COURT FILE NO.: CV-22-00676718-0000 DATE: 20230413
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
ATTORNEY GENERAL OF ONTARIO Applicant
– and –
$270,313 IN CANADIAN CURRENCY (IN REM) Respondent
Counsel: Susan Keenan and Wan Yao Chen for the Applicant Lusi Brace for Dimitri Kellesis
HEARD: April 11, 2023
Dineen J.
[1] In this application, the Attorney General of Ontario seeks the forfeiture of $270,313 as proceeds of crime pursuant to the Civil Remedies Act, 2001. The money in question was seized by the police during the execution of a search warrant at 2374 Chilsworth Avenue in Mississauga. The target of the search was Dimitri Kellesis and the money was found in his bedroom. He contends that he was involved in no illegal activity and that the money constitutes his parents’ life savings and the bulk of his savings from legitimate sources.
The Evidentiary Record
[2] The money at issue was seized on December 12, 2019, pursuant to a warrant issued in connection with a broad joint forces investigation into illegal gambling. Mr. Kellesis was alleged to be involved in operating a strip mall unit located at 680 Silver Creek Boulevard, Unit 9 in Mississauga linked to a large illegal gambling operation.
[3] Through surveillance and undercover activities, the police had gathered extensive evidence of a gambling ring that operated through websites that permitted the placing of illegal bets on sports. While the bets were placed online, access to the websites required credentials provided by bookies linked to the ring. Accounts were settled in person in cash, and bookies remitted their earnings less a commission to higher-ups in the ring and ultimately to its leaders who were members of an organized crime group. Agents of the ring used intimidation and violence to collect debts from bettors.
[4] The Applicant introduced considerable evidence that Unit 9 at 680 Silver Creek Boulevard was used as one of several physical locations for the management of this illegal gambling operation and for the collection and dispensing of money. In the course of their investigation, the police obtained general warrants to surreptitiously enter the unit and obtain documents and electronic data; a warrant to track the wireless internet use from the unit and an assistance order to identify the users of the sites through subscriber information associated to cell phone numbers and IP addresses; general warrants to access and acquire data for illegal gambling websites used by the targets of the investigation; and tracking warrants for cell phones and vehicles. An undercover operation also resulted in officers being invited into the unit and discussing the gambling ring’s practices with a bookie who used that location.
[5] Evidence acquired through the investigation related to the unit in question includes:
- Data showing that the wireless internet at the unit continually accessed illegal gambling websites with multiple user names used to track the summaries of bets placed by individual bettors linked to different bookies.
- Covert entries pursuant to a general warrant revealed a Samsung tablet used to access two of the illegal gambling websites, a money-counting machine, and a black binder with ledgers.
- OPP officers conducting surveillance saw many figures linked independently linked to the gambling operation attend the unit. One, Giorgio Campagna, was seen to attend weekly on Wednesdays and leave with a bag. On one occasion he went directly to a bank branch and deposited a large stack of cash.
- Undercover officers who were invited into the unit were told it was a “members only” club containing two televisions, a card table, and juice and chips for members. Officers were able to place bets through the website and paid cash for gambling losses to a bookie at the unit. The bookie described the operation including the remitting of his profits to organized crime figures and the use of violence to collect debts.
[6] Mr. Kellesis was observed by surveillance officers and a camera installed pursuant to a general warrant attending the unit on an almost daily basis and was seen using the money counter. He was also seen to lock doors at the end of the day and was sometimes seen carrying a tablet or a book police believed was a ledger when he left.
[7] Search warrants were executed at Unit 9 of 680 Silver Creek and at 2374 Chilsworthy Avenue, among other places, simultaneously on December 12, 2019. At Unit 9, the police seized documents that appear to be debt lists, video gaming terminals used for illegal gambling, items used to gamble such as cards, dice, and poker chips, and a holster and ammunition.
