COURT FILE NO.: CR-18-50000642-0000 DATE: 20200430 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

HER MAJESTY THE QUEEN – and – QUOC TRAN Accused

Counsel: Stuart Rothman, for the Crown Amedeo Dicarlo, for the Accused

HEARD: November 12 and 26, 2019 and February 13, 2020

B.A. Allen J.

REASONS FOR JUDGMENT

Background

[1] Quoc Tran, age 42 years, was charged with one count of possession of proceeds of crime over $5,000.00 obtained by fraud contrary s. 462.3 (1) of the Criminal Code and one count of fraud over $5,000.00 contrary to s. 380(1) of the Criminal Code.

[2] The charges arise from an alleged loan Mr. Tran claims he made to his friend, Mr. Hai Ha, and monies Mr. Tran received over a period from 2011 to 2014 from a fraudulent scheme set up by Mr. Ha. Mr. Ha was employed as a customer services representative at a fibreglass insulation dealer, GlassCell Isolab (hereafter, “GlassCell”). Mr. Ha set up a scheme to use the company’s product return process to defraud the company of over a half-million dollars. The loan was paid out of the funds he defrauded from the company. Mr. Tran claims to have been unaware of the source of the funds he received from Mr. Ha, unaware they were fraudulently derived from Mr. Ha’s employer.

Agreed Facts

[3] The parties entered into an agreed statement of facts under s. 655 of the Criminal Code. The following are the facts agreed upon:

a) Mr. Ha was employed by GlassCell from August 2004 until October 2014 at which time his employment was terminated. b) In October 2014, an employee in charge of inventory control discovered there was more material in stock than normal. His investigation revealed there was an unusually large number of returns for a particular product. It was Mr. Ha’s role in the company to implement repayment on the returns using his unique username and password. c) Further investigation disclosed that Mr. Ha was creating false return slips from false companies and crediting refund amounts to several credit and debit cards. d) Among those credit and debit cards were 12 credit cards belonging to Mr. Tran. Mr. Tran denies knowing of this, asserting that he only learned of the fraud when he received Crown disclosure. e) Mr. Tran admits that the Crown could prove the above facts through documentary and viva voce evidence. He does not admit knowledge of the fraud against GlassCell. f) In total, 27 different credit and debit cards belonging to six individuals were fraudulently refunded. g) There was a total of 1,083 fraudulent refunds done by Mr. Ha in various amounts totalling $518,291.76 which were dispersed to various credit cards. h) The transactions credited to Mr. Tran’s various credit cards numbered 589. Those transactions spanned the period from March 18, 2011 to October 9, 2014. The total amount credited by Mr. Ha to Mr. Tran is $291,459.12. i) The bank and business records filed with the court are admitted for the truth of their contents.

The Trial Proceeding

[4] The Crown called no viva voce evidence. The Crown relied on the agreed statement of facts and the cross-examination of the defence witnesses to prove the fraud and proceeds of crime charges beyond a reasonable doubt. The defence called Mr. Ha and Mr. Tran as witnesses.

The Defence Case

Mr. Ha’s Evidence

[5] Mr. Ha was arrested and charged with fraud. He pleaded guilty to fraud over $5,000.00 and was sentenced to nine months’ custody and 18 months’ probation.

[6] Mr. Tran and Mr. Ha take the position they entered into an oral agreement with respect to the loan. The Crown argues there was no agreement written or oral.

[7] Mr. Ha and Mr. Tran have known each other since about 2005. They are from the same racial and cultural background. They are from Vietnam of Chinese heritage. Mr. Ha testified about how it happened that he loaned Mr. Tran the funds.

[8] Mr. Ha testified that his father had a stroke in 2010 and had fallen down some stairs and hit his head in 2011 causing him to be confined to a wheelchair. Mr. Ha told Mr. Tran that he needed money for his father’s physiotherapy bills not covered by public health insurance and for a residence for his father. Mr. Ha stated that he began to have personal problems with depression, substance abuse and gambling because of his father’s circumstances. That is the information Mr. Tran says persuaded him to help Mr. Ha.

[9] In late 2010, Mr. Ha approached Mr. Tran for a loan. By early 2011, Mr. Ha was able to convince Mr. Tran to loan him $240,000.00. Mr. Ha agreed to pay 26% interest which would amount to a total loan of $300,000.00. According to the agreed statement of facts, Mr. Tran actually received $291,459.12.

[10] Mr. Ha asserts that he was the mastermind of the fraudulent scheme.

