a number of suspicious wins came to light, including Kathleen Chung’s win, and the Ombudsman of Ontario conducted an investigation. The Ombudsman issued a report in 2007, in which it is fair to say that there was serious criticism of the way in which OLG apparently paid winnings to “insiders” under suspicious circumstances. One of the cases mentioned was Kathleen Chung’s win of $12.5 million.

[18] After the Ombudsman issued his report, the then Minister responsible for the OLG announced that the Ontario Provincial Police would be asked to investigate. The OPP did so, and the charges now before the court were laid in 2010.

[19] A number of pre-trial issues subsequently arose, which it is unnecessary to review in detail. I will only mention that some of the accused retained and discharged different lawyers at different times, and there has been significant delay in ultimately having the matter heard at trial.

[20] On January 3, 2017, Miller J. dismissed an application brought under s.11(b) of the Canadian Charter of Rights and Freedoms by Jun-Chul Chung and Kathleen Chung: see R. v. Chung, 2017 ONSC 13, [2017] O.J. No.4 (S.C.J.).

[21] On March 16, 2017, I dismissed an application brought by all three accused, pursuant to s.7 of the Charter and pursuant to the common law abuse of process doctrine, in which it was alleged that the prosecution was brought for a political purpose and as a means to deflect or evade criticism of OLG.

[22] I will now describe the circumstances under which Kathleen Chung claimed to be the holder of a $12.5 million winning ticket, and the events leading up to the payment of the prize. I will discuss the circumstances under which the winning ticket was issued, and the events leading up to those circumstances. I will then discuss the evidence as it relates to the allegations against Jun-Chul Chung and Kenneth Chung under counts 1 and 2.

[23] In early January, 2004, David Summers, who was a team leader in the prize office of OLG, received a telephone call from a woman who wanted to know the procedure for claiming the proceeds of a winning ticket. She claimed that the ticket belonged to her brother, and there were concerns about publicity if the ticket were claimed.

[24] Mr. Summers testified that he advised the woman as to what would be involved in claiming the ticket. With respect to any media coverage, he advised her that it would be better if OLG handled the media. He told her that generally certain information would be given to the media, including the details of the particular lottery, the amount won, the name of the winner, and the city in which he or she lived. When Mr. Summers asked the woman whether the ticket had been verified, she answered that it had been.

[25] Mr. Summers testified that the woman said she would contact OLG when her brother was in a position to claim the prize.

[26] Mr. Summers testified that on February 5, 2004, a woman came to the OLG prize office in Toronto to claim a prize of $12.5 million.

[27] The woman was Kathleen Chung. She said it was her ticket, and she had no brother. She said she wanted to keep her name confidential.

[28] Mr. Summers testified that he obtained from the computer system a Transaction Master Information Report (TMIR). A TMIR is a computerized record of lottery and gaming transactions conducted through the OLG computer system. It records wagers made and claims made. Among other things, the computer records the date and time of the transaction, the location of the transaction, the serial number of the ticket purchased and/or claimed, and the details of any winnings, whether it be cash or free tickets. Also recorded will be whether Encore was purchased or whether it was part of a free ticket.

[29] Mr. Summers ushered Kathleen Chung into the “Major Winner” room. Also present for all or part of the interview were Kathy Pittman, Jeremy Hayes, and Emilio Molinaro. Ms. Pittman was the manager of the prize office, and Mr. Hayes was the manager of Sales and Distribution. Mr. Molinaro worked in security.

[30] Mr. Summers had advised Ms. Pittman that he had had a previous telephone call from Kathleen Chung, and that she was not interested in a press conference.

[31] From the TMIR, it was apparent to Mr. Summers and Ms. Pittman that the winning ticket was actually a free ticket that had been generated from a ticket that had previously been purchased in St. Catharines. I will discuss the specific details of the purchases and validations of the specific tickets later.

[32] It is sufficient to note that, at this point, Mr. Summers and Ms. Pittman realised there was an issue as to the purchase of the original ticket. They asked Ms. Chung to explain where and when she purchased that ticket.

[33] Mr. Summers testified that Ms. Chung could provide no specific, or even general, information as to the time, date or location of the purchase of the original ticket. She said she thought she purchased the ticket either on Christmas Eve or Christmas Day. She was asked whether she goes to St. Catherines, and she stated that she does not go to St. Catherines.

[34] Mr. Summers had discovered that the store at which the free winning ticket was generated, and validated, was Variety Plus in Burlington, and that the agent at the store was Kenneth Chung. It was apparent that Kenneth Chung was likely the brother of Kathleen Chung.

[35] Mr. Summers and Ms. Pittman prepared a draft statutory declaration for Kathleen Chung to execute. Among other things, the statutory declaration stated:

a) Kathleen Chung was the sole owner of the ticket;

b) She received the ticket as a free play ticket at a variety store located at Dundas Street and Walkers Line in Burlington;

c) She received one other free play ticket at the time she received the winning ticket;

d) On December 27, 2003, she attended the same variety store, at which her ticket was verified as having won a $12.5 million prize;

e) She is the legal owner of the ticket and is not sharing the ticket with anyone, and she is not claiming the prize for any other person or group of people;

f) She is not related to or acquainted with anyone by the name of Kenneth Chung, who is the manager of a retail location.

[36] Mr. Summers testified that when the last-mentioned paragraph of the statutory declaration was pointed out to Ms. Chung, she started to cry and then admitted that Kenneth Chung was her brother. At that point, Ms. Chung was advised that the OLG would treat the matter as an insider win, and it would require further investigation.

[37] Mr. Summers testified that Ms. Chung did not say anything about doing deliveries for any business operated by her father. She never said she was in St. Catharines. She said she likely purchased the ticket in Burlington or Toronto.

[38] Kathy Pittman testified. In 2004, she was the prize office manager for OLG.

[39] She testified that she was involved in the meeting with Kathleen Chung on February 5, 2004. She said Ms. Chung presented the ticket, which had been validated. The requisite claim form had been filled out.

[40] Ms. Pittman testified that she and Mr. Summers particularly questioned Ms. Chung as to where and when she had purchased the original ticket, and whether she was affiliated with anyone at any of the relevant retail locations.

[41] With respect to the purchase of the ticket, Ms. Chung said she did not know where she had purchased it. She said she purchases tickets all over the place, and there is no pattern. When asked, she said she never went to St. Catharines. She said she did not know where she got either the original ticket or the winning free ticket.

[42] Mr. Summers had asked Ms. Chung if she was the person who had telephoned him earlier. Ms. Chung said she was, but that she did not have a brother.

[43] The same day, Ms. Pittman had a telephone conversation with Kenneth Chung. He advised her that Kathleen Chung is his sister. Kenneth Chung said Kathleen had lied in order to protect him. The ticket was her ticket, and she purchased it on her own.

[44] Ms. Pittman testified that the draft statutory declaration was prepared on February 5, 2004. When it was discussed with Kathleen Chung, she apologized for lying about not being related to Kenneth Chung. She said she did not work at the store. She did not say her father worked at the store.

[45] Ms. Pittman testified that she advised Ms. Chung that there were concerns, and that she should think about where and when she purchased the ticket. She was advised that she would be contacted the next day.

[46] Ms. Pittman testified that at 4:25 p.m. on the same day on February 5, 2004, Kenneth Chung called her, after Kathleen had left. He asked about next steps that would be involved in claiming the prize. She testified that Kenneth advised her that Kathleen owned the ticket, and that she had lied to try to protect the family.

[47] Ms. Pittman confirmed that Ms. Chung had advised that she had never been to St. Catharines, and that she had said nothing about doing any deliveries for her father’s business.

[48] Ms. Pittman testified that she called Kathleen Chung on February 6, 2004. She requested that Ms. Chung and Kenneth Chung come and meet with them. She advised Ms. Chung that OLG would need information regarding purchase of the ticket. She does not recall asking Ms. Chung to bring her father to the meeting.

[49] A meeting was arranged for February 10, 2004. Kathleen Chung, Kenneth Chung and Jun-Chul Chung all attended. Ms. Pittman and Emilio Molinaro attended for OLG.

[50] The Chungs were advised that there was concern as to where and when the ticket was purchased. Kathleen advised that she was unable to give any further details. She said she did not work at the store. Jun-Chul Chung worked at the store.

[51] The Chungs advised that the winning ticket was validated on December 27, 2003 between 9:00 a.m. and 11:00 a.m. The terminal at which the ticket was validated was operated by Jun-Chul Chung. In addition to working in the store, he operates a health food business, and Kathleen does deliveries for that business. Included are deliveries in St. Catharines. They provided a handwritten list of cities and locations where deliveries are made.

[52] The Chungs advised that Kenneth Chung had managed the store since June, 2003. Kenneth worked in the store for seven days a week from noon until 10:30 p.m. Jun-Chul Chung works in the store seven days per week from 6:00 a.m. until 10:00 a.m. or noon. Occasionally, Jun-Chul Chung’s wife works in the store.

[53] Kathleen Chung advised that she played various lotteries, and sometime used numbers for purchased tickets that related to family birthdays. She said she sometimes purchases Encore.

[54] The Chungs wanted to know what would happen if they could not provide purchase information. Ms. Pittman testified that they were told that OLG would need further information, including whether deliveries were made in St. Catharines on the day the ticket was purchased.

[55] The Chungs were advised that the file would be turned over to investigations at OLG. The investigator would be Frank Sirianni.

[56] A meeting took place on March 10, 2004. All three Chungs attended. Ms. Pittman and Frank Sirianni attended for OLG.

[57] Kathleen Chung was interviewed by herself by Ms. Pittman and Mr. Sirianni. Subsequently on the same day, Kathleen Chung and Jun-Chul Chung were interviewed. During the first interview, Kathleen Chung advised that her father had been validating a number of tickets, and at one point the musical jingle, signifying a winner, played. Her father said “you won”. Kathleen Chung advised that it took her a while to settle down, and she spoke to her brother and her mother on the telephone. She said she was in shock. She said her father told her to calm down, and she should go straight home. She went to her car to calm down, while she spoke to her brother and mother. She said she called them on her cellphone. She hung around the store for a little while, and then went home. She said she was not sure whether she might have stopped off for gas.

[58] Ms. Chung reiterated that she could not recall where and when she bought the ticket. She said she buys many tickets, wherever she is. Because she does deliveries for her father, she was basically all over, and if she stopped at a gas station or convenience store, she would buy tickets if they have a lotto machine.

