Introduction

[1] Kuldeep Kapoor is charged with one count of defrauding the public of an amount over $5,000, contrary to s. 380(1) of the Criminal Code. The offence is alleged to have taken place between February 21, 2014 and April 29, 2015. His trial proceeded before me via Zoom over three days of evidence, following which the parties made written submissions and then oral submissions.

[2] By way of summary, the Crown adduced evidence from eight complainants, all of whom were friends or acquaintances of Mr. Kapoor or were referred to him by family or friends. Generally, they understood him to be employed as a mortgage broker. Each testified to having made short term loans to Mr. Kapoor for a high rate of return between 2013 and May 2015. At least at the beginning, most of them were told, and believed, that these loans were so that Mr. Kapoor could make further loans to people who needed short term money for such reasons as second or third mortgages or taxes. Almost all of the loans to Mr. Kapoor were in cash. Many were documented in signed promissory notes prepared by Mr. Kapoor that set out the principal, term of the loan and interest payable. Many of the early loans were repaid by Mr. Kapoor with the interest that was owed. This led to the complainants being happy with the relationship and making further loans.

[3] The complainants testified that in 2015, Mr. Kapoor was either late re-paying their loans or stopped doing so. Several of them received letters sent by counsel on Mr. Kapoor’s behalf (not Mr. Navarrete) suggesting that they had engaged in “predatory loans” with him. Mr. Kapoor became difficult for them to reach. Eventually, on May 28, 2015, he filed for bankruptcy, acknowledging a total debt owed of $1,511,150 to 40 creditors, including the eight complainants who testified in this trial.

[4] It is the Crown’s position that Mr. Kapoor engaged in deceit, falsehoods and other fraudulent means to induce the complainants to loan him money that they believed was being used for one purpose when, in fact, he gambled it away, leading to his financial collapse.

[5] The defence position is that the Crown has not proven the essential elements of fraud beyond a reasonable doubt. The defence says that the Crown has failed to prove that Mr. Kapoor acted dishonestly or that he misrepresented the use of the funds to the complainants in a way so as to entice them to loan him money and risk losses. The defence also submits that the Crown has failed to prove that Mr. Kapoor used “other fraudulent means” to defraud the complainants. The defence highlights that there is no evidence as to what Mr. Kapoor did with the money he borrowed from these complainants and no evidence that he gambled it away.

[6] There is no issue that the complainants made loans to Mr. Kapoor. Nor is there an issue that he did not pay all of those loans back and that he is indebted to the complainants. The issue to be decided is whether the Crown has proven beyond a reasonable doubt that he committed fraud.

[7] I shall summarize the relevant evidence, the applicable legal principles, the positions of the parties and then set out my analysis.

Relevant Facts

[8] As I have indicated, eight complainants testified in this trial.

Evidence of Miguel Neves

[9] Mr. Neves owns a wine store called Mosto Vinho, located in Mississauga. The store makes wine that customers bottle for themselves. Mr. Neves’ customers became his friends. While Mr. Kapoor was working in the same complex as the wine store, Mr. Neves met him and they become friends. Many of the complainants in this case met Mr. Kapoor at the wine store or through those individuals who socialized there regularly.

[10] Mr. Neves knew Mr. Kapoor to work as a mortgage broker. After Mr. Kapoor helped him with his own mortgage, Mr. Neves said that Mr. Kapoor approached him with a business deal involving him making Mr. Kapoor a short term loan for $10,000 or $15,000. This was in late 2013.

[11] Mr. Kapoor told Mr. Neves that he was the “middleman” who made short term loans to people who were in need of re-financing their mortgages or paying credit card debt. Mr. Neves then began lending Mr. Kapoor money on a regular basis. Mr. Kapoor would approach Mr. Neves and have a loan lined up for a set time and amount and would ask Mr. Neves if he was interested. If so, Mr. Kapoor would provide a promissory note that set out the amount of the loan and the interest. Mr. Kapoor decided the amounts and they did not really negotiate them. When the loan was due, sometimes Mr. Kapoor paid Mr. Neves the full amount and sometimes Mr. Neves reinvested it. All of the money that traded hands between them was cash. Mr. Neves estimated that he had made 40 to 50 loans to Mr. Kapoor in total.

[12] Mr. Neves also testified that while he and Mr. Kapoor did deals, they were sometimes at the wine store. Customers and friends would be around. Mr. Neves told them about his investments and the rates of return. Mr. Kapoor also asked him if he knew others who would be willing to invest with him. As a result of these referrals and introductions, Mr. Kapoor began to do deals with others in the wine store. Mr. Neves said that a number of his friends began investing with Mr. Kapoor and signed promissory notes with him at the store. Mr. Neves would tell friends that Mr. Kapoor was a friend who made short term loans for people who needed funds, but did not otherwise qualify for loans.

[13] Mr. Neves kept some of his promissory notes and destroyed others. When debts were paid in full, Mr. Kapoor suggested destroying them. Mr. Neves agreed that there was nothing improper about this when the loans had been repaid. Mr. Neves explained that they were friends and that sometimes the loan would simply be rolled over and Mr. Kapoor would initial the promissory note and change the dates on it.

[14] A number of documents setting out loan agreements between Mr. Neves and Mr. Kapoor were introduced at trial and are contained in Exhibits 2 and 3. The first one was signed July 5, 2013, for a loan due October 4, 2013. The last was a promissory note signed on April 22, 2015 and due May 6, 2015 and was a loan from Mr. Neves and his sister Rosa. Mr. Neves testified that Mr. Kapoor re-paid him all of these loans.

[15] Mr. Neves understood that there was nothing in the promissory notes about the reason for the loan and agreed that he had never asked that a term setting out the reason for the loan be included in the promissory notes. Mr. Neves understood that the loans that he was offered by Mr. Kapoor were for a high rate of interest that he could not get from a bank. He agreed that the reason he was interested in the loans was because of the rate of return.

[16] Up until some point in 2015, Mr. Neves was satisfied with the loans and repayments by Mr. Kapoor. He recommended to his mother and sister that they also make loans. They did so and were initially paid in full, though later things went sour for them as well. Mr. Neves also recommended to others in the wine store that this was a good investment opportunity.

[17] The last deal that Mr. Neves did with Mr. Kapoor was in 2015. There is evidence before me that Mr. Neves and his sister made a loan to Mr. Kapoor of $16,000 on April 22, 2015. He was repaid $16,500 two weeks later, on May 6, 2015, in accordance with the terms in the promissory note.