[11] Mr. Ha’s position in customer service gave him knowledge of the movement of products. GlassCell was a very large distributor of fibreglass insulation products where a great many product returns were processed daily. Credits for product returns were given through crediting clients’ credit and debit cards using an ATM machine. That process allowed Mr. Ha to credit fraudulent returns from false companies and apply credit to various credit and debit cards held by Mr. Tran and others who benefited from the scheme.

[12] Mr. Ha testified that Mr. Tran met him at a Shoppers Drug Mart parking lot on several occasions and delivered the money in cash instalments. They made no text or phone calls in advance to arrange the deliveries. No cheques or bank drafts were written. Mr. Ha said in his culture people do not go to people’s homes or banks to do this type of money transaction. He insisted that he felt more secure in a parking lot.

[13] Mr. Ha testified that he purposefully targeted Mr. Tran for the fraudulent scheme.

[14] Mr. Ha asked Mr. Tran for several credit cards. He explained that if he used only a few credit cards the scheme might more easily come to the attention of the company. Mr. Ha said Mr. Tran just handed over the credit cards when asked and did not raise any questions. Mr. Ha denied he and Mr. Tran executed the money deliveries as they did because they both knew they were involved in a fraudulent scheme.

[15] Mr. Ha’s evidence is that Mr. Tran did not know of the scheme.

[16] Mr. Ha contended that Mr. Tran was not really concerned with where the money came from. He raised no questions. Mr. Ha added that Mr. Tran had no knowledge of Mr. Ha’s drug and gambling problems and how he spent the money from the loan. Mr. Ha used only a portion of the funds, about $80,000.00, for his father’s medical and housing matters. The rest Mr. Ha says he disposed of for drugs, gambling and at strip clubs. Mr. Ha testified that he had so many personal problems that he did not care about the consequences to Mr. Tran of giving him funds derived from fraud. Mr. Ha’s evidence was that Mr. Tran trusted him absolutely and he abused that trust.

[17] Mr. Ha said he misled Mr. Tran about his position at GlassCell.

[18] Mr. Ha testified he led Mr. Tran to believe he was a partner in the company and persuaded Mr. Tran, without disclosing his fraudulent method, that because he was a partner, he was able to pay him back by crediting funds through his company to Mr. Tran’s credit cards. Mr. Tran did not ask for proof of his partnership in the company. As noted in the agreed facts, Mr. Ha did this over a period of some three years from 2011 to 2014.

[19] There was no documentary or written evidence of the loan, only the word of Mr. Tran and Mr. Ha.

[20] In spite of the large amount of money involved in the loan there was no written agreement. There were no terms such as the duration of the loan, payment amounts or repayment dates. No lawyers or banks were involved. A written contract never came up for discussion because, as Mr. Ha explained, Mr. Tran had confidence in him. Mr. Ha testified their common cultural bond was behind Mr. Tran’s willingness to lend. Mr. Ha said he never did anything to affect Mr. Tran’s confidence in him. As time went on, Mr. Ha would just tell Mr. Tran that everything was going fine.

[21] Mr. Tran had no knowledge of the nature of the fraud before trial.

[22] Mr. Ha’s evidence is that the first time he saw Mr. Tran since 2014 was at the trial. He said he felt ashamed to tell Mr. Tran the truth until he came to testify at trial. He contends that until trial, he left Mr. Tran unaware from 2011 of what he had done to obtain the funds, unaware of how he had exposed him to serious criminal consequences.

Mr. Tran’s Evidence

[23] Mr. Tran confirmed Mr. Ha’s evidence that he met Mr. Ha in about 2005. They began to go out socially with other friends. He and Mr. Ha “hit it off quickly”. He described Mr. Ha as a friendly and cheerful person. He spoke of their common heritage and a common history as refugees from Vietnam. Mr. Tran explained that is what motivated his willingness to help Mr. Ha with his family problems. He saw nothing in Mr. Ha that indicated he was addicted to drugs. There was no evidence when they first met that Mr. Ha had family or financial issues.

[24] Mr. Tran has been involved from 2005 at various levels of automobile dealership management. Mr. Tran is married with one young daughter. At the time of trial, Mr. Tran had been self-employed as an automobile sales consultant for about a year. Mr. Tran was employed at Grand Touring Automobiles, a luxury car dealer in downtown Toronto, where he was employed when he made the loan to Mr. Ha. Mr. Tran was arrested on September 8, 2015. He was terminated from Grand Touring in 2017 where he had worked for seven years.

