COURT FILE NO.: CR-19-90000013-00MO DATE: 2020-10-30

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

THE ATTORNEY GENERAL OF CANADA ON BEHALF OF THE UNITED STATES OF AMERICA

– and –

ZONGTAO CHEN a.k.a. ZONG TAO CHEN a.k.a MARK CHEN

Counsel: Rebecca Sewell and Chris Bundy, for the Attorney General of Canada on Behalf of the United States Leo Adler, on behalf of Zongtao Chen, Person Sought

HEARD: October 22, 2020

BEFORE: R.F. GOLDSTEIN J.

REASONS FOR JUDGMENT ON PRE-HEARING APPLICATIONS

[1] From 2015 to 2019 authorities in the United States investigated a prostitution ring allegedly operating in that country, as well as in Canada and Australia. The operators of the prostitution ring allegedly arranged dates between customers and sex workers. The sex workers were females of Asian descent. The dates were for the purposes of prostitution. The dates were arranged through a website. The sex workers allegedly went to hotels and apartments as arranged by the operators and charged for sexual services. The sex workers sent a portion of their earnings to the operators.

[2] The authorities in the United States allege that one of the operators was Mr. Chen. They now seek his extradition.

[3] Mr. Chen brings two pre-hearing applications. First, he seeks dismissal of the extradition proceedings, arguing that the strict timelines under the Extradition Act were not met. Second, he seeks disclosure. The Minister substituted the original Authority to Proceed (which I will refer to as the ATP) with a second ATP. He seeks documents and correspondence associated that decision. Mr. Chen also seeks disclosure of Toronto Police investigative materials.

[4] Respectfully, I disagree with the defence position. The applications are dismissed for reasons that follow.

BACKGROUND

[5] Between 2015 and 2019 the Portland, Oregon police and the F.B.I. investigated a prostitution ring involving the website supermatchescort.com. The website listed Asian females available for various sexual services. A Portland police officer arranged “dates” through the email address supermatchescort@gmail.com. He attended several dates in an undercover capacity and confirmed that the women offered sexual services.

[6] An F.B.I. agent obtained emails through several search warrants, including supermatchescort@gmail.com. There were thousands of emails from customers to arrange “dates”. The emails directed customers to hundreds of different hotel addresses across the United States. The locations matched with advertisements on the supermatchescorts.com website. Emails also included instructions to the sex workers, including bus and hotel reservations to send them to destination cities in the United States. These destination cities would then be advertised on the website. Several of these emails linked to email addresses associated with Mr. Chen. Several emails also indicated money transfers from sex workers to Mr. Chen. Mr. Chen is listed as the subscriber for supermatchescort@gmail.com.

[7] In January 2019 authorities in Portland executed a search warrant at the home of an alleged co-conspirator. F.B.I. agents found extensive ledgers listing dates and money transfers. The ledgers contained multiple references to owing money to “Drift”. Mr. Chen’s WeChat contact card has the Chinese character “Drift” next to his profile picture.

[8] Several emails obtained by F.B.I. agents from accounts associated with sex workers included screenshots from a scheduling site called folkpost.com. The F.B.I. obtained a search warrant for that website. It contained a very sophisticated scheduling system. The system also contained over 32,000 phone numbers associated with dates. An F.B.I. agent was able to match dates set up in folkpost.com with advertisements on supermatchescort.com and emails associated with supermatchesort@gmail.com.

[9] Undercover officers posing as customers obtained the cell phone of a sex worker in Sioux Falls, South Dakota, in April 2018. The cell phone also contained messages from Mr. Chen’s WeChat profile. Those messages included cities with hotel rooms, and a message containing an area code 416 phone number for Mr. Chen.

[10] The Record of the Case includes information from three women who worked as sex workers. Each of the sex workers described how she was recruited to the prostitution ring; how the ring operated; the sexual services provided; details of banking information; and in the case of one woman a threat made if she tried to leave the prostitution ring. Each of these women had dates arranged through Mr. Chen’s WeChat page.

