COURT FILE NO.: CR-141/13

DATE: 2021 09 23

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

HER MAJESTY THE QUEEN

– and –

Kenneth Chung

Mr. D. King, for the Crown

Ms. S. von Achten, for Mr. Chung

HEARD: September 15, 2021

REASONS FOR DECISION ON SENTENCING

Conlan j.

I. Introduction

The Convictions

[1] Mr. Kenneth Chung (“Kenneth”) has been convicted of theft over $5000.00 contrary to section 334(a) of the Criminal Code (count 3 on the Indictment) and possession of property obtained by crime over $5000.00 contrary to section 354(1)(a) of the Criminal Code (count 4 on the Indictment).

[2] Both sides agree that this Court enter a conditional stay, pursuant to the Kienapple principle, on count 4. That stay is hereby entered.

[3] Thus, Kenneth is to be sentenced on count 3 – theft over $5000.00.

The Background

[4] There is an extensive history to this case. In January and February 2018, Kenneth was tried before Justice Gray of the Ontario Superior Court of Justice, sitting without a jury. Mr. Chung’s father (Jun-Chul) and his sister (Kathleen) were also tried at the same time.

[5] To better understand what was before Justice Gray, set out below are paragraphs 1 through 18 of His Honour’s Reasons for Judgment dated April 9, 2018, reported at R. v. Chung, [2018] O.J. No. 1859, 2018 ONSC 2177.

[1] This case arises out of a Super 7 lottery that was conducted by the Ontario Lottery and Gaming Corporation (“OLG”) on December 26, 2003. The winning ticket was worth $12.5 million. It was apparently won by Kathleen Chung, and she was ultimately paid that sum by OLG.

[2] It is now contended that Kathleen Chung was not the rightful holder of the winning ticket. It is alleged that the winning ticket was improperly acquired through an unlawful scheme perpetrated by Jun-Chul Chung and Kenneth Chung, and the funds were unlawfully obtained by all three of them when they knew they were not entitled to them.

[3] It is further alleged that steps have been taken to hide the true source of the funds.

[4] There are seven counts:

a) Count 1 – It is alleged that Jun-Chul Chung and Kenneth Chung stole lottery tickets during an eight-month period ending on February 6, 2004;

b) Count 2 – It is alleged that Jun-Chul Chung and Kenneth Chung were in possession of the lottery tickets referred to in Count 1;

c) Count 3 – It is alleged that Jun-Chul Chung and Kenneth Chung stole a winning Super 7 lottery ticket, said to be the property of Daniel Campbell;

d) Count 4 – It is alleged that Jun-Chul Chung, Kenneth Chung and Kathleen Chung possessed the winning Super 7 lottery ticket, knowing that it was obtained by the commission of an indictable offence;

e) Count 5 – It is alleged that Jun-Chul Chung, Kenneth Chung and Kathleen Chung did, by deceit, falsehood or other fraudulent means, defraud OLG of the sum of $12.5 million;

f) Count 6 – It is alleged that Jun-Chul Chung, Kenneth Chung and Kathleen Chung possessed all or part of the sum of $12.5 million, and property purchased with it, knowing that the money and property were obtained by the commission of an indictable offence;

g) Count 7 – It is alleged that Jun-Chul Chung, Kenneth Chung and Kathleen Chung used or transferred or otherwise dealt with all or part of the $12.5 million, with intent to conceal or convert the proceeds, knowing that they were obtained as a result of the commission of a designated offence.

[5] Kenneth Chung and Kathleen Chung are the children of Jun-Chul Chung.

[6] At the times material to the charges, Kenneth Chung was the operator of a variety store at 3500 Dundas Street in Burlington. The store was called “Variety Plus”. His father, Jun-Chul Chung, regularly worked in the store. On occasion, his mother worked in the store.

[7] Evidence was given, which I will describe in more detail later, that Jun-Chul Chung regularly worked in the store from 6:00 a.m. or 7:00 a.m. until at least 10:00 a.m. each day. It is unclear as to whether he also worked from 10:00 a.m. until noon.

[8] Kenneth Chung worked each day from noon until 10:00 or 10:30 p.m.

[9] Kathleen Chung did not work at the store.

[10] During the times relevant to the charges, Kenneth Chung was a registered agent for OLG, and could sell and validate lottery tickets for lottery games conducted by OLG. In the store was a lottery terminal which was connected to OLG’s central computer system. Through that terminal, lottery tickets could be sold, and if a customer wished to determine whether a particular lottery ticket was or was not a winner, it could be done by presenting the ticket to the cashier, who would run the ticket through the terminal. If the ticket was a winner, in any respect, a form of musical jingle would be played.

[11] One of the lottery games that was played at the relevant time was “Super 7”. A person playing the game could purchase a ticket known as a “quick pick”, that is, a ticket whose numbers would be generated by the computer, or the customer could select the numbers himself or herself. Depending on the combination of numbers on the ticket, various amounts could be won, if the ticket was a winner. The winning amounts could be anywhere from $10 up to the amount of the grand prize, which in the case before the court, was $12.5 million. If the winning amounts were relatively small, they could be paid by the store clerk, but if the amount was large, it had to be claimed through the head office of OLG.

[12] The purchaser of a Super 7 ticket could also, by paying an additional $1, play in a further lottery game known as “Encore”.

[13] In addition to potential monetary winnings, the purchaser of a Super 7 lottery ticket could also potentially win one or more free tickets. Sometimes a free ticket would automatically come with an Encore wager included. However, sometimes Encore would not be included and, in such a case, the customer would be asked whether he or she wished to purchase Encore. In order to close off that transaction for the customer, it would be necessary for the clerk to record whether Encore had or had not been purchased with the free ticket. Until the clerk did so, the transaction would not be closed.

[14] It should be noted that at the time relevant to the charges, namely, in 2003 and 2004, the winning musical jingle would be played if the customer won something, but there would be no indication as to whether the customer was only a winner in one respect or more than one. Particularly, there would be no difference in the musical jingle whether the customer was the winner of one free ticket or two free tickets.

[15] It would not be uncommon, if the customer had won two free tickets, that one of the free tickets would automatically come with Encore included, while the other ticket would not.

[16] Before getting into the details of the evidence as it relates to the particular charges before the court, I should note that sometime after those transactions took place, and ultimately Kathleen Chung was paid $12.5 million, there developed some controversy over the way in which OLG was administering its lottery games. One Bob Edmonds alleged that he had won a prize of $250,000, but that his winning ticket had been stolen by a clerk at a variety store. After some litigation, OLG eventually admitted that Mr. Edmonds was the true winner, and paid his claim.

[17] Subsequently, a number of suspicious wins came to light, including Kathleen Chung’s win, and the Ombudsman of Ontario conducted an investigation. The Ombudsman issued a report in 2007, in which it is fair to say that there was serious criticism of the way in which OLG apparently paid winnings to “insiders” under suspicious circumstances. One of the cases mentioned was Kathleen Chung’s win of $12.5 million.

[18] After the Ombudsman issued his report, the then Minister responsible for the OLG announced that the Ontario Provincial Police would be asked to investigate. The OPP did so, and the charges now before the court were laid in 2010.

[6] After trial, Kenneth was found guilty on counts 1 and 2. He was acquitted on counts 3, 4, 5, 6, and 7.

