Court File and Parties

Court File No.: CR-10-0024-00/CR-12-0024-00 Date: 2023-09-26 Ontario Superior Court of Justice

Between: His Majesty the King, Crown Counsel: D. Hayton, for the Crown

- and -

Marcel Breton, Accused Counsel: M. Johnston, for Marcel Breton

Heard: September 1, 2023 at Thunder Bay, Ontario

Before: Mr. Justice F.B. Fitzpatrick

Judgment on Application

Background

[1] In January 2023 I heard evidence on a Crown application for forfeiture of property pursuant to section 462.43 and 490(9) of the Criminal Code. I released a decision on March 30, 2023 (R. v. Breton, 2023 ONSC 2035). That decision contained an explanation of the lengthy background in this matter. I rely on that decision as well as all that has gone before in this matter to inform this decision.

[2] What remains to be decided in this matter is whether the Crown has proved beyond a reasonable doubt, that physical cash, found on a property possessed by Mr. Breton in December 2009, were proceeds of crime.

[3] Following my ruling in March 2023, the parties agreed to additional facts that obviated the need for further viva voce evidence on this application. An agreed statement of admissions and a supplementary statement of admissions were placed before the court for consideration on this application. In addition, the Crown called two experts to give viva voce testimony at the first portion of this application. Mr. Breton elected to call no evidence on this application.

The Law

[4] Section 490(9) of the Criminal Code dealing with disposal of things seized, states the following:

490(9) Subject to this or any other Act of Parliament, if

(b) a justice, in any other case,

is satisfied that the periods of detention provided for or ordered under subsections (1) to (3) in respect of anything seized have expired and proceedings have not been instituted in which the thing detained may be required or, where those periods have not expired, that the continued detention of the thing seized will not be required for any purpose mentioned in subsection (1) or (4), he shall

(c) if possession of it by the person from whom it was seized is lawful, order it to be returned to that person, or

(d) if possession of it by the person from whom it was seized is unlawful and the lawful owner or person who is lawfully entitled to its possession is known, order it to be returned to the lawful owner or to the person who is lawfully entitled to its possession,

and may, if possession of it by the person from whom it was seized is unlawful, or if it was seized when it was not in the possession of any person, and the lawful owner or person who is lawfully entitled to its possession is not known, order it to be forfeited to Her Majesty, to be disposed of as the Attorney General directs, or otherwise dealt with in accordance with the law.

[5] "Proceeds of Crime" are defined in s. 462.3 of the Criminal Code as follows:

"proceeds of crime" means any property, benefit or advantage, within or outside Canada, obtained or derived directly or indirectly as a result of

(a) the commission in Canada of a designated offence, or

(b) an act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence.

[6] The parties agree that the standard of proof the Crown must meet in proving that the appellant’s possession is unlawful is the criminal standard of proof beyond a reasonable doubt: See R. v. Mac, 1995 ONCA 2071 ([1995] O.J. No. 604) [Mac]. The parties also agree that the Crown’s case relies exclusively on circumstantial evidence. As Such, the Crown bears the onus on this application to prove beyond a reasonable doubt on circumstantial evidence that the cash was proceeds of crime.

[7] There was no dispute that proof beyond a reasonable doubt requires more than a probability but something less than absolute certainty. The Supreme Court of Canada in R. v. Lifchus, [1997] 3 SCR 320 at para. 39, stated that “[a] reasonable doubt is not an imaginary or frivolous doubt. It must not be based upon sympathy or prejudice. Rather, it is based on reason and common sense. It is logically derived from the evidence or absence of evidence.”

[8] The parties agree that the leading case on the relationship between circumstantial evidence and proof beyond a reasonable doubt is the Supreme Court of Canada’s decision in R. v. Villaroman, 2016 SCC 33 [Villaroman]. In Villaroman, Cromwell J. for the unanimous Court directed that the following principles inform a court’s assessment of whether the Crown has met its onus in a case based on circumstantial evidence:

(a) A reasonable doubt is a doubt based on "reason and common sense"; it is not "imaginary or frivolous"; it "does not involve proof to an absolute certainty"; and it is "logically connected to the evidence or absence of evidence" (para. 28).

(b) An inference of guilt drawn from circumstantial evidence should be the only reasonable inference that such evidence permits (para. 30).