[18] Mr. Neves testified that at some point, Mr. Kapoor stopped paying him. Mr. Neves was unable to reach Mr. Kapoor. He was not sure when in 2015 this had been, although he agreed under cross-examination that things had started to go badly between January and June 2015. Mr. Neves said that towards the end, he believed that Mr. Kapoor knew something was going to happen and that they had a conversation in which Mr. Kapoor indicated that he needed more money but declined Mr. Neves’ offer and asked him to ask others. Mr. Neves believed that Mr. Kapoor knew he was in trouble and did not want to put him further into debt, knowing that he had kids.

[19] Asked whether Mr. Kapoor owed him money, Mr. Neves said that he did. He acknowledged having no paperwork to prove those loans, but testified that Mr. Kapoor owed him between $60,000 and $70,000.

[20] Mr. Neves testified that he would not have made the loans if he had not known where the money as going. It was his belief that the money was being used for small mortgages and to pay off credit card debts and property taxes. He said that Mr. Kapoor assured him that the money would be paid back and that he had done checks on the people to whom he was lending it. Under cross-examination, he agreed that while at first Mr. Kapoor had said he had a person who needed money, later on he would just say that he had another opportunity and would not say where the money was going. Mr. Neves assumed it was going to something where it was secure.

[21] Mr. Neves testified that he received a letter about Mr. Kapoor’s bankruptcy and went to a bankruptcy hearing. He said that at the bankruptcy hearing, the bankruptcy people gave him the idea that Mr. Kapoor had gambled some of the money away. He agreed that he could not say whether Mr. Kapoor had used his money to gamble.

Evidence of Leo Coelho

[22] Mr. Coelho was a 70 year old retiree. He testified that he had known Mr. Kapoor for 15 or 16 years and that they both spent time at the wine shop and became friends. They would help Mr. Neves out, order wine and have lunch together.

[23] Mr. Coelho knew that people in the wine store, including Mr. Neves, had invested with Mr. Kapoor and said that Mr. Kapoor approached him and others and suggested that they invest with him and he would give exceptional returns. By way of due diligence, Mr. Coelho went to where the accused worked as a mortgage broker with his father and found that there was a lawyer who also worked there. Mr Coelho was satisfied that Mr. Kapoor had the job he claimed and was assured by Mr. Kapoor that if anything happened to him, the lawyer and his father had all of the documents.

[24] According to Mr. Coelho, the investors were given different reasons for the loans. These included that the borrowers were losing their homes and needed money to pay off debt, needed money for taxes, needed money to close real estate deals or needed money to buy property or inventory for stores. Mr. Coelho first invested in 2014. He testified that he had enough trust, faith and friendship in Mr. Kapoor that he would have made the loans to him even had he not been told what the money was being used for, because of the high interest rates. He also agreed that later on, what was important to him was the amount, term and payout on the loans, rather than the details of what they were being used for.

[25] Mr. Coelho explained how the transactions worked. Mr. Kapoor would approach members of the group and request a certain amount of money and tell them the length of the loan and the return they would receive. Mr. Kapoor generated paperwork, sometimes generating it at the wine store and sometimes bringing it already completed. He would cross out and change names. Mr. Coelho testified that the transactions were usually done at the wine store, but also at his home and that they were mostly in cash. Various promissory notes that were used in his transactions were entered into evidence.

[26] Mr. Coelho’s initial investment was for $5,000. He got his money back and within a few days Mr. Kapoor asked for more money, which Mr. Coelho re-invested. After he started investing, he told others about the returns, because they were good. He encouraged family members to invest, including his brother in law, Norman Hendrycks and his daughter. He said that she was paid the principal and interest owed. He also made some loans together with Mr. Neves. Mr. Kapoor also approached him seeking new investors.

[27] For some time. Mr. Kapoor paid Mr. Coelho as they had agreed. On November 1, 2014, Mr. Coelho entered into a loan agreement in which he loaned Mr. Kapoor $25,000, which was to be repaid on December 1, 2014 with $3,750 interest. The cheque used to make this loan was filed as part of Exhibit 4a. Mr. Coelho agreed that Mr. Kapoor had told him he was having some issues and wanted to delay payment, so they amended the agreement to make it due February 1, 2015 with $3,000 interest. The amended the promissory note is part of Exhibit 4a. Mr. Coelho agreed that it appeared that Mr. Kapoor had a temporary glitch. He was paid the interest owed in January and February 2015. He was not repaid the principal.

[28] Mr. Coelho testified that he made a further loan of $10,000 on February 25, 2015, due on March 3, 2015 with $1,000 interest. He was not paid repaid.

[29] At some point after Mr. Kapoor owed him money he did not receive, Mr. Coelho tried to contact him by going to his home but was unable to locate him. Mr. Coelho said that by the end, he believed he was owed $60,000 by Mr. Kapoor.

Evidence of Stan Plausinis

[30] Stan Plausinis is an 81 year old retired small business owner. He met Mr. Kapoor through his friend Don Saraka, who advised that he had been investing with Mr. Kapoor for a couple of years and was satisfied with his investment in these loans. Mr. Plausinis suggested that Mr. Kapoor call him.

[31] They had their first call in January 2015. Mr. Plausinis understood that Mr. Kapoor was a registered mortgage broker and they discussed investing in first, second and third mortgages that Mr. Kapoor was trying to put together. Mr. Plausinis said that he “checked him out” and confirmed that Mr. Kapoor was a mortgage broker. He agreed that Mr. Kapoor never said that the loans were going to be a mortgage, just that he was working on a mortgage. Mr. Plausinis asked how Mr. Kapoor could pay so much interest and was told by him that he was charging a lot to the people who were trying to obtain the mortgages. Mr. Plausinis testified that he would not have loaned the money had he not understood it was for mortgages.

[32] Mr. Plausinis said that initially, Mr Kapoor wanted him to invest $50,000, but that he told him this was way too much and that he would start with $10,000 and would see how it went. He thought Mr. Kapoor may have been disappointed, but they agreed on a loan of $10,000 with a three month term.

[33] They signed their first promissory note on January 26, 2015 at Mr. Plausinis’ home. It was for a loan of $10,000 due April 26, 2015, with interest of $750. The deal was done with cash, at Mr. Kapoor’s suggestion. Mr. Plausinis provided cash and payments back to him were to be in cash, which was a benefit to Mr. Plausinis. Mr. Plausinis read the contract and understood that it did not say that the funds were being used for mortgages and that any oral understanding that they had did not form part of the contract. At the end of the three months, Mr. Plausinis was paid $750 in cash, which was the interest, and they agreed that he would re-invest the $10,000 principal and an additional $10,000 as a second loan.

