COURT FILE NO.: Crim J(P) 533/17
DATE: 20190208
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HER MAJESTY THE QUEEN
Maria Stevens, for the Crown
- and -
FATTAH ABDEL
Thomas W.G. Pratt, for the Accused
HEARD: December 3, 2018
REASONS FOR SENTENCE
FRAGOMENI J.
[1] Fattah Abdel (Abdel) was charged with the following two counts:
unlawfully had in his possession money knowing that it had been obtained by the commission of an indictable offence; and
that he unlawfully transferred money with the intent to conceal or convert it, knowing or believing that all of the money was derived, either directly or indirectly, as a result of an act or omission that would have constituted a designated offence contrary to the Criminal Code, section 462.31(1)(b).
[2] A judge alone trial took place on April 10, 11, 12, 13, 16, 17 and 22, 2018. Abdel was convicted on both charges with Reasons for Judgment released October 18, 2018.
[3] A Pre-Sentence Report was ordered and sentencing submissions were completed on December 3, 2018. The Pre-Sentence Report was filed as Exhibit 1 at the sentencing hearing. The Victim Impact Statements were filed as Exhibit 2.
[4] I will not review in these Reasons for Sentence the circumstances of these offences and the factual findings made at trial as they are set out in detail in my reasons dated October 18, 2018.
[5] I only wish to set out my conclusions as stated at paras. 119 to 123:
[119] Abdel had no authority or colour of right to possess, use, convert to his own use, or otherwise deal with the subject funds. The money did not belong to him. The money did not belong to any corporation he had an ownership interest or signing authority for.
[120] The evidence is clear that these funds belonged to Air Palace and were destined to an account identified by Rotor Maxx for payment of a negotiated contract in relation to helicopter repairs.
[121] How it ended up in the TD account through the email hacking is still a mystery, however, it is not a mystery that needs to be solved in order to determine whether the Crown has proven these charges beyond a reasonable doubt.
[122] I am satisfied that the evidence as a whole establishes the guilt of Abdel beyond a reasonable doubt. Even if Abdel did not know how the funds ended up in the TD account, he actually knew or was at least wilfully blind that these funds were illicit funds. He made no inquiries of how the funds came to be there. Surely with the volume of business conducted in his business and the desperate financial circumstances of the business, finding the large amount of money in an account he had access to would have resulted in an inquiry as to its origins. Providing two false and misleading explanations for its origins to two different people raises a reasonable inference that Abdel was hiding how he came upon the funds.
[123] Further, once he realized that he could access the funds, rather than make any inquiries, he immediately engaged in numerous transactions to immediately disperse the funds out of the reach of the legitimate owners of the funds.
VICTIM IMPACT STATEMENTS
[6] Sang Joon Bae, lawyer for Air Palace Co. Ltd., provided two letters outlining the impact this matter had on his company. The letters are dated November 2, 2018 and November 16, 2018. The letters set out the following, in part:
− the damage persists for the company and its employees financially and psychologically and socially;
− the crime devastated the managers, directors and shareholders;
− the employees had to perform extra duties to deal with lawsuits abroad, normalizing its relationship and credit status with banks, investigation and re-training of employees;
− borrowing additional funds
− several employees were directly and indirectly connected to the circumstances of this fraud and some have been fired. The CEO at the time was fired.
PRE-SENTENCE REPORT
[7] Abdel is 53 years old and appears before the court as a first time offender. He is married and his wife is 43 years of age. They have three children, Shiab, 18 years of age; Karim, 12 years of age; and Basil, 10 years of age.
[8] Abdel’s mother, who is 76 years of age, also resides with them. Abdel’s mother has significant health issues and takes 12 prescription pills per day. Abdel’s father passed away so Abdel is the sole support for his mother.
[9] At this time Abdel works as a mechanic and taxi driver, working out of the airport.
[10] Mrs. Abdel reported that Abdel is a good father and their three sons love him very much. She also noted that his father’s death was a difficult time for him but he continued to work and care for the family.
[11] Abdel is described as honest and helpful by Mr. Abdelrahman, a friend of six years.
[12] Abdel’s pharmacist describes the entire family as honest, cooperative and respectful. He described Abdel to be honest and hardworking.
[13] Abdel advised that as a result of this matter he is suffering from a great deal of stress and it is impacting his health.
