Court File and Parties

COURT FILE NO.: CR-15-0059-00 DATE: 2018-12-17

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

HER MAJESTY THE QUEEN G. Fillmore, for the Crown

- and -

PAUL WHITELEY LANGIS K. Matthews, for the Accused Accused

Delivered Orally: December 17, 2018 at Thunder Bay, Ontario

SMITH J:

Reasons On Sentencing

Introduction

[1] After a fairly lengthy trial, Paul Whiteley Langis was convicted of three counts of fraud contrary to section 380(1)(a) of the Criminal Code, R.S.C., 1985, c. C-46:

Count #1

That he, Paul Whiteley LANGIS on or between the 23rd day of January 2013 and the 21st of October 2013, at the City of Thunder Bay in the said Region, did, by deceit, falsehood, or other fraudulent means, defraud 1670635 Ontario Limited, carrying on business as WENDY'S Memorial Avenue, Thunder Bay, Ontario, of a sum of money, of a value exceeding five thousand dollars, contrary to Section 380(1)(a) of the Criminal Code.

Count #2

That he, Paul Whiteley LANGIS on or between the 15th day of April 2013 and the 30th day of September 2013, at the City of Thunder Bay in the said Region, did, by deceit, falsehood, or other fraudulent means, defraud Wen-Bay Limited, carrying on business as WENDY'S Red River Road, Thunder Bay, Ontario, of a sum of money, of a value exceeding five thousand dollars, contrary to Section 380(1)(a) of the Criminal Code.

Count #3

That he, Paul Whiteley LANGIS on or about the 11th day of June 2013, at the City of Thunder Bay in the said Region, did, by deceit, falsehood, or other fraudulent means, defraud 1670635 Ontario Limited, carrying on business as WENDY'S Memorial Avenue, Thunder Bay, Ontario, of a sum of money, of a value exceeding five thousand dollars, contrary to Section 380(1)(a) of the Criminal Code.

[2] All charges related to breaches of his employer’s trust in his capacity as manager of two Wendy’s Restaurants located in Thunder Bay.

[3] These reasons serve to impose a fit and just sentence for the aforementioned crimes.

Factual Overview

[4] In my reasons for judgment that were released on January 26, 2018, the details of the evidence adduced at trial are described in detail and will not be repeated here. With respect to Counts 1 and 2, Mr. Langis misappropriated company funds for his own purposes by employing a scheme of manipulating corporate accounting software. With respect to Count 3, Mr. Langis used a corporate credit card to purchase windows that were installed in his personal residence and falsified documentation to escape detection.

[5] It is to be noted that Mr. Langis denies any wrongdoing and portrays himself as a loyal employee who was following the instructions of the company owner who was aware of and authorized all transactions.

[6] The total provable loss that occurred over a nine to ten month period of time is admitted by both the defence and the Crown to be approximately $80,000.00. No restitution has been made to date.

The Position of the Crown

[7] The Crown submits that the appropriate range of sentence is between 18 months to two years less a day combined with an order for restitution in accordance with s.738 of the Criminal Code: the sum of $61,440.80 payable to 1670635 Ontario Limited, which operated as Wendy’s restaurant, 950 Memorial Avenue, Thunder Bay, and the sum of $17,597.80 payable to Wen-Bay limited, which owned and operated Wendy’s Restaurant located at 875 Red River Road, Thunder Bay.

[8] The Crown seeks an order pursuant to s. 380.2 of the Criminal Code prohibiting Mr. Langis from obtaining future employment where he would have access to finances and any authority over the real property, money, or valuable security of another person.

[9] Further, the Crown asks for a DNA order and a Victim Fine Surcharge for all three convictions.

Position of the Defence

[10] The defence proposes that a 90 day custodial term served intermittently on weekends followed by three years of probation coupled with a restitution order of $500.00 per month for the duration of his probation would be a fit and just sentence along with several statutory terms, including: to report to his supervisor when and as directed; to maintain employment; to refrain from attending at any Wendy’s Restaurant; to refrain from any contact with any member of the Jim Edward’s family; to attend credit counselling and grief and anti-theft counselling as and when recommended; to sign whatever release forms are required to allow for assessment of his commitments; to remain sober; and, to provide community service if recommend to do so.