(c) In assessing circumstantial evidence, inferences consistent with innocence do not have to arise from proven facts. A certain gap in the evidence may result in inferences other than guilt. But those inferences must be reasonable given the evidence and the absence of evidence, assessed logically, and in light of human experience and common sense (paras. 30, 36).

(d) When assessing circumstantial evidence, the trier of fact should consider "other plausible theories" and "other reasonable possibilities" which are inconsistent with guilt ... the Crown thus may need to negative these reasonable possibilities, but certainly does not need to negative every possible conjecture, no matter how irrational or fanciful, which might be consistent with the innocence of the accused. Other plausible theories or other reasonable possibilities must be based on logic and experience applied to the evidence or the absence of evidence, not on speculation (para. 37).

(e) Circumstantial evidence does not have to totally exclude other conceivable inferences; the trier of fact should not act on alternative interpretations of the circumstances that it considers to be unreasonable; alternative inferences must be reasonable, not just possible (para. 42).

[9] Circumstantial evidence must be considered in totality. The case as a whole must be proven beyond a reasonable doubt, but that standard is not to be applied piecemeal to the evidence (R. v. Tomlin, 2014 ONCA 357 at para. 12).

Positions of the Parties

[10] The cash at issue in this application was located primarily in an outbuilding (a garage) possessed by Mr. Breton. The Crown seeks an order against Mr. Breton, forfeiting the following property:

a. 2 bundles of currency totalling $15,000 in a heating vent in the floor of Mr. Breton's residence;

b. $9,750 CAD from inside a suitcase in two bundles, located in the heated portion of the garage;

c. $15,780 CAD in two bundles from under a drawer on top of the desk in the heated portion of the garage;

d. $1,750 CAD from a toolbox located in the heated portion of the garage;

e. $4,800 CAD in two flat bundles from a shelf in the cold garage, near where the Camaro was located; and

f. a Rubbermaid tub, buried in the dirt floor of the cold garage, containing $1,235,620.00 in Canadian currency and $100.00 in US currency.

[11] The Crown relies on the approximate 111 grams of cocaine that was also found in the garage. Digital scales were also found in the garage. The Crown submits this is circumstantial evidence that taints the cash found in the garage with the “stink” necessary to lead to the only reasonable conclusion about the source of the cash being from the sale of drugs. The Crown admits it has no evidence of Mr. Breton dealing drugs.

[12] The Crown relied on the expert opinion evidence of Detective Constable Stephen Davies. Detective Constable Davies was qualified as an expert to provide opinions on the use, distribution, drug trafficking patterns, consumption patterns, trafficking and packaging of cocaine.

[13] Detective Constable Davies opined that a typical user of cocaine would be in possession of between 1 and 3.5 grams of cocaine. Detective Constable Davies explained that typically 0.1 - 1 gram of cocaine is consumed for each use. Further, he testified that possession of multiple ounces of cocaine is consistent with an individual supplying lower tier drug dealers who sell at the street level.

[14] Detective Constable Davies did acknowledge that a heavy drug user, with the available disposable income, could use 111-113 grams of cocaine in approximately one month. He indicated that the paraphernalia one would typically expect to find in the possession of mid-level drug traffickers includes digital scales, packaging materials, cutting agents, currency, and debt lists.

[15] It was acknowledged by the Crown that there were no packaging materials, cutting agents or debt lists located in Mr. Breton’s possession in December 2009.

[16] Detective Constable Davies noted the correlation between cash and drugs in the illegal drug trade. He opined that where a large amount of cash was observed, often a small amount of drugs are located. Conversely, right after making a purchase of drugs, a person in possession of those drugs would not be expected to have a great deal of cash, the cash having been used to buy the drugs.

[17] The Crown counters the possible other reasonable explanations for this significant amount of cash with evidence from representatives of the Bank of Canada, Ontario Lottery and Gaming and the Canada Revenue Agency. The Bank of Canada representative gave evidence about when some of the various types of bills at issue in this matter were issued by the Bank. The Lottery and Gaming representative talked about Mr. Breton’s lack of any formally recognized major casino wins. The Canada Revenue Agency representative advised that an employer of Mr. Breton only declared approximately $12,000 for income from employment for him once during the period from 2001 to 2008.