[34] The second loan was arranged and a second promissory note was signed, dated April 15, 2015. It was for $20,000 with interest of $1,000 monthly for three months until July 15, 2015, when the principal was due. Mr. Plausinis testified that he negotiated the rate of interest up from $500 monthly, which had been on the pre-printed promissory note. He said that Mr. Kapoor paid the $1,000 interest the first month but after that he did not hear from him again.

[35] Mr. Plausinis testified that he later learned that Mr. Kapoor had filed for bankruptcy. He recalled that none of the investors were able to reach Mr. Kapoor. At Leo Coelho’s suggestion, they went to the police. They then received a notice from the receiver-in-bankruptcy requesting a listing of all of their investments.

[36] Mr. Plausinis said that he later attended a video meeting with the receiver and Mr. Kapoor. He testified, “this is where he advised that he lost all the money in gambling”. Under cross-examination about this video meeting, Mr. Plausinis testified that Mr. Kapoor was on video and told all the investors that he lost all the money gambling. He was sure it was Mr. Kapoor, and not his receiver or representative, who said this. Mr. Plausinis confirmed that he could not say if Mr. Kapoor lost his particular money gambling, but was clear that it was his view that Mr. Kapoor said, “I lost all the money gambling” and that he assumed that he lost all of their money.

Evidence of Norman Hendrycks

[37] Mr. Hendrycks was a 77 year old retired professional engineer. He was introduced to Mr. Kapoor through his brother-in-law, Leo Coelho. Mr. Hendrycks understood that Mr. Kapoor was looking for some funds. He knew Mr. Coelho had been satisfied with his transactions with Mr. Kapoor and was recommending that he also invest. Mr. Kapoor came to his home on March 5, 2015.

[38] At that initial meeting, Mr. Kapoor told him that he needed to borrow money for an individual who had a container that he needed to access so that he could sell the goods in it. Mr. Hendrycks understood that from his initial loan, he would make $500 as the goods would be sold by March 20, 2015. Mr. Hendrycks asked some questions about the proposal he was given and asked why Mr. Kapoor needed outside people to invest. He was told by Mr. Kapoor that he and his father were “fully loaded” with mortgages and that this was not a mortgage, that they could not borrow for this and so were looking for funds.

[39] They agreed that Mr. Hendrycks would make a loan of $5,000 on March 5, 2015 that was due on March 20, 2015 and that Mr. Hendrycks would be paid $500 interest. A promissory note that is part of Exhibit 7 was signed and Mr. Hendrycks provided Mr. Kapoor with the cash, at Mr. Kapoor’s suggestion. Mr. Hendrycks said that he was supposed to be paid on March 20, 2015. On April 6, 2015, Mr, Kapoor told him that he had his money but that he had another proposition for Mr. Hendrycks to re-invest the initial $5,000 and $500 interest, add to it a further $4,500, and make a loan of $10,000. Mr. Hendrycks agreed to this, wrote on the initial promissory note “paid in full”, even though he was not paid, and signed a second promissory note for a $10,000 loan.

[40] This second promissory note, signed on April 7, 2015, had Mr. Hendrycks and his wife loan to Mr. Kapoor $10,000 for a 3 month term and with an interest payment of $1,000 a month. Mr. Kapoor proposed the terms for this loan. Mr. Hendrycks testified that Mr. Kapoor told him that these funds were needed for an individual who was in the garden business and needed to buy materials, but was unable to secure loans to do the jobs. Mr. Kapoor said that the landscaping projects would be done and that they would get their money back in July. Mr. Hendrycks was never paid any interest or repaid the principal for this loan.

[41] Mr. Hendrycks testified that he would not have loaned the money had Mr. Kapoor not given him an explanation for where it was going. He agreed that the information about where the loan money was going was not included in the actual agreements that he signed. He said he believed what he was told by Mr. Kapoor and thought it was very plausible. He also agreed that he was interested in the fact that this was “fast and easy” money.

[42] Mr. Hendrycks subsequently received a letter from the De Bousquet Professional corporation dated May 28, 2015. This letter is in evidence as part of Exhibit 7. This letter says that Mr. Hendrycks made a series of loans to Mr. Kapoor that carried a criminal rate of interest and were in violation of s. 347 of the Criminal Code. The letter further indicated that Mr. Kapoor wanted to repudiate the entire agreement and to offset any interest previously paid against any claim Mr. Hendrycks might have for interest. There was contact information for a Trustee in Bankruptcy. Mr. Hendrycks said he did not really understand the letter as he had not negotiated the interest rates and they had all been set up by Mr. Kapoor.

[43] He tried calling Mr. Kapoor but his mailbox was full or the phone was not in service and he and his wife were unable to reach him. He subsequently received a letter dated June 2, 2015 respecting Mr. Kapoor’s bankruptcy. It indicated that Mr. Kapoor had filed an assignment for A. Farber & Partners to be trustee of the estate of the bankrupt and official receiver. That document lists Mr. Hendrycks as a creditor for an unsecured loan of $10,000.

[44] Mr. Hendrycks agreed that he does not know whether his money was given to individuals in need or not. He just knows that he did not receive the funds he was owed.

Evidence of Ruth Renwick

[45] Ruth Renwick is a 68 year old retired social worker. She met Mr. Kapoor in 2014 at Mosto Vinho. She knew that other people at the wine shop loaned him money and testified that he told her he was a mortgage broker and sometimes needed money to finish up mortgages. Both Mr. Neves and Mr. Coelho told her about him. She had the sense that they were comfortable in the loan arrangements that they had with Mr. Kapoor. She also heard stories that Mr. Kapoor told to the group about families he was helping with mortgages. She agreed that she asked for him to call her. She said he would tell the group of them how much money he needed and that she started “helping out” by providing loans, as she thought he was stressed and tense about loaning people money.

[46] Under cross-examination, Ms. Renwick agreed that while they talked about the use of the loans for mortgages at the beginning, later on he would simply tell her that he needed money and ask if she wanted to do another loan.

[47] Ms. Renwick said that at the beginning, she made loans of $4,000 or $5,000 with interest. Mr. Kapoor determined the interest, amount of the loans and the terms. He documented them and would print up promissory notes, copies of which she kept. All of the transactions were done in cash, an idea of Mr. Kapoor’s. She said that she was paid in cash at the beginning and received both interest and the principal back. She was happy with the agreement and the payments.