[25] Mr. Tran’s employment history, his income and his assets at the time of the fraud are germane to evaluating his evidence of his ability to loan Mr. Ha such a large sum of money in instalments over a relatively brief period of time.

[26] At the time he made the loan, Mr. Tran lived with his family in a condo in Toronto valued at between $800,000.00 and $900,000.00. He also owned a condo in mid-town Toronto which he held as an investment property. Mr. Tran started his employment at Grand Touring in 2010 as the director of sales. Before that position, from 2006 to 2010, Mr. Tran worked as general sales manager with Auto World, a luxury car dealership related to Grand Touring. Before 2006, he was employed for four years with BMW Toronto and then Downtown BMW respectively as assistant sales manager and sales manager.

[27] Mr. Tran explained that from 2005, in his positions as managers of sales, he earned bonuses on top of his salaries. He distinguished this from commissions that he earned as an employee involved in direct sales to clients. Mr. Tran stated that bonuses were calculated at a percentage of an employee’s pay plan, generally at 20% calculated as a percentage of monthly profit.

[28] Mr. Tran explained that as sales managers from 2005 to 2010 he also received tips, tips not from clients, but from wholesalers that traded in used vehicles. Mr. Tran would negotiate prices of cars turned in to the dealership and call the wholesaler who gave the highest bid to pick up the vehicle. He said he would earn between $5,000.00 to $20,000.00 in tips annually.

[29] When he was involved in direct sales before 2005, Mr Tran earned an annual income of about $140,000.00. Afterwards, his income rose considerably with bonuses. In 2005 his income went up to $160,000.00 with bonuses. This income level remained relatively steady until he began at Grand Touring in 2010. In 2017, before he left Grand Touring, his total annual income was approximately $291,000.00. Mr. Tran filed a chart documenting his incomes for the period when he worked for Downtown BMW and included the period he worked for Grand Touring.

[30] I will look at Mr. Tran’s income from two years before he began working as a general manager for Grand Touring. The incomes include salaries and commissions, and bonuses when applicable. In 2009 as general sales manager at BMW Autohaus, he earned $168,100.00, tips of $33,000.00. At Grand Touring as director of sales from 2010 to 2012 he earned, respectively, $161,975.00, tips of $33,000.00; $184,720.00, tips of $28,000.00; $225,687.00, tips of $18,000.00.

[31] As general manager at Grand Touring Mr. Tran earned: in 2013, $164,876.00, tips of $2,000.00; in 2014, $251,987.00, tips of $5,000.00; in 2015, $308,678.00, tips of $7,000.00; in 2016, $358,765.00, tips of $7,000.00; and in 2017, $290,897.000, no tips.

[32] Mr. Tran claimed no tips on his income tax returns.

[33] The Crown cross-examined Mr. Tran about the fact that there were no cash tips reported on his income tax assessments he filed in evidence. Mr. Tran testified he had left everything about his taxes in the hands of his accountant. Crown counsel pointed out to Mr. Tran, for instance, that the $18,000.00 in tips he received in 2012 is a great deal of money that went unreported in his taxes. The Crown inquired about whether Mr. Tran made personal note of his cash tips and whether he provided documentation of same to his accountant. Mr. Tran responded that he had no such documentation. When he was asked how his accountant would be aware of the cash amounts, Mr. Tran responded that he would simply advise her verbally.

[34] The Crown suggested either he did not earn the cash tips or he never told the accountant about the tips. Mr. Tran denied both propositions.

[35] It appeared to me that Mr. Tran acted as though he was unaware that the many cash tips he earned were not reported in his taxes. After several questions in this area, Mr. Tran ultimately casually responded, “I will have to talk to my accountant.” “Maybe she missed something.”

[36] The loan amount and the interest rate were proposed by Mr. Ha and Mr. Tran did not question the amount.

[37] Mr. Tran spoke about the time Mr. Ha made the request for the loan. Mr. Tran confirmed Mr. Ha’s evidence that he told Mr. Tran that his own finances were tied up in his business. Mr. Tran said Mr. Ha appeared sad, unlike his ordinary happy self. Mr. Tran stated that Mr. Ha flatly said he needed $240,000.00 with no justification for the amount and said he would pay 26% interest or $60,000.00 on the loan.

[38] Mr. Tran kept large amounts of cash in his and his mother’s homes.

