Court File and Parties

COURT FILE NO.: CR-21-9-082 DATE: 20230224 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: United States of America. APPLICANT

AND:

ANTON Vikharev respondent

BEFORE: S.F. Dunphy J.

COUNSEL: Christopher Bundy, for the A-G Canada for the United States Boris Bytensky, for the Defendant Anton Vikharev

HEARD at Toronto: February 3, 2023

Reasons for Decision

[1] The Attorney-General of Canada brings this Application pursuant to s. 29 of the Extradition Act, S.C. 1999, c. 18 on behalf of the United States of America seeking an order committing the respondent Anton Vikharev into custody to await the Minister’s decision on whether he should be surrendered to the United States of America for extradition.

[2] The evidentiary record upon which this Application proceeded, consisted of (i) the Certified Record of the Case dated July 16, 2021; and (ii) the Authority to Proceed dated August 26, 2021 of the Minister of Justice pursuant to s. 15 of the Extradition Act. The latter document certified that the Canadian offence corresponding to the conduct for which the United States seeks the extradition of Mr. Vikharev is that of money laundering contrary to s. 462.31 of the Criminal Code.

[3] In order to make an order of committal, s. 29(1)(a) of the Extradition Act requires me to be satisfied that (i) there is evidence admissible under the Act of conduct that, had it occurred in Canada, would justify committal for trial in Canada on the offence set out in the Authority to Proceed; and (ii) that the person before me is the person sought by the United States.

[4] For the reasons that I shall expand upon below, I find that the requested Order of Committal pursuant to s. 29 of the Extradition Act must be made. I find that the prisoner before me, identified as Mr. Anton Vikharev, is the same Anton Vikharev sought by the United States. Mr. Vikharev’s counsel did not dispute identification before me and I am satisfied from a visual comparison of the photographs of Mr. Vikharev presented in the Record of the Case to the prisoner before me that they are one and the same person.

[5] I am also satisfied that the Record of the Case contains sufficient evidence admissible pursuant to s. 32 of the Extradition Act of conduct of Mr. Vikharev which, had it occurred in Canada, would justify his committal for trial in Canada on a charge of money laundering contrary to s. 462.31 of the Criminal Code.

[6] The evidence establishes that the United States Treasury was defrauded by means of fraudulently filed tax returns pursuant to which tax refunds were paid to certain bank accounts in New York, New Jersey and Pennsylvania. Particulars of 12 such fraudulent tax refund claims made in January and February of 2017 are detailed in the Record of the Case along with evidence that the relevant taxpayers will testify that the refund claims were made without their knowledge or authority. In each of these twelve cases, banking records and ATM photographs evidence Mr. Vikharev withdrawing from the accounts into which the refund amounts were deposited all or substantially all of the refunds so deposited within a few days of the deposits being made. The withdrawals were made at different ATM machines and over multiple transactions as required to withdraw the balance deposited. The bank records indicate that Mr. Vikharev was not the named holder of any of the accounts from which such withdrawals were made.

[7] The Record of the Case contains additional details of (i) 53 refund applications made between 2012 and 2017 using false forms, each of which directed the payment of refunds to a particular identified account (#8882); (ii) two such false claims made in 2015 with refunds directed to a different account (#3761), (iii) six such false claims with refunds directed to a different account (#4242); (iv) three such false claims with refunds directed to a different account (#8090); and (v) three such false claims with refunds directed to a different account ((#4162).

[8] ATM records evidence Mr. Vikharev withdrawing some funds from each of the five listed accounts into which the proceeds of the 67 fraudulent refund applications referenced in the preceding paragraph were deposited within a few days of refunds being paid into such accounts although Mr. Vikharev was not the only person withdrawing such proceeds. In some instances, the surveillance evidence indicates that Mr. Vikharev withdrew the proceeds in question in the presence of one of the co-conspirators named in the Record of the Case (but who are not objects of this extradition proceeding).

