COURT FILE NO.: CR-18-50000642-0000 DATE: 20210312 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Stuart Rothman, for the Crown HER MAJESTY THE QUEEN – and – QUOC TRAN Accused Amedeo Dicarlo, for the Accused

HEARD: March 10, 2020

ALLEN J.

REASONS FOR DECISION ON SENTENCING

FACTUAL BACKGROUND

[1] On April 30, 2020, I convicted Quoc Tran on one count of possession of proceeds of crime over $5,000.00 obtained by fraud contrary to 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] By way of background, the charges arise from Mr. Tran’s claim that he made a loan to a friend, Hai Ha. The monies that are the subject matter of the fraud were funds Mr. Tran claimed Mr. Ha was repaying him on the loan. Mr. Tran’s evidence was that Mr. Ha explained that his method of reimbursement would be to repay the money through his company’s credit card product return process.

[3] Mr. Ha had a position at GlassCell Isolab, a fibreglass distributor, as a customer service employee. That gave him access to information about product sales and returns. Credits for product returns were given through crediting clients’ credit and debit cards using ATM machines. Mr. Ha took fraudulent returns from false companies and applied credit to various credit and debit cards held by Mr. Tran and others who benefited from the scheme. Mr. Tran received fraudulent funds for over three years from the scheme.

[4] Both Mr. Ha and Mr. Tran were arrested. Mr. Ha pleaded guilty and was sentenced before Mr. Tran’s trial. Mr. Tran and Mr. Ha hatched a story for Mr. Tran where they attempted to obscure Mr. Tran’s knowledge and involvement in the fraud. They urged the court to accept that Mr. Tran did not know the source of the funds he received, that he thought Mr. Ha was an owner of GlassCell Isolab and was repaying him through his company.

[5] Mr. Tran did not deny that from March 18, 2011 and October 9, 2014 there were 589 transactions made in relation to 12 credit cards connected to him and that he received $291,459.12 during that period. He claimed to have been unaware of the source of the funds, unaware they were fraudulently extracted from Mr. Ha’s employer.

[6] I did not believe Mr. Tran’s and Mr. Ha’s fabrications. In a three-day, judge-alone trial I convicted Mr. Tran on both counts on the indictment.

PRINCIPLES OF SENTENCING

[7] Section 718 of the Criminal Code provides that the fundamental purpose of sentencing is 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; (b) to deter the offender and other potential future offenders from committing offences; and (c) to separate offenders from society.

[8] Deterrence is pivotal in fraud cases. As the Ontario Court of Appeal remarked: [t]here are few crimes where the aspect of deterrence is more significant. It is not a crime of impulse and is of a type that is normally committed by a person who is knowledgeable and should be aware of the consequences. That awareness comes from the sentences given to others. [R. v. Dobis, [2002] O.J. No. 646, at para. 45, (Ont. C.A.)]

[9] Proportionality is also a guiding principle for sentencing. A sentence must be proportionate to the gravity of the offence determined on the particular facts of the case. The narrow focus of the sentencing process is directed to imposing a sentence that reflects the circumstances of the specific offence and the attributes of the specific offender: [Criminal Code, s. 718.1 and R. v. Hamilton (2004), 186 C.C.C. (3d) 129, 72 O.R. (3d) 1 (Ont. C.A.)].

[10] The parity principle requires a sentence be similar to sentences imposed on similar offenders for similar offences committed under similar circumstances. Sentencing is an individualized process this necessarily means that sentences imposed for similar offences may not be identical: [R. v. Cox, 2011 ONCA 58 (Ont. C.A.) and R. v. L.M., [2008] 2 S.C.R. 163, 2008 SCC 31 (S.C.C.)].

[11] The totality principle must be considered for some sentences. This principle is pertinent in fraud cases where restitution is ordered as part of the sentence. Section 718.2 (c) of the Criminal Code provides, “where consecutive sentences are imposed, the combined sentence should not be unduly long or harsh.” If a cumulative sentence is too harsh, the court must adjust the total sentence so that it is not out of proportion to the gravity of the offences.

[12] Section 718.2 (a) of the Criminal Code provides that “a sentence should be increased or reduced to account for any relevant aggravating or mitigating circumstances relating to the offence or the offender”. Some aggravating and mitigating factors are set by legislation and others have been developed at common law.

MR. TRAN’S LIFE

[13] Quoc Tran was 42 years of age at trial. He had a lengthy and successful career in various positions in the car dealership business. He lives with his wife and daughter in a condo unit he owns in the City of Toronto.

[14] From 2005, Mr. Tran was employed at various levels of automobile dealership management until he was terminated in 2017 from a luxury car dealership where he had worked from 2010. In 2017, before he left the dealership, his total annual income was approximately $300,000.00.