[39] Mr. Tran referred to his cultural background to explain why he would keep so much cash on hand. He said that people of Chinese Vietnamese backgrounds commonly keep cash at home rather than at banks. In his culture “cash is king”. He indicated he was taught from his youth to keep cash at home in fireproof safes. Mr. Tran testified that throughout the seven years, excluding the loan, he saved about $300,000.00 in cash.

[40] Mr. Tran testified that it was not unusual for him to have $240,00.00 in cash on hand. He testified his financial circumstances were good at that time and he would not have seen an issue with loaning the money. Mr. Tran’s evidence was that he saved cash from the tips he earned and from the sales of gifts and casino winnings. He said he would store cash in safes at his and his mother’s homes. The Crown asked Mr. Tran if he was at all concerned about burglary or fire. Mr. Tran responded that he has a fireproof safe, a security system with cameras and he lives in a safe neighbourhood.

[41] When the Crown put to Mr. Tran that perhaps a bank would be safer, Mr. Tran responded, “What if the bank caught fire?” The Crown pointed out that he was not referring to putting cash into a safety deposit box and posited that money deposits in the electronic age are digital. Mr. Tran responded that he was not brought up by his parents to put cash in banks. When asked, he stated that he did not have special insurance in his home insurance policy for the substantial amounts of cash in his home. Mr. Tran testified he did not know that this type of insurance existed.

[42] Mr. Tran testified that he used his regular income to support his lifestyle and daily life expenses. That money would be deposited into his bank account by his employer and he would draw on that money as he required. Mr. Tran said he did not need the extra cash to support his lifestyle.

[43] Mr. Tran had little information about Mr. Ha’s source of livelihood and finances.

[44] The Crown questioned Mr. Tran about what he knew about where Mr. Ha worked. Mr. Tran indicated that he knew Mr. Ha was involved with a fibreglass insulation company and that he was a partner in that company. The Crown asked why he was so confident that Mr. Ha would pay him back. Mr. Tran testified that he was not concerned about Mr. Ha’s financial status because, “He carried himself well and ate at fine restaurants and I saw no reason to disbelieve him.”

[45] The Crown followed up with the query, if Mr. Ha appeared so successful, why did he not cover the father’s expenses himself. Mr. Tran responded that he believed Mr. Ha’s explanation that his money was tied up in investments in his company. He admitted he never received any confirmation from Mr. Ha that he was more than an employee at GlassCell. He said he had no doubt about his partnership in the company even though he had never visited the premises of GlassCell.

[46] Mr. Tran testified he received some expensive gifts from clients like fine wine, champagne and a Rolex watch, which items he would sell and accumulate further cash. Added to this were casino winnings from 2010 to 2017 of about $75,000.00 to $80,000.00. From 2010 to 2017, Mr. Tran’s wife contributed to the household about $45,000.00 to $50,000.00 annually from her position as a marketing coordinator.

[47] Mr. Tran just happened to have the approximate amount Mr. Ha requested for the loan.

[48] Crown counsel asked Mr. Tran how much cash he had saved in 2011 by the time he loaned the $240,000.00 to Mr. Ha. Mr. Tran responded he had about $230,000.00. Crown counsel asked whether it was a coincidence that he just happened to have available cash in the approximate amount Mr. Ha requested, particularly since the evidence is that he never told Mr. Ha how much cash he had available. Mr. Tran said it was a coincidence.

[49] The Crown also posed to Mr. Tran the question whether Mr. Ha ever directly made payments to him such as by e-transfer, or whether he ever paid by cheques containing his or his company’s names. Mr. Tran responded in the negative. Mr. Tran confirmed Mr. Ha’s evidence that the only repayments he received were from GlassCell to his credit card accounts.

[50] Mr. Tran confirmed there was no written evidence of the agreement.

[51] The Crown also asked whether there was any type of written evidence of the repayment arrangements, either emails or texts of communications, about meeting up to deliver the payments. Mr. Tran responded in the negative. The Crown asked him if he retained a lawyer to assist him with the loan or to get a written agreement, to which Mr. Tran also responded in the negative. The Crown then asked him what if Mr. Ha was hit by a bus before he finished paying off the loan. Mr. Tran responded nonchalantly, “I had not thought of that. I’d be out unfortunately.”

[52] Mr. Tran confirmed the evidence that he delivered large amounts of cash to Mr. Ha. Mr. Tran testified he delivered the money in four instalments over a few months. He said he carried large instalments of $60,000.00 cash in gift bags and, unlike Mr. Ha, he said at times he met Mr. Ha at Tim Horton’s for coffee where they would chat over coffee and also met Mr. Ha at a café, not in the Shoppers Drug Mart parking lot.