[59] Ms. Chung provided a handwritten list of cities and street locations where she apparently did deliveries for her father’s business. One was apparently on Russel Avenue in St. Catharines. Another was on Queenston Street in St. Catharines, and another on Welland Avenue in St. Catharines. No other details were provided. Ms. Chung said some of these are residences, and in some cases she would meet the purchaser elsewhere, such as at a Tim Horton’s.

[60] Ms. Chung said she may have done one delivery in the Niagara region, near the bridge to the USA. She said she was not quite sure if she did or not.

[61] In the subsequent interview, Jun-Chul Chung said the winning ticket was brought into the store on a Saturday. It was pretty near 9:00. Kathleen asked him to validate the ticket. She handed him the one ticket and he started to validate. He saw the screen and there were lots of zeros. He gave Kathleen Chung the ticket, and they were both in shock.

[62] Jun-Chul Chung said he stayed in the store, and Kathleen went to her car, and came back in a long time later and she had been crying. She had been gone maybe half an hour or 40 minutes. He said Kathleen had called her mother and her brother.

[63] Jun-Chul Chung said that he had opened the store that day at 7:00 a.m., and that day he worked until 2:00 or 3:00 p.m.

[64] Jun-Chul Chung said he had validated a few tickets given to him by Kathleen.

[65] Jun-Chul Chung said he never validates another customer’s ticket or tickets and any “family” tickets at the same time. He will finish validating the other customers’ tickets first, before validating any tickets belonging to family members.

[66] Jun-Chul Chung insisted that the winning ticket belonged to Kathleen, and that neither he nor his son Kenneth owned the ticket.

[67] Ms. Pittman testified that she had no further contact with the Chungs.

[68] Eventually, a decision was made by OLG to pay Kathleen Chung’s claim. It was paid on December 28, 2004, by cheque.

[69] Kathleen Chung was asked to complete, and she did complete, a statutory declaration. She declared that she was the sole owner of the ticket. To the best of her recollection, she received the free play ticket at Variety Plus. She declared that she did not recall the exact date the ticket was generated. She declared that she was the legal owner of the ticket, that she was not sharing the ticket with anyone, and that she did not mislead anyone to obtain the ticket. She said she was not claiming the prize for any other person or group of people.

[70] Emilio Molinaro testified. He attended the interview with the Chungs and Ms. Pittman on February 10, 2004.

[71] Mr. Molinaro testified that Kathleen Chung advised that the ticket belonged to her, and she was not sharing it with anyone. She confirmed that she did not work at the store.

[72] Ms. Chung advised that she spends anywhere from $20 to $100 per week on lottery tickets. She sometimes buys quick pick tickets and sometimes provides numbers. She purchases tickets all over, in different cities and stores. She sometimes plays Encore.

[73] With respect to the winning free play ticket, she could not recall the date or time she received that ticket. She testified that she validated the ticket on December 27, 2003 between 7:00 and 9:00 a.m., at Variety Plus. Her father validated the ticket. He validated three or four tickets and one of them won. She was in shock. She stayed in her car for about an hour, and then went home.

[74] Mr. Molinaro testified that there was discussion of Jun-Chul Chung and Kenneth Chung’s hours of work at Variety Plus. Jun-Chul Chung said he worked from 6:00 a.m to 10:00 a.m. Kenneth worked seven days per week, from 12:00 noon until 10:00 p.m.

[75] Mr. Molinaro testified that he called Kathleen Chung subsequently at (416) 898-8460. She said she would provide a list of cities that she visited in December, 2003.

[76] Frank Sirianni testified. He was assigned the case in February, 2004.

[77] Mr. Sirianni testified that on February 27, 2004, he called Kathleen Chung and arranged an interview to take place on March 7, 2004.

[78] Mr. Sirianni testified that he attended the store called “That’s Entertainment” in St. Catharines on February 29, 2004. He discovered that that store did not sell men’s health products. He also attended at Avondale Lakeshore in St. Catharines.

[79] Mr. Sirianni attended the interviews on March 10, 2004, and he confirmed the recordings and transcripts of those interviews. He testified that he never received a list of the stores that apparently carry the men’s health products sold by Jun-Chul Chung.

[80] Mr. Sirianni testified that on March 12, 2004 he called Kathleen Chung. He spoke to Kenneth Chung. He said he was happy his sister had won the lottery. He said that he may get some of the money but not much.

[81] Mr. Sirianni then spoke to Kathleen Chung. He asked her about the list she was to provide. He testified that he never received a list from her of specific deliveries on specific dates and locations.

[82] David Myers testified. At the relevant time, he was Vice-President, Operations for OLG.

[83] Mr. Myers testified that on September 1, 2004, the executives of OLG met to decide whether the payout to Kathleen Chung would be made. It was decided that payment would be made to the holder of the ticket, namely, Kathleen Chung.

[84] Aklima Rojan testified. She has worked for Royal Bank of Canada for 27 years. She is the Manager, Client Care.

[85] Also filed in evidence, pursuant to s.29 of the Canada Evidence Act, was an affidavit sworn by an employee of Royal Bank of Canada, identifying certain banking records pertaining to Kathleen Chung. Specifically, three records were identified, and were discussed by Ms. Rojan:

a) an excerpt from the personal bank account record of Kathleen Chung, which reflected a deposit of $1,800 on December 29, 2003;

b) a receipt, which appeared to show a deposit of $1,800 to the same bank account on December 25, 2003, at 9:37 a.m.;

c) a deposit slip dated December 27, 2003, reflecting a deposit of $1,800 to the same bank account by Kathleen Chung; the depositor’s initials “KC” are under the heading “Depositor”.

[86] Ms. Rojan explained that December 25, 2003 was not a banking day. If the computer had been left open after the close of business on the previous banking day, namely December 24, 2003, and if a transaction were made on the next day the bank was open, December 27, 2003, it would be reflected as a transaction recorded on December 25, 2003. As far as an account-holder’s personal bank record is concerned, while the bank was open on Saturday December 27, 2003, it was not actually considered a banking day. Accordingly, a deposit made on December 27, 2003 would be recorded in the account-holder’s account as a deposit made on the next banking day, which was December 29, 2003. A deposit slip, which is initialled by both the depositor and the teller, would most likely have an accurate date on it.

[87] There seems little doubt that the deposit of $1,800 by Kathleen Chung was made on December 27, 2003.

[88] Don Calpito testified. He is a security investigator with TELUS Communications Company. He is responsible for, among other things, responding to production orders made against TELUS with respect to information regarding cellphone records of TELUS customers.

[89] Also filed was an affidavit from a representative from TELUS attaching certain business records relating to cellular telephone number (416) 898-8460. As noted earlier, that was the telephone number at which Mr. Molinaro had called Kathleen Chung. According to TELUS records, the owner of the account between November 19, 2003 and December 27, 2003 was Jun-Chul Chung, and the user was registered as Kathleen Chung.

[90] Also attached to the affidavit were billing call details relating to calls made to and from that telephone for the period November 19, 2003 to December 27, 2003.

[91] Mr. Calpito testified that in urban areas, cell towers are approximately 1.5 kilometres apart. In suburban areas, they are between 2.5 and 5 kilometres apart, and in rural areas they may be as much as 20 kilometres apart.

[92] The billing records will record the time and date of each call; whether the call was outgoing or ingoing; and whether the phone was activated to retrieve messages. In the case of an outgoing call, the billing record will record approximately where the phone was when the call was made. In the case of an incoming call, the billing record will record the approximate location of the phone when the call was received. Generally speaking, the location of the phone will be determined by its location in comparison to the closest cell tower.

[93] On December 15, 2003, the billing records reflects an outgoing call from the phone at 5:05 p.m. from Cooksville, Ontario. At 8:05 p.m., the billing record reflects an incoming call to the phone, then located at Streetsville, Ontario.

[94] On December 19, 2003, at 7:37 p.m., the billing record reflects a call from the phone when it was located in Toronto.

[95] On December 22, 2003, at 9:40 a.m., the billing record reflects an incoming call while the phone was in Streetsville, Ontario. On the same date, at 7:36 p.m., the billing record reflects an incoming call while the phone was in Streetsville, Ontario and on the same date at 7:44 p.m., the billing record reflects an incoming call while the phone was in Streetsville, Ontario.

[96] On December 27, 2003, the billing record reflects 22 transactions, from 9:49 a.m. to 7:23 p.m. Without going through each transaction in detail, the records disclose that the phone was in Cooksville, Toronto, Vaughan, Brampton, Mississauga, Malton, Port Credit, and Streetsville Ontario. None of these are in or near the Niagara Region, and specifically St. Catharines.

[97] On cross-examination, Mr. Calpito acknowledged that the billing records do not record who actually made the calls.

[98] Miles Hatcher testified. He is now retired from the OPP but at the relevant time was a detective sergeant with the OPP.

[99] Mr. Hatcher testified that he first met Kathleen Chung on June 8, 2007. He and Officer Dorian Dwyer arranged to meet her and interview her on June 11, 2007. Ms. Chung agreed to meet, and she chose the location, Great Lakes Grill.

[100] At the interview on June 11, 2007, Ms. Chung was asked whether the interview could be recorded, and she said no. Accordingly, the officers made notes.

[101] The officers were advised by Ms. Chung that she checked the winning ticket at her brother’s store, and she won. She said she bought tickets at various locations, and she did deliveries for her dad’s business. She said she bought tickets all over, in St. Catharines, Ottawa, up north and everywhere. She said she checked tickets at her brother’s store in Burlington. She had a stack of tickets. Her father worked there.

[102] She would buy many different types of lottery tickets, including quick picks and various numbers.

[103] She said her father’s business was selling a male health product. She drove to many different locations, including St. Catharines, Hamilton, London, Windsor, Ottawa, Yorkdale, downtown Toronto, and Burlington.

[104] Around Christmas, 2003, she did not remember where she was. She had a stack of tickets in her wallet.

[105] She said she validated the tickets at her brother’s store. Her dad was working there. She was on her way home from St. Catharines. She had a stack of tickets. When the tickets were being validated, there was no music for three tickets, then there was music, and her dad said “you won”.

[106] She said her dad would not let her drive, and she did not leave right away. She let it sink in.

[107] When asked where she purchased the ticket, she said it was hard to pinpoint it. She insisted she was the lawful owner, and the ticket was in her wallet. She said her father was alone in the store when he validated the ticket. There was more than one ticket validated. She said she always checks her tickets at the store. She insisted she was not claiming the prize for someone else.

[108] On cross-examination, Mr. Hatcher confirmed that at the time of the interview, Kathleen Chung was not a suspect at that point.

[109] Rob Hofsink testified. He is the general manager of Bethlehem Trenching. The office of that company is at 1154 Pettit Road, Burlington, which is approximately at Brant Street and the Queen Elizabeth Way. It is west of Guelph Line, just north of North Service Road.