POSITION OF THE CROWN
[14] The Crown submits that a period of incarceration of 30 months is appropriate in all of the circumstances. The Crown is also asking for a restitution order in the full amount of the loss, namely $348,751.57.
[15] In support of that position the Crown points to the following aggravating factors:
− the phishing fraud was sophisticated
− the funds received were diverted quickly and used immediately to pay off Abdel’s debts so tracing of the funds was impossible and out of the reach of the legitimate owners;
− there has been no recovery of the lost money;
− general deterrence and denunciation are significant sentencing principles in play in this matter;
− the impact on Air Palace as a company and to its employees was substantial and far reaching.
POSITION OF THE DEFENCE
[16] The defence submits that a conditional sentence of two years less a day is the appropriate response from the court in all of the circumstances.
[17] In addition, the defence submits that it would be reasonable to allow five years within which to make restitution. The defence sets out the following mitigating factors in support of this position:
− this event was a single act;
− Abdel takes care of his elderly, ill mother;
− Abdel supports his wife and three children in addition to his mother;
− Abdel is 53 years of age and has no criminal record;
− the court found no evidence he was involved in the e-mail hacking.
ANALYSIS & CONCLUSION
[18] Section 718 of the Criminal Code States:
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.
[19] Section 718.1 states:
A sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.
[20] Section 718.2(b) states:
a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances.
[21] In R. v. Fletcher, [2015] O.J. No. 3965, K.L. Campbell, J. reviews the aggravating factors the court must consider when sentencing an offender for fraud at para. 20, as follows:
More specifically, s. 380.1(1) of the Criminal Code provides that, without limiting the generality of section 718.2, a court sentencing an offender for fraud must consider the following as aggravating circumstances: (a) the magnitude, complexity, duration or degree of planning of the fraud committed was significant; (b) the offence adversely affected, or had the potential to adversely affect, the stability of the Canadian economy or financial system or any financial market in Canada or investor confidence in such a financial market; (c) the offence involved a large number of victims; (c.1) the offence had a significant impact on the victims given their personal circumstances including their age, health and financial situation; (d) in committing the offence, the offender took advantage of the high regard in which the offender was held in the community; (e) the offender did not comply with a licensing requirement, or professional standard, that is normally applicable to the activity or conduct that forms the subject-matter of the offence; and (f) the offender concealed or destroyed records related to the fraud or to the disbursement of the proceeds of the fraud. Further, s. 380.1(2) of the Code provides that, in such cases, the sentencing court 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. Finally, according to s. 380(3) of the Code, the sentencing court “shall cause to be stated in the record the aggravating and mitigating circumstances it took into account when determining the sentence.
[22] At paras. 28 and 29 Campbell J. states:
In my view, in all of the circumstances of this case, the accused should be sentenced to a nine-month term of imprisonment, followed by a two-year term of probation, for each offence, served concurrently. I appreciate that this sentence is at the upper end of the range of sentence proposed by the Crown. In my view, in light of the gravity of the offences committed, and Mr. Fletcher’s criminal record, the sentence proposed by the Crown was quite lenient. Indeed, the custodial sentence imposed upon the accused could easily have been longer. Nevertheless, in my view a nine-month term of imprisonment and a two-year term of probation will appropriately balance all of the relevant sentencing principles.
First, the nine month custodial sentence proportionally reflects the gravity of the frauds and the specific role of the accused in those criminal offences. While the accused may have played a lesser role in the fraud on Fabcor, such large-scale, sophisticated electronic frauds could not be committed without the assistance of offenders willing to play the important, lesser roles of receiving and quickly withdrawing the distributed funds. General deterrence is important in these types of cases. Potential offenders must understand that their participation in such crimes will have serious custodial consequences upon conviction.
[23] Finally, at paras. 30 – 32 Campbell J. Notes the following:
In furtherance of the statutory obligation created by s. 380(3) of the Code, I note that, in the present case, most of the statutory “aggravating circumstances” outlined in s. 380.1(1) of the Code do not exist. However, the magnitude and complexity of the fraud on Fabcor was significant, must have involved considerable planning, and Mr. Fletcher, like many others, played an important role in its execution. I note in passing that none of the statutory “non-mitigating circumstances” outlined in s. 380.1(2) of the Code exist in the present case.