[53] The Crown cross-examined Mr. Tran about the apparent contradiction between Mr. Tran having misgivings about the safety of putting his cash in a bank and his lack of safety concerns in carrying $60,000.00 in cash into public areas in gift bags. Mr. Tran responded that he felt comfortable delivering the money that way.

[54] Mr. Tran never queried the unusual method of repayment of the loan.

[55] Mr. Tran testified that Mr. Ha explained to him that his method of repayment would be to repay the money through his company’s credit card product return process. Mr. Tran acknowledged that there were 589 transactions made in relation to 12 credit cards in his name from March 18, 2011 and October 9, 2014 and that he received $291,459.12 during that period. Mr. Tran admitted he never questioned the method of repayment. He routinely reviewed his monthly credit card statements and kept a log of the repayments but never got suspicious of Mr. Ha. He never questioned Mr. Ha about his role in the company. He indicated he had no reason to question him.

[56] Crown counsel questioned Mr. Tran about giving Mr. Ha several card numbers. He said he gave Mr. Ha maybe three or four card numbers at a time. The Crown asked whether Mr. Tran questioned Mr. Ha about why he required multiple credit cards and Mr. Tran said he did not. Mr. Tran testified multiple cards were used because a decision had to be made as to which one had the best balance for payment at a particular time. Mr. Tran explained that after he chose the optimal credit card for the first transaction, subsequently, Mr. Ha decided which credit card to use, although it is not clear how Mr. Ha would know at any given time, for the many transactions, which card had the optimal balance.

[57] In spite of his stated preference for cash, “since cash was king,” Mr. Tran was not concerned about receiving payments on his credit cards instead of cash.

[58] The Crown also suggested that as far as Mr. Tran having access to direct cash money in relation to the repayments, it would make more sense for the repayments to have been in cash, or by cheque or bank draft. Those methods, the Crown posited, would allow Mr. Tran to have immediate money in hand since cash was so important in his culture. As the Crown suggested, when payments are made to credit cards access to money is not immediately realizable but could be obtained through cash advances on which interest would be charged. Mr. Tran responded again that was the way Mr. Ha wanted to make the repayments and he trusted him.

[59] Mr. Tran did not inquire into the details of the fraudulent scheme after he was arrested.

[60] Mr. Tran testified he was embarrassed and ashamed when he learned at trial that his friend Mr. Ha had targeted him for a fraudulent scheme. He said he was shocked and thought it was a joke when the police called him at work on September 7, 2017 and told him he should turn himself in because he was going to be arrested for fraud. He said the first time he knew the details of the fraudulent scheme was when he heard Mr. Ha’s testimony. He testified that apart from seeing Mr. Ha at the preliminary inquiry, this was the first time Mr. Tran had encountered Mr. Ha since he was arrested in September 2017.

[61] In closing his evidence, Mr. Tran denied knowing about the scheme and was adamant that he would never knowingly involve himself in fraud because he would be aware of the peril to his reputation and professional career if he were to engage in such a criminal act.

Analysis

The Law of Fraud

[62] Mr. Tran is charged under s. 380(1) of the Criminal Code with fraud over $5,000.00.

[63] To make out the crime of fraud, the mens rea and actus reus of the offence must be established beyond a reasonable doubt.

[64] The actus reus of fraud is determined based on the following principles:

(a) the offence has two elements: a dishonest act and deprivation; (b) the dishonest act is established by proof of deceit, falsehood or “other fraudulent means”; (c) the element of deprivation is established by proof of detriment, prejudice, or risk of prejudice to the economic interests of the victim, caused by the dishonest act.

[R. c. Théroux, [1993] 2 S.C.R. 5, at para. 16 (S.C.C.) as cited from R. v. Olan, [1978] 2. S.C.R. 1175].

[65] The mens rea of fraud is based on the subjective test of whether the accused subjectively appreciated the consequences of the prohibited act as at least a possibility and not on the objective test of whether a reasonable person would have foreseen those consequences. The subjective test looks to the accused’s intention and the facts as the accused believed them to be: [R. c. Théroux, at para. 21]. There are two important factors to consider:

• A person is not saved from conviction because they believe there is nothing wrong with what they are doing. The question is whether the accused subjectively appreciated that certain consequences would follow from their acts not whether the accused believed the acts or their consequences to be moral.
• The Crown is not required in every case to show precisely what was in the accused’s mind at the time of the criminal act. Subjective awareness of the consequences can be inferred in some cases from the act itself, absent an an explanation that creates doubt about the inference.