[48] Copies of promissory notes reflecting her loans, beginning in February 2014 were filed as part of Exhibit 8. She confirmed having been paid for many of these loans over the course of 2014 and having used the money to pay off her line of credit and credit card. On May 6, 2014, she hand-wrote a loan agreement in which she loaned Mr. Kapoor $2,200 that he was to re-pay on June 6, 2014 with $220 interest.

[49] Ms. Renwick agreed that she read the promissory notes and understood that any oral discussions that they had were not part of the agreement and that it was Mr. Kapoor who was the borrower.

[50] Ms. Renwick said that at one point when Mr. Kapoor came by her home, she mentioned that it was time for her to re-finance her mortgage. She was seeking his professional advice. He suggested that she should borrow an extra $100,000 and lend it to him. She did not do so.

[51] On February 1, 2015, Ms. Renwick entered into a loan agreement with Mr. Kapoor for $10,000, due 6 months later on July 1, 2015, with interest of $500. She testified that for the first time, she was not paid back for this loan.

[52] Ms. Renwick received a letter similar to the one Mr. Hendrycks received from the De Bousquet Professional corporation, dated May 29, 2015, advising that her loans to Mr. Kapoor had carried a criminal rate of interest. She also received a letter from the trustee in bankruptcy.

[53] Ms. Renwick testified that there was a meeting at one point with the trustees. She learned that Mr. Kapoor had filed for bankruptcy. She said that she understood that he had gambled their money. Asked from whom she learned that, she said “probably the trustee” but that she did not recall the source.

Evidence of Angela D’Orazio

[54] Ms. D’Orazio is a 63 year old retired bank clerk.

[55] She testified that she had known Mr. Kapoor for 20 years, having met him when he worked for her brother and through one of her daughters. She viewed him as a friend and acquaintance. She understood that her brother had loaned Mr. Kapoor money and received back the principal and a high rate of interest.

[56] Ms. D’Orazio explained that when she ran into Mr. Kapoor, he told her that she could do an investment with him for a mortgage or a bridge loan. Under cross-examination she testified that he had not really said what it was for and that it could have been a bridge loan or a mortgage or an investment. He initially asked her for $10,000, which she told him she did not have. She initially invested $6,000 with him, for a month, making $600 in interest. She was paid her interest and principal for this loan. She has no documentation for this loan.

[57] Then, in March 2015, she asked him to re-finance her mortgage for her. After that, she said that he encouraged her to invest with him again. As a result, she borrowed against her mortgage and loaned him $35,000. She understood that this was going to a mortgage or bridge loan of some form, although she did not ask too many questions. She testified that Mr. Kapoor came up with the loan amount and the 6 month term and the rate of interest, which was $1,750 a month each month. Mr. Kapoor prepared the promissory note for this $35,000, which is part of Exhibit 9. It was signed at her home on April 10, 2015.

[58] Ms. D’Orazio agreed that the documentation she signed made clear that she was the lender and Mr. Kapoor was the borrower. She had experience with contracts as a senior accountant with a bank and agreed that she had read the promissory note and knew that what was written was the entirety of the contract between them.

[59] Ms. D’Orazio testified that none of this interest was ever paid to her and that the loan principal was not repaid to her.

[60] Ms. D’Orazio also testified that about two weeks after she made the $35,000 loan, she made a bridge loan to him for $12,500. There is no documentation before the court respecting this transaction. She thought the loan had been in cash.

[61] Later, Ms. D’Orazio did not hear from Mr. Kapoor for some time. Eventually she was able to contact the legal secretary who had assisted with her mortgage and who gave her the number of Lali Jaswal, a mortgage broker, Ms. D’Orazio called him and he introduced her to others who had loaned Mr. Kapoor money. She testified that she later met up with other investors and learned from them about what she viewed as the “extent of the fraud”. She said that a private meeting of 30 to 35 people was held at Mosto Vinho before the bankruptcy meeting. She said that they all discussed that they had lent Mr. Kapoor money and that he had disappeared and what had happened to them. They exchanged numbers and agreed to keep in touch and eventually decided to go to the police.

[62] She received a letter in the mail about Ms. Kapoor’s bankruptcy. She did not attend any bankruptcy meeting.

Evidence of Jacob Van Gelder

[63] Mr. Van Gelder is a 75 year old who continues to do contract work. He met Mr. Kapoor through Mr. Neves, whom he would help at Mosto Vinho.

[64] At some point in the latter part of 2013, he learned from Mr. Neves, or others at the store, about deals they were doing with Mr. Kapoor. Mr. Van Gelder told Mr. Kapoor that he might be interested in doing small loans. He thought he had started with a loan of $2,000 or $2,500, which he understood was for Mr. Kapoor to make loans to people for a mortgage. He received back the money he loaned and then made further loans. He estimated that in total, he had made 15 to 20 loans to Mr. Kapoor.

[65] Under cross-examination about what he understood the loans were being used for, Mr. Van Gelder said that Mr. Kapoor told him he was lending the money to other people as a third or fourth mortgage. He knew it was as a loan, and not as an investment. Mr. Van Gelder agreed that he never put any conditions on the loans. He also agreed that there was nothing in the promissory notes themselves that reflected what the loans were being used for. Finally, he agreed that he had read the promissory notes before signing them. He testified that he did not really understand that entirety of the agreement clause and was adamant that he believed that the money was being put into mortgages.

[66] For each loan, Mr. Van Gelder said that Mr. Kapoor decided the loan amount, the interest and the term. Mr. Kapoor prepared the paperwork and it was signed either at the wine store or Mr. Van Gelder’s home. Mr. Van Gelder had some of the relevant documents. However, he explained that often, as soon as the loan was paid, they would enter into another loan and that Mr. Kapoor took the documents back.

[67] Mr. Van Gelder agreed that at the beginning, he was happy with the business relationship and the rate of return. He agreed that he had been paid the interest, and said that sometimes he received the principal back. Other times he agreed to Mr. Kapoor keeping the principal and rolling it into the next loan.

[68] Three promissory notes reflecting loans by Mr. Van Gelder to Mr. Kapoor were filed as parts of Exhibit 10. The first was signed February 1, 2015 and was for a loan from Mr. Van Gelder and his wife to Mr. Kapoor for $50,000 with a one year term. Interest of $4,585 was to be paid on the loan at a rate of $1,147 quarterly. Asked how the loan amount of $50,000 was determined, Mr. Van Gelder explained that this was a consolidation of earlier, smaller outstanding loans.

[69] Mr. Van Gelder believed that the money was to be used for a loan to people who wanted a mortgage. He knew that Mr. Kapoor had a company that did mortgages.

[70] The $50,000 principal was not paid back. While it was possible that some of the interest on the smaller loans had been paid, none of the interest on this loan was ever paid.

