Court File and Parties
COURT FILE NO.: CV-17-569643 DATE: 20180628 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Attorney General of Ontario Applicant – and – $44,215 in Canadian Currency (In Rem) Respondent
COUNSEL: Sandra Di Ciano, for the Applicant Matthew Tubie, for the Respondent (Wrann Gould)
HEARD: May 15, 2018
Reasons for Decision
CAROLE J. BROWN, J.
[1] The Attorney General of Ontario (“AG”) brings this application for a forfeiture order pursuant to the Civil Remedies Act, 2001 for forfeiture of currency seized by members of the Toronto Police Services (“TPS”) from 296 Grandravine Dr., Unit 135, Toronto, a residence associated with a drug trafficker, Stavon Sam (“Mr. Sam”).
[2] On June 22, 2016, members of the TPS executed two search warrants, one for 85 Gosford Blvd., Unit 3 and a second for 296 Grandravine Dr., Unit 135, Toronto. At 85 Gosford Blvd., Unit 3, the TPS located Mr. Sam along with two others, Daanesh Phagoo and Ganesh Phagoo in the same bedroom. They were found to have wrapped packages of crack cocaine and heroin, two digital scales, drug packaging, as well as Canadian currency in the total amount of $865. The drugs located were in individual bundles. In total, 1.58g of crack cocaine, 2.11g of heroin/Fentanol and 358.27g of marijuana were located.
[3] Upon execution of the search warrant for 296 Grandravine Drive, Unit 135, the TPS located a large sum of Canadian currency bundled in denominations of $20, $50 and $100, totaling $43,350. Thus, the total amount seized in the two searches amounted to $44,215. All monies seized were photographed, reconciled and recorded on a property sheet.
[4] At 296 Grandravine Drive, the $43,350 was located in a bedroom closet behind an ottoman near the rear of the closet in a plastic container covered by a sheet of wrapping paper. The teenaged girl in the room indicated that it was her room, but was not her money. She told the police that her brother, Stavon Sam, kept his clothes in the closet. A passport photo of Mr. Sam and a stub or receipt from a driver’s license in his name and indicating his address as 296 Grandravine Dr., Unit 135, were found in the living room of 296 Grandravine Drive.
[5] The three men located at 85 Gosford Blvd. were arrested and charged. The charges against Daanesh Phagoo were withdrawn. Ganesh Phagoo pled guilty to possession for the purpose of trafficking and received a suspended sentence and probation. On January 27, 2017, the charges against Mr. Sam were stayed. On February 24, 2017, the AG obtained a preservation order directing that the currency be paid into court until the disposition of the forfeiture application, which is now before this Court.
[6] Mr. Sam is known to the TPS to be in the drug trafficking business. He has had five arrests and two convictions for drug related offences. On March 22, 2014, he was charged with and convicted of trafficking in heroin, possession of marijuana and failure to comply with a recognizance. In May, 2015, he was again charged with and convicted of trafficking in heroin and failure to comply with a recognizance.
Claim by Wrann Gould re Money Seized
[7] On this application, Wrann Gould, Mr. Sam’s father, has come forward to claim the money seized as his. He denies the statement his teenage daughter, Danielle Bryan, made to the police that her brother, Stavon Sam, kept his clothes in her bedroom closet. Mr. Gould denied that the bedroom was hers and, at one point, testified on cross-examination that members of the family did not have a specific bedroom, but all used all of the rooms. In the factum, he states that the bedroom was his. When the police first spoke with him, he denied that he lived at the residence. Subsequently, he indicated that he did live at the residence.
[8] He testified on cross-examination that the money was money he had saved over a long period of time from 2009 to 2015. He testified that he did not trust banks and so kept it at home. He explained that it was kept in bundles, which he stated was consistent with the way people store their cash at home. He testified that the money came from jobs, withdrawals from his bank accounts at CIBC and TD, withdrawals from his seven credit cards and from his line of credit. While he was asked to produce his complete bank records from 2009 to 2015, he produced a part of his TD records for that period of time and none of his CIBC records. When asked about paying interest on over $50,000 in credit card and line of credit debt, including the amounts he withdrew from his credit cards and line of credit and kept at home, he responded saying “That’s my personal life, I don’t need to explain that” and thereafter, “That’s how people operate in life” and “That’s how people use their money, to invest”.
[9] It is the position of Mr. Gould that the police actually took from 296 Grandravine Dr. his total life savings in the amount of $80,000 which, in his submissions, he changed at one point to $80,200 and then to $81,000. He denied that they took only $43,350 from Grandravine Drive, and stated that the police were lying and falsifying the records. Indeed, he has asserted that the sworn evidence of multiple police officers in this case was fabricated.
The Issues
[10] The issues for determination by this Court are as follows:
- Whether the AG has proven, on a balance of probabilities, that the currency is an instrument and/or proceeds of unlawful activity.
- If the currency is, on a balance of probabilities, the proceeds and/or an instrument of unlawful activity, whether it is clearly not in the interests of justice to order forfeiture.
The Law
The Test for Granting a Forfeiture Order
[11] The purpose of the Civil Remedies Act is to make crime or unlawful activity unprofitable, to capture resources so tainted as to make them unavailable to fund future unlawful activity, to prevent persons who engage in unlawful activity from keeping property that was acquired as a result of unlawful activity, to prevent injury to the public that may result from conspiracies to engage in unlawful activity, and to compensate victims for the costs of crime or unlawful activity.