[110] Mr. Hofsink testified that employees will gather at the company’s yard at 6:45 a.m., where the crews are assigned the jobs they will perform.

[111] Mr. Hofsink testified that the company keeps daily log journals in the ordinary course of business. The journals record the hours worked by employees, and where each employee is working on a particular day.

[112] Mr. Hofsink testified that Dan Campbell was an employee in 2003 and 2004, and is now an employee again.

[113] Mr. Hofsink identified the locations at which Mr. Campbell was working, and on December 22, 2003, he was working at Bronte Road and Rebecca Street in Oakville, and he worked a ten-hour shift on that day.

[114] On cross-examination, Mr. Hofsink testified that on December 19, 2003, Mr. Campbell was working at Third Line in Oakville and he worked a ten-hour shift. On Saturday December 27, 2003, Mr. Campbell was not working.

[115] Mr. Hofsink confirmed that on December 22, 2003, Mr. Campbell was working with three other people. The crew probably left the yard at about 7:00 a.m.

[116] He confirmed that 3500 Dundas Street is located between Appleby Line and Brant Street, in a plaza occupied by Longo’s. It is less than ten minutes from the company’s yard.

[117] Mr. Hofsink testified that the usual route to get from the company’s yard to Bronte Road and Rebecca would be to go along Dundas Street, and, in all likelihood, pass by 3500 Dundas Street.

[118] Mr. Hofsink testified that Mr. Campbell was known to play lottery games at a store located near the company yard, called “Windmill Restaurant”. He said it was typical for the crew to stop on the way to a job to do “personal stuff”.

[119] Patricia Fryer testified. She is a production order specialist with TD Canada Trust. She is responsible, among other things, for responding to production orders for records involving accounts held by customers of TD Canada Trust.

[120] Ms. Fryer identified certain business records relating to an ATM card held by Dan Campbell from November 1, 2003 to June 22, 2004.

[121] Ms. Fryer testified that the records will disclose transactions made through TD Canada Trust ATM machines. Where a transaction is made through a non-TD Canada Trust ATM machine, the record will simply disclose that it is an Interac-network transaction, but will not disclose the financial institution or the location of the ATM machine.

[122] Ms. Fryer identified a particular transaction that occurred on November 24, 2003 at a TD Canada Trust ATM machine, located at 37 Lakeshore in St. Catharines. She testified that there are two ATM machines in that location. The transaction reflected a $100 withdrawal through Mr. Campbell’s ATM card.

[123] Ms. Fryer identified a transaction on December 19, 2003 at 37 Lakeshore, St. Catharines, which reflected a withdrawal of $200.

[124] Ms. Fryer identified a number of other transactions involving Mr. Campbell’s ATM card.

[125] On cross-examination, Ms. Fryer acknowledged that it could not be said with certainty who actually used the card during the transactions in question, or what was done with the money in the case of withdrawals.

[126] Dorian Dwyer testified. During the relevant periods of time, he was an OPP officer.

[127] Mr. Dwyer confirmed the evidence of the interview that he and Mr. Hatcher conducted with Kathleen Chung.

[128] Daniel Campbell testified. In 2003 and 2004, he lived at 271 Lakeshore Road, St. Catharines. He worked at Bethlehem Trenching in Burlington.

[129] Mr. Campbell testified that his normal day consisted of driving from his home to the company’s shop on Pettit Road in Burlington. From there they were given their assignments, and drove to the relevant job site. After work they would return to the shop, and then he would drive home. He testified that it took approximately 45 minutes to get from his home to the shop. He would typically work from 7:00 a.m. to 5:00 or 6:00 p.m., Monday to Friday.

[130] Mr. Campbell testified that he bought many different lottery tickets. He could not recall any specific lottery tickets that he purchased.

[131] Mr. Campbell testified that there was a group of seven people at work who would traditionally buy lottery tickets. Each person would contribute $10 per week, and he would buy the tickets. In addition, he would buy his own tickets apart from his participation in the group.

[132] Mr. Campbell testified that he would often purchase Super 7 lottery tickets. The draws were held on Friday nights. Tickets could be purchased up until shortly after 9:00 on Friday night for the draw which would occur the next Friday. He would buy Super 7 tickets when he happened to be a store that sold them. There were many locations at which he bought tickets.

[133] One such location was at a convenience store called “For Your Convenience”, which was near the shop. Another was in the Longo’s plaza at Walker’s Line and Dundas, called Variety Plus. Another was called No Frills Plaza, at Guelph Line and Coventry. He would check tickets at those locations, others less frequently.

[134] After work hours, and on weekends, he would often buy a ticket at That’s Entertainment, at Lake Street in St. Catharines, and at Avondale Lakeshore, which was practically across the road from his home in St. Catharines.

[135] Mr. Campbell explained that That’s Entertainment is a video store, but it was the cheapest place he found to get cigarettes. It also sold lottery tickets. Avondale Lakeshore is a convenience store.

[136] Mr. Campbell testified that he could buy tickets anywhere, including at gas stations, at a Becker’s store near his parents place in Thorold, and at another Avondale store.

[137] Mr. Campbell testified that he always bought quick pick tickets, and always bought Encore. Whatever tickets he bought went in his wallet.

[138] Mr. Campbell testified that when he was working he would buy tickets if the crew stopped for coffee. He said that they often stopped at a particular Tim Horton’s which was next door to Variety Plus in Longo’s plaza.

[139] Mr. Campbell testified that he did not always check all of his tickets at once. He would check them a few at a time. He would hand them to the cashier, who would run them through the machine.

[140] Mr. Campbell testified that he did his banking at TD Canada Trust, at the corner of Lake and Lakeshore in St. Catharines. He often used an ATM machine there. He would also use other ATM machines where needed, if they were located in convenience stores where he purchased tickets. He said he never lent the card to anyone.

[141] Mr. Campbell testified that That’s Entertainment had an ATM machine in the store, as did Avondale Lakeshore.

[142] Mr. Campbell testified that he could drive from one store to another in St. Catharines in between three and nine minutes.

[143] Mr. Campbell testified that he did not know anyone who worked at Variety Plus. He recognized Jun-Chul Chung as the clerk who was there quite often when he bought and checked tickets at that store.

[144] Mr. Campbell testified that he became aware that OLG was looking for people who might potentially be the true winners of the $12.5 million payout that was made in 2004. He met the police in January 2011 and after providing details and driving with the police, he was ultimately paid $12.5 million plus interest, which he shared with the other members of his group.

[145] On cross-examination, Mr. Campbell acknowledged that he could not specifically recall purchasing the winning ticket.

[146] Troy Richter testified. He is the Retail Operations Manager, Ontario for Parkland Fuel Corp. It was formerly Pioneer Petroleums. Mr. Richter was the director of Retail Systems for that company.

[147] Mr. Richter produced business records for three transactions relating to a VISA credit card. One of the transactions was made on December 27, 2003, at 7:24:19 a.m. at Pioneer’s location no.112, located at 3100 Winston Churchill Boulevard, Mississauga. The transaction was in the amount of $24, and was for a purchase. Business records produced by the Canadian Imperial Bank of Commerce disclose that the VISA credit card in question was listed as belonging to Kathleen Chung, and her transaction statement for the relevant period shows a purchase for $24 on December 27, 2003.

[148] On cross-examination, Mr. Richter acknowledged that the documents do not disclose who actually used the card on December 27, 2003.

[149] Aaron Chan testified. He is a forensic accountant. He prepared a report and certain charts in connection with this matter, and he testified to confirm the accuracy of his report and the charts. He also produced a supplementary report, and he confirmed the accuracy of that report. It is not necessary to go through all of the minute details of the various transactions traced by Mr. Chan. It is sufficient to note that the cheque for $12.5 million, which was given to Kathleen Chung on December 28, 2004, was deposited in an account at the Canadian Imperial Bank of Commerce. Thereafter, it was dispersed in many different ways, and ultimately the lion’s share of the money (at least $8 million) was vested in something called the “Hi Ok Chung Trust.”

[150] From documents seized during the execution of a search warrant subsequently, it appears that Hi Ok Chung is the sister of Jun-Chul Chung and she lives in Korea. A trust agreement was executed on March 7, 2005, under which Hi Ok Chung (a resident of Seoul, Korea), as the settlor conferred on three trustees, including Jun-Chul Chung, certain assets, for the benefit of Jun-Chul Chung, Young-Ja Chung, Kathleen Chung and Kenneth Chung (referred to as the “Hi Ok Chung family”).

[151] Mr. Chan confirmed that virtually all of the money came, one way or another, from the proceeds of the $12.5 million lottery win, and none of it came from any source in Korea.

[152] Some of the assets of the Hi Ok Chung Trust were used to purchase real estate, and some was used to provide mortgages for properties purchased by Kathleen Chung and Kenneth Chung.

[153] A large amount of the funds have been placed on deposit with the Korea Exchange Bank, and approximately $2.5 million have been transferred to an account or accounts with that bank in Korea.

[154] It is apparent that where funds are transferred to the Hi Ok Chung Trust, they are under the control of the trustees, one of whom is Jun-Chul Chung.

[155] On cross-examination, Mr. Chan confirmed that he could only trace where the money went. He could not say what are the reasons for any of the transactions.

[156] Rick Guzzo testified. He has been with OLG since 1991. He is the Senior Manager, Forensic Investigation Unit.

[157] Mr. Guzzo testified that TMIRs are now known as ITMIRs (Indexed Transaction Master Inquiry Report).

[158] Mr. Guzzo testified that an ITMIR will record all the details of every ticket purchased or validated through OLG’s computer system.

[159] Each ticket is assigned a unique serial number. The ITMIR will record the date the ticket was printed, the product code, and where and when the ticket was purchased. It will also record validation information when the ticket is validated.

[160] Mr. Guzzo produced a “map” of various transactions conducted during the relevant period. In addition, he produced ITMIRs for transactions conducted on December 19, 2003, at That’s Entertainment in St. Catharines; transactions on December 22, 2003 at Variety Plus in Burlington; and transactions on December 27, 2003 at Variety Plus in Burlington.