[9] I have concluded that the evidence summarized in the Record of the Case establishes with clarity that the funds deposited into each of the described bank accounts were proceeds of a fraud upon the United States Treasury – the funds paid having been applied for on the basis of fraudulent representations or statements. The funds so deposited thus represented proceeds obtained or derived directly or indirectly as a result of the commission of the designated offence of fraud contrary to s. 380 of the Criminal Code had the offence occurred in Canada.

[10] The actus reus of the offence of money laundering pursuant to s. 462.31 of the Criminal Code is complete when a person “alters, disposes of or otherwise deals with in any manner and by any means” property or proceeds “obtained directly or indirectly as a result of …(b) an act…anywhere that, if it had occurred in Canada, would have constituted a designated offence”.

[11] Fraud is a designated offence. The Record of the Case provides evidence from which it might reasonably be concluded that that the funds deposited into each of the accounts described above was, when deposited, proceeds of fraud. By withdrawing the funds from the accounts into which they were deposited, Mr. Vikharev converted what was formerly a credit balance created by each such deposit into each account into cash in his hands. The location, control over and form of the property was thus altered or disposed of by the act of withdrawing it from the account into which the victim of the crime (the US Treasury) had placed it. Thereafter, the proceeds no longer resided in the original account but were converted to cash under Mr. Vikharev’s direct control.

[12] There can be no serious question that the Record of the Case discloses sufficient evidence to commit as regards the actus reus of the designated offence in the Authority to Proceed.

[13] The mens rea element of the offence of money laundering applicable in this case requires evidence that the accused person had the “intent to conceal or convert that property or proceeds, knowing or believing that, or being reckless as to whether, all or a part of that property or those proceeds was obtained directly or indirectly as a result of” the commission of a designated crime (or what would be such a crime if committed in Canada).

[14] The central question to be resolved is whether the evidence in the Record of the Case provides sufficient evidence of the required mens rea to commit.

[15] In my view it does. It is not my task on this Application to weigh the evidence presented nor to assess the strength of any defences that Mr. Vikharev may have. After satisfying myself on the question of identification, my role is restricted to considering whether the evidence presented is admissible pursuant to the standards of admissibility prescribed by the Extradition Act and thereafter to consider whether the admissible evidence so presented clears the very limited threshold of being sufficient to justify committal were the offence in question to have occurred in Canada.

[16] Establishing knowledge in a criminal case very often requires resort to circumstantial evidence of the things that the accused person knew. Such evidence may include things seen or heard by the accused person and things done by the accused person. In the present case, there is ample evidence that Mr. Vikharev knew or was willfully blind to the fact that the funds in the accounts from which he withdrew money represented the proceeds of crime and that by withdrawing such funds from the account he intended the usual and ordinary consequences of his actions to occur i.e. that the funds so withdrawn were being converted from one form into another. It is not required that he know all of the details of the unlawful scheme which gave rise to the proceeds. He is required only to know that the amounts in question were “proceeds…obtained or derived directly or indirectly as a result of…an act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence” (emphasis added).

[17] Among the circumstantial evidence supporting the inference of Mr. Vikharev’s possession of the requisite degree of knowledge that the funds in the accounts were proceeds of crime is the following:

a. The evidence that the withdrawals were made from 12 different accounts in three states; b. The evidence that Mr. Vikharev was not listed as owner of any of the 12 accounts in question; c. The evidence that each such account received the proceeds of fraudulent tax refund claims from different taxpayers and that the taxpayer in whose name each such refund claim was made was not the owner of record of any of the accounts into which the funds were deposited; d. The additional evidence of 67 additional fraudulent tax refund claims resulting in deposits of fraudulently obtained refunds to five separate accounts; e. The evidence of Mr. Vikharev removing funds from each of those five accounts within days of certain of the 67 refunds claims being paid into such accounts; f. The evidence that within a small number of days of the refunds being paid into the accounts, Mr. Vikharev withdrew all or substantially all of the refund amounts so deposited, usually in several separate transactions from different ATM’s over a short period of time; g. The evidence that on at least one such occasion, Mr. Vikharev was observed arriving at the ATM in a vehicle registered in the name of a named co-conspirator who effected another transaction that same day in another account at the same branch used in connection with the described scheme.