[11] The Record of the Case also contains information from a cooperating witness. This witness appears to have worked as a despatcher for Mr. Chen. The witness can describe how the prostitution ring worked, and how Mr. Chen operated his part of it.

[12] The Record of the Case also includes information from an F.B.I. forensic accountant. The accountant examined accounts in the United States associated with Mr. Chen. The accounts received funds from across the United States. Cash was withdrawn from that account at locations in Ontario. Some of the sex workers sent funds to an account associated with Mr. Chen. An account associated with Mr. Chen paid the webhosting site that hosts supermatchescorts.com.

[13] Finally, the Record of the Case includes information from U.S. Customs and Border Protection agents. These agents interviewed Mr. Chen when he tried to enter the United States in May, 2016, at the Alexandria, New York, port of entry. The officers examined Mr. Chen’s cell phone. They found numerous images associated with escorts. Mr. Chen admitted that he posted advertisements for escorts on websites and arranged dates for them. The Americans refused to allow Mr. Chen entry.

ISSUES AND ANALYSIS

[14] As noted, Mr. Chen brings two pre-hearing applications. These applications raise three issues:

• Mr. Chen argues that the Minister of Justice did not comply with the strict time limits set out in the Extradition Act. He should, therefore, be discharged.
• The Minister initially signed an ATP based on a Canadian charge of receiving a material benefit from sexual services – the equivalent of the old charge of living of the avails of prostitution. Later, the Minister substituted a new ATP based on a Canadian charge of receiving a material benefit from human trafficking. Mr. Chen argues that he is entitled to disclosure related to the reasons for the substitution of the new ATP. Mr. Chen intends to argue at a later point that the substitution of the new ATP constituted an abuse of process and that he is entitled to a stay of proceedings.
• Mr. Chen says that the Americans jointly investigated with the Toronto Police. The Americans do not rely on any material derived from a Canadian investigation as part of their extradition request. Nonetheless, by operation of s. 32(2) of the Extradition Act the Toronto Police must make disclosure of all notes, documents, and other materials generated in the course of their investigation.

[15] I deal with each issue in turn.

(a) Did the Minister comply with the timelines under the Extradition Act?

[16] Counsel for Mr. Chen argues that there are strict timelines under the Extradition Act. If the Minister of Justice (who administers the Extradition Act) fails to comply with them, then a person sought must be discharged. In this case, Mr. Chen’s counsel argues, the ATP was not signed until 91 days after Mr. Chen’s provisional arrest – one day later than authorized.

[17] With respect, I cannot agree.

[18] There is no doubt that the scheme of the Extradition Act mandates a speedy process. The timelines are governed by a combination of the Extradition Act and the Canada-U.S. Treaty On Extradition (which I will refer to simply as the Treaty).

[19] In this case, the police arrested Mr. Chen pursuant to a provisional arrest warrant. In the case of a provisional arrest, the requesting state must supply information to identify the person sought and other relevant information setting out the reasons for the urgency: Treaty, Art. 11(1). The requesting state shall then take the steps necessary to arrest the person sought: Treaty, Art. 11(2). The Minister then authorizes the Attorney General to apply for a warrant from a judge: Extradition Act, s. 12, s. 13(1). Mr. Chen does not argue that there was any failure to comply by either the American or Canadian authorities up to the point of his arrest.

[20] The timelines commence running when the person sought is arrested. Under Art. 11(3) of the Treaty the requesting state has 60 days to transmit the Record of the Case (The Treaty, when signed in 1971, originally specified 45 days; it was amended by diplomatic note in 1988 to 60 days). The person sought must be “set at liberty” if the request is not made within 60 days. After the Record of the Case is received, the Minister must then decide whether to authorize the Attorney General to proceed with the extradition.

[21] The critical date for calculation purposes is not when the Record of the Case was received in Canada. The critical date is the date upon which the combined periods have expired. That is based on the wording of the Treaty and the operation of the Extradition Act. Section 14(b)(ii) provides that the Minister has 30 days to sign the ATP from the expiry of that period where:

• A person sought is provisionally arrested;
• The provisional arrest is made pursuant to an extradition agreement;
• The extradition agreement contains a time period within which the request is made and the documents provided by the requesting state;
• The Treaty is such an agreement; then,

[22] Thus, the Minister must sign the ATP within 90 days of a provisional arrest – the combined time periods. If the ATP is not signed within that time period, the person sought must be discharged.