[7] A Pre-Sentence Report was prepared in relation to Kenneth. On September 4, 2018, oral reasons for sentence were delivered by Justice Gray. The finding of guilt on count 2 was conditionally stayed. On count 1, theft under $5000.00, a sentence of ten (10) months in custody was imposed.

[8] Both Kenneth and the Crown appealed. The Court of Appeal for Ontario, in a decision reported at R. v. Chung, [2021] O.J. No. 1624, 2021 ONCA 188, dismissed Kenneth’s appeal. The Crown’s appeal, however, was allowed in that convictions were entered on counts 3 and 4, and a new trial was ordered on counts 5 and 6.

[9] The Crown subsequently elected not to proceed with a new trial on counts 5 and 6.

[10] Counts 3 and 4 were ordered returned to the Superior Court of Justice for sentencing. Justice Gray having since retired from the Bench, the sentencing of Kenneth on counts 3 and 4 was assigned to me. Again, count 4 has now been conditionally stayed.

[11] The sentencing hearing before this Court was held on the Zoom platform on September 15, 2021. At that time, Kenneth was still in custody on the ten-month sentence of imprisonment that was imposed by Justice Gray. This Court reserved its decision until today, September 23, 2021. Kenneth remains in custody on the prior sentence.

Whether There is a Mandatory Minimum Sentence on Count 3, Theft Over $5000.00

[12] No mandatory minimum sentence is applicable here.

Whether a Conditional Sentence of Imprisonment is Available on Count 3, Theft Over $5000.00

[13] Because of the offence date, notwithstanding the state of the law currently, a conditional sentence of imprisonment is statutorily available in this case.

Ancillary Orders

[14] There are no ancillary orders being sought by the Crown.

The Issue to be Decided

[15] The dispute between the Crown and the Defence is twofold – (i) the appropriate length of a custodial sentence on count 3, and (ii) whether that sentence should be served in the community by way of a conditional sentence order.

The Positions of the Crown and the Defence

[16] The Crown asks for a sentence of three (3) years’ imprisonment, less the ten (10) months that was imposed by Justice Gray (because the sentences would have likely been concurrent if the convictions were entered at the same time).

[17] Among other things, the Crown focusses on these factors:

i. Kenneth’s father was sentenced to five (5) years’ imprisonment for stealing the lottery ticket that is the subject of count 3;

ii. this was a 12.5 million-dollar lottery ticket;

iii. Kenneth was sentenced to ten (10) months of real jail on a theft under $5000.00 conviction, which sentence was upheld on appeal;

iv. Kenneth’s sister was sentenced to three (3) years’ imprisonment for her part in this illegal scheme, and parity would suggest that Kenneth receive about the same; and

v. Kenneth was in a position of trust as the store manager, and he lied to the lottery authorities during their investigation, and this is not an instance where the mitigating factor of a guilty plea exists.

[18] The Defence suggests a sentence of twelve (12) months in custody, from today, to be served in the community by way of a conditional sentence order, to be followed by one (1) to three (3) years of probation.

[19] Alternatively, if this Court declines to impose a conditional sentence order, the Defence agrees that any sentence of imprisonment should have deducted from it the ten (10) months referred to above.

[20] The Defence, among other items, stresses the following:

i. there is scant evidence about what Kenneth actually did, as his conviction on count 3 is on the basis of having been a party to the offence;

ii. beware of placing too much emphasis on the principle of parity with regard to Kathleen because she, unlike Kenneth, was convicted of fraud, and fraud is a more serious offence than theft;

iii. there is no evidence that Kenneth received any money from the illegal scheme;

iv. for eleven (11) years now, since 2010, Kenneth has been on bail, with no breaches, and a very positive affidavit has been filed in the name of the surety;

v. Kenneth is a first-time offender;

vi. Kenneth plays a vital role in the life of his mother, who has diabetes;

vii. Kenneth has a job waiting for him upon release from custody – as an assistant chef at a sushi restaurant;

viii. Kenneth has a good employment history in the construction field (mainly drywall);

ix. Kenneth is a person of general good character, for example, he once saved a person’s life who was suffering from a seizure, and he once helped the victim of a motor vehicle accident until first responders arrived on scene; and

x. Kenneth has already suffered a great deal in that (a) the police seized $28,000.00 from him, money that he intended to buy a condominium with, and (b) he lost the chance to obtain a Tim Horton’s franchise, and (c) he lost his wife as she left him to return to Korea.

II. Analysis

The Offender

[21] Kenneth is now 39 years old, born in April 1982. He was significantly younger at the time of the offence for which he is now being sentenced. He has no prior criminal record.

[22] The Pre-Sentence Report that was before Justice Gray was, generally, a positive one. It described Kenneth as being cooperative, surrounded by a strong and supportive social circle, of good character, goal-oriented, proactive, and hardworking. No concern was expressed about Kenneth’s ability to adhere to community supervision.

The Offence

[23] The facts can be gleaned from paragraphs 266 through 286 of Justice Gray’s Reasons for Judgment, reproduced below.

[266] Count 3 reads as follows:

JUN-CHUL CHUNG and KENNETH CHUNG stand further charged that they, on or about December 22nd, 2003, at the City of Burlington, in the said Region, did steal a Lotto Super 7 lottery ticket, the property of Daniel Campbell, of a value exceeding $5,000, contrary to Section 334(a) of the Criminal Code of Canada.

[267] For me to convict Jun-Chul Chung and Kenneth Chung on Count 3 as drafted, I would need to hold that the Crown had proven beyond a reasonable doubt that Daniel Campbell was the owner of the $12.5 million winning ticket.

[268] Based on the evidence as a whole, I think it is quite likely that Daniel Campbell was the true owner of the $12.5 million winning ticket. If this case depended on the standard of proof on a balance of probabilities, there is no doubt that the Crown will have met that burden. However, I am not prepared to find, on this evidence, that the Crown has proven beyond a reasonable doubt that Daniel Campbell was the owner of the ticket.

[269] Based on the data produced by Mr. Guzzo, there is no doubt whatsoever the same person purchased four lottery tickets at That’s Entertainment in St. Catharines on December 19, 2003. All four tickets were validated at Variety Plus on December 22, 2003. One of the tickets purchased on December 19, 2003 produced two free tickets, and one of them was the $12.5 million winning ticket. That ticket was validated at Variety Plus on December 27, 2003. The other free ticket was validated on December 27, 2003 in St. Catharines.

[270] Each of the other tickets purchased at That’s Entertainment on December 19, 2003, which were validated at Variety Plus on December 22, 2003, produced one free ticket, with Encore included. Each of the three free play tickets was validated in St. Catharines on December 27, 2003, two of them at Avondale Lakeshore, and one of them at JC Foods.

[271] Mr. Campbell had no recollection of purchasing any of the tickets in question, or validating them. Based on his betting patterns, and based on his place of residence and his place of work, it is quite probable that he was the purchaser of the four original tickets on December 19, 2003 at That’s Entertainment in St. Catharines. However, I am simply unable to come to that conclusion beyond any reasonable doubt.

