COURT FILE NO.: 16-20006 DATE: 2019-03-21 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
HER MAJESTY THE QUEEN – and – Robert Thomas Barra and Shailesh Hansraj Govindia
Emma Beauchamp and Allyson Ratsoy, for the Crown Seth P. Weinstein and Naomi M. Lutes, counsel for Mr. Robert Barra Graeme A. Hamilton and Alannah Fotheringham, counsel for Mr. Shailesh Hansraj Govindia.
HEARD: March 7, 2019
REASONS FOR sentence of robert barra and shailish govindia
R. SMITH J
[1] The offenders Robert Barra (“Barra”) and Shailesh Govindia (“Govindia”) were convicted of one count of agreeing to bribe the Indian Minister of Civil Aviation contrary to section 3(1)(b) of the Corruption of Foreign Public Officials Act (“CFPOA”). They were both sentenced on March 7, 2019 to 2 ½ years in prison with reasons to follow. These are the reasons.
A. Circumstances of the Offence
[2] Barra was the CEO of Cryptometrics US, which owned all of the shares of its Canadian Subsidiary Cryptometrics Canada Limited. Cryptometrics Canada submitted a bid on a contract to supply facial recognition software to Air India. In order to get the Minister to approve the contract Barra retained Govindia as Cryptometrics’ agent. He agreed to pay an initial bribe of $500,000.00 plus the possibility of an additional $1.5 million at a later date, plus some shares to the Indian Minister of Civil Aviation to obtain his approval to award the contract. The details about future payments and granting of shares was discussed but not clearly agreed to by Barra and Govindia. They did agree to pay $500,000.00 to the Minister to obtain his approval.
[3] Barra sent the $650,000.00 US to Govindia, $150,000.00 of which was for Govindia’s services, and $500,000.00 was agreed to be used to bribe the Indian Minister of Civil Aviation to approve the contract. However, Govindia did not pay the $500,000.00 bribe to the Minister as agreed, but rather used the funds within his own companies. As a result, the Minister never approved the contract with Cryptometrics and the contract was never awarded to Cryptometrics Canada.
B. Positions of the Crown and Defence
[4] The Crown sought a sentence of 4 years in prison for Mr. Barra and 3 years in prison for Mr. Govindia. The defence submitted that a sentence of 2 years in prison for both offenders was sufficient to meet the applicable principles of sentencing in the circumstances.
C. Offenders’ Circumstances
[5] Mr. Barra is 66 years of age and has no prior criminal record. He is now living in Nevada, USA and has been married to his wife for 30 years. He obtained a B.Sc in biology and a master’s degree in nutrition. During his career he worked primarily in the health care industry and in the latter part raising funds for companies. He suffers from heart disease (arrhythmia), sleep apnea and glaucoma.
[6] Mr. Govindia is currently 54 years of age. He has been married to his wife for 32 years and has four children. He is currently residing with his son outside of London, England. He obtained a B.Sc in math in 1987 and took an Executive Management Program offered by UBS, his employer at the time. He was the group lead for corporate strategy at UBS. He worked as a consultant and as an entrepreneur since leaving UBS in 1996. He has not been employed since those charges were laid in 2014.
D. Victim Impact
[7] There has not been any impact on Air India or on the citizens of India because the bribe was never paid to the Minister and the contract with Air India was never awarded to Cryptometrics.
E. Mitigating Factors
[8] The following are mitigating factors for Mr. Barra: (a) Mr. Barra is 66 years of age and has no prior criminal record; (b) He does not have any legal or accounting background and this was the first time he was involved with bidding for a contract in a foreign country; (c) He suffers from heart disease, glaucoma, and sleep apnea; (d) Cryptometrics went bankrupt as a result of failing to obtain the Air India contract and Mr. Barra lost his job as a result. He has had minimal employment income since these bribery charges were laid in 2014; (e) He will be serving his sentence in Canada, a long distance from his family; (f) The entire bribery scheme was completely unsuccessful and as a result minimum harm was caused to the citizens of India or to Air India; (g) He cooperated with the Crown to allow the complex trial to proceed in an efficient manner.
[9] Mitigating factors for Mr. Govindia are as follows: (a) He has no prior criminal record; (b) He cooperated with the Crown in the conduct of the trial; (c) He has not been able to obtain employment since these charges were laid in 2014 and his EMG company was struck from the record in 2014.
F. Aggravating Factors
[10] Aggravating factors for Mr. Barra are as follows: (a) He was motivated by financial gain and did not seem to appreciate the bribing of a foreign public official was morally wrong because he agreed to do so both with Mr. Karigar and Mr. Govindia; (b) The amount of the bribes were substantial, namely $500,000.00 with possibly a further $1.5 million dollars plus shares were to be paid or given to the Minister; (c) There is no evidence beyond a reasonable doubt that Barra would have been the main financial beneficiary if the contract with Air India had been obtained and Cryptometrics went public. I do not have any evidence about the number of shares or the value of the shares that Barra would have received. I suspect that he would have received shares worth a substantial value if the contract had been obtained, but I do not have evidence beyond a reasonable doubt on this issue; (d) The size of the contract was substantial as it was anticipated that it would have generated a gross revenue of $100 million dollars over five years. The amount of net profit that would have been generated by Cryptometrics is unclear, but the spreadsheets indicate it was projected to be in the range of $20-$30 million dollars over the term of the contract; (e) Bribery of foreign public officials to obtain contracts is a serious crime which carried a maximum penalty of five years at the time of the commission of this offence and this has since been increased to a maximum of 14 years in prison.