[18] The Crown also provided and relied upon expert opinion evidence from Detective Chris Rhone. He was qualified to give expert opinion evidence in the characteristics of bundled and bulk currency, the characteristics of currency in profit motivated crimes, the movement of currency in the drug trafficking cycle, and the use of nominees in proceeds of crime. It was Detective Rhone’s opinion that the $1,178,550 CAD and $100 USD buried in the unheated portion of the garage was proceeds derived from the profit motivated crime of drug trafficking.

[19] Mr. Breton submits the Crown has not met its burden on this application. Mr. Breton admits he was in possession of all the cash both in the garage and in the vents in the house he was renting; however, Mr. Breton argues that there are other reasonable alternative explanations for the presence of the cash. The presence of the variety of vehicles found at the property as well as the number of tools present in the garage suggest Mr. Breton was operating a “cash only” vehicle repair business. He had a casino card. He could have won a large amount of money gambling in a variety of Ontario casinos with a series of less than $10,000 wins.

Disposition

[20] On the circumstantial evidence presented on this application the Crown has proven beyond a reasonable doubt that Mr. Breton did not lawfully possess the cash found in his garage in December 2009. I find the Crown has proven beyond a reasonable doubt that the cash found in the garage was proceeds of crime. I have a reasonable doubt about the cash found in the vents inside the house as being proceeds of crime. I say all of this for the following reasons.

[21] Mr. Breton’s fingerprints were found on a plastic bag that contained some of the cash found in the buried Rubbermaid tub. In addition to his admission of possession of all the cash found by the police, in my view, this proves he was aware of the cash buried in the unheated portion of the garage because he had touched some of it at least once.

[22] Possession of large amounts of cash is one of the easiest things to explain away if there is no legitimate reason for being in possession of it. Cash is designed to be an easily transferable storehouse of value. Unlike an e-transfer, you cannot trace how it came into a person’s possession. That is why cash is the currency of the illegal drug trade.

[23] I do not accept the alternate explanations for the cash as argued by Mr. Breton as creating reasonable doubt in the face of strong circumstantial Crown evidence proving that the money was derived from the drug trade. Just on its own, $1.2 million in cash is a fantastic amount of money. For the average person in Northwest Ontario, particularly in 2009, I observe this was a lot of money to be found in one place. How many people have that much cash buried in tubs under their property? How many average people have that much money in their bank accounts at any given time? Not a lot in my experience. This is strong circumstantial evidence that demonstrates Mr. Breton was possessing something extraordinary. It was extraordinary and it was hidden from view. I find that this is part of the convincing proof beyond a reasonable doubt that the cash was not lawfully possessed by Mr. Breton.

[24] In my view, the Crown has led expert opinion evidence that both positively proves that the cash was proceeds of crime, while at the same time negating Mr. Breton’s arguments about various alternate theories for his possession of this large amount of cash. I was persuaded beyond a reasonable doubt by the expert opinions of Detective Constable Rhone and Detective Constable Davies that the cash found in the garage was not lawfully obtained.

[25] I accept the evidence from all of the Crown witnesses on this application. I accept, in particular, the expert opinions of Detective Constable Rhone and Detective Constable Davies that the cash found in the buried tub and elsewhere in the garage were proceeds of crime. The discrepancies in their evidence pointed to by the defence in cross examination were not sufficient to raise any reasonable doubt about these conclusions, in my view. They gave their evidence in a forthright and straightforward manner, and they acknowledged certain alternative conclusions put to them by the defence. For example, Detective Constable Davies did admit that a heavy cocaine user could consume upwards of 111 grams in a month, and Detective Constable Rhone did admit that he had no idea if Mr. Breton had a bank account or how many Canadians actually have a bank account. These particular concessions, however, were not sufficient to convince me to discount their opinions about the correlation of the cash in this case to the illegal drug trade. The physical location of the cocaine in the garage suggests that it was not available for immediate use by any person living in an adjacent house. The bulk amount of cocaine more reasonably suggests to me that it was being stored not for Mr. Breton’s personal use, but as an item of trade, which would explain the presence of cash nearby. In my view such cash was obtained from the sale of other amounts of cocaine or illegal drugs; the cash was obtained from the profit motivated crime of drug trafficking.