[272] However, I do not think it is an essential element of the offence to prove that Daniel Campbell was the owner of the ticket. I do not agree with the Crown that theft from an unknown person is an included offence. However, the name of the rightful owner is mere surplusage, and can be ignored unless there is prejudice to the accused: see R. v. Vézina, 1986 CanLII 93 (SCC), [1986] 1 S.C.R. 2. There is no prejudice here. If the Crown establishes, beyond a reasonable doubt, that Jun-Chul Chung and Kenneth Chung stole the $12.5 million winning ticket from the rightful owner of that ticket, the offence is made out.

[273] As noted, no application was brought by the Crown to have the evidence relevant to Counts 1 and 2, that I have reviewed, rendered admissible under Count 3 or, for that matter, any of the other Counts. Accordingly, I will not consider any of the “pattern” evidence elicited under Count 1, through Exhibit 38, on any of the other counts, including Count 3.

[274] In my view, the specific evidence relevant to Count 3, that I reviewed in detail earlier in these reasons, and that I have summarized now, points to only one inescapable conclusion, namely, the $12.5 million winning free play ticket was stolen from the rightful owner of that ticket.

[275] As noted, the original ticket was purchased on December 19, 2003 in St. Catharines. It was one of four tickets, all of which were validated at Varity Plus on December 22, 2003. There is no doubt that Jun-Chul Chung validated the ticket; indeed, he advised the OLG personnel that he had done so. Clearly, the evidence shows that he validated the other three tickets as well.

[276] Three of the tickets generated single free play tickets, with Encore included. One of the tickets generated two free play tickets, one of which had Encore included, and one of which did not. That ticket was the winning ticket.

[277] All of the free play tickets, except the winning ticket, were validated in St. Catharines, on December 27, 2003. The winning ticket was not; rather, it was validated at Variety Plus on December 27, 2003.

[278] Jun-Chul Chung and Kathleen Chung advised the OLG personnel that Kathleen Chung had purchased the original ticket, and that she had won the free play ticket that turned out to be the winner. Both of them knew that was false. When Kenneth Chung attended meetings at the OLG, he joined in that story.

[279] It is clear, in my view, that there is only one reasonable conclusion: the winning free play ticket was kept by Jun-Chul Chung for himself after he validated all of the tickets on December 22, 2003. In so doing, he stole that ticket from its rightful owner.

[280] I have considered whether there are other reasonable inferences inconsistent with guilt. There are none.

[281] To accept that Kathleen Chung was the purchaser of the original ticket, it would have to be concluded that she purchased all four tickets that were sold within a few seconds of each other on December 19, 2003 at That’s Entertainment in St. Catharines. That being the case, she would have to have been the person who validated all four tickets at Variety Plus on December 22, 2003.

[282] Kathleen Chung has never said she bought four tickets in St. Catharines on December 19, 2003. She said she did not know where she bought the ticket that produced the winning ticket that was validated on December 22, 2003.

[283] Jun-Chul Chung told the OLG personnel that he had validated a number of tickets given to him by Kathleen Chung on December 22, 2003. There was no musical jingle until the winning $12.5 million winner was validated. However, each of the other three tickets purchased in St. Catharine’s, that were validated at Variety Plus on December 22, 2003 at the same time as the ticket that generated the winning ticket, produced free play tickets themselves. Each of them would have produced a musical jingle.

[284] As noted, the winning ticket was validated at Variety Plus on December 27, 2003. All of the other free play tickets, including the sister ticket to the winning ticket, were validated in St. Catharines on December 27, 2003.

[285] Viewed logically, and in light of human experience, this combination of circumstances is not reasonably capable of supporting an inference other than that Jun-Chul Chung is guilty of the offence.

[286] It has not been established that Kenneth Chung was present in the store at the time Jun-Chul Chung stole the ticket. I am not persuaded beyond a reasonable doubt that he was involved in the theft. He must be acquitted on Count 3.

[24] Remember, however, the verdict reached at paragraph 286 was overturned on appeal. The Court of Appeal for Ontario stated the following at paragraphs 31 and 237-252 of its decision.

[31] The trial judge found the Crown did not establish that Kenneth was present at the store when Jun-Chul stole the ticket, and he was not persuaded beyond a reasonable doubt that Kenneth was involved in the theft of the winning ticket. In coming to this conclusion, he did not consider the evidence relating to the split ticket scheme which was the basis for Kenneth’s convictions on counts 1 and 2. He reasoned that the Crown had not made a similar fact application and accordingly, he acquitted Kenneth of count 3.

[237] The Crown appeals Kenneth’s acquittal on count 3 (the theft of the winning ticket), count 4 (possession of the winning ticket), count 5 (fraud) and count 6 (possession of the proceeds of crime).

[238] Relying on Exhibit 38, the trial judge found there was a scheme by Jun-Chul and Kenneth to steal free tickets. He found they were joint participants in an eight-month scheme under which they stole lottery tickets from customers. He convicted them both for theft and possession of stolen lottery tickets. However, the trial judge refused to consider the split ticket scheme in relation to remaining counts because the Crown did not bring a similar fact application:

As noted, no application was brought by the Crown to have the evidence relevant to Counts 1 and 2, that I have reviewed, rendered admissible under Count 3 or, for that matter, any of the other Counts. Accordingly, I will not consider any of the “pattern” evidence elicited under Count 1, through Exhibit 38, on any of the other counts, including Count 3.

[239] The Crown submits that the trial judge wrongly treated the theft of the winning ticket as an isolated act and acquitted Kenneth because there was insufficient evidence under counts 3-6 to support a conviction. In response, Kenneth repeats the submissions relied upon with respect to his appeal of the convictions on counts 1 and 2.

[240] In each of the remaining counts, the trial judge – having ignored his finding on the split ticket scheme – found that there was a reasonable doubt because Kenneth could have been told that Kathleen was the legitimate owner of the ticket.

[241] We have concluded that the trial judge erred by failing to consider Kenneth’s participation in the split ticket scheme on the remaining counts. This legal error had a material bearing on the acquittals.

[242] We have further concluded that the trial judge’s factual findings with respect to counts 1 and 2 establish Kenneth’s guilt on counts 3 and 4 beyond a reasonable doubt. But for the error, Kenneth would have been convicted. However, the trial judge did not make factual findings sufficient to convict on counts 5 and 6. Therefore we substitute a conviction on counts 3 and 4 and order a new trial on counts 5 and 6.

[243] The trial judge concluded that Kenneth Chung was a joint participant in the split ticket scheme. He concluded that it was “clear that Jun-Chul Chung stole some of the tickets and Kenneth Chung stole some. However, more fundamentally, in my view they are both guilty of all the thefts as parties under s. 21(1)(a) of the Code.”

[244] It was pursuant to that scheme that the winning ticket was stolen. Thirty-one free tickets were stolen, one won the $12.5 million. The theft of the 31st ticket was not an isolated act but part of the scheme. The trial judge was required to consider all of the evidence, and evidence of Kenneth’s participation in the scheme was admissible on counts 3-6. This was addressed by Doherty J. (as he then was) in R. v. Sahaidak,[1990] O.J. No 3228 (Ont. H.C.), at para. 150:

In most cases where a multi-count indictment is before the Court, evidence adduced on one count is not admissible for or against an accused on the other counts. Where, however, the events underlying the various counts are part of an ongoing course of dealings and where those events are interwoven and interrelated so that as a matter of logic and common sense, the events underlying one count also enlighten and assists the trier of fact in understanding and assessing the evidence on the other counts, then the evidence directly relevant to one count is admissible on the other counts as well. [Emphasis added.]