[11] Notwithstanding the weight of case law that focuses on the principles of denunciation and deterrence, as well as a custodial term of a range of six months to a penitentiary term, the defence submits that the following factors justify its position: the magnitude of the fraud (approximately $80,000.00) is not large and is at the lower end of the spectrum; although the evidence shows that some thought and planning were involved in the scheme, it cannot be considered complex or sophisticated requiring a significant degree of planning; the duration of the scheme (approximately ten months) is of short duration; although a not guilty plea was entered warranting a trial, the admissions made by Mr. Langis shortened the length of the trial; restitution would be made of $12,000.00 per year during three years of probation.

[12] In addition, to the above considerations, Mr. Langis is 46 years of age, a first offender, with a long term marriage of 21 years and two young children. He is employed by Bombardier in a capacity that does not involve him having access to finances or monetary transactions and is unlikely to re-offend. A custodial term of imprisonment that prevents him from serving his sentence on weekends would cause Mr. Langis to lose his job with dire financial consequences for his family.

The Victim Impact Evidence

[13] Karen Witiluk, the daughter of Jim Edwards, provided a victim impact statement to the court. In her statement, she describes how the length of the court proceedings has been very stressful for her causing her to suffer from depression and “years of sleepless nights, and days filled with worry and anxiety.”

[14] Ms. Witiluk explained that the timing of the theft was especially hurtful because of the vulnerability of her father at the time – he had just been diagnosed with stage four colon cancer and was struggling to process this news.

[15] When the family became aware of the “theft,” Ms. Witiluk stated that this added significantly to the stress that her father and family were experiencing.

[16] The most painful part of the actions of Mr. Langis for Ms. Witiluk was the impact that it had on her relationship with her father: “I couldn’t spend quality time with my dad. I needed to meet with [the] police department, lawyers, and accountants to deal with the theft. I also had to watch as my dad was overcome with sadness and the feelings of betrayal and guilt. He had trusted Mr. Langis and was ashamed that he put himself in this position.”

[17] Ms. Witiluk and her family decided, partly because of the actions of Mr. Langis, to sell the two restaurants because they felt they were no longer able to trust employees and needed to keep a constant vigilant watch on all of their activities.

The Personal Circumstances of the Offender

[18] The personal circumstances of Mr. Langis are set out in the pre-sentence report that was filed with the court.

[19] The report documents Mr. Langis’ upbringing stating that, “[the] subject comes from a family who were nurturing and loving and provided everything a child could ever want and need. He admitted that he came from a privileged family.”

[20] Problems with family investments created financial difficulties which somehow were passed on to Mr. Langis putting tremendous strain on his relationship with his family. This continues to date.

[21] Mr. Langis is currently 46 years of age, has two young sons, and has maintained a long term marriage. His wife described him as a “good father and husband” who “consistently puts others before himself.” He continues to live in Thunder Bay where he is employed by a local manufacturing company. Reports from the company’s procurement manager are very positive regarding Mr. Langis and his work performance.

[22] This is a first criminal offence for Mr. Langis. It is important to note that, as stated in the pre-sentence report, he “continues to express his innocence for these offences and does not feel that he was accurately able to depict his side of the case,” although he was represented by counsel and testified on his own behalf.

[23] Several third parties provided character reference letters describing Mr. Langis as “a very positive individual who is kind, compassionate and trustworthy.” He possesses an excellent work ethic and is considered trustworthy and ethical by those who know him.

Analysis

General Principles

[24] Fraud under the Criminal Code is described as follows:

Fraud

380 (1) Everyone who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,

(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or

(b) is guilty

(i) of an indictable offence and is liable to imprisonment for a term not exceeding two years, or

(ii) of an offence punishable on summary conviction,

where the value of the subject-matter of the offence does not exceed five thousand dollars.