[161] From the ITMIRs and the map, the following can be discerned:

a) On December 19, 2003, 4 tickets were purchased, clearly by the same person. Ticket “A” was purchased at 19:57:50 for $11; ticket “B” was purchased at 19:57:55, for $11; ticket “C” was purchased at 19:58:00 for $11; and ticket “D” was purchased at 19:58:04, for $7. All four tickets were purchased at That’s Entertainment in St. Catharines.

b) All four tickets were validated on December 22, 2003 at Variety Plus in Burlington. They were validated in reverse order, ticket “D” first; ticket “C” second; ticket “B” third; and ticket “A” last.

c) Ticket “D” was validated at 07:38:48, and it produced a free play ticket at 07:39:02. It included Encore automatically.

d) Ticket “C” was validated at 07:39:13, and it produced one free ticket at 07:39:28. It included Encore automatically.

e) Ticket “B” was validated at 07:39:39, and it produced one free play ticket at 07:39:52. It included Encore automatically.

f) Ticket “A” was validated at 07:40:06. It produced two free tickets. The first one was produced at 07:40:17. It included Encore automatically. The second free ticket (which ended up being the $12.5 million winning ticket) was produced at 07:41:00. Encore was not played automatically, nor was it paid for.

g) It seems quite evident that the four tickets purchased on December 19, 2003, clearly by the same person, were all validated at the same time on December 22, 2003, also clearly by the same person.

h) It is instructive to see what happened to the five free play tickets that were produced through the validation process on December 22, 2003.

i) The free play ticket that was produced by ticket “D” was validated on December 27, 2003 at Avondale Lakeshore in St. Catharines at 12:41:30. It was a non-winner.

j) The free play ticket that was produced by ticket “C” on December 22, 2003 was validated on December 27, 2003 at Avondale Lakeshore in St. Catharines at 12:41:11. It produced a free ticket at 12:41:21, which itself was validated on January 3, 2004 at Avondale Lakeshore, St. Catharines at 17:00:09. It was non-winner.

k) The free ticket generated by ticket “B” on December 22, 2003 was validated on December 27, 2003 at JC Foods in St. Catharines at 13:05:36. It was a non-winner.

l) The first free ticket generated by ticket “A” on December 22, 2003 was validated on December 27, 2003 at JC Foods in St. Catharines at 13:05:28. It was a non-winner.

m) The second free ticket generated from ticket “A” on December 22, 2003 (which turned out to be the winning ticket) was validated on December 27, 2003 at Variety Plus in Burlington at 9:27:30. It was the winner of $12.5 million.

[162] In my view, there is no conceivable way that the person who validated the winning ticket on December 27, 2003 was the person who purchased a ticket at That’s Entertainment in St. Catharines on December 19, 2003.

[163] First of all, it is inescapable, in my view, that the same person who purchased the four tickets on December 19, 2003, was the same person who validated all four tickets at Variety Plus on December 22, 2003. Furthermore, all of the free tickets generated by the validation process on December 22, 2003, except one, were validated in St. Catharines, either at Avondale Lakeshore or JC Foods, and they were validated within an hour of each other. One of the tickets validated at JC Foods in St. Catharines was the sister free ticket to the winning ticket, and it was one of the tickets validated within about 25 minutes of the other tickets validated in St. Catharines.

[164] There was only one free ticket generated through the validation process at Variety Plus on December 22, 2003 that was validated at Variety Plus on December 27, 2003 at 9:27 a.m. In my view, it is impossible to accept that the person who won $12.5 million by cashing a free ticket on December 27, 2003 at 9:27 a.m. was the same person who purchased four tickets on December 19, 2003 within one minute of each other, and which were all validated at Variety Plus on December 22, 2003 within about 2 minutes of each other. Furthermore, it is impossible to believe that the winner of the $12.5 million ticket validated that ticket in Burlington on December 27, 2003 at 9:27 a.m., when the rest of the free tickets generated on December 22, 2003 (including the sister ticket to the winning ticket) were all validated in St. Catharines shortly after noon on December 27, 2003.

[165] It is noteworthy that if a ticket produced a winner (whether in cash or one or more free tickets) the computer system at the time produced a musical jingle, which was the same no matter how much cash or how many free tickets were generated.

[166] I will have more to say about this evidence when I analyse the case.

[167] Mr. Guzzo also produced a table that disclosed certain ticket purchasing patterns at Variety Plus from June 9, 2003 to February 6, 2004. Since it is the basis on which the Crown makes its case against Jun-Chul Chung and Kenneth Chung on counts 1 and 2, I will analyse it in some detail. It was put together with the use of ITMIRs.

[168] For the sake of completeness, I attach a copy of the chart (Exhibit 38) as Appendix A to these reasons. To recall, the evidence was that Jun-Chul Chung worked seven days per week at Variety Plus, from the opening of the store at 6:00 or 7:00 a.m. until 10:00 a.m. or noon. Kenneth Chung worked at the store from noon till the closing of the store between 10:00 p.m. and 10:30 p.m.

[169] There is a tracing of tickets generated by 30 transactions on Exhibit 38.

[170] In each case, a ticket purchased or received as a free play ticket was validated at Variety Plus, and two free tickets were generated.

[171] In 6 cases out of 30, the original purchase or generation of a free play ticket occurred at Variety Plus.

[172] On ten occasions, validation of the originating ticket (which produced two free tickets) occurred during hours that Kenneth Chung was at work. On eight occasions, validation of the originating ticket (which produced two free tickets) occurred when Jun-Chul Chung was at work. On twelve occasions, validation of the originating ticket occurred during hours when it is not clear whether Kenneth Chung or Jun-Chul Chung was at work.

[173] On every one of the 30 occurrences, validation of one of the free tickets occurred at a location other than at Variety Plus, and the other ticket was validated at Variety Plus. In some cases, the validations were done many miles apart. They were also validated on different dates.

[174] On one occasion, the validation of the free ticket at Variety Plus was done during hours that Kenneth Chung was working. On one occasion, the validation of the free tickets at Variety Plus was done during hours that Jun-Chul Chung was working. On two occasions, the validation of the second free ticket was done during hours when it is not clear whether it was Kenneth or Jun-Chul Chung who was working.

[175] Four of the particular transactions require comment:

1. On September 26, 2003, a quick pick ticket was purchased in Owen Sound. It was validated on September 27, 2003 at Variety Plus, and the ticket generated two free tickets. One free ticket was validated on October 6, 2003 in Owen Sound. The other free ticket was validated on October 4, 2003 at Variety Plus.

2. On October 3, 2003, a quick pick ticket was purchased in North Bay. It was validated on October 5, 2003 at Variety Plus, and it generated two free tickets. The first free ticket was validated on October 12, 2003 in North Bay. The second free ticket was validated on October 11, 2003 at Variety Plus.

3. On December 13, 2003, a free play ticket was generated in Hamilton. It was validated on December 20, 2003 at Variety Plus, and it generated two free tickets. The first free ticket was validated on December 31, 2003 at Stoney Creek. The second free ticket was validated on December 27, 2003 at 9:27:19, immediately before the $12.5 million winner was validated, at 9:027:30.

4. On December 19, 2003 a quick pick ticket was purchased in Toronto. It was validated on December 21, 2003 at Variety Plus and it generated two free tickets. The first free ticket was validated on January 2, 2004 in Toronto. The second free ticket was attempted to be validated on December 22, 2003 at Variety Plus. Because the draw had not been held, there was no validation. The ticket was validated again on December 27, 2003 at Variety Plus, at 9:49:28, shortly after the $12.5 million winner was validated.

[176] I will have more to say about this evidence when I analyse the case.

[177] Officer John Uttley testified. He has been with the OPP for 30 years. He is currently seconded to the Alcohol and Gaming Commission of Ontario.

[178] He was involved in attempting to discover the true winner of the $12.5 million ticket. There had been broadcasts of a program called Fifth Estate by the CBC that had mentioned that the original ticket had been purchased in St. Catherine’s. Eventually, after screening over 600 potential prize claimants, Officer Uttley participated in a “drive around” with Dan Campbell in early January, 2011, after which OLG determined that Mr. Campbell was the rightful winner.

[179] Officer Uttley participated in the execution of a search warrant at 101 Calloway Court, Vaughan, on September 28, 2010. That was the home occupied by Kathleen Chung.

[180] Among other things, the following documents were seized:

a) A continuing Power of Attorney granted by Kathleen Chung to Jun-Chul Chung, dated October 4, 2004;

b) A Trust Agreement relating to the Hi Ok Chung Family Trust, dated March 7, 2005; the settlor is Hi Ok Chung “sister”, and the trustees include Jun-Chul Chung “brother”;

c) A direction as to funds addressed to the Hi Ok Chung Family Trust, authorizing payment of loan proceeds relating to 3421 Lakeshore Road, Oakville, to the solicitors for Kathleen Chung and Jun-Ho Park, Ms. Chung’s husband;

d) A number of resolutions of the trustees of Hi Ok Chung Family Trust, authorizing loans to various corporations owned by one of the Chungs;

e) A statutory declaration sworn by Kathleen Chung, in which she declared that she had received from her aunt, Hi Ok Chung, the sum of $9,573,102 in Canadian dollars, with the intention that it be held in trust until it could be paid to the trustees of the Hi Ok Chung Family Trust. She declared that the money was paid to her rather than directly to the trust because of the need to comply with the requirements of Korean currency exchange controls. She declared that pending the establishment of the trust, she invested $572,000 in various mortgages, and $2,820,100 in mutual funds;

f) A resolution of the trustees of Hi Ok Chung Family Trust, dated March 24, 2005, in which it was resolved that the Trust accept gifts and benefits made to the Trust from the Republic of Korea by Hi Ok Chung. The total intended to be deposited was said to be $9,531,102;

g) Copies of certain banking documents, including a copy of the deposit slip in the amount of $1,800 dated December 27, 2003, that had been discussed by Aklima Rojan in her evidence; the deposit slip has, on its reverse, a stamp placed by the Royal Bank of Canada, dated December 29, 2003;

h) Further continuing Powers of Attorney granted by Kathleen Chung to Jun-Chul Chung, dated April 28, 2005 and June 16, 2005;

i) Various handwritten notes; from the content of the notes, it is clear that they were made by Kathleen Chung; included are the following:

i. Feb 5/04 – went into OLGC to claim prize; meet with Dave from Claim Office and Kathy; told them validation date was Dec. 27/03 and on that day I met with friends in the morning went over to the store while my dad was working to validate few tickets I had in my wallet, suddenly I heard music and my dad told me that I won the jackpot; I started to scream, went to my car called my brother and mother at home;

ii. Told Dave and Kathy not sure where I played original ticket or what type of play it was because I play both quick pick and random selection of numbers;

iii. Originally I lied that Ken was the manager of Variety Plus (Burlington) but Dave + Kathy eventually found out and told me that I am possibly an insider winner because I live at the same address as Ken and he is the manager of the store. Also, I would have to possibly go through interviews with their security and auditing department. I told them I lied about Ken because I was afraid of security and safety issues of myself and Ken – he has to show his face at the store and I was scared somebody may abuse our financial status after we claimed the prize;

iv. Dave mentioned “St. Catharines” could be possible location of where original ticket was generated. Told OLGC that boyfriend and I did make a trip down to Niagara Falls week of Dec 14 or week of Dec 21/03 but not quite sure; could possibly stopped over to get gas and played but since I didn’t drive and not familiar w/St. Cath or wherever we stopped not sure where this location is.

v. Asked me what I did after I found out I won; shocked, went to my car/called = woke up my brother (mom was home at this time); Ken picked up phone and told mom; my dad told me to go home b/c worried that I was too shocked to drive and to stay @ home. Emilio asked me did you drop off anywhere on the way home did you make any deliveries; I said no deliveries but may have dropped off for gas on the way home.

vi. Told them I deliver residential; asked me again when boyfriend and I went to Niagara told them any day of two weeks.