[15] A pre-sentence report was filed that provides some biographical evidence. Mr. Tran was born in Vietnam. He emigrated to Canada as a young child with his parents and they settled in Toronto. He has a younger sister. Mr. Tran is a Canadian citizen. His parents who have a strong work ethic divorced after some years after arrival. Mr. Tran comes from a family of modest means. He was required to leave secondary school in grade 11 to assist his mother with supporting the family. Mr. Tran maintains a good relationship with both parents and interacts with them regularly.

[16] There is no history of alcohol or substance abuse. He has no criminal record. He indicated in the pre-sentence report that in view of the verdict he takes responsibility for the crime.

[17] Mr. Tran filed six letters of reference from long-time friends, past colleagues, clients and family members. His references uniformly show respect for his integrity, his leadership qualities, trustworthiness, honesty and stellar relationships with co-workers and friends. Given their personal knowledge of Mr. Tran, the references expressed shock, alarm and disbelief that Mr. Tran was involved in criminal activity. They say that is not the “Danny” Tran they know. A pastor in the church Mr. Tran attends described him as a great asset to the church and its members by volunteering in community service and donating to the church.

THE AGGRAVATING AND MITIGATING FACTORS

[18] The main aggravating factor is that the fraud involved a large quantity of money defrauded from his friend’s employer over a nearly three-year period. It was not the most complex fraud as fraudulent schemes go, but it was well-thought-out as it was executed without the notice of the employer over a rather protracted period. Mr. Tran was into the fraud to the tune of a large unearned windfall of $291,459.12.

[19] Mr. Tran was making a good living at the time of his arrest, earning annually in the range of $300,000.00. The motivation I can only conclude was greed. Also aggravating is that the scheme involved considerable deliberation and forethought to come up with their ill-fated attempt to protect Mr. Tran from blame and condemnation for his involvement.

[20] The mitigating factors are plentiful. Mr. Tran appeared in court as an articulate and intelligent man who spoke with great ease and enthusiasm about the elevations in his lengthy career in luxury car dealerships. His demeanour in that regard was not contrary to how his co-workers described him.

[21] Mr. Tran comes from a hardworking family who emigrated to Canada from Vietnam when he was young. When his mother became the only breadwinner in the family, Mr. Tran left secondary school without graduating to help support the family. Despite never having the opportunity to return to school to graduate, he has done very well for himself in his career. That is laudable. He has made many personal friends through his career and has maintained friendships from his youth. Mr. Tran has lived a pro-social and stable life. He has been continuously employed since his youth. He is a family man and the main breadwinner to his wife and teenage daughter. This accords with what his references say about him.

[22] Mr. Tran did not plead guilty so he will not have the mitigating benefit a guilty plea might have garnered. He did however accept responsibility for his crime in his pre-sentence interview.

THE PARTIES’ POSITIONS

[23] In November 2012, Parliament passed legislation that barred conditional sentences for certain offences in the Criminal Code, including fraud over $5,000.00. The fraud in the case before me covered a period on both sides of the amendment. A conditional sentence is therefore available to Mr. Tran.

[24] The Crown takes the position that Mr. Tran should receive a penitentiary sentence of two years, three years’ probation, a free-standing restitution order and a fine in lieu of forfeiture.

[25] The defence’s view is that Mr. Tran should be granted a conditional sentence of 6 months to 2 years less a day with terms and probation. He does not dispute the free-standing restitution order and leaves the decision on the fine in the discretion of the court.

CASE LAW

Custodial Sentences

[26] R. v. Bogart (M.) (2002), 162 O.A.C. 347 (CA): Offender medical doctor; billed OHIP for services totalling $923,780.53 he never performed; trial judge ordered the offender to serve a conditional sentence of 2 years less a day and be subject to 3 years’ probation; appellate court sentenced him to 18-months’ imprisonment.

[27] R. v. Dobis, [2002] O.J. No. 646 (Ont. C.A.) − offender, accounts manager for electrical wiring manufacturer; in a position of trust; pleaded guilty to large-scale fraud over $2 million; sentenced to 2 years less a day reformatory sentence; restitution of $286,636.00 ordered.

[28] R. v. Davatgar-Jafarpour, 2019 ONCA (Ont. C.A.): offender, executive of non-profit organization; committed fraud between $2 million and $2.5 million against the federal government over several years through submitting false reimbursements; large sophisticated scheme; 150 employees lost their jobs with bankruptcy; government regained most of its losses; no breach of trust; 4-year sentence on appeal.