[R. c. Théroux, at paras. 22 and 23]

The Concept of Wilful Blindness

[66] Wilful blindness is in play if an accused’s suspicion is awakened and rather than making further inquiries, they deliberately omit to do so in order to maintain ignorance about the reason for their suspicion.

[67] The evidentiary threshold for wilful blindness may be met by an accused’s own evidence where it discloses inherently suspicious circumstances characterized by unclear details at odds with common sense and human experience: [R. v. Onasanya, 2018 ONCA 932, at para. 25] (Ont. C.A.). Wilful blindness requires that the accused purposefully omit to make inquiries to avoid receiving undesirable knowledge.

[68] Under these circumstances, the accused is deemed to have actual knowledge. This is sufficient to satisfy a mens rea requirement of knowledge, intention or recklessness: [R. v. Sansregret, [1985] S.C.J. No. 23, 17] (S.C.C.). The Supreme Court of Canada in Sansregret explains:

[W]hile recklessness involves knowledge of a danger or risk and persistence in a course of conduct which creates a risk that the prohibited result will occur, wilful blindness arises where a person who has become aware of the need for some inquiry declines to make the inquiry because he does not wish to know the truth. He would prefer to remain ignorant. The culpability in recklessness is justified by consciousness of the risk and by proceeding in the face of it, while in wilful blindness it is justified by the accused’s fault in deliberately failing to inquire when he knows there is reason for inquiry.

[R. v. Sansregret, at p. 585]; author’s emphasis]

[69] The Supreme Court of Canada in R. v. Briscoe observed that: “A finding of wilful blindness involves an affirmative answer to the question: “Did the accused shut his eyes because he knew or strongly suspected that looking would fix him with knowledge?” The Court in R. v. Briscoe went on, quoting Glanville Williams, in Criminal Law: The General Part, 2nd ed. (London: Stevens & Sons, 1961), at p. 159, holding:

A court can properly find wilful blindness only where it can almost be said that the defendant actually knew. He suspected the fact; he realised its probability; but he refrained from obtaining the final confirmation because he wanted in the event to be able to deny knowledge. This, and this alone, is wilful blindness. It requires in effect a finding that the defendant intended to cheat the administration of justice. Any wider definition would make the doctrine of wilful blindness indistinguishable from the civil doctrine of negligence in not obtaining knowledge.

[R. v. Briscoe, at para. 23]; author’s emphasis]

[70] Therefore, a finding of wilful blindness is sufficient to establish the requisite knowledge to support a conviction for fraud.

Application of the Law of Fraud

The Actus Reus

[71] By the time of Mr. Tran’s trial, Mr. Ha had pleaded guilty to fraud over $5,000.00 and served a sentence. Mr. Tran received $291,459.12 on his credit card accounts between March 18, 2011 and October 9, 2014. The defence does not contest that the fraud occurred, or the circumstances surrounding the fraud, or the manner in which the fraud was effected by Mr. Ha.

[72] Mr. Tran contends he received the money based on an oral agreement between him and Mr. Ha. I do not accept that there was an agreement. It is difficult to believe that with such a large transfer of cash over three years that there is not an iota of evidence pointing to the existence of an agreement. This is not to say that oral agreements between parties are not valid. The point here is that combined with the many and varied credibility problems I find below in Mr. Tran’s and Mr. Ha’s evidence the existence of even an oral agreement is in question.

[73] I find the actus reus is established by Mr. Tran’s acts of having provided Mr. Ha the credit card numbers and by Mr. Tran being in possession of the $291,459.12. Those funds were from GlassCell where Mr. Tran had never been employed or otherwise engaged in any capacity for remuneration which raises the question of the justification for the payments. I conclude under the circumstances this provides proof beyond a reasonable doubt of fraudulent acts by Mr. Tran.

The Mens Rea

[74] The question is whether the Crown has proven beyond a reasonable doubt that Mr. Tran had the proper mens rea or knowledge of the fraud.

[75] Mr. Tran does not deny providing the credit card numbers or receiving the $291,459.12. He contends that he had no knowledge of the fraudulent scheme. Mr. Tran seeks support in Mr. Ha’s evidence that he never told Mr. Tran about the fraudulent scheme.