[245] This reasoning was cited with support in R. v. Kirk, 2004 CanLII 7197 (ON CA), [2004] O.J. No. 3442 (C.A.), at para. 15.

[246] The scheme to steal free tickets, which produced 30 no wins or nominal wins, also produced the winning ticket. The winning ticket was part of “an ongoing course of dealings” and was “interwoven and interrelated.” The scheme outlined in Exhibit 38 was admissible on the remaining counts in the indictment. The legal error had a material bearing on the acquittals.

[247] On an appeal from an acquittal, this court may “enter a verdict of guilty with respect to the offence of which, in its opinion, the accused should have been found guilty but for the error in law”: s. 686(4)(b)(ii) of the Criminal Code. The trial judge’s conclusion that Kenneth was a joint participant in the scheme pursuant to s. 21 of the Criminal Code leads inevitably to convictions on counts 3 and 4.

[248] Section 21(1) of the Criminal Code provides:

Everyone is a party to an offence who

(a) actually commits it;

(b) does or omits to do anything for the purpose of aiding any person to commit it; or

(c) abets any person in committing it.

[249] As found by the trial judge, the scheme that Kenneth participated in was to steal lottery tickets. The scheme produced the winning ticket. Kenneth is guilty of theft and possession of the winning ticket based on the same evidence that resulted in his convictions on counts 1 and 2.

[250] With respect to count 3, theft of the winning ticket, the trial judge found as follows:

It has not been established that Kenneth Chung was present in the store at the time Jun-Chul Chung stole the ticket. I am not persuaded beyond a reasonable doubt that he was involved in the theft. He must be acquitted on Count 3.

[251] The trial judge made the same finding on count 4, possession of the winning ticket.

[252] These findings by the trial judge on counts 3 and 4 are inconsistent with Kenneth’s involvement in the scheme to steal tickets. The theft of the winning ticket was indistinguishable from the other 30 tickets. As part of the scheme it was not necessary for Kenneth to steal the specific ticket. As the trial judge held, the scheme involved Kenneth stealing some tickets and Jun-Chul stealing some tickets, but they are both guilty of all of the thefts. Had the trial judge considered the scheme, Kenneth would have been found guilty of theft of the winning ticket (count 3) and possession of the winning ticket (count 4).

[25] The above references provide the factual underpinning on count 3, theft over $5000.00.

General Principles of Sentencing that are Relevant in the Case at Bar: a Review of the Jurisprudence

[26] Sentencing is a highly individualized exercise, and the penultimate goal is to craft a penalty that is proportionate to the gravity of the offence(s) and the degree of responsibility of the offender.

[27] I agree with the Crown that the decision of Justice Hill of the Ontario Superior Court of Justice in R. v. Williams, [2007] O.J. No. 1604, 2007 CanLII 13949, is instructive. Set out below are paragraphs 21 through 33 of that decision.

[21] “Fraud over $5000 is a serious offence, attracting a maximum sanction of 10 years in jail”: R. v. Bogart (2002), 2002 CanLII 41073 (ON CA), 167 C.C.C. (3d) 390 (Ont. C.A.) at 396 (leave to appeal refused [2002] S.C.C.A. No. 398).

[22] Section 718.2 of the Criminal Code provides that a breach of trust is deemed to be an aggravating circumstance in sentencing warranting an increase in sentence.

[23] The most important factor in sentencing persons who have occupied positions of trust is the factor of general deterrence: R. v. Scott, [2007] O.J. No. 1154 (C.A.) at para. 2; R. v. Phronimadis, [2006] O.J. No. 3992 (C.A.) at para. 4; R. v. Taipow, 2005 CanLII 39666 (ON CA), [2005] O.J. No. 4643 (C.A.) at para. 5; R. v. Dobis (2002), 2002 CanLII 32815 (ON CA), 163 C.C.C. (3d) 259 (Ont. C.A.) at 272-3; R. v. Pierce (1997), 1997 CanLII 3020 (ON CA), 114 C.C.C. (3d) 23 (Ont. C.A.) at 36-7 (leave to appeal refused [1997] 3 S.C.R. xiii); R. v. List, [1978] O.J. No. 751 (C.A.) at para. 6; R. v. McEachern (1978), 1978 CanLII 2506 (ON CA), 42 C.C.C. (2d) 189 (Ont. C.A.) at 191; R. v. Coffin (2006), 2006 QCCA 471, 210 C.C.C. (3d) 227 (Que. C.A.) at para. 49; R. v. Steeves and Connors (2005), 2005 NBCA 85, 200 C.C.C. (3d) 282 (N.B.C.A.) at 283, 285; R. v. McKinnon, 2005 ABCA 8, [2005] A.J. No. 12 (C.A.) at para. 63; R. v. Paul, 2003 MBCA 153, [2003] M.J. No. 447 (C.A.) at para. 4; R. v. Gauthier (1998), 1998 CanLII 5063 (PE SCAD), 131 C.C.C. (3d) 177 (P.E.I.C.A.) at 187-8, 189 (per dissent). “Mitigating factors and even rehabilitation become secondary”: R. v. Bogart, at 398.

[24] General deterrence tends to have greater impact in the case of embezzlement-type crimes, whether fraud or theft – criminal conduct where persons “usually plan and deliberate about it to some extent”: R. v. Dobis, at 272-3; R. v. Wismayer (1997), 1997 CanLII 3294 (ON CA), 115 C.C.C. (3d) 18 (Ont. C.A.) at 38; R. v. Gray (1995), 1995 CanLII 18 (ON CA), 76 O.A.C. 387 (C.A.) at 398-9; R. v. McKinnon, at para. 60; R. v. Gauthier, at 189 (dissent); R. v. Hoy, 1998 CanLII 6024 (BC CA), [1998] B.C.J. No. 1649 (C.A.) at para. 6; R. v. Reid, 2004 YKCA 4, [2004] Y.J. No. 3 (C.A.) at para. 13. Put differently, “law-abiding persons, with good employment records and families…are the ones most likely to be deterred by the threat of severe penalties”: R. v. Proulx (2000), 2000 SCC 5, 140 C.C.C. (3d) 449 (S.C.C.) at 503.

[25] While the defence at trial did not argue good character as a factor pointing away from guilt, the sentencing materials convincingly establish Ms. Williams’ history as a respected educator, and community volunteer. It is, of course, this very type of character profile which allows an individual to attain a position of trust. One need only look across a representative sample of fraud sentencing jurisprudence, to see that it is frequently those with successful employment and comfortable income, persons “with spotless reputations” (R. v. Coffin, at fn. 26), who, through a character flaw, succumb to supplementing their compensation through dishonest means. General deterrence remains a paramount consideration even for first offenders of otherwise good character. “[M]ost people who get caught stealing from their employer are unlikely to reoffend”: R. v. Pierce, at 36; R. v. Bertram, [1990] O.J. No. 2013 (C.A.) at 3; R. v. Clarke, 2004 CanLII 7246 (ON CA), [2004] O.J. No. 3438 (C.A.) at para. 16; R. v. Gauthier, at 189 (dissent); R. v. Barrick (1985), 81 Cr. App. R. 78 (C.A.) at 81.