[25] When a court considers the appropriate sentence for a fraud conviction, the Criminal Code requires that the following factors be considered:

Sentencing — aggravating circumstances

380.1 (1) Without limiting the generality of section 718.2, where a court imposes a sentence for an offence referred to in section 380, 382, 382.1 or 400, it shall consider the following as aggravating circumstances:

(a) the magnitude, complexity, duration or degree of planning of the fraud committed was significant;

(c.1) the offence had a significant impact on the victims given their personal circumstances including their age, health and financial situation;

Non-mitigating factors

(2) When a court imposes a sentence for an offence referred to in section 380, 382, 382.1 or 400, it shall not consider as mitigating circumstances the offender’s employment, employment skills or status or reputation in the community if those circumstances were relevant to, contributed to, or were used in the commission of the offence.

(3) The court shall cause to be stated in the record the aggravating and mitigating circumstances it took into account when determining the sentence.

General Sentencing Principles

[26] The General Principles of Sentencing set out in the Criminal Code are as follows:

Purpose

718. The fundamental purpose of sentencing is to protect society and to contribute, along with crime prevention initiatives, to respect for the law and the maintenance of a just, peaceful and safe society by imposing just sanctions that have one or more of the following objectives:

(a) to denounce unlawful conduct and the harm done to victims or to the community that is caused by unlawful conduct;

(b) to deter the offender and other persons from committing offences;

(c) to separate offenders from society, where necessary;

(d) to assist in rehabilitating offenders;

(e) to provide reparations for harm done to victims or to the community; and

(f) to promote a sense of responsibility in offenders, and acknowledgment of the harm done to victims or to the community.

Fundamental Sentencing Principle

[27] Section 718.1 of the Criminal Code sets out the fundamental principle of sentencing an offender - a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.

[28] Other sentencing principles relevant to the case before the court are:

718.2 A court that imposes a sentence shall also take into consideration the following as aggravating factors:

(a) a sentence should be increased or reduced to account for any relevant aggravating or mitigating circumstances relating to the offence or the offender, and, without limiting the generality of the foregoing,

(iii) evidence that the offender, in committing the offence, abused a position of trust or authority in relation to the victim,

(iii.1) evidence that the offence had a significant impact on the victim, considering their age and other personal circumstances, including their health and financial situation,

(b) a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances;

(c) where consecutive sentences are imposed, the combined sentence should not be unduly long or harsh;

(d) an offender should not be deprived of liberty, if less restrictive sanctions may be appropriate in the circumstances; and

(e) all available sanctions, other than imprisonment, that are reasonable in the circumstances and consistent with the harm done to victims or to the community should be considered for all offenders, with particular attention to the circumstances of Aboriginal offenders.

Conditional and Intermittent Sentences

[29] A conditional sentence on a conviction under s. 380(1)(a) is not available pursuant to s. 742.1(c) following the amendments to the Criminal Code that took effect in 2012.

[30] An intermittent sentence is available on a conviction under s. 380(1)(a) pursuant to s. 732 of the Criminal Code. Section 732 reads:

Intermittent sentence

732 (1) Where the court imposes a sentence of imprisonment of ninety days or less on an offender convicted of an offence, whether in default of payment of a fine or otherwise, the court may, having regard to the age and character of the offender, the nature of the offence and the circumstances surrounding its commission, and the availability of appropriate accommodation to ensure compliance with the sentence, order

(a) that the sentence be served intermittently at such times as are specified in the order; and

(b) that the offender comply with the conditions prescribed in a probation order when not in confinement during the period that the sentence is being served and, if the court so orders, on release from prison after completing the intermittent sentence.