[23] I do not agree with Mr. Chen that if the Record of the Case is not received within 60 days then the person sought must be discharged. The Treaty states that if the documents are not received within 60 days, then a person sought who has been provisionally arrested must be “set at liberty”: Art. 11(3). However, the Treaty does not simply contemplate the end of the extradition process. A requesting state can still make an extradition request, as set out in Art. 11(3):

This stipulation shall not prevent the institution of proceedings with a view to extraditing the person sought if the request is subsequently received.

[24] In other words, the Treaty is not designed to simply end the extradition process if the Record of the Case is not received within 60 days. The Treaty is designed to prevent a person sought from languishing in jail while waiting for the requesting state to transmit the Record of the Case. That is also reflected in the wording of s. 14(1) of the Extradition Act, which mandates a discharge at the end of the 90-day period whether the person sought has been “detained or released on judicial interim release”.

[25] The police arrested Mr. Chen on January 15, 2019. There is no direct evidence as to when the Record of the Case was transmitted to Canada but it is irrelevant – the 90 day period begins counting the day after the arrest by virtue of the Interpretation Act. The time period expires on the 91st day. It is a matter of simple calendar counting. On my count, the 90th day was April 15, 2019. The Minister’s delegate signed the ATP on April 15, 2019. I therefore see no violation of the time periods in the Extradition Act. Mr. Chen is not discharged.

(b) Is Mr. Chen entitled to disclosure of the reasons why the Minister substituted a new ATP?

[26] As noted, the Minister’s delegate signed an ATP on April 15, 2019. The ATP stated that the Canadian offence corresponding to the alleged criminal conduct was receiving a material benefit from sexual services contrary to s. 286.2(1) of the Criminal Code.

[27] On June 22, 2020, Mr. Chen filed a notice of application and constitutional question. He argued that s. 286.2(1) of the Criminal Code is unconstitutional. Thus, the Canadian conduct for which extradition was sought was not criminal.

[28] On the same day, June 22, 2020, the Minister substituted a new ATP. The new ATP stated that the Canadian offence corresponding to the alleged criminal conduct was receiving a financial or other material benefit from human trafficking contrary to s. 279.02 of the Criminal Code.

[29] The defence intends to bring an application to stay the extradition proceeding as an abuse of process. The defence intends to argue that all of the material submitted by the requesting state – including the material in support of the provisional arrest warrant and the record of the case – referenced prostitution-related offences with nary a word about human trafficking. Mr. Chen, citing Idziak v. Canada (Minister of Justice), [1992] 3 S.C.R 631 in support, argues in his factum that the action of the Minister substituting a new ATP is fundamentally unfair. He argues that it was likely a decision of the Ontario Court of Justice finding s. 286.2(1) of the Criminal Code to be unconstitutional that spurred the change. The inference is that the Minister knew, therefore, that he could not obtain a committal based on the original ATP.

[30] The defence therefore requests “… communications and materials … to explain what led to such a drastic and material change in the ATP…”

[31] With respect, I cannot find anything unfair or abusive about substituting a new ATP. There is no basis to for a judge of this Court, sitting as an extradition judge, to review that exercise of the Minister’s discretion. There is no air of reality to the abuse of process argument. Thus, the defence has not established an entitlement to further disclosure.

[32] An extradition judge may only order disclosure of material that is relevant to the issues at the extradition hearing. That flows from an extradition judge’s limited statutory jurisdiction. An extradition judge may expand the scope of an extradition hearing to allow a person sought to establish a Charter claim. An extradition judge may only do so, however, where the person sought has established an air of reality to that claim. In the absence of any indication of bad faith or improper motive, there is no basis to order further disclosure: United States v. Kowk, 2001 SCC 18 at paras. 100-101. The jurisdiction to hear a Charter challenge is limited to issues pertaining to the extradition hearing itself: United Sates v. Cobb, 2001 SCC 19.