[12] Pursuant to the Civil Remedies Act, 2001, SO 2001, c 28, a two-pronged test for granting a forfeiture order is set forth, as follows.
- The court must be satisfied that, on a balance of probabilities, the property sought to be forfeited is either “proceeds of an unlawful activity (s 3(1)) or an “instrument of unlawful activity” (s 8(1)).
- If the Court is satisfied that the first part of the test has been met, then the court shall make the order unless it is clearly not in the interests of justice to make the order sought.
On a Balance of Probabilities, Is the Property Sought to Be Forfeited Proceeds of an Unlawful Activity or an Instrument of Unlawful Activity
[13] In determining this aspect of the test, I have considered all of the voluminous evidence before me from the Crown as regards the investigation, the affidavits of the police and the expert report, the transcript of Mr. Gould on cross-examination and, as well, the factum and responding records of Mr. Gould.
[14] It is long recognized that drug trafficking is a cash business and that suspicious circumstances, such as the possession of large amounts of bundled currency require a credible and reasonable answer: Ontario (Attorney General) v $1650 in Canadian Currency (In Rem); Ontario (Attorney General) v $10,000 in Canadian Currency (In Rem), 2014 ONSC 944; Ontario (Attorney General) v $9616.98 in Canadian Currency (In Rem), 2011 ONSC 3820; Ontario (Attorney General) v $42,885 in Canadian Currency (In Rem), 2012 ONSC 4843.
[15] The storage of large sums of money in a residence is just such a suspicious circumstance: Ontario (Attorney General) v $61,686 in Canadian Currency (In Rem).
[16] In the present case, $43,350 cash, bundled in $20, $50 and $100 bills with elastic bands was found hidden in a plastic box behind an ottoman covered by a sheet of wrapping paper in a bedroom closet at 296 Grandravine Dr., Unit 135. The manner of bundling and the denominations of the bills bundled are indicia of the drug trade. The fact that they were hidden away often indicates illicit funds. Large amounts of cash from illicit activity is rarely placed in a financial institution due to mandatory reporting requirements pursuant to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act: see expert opinion of Detective Constable C David Waterfield, in evidence.
[17] Has there been a credible and reasonable answer as regards the large amounts of cash, bundled with elastic bands in denominations of $20, $50 and $100? Mr. Gould, who claims that the funds are his, has given vague and changing responses, as set forth above, as regards the sources of the cash and the reasons why it is kept at home, hidden in a closet. He indicates that he distrust banks, although he has apparently two bank accounts, one for which he provided some but not all of the bank statements. The bank statements provided from TD Bank indicate that he used the bank account on a regular basis, despite his purported distrust. His evidence as regards withdrawing the large amounts of money found, from the bank accounts, from his 7 credit cards and from a line of credit, incurring debt of $50,000 upon which he paid interest, does not make business or investment sense. He further alleges that the police have lied and falsified their records, that they actually took $80,000-$81,000 from the closet, that they lied about the statement made to them by his daughter as regards the fact that the money was not hers, but that her brother kept his clothing in the closet. These and the other explanations, as contained in the transcripts of his cross-examination as well as the facta are, in my view, not credible or reasonable.
[18] I do not find there to be any credible or reasonable explanation for the subject funds and no credible explanation which would establish that these funds belong to Mr. Gould, i.e. that he is the rightful owner.
[19] Based on all the evidence before me, I am satisfied that the monies sought to be forfeited are proceeds of unlawful activity or an instrument of unlawful activity.
[20] While I do not base my decision on this, it is of note that, related to the 2014 charges against Mr. Sam, in which $65,660 Canadian was seized, his mother, Sharon Sam came forward as an interested party and claimed to be the rightful owner of that currency, which she claimed was her life savings, which she kept hidden in the home and which she stated had been stolen by Stavon Sam.
Is It Clearly Not in the Interests of Justice to Make the Order Sought?
[21] In the case of Ontario (Attorney General) v 1140 Aubin Rd., Windsor et al, 2011 ONCA 363, the Court of Appeal determined that the “clearly not in the interests of justice” test was very much the exception and should only be granted where it was established that forfeiture would be “manifestly harsh” or “draconian”. In considering whether forfeiture would meet such a threshold, the Court of Appeal considered three non-exhaustive factors: (i) the role of the respondent in the unlawful activity; (ii) any disparity between the amount of the proceeds and the amount sought to be forfeited; and (iii) whether forfeiture would be consistent with the purposes of the Civil Remedies Act.
[22] I have considered the three factors set forth above. I find that there are no facts and no evidence in this case which would suggest that an order for forfeiture of the subject property would create a result that is either manifestly harsh or draconian. A forfeiture order in this case would, in my view, promote the purposes of the Civil Remedies Act, including taking the profit out of crime and deterring current and would-be perpetrators of crime.
[23] Accordingly, I order that the $44,215 in Canadian currency, including all interest accrued thereupon to date, be forfeited to the Crown in Right of Ontario pursuant to section 3 and 8 of the Civil Remedies Act and, on receipt of that Order, that the accountant of the Superior Court of Justice pay the aforementioned amounts including all accumulated interest to the Minister of Finance.