[181] None of the accused testified and no evidence was called on their behalf.

Submissions

[182] Mr. King, counsel for the Crown, submits that while the case is to be determined on the basis of circumstantial evidence, in this case that evidence is reliable and accurate. Mr. King traced the origin of the winning ticket to a series of four tickets purchased, clearly by the same person, on December 19, 2003, at That’s Entertainment in St. Catharines. All four tickets were validated on December 22, 2003 at Variety Plus, in Burlington. One of those tickets generated two free play tickets. The first free play ticket came with Encore, and the second free play ticket, that turned out to the winning ticket, did not come with Encore, and the recipient of the ticket did not request Encore.

[183] Mr. King points out that if Kathleen Chung was indeed the winner of the $12.5 million prize, she had to have been at That’s Entertainment in St. Catharines on December 19, 2003, around 8:00 p.m. She then had to be at Variety Plus in Burlington on December 22, 2003 at around 7:38 a.m. She then had to be at Variety Plus on December 27, 2003 at 9:27 a.m., where the winning ticket was validated. She then had to be at JC Foods in St. Catharines on December 27, 2003 at 1:05 p.m. when the other free ticket was validated.

[184] Mr. King points out that two of the other free tickets generated by two of the four tickets purchased on December 19, 2003 were validated on December 27, 2003 at Avondale Lakeshore in St. Catharines at 12:41 a.m. Furthermore, one of the other free tickets generated on December 22, 2003 was validated at Avondale Lakeshore in St. Catharines on January 3, 2004 at 5:00 p.m. and another of the free tickets was also validated at JC Foods in St. Catharines on December 27, 2003 at 1:05 p.m.

[185] Since all of the tickets purchased on December 19, 2003 were clearly purchased by the same person, it is impossible to believe that Kathleen Chung was the person who validated the tickets subsequently generated, including the free play ticket that was the winner. Furthermore, Ms. Chung’s cellphone and banking records clearly show that she was not in the locations where any of the tickets were validated on the dates and times they were validated, and the data is fundamentally inconsistent with what she told representatives of the OLG when she was interviewed by them.

[186] Mr. King submits that where parties are engaged in a joint venture, things said by one member of the joint venture are admissible against all of them, if what is said is in furtherance of the joint venture. In this case, the evidence is clear that Jun-Chul Chung and Kenneth Chung were engaged in a joint venture to steal free play lottery tickets, and Mr. King submits that Kathleen Chung joined the joint venture when she attended at the offices of OLG to claim the prize.

[187] Mr. King points out that Jun-Chul Chung and Kenneth Chung advised the representatives of OLG as to their hours of work. Kenneth Chung worked seven days per week from noon until 10:00 or 10:30 p.m., when the store closed. Jun-Chul Chung worked from the opening of the store, at 6:00 a.m. or 7:00 a.m. until 10:00 a.m. or noon. Jun-Chul Chung confirmed that he was working on the day the winning ticket was validated.

[188] Mr. King submits that it is significant that where two free play tickets are generated, one of them comes with Encore already included, and the second ticket comes without Encore unless the customer decides to pay for it. Significantly, at the time of these events, there would only be one musical jingle when a ticket generated a prize, no matter how much cash or how many free tickets were generated. In such a circumstance, where two free play tickets were generated, the customer would not know about the second free ticket unless the clerk pointed it out. Until a decision is made as to whether Encore will or will not be purchased for the second ticket, the transaction will remain open. After the customer leaves, the clerk can simply print the ticket without Encore.

[189] Mr. King submits that Exhibit 38 is compelling, and demonstrates beyond any doubt that Jun-Chul Chung and Kenneth Chung were engaged in a scheme to steal free play lottery tickets. In all 30 transactions depicted on Exhibit 38, a lottery ticket was purchased and, when validated, produced two free tickets. In every case, one of the free tickets was validated somewhere other than at Variety Plus. In only six cases were the two free tickets validated on the same day, but on each such occasion they were validated at different times in different locations. On 24 occasions, the free tickets were validated on different days in different locations.

[190] Four of the transactions are particularly suspicious:

a) A ticket was purchased on Owen Sound on September 26, 2003; that ticket was validated on September 27, 2003 at Variety Plus. It produced two free tickets, one of which was validated on October 6, 2003 in Owen Sound, and the second of which was validated on October 4, 2003 at Variety Plus.

b) On October 3, 2003, a ticket was purchased in North Bay. It was validated on October 5, 2003 at Variety Plus, and it won two free tickets. The first free ticket was validated on October 12, 2003 in North Bay, and the second was validated on October 11, 2003 at Variety Plus.

c) A ticket was purchased in Hamilton on December 13, 2003. It was validated on December 20, 2003 at Variety Plus, and it won two free tickets. The first was validated on December 31, 2003 in Stoney Creek. The second was validated on December 27, 2003 at 09:27:19 at Variety Plus, at the same time as the $12.5 million winner was validated.

d) A ticket was purchased in Toronto on December 19, 2003. It was validated on December 21, 2003 at Variety Plus, and it won two free tickets. The first ticket was validated on January 2, 2004 in Toronto. The second was attempted to be validated on December 22, 2003 at Variety Plus, but it could not be validated as the draw had not been held. It was validated again on December 27, 2003 at 09:49:28 at Variety Plus, on the same day the $12.5 million winner was validated.

[191] Mr. King submits that based on when the transactions occurred, and based on the hours of work of Jun-Chul Chung and Kenneth Chung, it is clear that both Jun-Chul Chung and Kenneth Chung were parties to a scheme to steal free play lottery tickets as reflected in Exhibit 38. Mr. King submits that the evidence admits of no other rational conclusion.

[192] Mr. King submits that the actions of all three accused support their involvement in the joint venture.

[193] Mr. King points out that Kenneth Chung became actively involved in attempts to cash the winning ticket. He called Ms. Pittman and asked her what the next steps would be in claiming the prize. He knew the ticket was a stolen ticket, but he engaged in actions to claim the prize. Jun-Chul Chung also knew that the ticket was a stolen ticket, but he attended meetings with OLG to attempt to claim the prize.

[194] Kathleen Chung joined the joint venture at least at the point in time when she attempted to claim the prize. Furthermore, it is clear that she lied to OLG as to where she was when the relevant tickets were purchased and validated. It is clear from what she said to OLG, what she wrote in her notes, what appears in her cellphone records, what appeared on a deposit slip created on December 27, 2003, and from the Pioneer Petroleum transaction on December 27, 2003, that she could not have been in the places and on the dates and times when the relevant tickets were purchased and validated.

[195] Particularly compelling are the cellphone records, and an RBC deposit slip, that shows that Kathleen Chung made a deposit on December 27, 2003. Furthermore, the Pioneer Petroleum transaction shows that she was at Winston Churchill Boulevard in Mississauga on that date.

[196] Mr. King submits that the evidence shows that the true winner of the prize was Dan Campbell. However, he submits that it would be an included offence that the ticket was stolen from some person other than Dan Campbell.

[197] Mr. King submits that the evidence is compelling, that the Crown’s case on counts 1, 2, 3, 4, 5, and 6, have been made out beyond a reasonable doubt.

[198] As far as count 7 is concerned, the evidence of Mr. Chan, the forensic accountant, shows that the money that ended up in the Hi Ok Chung Family Trust came, one way or the other, from the lottery winnings of $12.5 million. However, Mr. King submits that the Trust itself, and the statutory declarations that were made at around the time the trust was created, show that the Chungs have attempted to make it appear that the money came from an aunt in Korea. Clearly, Mr. King submits, they have attempted to hide the source of the stolen money. Furthermore, transfers of some of the funds to Korea were done in an attempt to hide the source of the funds.

[199] Ms. An, counsel for Jun-Chul Chung, submits that the Crown has not proven the case as against her client beyond a reasonable doubt. In her submission, particularly because the Crown’s case is dependent solely on circumstantial evidence, the court must be vigilant in ensuring that the Crown has proven the case beyond a reasonable doubt. In the circumstances, Ms. An submits that the Crown’s case is based on suspicion and speculation, rather than on legitimate inferences from the evidence.

[200] Ms. An points out that on the one occasion when Kathleen Chung lied to the OLG personnel, that is, when she denied that Kenneth Chung was her brother, she immediately told the truth when she was confronted.

[201] The fact that Ms. Chung could not recall where and when she purchased the original ticket is of no moment. She testified that she bought tickets anywhere she happened to be, and she drove many places in delivering product for her father’s business. This included driving to the Niagara Region, including St. Catharines.

[202] Ms. An points out that OLG decided to pay the claim notwithstanding their suspicions. Having done so it is not now open to the Crown to argue that OLG was defrauded. OLG made the payment with its eyes open, and it cannot now be contended that there was fraud.

[203] With respect to the cellphone and banking records, Ms. An points out that the evidence does not disclose who actually used the cellphone from which the calls were made and received, and does not disclose who used the particular ATM card. Once again, the Crown relies only on suspicion rather than legitimate inferences.

[204] Ms. An points out that there is uncertainty as to the date of the actual deposit reflected in the RBC deposit slip. The various dates included December 25th, 27th and December 29th. That being the case, there is no certainty that Kathleen Chung made a deposit on December 27th, 2003.

[205] Ms. An submits that there is no certainty that Dan Campbell was the actual winner of the $12.5 million prize. Mr. Campbell himself could not recall purchasing the ticket that produced the winning free play ticket, nor could he recall any of the other circumstances.

[206] Ms. An points out that Mr. Guzzo, who analyzed the data flowing from the OLG’s computer system, could not say that one can identify the winner simply by looking at the data. She submits that Mr. Guzzo’s evidence should be given minimal weight, and once again it is speculative and based on conjecture.