[33] In R. v. Larosa (2002), 166 CCC (3d) 449 (Ont.C.A.) the person sought was arrested and charged in Ontario with serious drug and money laundering offences. The investigation involved police forces in Canada, the United States, and other countries. The Minister also commenced extradition proceedings. The Canadian authorities determined that it was more appropriate for the United States to prosecute. The Canadian prosecutors then stayed the Ontario charges. Mr. Larosa argued that the stay of the Ontario charges in order to extradite him was an abuse of process. Mr. Larosa also sought disclosure of materials in support of his allegation of state misconduct. Doherty J.A., set out a three-part test:

… before ordering the production of documents and compelling testimony in support of allegations of state misconduct, this court should be satisfied that the following three criteria have been met by the applicant:

• the allegations must be capable of supporting the remedy sought;
• there must be an air of reality to the allegations; and,
• it must be likely that the documents sought and the testimony sought would be relevant to the allegations.

[34] In my respectful view, the allegations, even if true, could not support an allegation of an abuse of process. Section 23 of the Act clearly authorizes the Minister to substitute an ATP before the extradition hearing commences; or with leave of the court substitution of an ATP after a hearing has commenced; or to withdraw an ATP at any time. The use of the permissive word “may” throughout the section clearly gives the Minister discretion. Although the courts may review the Minister’s discretion, they may not interfere unless it is unreasonable: United States v. Lake, 2008 SCC 23.

[35] It is true that Lake concerns the ministerial phase of extradition. In my view, however, the Minister also has discretion during the judicial phase of the extradition process. That discretion is akin to the prosecutorial discretion of the Crown in a domestic prosecution. The Minister’s decision to substitute an ATP is equivalent to the Crown’s undoubted discretion to substitute a new indictment in a domestic criminal matter. The Minister’s discretion to withdraw an ATP is akin to the Crown’s discretion to stay or withdraw a charge in a criminal matter. Section 23(2) of the Extradition Act permits the judge to amend the ATP to conform with the evidence after the hearing has commenced. That is also akin to a criminal proceeding, where the Crown may only amend an indictment or information after a proceeding has commenced with the permission of the court. See: R. v. Ritter, 2006 ABQB 576 at para. 42.

[36] The discretion, like prosecutorial discretion generally, is unreviewable by the courts except “where there is conspicuous evidence of improper motives or of bad faith or of an act so wrong that it violates the conscience of the community, such that it would genuinely be unfair and indecent to proceed, then, and only then, should courts intervene to prevent an abuse of process which could bring the administration of justice into disrepute.” Cases of this nature are extremely rare: R. v. Power, [1994] 1 S.C.R. 601; R. v. Babos, 2014 SCC 16.

[37] Assuming without deciding that the defence allegation is true – that the Minister substituted a new ATP in light of developments in the law – I cannot see anything wrong, abusive, or unfair about that. Indeed, the Minister would be derelict in his or her duty if he or she did not do so. Given Canada’s international obligations, the Minister is entitled to review the Record of the Case, decide whether the old Canadian charge is still viable, and, if not, determine whether there is some other Canadian charge that would catch the alleged criminal activity. Much criminal conduct can be prosecuted under more than one section of the Criminal Code: R. v. Kienapple, [1975] 1 S.C.R. 729. It would be an odd result if the Minister were required to fetter his or her discretion and never be able to determine if the alleged criminal conduct fell afoul of a different section of the Criminal Code.

[38] I also cannot see any prejudice to Mr. Chen as a result of the substitution of a new ATP. It did not occur on the eve of a hearing – and if it had, the remedy would have been an adjournment, not a stay. The Record of the Case is unchanged. It therefore follows that since there is no basis upon which a stay of proceedings may be granted, then there is no basis upon which disclosure should be ordered.

(c) Is Mr. Chen entitled to disclosure of notes and other materials associated with a TPS investigation?

[39] Mr. Chen asserts that the TPS has been investigating him since August 2018. He points to evidence and statements in the Record of the Case, as well as a Toronto Police press release, to argue that there was a Canadian investigation of Canadian offences on Canadian soil.