[8] The money at issue in this proceeding was seized from a bedroom that is agreed to belong to Mr. Kellesis, who shared the residence at 2374 Chilsworthy with his mother Sotira. This included $1910 found in a pair of jeans, $17,551, $425 U.S., and 600 Euros bound with elastic bands in a “fanny pack” bag found in the closet, and $250,000 in a gift bag found under the bed. The money in the gift bag was primarily bound with elastics in bundles of $10,000 but also included two bundles of $20,000 bound with Bank of Montreal bands [1]. The money was almost exclusively polymer bills, which were introduced in 2011.
[9] Also found in the bedroom were many apparent debt lists handwritten on post-it notes. Some contain apparent calculations with items including “machines”, “payroll”, and “paid back” and expenses including food and coffee. The Applicant notes that the list of debts includes amounts next to names that also appear on ledgers seized from 680 Silver Creek and that are nicknames associated with bookies linked to the gambling operation. Some of the notes also include what appear to be lists of odds for college sports contests.
[10] Mr. Kellesis was charged together with many co-accused with offences involving illegal gambling. These charges were ultimately stayed on December 16, 2021 by McPherson J. of the Ontario Court of Justice on the basis that the delay in trying the case violated Mr. Kellesis’s right under s. 11(b) of the Canadian Charter of Rights and Freedoms.
[11] Mr. Kellesis swore an affidavit for this proceeding and tendered supporting affidavits from his mother Sotira Kellesis, his sister Lisa Elisak, his daughter Kristina Faye Gluvakov, and a friend named Trevor Rosenberg.
[12] In short, Mr. Kellesis denies any involvement in illegal gambling. He says that he kept such a large amount of cash in his bedroom because of a mistrust of banks. He came to Canada from Czechoslovakia as a child and the family’s assets were all seized by the government upon their departure from that country. This left the family suspicious of financial institutions and governments. Mr. Kellesis says this attitude was reinforced by an experience in the late 1970s when he sought to withdraw $15,000 in cash from his account to buy a car and was told it would take up to five business days to receive the money. Mr. Kellesis says that he thereafter preferred to keep the bulk of his money in cash to ensure speedy access.
[13] According to Mr. Kellesis, the money in his bedroom came from several sources. First, it includes the life savings of his mother and now-deceased father, who would give him their saved income to store each time they accumulated $5000. Their total savings according to Mr. Kellesis and supported by the evidence of his mother and sister is $75,000. Mr. Kellesis also claims to have won $100,000 at a casino more than 20 years ago, though he was unsuccessful in obtaining any documentation of this. Mr. Kellesis also says that he saved money from employment when he worked in construction before retiring.
[14] As for the apparent debt lists, Mr. Kellesis testified that he would frequently lend money to friends and family on an interest-free basis and was sometimes paid back in cash. Some of the money came from cash repayments from Mr. Rosenberg and Mr. Kellesis’s daughter for loaned money advanced, in whole or in part, in the form of a bank draft. While all of these loans had been paid back before the execution of the warrant, Mr. Kellesis is a hoarder and rarely throws out old documents and so kept lists of his old debts. He also suggested that the lists containing entries apparently referring to machines may not be written by him.
[15] Mr. Kellesis testified that his regular presence at Unit 9 of 680 Silver Creek had nothing to do with gambling. He saw it as a café and went there to socialize with friends having recently retired from work. He would bring his tablet not to access gambling websites but to play a video game called Clash of Clans for many hours on end.
The Statutory Framework
[16] Section 3(1) of the Civil Remedies Act, 2001 provides that, subject to a third party proving a claim to be an uninvolved interest holder of the property, the court “shall” make an order forfeiting any property found to be proceeds of unlawful activity except where it would clearly not be in the interests of justice. Section 8 is an equivalent provision for “instruments” of unlawful activity.
[17] There is no requirement that the Attorney General prove any particular offence and no criminal charges or convictions are required as a prerequisite for a forfeiture order. The Attorney General must prove on a balance of probabilities that the property was acquired from crime in general: Ontario (Attorney General) v. Chatterjee, 2007 ONCA 406.