[26] In these cases, in addition to general deterrence, “denunciation…and accountability for one’s actions” are the controlling principles of sentencing: R. v. Gosal, [2006] O.J. No. 2651 (C.A.) at para. 7; R. v. Scott, at para. 2; R. v. Poutney, [2006] O.J. No. 2964 (C.A.) at para. 5.

[27] The sentencing option of a conditional sentence is not excluded from consideration in breach of trust fraud cases: R. v. Dobis, at 273 and see for example, R. v. Bunn (2000), 2000 SCC 9, 140 C.C.C. (3d) 505 (S.C.C.); R. v. Burkart (2006), 2006 BCCA 446, 214 C.C.C. (3d) 226 (B.C.C.A.); R. v. Gauthier; R. v. Steeves and Connors; R. v. Robinson, [2003] O.J. No. 4722 (S.C.J.); R. v. Tulloch, [2002] O.J. No. 5446 (S.C.J.). Many of these cases include exceptional mitigating circumstances. A conditional sentence, with properly tailored punitive conditions, can effect a measure of general deterrence and denunciation.

[28] That said, large-scale frauds by persons in positions of trust will almost inevitably attract a significant custodial sentence. In R. v. Dobis, at 273, the court observed:

This court has said repeatedly that general deterrence is central to the sentencing process in cases involving large scale frauds with serious consequences for the victims: see: McEachern, Bertram and Wood, Gray and Holden, supra. Importantly, the court has said the same thing since the introduction of the conditional sentencing regime. Conditional sentences have been rejected in large scale fraud cases such as Pierce, supra, and Ruhland, supra, and commented on adversely in the leading Ontario case dealing with conditional sentences, R. v. Wismayer (1997), 1997 CanLII 3294 (ON CA), 115 C.C.C. (3d) 18 (Ont. C.A.).

In Pierce, Finlayson J.A. observed, at p. 40:

I would ... refuse the application to permit the appellant to serve the sentence in the community. The abuse of a position of trust or authority in relation to a victim is an express aggravating circumstance set out in the sentencing guidelines under s. 718.2. This factor has traditionally drawn a severe custodial term even with first offenders.

In the Pierce decision, at 29-30, the court stated:

In all of the circumstances, when the competing principles of rehabilitation and general deterrence are considered, the nature of this particular crime with the large amount of money that is involved, all of which is apparently not recovered, it seems to me that a custodial sentence has to follow, that is so even though she has no criminal record. That is so even though this will be the first time in her life that she has experienced jail. I am quite alive to the principle that jail should be the last resort in the difficult matter of sentence. The reason is clear.

This country, from coast to coast and especially the heavy populated urban areas of Southern Ontario, abounds with fraudsmen who would regard a low or a non-custodial sentence in these circumstances as an irresistible temptation to take the risk of spending a few short months in jail (a Canadian jail) in return for attempting the crime of fraud or theft where the prize exceeds $150,000. To some, such a prospect would be almost irresistible. Great care must be taken in the matter of sentence for a criminal offence such as fraud at this level of seriousness, to avoid the prospect that by over-emphasizing the principle of rehabilitation, the crime, to many, would be worth the risk of being caught.

See also R. v. Clarke, at para. 17; R. v. Paul, at para. 15-6; R. v. Steeves and Connors, at 286-7; R. v. McIvor (1996), 1996 ABCA 154, 106 C.C.C. (3d) 285 (Alta. C.A.) at 286.

[29] “[A] sentence of six years is within the correct range of sentences for major frauds” and sentences in the 3 to 5-year range are common: R. v. Dobis, at 271; R. v. Bertram, at 3; R. v. Wilson, 2003 CanLII 48181 (ON CA), [2003] O.J. No. 1047 (C.A.) at para. 5. Penitentiary sentences in the six-year range have been imposed in cases involving millions of dollars. The Dobis decision, at 273, includes at the lower end of “large-scale frauds”, the McEachern case involving $87,000. and the fraud in Pierce in the amount of $270,000., while a $200,000. defalcation was described as a large-scale fraud in R. v. Robinson, at para. 4, 11. By way of jurisdictional comparison, in England, on a guilty plea to theft or fraud of sums between £100,000 and £200,000 the appropriate sentence is in the range of 2 to 3 years’ imprisonment: R. v. Clark, [1997] EWCA Crim 3081 at 4-5.

[30] By way of overview and non-exhaustive list only, certain circumstances have, over time, been recognized as aggravating factors in “white collar” breach of trust cases:

(a) The nature and extent of the loss: R. v. Savard (1996), 1996 CanLII 5703 (QC CA), 109 C.C.C. (3d) 471 (Que. C.A.) at 474. The amount of the theft or fraud is one factor only: R. v. Clark, at 4; R. v. Barrick, at 82.

(b) The dishonest attainment of public monies is a serious crime with its own effects even though the institution, on its face, seems able to bear the loss: R. v. Bogart, at 396; R. v. Coffin, at para. 46.

(c) The degree of sophistication of the dishonesty and the degree of planning, skill and deception: R. v. Dobis, at 272; R. v. Clarke, at para. 18; R. v. Wilson, at para. 8; R. v. Steeves and Connors, at 285, 287; R. v. Savard, at 474; R. v. Downey, [2003] O.J. No. 4997 (S.C.J.) at para. 55 (aff’d [2005] O.J. No. 6301 (C.A.)).

(d) Whether the sole motivation is greed: R. v. Savard, at 474; R. v. Clark, at 5; R. v. Steeves and Connors, at 285, 287.

(e) A lengthy period of dishonesty: R. v. Dobis, at 270; R. v. Wilson, at para. 8-9; R. v. Clarke, at para. 18; R. v. Harding (2007), 2006 SKCA 118, 213 C.C.C. (3d) 543 (Sask. C.A.) at 548; R. v. Reid, at para. 15; R. v. Coffin, at para. 47; R. v. Steeves and Connors, at 285, 287; R. v. Leaf, [2007] EWCA Crim 802 at para. 14-15; R. v. Gulam et al., [2006] EWCA 2320 at para. 11.

(f) The number of dishonest transactions undertaken in the commission of the offence: R. v. Smith, 2004 CanLII 33793 (ON CA), [2004] O.J. No. 4179 (C.A.) at para. 5-6; R. v. Wilson, at para. 9; R. v. Harding, at 548; R. v. Coffin, at para. 47; R. v. McKinnon, at para. 47.

(g) Where there exists little hope of restitution: R. v. Reid, at para. 15.

(h) The offender was caught as opposed to voluntary termination of the criminality: R. v. McKinnon, at para. 47; R. v. Steeves and Connors, at 287; R. v. Gauthier, at 186-7 (dissent); R. v. Gulam et al., at para. 9.

(i) Running the risk that others would fall under suspicion: R. v. Gulam et al., at para. 3.

(j) The impact on victims of the fraud including members of the public, the employer and fellow employees: R. v. Dobis, at 270; R. v. Reid, at para. 3; R. v. Paul, at para. 16.

(k) The “quality and degree of trust reposed in the offender”: R. v. Barrick, at 82.

