Court File and Parties
Court File No.: CR-13-00007205-0000 Superior Court of Justice
Her Majesty the Queen v. Julia Schulz
Reasons for Sentence
Before the Honourable Justice M. Fuerst on June 28, 2018, at Newmarket, Ontario
Appearances: P. Westgate, Counsel for the Crown J. Schulz, In Person
Reasons for Sentence
Fuerst, J. (Orally):
Introduction
Julia Schulz defrauded her employer of hundreds of thousands of dollars over a period of several months. She pleaded guilty to one count of fraud over $5,000.
While Crown counsel seeks a sentence to be served in jail, Ms. Schulz, who is self-represented, asks that I impose a conditional sentence of imprisonment.
The Circumstances of the Offence
Between May 2nd, 2011 and January 12, 2012, Ms. Schulz was employed by Integral Window Systems as an accounts payable and payroll clerk. During that time period, she forged the signature of company owner Ted Gawlik on 187 cheques that she made out to herself. She deposited the cheques into her bank account.
The total amount of the cheques was $333,827.61. None of the payments to her were authorized by Mr. Gawlik.
Ms. Schulz did little, if anything, to hide her fraudulent acts.
Her employment was terminated for unrelated reasons on January 7th, 2012.
When the losses were discovered subsequently, Mr. Gawlik confronted Ms. Schulz. She admitted that she wrote the cheques to herself. Mr. Gawlik reported the fraud to the police.
When contacted by the police, Ms. Schulz went to the police station and told the police what happened. She later provided a letter of apology to Mr. Gawlik.
To date, Ms. Schulz has paid a little over $20,000 in restitution to Mr. Gawlik.
The Victim Impact Information
Mr. Gawlik provided a Victim Impact Statement in which he described the company as a small, family-run business that has about 20 employees. While Ms. Schulz was employed at the company, it operated at a loss. Accountants advised Mr. Gawlik to close the business, but he chose to keep it running. Unknown to him, Ms. Schulz continued to take money out of the business. When Ms. Schulz’s fraudulent activity came to light, Mr. Gawlik and his business partner blamed one another for the situation. Their relationship suffered. Mr. Gawlik had to resort to a line of credit on his house to make up for the money that Ms. Schulz took. He is still paying off that line of credit. He describes losing sleep and being unable to focus. He no longer trusts anyone.
The Circumstances of Ms. Schulz
Information about Ms. Schulz’s background and circumstances is set out in a pre-sentence report.
Ms. Schulz is 44 years old. She immigrated to Canada from Germany with her husband when she was 24. She, like her husband, is a permanent resident of Canada. They have two daughters, who are 18 and 19 years old. One daughter is in her last year of high school. The other is in her second year of university.
Ms. Schulz has a close relationship with her daughters. She is described as a dedicated and caring mother. She has been a volunteer with a sports association in which her younger daughter participates.
In the past, Ms. Schulz worked in office jobs, including administrative assistance and bookkeeping. As indicated, she lost her job with Integral Window Systems in early 2012. Currently she works full-time as a live-out nanny for a family of two children. She also has worked part-time at a food truck, mainly on weekends, and at a flower shop. Her husband became unemployed as a result of a layoff by his employer, but has been looking for work. They live in a rented house.
Ms. Schulz has a criminal record. In mid-June 2010 she was convicted of fraud over $5,000 in respect of conduct that occurred before she committed the fraud on Integral Window Systems. She received a conditional sentence of imprisonment of 12 months. A restitution order was made in the amount of $60,000. In April 2013, after her fraud on Integral Window Systems came to light, she was convicted of fraud over $5,000 in respect of conduct that occurred before she committed the fraud on Integral Window Systems. She received a conditional sentence of imprisonment of two years less a day, followed by three years of probation. That probation expired in April. She has been compliant in reporting, and expressed that she got some benefit from counselling, but told the pre-sentence reporter that her community supervision terms did not contribute to her rehabilitation.
Ms. Schulz’s relationship with her husband is described as “complicated”. She told the pre-sentence reporter that they had minimal communication and led separate lives even though they were residing together. Her husband apparently became involved with someone else. He knew nothing of his wife’s offence, until Mr. Gawlik contacted him. Once Ms. Schulz told her husband details of her offence, they opened a line of communication. Her husband began to participate in activities with her, and they started to work through issues as partners. He describes as Ms. Schulz as now having a healthier mind-set.
Ms. Schulz denies any substance abuse problems or mental health issues. She told the pre-sentence reporter that her fraudulent activity was the result of her inability to say no, and that she did not want to burden her family with a residential move. Her husband, however, denied that there were any financial troubles around the time of the offence.
Ms. Schulz’s older daughter has been experiencing some health problems, for which she has been seen by a variety of specialists. Neither of her daughters know about her offence.