[18] My task does not require me to consider how a jury might apply R. v. Villaroman, 2016 SCC 33, [2016] 1 SCR 1000 to possible innocent inferences that might be drawn from this same body of evidence although I would note that there is simply no evidence at all to support any of the innocent inferences suggested by Mr. Bytensky. There is some evidence of all of the essential elements of the designated offence in the Authority to Proceed. In my view, the evidence in the Record of the Case summarized above is clearly sufficient to satisfy the requirement of s. 29 of the Extradition Act and the requested orders must accordingly be made.

[19] Although not necessary to support my conclusion on this Application, there is in fact a great volume of additional evidence of what might be characterized as the broader scheme that both supports the inference of the necessary mens rea of the offence and provides evidence of additional acts by Mr. Vikharev capable of supplying the necessary actus reus as well. While Mr. Bytensky noted various gaps in this part of the evidence, it should be noted that the standard for committal is “some evidence” and it is neither necessary nor appropriate for me to undertake a weighing of that evidence. I shall briefly summarize that body of additional evidence below.

[20] I have already mentioned the evidence of the 67 fraudulent refund claims with proceeds deposited into five separate accounts each of which was accessed by Mr. Vikharev on one or more occasions. The Record of the Case does not purport to establish that Mr. Vikharev personally filed any of the refund claims or that he personally withdrew all of the refund amount from the five accounts. Rather, it provides evidence that he accessed each such account on one or more occasions during the lifetime of the scheme. The Record of the Case also contains evidence from which it might be inferred that Mr. Vikharev opened accounts with a United States bullion dealer “APMEX” in his own name funded from a PayPal account named “vikhar”. This account was used to purchase a total of $537,009.01 in gold from Apmex between April 2016 and January 2019 in a large number of transactions ranging in size from under $500 to some just below $25,000. The gold so purchased was shipped to two addresses in New Jersey and one in Pennsylvania. The Record of the Case contains evidence that Mr. Vikharev sold gold bullion to a different bullion dealer named Kitco and received proceeds of the sale into an account of his in the United States which was used by Mr. Vikharev to wire funds to Russia in various names. Other sales of gold to Kitco were made by one or the other of the co-conspirators named in the record of the case.

[21] The Record of the Case does not purport to contain evidence directly tracing with certainty the origin of the funds in the PayPal account of Mr. Vikharev that was used to fund the APMEX bullion purchases nor could it possibly trace the gold shipped to Mr. Vikharev into the gold sold by him or his co-conspirator to Kitco. It does contain evidence of Mr. Vikharev’s involvement with the other three named co-conspirators in the described scheme to defraud the United States Treasury of millions of dollars over a period of several years, evidence from which it might be inferred that Mr. Vikharev acted with such co-conspirators in pursuit of the common goal of carrying out such scheme and evidence that Mr. Vikharev had no other declared sources of income during the same time frame. A jury assessing this or any other case would look to the totality of the evidence and the inferences that can reasonably be drawn from it. A court hearing an extradition request is not tasked with supplanting the role of the jury nor with weighing the strength of the evidence from which such inferences may or may not ultimately be reasonably drawn. It is enough if there is evidence from which such an inference might be drawn and clearly there is some such evidence here.

[22] These Reasons for Decision shall constitute my report to the Minister referenced in the formal Report to the Minister signed by me today pursuant to s. 38(1) of the Extradition Act. Concurrent with the signing and delivery of these reasons to counsel and Mr. Vikharev and my Report to the Minister, I have also signed the requested Order of Committal.

[23] Mr. Vikharev was before me in court when these reasons were delivered. I advised him as required by s. 38(2) of the Extradition Act that he will not be surrendered until after the expiry of 30 days and that he has a right to appeal the order and to apply for judicial interim release.

S.F. Dunphy J. Date: February 24, 2023