[31] In addition to the usual factors mitigating sentence, such as first offender status, a plea of guilt, cooperation and assistance with the authorities, impact of incarceration on a third party as in Bunn, other circumstances in breach of trust fraud cases can serve to ameliorate the harshness of the disposition to be imposed:

(a) “[S]ubstantial recovery” of the proceeds of the dishonest conduct: R. v. Wilson, at para. 9; R. v. Nichols, 2001 CanLII 5680 (ON CA), [2001] O.J. No. 3220 (C.A.) at para. 47, 49 (leave to appeal refused [2001] S.C.C.A. No. 508).

(b) The pre-sentence making of restitution is a mitigating factor: R. v. Pavich, 2000 CanLII 16971 (ON CA), [2000] O.J. No. 4209 (C.A.) at para. 2; R. v. Bogart, at 400; R. v. McKinnon, at para. 22, 88-92; R. v. Francis, [2000] O.J. No. 5043 (C.A.) at para. 2; R. v. Clark, at 5.

(c) Where the dishonesty resulted in personal benefit to the accused, was there a motive mitigating the breach of trust, whether a medical condition, or addiction, or other motivating cause existing other than greed or financial gain: R. v. Poutney, at para. 1, 3; R. v. Davies (2005), 2005 CanLII 63757 (ON CA), 199 C.C.C. (3d) 389 (Ont. C.A.) at 399-401; R. v. Bogart, at 400; R. v. McKinnon, at para. 47; R. v. McIvor, at 286-7; R. v. Harding, at 548-9; R. v. Gulam et al., at para. 8; R. v. Barrick, at 82; R. v. Clark, at 4.

[32] A sentencing court may take into account in the exercise of its sentencing discretion, not as an aggravating feature of sentencing, but as the absence of a factor entitling sentence reduction, and as relevant to whether restorative objectives can be satisfied in a particular case, an offender’s lack of remorse and acceptance of responsibility for her crime: R. v. Proulx, at para. 113; R. v. Valle-Quintero (2002), 2002 CanLII 45123 (ON CA), 169 C.C.C. (3d) 140 (Ont. C.A.) at 164; R. v. A.(K.) (1999), 1999 CanLII 3756 (ON CA), 137 C.C.C. (3d) 554 (Ont. C.A.) at 570; R. v. Downey (S.C.J.), at para. 61.

[33] A fundamental principle of sentencing is reparation for harm done (s. 718(e)(f) of the Code). Restitution is a discretionary order. The amount of the loss must be clearly calculable. A factor, though not a determinative factor, in considering the reparation of a restitution order, is an assessment of the means of the offender to meet the obligations of court-ordered restitution: R. v. Chambers, [2007] O.J. No. 1198 (C.A.) at para. 2; R. v. Taylor (2003), 2003 CanLII 16380 (ON CA), 180 C.C.C. (3d) 495 (Ont. C.A.) at 497; R. v. Devgan (1999), 1999 CanLII 2412 (ON CA), 136 C.C.C. (3d) 238 (Ont. C.A.) at 246-7; R. v. Biegus (1999), 1999 CanLII 3815 (ON CA), 141 C.C.C. (3d) 245 (Ont. C.A.) at 249-251.

[28] I also agree with the Crown that Justice Hill’s decision in R. v. Atwal, [2016] O.J. No. 3109, 2016 ONSC 3668, is very helpful, particularly paragraphs 41 and 42, found below.

[41] The fundamental principle of sentencing is that the sentence imposed be proportionate to the gravity of the offence and the degree of responsibility of the offender: Criminal Code, s. 718.1; R. v. Lacasse, 2015 SCC 64, [2015] 3 S.C.R. 1089, at para. 12; R. v. Clouthier, 2016 ONCA 197, at para. 53.

[42] There was little in the way of controversy between the parties as to the applicable legal principles. Having summarized many of these overarching considerations in R. v. Cunsolo, 2012 ONSC 114, (affd 2014 ONCA 364); and, in R. v. Williams, 2007 CanLII 13949 (ON SC), [2007] O.J. No. 1604 (S.C.J.), an overview will suffice here:

(1) “Fraud over $5,000 is a serious offence”: R. v. Bogart (2002), 2002 CanLII 41073 (ON CA), 167 C.C.C. (3d) 390 (Ont. C.A.), at p. 396, leave to appeal refused [2002] S.C.C.A. No. 398.

(2) When sentencing for fraud involving substantial dishonesty, the principles of general deterrence and denunciation merit paramount consideration: R. v. Drabinsky and Gottlieb, 2011 ONCA 582, at paras. 160, 173, application for leave to appeal refused [2011] S.C.C.A. No. 491.

(3) General deterrence tends to have greater impact in the case of embezzlement-type crimes, whether fraud or theft – criminal conduct where persons “usually plan and deliberate about it to some extent”: R. v. Dobis (2002), 2002 CanLII 32815 (ON CA), 163 C.C.C. (3d) 259 (Ont. C.A.), at pp. 272-3; R. v. Wismayer (1997), 1997 CanLII 3294 (ON CA), 115 C.C.C. (3d) 18 (Ont. C.A.), at p. 38; R. v. Gray (1995), 1995 CanLII 18 (ON CA), 76 O.A.C. 387 (C.A.), at pp. 398-9 (leave to appeal refused, [1995] S.C.C.A. No. 116); R. v. McKinnon, 2005 ABCA 8, [2005] A.J. No. 12 (C.A.), at para. 60; R. v. Hoy, 1998 CanLII 6024 (BC CA), [1998] B.C.J. No. 1649 (C.A.), at para. 6; R. v. Reid, 2004 YKCA 4, [2004] Y.J. No. 3 (C.A.), at para. 13. Put differently, “law-abiding persons, with good employment records and families...are the ones most likely to be deterred by the threat of severe penalties”: R. v. Proulx (2000), 2000 SCC 5, 140 C.C.C. (3d) 449 (S.C.C.), at 503; see also Drabinsky, at para. 160.

(4) “[A] sentence of six years is within the correct range of sentences for major frauds” and sentences in the 3 to 5-year range are common: Dobis, at p. 271; R. v. McGill, 2016 ONCA 139, at paras. 13-17; R. v. Khatchatourov and Keznick, 2014 ONCA 464, at para. 39; R. v. Witen, 2014 ONCA 694, at paras. 1, 25 (leave to appeal refused [2015] S.C.C.A. No. 287); R. v. Maxwell, 2014 ONCA 316, at para. 5; R. v. Dwyer, 2013 ONCA 34, at para. 12; R. v. Drakes, 2009 ONCA 560, at paras. 24-6 (leave to appeal refused, [2009] S.C.C.A. No. 381); R. v. Bertram, [1990] O.J. No. 2013 (C.A.), at p. 3; R. v. Wilson, 2003 CanLII 48181 (ON CA), [2003] O.J. No. 1047 (C.A.), at para. 5. The Dobis decision, at p. 273, includes at the lower end of “large-scale frauds”, the McEachern case ((1978), 1978 CanLII 2506 (ON CA), 42 C.C.C. (2d) 189 (Ont. C.A.)) involving $87,000 and the fraud in Pierce ((1997), 1997 CanLII 3020 (ON CA), 114 C.C.C. (3d) 23 (Ont. C.A.) (leave to appeal refused, [1997] S.C.C.A. No. 225)) in the amount of $270,000, while a $200,000 defalcation was described by Juriansz J. (as he then was) as a large-scale fraud in R. v. Robinson, [2003] O.J. No. 4722 (S.C.J.), at paras. 4, 11.