[11] Aggravating factors for Mr. Govindia are as follows: (a) He agreed to pay a substantial amount of bribes to the Minister namely in the amount of $500,000.00 plus possibly a further $1.5 million plus some shares; (b) He was motivated by financial gain, namely an initial $150,000.00 and then another $500,000.00 and a possible joint venture arrangement; (c) This is a serious offence; (d) He profited from the arrangement as he received and used the full $650,000.00 and used all of the money for his or his companies’ benefit.
G. Principles of Sentencing
[12] The main principles of sentencing that apply in this case are denunciation and deterrence of this conduct. Bribery of foreign public officials is a serious offence. Canada enacted the CFPOA in accordance with a United Nations Convention to which Canada is a signatory. The principles of parity, proportionality and restraint are also applicable in a situation where both offenders have no prior criminal records.
H. Case Law
[13] The Crown referred to a number of decisions which involve fraud and are not exactly on point. Both the Crown and Defence agreed that the Karigar decision is the benchmark for sentencing these two offenders.
[14] R. v. Drabinski, 2011 ONCA 582 was a case of a large scale fraud. At paragraph 160 the Court of Appeal stated that denunciation and deterrence must dominate sentencing for large scale frauds. This case involves a small scale of fraud than the Drabinsky case where sentences of four years for Dabrinsky and three years Gottlieb were imposed.
[15] In R. v. Griffiths Energy International, [2013] A.J. No. 412 the company pleaded guilty to bribing a foreign official contrary to s. 5.3(1) of the CPFOA. A bribe of 2 million dollars as well as a number of founder shares were paid and given to a corporate entity owned by the wife of the foreign ambassador. The company was sentenced to pay a fine of $10,350,000.00 inclusive of the victim impact charge. The case is not exactly on point because it involved a guilty plea, a joint submission on sentence and it was against a corporate entity and not the individuals.
[16] In R v. Niko Resources Ltd. , 2011 CarswellAlta 2521 , the company provided the use of a vehicle worth $190,984 and paid $5,000 of non-business travel expenses and accommodation expenses for the Bangladeshi State Minister to use his influence to secure a gas purchase agreement. A fine of $8,260,000 plus a 15% victim surcharge fine was imposed. This case is distinguishable because it involved a joint submission, a guilty plea and the offender was also a corporate entity with a market capitalization value of 3.3 billion dollars.
[17] The decision of Hackland J. in R. v. Karigar , 2014 ONSC 3093 , upheld by the Court of Appeal at R. v. Karigar , 2017 ONCA 576 , is the closest to the facts in this case. Mr. Karigar was sentenced to 3 years in prison. Mr. Karigar conceived of and orchestrated the bribery scheme, including the bribing of several senior employees of Air India to have Cryptometrics’ bid downselected as well as proposing substantial bribes to the Minister.
[18] The maximum sentence available at the time under the CFPOA was five years in prison. While Mr. Barra was the CEO of Cryptometrics and authorized the payments of substantial bribes he did not conceive of or orchestrate the bribery and did not act with a complete sense of entitlement like Mr. Karigar.
[19] In addition Mr. Barra is 66 and suffers from some health problems and will be serving his sentence away from any contact or support from his family which was not the case for Mr. Karigar.
[20] While Mr. Govindia was also an agent who agreed to pay substantial bribes to the Minister he did not conceive of or orchestrate the bribery scheme like Mr. Karigar.
[21] In addition, both Mr. Barra and Mr. Govindia have suffered substantial economic consequences as a result of these charges in that both companies have gone bankrupt and both individuals have not been able to earn income to support themselves and their families for the past 5 years before their sentence due to the laying of these charges.
Disposition
[22] Having considered the applicable sentencing principles, comparing the facts of this case with those of Mr. Karigar, where a sentence of 3 years was upheld, the positions of the Crown and Defence, the case law referred to by the Crown and the Defence, the seriousness of the charges, the amount of the bribes they agreed to pay, the fact that the bribery scheme was a complete failure, that the maximum sentence available was 5 years, that the extent to which Mr. Barra would have benefited financially is unknown, the substantial adverse financial effect the charges have had on the ability of Barra and Govindia to earn income since 2014, and Mr. Barra’s health issues, I impose a sentence of 2½ years in prison for both Mr. Barra and Mr. Govinda.
R. Smith, J
Given orally on: March 7, 2019
COURT FILE NO.: 16-20006 DATE: 2019-03-21 SUPERIOR COURT OF JUSTICE - ONTARIO RE: HER MAJESTY THE QUEEN AND ROBERT THOMAS BARRA AND SHAILESH HANSRAJ GOVINDIA BEFORE: Justice R. Smith COUNSEL: Emma Beauchamp and Allyson Ratsoy, counsel for the Crown Seth P. Weinstein and Naomi M. Lutes, counsel for Mr. Robert Barra Graeme A. Hamilton and Alannah Fotheringham, counsel for Mr. Shailesh Hansraj Govindia, HEARD: Given orally on March 07, 2019 REASONS FOR DECISION ON MISTRIAL APPLICATION Justice Robert Smith Released: 2019/03/21