Relevant Case Law

[31] The most relevant cases in terms of the amount of the fraud, breach of trust, and similar mitigating factors are briefly summarized below:

• R. v. Clarke, 2017 ONSC 1966: One count of fraud against employer for over $300,000.00. This occurred over five months; prior conviction from ten years before for a small amount; breach of Trust; well thought out scheme. The accused led a pro-social life, had good employment records beyond the fraud, had the support of her family, and suffered from sleep apnea. Sentence: Three years imprisonment and a restitution order.
• R. v. Takeshita, 2013 ONSC 1122 — offender defrauded church of $80,154.00 by making out false cheques to himself; age 68; no prior record; position of trust; sentence 16 months’ imprisonment.
• R. v. Lall, 2007 ONSC 5213 — offender filed fraudulent tax returns with CRA in the amount of $143,000.00, offender age 45; alcohol and gambling problems; breach of trust; sophisticated scheme; no criminal record; guilty plea; family support and care obligations; remorse and positive steps towards rehabilitation; sentence 18 months’ imprisonment.
• R. v. Alves, 2015 ONSC 770 — offender, customer service representative at bank; conducted ten fraudulent transactions withdrawing $536,000.00 from eight customer accounts; position of trust; $347,000.00 was recovered; bank reimbursed and suffered $188,085.00 loss; forfeiture order for $188,080.00, two years’ imprisonment.
• R. v. Castro, 2010 ONCA 718, [2010] O.J. No. 4573 (Ont. C.A.) — offender operated a paralegal firm and stole from his clients; many vulnerable new immigrants and disabled were his victims; breach of trust; order of restitution order of $141,252.00; sentence of 23 months imprisonment, two years’ probation; sentence upheld on appeal.
• R. v. Collalti, 2003 ONSC 5353 — offender, no criminal record; bookkeeper, defrauded employer of $120,000 through 30 transactions; sentence 14 months’ imprisonment; restitution order of $120,000.00.
• R. v. Pastore, 2017 ONCA 487: The accused was convicted of two counts of making false statement under Canada Small Business Financing Act and three counts of fraud. The accused defrauded Canada of over $400,000.00, extracted fees of $192,000.00 for helping others defraud, and obtained $100,000.00 through his own company. No restitution made. Sentence: 15 months in prison. Upheld on appeal.
• R. v. Schulz, 2018 ONSC 5449: This case involved one count of fraud between 2011 and 2012 for over $330,000. This is a breach of trust case against the accused’s employer. The accused had two teenage daughters and one prior conviction for fraud over $5,000.00. Sentence: Six months less a day in prison, two years of probation. The prison term would have been higher, but for the overly punitive immigration repercussions.
• R. v. Ahmed, 2018 ONCA 426: The accused perpetrated a scheme to deprive a client and friend of the family of $110,000.00 in only a few days. Sentence: 13 and a half months in prison, 2 years of probation. Upheld on appeal.
• R. v. Ajise, 2018 ONCA 494: The accused was convicted of fraud for over $1 million through a charitable donation scheme. He had three children, a wife, and positive community references. He had a prior but dated conviction for which he was pardoned. The trial judge considered the immigration implications in the reasons for sentence. Sentence: 30 months in prison. Upheld on appeal. The dissenting opinion does not consider the appropriateness of the sentence.
• R. v. Bullen, 2018 ONCJ 745: The accused plead guilty to fraud, two counts of charging a criminal interest rate, and possession of property obtained by crime. The accused has a wife, 2 children aged 12, and a 25-year-old son. He had a prior criminal record for drug trafficking and was awaiting sentence on another drug trafficking conviction. Sentence: Two years in prison for fraud.
• R. v. Lebel, 2018 ONCJ 748: The accused was convicted for one count of fraud that took place over five and a half years; the accused stole from his employer; loss to company was $162,480.29; breach of trust; first time offender; accused plead guilty. He had gambling and drug addictions which motivated the crime. This was a mitigating factor. The accused abided by the restitution order prior to sentence, which was also mitigating. Sentence: Conditional sentence of 2 years less a day, 3 years of probation. A conditional sentence was available because the fraud was committed prior to the 2012 amendments.
• R. v. Piccinini, 2018 ONCA 433: The accused worked as a book keeper/licensed paralegal for a civil litigation lawyer. She was convicted of one count of fraud over $5,000.00 and theft over $5,000.00, which was stayed. Her brother and father had health issues, but this did not amount to exceptional circumstances. There was a breach of trust, as she defrauded her employer of over $50,000.00, which took place over three years, and had limited remorse. Sentence: One year in prison. Upheld on appeal.