Ms. Schulz told the pre-sentence reporter that her actions put Mr. Gawlik “through hell and back”. She provided me with a written submission in which she apologized to Mr. Gawlik and expressed her wish to repay what she owes.
The Positions of the Parties
On behalf of the Crown, Mr. Westgate acknowledges the immigration consequences for Ms. Schulz if she receives a sentence of six months or more in jail. He seeks a jail term of six months less a day, followed by two years of probation. He stands by the earlier submissions of his colleague, Mr. Dionne, who emphasized that this is Ms. Schulz’s third conviction for fraud. This offence involved a significant breach of trust. A large amount of money was taken by Ms. Schulz from her employer. Full restitution is unlikely.
Ms. Schulz initially asked that I suspend the passing of sentence and place her on probation for two years, but then clarified that she was seeking the same kind of sentence that she received previously, meaning a conditional sentence of imprisonment followed by probation. She would like to continue working as a nanny, and does not want to work in any aspect of accounting. She is willing to engage in counselling as part of her sentence. She said that she had not discussed with her husband whether he would support her through a jail term and on her release. If she is sentenced to a jail term, her husband would have to move, as he could not afford to stay in the home without her income. Her younger daughter would continue to live with him. She said that neither of her daughters needed her financial support.
At the request of Ms. Schulz, I warned her on an interim appearance after sentencing submissions were made, that I would be imposing a jail sentence, without specifying its length. I adjourned the imposition of sentence so that she could get her personal life in order. On a subsequent occasion, I adjourned the imposition of sentence so that she could get advice about immigration consequences. She did so, and then advised me that she did not wish to strike her guilty plea, but asked that any jail term imposed be less than six months.
The Principles of Sentencing
The objectives of sentencing recognized at common law are codified in section 718 of the Criminal Code. As that section was framed in 2011, they are the denunciation of unlawful conduct; deterrence both general and specific; the separation of the offender from society, where necessary; rehabilitation; reparation for harm done to the victims or the community; and promotion of a sense of responsibility in offenders and acknowledgement of the harm done.
Section 718.1 provided then, as it does now, that a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.
Section 718.2 provided then, as it does now, that a sentence should be increased or decreased to account for any aggravating and mitigating circumstances. It sets out various aggravating factors, one of which was that the offender abused a position of trust in relation to the victim. It also required that a sentence be similar to those imposed on similar offenders in similar circumstances; that the combined duration of consecutive sentences not be unduly long; that an offender not be deprived of liberty if less restrictive sanctions may be appropriate; and that all available sanctions other than imprisonment that are reasonable in the circumstances be considered.
In R. v. Bogart (2002), 61 O.R. (3d) 75, the Ontario Court of Appeal described fraud over $5,000 as a serious offence. It attracted then, as it does now, a maximum sanction of 14 years in jail.
Analysis
There are a number of aggravating factors that make this a significant instance of fraud. They include the following:
Ms. Schulz’s activities represent a blatant and egregious breach of trust, committed while she was an employee, against her employer.
Her fraudulent activity in writing forged cheques to herself was not an isolated incident, but was repeated over a period of about eight months.
The amount of the fraud, over $330,000, was large.
The target of the fraud was a small, family-run business. By her actions, Ms. Schulz put the continued operation of the company, and the jobs of its other employees, at risk.
The fraud had a significant impact on Mr. Gawlik as a co-owner of the business, both financially and emotionally.
The restitution made to date by Ms. Schulz has been minimal, and more than $300,000 remains outstanding.
Ms. Schulz has a previous conviction for fraud in 2010, and was still bound by the terms of a conditional sentence of imprisonment when her fraudulent activity against Integral Window Systems began. It is a statutory term of every conditional sentence that the offender keep the peace and be of good behaviour. Ms. Schulz violated that condition.
I also consider the mitigating factors. They include:
Ms. Schulz pleaded guilty, which is an an expression of remorse and willingness to accept responsibility for her wrongdoing.
She expressed remorse in a written submission she provided to me.
She is a dedicated and caring mother to her two daughters.
She has held employment as a nanny and at two part-time jobs in addition.
She expressed her willingness to engage in counselling as part of her sentence, and her desire to make restitution.
General deterrence and denunciation must be the paramount principles in sentencing an offender who abuses a position of trust to commit a significant fraud. Given Ms. Schulz’s previous conviction for fraud over $5,000 in 2010, specific deterrence is also an important objective of sentencing in this case. Rehabilitation plays a less predominant role.
A reformatory length term of imprisonment is warranted because of the seriousness of the offence, Ms. Schulz’s moral blameworthiness, and the governing objectives of sentencing. Although a conditional sentence of imprisonment was not automatically unavailable under s. 742.1, as that provision was framed in 2011, I conclude that in the circumstances of this case a conditional sentence would not be consistent with the fundamental purpose and principles of sentencing. A term of imprisonment to be served in jail is required.