[71] A second promissory note was signed on February 1, 2015 for a $40,000 loan to Mr. Kapoor with a one year term. This one had interest of 5% a month and payments of $2,000 monthly. Mr. Van Gelder agreed that this was also a loan consolidation and said that at that time he probably only loaned an additional $10,000. He never got any money back on this loan either, neither principal nor interest, though he may have received interest on the earlier loans before the consolidation.

[72] Mr. Van Gelder entered into a third loan with Mr. Kapoor on March 20, 2015 for $10,000 with a two week term, with $2,000 interest after the two weeks. Mr. Van Gelder did not really recall making this loan and did not recall being paid back for it.

[73] All of his loans to Mr. Kapoor were made in cash. It was suggested to Mr. Van Gelder that later on, he was only concerned about what the loan was going to make him and how much it was for, rather than what it was being put towards. He did not agree and testified that he never had any doubt that the money was going to mortgages, although he agreed that this was an assumption he made because Mr. Kapoor worked in mortgages. Ultimately, he agreed that while in 2013 Mr. Kapoor had said that the loans were for mortgages, later on this just did not come up between them. Under re-examination, Mr. Van Gelder clarified that while he did not ask the purpose of the loans later on, he was sure they were for mortgages.

[74] On March 27, 2015, Mr. Van Gelder and Mr. Neves made a joint loan of $5,000 to Mr. Kapoor, to be repaid on April 14, 2015 with $500 interest. A handwritten acknowledgement was signed by Mr. Kapoor. Mr. Van Gelder agreed that this loan was as a result of Mr. Neves calling him and asking him to go in on the loan. He agreed that there was never any discussion about what the money for this loan was being used for. He was not sure if he had been repaid for this loan.

Evidence of Donald Saraka

[75] Mr. Saraka is an 81 year old retired construction manager. He first met Mr. Kapoor when Mr. Kapoor worked as a bank financial manager in about 2009. They became re-acquainted at Mosto Vinho around 2013. Mr. Saraka went to the wine store to help Mr. Neves bottling wine and to socialize with others, including Jake Van Gelder and Leo Coelho.

[76] Mr. Saraka recalled Mr. Kapoor arranging a mortgage for Mr. Neves on his house. He recalled that what generally occurred was that Kapoor made offers to a group of them that he would borrow money from them and would repay them with a high rate of interest. Mr. Saraka understood that Mr. Kapoor needed money for clients who needed it for a quick turn around. He said that they did not question too much what the loans were for. He knew that Mr. Kapoor was a mortgage broker and that the money was being lent to him to help people who needed money fast to close transactions. Mr. Saraka agreed that he would have loaned the money even had he not been told any of the uses that Mr. Kapoor had for it as he trusted him.

[77] The practice was that Mr. Kapoor would indicate the amount of money he wanted to borrow and the interest rate. Mr. Saraka said that he would go to the bank and obtain cash for the loan, as Mr. Kapoor required cash. Mr. Kapoor prepared promissory notes which they signed. Mr. Saraka believed that he made his first loan to Mr. Kapoor in September 2013.

[78] Mr. Saraka testified that he did not have all of the documents respecting his loans to Mr. Kapoor and did not recall all of their transactions. A number of promissory notes signed by the two of them are contained in Exhibit 12 and 13, which reveal numerous loans beginning in September 2013. Many of these have handwritten notes on them that they were re-paid.

[79] Mr. Saraka said that in 2014, the interest on these loans was paid by Mr. Kapoor. Some of the principal amounts were paid back, but more frequently there were rollovers in which the principal was put into another loan. Mr. Saraka was satisfied enough in the period up until mid-2014 that he continued to make loans. He agreed that he was paid in cash and that both the cash payments and high interest rates were a benefit to him.

[80] I need not review the evidence respecting each of the loans made by Mr. Saraka to Mr. Kapoor. Mr. Saraka was assisted in his evidence by ledgers that he created respecting his various transactions with Mr. Kapoor. These are included at tabs 10 (for 2014) and 11 (for 2015) of Exhibit 12. He recorded the dates, amount of the loan, interest due date, whether interest was paid and whether the principal was repaid. Where loans were rolled over, he indicated this as well.

[81] Mr. Saraka conceded that as time went on in their relationship, there was not always discussion about where the funds were going. He agreed that he knew that what he was doing was making loans to Mr. Kapoor. He read the promissory notes and agreed that there was nothing in writing about what the money was to be used for, although he said that there was a verbal agreement early on, but that later even that was not needed.

[82] As I understand Mr. Saraka’s evidence, it is that beginning in 2015, he did not receive the payments he was owed by Mr. Kapoor. For instance, in respect of a one week loan he made on February 9, 2015 of $10,000 that was supposed to result in him being paid $1,000 interest, he thought he was paid only the interest, although he conceded under cross-examination that he might have also received the principal.

[83] For other loans made in 2015, Mr. Saraka testified that there were some for which interest was paid as due, some for which interest was not paid and a number for which the principal was never repaid. By way of example, they entered into a loan agreement on January 1, 2015 in which Mr. Saraka and his wife loaned Mr. Kapoor $35,000 for 6 months. This was due on June 1, 2015 with interest and principal of $36,750. Neither the interest nor the principal were paid. On the same day, they also entered into a second agreement for Mr. Saraka and his wife to loan to Mr. Kapoor another $35,000 for 6 months. This was also due June 1, 2015 with interest of $1,750 to be paid on the first day of every month. Mr. Saraka said that for this loan, interest of $7,000 was paid, representing the first four months but that after that interest was not paid, nor was the principal.

[84] Under cross-examination, Mr. Saraka agreed that the two $35,000 loans were a consolidation of loans he had previously made. After that, Mr. Saraka continued to make loans, indicating that he was satisfied with their financial relationship. For instance, on May 6, 2015, Mr. Saraka and his wife made a loan of $10,000 to be paid on May 8, 2015 with $2,000 interest. The last payments Mr. Saraka received from Mr. Kapoor were on May 8, 2015 when this loan principal was repaid and on May 15, 2015 when the interest was paid.

[85] After this, Mr, Saraka testified that he had no communication with Mr. Kapoor. He tried to call him and could not reach him and his calls were not returned. He then received a letter from Mr. Kapoor’s solicitor dated May 28, 2015. He testified that he was shocked by the letter because he had not set the rates of interest. He perceived this letter as a threat and as some sort of a scare tactic. He did not hear from Mr. Kapoor until he received a call from his bankruptcy lawyer.