[32] Generally, a sentence range between 12 months and 2 years less a day incarceration is appropriate for a fraud of $70,000.00 to $80,000.00 based on the case law. Where the sentence falls within this range depends on the court’s view of the aggravating and mitigating factors.

Aggravating Circumstances

[33] Case law clearly establishes that the most important factor when sentencing a person who occupied a position of trust is deterrence: R. v. Scott, 2007 ONCA 1154; R. v. Pierce (1997), 114 C.C.C. (3d) 23 (Ont. C.A.); R. v. Dobis (2002), 163 C.C.C. (3d) 259 (Ont. C.A.); and R. v. McEachern (1978), 42 C.C.C. (2d) 189 (Ont. C.A.).

[34] When the offence involves a breach of trust, mitigating factors including rehabilitation are to be considered secondary factors: R. v. Bogart (2002), 61 O.R. (3d) 75, at para. 30.

[35] It is not unusual for individuals with no prior criminal involvement to commit a crime involving a breach of trust. The rationale why general deterrence is considered the paramount consideration is because: “most people who get caught stealing from their employer are unlikely to re-offend:” R. v. Pierce, at para. 36; R. v. Bertram.

[36] In the words of the Supreme Court of Canada, “law-abiding persons, with good employment records and families… are the ones most likely to be deterred by the threat of severe penalties:” R. v. Proulx, 2000 SCC 5, 140 C.C.C. (3d) 499, at para. 129.

[37] The amount of money that Mr. Langis acquired as a result of the fraud, roughly $80,000.00, is significant, but also on the low to mid-range in comparison to much of the case law where the court mandated a sentence of three years or more. R. v. Kelly, 2008 ONSC 1115, dealt with fraud for over $700,000.00, and the accused was sentenced to three years imprisonment. In R v. Schulz, 2018 ONSC 5449, the accused acquired $330,000.00 by fraud. The court sentenced the accused to six month less a day jail time, followed by two years of probation, although the accused would face undue immigration repercussions for a longer sentence.

[38] In the Langis case, the fraud scheme is sophisticated, although not overly complex. The fraud occurred over a period of nine to ten months and not over a period of years: see R. v. Lebel, 2018 ONCJ 748; R. v. Pavao, 2018 ONSC 4889; R. v. Piccinini, 2018 ONCA 433; and R. v. Palantzas, 2009 ONSC 3862.

[39] The fact that Mr. Edwards had stage four colon cancer when the fraud was perpetrated is also an aggravating factor. The health of the victim at the time of the offence is a relevant factor under s. 718.2(a)(iii).

[40] The aggravating circumstances in the case before the court that are to be considered in fashioning a fit and just sentence for Mr. Langis include:

• Mr. Langis breached his position of trust as the restaurant manager as well as the personal trust that his employer, Jim Edwards, had reposed in him.
• The timing of the offences is significant because they were committed at a time when Mr. Edwards had been diagnosed with stage four colon cancer and was unable to supervise or give attention to the day to day running of the restaurants. Mr. Edwards trusted that he could focus on his health issue and trusted that Mr. Langis would look after the businesses on his behalf.
• The amount of money involved in the frauds was approximately $80,000.00 and, while not a significant amount compared to other fraud cases, it is a considerable amount of money and caused serious financial difficulties for the companies and owners.
• The evidence revealed a relatively high level of planning and sophistication. Accounting software was manipulated and document forged to cover up the actions of Mr. Langis.
• But for the suspicions and actions of Ms. Witiluk there is no indication that Mr. Langis would have voluntarily terminated his dishonest conduct.
• Throughout the trial and proceedings, Mr. Langis maintained his innocence and demonstrates no remorse for his actions.
• Although my Reasons of Judgment were delivered almost a year ago (January 26, 2018) Mr. Langis has not made any efforts to make restitution.

[41] Lack of remorse is also a consideration relevant to sentencing for fraud. Mr. Langis continues to assert his innocence and has not expressed remorse for his actions.

Mitigating Circumstances

[42] In R. v. Pavao, 2018 ONSC 4889, the court notes the following, at para. 85: “The Crown submitted, and I agree, that there are four significant factors that most commonly have a mitigating impact on sentencing for large scale frauds: (1) guilty plea; (2) substantial recovery; (3) cooperation in recovery; and (4) motivation other than greed or financial gain.”