Analysis and Conclusions
The Affidavit of Detective Constable Brants
[18] The primary affidavit tendered by the Applicant comes from a police officer, Detective Constable Brants, involved in the investigation. This affidavit reviews the history of the investigation and attaches much of the relevant evidence gathered by the police.
[19] D.C. Brants also offers many opinions in her affidavit. These include her opinions about what the evidence shows Mr. Kellesis’s role was in the illegal gambling operation as well as many opinions derived from her experience in similar investigations about the significance of the use of cash, debt lists, and currency counting machines. There was no attempt to qualify D.C. Brants as an expert. The Applicant submits that this opinion evidence is admissible pursuant to the Supreme Court of Canada’s decision in R. v. Mackenzie, 2013 SCC 50, arguing that this decision permits police officers to offer such evidence derived from their experience without being qualified as expert witnesses. I disagree.
[20] The police opinion evidence in MacKenzie was offered during a Charter voir dire where the issue was the sufficiency of the officer’s grounds for a detention and search. Accordingly, the officer’s opinions went to a component of the legal test being applied and the Court held that the knowledge derived from his training and experience were relevant to the reasonableness of his beliefs.
[21] I take no issue with the admissibility of this sort of opinion in proceedings where the issue is one of reasonable grounds. But the issue before me is not whether D.C. Brants has reasonable grounds to believe that the money in question is proceeds of illegal activity, it is whether the Applicant has established that it is proceeds of illegal activity on a balance of probabilities. In my view, the opinions in D.C. Brants’s affidavit are not admissible on this issue and I have not considered them.
Mr. Kellesis’s Explanations for the Seized Cash
The General Credibility of Mr. Kellesis’s Evidence
[22] I have concluded that Mr. Kellesis is not a credible witness and I do not accept his evidence about the origin of the money found in his bedroom.
[23] I can accept his evidence, corroborated by several other witnesses, that he limited his use of banks at least in part as a result of his own and his family’s life experiences. However, his evidence about his regular presence at 680 Silver Creek was inherently implausible and contradicted by the bulk of the other evidence.
[24] It is not credible that he spent many hours virtually every day at this “café” as a mere social visitor who socialized or sat by himself playing a mobile video game and was entirely unaware that any gambling was taking place. This location was clearly a gambling hall with obvious gambling paraphernalia and Mr. Kellesis’s claim brings to mind Captain Renault in Casablanca. I do not accept that Mr. Kellesis was this unobservant. The fact that he was often the last to leave and locked the unit together with his possession of handwritten documents that manifestly relate to the financial management of the gambling business that was conducted, together with the intercepted phone conversations strongly implying that he helped manage the café, in my view amply prove on a balance of probabilities that he was earning illegal income from the operation and that his regular presence there was for this purpose [2]. Mr. Kellesis had no plausible alternative explanation for this body of evidence.
[25] This conclusion is reinforced by Mr. Kellesis’s cross-examination on this subject. He was exceptionally argumentative and evasive when asked about his attendance at 680 Silver Creek. When asked whether he did things like count cash or leave cash envelopes behind the bar as police officers reported, he sometimes demanded to see photographic proof. Similarly, he initially refused to confirm whether he had access to the back office without seeing a picture of him there. When asked about another police observation of him handling money, he replied “… you have no proof that I was doing anything illegal.”
[26] In my view, it was clear from his cross-examination that Mr. Kellesis was not being candid in his evidence and had no intention of admitting anything that he believed the Applicant could not independently prove. This leads me to place no reliance on his testimony unless it is corroborated by other credible evidence. I accordingly place no weight on his evidence that the cash in his room included legitimate savings from old employment and winnings from the casino.
[27] I am satisfied on a balance of probabilities that proceeds of crime from the 680 Silver Creek gambling operation were stored in Mr. Kellesis’s bedroom.