The letter sent to some of the complainants

[86] As I have indicated, a letter dated May 28, 2015 was sent to a number of the witnesses from De Bousquet Professional Corporation in the name of Jean-Alexandre De Bousquest. In each letter, the writer set out that the loan or loans made to Mr. Kapoor had carried a criminal rate of interest and that lending money at a rate exceeding 60% per year is a criminal offence. The letter also provided that the agreements entered into failed to specify the yearly rate of interest, contrary to s. 4 of the Interest Act. Recipients were told that if they required further information, they were to contact Olga Chtcherbakova, the trustee in bankruptcy.

The bankruptcy proceedings

[87] Bankruptcy documents respecting Mr. Kapoor, dated June 2, 2015, were sent to a number of the witnesses. These documents include an unsigned form 79 Statement of Affairs. Among the creditors listed are those who testified at trial. There are a total of 40 creditors listed to whom Mr. Kapoor has a total of $1,511,150 owing in unsecured debt. This includes a total of $450,900 in debts to the witnesses who testified at trial:

Creditor

Amount of debt

Miguel Neves

$65,000

Leo Coelho

$69,150

Stan and Mary Plausinis

$20,000

Norman Hendrycks

$10,000

Ruth Renwick

$10,500

Angela D’Orazio

$53,000

Jacob Van Gelder and Kwai Ying Choi

$114,000

Donald and Bernice Saraka

$109,250

[88] As I have indicated, a number of witnesses testified about a meeting held between the creditors, Mr. Kapoor and the trustee-in-bankruptcy. By way of summary, Mr. Neves and Ms. Renwick understood from the meeting they attended that Mr. Kapoor had gambled their money away, though neither heard this directly from him. By contrast, Mr. Plausinis was sure that at the meeting Mr. Kapoor had told the creditors that he had gambled their money away.

The statement of the accused

[89] The Crown tendered a videotaped statement of Mr. Kapoor to police made on January 12, 2017 (Exhibit 1-A) and a transcript of that statement (Exhibit 1-B).

[90] In his statement, Mr. Kapoor acknowledges that he had been involved in sports betting or sports gambling and that more often than not he was losing. He told police he had sought help for it and was in counselling. Mr. Kapoor explains that it got to the point where it was impacting his whole family and that he was not spending time with his wife or children and that it was an addiction.

Applicable Legal Principles

[91] Mr. Kapoor is presumed innocent. The burden of proof is on the Crown. It is for the Crown to prove beyond a reasonable doubt that Mr. Kapoor is guilty of the offence charged. There is no onus on the accused to prove anything.

[92] The standard of proof beyond a reasonable doubt is an exacting one. It is more than probable or likely guilt. Indeed, proof beyond a reasonable doubt falls much closer to absolute certainty than it does to proof on a balance of probabilities. Ultimately, I may find Mr. Kapoor guilty only if I am sure that he committed the offence alleged.

[93] The parties agree that the essential elements of fraud were set out by the Supreme Court of Canada decision in R. v. Théroux, 1993 CanLII 134 (SCC), [1993] 2 S.C.R. 5 at paras. 13, 21-25. The Crown must prove the following:

That there was a dishonest act established by proof of deceit, falsehood or “other fraudulent means”;
There was a deprivation established by proof of detriment, prejudice, or risk of prejudice to the economic interests of the victim, caused by the dishonest act;
Subjective awareness that one was undertaking a dishonest act; and
Subjective knowledge that the dishonest act could have as a consequence the deprivation of another (which deprivation may consist in knowledge that the victim's pecuniary interests are put at risk).

[94] In terms of the actus reas, what constitutes a lie or deceitful act is assessed by reference to objective facts. What must be decided is whether the accused represented a situation to be of a certain character when it was not. Whether there has been “other fraudulent means” is also determined objectively, but with reference to what a reasonable person would consider to be a dishonest act: Théroux at paras. 14-15.

[95] The Supreme Court of Canada has recognized that dishonesty is difficult to define with precision. It connotes “an underhanded design which has the effect, or which engenders the risk of depriving other of what is theirs”. At its heart, “other fraudulent means” is “the wrongful use of something in which another person has an interest in such a manner that this other interest is extinguished or put at risk”. A use is “wrongful” in this context if it “constitutes conduct which reasonable decent persons would consider dishonest and unscrupulous”: R. v. Zlatic, 1993 CanLII 135 (SCC), [1993] S.C.J. 43 at para 19.

[96] As set out in various cases and summarized in Théroux, “other fraudulent means” includes: the use of corporate funds for personal purposes, non-disclosure of important facts, exploiting the weakness of another, unauthorized diversion of funds and unauthorized arrogation of funds or property.

Positions of the Parties

[97] The Crown’s position is that Mr. Kapoor engaged in deceit, falsehoods or other fraudulent means in order to induce the complainants to loan him money. The Crown says that he told the complainants that their money would be used for legitimate mortgages and short term loans to other people, but that he in fact used it to gamble. The Crown submits that the “dishonest act” element has been established in two ways: first, Mr. Kapoor deceived the complainants by telling them that he would use their money for one purpose, and then using it for another; second, Mr. Kapoor engaged in other fraudulent means by not disclosing the important fact that he was gambling the complainant’s money and diverting it for his own purposes, conduct that would lead a reasonable person to conclude that he engaged in dishonest activity.

[98] The Crown relies, in support of its position, on Mr. Kapoor’s confession to having a gambling addition. It also emphasizes his poor financial situation before his declaration of bankruptcy, including his desperation in pulling in more investors in early 2015, the fact that he vanished, and the fact that his counsel sent a letter to the complainants accusing them of having engaged in predatory loans with criminal interest rates. Together, the Crown says that this evidence supports its position that he knowingly engaged in deception.

[99] The defence submits that the Crown has not proven that Mr. Kapoor engaged in any acts of dishonesty because he made no written or oral misrepresentations about how the money he borrowed was going to be used. The defence says that the Crown has not proved that the funds were not used for the purposes Mr. Kapoor said they would be. The defence points out that there is no evidence from the complainants as to where their funds went and that most of the complainants acknowledged that they had a strong business relationship with Mr. Kapoor for over a year before he began having financial difficulties.

[100] Further, the defence disputes the fact that the evidence of Mr. Kapoor’s gambling and post offence conduct support the inferences sought by the Crown. The defence says that there is no evidence that the funds loaned to Mr. Kapoor were used to gamble and that he made no admission of this in his statement. It is submitted that the evidence does not prove that there was an admission by Mr. Kapoor of having gambled away the complainants’ money at the creditors’ meeting.