[29] R. v. Ahmad, 2018 ONSC 518 (Ont. S.C.J.): offender, age 51, no criminal record; over $140,000.00 fraudulent deposits in a sophisticated, deliberated scheme; some recovery of funds; no remorse; sentence 15 months’ imprisonment, 2 years’ probation.

[30] R. v. Williams, [2007] O.J. No. 1604 (Ont. S.C.J.) – offender age 60; no criminal record; no guilty plea; sentenced to 18 months’ imprisonment for embezzling $195,000.00 from her employer over three years; $159,000.00 restitution ordered; as result of offence, offender suffered clinical depression and loss of employment.

[31] R. v. Fiorillo, 2015 ONCA 328 (Ont. C.A.): offender, age 48, health issues; first-time offender; with others used fake purchasers to purchase properties with fraudulent documentation on financial status of purchasers; mortgage funds advanced on strength of these deceitful representations; large-scale fraud $267,082.00 from which offender received $110,000.00; no remorse; 1-year prison sentence.

[32] R. v. Maxwell, 2014 ONCA 316 (Ont. C.A.): offender convicted of defrauding a bank in the amount of $375,000.00; scheme involved several individual transactions that took place during a period of about 1-month; trial sentence of 4 years’ imprisonment; appellate court upholds trial sentence.

Conditional Sentences

[33] R. v. Smolyar: fresh evidence after trial before appeal; substantial restitution made before appeal; appellate court set aside custodial sentence.

[34] R. v. Schotz, 2019 ONSC 5490 (Ont. S.C.J.): offender convicted one count of defrauding the Government of Canada of over $1 million income tax and GST/HST; no guilty plea; dates on indictment straddles before and after November 2012 amendment precluding conditional sentences; conditional sentence available; conditional sentence 2 years less a day

[35] R. v. Scott, 2011 ONSC 5964 (Ont. S.C.J.): offender, woman, age 56, petty cash cashier defrauded $9,367.24 from employer; breach of trust found; serious emotional health issues including depression and suicide attempt; 15-month conditional sentence.

[36] R. v. Clermont, 2016 ONSC 4655: 3 offenders, first-time, women offenders, in their mid to late 40s, convicted of fraud against an insurance company in applications for motor vehicle accident benefits in the amounts of $12,669.58, $10,942.73 and $12,649.41; each had young and teenaged children; each received conditional sentences of 5 months, 29 days, followed by 2-years’ probation.

[37] R. v. Callendar: offender, age 44, no criminal record; convicted on 1 count of fraud over $280,000.00 and 1 count of use of a forged document involving a bank; involved fake purchase and sale agreements and a fake purchaser with a false name and identification; 9-month conditional sentence.

Restitution

[38] Section 738 of the Criminal Code extends to the sentencing judge the discretion to order the offender to make restitution by paying the victim an amount not exceeding the replacement value of the property as of the date the order is imposed, less the value of any property returned, where the amount is readily ascertainable.

[39] None of the funds in the case before me were recovered and the amount is readily ascertainable.

[40] Important to consider is that a restitution order is part of the overall sentence. It is not to be simply tacked onto a prison sentence which is itself a suitable sentence. This would offend the totality principle in that this could result in an excessive sentence: To summarize, a restitution order is simply part of the determination of an overall fit sentence, and general sentencing principles apply. While consideration of the offender’s ability to pay and the impact of a restitution order on an offender’s rehabilitation are factors to be considered, the weight to be given to these factors will vary depending on the nature of the offence and the circumstances of the offender. When the offence involves a breach of trust, a primary consideration is the effect on the victim; rehabilitation is a secondary consideration. Furthermore, consideration of the ability to pay includes the ability to make payments from the money taken as a source of restitution. [R. v. Castro, 2010 ONCA 718, [2010] O.J. No. 4573, at para. 35, (Ont. C.A.)]

[41] The objectives of imposing a restitution order are enumerated in R. v. Castro at para. 24, namely:

• to emphasize the sanction imposed on the offender;
• to make the offender responsible for making restitution to the victim;
• to prevent the offender from profiting from crime; and
• to provide a convenient, rapid and inexpensive means of recovery for the victim.

[42] The sentencing court may take the means of the offender into account. But s. 739.1 of the Criminal Code provides that the ability to pay does not prevent the court from ordering restitution. When determining whether a restitution order is appropriate, the court must consider, among other things, both the present and future ability of the accused to pay restitution: [R. v Yates, 2002 BCCA 583, at paras. 15 and 17, (BCCA)].

[43] Financial evidence shows that Mr. Tran disposed of the entirety of the money. Mr. Ha’s employer, GlassCell Isolab, has gone out of business. There is correspondence from the loss insurance broker requesting if restitution is ordered that the payment be made to the insurer, The Guarantee Company of North America.