I raised with Crown counsel and Ms. Schulz her status as a permanent resident of Canada after it came to my attention in the pre-sentence report. The Supreme Court of Canada held in R. v. Pham, 2013 SCC 15, that collateral immigration consequences are relevant to the sentencing determination. While a sentence in excess of six months would be justifiable on the facts of this case, it would be unduly punitive for Ms. Schulz as a long-time resident of Canada, given that it would make her subject to deportation without right of appeal. For that reason, I have decided to reduce the sentence below what would otherwise be appropriate.
Sentence
Ms. Schulz, please stand. I sentence you to six months less a day in jail, followed by two years of probation. The conditions of probation are the statutory conditions plus the following:
Report to a probation officer immediately on your release and thereafter as required.
Inform your probation officer of any employment in which you are engaged, including any self-employment.
Not have authority over the real property, money, or valuable security of another person, with the exception of your spouse.
Attend at and participate in any assessment or counselling as your probation officer recommends.
Sign releases between your counsellor and probation officer so that your progress and counselling can be monitored.
Have no contact, direct or indirect, with Ted Gawlik, except to comply with the restitution order or for the purpose of court proceedings.
Not be within 100 metres of the known place of employment, education, or residence of Ted Gawlik.
I make a freestanding restitution order in favour of Ted Gawlik in the amount of $312,827.61.
I recommend that the correctional authorities consider Ms. Schulz for any early release program that may be available.
You can have a seat, Ms. Schulz.
So we’ll need to have the court officers come up. Mr. Westgate, is there anything that needs to be clarified?
MR. WESTGATE: No, thank you, Your Honour.
THE COURT: I’ll just endorse the indictment.
JULIA SCHULZ: May I ask a question?
THE COURT: Yes, you may.
JULIA SCHULZ: I have family waiting outside. Is there any way that I can let them know where I will be going?
THE COURT: I’m not sure if the officers will know that information.
CLERK REGISTRAR: The court service officers are on their way.
THE COURT: All right, so we’ll ask them if they know. So maybe we’ll ask our court officer. Ms. Schulz is wondering where she will be taken. Today, sorry. Yes, sorry.
MR. STEVENSON: Hi, Your Honour.
THE COURT: Can you assist us as to that? She wants her family to know. Thanks.
MR. STEVENSON: Officer Stevenson, 6089, York Regional Police. If this lady’s stepping into custody today, she’ll be taken to Central East Correction Centre in Lindsay.
THE COURT: All right.
JULIA SCHULZ: In Lindsay. Is that where I will be remaining for - I have my daughter outside.
MR. STEVENSON: I’m sorry, I just walked into this. That’s why....
JULIA SCHULZ: I’m sorry.
THE COURT: Yeah, I don’t think our court officer knows that answer.
JULIA SCHULZ: Okay.
THE COURT: They’ll be able to tell you at Lindsay whether they will hold you there or whether you might be eligible for another kind of institution.
MR. STEVENSON: Any other questions, Your Honour?
THE COURT: I don’t think so. Do you want someone to convey that information to your....
JULIA SCHULZ: May I just step outside to my daughter and tell her?
THE COURT: Can you go with....
MR. STEVENSON: I don’t have an issue with that, Your Honour.
THE COURT: All right. Do you want to just....
JULIA SCHULZ: [indiscernible] .
THE COURT: Well, just - since I have sentenced her, I think I should ask you just to accompany her outside...
MR. STEVENSON: Yes.
THE COURT: ...if you wouldn’t mind.
MR. STEVENSON: Okay, Your Honour. I just have to place the handcuffs on her. The lady’s in custody.
THE COURT: All right. Do you....
JULIA SCHULZ: Can I ask my daughter to come inside?
THE COURT: Can we - yeah, before - I don’t want her child or children to see her in handcuffs, so can we....
MR. WESTGATE: Okay. What’s the name of your daughter?
JULIA SCHULZ: She looks like me. You can notice her.
MR. WESTGATE: I am happy to step outside and ask....
THE COURT: Okay. Can we just hold off on the handcuffing?
MR. STEVENSON: Yes, Your Honour.
THE COURT: Thanks. I’m sorry, I can’t answer that question either. All right. We’re going to move on then. All right. Thank you. Thank you to our court officers. All right. So I have endorsed:
Ms. Schulz is sentenced to six months less a day in jail, followed by probation of two years on conditions read into the record. I recommend that she be considered for any early release program. There is a freestanding restitution order for $312,827.61.
All right. Thank you.
JULIA SCHULZ: Thank you.
THE COURT: All right. I hope you achieve early release and that you get back on your feet, Ms. Schulz.
JULIA SCHULZ: All four of the jobs that I was holding, everybody wants me to come back to my job.
THE COURT: Well, that’s a good sign for the future. All right. Thank you.
JULIA SCHULZ: My husband knows too, and he has moved since - it’s okay, it was just emotional to say goodbye.