[207] Similarly, Ms. An submits that the inference sought to be drawn by the Crown from Exhibit 38 should not be drawn. Once again, while the circumstances are suspicious, that is all the document discloses, namely suspicion. Ms. An submits that it does not rise to the level of proving the case beyond a reasonable doubt.

[208] Ms. An submits that since there is no compelling evidence of any theft or fraud, acquittals should be entered on all of counts 1 through 6.

[209] As far as count 7 is concerned, Ms. An submits that the Crown’s case depends only on the tracing of the funds that was done by Mr. Chan, and on certain documents seized during the execution of the search warrant. Those documents, including a statutory declaration that the Hi Ok Chung Family Trust was funded through money received from Korea, contain no information as to the reason or reasons for doing so. Since Mr. Chan was quite easily able to trace the source of the funds that ended up in the Hi Ok Chung Family Trust, there is no reason to conclude that there was any intent to hide the source of the funds.

[210] In the result, count 7 has simply not been proven beyond a reasonable doubt.

[211] Mr. King, counsel for Kathleen Chung, submits that the case against his client is entirely circumstantial. The Crown relies on data that was obtained from various sources, particularly the OLG’s computer system. Mr. King notes that no expert opinion was offered that would assist the court in drawing appropriate conclusions from the data.

[212] Mr. King submits that in a case in which the Crown relies on circumstantial evidence, it must be shown that guilt is the only rational or reasonable inference from the evidence. If there are rational or reasonable inferences available other than guilt, the accused must be acquitted.

[213] Mr. King submits that with respect to the counts in which Kathleen Chung is charged, there are three questions:

1. did the winning ticket belong to Kathleen Chung?

2. if the answer is no, are there rational and reasonable inferences available consistent with innocence?

3. in any event, have all the elements of each offence been proven beyond a reasonable doubt?

[214] With respect to the first question, Mr. King submits that the evidence as a whole is consistent with Kathleen Chung’s ownership of the ticket. He submits that her statements to the OLG personnel are consistent with her ownership. The evidence of her location or locations at the various times, consisting of a gas receipt, deposit slips, and cellphone evidence, are not inconsistent with her ownership of the ticket.

[215] The evidence from the OLG computer system with respect to the tracking of the tickets is inconclusive. For example, the two free tickets, of which the winning ticket was one, were validated several hours apart. No opinion evidence was tendered by the Crown as to the time it might have taken to travel between the two locations where the tickets were validated.

[216] Mr. King submits that Exhibit 38, that purports to show a pattern involving the issuance and validation of two free tickets flowing from an original purchase, is not relevant as far as Kathleen Chung is concerned. No opinion evidence was tendered with respect to any conclusions that ought to be properly drawn from exhibit 38. No application was brought to have it regarded as similar fact evidence, and in any event Kathleen Chung is not implicated by that evidence.

[217] As far as the evidence of Mr. Chan is concerned, all it shows is what was done with the money after the $12.5million cheque was cashed by Kathleen Chung. There is nothing untoward about any of the evidence, and it certainly does not constitute evidence of consciousness of guilt. Once again, no expert evidence was called with respect to any conclusions that might properly be drawn from the evidence.

[218] With respect to the second question mentioned above, Mr. King submits that even if Kathleen Chung was not the lawful owner of the ticket, there are other inferences available other than guilt.

[219] Mr. King points out that if Kathleen Chung was not involved in acquiring the winning ticket, there is a reasonable inference that she believed that the ticket was owned by Kenneth Chung or Jun-Chul Chung. There is a reasonable inference that she did not know the origin of the original ticket. Mr. King points out that Kathleen Chung’s first explanation to Mr. Summers, over the telephone, was that she was inquiring about how to claim a ticket that was owned by her brother.

[220] With respect to counts 5 and 6, Mr. King submits that Kathleen Chung cannot be guilty of fraud, since OLG made the determination to pay the claim to the bearer of the ticket. OLG at that point was fully aware of the all the suspicious circumstances, and nevertheless decided to pay the bearer. There is no dispute at that point that Kathleen Chung was the bearer of the ticket.

[221] With respect to count 7, Mr. King submits that it is not relevant to Kathleen Chung unless she is found guilty on count 4.

[222] Mr. King submits that under s. 462.31(1) of the Criminal Code, the Crown must prove that Kathleen Chung knew or believed that property or proceeds of the property was obtained or derived directly or indirectly as a result of theft or fraud, and that she sent or delivered, transported, transmitted, altered, disposed of or otherwise dealt with that property with intent to conceal or convert the property.

[223] Mr. King submits that in this case there is no doubt, based on the evidence of Mr. Chan, that the Crown quite easily discovered where and when the funds were disposed of. There was no attempt to hide the banking and other records from which it could easily be discovered where and when the funds were transmitted.

[224] The only evidence relied on by the Crown to show an intent to conceal or convert the funds are documents seized during the execution of the search warrant. Included in those documents are statutory declarations that appear to show that the source of the funds for the Hi Ok Chung Family Trust was a person is Korea.

[225] Mr. King submits that one cannot draw a conclusion that this, standing alone, is sufficient to prove a violation of s. 462.31(1). He points out that there is no evidence as to the use that may have been intended for the statutory declarations. If their preparation was an attempt to hide the origin of the funds, it was notably unsuccessful.

[226] Ms. von Achten, counsel for Kenneth Chung, submits that if it cannot be concluded, beyond a reasonable doubt, that the winning ticket was stolen, the Crown’s case fails on all counts.

[227] Ms. von Achten submits, consistent with the submissions of other counsel, that in this case the evidence is entirely circumstantial, and inferences consistent with guilt are not the only rational or reasonable inferences. Inferences consistent with innocence are also available.

[228] As far as Kenneth Chung is concerned, the only evidence against him is contained in Exhibit 38; what he said to the OLG personnel; that he assisted in the sending of money to Korea; and that he signed one or more of the documents in evidence.

[229] Ms. von Achten submits that, individually or collectively, this evidence is not sufficient to prove the case as against Kenneth Chung beyond a reasonable doubt. Specifically, as to whether any theft occurred to which Kenneth Chung was a party, there is only suspicion. That is not enough.

[230] With respect to count 7, Ms. von Achten submits that there is no evidence that any of the transactions, or any of the documents prepared, were effected with any intent to hide the source of the funds.

Analysis

[231] As contended or conceded by all counsel, this case depends almost entirely on circumstantial evidence. The court is asked to draw inferences from evidence tendered by the Crown. The Crown asks me to find that the only rational or reasonable inference, on each count, is that the accused are guilty. The accused, on the other hand, argue that any inferences consistent with guilt are merely speculative. They argue that suspicion and speculation are not enough.

[232] It is useful to briefly review the principles to be applied when the Crown’s case depends, for the most part, on circumstantial evidence.

[233] Judicial consideration of the issue commenced in 1838 in Hodge’s Case (1838), 1838 CanLII 1 (FOREP), 2 Lewin 227, 168 E.R. 1136. In that case, the accused was charged with murder. The murdered party was robbed, and was returning from the market with money in her pocket. The accused had been seen near the spot where the murder was committed, shortly before the murder. There were also four other persons in the same place at about the same time. Later, the accused was seen some distance away burying something, which turned out to be money, and which corresponded generally to the amount that the murdered woman had.

[234] Baron Alderson told the jury that the case was made up of circumstances entirely, and that before they could find the prisoner guilty, they must be satisfied “not only that those circumstances were consistent with his having committed the act, but they must also be satisfied that the facts were such as to be inconsistent with any other rational conclusion than that the prisoner was the guilty person.” The jury returned a verdict of not guilty.

[235] Since that time, the courts have wrestled with how this 1838 instruction should be applied in a modern context, and specifically whether “other rational conclusions” must arise from the evidence adduced at trial, or whether they could arise from the lack of evidence.

[236] The historical debate, and its progress over the years, is thoroughly discussed in Hill, Tanovich and Strezos, Canadian Criminal Evidence, §31:40.20-31:50.

[237] The Supreme Court of Canada has recently done much to settle the debate in R. v. Villaroman, 2016 SCC 33, [2016] 1 S.C.R. 1000.

[238] The accused in that case was charged with possession of child pornography. Pornographic images had been found on the accused’s computer, and the issue was whether he had possession of the pornography; in other words, whether he was aware that he had physical custody of the pornography and that he was aware of what it was. The accused did not testify.

[239] The trial judge held that the Crown had proven the case beyond a reasonable doubt, and that any inferences consistent with innocence were speculative. The Alberta Court of Appeal reversed the trial judge, and substituted an acquittal, holding that the trial judge had misunderstood and misapplied the law relating to circumstantial evidence. The Court of Appeal held that the trial judge had erred by requiring that an inference supporting a conclusion other than guilt be based on evidence rather than upon a lack of evidence. The Supreme Court of Canada allowed an appeal by the Crown, and restored the conviction.

[240] Cromwell J. for a unanimous Supreme Court of Canada, commenced his analysis by reviewing the law that had developed since Hodge’s Case, supra. He noted that there was some divergence in the jurisprudence as to whether the trier of fact should consider “rational” as opposed to “reasonable” inferences consistent with innocence, and whether any such inferences had to flow from the evidence called before the court, or whether they could follow from the lack of evidence.

[241] Cromwell J. said that he thought using the word “reasonable” is preferable to using the word “rational”. At para. 33, he stated that the two words are virtually synonymous, and at para. 34 he stated:

There is an advantage of using the word “reasonable”. It avoids the risk of confusion that might arise from using the word “reasonable” in relation to “reasonable doubt” but referring to “rational” inferences or explanations when speaking about circumstantial evidence.

[242] He stated, however, that it would not be an error to use the traditional term “rational”, noting that the court had said that the necessary message may be imparted in different ways.

[243] Cromwell J. went on to hold that inferences consistent with innocence did not have to be based on “proven facts”, but could arise from the lack of evidence. At para. 35 he stated “In assessing circumstantial evidence, inferences consistent with innocence do not have to arise from proven facts”, and after citing caselaw he continued:

Requiring proven facts to support explanations other than guilt wrongly puts an obligation on an accused to prove facts and is contrary to the rule that whether there is a reasonable doubt is assessed by considering all of the evidence. The issue with respect to circumstantial evidence is the range of reasonable inferences that can be drawn from it. If there are reasonable inferences other than guilt, the Crown’s evidence does not meet the standard of proof beyond a reasonable doubt.