Second, the nine-month custodial sentence sends an important and necessary message of specific deterrence to the accused. While Mr. Fletcher is only 34 years old, he has already amassed a criminal record displaying convictions for 16 prior criminal offences. Just as he has committed a wide variety of criminal offences, Mr. Fletcher has received a wide variety of sentences. Unfortunately, none of these earlier sentences have deterred him from committing further offences. Not even the one-year term of imprisonment (after more than five months of pre-sentence custody) imposed in the fall of 2007, dissuaded Mr. Fletcher from engaging in further criminal activity. The message must be sent to the accused that he must cease his criminal activity. Mr. Fletcher must be made to realize that if he continues to commit offences, he will receive increasingly severe sentences.
It is for this reason that I have concluded that a conditional sentence would be inappropriate in the circumstances of the present case. While the imposition of a conditional sentence can certainly have a punitive and deterrent impact upon an offender, in my view, a conditional sentence in this case would not provide a sufficiently effective deterrent to Mr. Fletcher. If significant terms of actual imprisonment have already proven to be ineffective in deterring the accused from the commission of further criminal activity, it is hard to believe that a conditional sentence of imprisonment in the community would be more effective. Accordingly, I reject Mr. Fletcher’s request for a conditional sentence.
[24] In R. v. Alves [2015] O.J. No. 770 J.E. Kelly, J. sentenced Alves to two years in jail with restitution ordered in the amount of $188,080 to the bank. At para. 30, Kelly J. reviews the aggravating factors:
Along with mitigating factors, there are always aggravating ones, and I consider the aggravating factors to be the following: This was a large scale fraud. The fraud was over $500,000. The actual loss to CIBC was over $188,000. There was a degree of sophistication. The fraud continued for a couple of months, which required a degree of deception as Mr. Alves went to his place of employment. The Bank remained unaware of this for a couple of months. The sole motivation for this fraud appears to be greed. Monies were used to benefit Mr. Alves and his partner by buying high- end goods, such as a car, camera equipment, et cetera. As I have said, this occurred over a period of two months, which is a lengthy period of time to commit deception on a place of employment that Mr. Alves found satisfying. In other words, this was not a spontaneous lapse of judgment. There were ten dishonest transactions involving eight elderly clients. Although there is some hope of restitution, it did come at the last minute on the day the court was to pass sentence. Until that date, none had been made and none has been made thus far. I was told that $5,000 could be put towards repayment and that a monthly payment would be made and that the restitution would be completed within eight to nine years.
[25] In R. v. Peloso, 2011 ONSC 433, relied on by the defence, R. Smith, J. reviews the mitigating factors and aggravating factors at paras. 7 and 8 as follows:
Mitigating Factors
The following are mitigating factors for the accused:
(a) The accused has no prior criminal record.
(b) He has followed his bail conditions for a substantial period without any breaches.
(c) He is married and has two young children.
(d) He is well educated and has been a teacher with the Ottawa Separate School Board.
(e) The accused has a good family background and a supportive family, including good references.
(f) The accused has received a very positive pre-sentence report.
Aggravating Factors
The following are the aggravating factors:
(a) The accused has been involved with a large number of transactions, laundering proceeds of crime, through four separate bank accounts.
(b) The amount of the proceeds laundered is substantial being in excess of $500,000 when the properties registered in Battista’s relatives are included.
(c) The accused used his position of trust as a teacher and pastor with the School Board in order to launder what he knew were proceeds of crime and which he suspected initially came from the sale of narcotics in the Ottawa area.
(d) The accused was assisting with the sale of narcotics by laundering the proceeds of crime.
(e) The accused received a further substantial amount of money from the Battista family after Battista was arrested, some $225,000 was transferred to Mr. Peloso, which indicates that he is highly trusted by Mr. Battista.