(5) The current s. 380(1.1) carries a mandatory minimum term of imprisonment of two years where the subject matter of the fraud exceeds $1,000,000. That provision is inapplicable here because the offender’s crime preceded passage of this Code amendment. While recognizing that “custodial sentences are the norm in cases of large-scale fraud” (R. v. Gour, 2014 ONCA 51, at para. 11), even where the offender is a first-time offender (R. v. Fratia, 2015 ONCA 460, at para. 6), and that “the jurisprudence of [the Ontario Court of Appeal] indicates that conditional sentences are not appropriate in cases involving convictions for large-scale frauds” where “penitentiary sentences are typically imposed in such cases” (Cunsolo (OCA), at para. 53) and are “rarely imposed in cases involving a breach of trust” (R. v. Silva, 2015 ONCA 301, at para. 4), the sentencing option of a conditional sentence was available when this fraud was perpetrated. Such a disposition has not been excluded from consideration in the past in breach of trust fraud cases; Dobis, at p. 273 and as discussed in R. v. Bunn (2000), 2000 SCC 9, 140 C.C.C. (3d) 505 (S.C.C.); R. v. Fiorilli, 2015 ONCA 328, at para. 6 (leave to appeal refused [2015] S.C.C.A. No. 261); R. v. Montoya, 2015 ONCA 786, at paras. 1, 14; R. v. Stewart, 2014 ONCA 715; R. v. Burkart (2006), 2006 BCCA 446, 214 C.C.C. (3d) 226 (B.C.C.A.); R. v. Gauthier (1998), 1998 CanLII 5063 (PE SCAD), 131 C.C.C. (3d) 177 (P.E.I.C.A.); R. v. Steeves and Connors (2005), 2005 NBCA 85, 200 C.C.C. (3d) 282 (N.B.C.A.); R. v. Robinson, [2003] O.J. No. 4722 (S.C.J.); R. v. Tulloch, [2002] O.J. No. 5446 (S.C.J.). While a conditional sentence, with properly tailored punitive conditions, can effect a measure of general deterrence and denunciation, many of these cases where a conditional sentence was appropriate involved pleas of guilt and/or certain exceptional mitigating circumstances.

[29] I have not ignored the other cases filed by the Crown, including R. v. Nero, [2008] O.J. No. 3506, 2008 ONCA 622, 79 W.C.B. (2d) 463, and R. v. Bruni, [2007] O.J. No. 155, 73 W.C.B. (2d) 507 (S.C.J.), and R. v. Stante, [2006] O.J. No. 4639, 71 W.C.B. (2d) 906 (S.C.J.), which trilogy of decisions dealt with an armoured vehicle theft, but on the issue of the applicable general principles of sentencing that are relevant to our situation, the above jurisprudential references are sufficient, in my view.

[30] In saying that, I recognize that count 3 is a theft and not a fraud. Currently, Canadian criminal law provides for a lengthier maximum term of imprisonment for fraud over $5000.00 (14 years) than it does for theft over $5000.00 (10 years), but, in my opinion, a proper sentence on either offence will often involve a consideration of the factors outlined by Justice Hill in Williams and Atwal, supra.

[31] At the same time, I agree with Defence counsel that paragraphs 8 through 12, 18-19, 34, 54, and 57 of Justice Lacelle’s decision in R. v. Saucier, 2019 ONSC 3611, all reproduced below, are instructive.

[8] The Criminal Code sets out a number of principles of sentencing which must be considered in determining a fit sentence.

[9] The fundamental purpose of sentencing is confirmed in s. 718. That section provides that the sanction imposed by the court should have one or more of the following objectives:

a. To denounce 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 and to the community.

[10] Section 718.2 of the Code identifies additional principles of sentencing, including that the court should increase or decrease the sentence to account for any relevant aggravating or mitigating factors.

[11] The fundamental principle of sentencing is that the sentence must be proportionate to the gravity of the offence and the responsibility of the offender. Imposing a proportionate sentence is an individualized exercise. The sentence must be tailored having regard to the gravity of the offence, the blameworthiness of the offender, and the harm caused by the crime: R. v. Nur, 2015 SCC 15 at para. 43.

[12] The parity principle requires a judge to consider the range of sentence imposed in similar matters. The Criminal Code requires that a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances. A judge must also apply the principle of restraint. An offender should not be deprived of liberty if less restrictive sanctions are appropriate in the circumstances.

[18] This does not mean that prior good character is irrelevant, however. As noted by the Court of Appeal for Ontario in R. v. Drabinsky, 2011 ONCA 582 at paras. 167-8,

individuals who perpetrate frauds like these are usually seen in the community as solid, responsible and law-abiding citizens. Often, they suffer personal and financial ruin as a result of the exposure of their frauds. Those factors cannot, however, alone justify any departure from the range. The offender’s prior good character and standing in the community are to some extent the tools by which they commit and sustain frauds over lengthy time periods. Considerable personal hardship, if not ruin, is virtually inevitable upon exposure of one’s involvement in these kinds of frauds. It cannot be regarded as the kind of unusual circumstances meriting departure from the range.

In holding that prior good character and the personal consequences of the fraud cannot push the appropriate sentence outside of the range, we do not suggest that they are not relevant mitigating factors. They must be considered in determining where within the range the sentence should fall.

[19] Here, the accused’s status as a first offender entitles him to mitigation of his sentence. Insofar as the personal consequences of the offences upon the offender are concerned, the evidentiary record supports the conclusion that the offender lost his contract with London Life. While I would expect there to be other professional consequences for the offender, and I consider that this case has attracted the attention of the local media, the record before me does not support the conclusion that any of these consequences are distinguishable from what Drabinsky described as “inevitable” following the commission of offences of this kind.

[34] In R. v. MacDiarmid (2001), 2001 CanLII 24117 (ON CA), 140 O.A.C. 287 (Ont. C.A.), the court of appeal upheld an 18 month conditional sentence plus two years’ probation for a doctor who defrauded OHIP of about $155, 000. The issue on appeal was only whether the additional $100, 000 fine imposed by the trial judge could stand with the probation order. The accused had pleaded guilty and admitted he had submitted approximately 6000 false claims to OHIP. The court noted he did not profit from his crime and repaid the entire amount before sentencing.

[54] Further, I have no reason on this evidentiary record to find that the offender’s rehabilitative potential is such as to favour the conclusion that this is a sentence where a combination of both punitive and restorative objectives may be achieved (see Proulx at para. 113). There is no evidence the offender has any remorse. There is no evidence he has any insight into his behaviour. In short, this is one of those cases where the punitive objectives of denunciation and deterrence are particularly pressing and incarceration is the preferable sanction (see Proulx at para. 114).

[57] On the whole, I conclude that those cases where a conditional sentence was imposed for offences of this kind involved a collection of mitigating factors that shifted the balance as to where the sentence should fall having regard to the aggravating factors in those cases. In this case, I conclude that the constellation of aggravating and mitigating factors are such that a jail sentence is required.

[32] Regarding paragraph 57 of Saucier, supra, I agree with Defence counsel that, in deciding whether a conditional sentence order is appropriate for Kenneth, this Court should assess the “constellation of aggravating and mitigating factors” at play.