Analysis

[101] The issue to decide is whether the Crown has proven beyond a reasonable doubt that Mr. Kapoor engaged in dishonest acts by persuading the complainants to loan him money on the basis that their money would be used for one purpose when, in fact, he used it to gamble.

a) What Mr. Kapoor told the complainants about the reasons for the loans

[102] I begin by making findings about what exactly Mr. Kapoor told the investors about the investments they were making at the relevant time. On the basis of the evidence, I find:

a) Mr. Neves was clearly told early on why Mr. Kapoor needed the loans. He was told it was for short term loans for people in need of financing mortgages or paying credit card debts. Later on, he made an assumption that the loans were being used for the same reason, but was not specifically told so by Mr. Kapoor.

b) Mr. Coelho’s first investments in 2014 were on the basis of being told what Mr. Kapoor was using the funds for. This included for people who needed money for debt, taxes, mortgages or inventory. Later on, he did not ask, and was not really concerned with what the money was being used for. He was primarily concerned with the rates of return he was getting.

c) Mr. Plausinis did not begin investing until January 2015 at which time he was told by Mr. Kapoor that the money was being used for mortgages.

d) Mr. Hendrycks made two loans to Mr. Kapoor: the first was in March 2015, which he was told was to loan to a person who had to secure a shipping container: the second was to help a person buy landscaping materials.

e) Ms. Renwick was told early on that the loans were to help people with mortgages. By the time she made the loan that falls within the time frame in the indictment she was not asking Mr. Kapoor what the loans were for and their conversations were about whether she wanted to make a loan on his terms or not.

f) Ms. D’Orazio understood from Mr. Kapoor that the loans that she made to him in March and April 2015 were for mortgages or bridge loans.

g) Mr. Van Gelder made many loans to Mr. Kapoor in 2013 and 2014. He was told that they were being used for mortgages. Under cross-examination, he agreed that he had not been told that the later loans were for mortgages and that his belief that they were was based on an assumption.

h) Mr. Saraka was told when he began making the loans in 2013 that they were for mortgages. He conceded that he and Mr. Kapoor never discussed the purposes for the loans in the later part of their relationship.

[103] Generally, the complainants knew Mr. Kapoor to be a mortgage broker. The word amongst those who invested seems to have been that the loans they made to him were connected with that business. I have no hesitation in concluding from the evidence that early in their relationships with Mr. Kapoor, he told each of the complainants the purposes for which he was seeking loans. They agreed to loan him money on the basis that these purposes continued. For most, but not all of them, there was a belief that the loans were for short term mortgages. As the summary above makes clear, some of the complainants had their discussions with him during the time frame in the indictment. For others, the specific discussions were earlier, and the complainants, reasonably in my view, believed their subsequent loans continued to be for the same purpose or purposes.

[104] I accept that there was an “entirety of agreement” clause in the promissory notes that the complainants signed. It was clear to me that while each had read it and understood it, they continued to rely on what Mr. Kapoor had told them as to the reasons for the loans, notwithstanding that there was no reference to those reasons in the promissory notes. I do not think that this clause means that Mr. Kapoor, who had represented certain things to these trusting complainants, had carte blanche to use the loans for whatever purpose he chose. Generally, he continued to represent that the loans were being made for similar purposes throughout his relationships with these complainants.

[105] I accept that the complainants believed, as a result of what Mr. Kapoor told them, that their money was being used to assist those who needed short term finances and who could not otherwise obtain loans. I accept that their beliefs that this was the purpose of the loans was reasonable.

b) Was there deceit, falsehood or other fraudulent means?

[106] Given my view that the accused represented the situation to be that he would be using the loans made to him for one purpose, as set out above, the next issue is whether the Crown has proven that Mr. Kapoor engaged in a dishonest act, either by deceiving the complainants that he was using their money for one purpose when he was in fact using it to gamble, or by engaging in “other fraudulent means” by not disclosing that he was diverting the money for gambling. In either case, the Crown must prove that the loaned money was gambled by Mr. Kapoor.

[107] There is certainly some evidence to suggest that Mr. Kapoor may have gambled the money he borrowed. That evidence includes:

i) Mr. Kapoor’s financial situation by May 2015

[108] I accept the Crown’s submission that by May 2015, when he declared bankruptcy, Mr. Kapoor was in financial ruin, with debts over $1.5 million owed to more than 40 different creditors. This suggests, without doubt, that he had lost the money he had borrowed from the complainants in this case, as well as the money of others. It does not, however, mean that he did so gambling.

[109] Similarly, while I agree with the Crown’s position that the consolidation of outstanding loans for such investors as Mr. Van Gelder and Mr. Saraka, as well as the utilization of new lenders such as Mr. Plausinis and Mr. Hendrycks in early 2015, suggests that things were not going well for Mr. Kapoor financially, I am not persuaded that it can reasonably be inferred from this evidence that Mr. Kapoor was gambling the money away.

[110] I agree that Mr. Kapoor’s financial position had deteriorated by 2015. This, alone, does not advance the Crown’s position that the money had been gambled.

ii) Mr. Kapoor’s disappearance and the letter respecting predatory loans

[111] I accept that none of the complainants were able to contact Mr. Kapoor in the spring of 2015. The evidence as a whole suggests that he was avoiding them. I accept that he did not return their phone calls or respond to their efforts to track him down. Similarly, Mr. Kapoor authorized the letter sent from counsel Jean-Alexandre Bousquet to the various complainants suggesting that they had engaged in predatory loans. I understand why the complainants might, reasonably, have viewed this letter as threatening. At a minimum, it made little sense given that Mr. Kapoor had been the one who set the terms of the loans, including the interest rates.

[112] One inference that might be drawn from these letters is that Mr. Kapoor was trying to scare creditors away because he knew he had defrauded them. Similarly, he might have disappeared because he knew he had defrauded them.

[113] In my view, however, there are other reasonable explanations for Mr. Kapoor not wanting to speak with the complainants personally as his finances were unravelling, and in the time frame before he had declared bankruptcy. The fact that he might have gambled their money away is just one reason. An equally plausible explanation is that he received advice from counsel not to discuss the matter, regardless of the explanation as to how the money had been lost. Similarly, it could well be that the letter sent to the complainants, while it might have been perceived by some of them as threatening, was being sent to advance Mr. Kapoor’s position on the bankruptcy.

[114] I cannot draw from this evidence the inference that the Crown seeks.

iii) Mr. Kapoor’s alleged confession

[115] The Crown suggests that Mr. Kapoor confessed to gambling in his statement to police and that he confessed to the creditors that he had lost their money gambling.