[43] The following mitigating circumstances must be also be considered:

• Mr. Langis is a first offender.
• As a result of his conduct, the reputation of Mr. Langis in the community of Thunder Bay has been damaged and he will continue to suffer the stigma, shame, and reputational loss.
• Other than the offences before the court, Mr. Langis appears to be a person of good character who is trusted and admired by his friends and associates.
• Mr. Langis has maintained a stable long term marriage and is described as a loving husband and good father who regularly puts others before his self-interest.
• With regard to the jurisprudence, mitigating factors also include: the fact that the offender has a young family (R v. Schulz, 2018 ONSC 5449; R. v. Ajise, 2018 ONCA 494); the fact that the offender has no criminal record; and that he is unlikely to pose a risk to society.

[44] A guilty plea can also be a mitigating factor. Mr. Langis did not plead guilty, however, the law is clear that an accused “cannot be penalized for insisting on his right to a trial:” R. v. Reeves, 2018 ONSC 3939, at para. 38.

[45] The determination of what is a just and fit sentence remains a discretionary and individualized exercise.

[46] Although this case involves a breach of trust, planning and sophistication with no expression of remorse of wrongdoing, I am of the belief that a penitentiary term is not warranted to express the necessary elements of deterrence and denunciation.

[47] Although I am satisfied that Mr. Langis is unlikely to re-offend, the principles of denunciation and deterrence require the imposition of a jail sentence proportionate to the gravity of the offences and responsibility of Mr. Langis.

[48] With respect to the issue of restitution, s. 738 of the Criminal Code provides a sentencing judge with the discretion to order the offender to make restitution to the victim as part of the overall sentence.

[49] A restitution order is not to be tacked onto a sentence of imprisonment, which alone may provide a just and fit sentence. To do so would offend the totality principle and could result in an excessive sentence.

[50] In R. v. Castro, 2010 ONCA 718, [2010] O.J. No. 4573, at para. 23, the Ontario Court of Appeal reviewed the factors that should be considered when making a restitution order:

• Emphasizes the sanction imposed on an offender.
• Makes the offender responsible for making restitution to the victim.
• Prevents the offender from profiting from the crime.
• Provides a convenient, rapid, and inexpensive means for recovery for the victim.

[51] A sentencing judge may also take the financial circumstances of the offender into account. As stated by the Court in Castro, at para, 35:

To summarize, a restitution order is simply part of the determination of an overall fit and just sentence, and general sentencing principles apply. While consideration of the offender’s ability to pay and the impact of a restitution order on an offender’s rehabilitation are factors to be considered, the weight to be given to these factors will vary depending on the nature of the offence and the circumstances of the offender. When the offence involves a breach of trust, a primary consideration is the effect on the victim; rehabilitation is a secondary consideration. Furthermore, consideration of the ability to pay includes the ability to make payments from the money taken as a source of restitution.

Summary

[52] Mr. Langis, please stand:

[53] I sentence you to a period of incarceration of 14 months concurrent on all charges.

[54] In addition, I make a free standing restitution order in the amount of $40,000.00.

[55] I also make an order pursuant to s. 380.2 of the Criminal Code prohibiting you for life from seeking, obtaining, or continuing any employment or becoming a volunteer in any capacity that involves having authority over the real property, money, or valuable security of another person.

[56] I decline from making an order under s. 487.04 of the Criminal Code to obtain bodily fluids for a DNA analysis.

[57] I believe the recent decision of the Supreme Court of Canada, R. v. Boudreault, 2018 SCC 58, disposes of the request for Victim Fine Surcharges for all three offences.

“original signed by”

P. Smith J.

Released: December 17, 2018

COURT FILE NO.: CR-15-0059-00 DATE: 2018-12-17 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: HER MAJESTY THE QUEEN Crown - and – PAUL WHITELEY LANGIS Accused REASONS ON SENTENCING P. Smith J. Released: December 17, 2018 /sab