[40] In the Notice of Application Mr. Chen asks that this Court order production of “all notes, statements, documents and materials pertaining to the Canadian gathered evidence…” He specifically relies on s. 32 of the Extradition Act, which governs the admission of evidence at an extradition hearing. He puts the argument this way in the defence factum:

Assuming that there is any Canadian gathered evidence available for use in the foreign prosecution, must the existence of all such evidence be disclosed, pursuant to s.33(1)(a); and all then subjected to a s.32(2) scrutiny?

Respectfully, the answer, given the present Act’s requirements, is a resounding “yes”, and the evidence seized from Mr. Chen’s home(s) as well as all other evidence gathered by the Toronto Police, whether before or after the search, ought to be disclosed and produced – especially because of the potential for the sharing of such information with the Americans, given their well-established history of cooperation in this matter.

[41] I must respectfully disagree with this argument.

[42] Subsection 32(1) provides that specific evidence that would otherwise be inadmissible under Canadian law shall be admitted at the extradition hearing. That evidence includes the Record of the Case; documents submitted in conformity with an extradition agreement; and evidence adduced by the person sought that is relevant to the test for committal and the judge considers reliable. Subsection 32(2) of the Extradition Act, states that “evidence gathered in Canada must satisfy the rules of evidence under Canadian law in order to be admitted.”

[43] The words of the statute make it clear that s. 32 applies to evidence adduced at the extradition hearing. Here, there is simply no evidence from a Canadian police investigation in the Record of the Case. Where the foreign state does not rely on Canadian-gathered materials for an extradition request there is no basis to order disclosure: United States v. McAmmond (2005), 192 C.C.C. (3d) 149 (Ont.C.A.) at paras. 16 and 21.

[44] In my view, s. 32(2) cannot be read to create a general right of disclosure beyond the limited right described in Kwok. Section 39(1) of the Extradition Act empowers a judge to order anything seized during the arrest of the person sought sent to the extradition partner. The Attorney General has not made an application in this case. That section is not engaged.

[45] I accept Mr. Adler’s assertion that the Toronto police executed various search warrants at Mr. Chen’s home and properties. I also accept that his assertion that Mr. Chen has received no disclosure of warrants, informations to obtain, or applications under s. 490 of the Criminal Code to retain documents. I do not accept, however, that these police actions give Mr. Chen what amounts to a freestanding right to disclosure in this proceeding.

[46] The defence relies on United States v. Anekwu, 2009 SCC 41, [2009] 3 S.C.R. In my respectful view, that case does not support such a wide right of disclosure. Mr. Anekwu was sought in the United States for telemarketing fraud. Much of the evidence – such as financial and post office records – was obtained by Canadian authorities from Canadian sources. The Canadian authorities gathered the evidence and transmitted it pursuant to the Mutual Legal Assistance in Criminal Matters Act. The Record of the Case included a summary of the evidence gathered in Canada.

[47] The defence specifically relies on this passage from the judgment of Charron J. for the Supreme Court of Canada:

The Attorney General concedes in this Court that s. 32(2) applies to all Canadian-gathered evidence, whether it forms part of the record of the case or not. In my view, this concession is well founded. Suffice it to say that, for our purposes in this appeal, I agree with the interpretation adopted by these appellate courts on this point, and find it more consistent with basic principles of statutory interpretation to conclude that the entirety of s. 32(1) is subject to the specific provision contained in s. 32(2).

[48] The issue in Anekwu was not with Canadian-gathered evidence at large, but rather with the admissibility of Canadian-gathered evidence certified as available for prosecution in the foreign proceeding. Respectfully, Charron J.’s comment cannot be bootstrapped into a wider right to disclosure. Indeed, at para. 29 the Court affirmed the limited right to disclosure in the extradition context. Anekwu must be read with in light of Kwok, where, at para. 101 Arbour J. stated:

In this case, the Appellant was entitled to know the case against him, including the materials upon which the United States relied upon to establish a prima facie case. Since the requesting State was not relying upon materials in the possession of Canadian authorities, and in the absence of any indication of bad faith or improper motives on the part of the prosecuting authorities, there was no obligation to provide further disclosure of materials requested.