[26] I now address the possibility that the money was won by legal lottery or legally in a casino. It is possible. But with respect to the amount of money that was found in the garage, and how it was being kept, I am not convinced it was a reasonably probable explanation for the presence of all that cash. The court was provided with evidence of Mr. Breton’s activities in the local Thunder Bay casino. It is not the only operation of its type in the province or within a day’s drive of Thunder Bay. However, Mr. Breton did use a Winners Circle Card issued on December 29, 2008. He had to be in a casino to get one of those, so I infer that he must have been in a casino at some point prior to December 2009. However, I am not convinced that he would have accumulated $1.2 million in cash without some big wins that would have come to the attention of the Ontario Lottery and Gaming Commission, at a minimum for their marketing purposes. Also, winnings at that level requires frequent visits to casinos. This would generate more visibility than was evidenced from the affidavit testimony I received from the representative of the OLG.

[27] This evidence did not disclose lottery wins. Again, it is possible to have won a million dollars or more on a lottery ticket pre-2009, or to have a number of wins that add up to a million plus dollars. Nevertheless, I find it is not a probable circumstance without some corresponding evidence of that situation having come to some public attention or notoriety. The evidence on the application did not disclose that Mr. Breton had received any individual casino or lottery winnings above $10,000.00 that would have required reporting under the FINTRAC reporting system in place prior to 2009. Nor, for that matter, was there any evidence on this application that Mr. Breton had received any casino or lottery winnings at all.

[28] I also did not see it reasonably possible that Mr. Breton obtained this cash from the operation of a successful small engine or vehicle repair mechanic business. According to the statement of admissions, there were 18 vehicles observed by the police on the property in December 2009. This included a 2008 GMC Sierra pickup truck, snowmachines, a riding lawn mower, ATVs, and a boat. Later, in March 2010, police obtained a warrant to seize nine vehicles from the premises occupied by Mr. Breton. These nine “vehicles” consisted of a car, a truck, a Bobcat, a snowmachine, a boat, a riding lawnmower, a 40 hp motor and two ATVs. The Crown also conceded there was a motorcycle shown in photographs taken of the garage in December 2009, although it may not have been seized by the police.

[29] There were also a variety of tools located in the garage, which may be usual in a repair business. However, there were many things I did not see that one would reasonably expect to find if a small engine repair business was being operated, either actively or passively. I did not see a hoist or large car jacks. I did not see large storage containers for waste oil or other waste materials. I did not see a vehicle parts storage area or a large amount of parts, boxed or otherwise. There was no cash register or till for the day to day proceeds to be held. I would expect to see such unique and easily identifiable items in a business of that nature. There were no invoices or other paper evidence of any transactions for the inputs necessary to operate a small mechanic shop found in the garage or in Mr. Breton’s house. Also, there was no signage indicating a place of business anywhere outside the garage, or anywhere else on the property.

[30] From the photographs I saw in evidence, the inside of the garage, overall, looked fairly disorganized. This is perhaps understandable in a small business scenario. However, it looked more like a garage of a person who could and did fix their own vehicles, but it did not look like a small business that was generating enough profit from the efforts of one person to generate $1.2 million in cash, which ended up buried in a tub underneath the only car found inside the garage.

[31] Accordingly, I do not see the operation of a small business as being a reasonable explanation for the presence of all this cash.

[32] Our tax system relies on self-reporting, and non-filing is supposed to be a rare event. It is a notorious fact, however, that some people just never file an annual income tax return with the CRA, particularly those who do not earn income or who are regularly earning an extremely low income. It is a phenomenon that is now leading the Federal government to consider an automatic filing system for low-income Canadians. That said, Mr. Breton was obliged by law to file a return if he was earning income in any particular year.

[33] Mr. Breton did not report any income to the CRA for the years 2001 to 2008. An employer filed an Income Report on his behalf in 2008 advising that Mr. Breton earned $14,976.00, the net total of which was $11,936.04 after deductions. If this amount of income was the sole source of income for any individual at that time, this would represent a person living below the poverty line. As such, having not filed an income tax return for eight years, the presence of $1.2 million in buried cash is strong circumstantial evidence that tends more to a reasonable conclusion that the cash was obtained illegally.

[34] The way the money was packaged also leads me to the conclusion that the cash was proceeds of crime. Mr. Breton argues that his burial of the tub was mimicking the defence mechanism of concealing value from unwanted eyes or hands afforded by banks. Although possible, this argument is unreasonable when coupled with the way the money was bundled.