[33] Concerning paragraph 54 of Saucier, supra, I agree with Defence counsel that the rehabilitative potential for Kenneth is relatively strong.

[34] With regard to paragraph 34 of Saucier, supra, I agree with Defence counsel that Kenneth may not have received any actual money from the illegal scheme; there is no evidence that he did. I disagree, however, that our offender did not “profit” from the crime. He did. He benefitted from the family’s criminal operation, one that he was a part of. He lived in a very nice home. He had access to the profits, regardless of whether he exercised that access.

[35] Regarding paragraphs 18-19 of Saucier, supra, it is undeniable that Kenneth is a first-time offender and a person of otherwise good character.

[36] I agree further with Defence counsel that:

i. this Court should take into account the collateral consequences already suffered by Kenneth, such as the loss of his money, business opportunity, and his wife – R. v. Scott, 2011 ONSC 5964, per Justice Belobaba, at paragraph 14;

ii. a conditional sentence of imprisonment can meet the sentencing objective of general deterrence – Scott, supra, at paragraph 33; and

iii. it is relevant that Kenneth did not “commence the fraud”, or at least that there is no evidence that he was the brainchild of the illegal scheme – R. v. Clermont, 2016 ONSC 4655, per Justice M.G. Quigley, at paragraph 29.

[37] Finally, the Defence took this Court to the decision of Justice Allen of the Ontario Superior Court of Justice in R. v. Tran, 2021 ONSC 1888. That is, indeed, a helpful authority. Its helpfulness is twofold – (i) on the general principles of sentencing (paragraphs 7 through 12) and (ii) for a summary of relevant sentencing decisions, both custodial and conditional sentence orders (paragraphs 26 through 37). All of those clauses are set out below.

[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 CanLII 32815 (ON CA), [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), 2004 CanLII 5549 (ON CA), 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.

[26] R. v. Bogart (M.) (2002), 2002 CanLII 41073 (ON CA), 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 CanLII 32815 (ON CA), [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 CanLII 13949 (ON SC), [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.

[33] R. v. Smolyar, 2003 CanLII 27612 (ON CA): 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, 2009 CanLII 72039 (ON SC): 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.

The Most Important Sentencing Principles for Our Offender on Our Facts

[38] In my view, without ignoring other sentencing principles, (i) denunciation, (ii) general deterrence, (iii) individual or specific deterrence, and (iv) rehabilitation are all highly important in this Court’s decision.

[39] Denunciation and general deterrence are key in matters of what I choose to term “big-money breach of trust fraud and/or theft cases”. This is certainly one of those.

[40] On the other hand, rehabilitation and specific deterrence have long been considered to be critically important considerations in sentencing first-time offenders, especially youthful ones. At the time of the offence for which Kenneth is now being sentenced, he was not a kid, but he was still a relatively young adult, in his early twenties.

The Impact on the Victim

[41] Let us not forget that there was a victim of Kenneth’s crime. In its victim impact statement filed before Justice Gray, the Ontario Lottery and Gaming Commission (“Commission”) outlined, in some detail, the “profound impact on the public’s trust and confidence in the integrity of lotteries and on [the Commission’s] reputation” that the Chungs’ criminal scheme had.

[42] As the Commission stated, “[c]entral to public trust and confidence in the integrity of lotteries is ensuring that [the Commission] pays the right person, the right prize every time”.

[43] In being part of a successful effort to steal a lottery ticket that had wrongfully paid out on its account huge money, 12.5 million dollars, Kenneth shook the confidence of the public in lotteries, while abusing his position of trust as the manager of the variety store and the local face of the Commission. All out of pure greed for the benefit of the Chung family.

[44] It was shameful conduct, in my opinion. The degree of moral blameworthiness on the part of this offender, Kenneth, is high.

The Aggravating and Mitigating Factors

[45] I agree with the Crown that the two chief aggravating factors here are (i) the massive amount of money involved, 12.5 million dollars, and (ii) the gross abuse of trust and authority in having the store manager, Kenneth, being a party to stealing the winning lottery ticket.

[46] There are, however, many mitigating factors that are present here, all of which can be encapsulated with this phrase – Kenneth is a first-time offender, not old when he did this, of good character, who has already suffered a great deal, and who has proven to be a very good candidate for community supervision.

A Fit Sentence for This Offender, on These Facts

[47] Despite Defence counsel’s very able submissions, I decline to impose upon Kenneth a conditional sentence order.

[48] First, in my opinion, such a sentence would be irrational in light of the Court of Appeal for Ontario’s decision to uphold a ten-month jail sentence for a theft under $5000.00 conviction.

[49] Second, it would offend the parity principle in that Kathleen, who was simply the back-end of the same illegal scheme that Kenneth and his father fronted, was sentenced to three (3) years in prison. That Kathleen was convicted of fraud instead of theft cannot reasonably be squared with her receiving a three-year sentence behind bars and Kenneth receiving a reformatory sentence of imprisonment to be served in the community.

[50] Third, it would be inconsistent with the principles of denunciation and general deterrence – section 742.1(a) of the Criminal Code. Not simply because it is a theft over $5000.00 offence, but because of the sheer scale of the theft and Kenneth’s gross abuse of trust and authority.

[51] I do think that Kenneth should be sentenced to a shorter period of imprisonment than Kathleen, however. Not necessarily because of the theft/fraud distinction but rather on account of the mitigating factors outlined above. This Court is sentencing Kenneth, and whether Kathleen presented similar mitigating factors is not entirely clear to me. For example, the extent to which she suffered collateral consequences of her criminal conduct before being sentenced is not clear from my review of the writings of the trial judge and the appellate court. There is a reference in the sentencing decision of Justice Gray of Kathleen having had her marriage fall apart, but otherwise I am not sure.

[52] Further, in my view, that Kathleen was the person who actually duped the Commission and was paid out the 12.5 million dollars heightens her degree of moral blameworthiness. She was the one who ultimately closed the door, lied to and ripped-off the Commission, and happily accepted the massive payout.

[53] Thus, notwithstanding his own gross abuse of trust and authority, I have decided to impose upon Kenneth a penitentiary sentence that is less than three (3) years in duration, before a consideration of the ten (10) months.

[54] Two (2) years’ imprisonment, I think, is a fit sentence. It is undoubtedly at the low end of what this Court could have reasonably settled on, but it remains fit nonetheless.

[55] From that I will, as agreed, deduct the ten (10) months, resulting in a net sentence of fourteen (14) months in custody.

Disposition

[56] For all of these reasons, therefore, Kenneth Chung, on count 3 (theft over $5000.00), is sentenced to fourteen (14) months in custody. That 14-month sentence shall run consecutive to the sentence that Kenneth is currently serving.

[57] I sincerely thank Mr. King and Ms. von Achten for their professionalism and their very competent submissions on sentence. They were of great assistance to this Court.

(“Original signed by”)

Conlan J.

Released: September 23, 2021

COURT FILE NO.: CR-141/13

DATE: 2021 09 23

ONTARIO

SUPERIOR COURT OF JUSTICE

HER MAJESTY THE QUEEN

– and –

Kenneth Chung

REASONS FOR DECISION ON SENTENCING

Conlan J.

Released: September 23, 2021