[26] At para. 21, Smith J. sets out the reasons for imposing a sentence of two years less a day plus three years’ probation:
Having considered the above cases and the principles of sentencing, of denunciation and deterrence as the primary principles and considering the totality principle, I impose a sentence of two years less a day of imprisonment, plus three years probation concurrent on all counts. I believe the sentence is in the appropriate range given that there were three offences, that they were planned and deliberate and a substantial amount of money was laundered, $242,500, which I accept, based on the evidence of the forensic accountants, was proceeds of crime that were laundered by Mr. Peloso, in addition to the two properties which were laundered proceeds and a further $222,800 is probably proceeds of crime. However, I am not satisfied beyond a reasonable doubt that the additional $222,800 was proceeds of crime, although no other reasonable or believable explanation was offered for these funds. The amount laundered was in the approximate range of $500,000. Also, the accused did not simply perform one transaction, he executed many transactions over the 13 month period and substantial sums were involved. The accused has also breached his position of trust as a teacher and pastor with the Separate School Board in order to launder the proceeds and used his trusted position to avoid arousing suspicions.
[27] Section 742.1 of the Criminal Code sets out the parameters relating to the imposition of a conditional sentence:
If a person is convicted of an offence and the court imposes a sentence of imprisonment of less than two years, the court may, for the purpose of supervising the offender’s behaviour in the community, order that the offender serve the sentence in the community, subject to the conditions imposed under section 742.3, if
(a) the court is satisfied that the service of the sentence in the community would not endanger the safety of the community and would be consistent with the fundamental purpose and principles of sentencing set out in sections 718 to 718.2;
(b) the offence is not an offence punishable by a minimum term of imprisonment;
(c) the offence is not an offence, prosecuted by way of indictment, for which the maximum term of imprisonment is 14 years or life;
(d) the offence is not a terrorism offence, or a criminal organization offence, prosecuted by way of indictment, for which the maximum term of imprisonment is 10 years or more;
(e) the offence is not an offence, prosecuted by way of indictment, for which the maximum term of imprisonment is 10 years, that
(i) resulted in bodily harm,
(ii) involved the import, export, trafficking or production of drugs, or
(iii) involved the use of a weapon; and
(f) the offence is not an offence, prosecuted by way of indictment, under any of the following provisions:
(i) section 144 (prison breach),
(ii) section 264 (criminal harassment),
(iii) section 271 (sexual assault),
(iv) section 279 (kidnapping),
(v) section 279.02 (trafficking in persons — material benefit),
(vi) section 281 (abduction of person under fourteen),
(vii) section 333.1 (motor vehicle theft),
(viii) paragraph 334(a) (theft over $5000),
(ix) paragraph 348(1)(e) (breaking and entering a place other than a dwelling-house),
(x) section 349 (being unlawfully in a dwelling-house), and
(xi) section 435 (arson for fraudulent purpose).
[28] Although I am satisfied that a sentence of imprisonment of less than two years is appropriate, I am not satisfied that a conditional sentence is the appropriate response from the court and I am not satisfied such a sentence adequately addresses the sentencing principles of deterrence and denunciation. A conditional sentence would not be consistent with the fundamental purpose and principles of sentencing set out in sections 718 to 718.2 of the Criminal Code.
[29] The Crown has set out the aggravating features of this case and I agree with the factors set out by her. This was a sophisticated scheme to divert funds from the legitimate owner of same. Abdel acted quickly to obtain and then divert these funds out of the reach of its rightful owner. As I found in my reasons for judgment, Abdel knew or was at the very least wilfully blind to the fact that he had no legal right to those funds.
[30] The amount involved was significant and the impact on Air Palace was substantial and far reaching.
[31] I accept that Abdel has family obligations that are significant, especially as it relates to his elderly mother. This no doubt will create a hardship for him as his wife will be called up to assist in the care of his mother as well as look after their three children.
[32] Mr. Abdel has to understand that when he makes poor choices the consequences of doing so not only affect him but such poor judgment also affects his entire family.
[33] I agree with the Crown that general deterrence and denunciation are the main sentencing principles in play at this sentencing. Mr. Abdel is 53 years of age and has no criminal record. I am satisfied that a period of incarceration in a reformatory would be appropriate. I am also satisfied that a period of probation should follow for a period of two years. The conditions of the probation order shall be those set out at section 732.1(2)(a),(b) and (c).
[34] In all of the circumstances I am sentencing Mr. Abdel to 18 months in a reformatory.
[35] A stand-alone compensation order shall issue in the amount of $348,751.57.
Fragomeni J.
Released: February 8, 2019
COURT FILE NO.: Crim J(P) 533/17
DATE: 20180208
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HER MAJESTY THE QUEEN
- and -
FATTAH ABDEL
REASONS FOR SENTENCE
Fragomeni J.
Released: February 8, 2019