[Emphasis added]

[244] At para. 27, Cromwell J. stated “When assessing circumstantial evidence, the trier of fact should consider “other plausible theories” and “other reasonable possibilities” which are inconsistent with guilt.” After citing caselaw, he stated “I agree with the appellant that the Crown thus may need to negative these reasonable possibilities, but certainly does not need to “negative every possible conjecture, no matter how irrational or fanciful, which might be consistent with the innocence of the accused”: R. v. Bagshaw, 1971 CanLII 13 (SCC), [1972] S.C.R. 2, at p.8. “Other plausible theories” or “other reasonable possibilities” must be based on logic and experience applied to the evidence or the absence of evidence, not on speculation.”

[245] At para.38, Cromwell J. concluded his analysis as follows:

Of course, the line between a “plausible theory” and “speculation” is not always easy to draw. But the basic question is whether the circumstantial evidence, viewed logically and in light of human experience, is reasonably capable of supporting an inference other than that the accused is guilty. [Emphasis added]

[246] It seems clear, in my view, that the issue of speculation cuts both ways. The Crown cannot rely on speculative inferences in order to establish guilt. However, the accused cannot rely on speculative and implausible inferences either. At the end of the day, as stated by Cromwell J., the basic question is whether the circumstantial evidence, viewed logically and in light of human experience, is reasonably capable of supporting an inference other than that the accused is guilty.

[247] It is with these principles in mind that I will review the evidence as it relates to each count in the indictment.

[248] Count 1 reads as follows:

JUN-CHUL CHUNG and KENNETH CHUNG stand charged:

That they, during an eight-month period, last, past and ending on February 6th, 2004, at the City of Burlington, in the said Region, did steal lottery tickets, the property of persons unknown, of a value not exceeding $5,000, contrary to Section 334 (b) of the Criminal Code of Canada.

[249] The definition of “theft” is contained in s. 322(1) of the Code, which reads as follows:

322 (1) Every one commits theft who fraudulently and without colour of right takes, or fraudulently and without colour of right converts to his use or to the use of another person, anything, whether animate or inanimate, with intent

(a) to deprive, temporarily or absolutely, the owner of it, or a person who has a special property or interest in it, of the thing or of his property or interest in it;

(b) to pledge it or deposit it as security;

(c) to part with it under a condition with respect to its return that the person who parts with it may be unable to perform; or

(d) to deal with it in such a manner that it cannot be restored in the condition in which it was at the time it was taken or converted.

[250] Pursuant to s. 322(1), the Crown must prove that Jun-Chul Chung and Kenneth Chung fraudulently and without colour of right converted lottery tickets to their use or the use of another person, with intent to deprive the owners of those tickets of the tickets or their property interest in them.

[251] The entirety of the Crown’s case on this count depends on what is contained in Exhibit 38, which shows 30 examples of ticket transactions between June 9, 2003 and February 6, 2004. I reviewed that evidence earlier, and I will not review it in detail again.

[252] There is no doubt, in my view, that the evidence discloses a scheme to steal free play lottery tickets.

[253] In every case, a lottery ticket was purchased and that lottery ticket was validated at Variety Plus. In every case, two free tickets were generated. In every case, one of those tickets was validated elsewhere, and the second free ticket was validated at Variety Plus. In every case, the validation of the original ticket was done by either Jun-Chul Chung or Kenneth Chung, and the validation of the second free ticket was done by Jun-Chul Chung or Kenneth Chung.

[254] In my view, the evidence, while circumstantial, is consistent only with the guilt of Jun-Chul Chung and Kenneth Chung, and it is inconsistent with any other reasonable conclusion.

[255] I have considered whether reasonable inferences inconsistent with guilt are available. In my view, they are not.

[256] A possible inference is that the winners of both free tickets validated both. If that was the case, each winner would have had to cash the two tickets in different places on different dates. While that is theoretically possible, the chances of it happening 30 times over an eight-month period become impossible to comprehend. Such an inference is simply unreasonable.

[257] This is particularly problematic, in my view, with respect to the four specific examples that I reviewed in the evidence earlier. In one case, the original ticket was purchased in North Bay, and one of the free play tickets was validated in North Bay, while the second free ticket was validated at Variety Plus. In another example, the original ticket was purchased in Owen Sound, one free ticket was validated in Owen Sound, and the other free ticket was validated at Variety Plus. In another example, the original ticket was purchased in Hamilton, one free ticket was validated in Stoney Creek, and the other free ticket was validated at Variety Plus at approximately the same time as the $12.5 million winner was validated. In the fourth example, the original ticket was purchased in Toronto, one of the free tickets was validated in Toronto, and the other free ticket was attempted to be validated twice at Variety Plus: once before the draw was held, and the second time on the same day that the $12.5 million winner was validated.

[258] The remaining issue is whether the evidence discloses thefts by both Jun-Chul Chung and Kenneth Chung, or whether, as in R. v. Schell (1977), 1977 CanLII 1939 (ON CA), 33 C.C.C. (2d) 422 (Ont. C.A.), it merely shows that offences have been committed by one of two people but it is not possible to say which one, in which case both must be acquitted.

[259] In my view, having regard to the hours of work of Jun-Chul Chung and Kenneth Chung, and the timing of the transactions, it is clear that Jun-Chul Chung stole some of the tickets and Kenneth Chung stole some.

[260] However, more fundamentally, in my view they are both guilty of all of the thefts as parties under s.21(1)(a) of the Code.

[261] Section 21(2) of the Code has no application. As held in R. v. Simpson, 1988 CanLII 89 (SCC), [1988] 1 S.C.R. 3, the “unlawful purpose” or “common purpose” referred to in the subsection cannot refer to the very offence alleged to be committed. However, where the evidence discloses common participation, as opposed to a common purpose, both accused can be convicted as principals: see R. v. Ball (2011), 2011 BCCA 11, 267 C.C.C. (3d) 532 (B.C.C.A); and R. v. Wood (1989), 1989 CanLII 7193 (ON CA), 51 C.C.C. (3d) 201 (Ont. C.A.). On at least 8 occasions out of 30, the original ticket was validated by one and the free ticket that was generated was validated by the other. The evidence, in my view, overwhelmingly shows joint participation.

[262] In the final analysis, I am satisfied beyond a reasonable doubt that Jun-Chul Chung and Kenneth Chung are guilty on count 1.

[263] Count 2 reads as follows:

JUN-CHUL CHUNG and KENNETH CHUNG stand further charged that they, during an eight-month period last, past and ending on February 6th2004, at the City of Burlington, in the said Region, did possess property, to wit: lottery tickets, of a value not exceeding $5,000, knowing that the said property had been obtained by the commission in Canada of an offence punishable by indictment, contrary to Section 354(1)(a) of the Criminal Code of Canada.

[264] Having been found guilty on Count 1, it is clear that Jun-Chul Chung and Kenneth Chung must be found guilty on Count 2. They are charged with possessing the very property stolen as alleged under Count 1, knowing that the property had been obtained by the commission in Canada of an offence punishable by indictment. Based on the same evidence tendered on Count 1, I am satisfied beyond a reasonable doubt that Jun-Chul Chung and Kenneth Chung are guilty on Count 2.

[265] I would point out, however, that no application was brought by the Crown to have the evidence on counts 1 and 2 apply as similar fact evidence on any of the other counts. This will have significance for the other counts in which Kenneth Chung is charged.

[266] Count 3 reads as follows:

JUN-CHUL CHUNG and KENNETH CHUNG stand further charged that they, on or about December 22nd, 2003, at the City of Burlington, in the said Region, did steal a Lotto Super 7 lottery ticket, the property of Daniel Campbell, of a value exceeding $5,000, contrary to Section 334(a) of the Criminal Code of Canada.

[267] For me to convict Jun-Chul Chung and Kenneth Chung on Count 3 as drafted, I would need to hold that the Crown had proven beyond a reasonable doubt that Daniel Campbell was the owner of the $12.5 million winning ticket.

[268] Based on the evidence as a whole, I think it is quite likely that Daniel Campbell was the true owner of the $12.5 million winning ticket. If this case depended on the standard of proof on a balance of probabilities, there is no doubt that the Crown will have met that burden. However, I am not prepared to find, on this evidence, that the Crown has proven beyond a reasonable doubt that Daniel Campbell was the owner of the ticket.

[269] Based on the data produced by Mr. Guzzo, there is no doubt whatsoever the same person purchased four lottery tickets at That’s Entertainment in St. Catharines on December 19, 2003. All four tickets were validated at Variety Plus on December 22, 2003. One of the tickets purchased on December 19, 2003 produced two free tickets, and one of them was the $12.5 million winning ticket. That ticket was validated at Variety Plus on December 27, 2003. The other free ticket was validated on December 27, 2003 in St. Catharines.

[270] Each of the other tickets purchased at That’s Entertainment on December 19, 2003, which were validated at Variety Plus on December 22, 2003, produced one free ticket, with Encore included. Each of the three free play tickets was validated in St. Catharines on December 27, 2003, two of them at Avondale Lakeshore, and one of them at JC Foods.

[271] Mr. Campbell had no recollection of purchasing any of the tickets in question, or validating them. Based on his betting patterns, and based on his place of residence and his place of work, it is quite probable that he was the purchaser of the four original tickets on December 19, 2003 at That’s Entertainment in St. Catharines. However, I am simply unable to come to that conclusion beyond any reasonable doubt.

[272] However, I do not think it is an essential element of the offence to prove that Daniel Campbell was the owner of the ticket. I do not agree with the Crown that theft from an unknown person is an included offence. However, the name of the rightful owner is mere surplusage, and can be ignored unless there is prejudice to the accused: see R. v. Vézina, 1986 CanLII 93 (SCC), [1986] 1 S.C.R. 2. There is no prejudice here. If the Crown establishes, beyond a reasonable doubt, that Jun-Chul Chung and Kenneth Chung stole the $12.5 million winning ticket from the rightful owner of that ticket, the offence is made out.

[273] As noted, no application was brought by the Crown to have the evidence relevant to Counts 1 and 2, that I have reviewed, rendered admissible under Count 3 or, for that matter, any of the other Counts. Accordingly, I will not consider any of the “pattern” evidence elicited under Count 1, through Exhibit 38, on any of the other counts, including Count 3.

[274] In my view, the specific evidence relevant to Count 3, that I reviewed in detail earlier in these reasons, and that I have summarized now, points to only one inescapable conclusion, namely, the $12.5 million winning free play ticket was stolen from the rightful owner of that ticket.

[275] As noted, the original ticket was purchased on December 19, 2003 in St. Catharines. It was one of four tickets, all of which were validated at Varity Plus on December 22, 2003. There is no doubt that Jun-Chul Chung validated the ticket; indeed, he advised the OLG personnel that he had done so. Clearly, the evidence shows that he validated the other three tickets as well.