[49] The Attorney General of Canada has specific responsibility for carriage of the extradition request during the committal phase. The police are an independent entity, separate from the Attorney General. If the police have gathered evidence in relation to Mr. Chen for use by the American prosecutors, then the proper forum is a request under the Canada-U.S. Mutual Legal Assistance Treaty (which I will refer to as “the MLAT Treaty”) and an application to gather and then send the evidence under the Mutual Legal Assistance In Criminal Matters Act (which I will refer to as “the MLAT Act”).

[50] In United States v. Lane, 2014 ONCA 506, is on point. Lane was the target of a child pornography investigation in the United States. Canadian police executed a warrant at his residence. They seized his computer and several hard drives. The United States requested his extradition shortly after that. The extradition request included material that had been seized pursuant to the search warrant. At the extradition hearing Lane applied to have the material excluded due to a Charter violation. At the same time the Attorney General of Ontario sought and obtained an order from a different judge under the MLAT Act to send Lane’s computer and hard drives to the United States. The MLAT Act judge was informed of the extradition proceeding (and a Charter motion brought by Lane) but the extradition judge was not informed of the MLAT Treaty or the MLAT Act application. The extradition judge subsequently granted Lane’s Charter motion. Lane asked for the return of the seized items. Counsel for the Attorney General of Canada then informed him that the items had been sent to the United States by order under the MLAT Act. The extradition judge found that there had been an abuse of process. (In doing so, he made findings of misconduct against several Crown law officers. The Court of Appeal found that there was no basis for him to have made findings of misconduct.)

[51] The Court of Appeal found several errors by the extradition judge. I reproduce the key excerpts, found in part in paras. 38-47:

The extradition judge was of the view that when determining whether there was an abuse of process in the respondent’s committal proceeding, he was entitled to consider the conduct of the MLAT proceedings…

This view is mistaken. Extradition proceedings and MLAT proceedings are governed by separate statutes, each with its own purpose, procedures and safeguards to ensure that the rights of individuals are protected.

The existence of the Charter motion was a relevant factor for the MLAT judge to consider in deciding whether to give the respondent notice of the sending hearing…

The MLAT proceeding, however, was not relevant to the function of the extradition judge, and accordingly it was not necessary to advise him of its existence. The task of the extradition judge is to determine if there is sufficient evidence to justify committal. The existence of an MLAT request has no bearing on the question of whether sufficient evidence exists to justify committal.

Further, an extradition judge’s jurisdiction to consider Charter issues is not inherent; it flows from s. 25 of the Extradition Act, which gives the judge jurisdiction to consider Charter issues that “pertain directly to the circumscribed issues relevant at the committal stage of the extradition process”: Kwok, at para.

This means that where a stay of proceedings is sought, there should be “a nexus between the conduct alleged to constitute an abuse of process and the committal hearing itself”…

We see no nexus between the MLAT proceeding and this committal proceeding. The MLAT proceeding did not affect the nature or sufficiency of the evidence before the extradition judge.

[52] There is no evidence generated by the Toronto Police in the Record of the Case; there is no Canadian-generated evidence that the Attorney General seeks to introduce at the extradition hearing; and there is no air of reality to an alleged Charter breach by the Toronto Police. Thus, the Toronto Police investigation is irrelevant at this extradition hearing, even if that investigation targeted Mr. Chen. I see no reason to order disclosure.

DISPOSITION

[53] The applications are dismissed.

Released: October 30, 2020

COURT FILE NO.: CR-19-90000013-00MO DATE: 2020-10-30

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

THE ATTORNEY GENERAL OF CANADA ON BEHALF OF THE UNITED STATES OF AMERICA

– and –

ZONGTAO CHEN a.k.a. ZONG TAO CHEN a.k.a MARK CHEN

REASONS FOR JUDGMENT ON PRE-HEARING APPLICATIONS

R.F. Goldstein J.