A FIT SENTENCE

[44] Mr. Tran seeks a conditional sentence. Statutory and common law set down factors to be considered when deciding whether a conditional sentence is fit in the circumstances of a case.

[45] Section 742.1 of the Criminal Code sets out four criteria a court must consider before deciding to impose a conditional sentence: (a) the offence must be one that is not punishable by a minimum term of imprisonment; (b) the court must impose a term of imprisonment of less than two years; (c) the safety of the community would not be endangered by the offender serving the sentence in the community; and (d) a conditional sentence would be consistent with the fundamental principles of sentencing.

[46] The first two criteria are met in this case. Offences that occurred before November 2012 are not punishable by a minimum term of imprisonment. I will impose a sentence of less than two years.

[47] There is the further question of whether serving the sentence in the community would endanger its safety. According to the Supreme Court of Canada’s leading decision of R. v. Proulx, (2000) 2000 SCC 5, 140 C.C.C. (3d) 449, two factors must be considered: (a) the risk of the offender re-offending; and (b) the gravity of the damage that could ensue in the event of re-offence.

[48] Mr. Tran does not have a criminal record. He has a lengthy and enviable record of employment in the car sales business. He was not in a position of trust in relation to the company victimized by the fraud. Friends, past co-workers, business associates and clients vouch for his positive attributes. As a result of his crime, Mr. Tran lost a position he enjoyed and prospered in. His reputation in the business has likely been irreparably tarnished.

[49] It appears that the fraud Mr. Tran partook in is an aberration from an otherwise unblemished record. I think the risk of reoffending and endangering the public is minimal.

[50] This is not to underplay the crime. The fraud was not the most sophisticated of fraud scams. Nor did it represent an impulsive lapse in judgment on Mr. Tran’s part. It was a protracted crime effected over about three years. Mr. Tran was active in the fraud to the tune of 589 transactions made in his name and 12 credit cards that gained him a large sum of money.

[51] There are other factors to consider. Mr. Tran provided a letter from his wife’s doctor that indicates she requires a full-time caregiver at home for a debilitating injury to her leg. Mr. Tran is currently unemployed and has to date undertaken the care of his wife and will continue to so. It appears she needs further surgery. But because of the restrictive circumstances in hospitals due to the COVID virus, there is no certainty as to when that will be possible. Mr. Tran requested, and Crown counsel and the court agreed, that I delay passage of sentence for three months to await word on his wife’s circumstances. This is the reason for the delay in sentencing until March 12, 2021.

[52] Given the nature of the crime, the sentence must be susceptible to satisfying the paramount objectives of deterrence and denunciation. Conditional sentences have been allowed in the appropriate circumstances in cases with larger and more complex frauds. While Mr. Tran did not plead guilty, he took responsibility for the crime in his pre-sentence interview.

[53] I find, in all the circumstances, releasing him into the community on restrictive terms is a sentence that will achieve the goals of public denunciation and deterrence and deter the prospect of future criminality by Mr. Tran. I do not find incarceration is necessary to fulfil those objectives.

[54] I am required to consider the totality principle as it applies to a restitution order being part of an overall fit sentence. I find the combination of a two-year less a day conditional sentence, two years’ probation and a restitution order overall will be in keeping with the totality principle. Restitution will require Mr. Tran to take responsibility for the fraud and prevent him from walking away with a gain from his criminal activity.

[55] While I may take the ability to pay into account, it is not necessary in deciding whether to impose a restitution order. I impose a stand-alone restitution order of $291,459.12.

[56] I will not impose a fine in lieu of forfeiture.

SENTENCE

[57] Quoc Tran, I will now pass sentence. I sentence you to a 2-year less a day conditional sentence to be served in the community: (a) during that period, in addition to the statutory conditions set out in s. 742.3 of the Criminal Code, you shall, i. be within your residence at all times during the conditional sentence, except to permit attendance at a place of employment or accredited schooling, or to travel directly between a place of employment or schooling and residence, or for medical emergencies; ii. as an exception to the above, be allowed to leave your residence from 9:00 a.m. to 2:00 p.m. on Sundays, to permit attendance at a place of worship or for personal errands; iii. refrain from contacting Hai Ha directly or indirectly by any means including by any electronic device; iv. not attend any place or be within 200 metres of anywhere you know Hai Ha to be. (b) I impose a stand-alone restitution order of $291,459.12 payable to the insurer, The Guarantee Company of North America. (c) The conditional sentence shall be followed by a probationary term of two years under all the statutory conditions set out under s. 742.3 of the Criminal Code.

Released: March 12, 2021 B.A. Allen J.