The Loan Repayments
[28] Mr. Kellesis did lead supporting evidence from his daughter and Mr. Rosenberg that he advanced them money at least partially in the form of bank drafts and had them repay cash, Mr. Rosenberg saying that he withdrew this money from the branch of the Bank of Montreal noted on the bands found around two of the bundles in Mr. Kellesis’s room. The Applicant submits that their evidence is not credible, noting that Mr. Kellesis and Mr. Rosenberg have not been wholly consistent in their accounts of how much cash was paid and that a bank statement from Mr. Rosenberg purportedly showing the cash withdrawal appears to reflect a cheque being cashed. The Applicant also relies on an intercepted telephone call in which Mr. Kellesis appears to say that his daughter did not repay him.
[29] I find that I do not need to draw any final conclusions about the credibility of these supporting witnesses because there is no credible evidence that the source of these loans was legitimate income or savings from Mr. Kellesis. Assuming that some of the specific bills in the bedroom came from loan repayments, I find on a balance of probabilities that the original source of the money used to make the loans was proceeds of crime and so this provides no answer to this application.
The Savings of Mr. Kellesis’s Parents
[30] Mr. Kellesis also filed supporting evidence for his claim to be keeping $75,000 on behalf of his mother Sotira. Mr. Kellesis’s father died in 2012. Sotira testified that she and her husband would keep their cash savings in the bedroom that ultimately became their son’s because it had a lock. She is now 92 years old and moved out of the bedroom for accessibility reasons but continued to give money to her son to keep in the locked room.
[31] Mr. Kellesis’s sister Lisa Elisak corroborated this evidence. She testified that she kept track of how much of their parents’ money her brother was keeping because she expected to receive her own share of the savings eventually and her mother would advise her every time she gave $5,000 to Mr. Kellesis to add to their savings.
[32] The Applicant challenges the credibility of this evidence as well. Counsel notes that in cross-examination both witnesses acknowledged that they did not know how much money Mr. Kellesis was keeping in total in the bedroom. I do not consider this inconsistent with their position that they did know how much he had on his mother’s behalf. It is reasonably possible that Mr. Kellesis kept a store of cash in his bedroom that combined his own illegal income with money from other sources including his family.
[33] More significantly, the applicant points out that the bills seized were polymer bills dating from 2011 or later, and that the evidence of Mr. Kellesis and his family was that the cash savings attributable to his parents began to be accumulated in the 1970s.
[34] When challenged on this point in cross-examination, the witnesses said that Mr. Kellesis would change old bills periodically. Ms. Elisak linked this to his mistrust of banks, saying that Mr. Kellesis would express concern that old bills might not always be honoured in the future and would change them when new types of bills were introduced.
[35] The Applicant notes that Mr. Kellesis offered a number of different explanations in his evidence for the age of the bills and that none of these witnesses volunteered evidence about the changing of bills until specifically confronted with the age of the seized bills in cross-examination.
[36] While I appreciate that one might legitimately be suspicious of this evidence, I do not see it as wholly implausible and I cannot say that Ms. Kellesis and Ms. Elisak were untruthful in their evidence. I accept on a balance of probabilities that $75,000 of the amount seized was legitimate savings of Ms. Kellesis with no link to illegal activity and would order that amount returned to her.
Disposition
[37] The application is allowed in part. The non-Canadian currency will be returned to Mr. Kellesis and $75,000 returned to Ms. Kellesis. The remaining seized money is ordered forfeited pursuant to s. 3(1) of the Civil Remedies Act, 2001. Given the divided success I would not order costs.
Dineen J.
Released: April 13, 2023
Footnotes
[1] Mr. Kellesis argued that there were discrepancies between the photos of the seized bundles and the report of the police about the money and argues that $20,000 appears to be missing. I see no such discrepancies and conclude that he is misinterpreting the photos and report, and there is no evidence to support the contention that money has gone missing.
[2] I reach this conclusion without having to rely on the hearsay statements reported by the undercover police officers who attended the unit to place bets, and so need not determine whether those statements are properly admissible on this application.