[76] I find it impossible to believe that Mr. Tran only found out about the fraud leading to his arrest when Mr. Ha was on the witness stand at Mr. Tran’s trial. Although Mr. Ha said he was too embarrassed to tell Mr. Tran sooner, I find it rather far-fetched that he would say nothing to Mr. Tran for five years and leave Mr. Tran suspended in ignorance of the basis of his charges. Further, I do not believe Mr. Tran would not make it his business to inquire into the details of what he contends destroyed his life and long-established career.

[77] The existence of mens rea therefore revolves on questions of the credibility of his and Mr. Ha’s evidence.

[78] What struck me about Mr. Tran was that he is an intelligent and articulate witness. He answered questions from both counsel with easy dispatch. I was also impressed with the advancements in the course of Mr. Tran’s career from automobile sales of semi-luxury cars in 2005 to in 2013 becoming the general manager of sales at a top of the line luxury car dealership.

[79] Mr. Tran spoke very knowledgeably about the operation and management of automobile dealerships and their remuneration schemes. He spoke with facility about financial matters in relation to the luxury car dealership business. Mr. Tran appeared to be quite sophisticated. And so he would have to be in order to confidently deal with the sale of high-end expensive cars to sophisticated, wealthy clients. This is true about Mr. Tran because his employment record reflects steady rises in employment status and increases in remuneration in a business the depends on performance.

[80] I was equally struck by Mr. Tran’s professed lack of knowledge and understanding of certain financial matters and his marked lack of curiosity about the rather unusual and suspicious means Mr. Ha used to repay the loan.

[81] Mr. Tran’s credibility in various areas of his evidence in relation to his explanations about not knowing about the scheme, I cannot accept.

[82] For example, I had difficulty accepting his evidence about his cash tips and his testimony about the income tax assessments he filed as evidence. Evidence about sizable cash tips was an important aspect of Mr. Tran’s effort to establish that he had cash funds available when Mr. Tran asked for the $240,000.00. There were no reports of cash tips on any of the assessments and yet Mr. Tran testified that each year he gave information of his tips to his accountant.

[83] Mr. Tran kept no paper records of his tips. I have difficulty understanding how he could report the amounts of cash tips each year to his accountant when he kept no documentation of this. I find he had no reasonable explanation for why the cash tips were not on his tax assessments. And there is no evidence that he expressed a concern about that income not being claimed over the years.

[84] Either way one looks at it, Mr. Tran’s trustworthiness suffers. He either did not earn cash tips and he lied about this. Or he earned the cash tips and dishonestly did not report this on his tax returns.

[85] The same is true of his other sources of cash such as the cash he spoke of that was derived from sales of gifts and lottery winnings. Again, he kept no records of these cash amounts. It appears to me to be below Mr. Tran’s level of sophistication not to have kept paper records of such large amounts of money especially if he had intentions of claiming it as income through his accountant.

[86] Then there is what Mr. Tran said was a “coincidence”, that Mr. Ha asked for a cash loan of the approximate amount that Mr. Tran just happened to have stored in the safes. This, together with the other credibility problems in the evidence, just seem too convenient to be accepted as true. This only adds to what I regard as a fantastic story Mr. Ha and Mr. Tran have concocted to prevent Mr. Tran from being convicted of fraud.

[87] Regarding Mr. Tran’s evidence that he kept up to $300,000.00 in cash in safes at his and his mother’s homes, I do not question Mr. Tran’s evidence that there might be a cultural element to this practice. However, a sophisticated person would be aware of the obvious risk of that practice in spite of having security services and fire proof safes.

[88] I also found Mr. Tran’s answers to questions about the prospect of banking the cash fell out of line with his level of sophistication on financial matters. While downplaying the risks involved in keeping the cash in his home, he raised as a reason not to bank the money, the more unlikely risk of a fire at the bank, seemingly ignoring the reality of the electronic nature of money deposits in banks and the insurance coverage banks carry.

[89] I contrast Mr. Tran’s over-concern with the risk of banking his cash with his equal lack of concern with the risk of carrying $60,000.00 in cash on four occasions in gift bags to public venues to deliver the money to Mr. Ha. That contradiction only adds to the incredulity of Mr. Tran’s evidence.

[90] I was also surprised by Mr. Tran’s evidence on home insurance. Mr. Tran did not have a special term in his home insurance policy to cover special valuable property such as large amounts of funds kept in a home. Mr. Tran professed to not being aware of such insurance. It seems somewhat difficult to accept that he is not aware of this sort of insurance policy given Mr. Tran’s level of sophistication and his evidence that he occasionally received in addition to cash luxury gifts as valuable as a $30,000.00 Rolex watch which he would likely hold in his home until he sold it.