[116] I agree that Mr. Kapoor told the police that he had an online sports gambling addiction. One possible inference that is available from this is that he used the money from the complainants in furtherance of this addiction and gambled it away. I accept that this is possible, even likely. But to be clear, he never told the police that this was the case.

[117] I also accept that a number of the complainants understood that Mr. Kapoor had a gambling problem and believed that he had gambled their money away. It seems that at a creditors’ meeting that was conducted after the complainants were aware of the bankruptcy, attended by some of them, there was some discussion about Mr. Kapoor having lost money through gambling.

[118] That said, the evidence does not persuade me that Mr. Kapoor in fact confessed to having gambled the money away. I reach this conclusion after carefully reviewing the transcripts of the witnesses who said that they were at a meeting. Those witnesses were Mr. Plausinis, Ms. Renwick and Mr. Neves.

[119] Mr. Plausinis clearly testified he recalled Mr. Kapoor saying that he had gambled their money away. He was unshaken in that assertion. I found that Mr. Plausinis, generally, had a good recollection of the issues about which he testified and was credible.

[120] Ms. Renwick learned of Mr. Kapoor’s gambling problem at the bankruptcy meeting, but was not sure from whom and thought it had been from the trustee. She certainly could not say that she heard it from Mr. Kapoor.

[121] Mr. Neves testified that it was the bankruptcy people who gave him the idea at that meeting that Mr. Kapoor had a gambling problem and had gambled their money. Again, he did not suggest that he heard this from Mr. Kapoor.

[122] It seems to me that, in the context of the discussion about Mr. Kapoor’s gambling, if he had admitted to having gambled their money away, as Mr. Plausinis suggests, this would have been significant and important information that Mr. Neves and Ms. Renwick would have remembered. Neither suggested that this was the case.

[123] No evidence was provided from anyone else at the creditors’ meeting, including any representative of the trustee, A. Farber & Partners Inc., as to what, if anything, Mr. Kapoor said at the first meeting of creditors.

[124] I am not persuaded that the Crown has proven that Mr. Kapoor said what Mr. Plausinis recalls him having said. I accept that there was discussion about Mr. Kapoor having a gambling problem. I accept that Mr. Plausinis honestly believes he heard a confession. But, on the basis of the evidence as a whole, I am not satisfied that Mr. Kapoor confessed to having gambled the money away. He may have, or someone else may have said he had a gambling problem. I just cannot be sure.

[125] As I have indicated, the evidence presented by the Crown suggests to me that Mr. Kapoor may well have taken the money he borrowed from the complainants’ and gambled it away. There is, however, a real absence of evidence including:

a) Any evidence as to what was done with the funds that Mr. Kapoor borrowed. I accept that he borrowed the funds the complainants described. But there is just no evidence as to what he did with it – no bank records, no computer records, no financial records. I have no evidence to prove that he was dishonest about what he did with the money.

b) Any evidence that Mr. Kapoor gambled any money at the relevant time. There is no evidence respecting any money going in or out of his bank accounts. Certainly, there is no evidence of him spending money on online gambling over the course of the relevant time period. There is evidence, first, of an admission of a gambling problem on January 12, 2017 for which he was receiving counselling and, second, an indication that his gambling issues were discussed at the first creditor meeting as the cause of the creditors’ losses. I cannot find this to be proof that the money was gambled away.

iv) Conclusion on whether dishonest acts have been proven

[126] It is common ground that in late 2013 and through much of 2014, Mr. Kapoor engaged in business relationships that involved him borrowing money at high rates of interest and paying back to the lenders both the interest and much of the principal on the terms they agreed to. The complainants who dealt with him in this period were generally content with their arrangement, so much so that they recommended investing with him to friends and relatives. They trusted him and, reasonably, expected that their money was being used for the purposes that he had spoken about to them and to others.

[127] What Mr. Kapoor was actually doing with the money he borrowed during this time period has not been proven and is really unknown.

[128] I accept that Mr. Kapoor’s situation appears to have changed in later 2014 and by early 2015, as evidenced by the fact that he was consolidating loans, seeking out new investors, and was sometimes not paying the interest he had committed to or the principal amounts when they were due. He did make some payments to some lenders though, including repaying to Mr. Saraka and his wife a $10,000 loan made in May 2015 with the owed $2,000 interest.

[129] Whether the failure on Mr. Kapoor’s part to make interest payments and repay loan principals as he should have during the period of the indictment was because he was lending the money to people who defaulted on their payments to him, or because he was gambling the money away, is not clear to me. I have no evidence respecting what happened with the money loaned by the complainants over the relevant time period that was not repaid. On the basis of the evidence that I do have, I cannot draw the inference that the money was gambled away.

[130] The Crown relies on the case of R. v. Zlatic in support of its position that if Mr. Kapoor drew from a pool of money that included the complainants’ money, for the purpose of gambling, there is a sufficient connection between Mr. Kapoor’s dishonest activity and the loss of the complainants’ money to prove the offence. I accept the position that if a person gambles away funds in which others have a pecuniary interest, that person knowingly puts that interest at risk and would be guilty of fraud. My concern in this case is the absence of evidence from which to conclude that Mr. Kapoor in fact gambled any of the complainants’ money away. He may well have. But he may not have. The evidence does not persuade me of this point beyond a reasonable doubt.

Conclusion

[131] I have no hesitation in concluding that Mr. Kapoor took advantage of the people who trusted him. Drawn by the prospect of high interest rates, and cash profits, the complainants believed that their investments with Mr. Kapoor were not only safe, but profitable. They took a risk that they calculated was small. He lost their money. Mr. Kapoor has acknowledged, through his bankruptcy, that he is indebted to each of the complainants because he borrowed money from them that he did not repay.

[132] A finding that this amounts to the criminal offence of fraud requires the Crown to prove beyond a reasonable doubt that Mr. Kapoor committed a dishonest act, as that term is properly understood. If the Crown had proved that Mr. Kapoor had borrowed the money on the basis that he was making loans, and then gambled it away, I would have been satisfied that a fraud had been established. The real difficulty with the Crown’s case, however, is the absence of evidence that Mr. Kapoor gambled the complainants’ money away, or even that he used their money for purposes other than what he told them. I think he probably did so. But I am not sure. On this basis, he must be acquitted.

Woollcombe J.

Released: January 29, 2021

COURT FILE NO.: CR-18 -1122

DATE: 20210129

ONTARIO

SUPERIOR COURT OF JUSTICE

HER MAJESTY THE QUEEN

– and –

KULDEEP KAPOOR

REASONS FOR JUDGMENT