[276] Three of the tickets generated single free play tickets, with Encore included. One of the tickets generated two free play tickets, one of which had Encore included, and one of which did not. That ticket was the winning ticket.

[277] All of the free play tickets, except the winning ticket, were validated in St. Catharines, on December 27, 2003. The winning ticket was not; rather, it was validated at Variety Plus on December 27, 2003.

[278] Jun-Chul Chung and Kathleen Chung advised the OLG personnel that Kathleen Chung had purchased the original ticket, and that she had won the free play ticket that turned out to be the winner. Both of them knew that was false. When Kenneth Chung attended meetings at the OLG, he joined in that story.

[279] It is clear, in my view, that there is only one reasonable conclusion: the winning free play ticket was kept by Jun-Chul Chung for himself after he validated all of the tickets on December 22, 2003. In so doing, he stole that ticket from its rightful owner.

[280] I have considered whether there are other reasonable inferences inconsistent with guilt. There are none.

[281] To accept that Kathleen Chung was the purchaser of the original ticket, it would have to be concluded that she purchased all four tickets that were sold within a few seconds of each other on December 19, 2003 at That’s Entertainment in St. Catharines. That being the case, she would have to have been the person who validated all four tickets at Variety Plus on December 22, 2003.

[282] Kathleen Chung has never said she bought four tickets in St. Catharines on December 19, 2003. She said she did not know where she bought the ticket that produced the winning ticket that was validated on December 22, 2003.

[283] Jun-Chul Chung told the OLG personnel that he had validated a number of tickets given to him by Kathleen Chung on December 22, 2003. There was no musical jingle until the winning $12.5 million winner was validated. However, each of the other three tickets purchased in St. Catharine’s, that were validated at Variety Plus on December 22, 2003 at the same time as the ticket that generated the winning ticket, produced free play tickets themselves. Each of them would have produced a musical jingle.

[284] As noted, the winning ticket was validated at Variety Plus on December 27, 2003. All of the other free play tickets, including the sister ticket to the winning ticket, were validated in St. Catharines on December 27, 2003.

[285] Viewed logically, and in light of human experience, this combination of circumstances is not reasonably capable of supporting an inference other than that Jun-Chul Chung is guilty of the offence.

[286] It has not been established that Kenneth Chung was present in the store at the time Jun-Chul Chung stole the ticket. I am not persuaded beyond a reasonable doubt that he was involved in the theft. He must be acquitted on Count 3.

[287] Count 4 reads as follows:

JUN-CHUL CHUNG, KENNETH CHUNG and KATHLEEN CHUNG stand charged that they, between December 22nd, 2003 and February 5th, 2004 at the City of Burlington, in the said Region, and elsewhere in the Province of Ontario, did possess property, to wit: a Lotto Super 7 lottery ticket, of a value exceeding $5,000, knowing that the property was obtained by the commission in Canada of an offence punishable by indictment, contrary to Section 354(1)(a) of the Criminal Code of Canada.

[288] I have reviewed the evidence as it relates to Jun-Chul Chung and Kathleen Chung already. Based on that evidence, as I have already found, Jun-Chul Chung stole the $12.5 million winning lottery ticket. There is also no doubt that Kathleen Chung, subsequent to the validation of the ticket, was in possession of that ticket knowing that it had been obtained by theft. She did not purchase the original ticket in St. Catharines on December 19, 2003, nor did she validate the sister ticket in St. Catharines on December 27, 2003. Nor, for that matter, did she validate the other three tickets purchased on December 19, 2003, nor did she validate any of the free play tickets in St. Catharines on December 27, 2003, that had been generated from those three tickets.

[289] Kathleen Chung has lied throughout about her purchase of the original ticket and the validation of the winning ticket. She could not, in fact, have purchased any of the original tickets nor validated any of the subsequent tickets. Apart from the OLG computer records, her cellphone, banking and VISA records show that she could not have been where she said she was at the relevant times. She obviously lied to the OLG personnel about being the legitimate owner of the ticket, and how she came to possess it. She knew the ticket was stolen. There can be little doubt, in my view, that Kathleen Chung is guilty on Count 4.

[290] The issue is whether Kenneth Chung is also guilty on Count 4. Not without doubt, I am not convinced beyond a reasonable doubt that he is.

[291] As noted earlier, there is no evidence that Kenneth Chung was in the store at the time the winning ticket was validated. There is no evidence that he knew, subsequently, that the ticket was stolen. It is possible, although unlikely, that he was told Kathleen was the rightful winner and he believed her. This is at least a reasonable possibility that is inconsistent with the guilt of Kenneth Chung.

[292] Accordingly, Kenneth Chung must be acquitted on Count 4.

[293] Count 5 reads as follows:

JUN-CHUL CHUNG, KENNETH CHUNG and KATHLEEN CHUNG stand further charged that they, between December 22nd, 2003 and December 30th, 2004, at the City of Burlington in the said Region and elsewhere in the Province of Ontario, did by deceit, falsehood or other fraudulent means, defraud the Ontario Lottery and Gaming Corporation of the sum of $12.5 million, contrary to Section 380(1) of the Criminal Code of Canada.

[294] It is clear from the evidence I have reviewed that Jun-Chul Chung stole the $12.5 million winning lottery and that Kathleen Chung knew that it was stolen. She knew that she did not purchase the original ticket. She did not validate any of the original tickets, nor did she validate any of the free tickets generated from them, including the sister ticket to the $12.5 million winner.

[295] When Kathleen Chung and Jun-Chul Chung attended at the OLG premises to claim the prize, they represented, falsely, that Kathleen Chung was the purchaser of the original ticket, and that she was the owner of the $12.5 million winner. They knew this was false. They continued with these falsehoods throughout, until the money was paid. The fact that the OLG paid the money, notwithstanding their suspicions, does not alter the fact that they obtained the money through the falsehoods they uttered.

[296] The issue is whether Kenneth Chung is also guilty on this count. Once again, not without doubt, I am not convinced of his guilt beyond a reasonable doubt. As noted earlier, it is possible that he was told, falsely, that Kathleen Chung was the legitimate purchaser of the original ticket, and he believed her. Once again, this is a reasonable possibility which is inconsistent with Kenneth Chung’s guilt. Accordingly, he must be acquitted on Count 5.

[297] Count 6 reads as follows:

JUN-CHUL CHUNG, KENNETH CHUNG and KATHLEEN CHUNG stand further charged that they, between December 30th, 2004 and September 27th, 2010, at the Town of Oakville in the said Region and elsewhere in the Province of Ontario, possess property, to wit: all or part of the sum of $12.5 million and property purchased with all or part of the sum of $12.5 million, knowing that the money and property were obtained by the commission in Canada of an offence punishable by indictment, contrary to Section 354(1)(a) of the Criminal Code of Canada.

[298] There is no doubt that Jun-Chul Chung and Kathleen Chung are guilty on this count. For the reasons articulated earlier, they both knew the $12.5 million was obtained fraudulently. Kathleen Chung obtained the benefit of large amounts of the proceeds, including the purchase of an expensive home and some cars, and she was the beneficial owner of a number of investments. Jun-Chul Chung became a trustee of the Family Trust that obtained most of the funds, and he is a beneficiary of the Trust. While Kenneth Chung obtained considerable benefit from some of the proceeds of the $12.5 million, once again I am not convinced beyond a reasonable doubt that he knew that the money and property were obtained by fraud. As noted, it is at least a reasonable possibility that he was told that Kathleen Chung was the legitimate owner of the ticket, and he believed her. Thus, it is a reasonable possibility which is inconsistent with the guilt of Kenneth Chung.

[299] Count 7 reads as follows:

JUN-CHUL CHUNG, KENNETH CHUNG and KATHLEEN CHUNG stand further charged that they, between December 30th, 2004 and September 27th, 2010, at the Town of Oakville in the said Region and elsewhere in the Province of Ontario, did use, transfer the possession of or otherwise deal with proceeds of property, to wit: all or part of the sum of $12.5 million, with intent to conceal or convert the proceeds, knowing that those proceeds were obtained as a result of the commission in Canada of a designated offence, contrary to Section 462.31(1)(a) of the Criminal Code of Canada.

[300] The section under which the accused are charged here is colloquially referred to as a “money laundering” provision. Generally speaking, money-laundering provisions are designed to prevent people from hiding the source of ill-gotten gains.

[301] In this case, it is contended that the ill-gotten gains are the $12.5 million obtained by fraud. It is contended that efforts were made to conceal the source of the proceeds, by establishing the Hi Ok Chung Family Trust, and by the creation of documents that purport to show that the funds provided to the trust were obtained from a source in Korea.

[302] I am not persuaded that the Crown has made out this offence beyond a reasonable doubt.

[303] The banking and other records maintained by the accused were not altered in any way to disguise what happened to the $12.5 million, or where the funds that ended up with the Hi Ok Chung Family Trust came from.

[304] There is simply no evidence to explain the purpose of the statutory declarations seized during the execution of the search warrant. While those statutory declarations state that at least $9 million was furnished to the Hi Ok Chung Family Trust from a source in Korea, I am not convinced that the purpose of preparing those documents was necessarily to hide the source of the funds. As noted, the banking records retained in Canada were not altered in any way to disguise the source of the funds.

[305] Accordingly, all three accused must be acquitted on this count.

Disposition

[306] For the foregoing reasons, the verdicts on each count are as follows:

a) Count 1:

i) Jun-Chul Chung – guilty;

ii) Kenneth Chung – guilty;

b) Count 2:

i) Jun-Chul Chung – guilty;

ii) Kenneth Chung – guilty;

c) Count 3:

i) Jun-Chul Chung – guilty;

ii) Kenneth Chung – not guilty;

d) Count 4:

i) Jun-Chul Chung – guilty;

ii) Kenneth Chung – not guilty;

iii) Kathleen Chung – guilty;

e) Count 5:

i) Jun-Chul Chung – guilty;

ii) Kenneth Chung – not guilty;

iii) Kathleen Chung – guilty;

f) Count 6:

i) Jun-Chul Chung – guilty;

ii) Kenneth Chung – not guilty;

iii) Kathleen Chung – guilty;

g) Count 7:

i) Jun-Chul Chung – not guilty;

ii) Kenneth Chung – not guilty;

iii) Kathleen Chung – not guilty.

[307] I will entertain submissions as to the application of the principle in R. v. Kienapple, 1974 CanLII 14 (SCC), [1975] 1 S.C.R. 729, when the matter is next before me.

Gray J.

Released: April 9, 2018