[91] The credibility problems with Mr. Tran’s evidence, all told, raise questions about whether he actually kept that amount of money in a safe in his home.

[92] Also running against his level of sophistication is the fact that Mr. Tran handed over $240,000.00 on a simple request from Mr. Ha without having a written document, terms of repayment and without the involvement of a lawyer. As I noted above, this is not to suggest that oral agreements are by their nature invalid. But what has to be considered in these circumstances is the large amount of money Mr. Tran claims he handed over to a person he only knew for five years. No collateral, no security, no schedule of repayment for such a large cash loan gives me no confidence there was an agreement at all.

[93] Furthermore, Mr. Tran admitted to not turning his mind to what remedy he would have if Mr. Ha had died before he finished paying. Mr. Tran gave an altogether too nonchalant a response when he said, “I had not thought of that. I’d be out unfortunately.” This is not a credible response to the prospect of losing such a large amount of money.

[94] There were also many red flag warnings Mr. Tran had to overlook to not know what was happening.

[95] There are obvious questions that arise from Mr. Tran accepting without question Mr. Ha’s plan to repay the loan through crediting multiple credit cards. There were 589 transactions made in relation to 12 credit cards in Mr. Tran’s name from March 2011 and October 2014. Why did Mr. Tran not question this unusual method of repayment?

[96] “Cash being king”, this repayment scheme of course contradicted the cultural proclivity to prefer cash. The scheme did not give Mr. Tran the cash in-hand he had provided to Mr. Ha. As the Crown pointed out, Mr. Tran would have to take cash advances against his credit cards payable with interest to have the use of the payments Mr. Ha made to his accounts. For a man of Mr. Tran’s knowledge and sophistication to blindly accept this arrangement simply defies reason.

[97] As well, it stretches credulity to accept that Mr. Tran did not look into anything about the company Mr. Ha said he had a partnership in. He only knew GlassCell sold fibreglass insulation. He said he never received a business card or letterhead for the company or Mr. Ha. He never visited the premises. He said he operated on no proof at all that Mr. Ha was actually a partner and not just an employee of the company.

[98] I think common culture, up bringing and friendship might explain a loan and repayment under some more commonplace circumstances. But I am not sure that Mr. Tran’s culture and upbringing would support the rather peculiar arrangements of the loan in this case. Mr. Tran’s professed unquestioning acceptance of the very unusual and unorthodox scheme, I do not think, can be explained by culture, upbringing and friendship.

[99] I have a difficult time believing Mr. Tran would go along with handing over so many credit cards and receiving 589 transactions over three years without once asking or knowing how and why Mr. Ha was using that approach to repay the loan. This is also not in line with his level of sophistication.

[100] I find Mr. Tran either knew of the fraud and knowingly participated in it or was wilfully blind to it. At a minimum, Mr. Tran was a person who became aware of the need to inquire and declined to make the inquiry because he did not wish to know the truth. In whichever case, the Crown has successfully proved the mens rea of fraud.

Conclusion

[101] The actus reus and mens rea of fraud having been established, I find Mr. Tran guilty of fraud over $5,000.00 beyond a reasonable doubt contrary to s. 380(1) of the Criminal Code. Nothing in the evidence raises a doubt in my mind about this.

Possession of Proceeds of Crime

[102] Mr. Tran was also charged under s. 462.31 (1) of the Criminal Code with possession of proceeds of crime over $5,000.00 obtained by the commission of a criminal offence.

[103] Section 462.3 (1) of the Criminal Code defines proceeds of crime in part as any property, benefit or advantage, within or outside Canada, obtained or derived directly or indirectly as a result of the commission of an offence in Canada. Pursuant to s. 4(3) of the Criminal Code possession requires that a person have anything in their control or custody knowingly.

[104] I found that Mr. Tran committed the offence of fraud. He knowingly received $291,459.12 as a function of the fraud.

[105] I therefore find Mr. Tran guilty of possession of proceeds over $5,000.00 obtained by crime in violation of s. 462.3 (1) of the Criminal Code.

Verdict

[106] I find Quoc Tran guilty of possession of property obtained by fraud over $5,000.00 on count 1 on the indictment under s. 462.3 (1) of the Criminal Code.

[107] I find Quoc Tran guilty of fraud over $5,000.00 on count 2 on the indictment under s. 380(1) of the Criminal Code.

[108] Convictions will be entered accordingly.

B.A. Allen J.

Released: April 30, 2020