[35] I accept the expert opinion evidence of Detective Constable Rhone stating that the manner of bundling of the cash leads to a reasonable conclusion that the cash was proceeds of crime. The money located in the tub was divided into 30 bricks of cash, and further divided into sub-bundles. A large number of the bundles were marked “5” and “10” and mostly corresponded with bundles being exactly $5,000 and $10,000. I accept the opinion evidence of the Detective that these amounts are consistent with the need to quickly grab bundles that correspond to amounts that would be utilized in the drug trade. The bundles could have been bigger or smaller, but in my view the consistency of the $5,000 and $10,000 amounts indicates there was a purpose to these particular amounts. I conclude it was for a transactional purpose as opposed to being for a savings or accumulative purpose.

[36] In contrast to his opinion about the cash found in the garage, Detective Constable Rhone’s opinion concerning the bundles of cash found in the vents in the house was of particular note. He said that those bundles ($3,300, $3,600, and $8,100) were not consistent with cash that is readily available to reasonably facilitate a quick transaction, unlike the vast majority of the cash found in the garage, which was consistently bundled in $5,000 or $10,000 denominations. The bundles from the garage suggest commercial efficiency and not storage for the purpose of personal savings. I accept his opinion that bundling in this manner serves a purpose of commercial efficiency in the illegal drug trade. Such transactions must be done quickly to avoid drawing the attention of police. Pre-prepared bundles in large and consistent denominations provide those in the trade with assurance that they are being properly compensated for the goods they are providing.

[37] Also, I accept Detective Constable Rhone’s opinion that the $20 bill is the most predominant denomination associated with the drug trade. Defence counsel pointed to decisions of the Ontario Court of Appeal in R. v. Mac, 1995 ONCA 2071 ([1995] O.J. No. 604), and R. v. West, 2005 ONCA 30052 ([2005] O.J. No. 3548) [West] as standing for the proposition that the presence of a large amount of $20’s is not a “smoking gun” in these forfeiture cases. I disagree that those decision made any such findings or gave any directions of that nature with regard to the use of $20 bills in the drug trade. West ordered a new hearing but said nothing specific about $20 bills. Mac saw the money returned because the officer had no reasonable and probable ground to believe a crime had been committed and therefore the seizure power conferred by legislation could not have authorized the officer’s actions in the first place; there was no finding regarding the use of $20 bills in the drug trade.

[38] In the case at bar, there were over 35,000, $20 bills found on Mr. Breton’s property. The next closest denomination was $50, but it represented about half the amount that was found in 20’s. And in $100 denominations, there were 2,018 bills found, which again, is not the majority portion of the cash.

[39] With respect to the cash found in the tub, I also accept the opinion evidence of the Crown that that two bricks were marked 60 and 40 respectively and contained $59,950 and 39,760, which is consistent with the 2009 market price of between $40,000 to $60,000 for 1 Kg of cocaine. The fact that the cash was bundled in amounts that just happened to mirror the market price for 1kg of cocaine is a more than a mere coincidence in my view.

[40] In my view, the way this cash was bundled, along with the predominance of the primary bill of the drug trade, the 20, is strong evidence militating in favour of the only reasonable conclusion, that the bundles of cash were proceeds of crime.

[41] The opinion of Detective Constable Rhone as to the bundling of the cash found in the vent, leads me to have a reasonable doubt that this cash, alone, was proceeds of crime. Although it constituted a round number, $15,000, it was stuffed into a vent in Mr. Breton’s home. This is consistent with a conclusion that this cash, alone, was his personal money, being kept there, close to him, because it was his, as opposed to the other cash, which was being used for, or had come from, a criminal enterprise.

[42] I find the Crown has proven beyond a reasonable doubt that the cash found in the garage was proceeds of crime. I find the circumstances in which the cash was found, such as the presence of drugs and drug paraphernalia in the vicinity of the garage, the fact that the vast majority was buried and bundled in particular amounts that coincide with the market price of trafficable quantities of cocaine, with the vast majority being $20 bills, leads me to the only reasonable inference that such evidence permits: that the cash in the garage were proceeds of crime. I have considered "other plausible theories" and "other reasonable possibilities" which are inconsistent with such a conclusion, and I have found them unreasonable on the evidence before me on this application.

[43] Accordingly, the Crown application is allowed.

[44] An Order shall be issued against Marcel Breton for forfeiture of the properties set out below to His Majesty the King in Right of Canada to be disposed of by the Minister of Public Works and Government Services pursuant to s. 490(9) C.C.:

a. $9,750 CAD from inside a suitcase in two bundles, located in the heated portion of the garage;

b. $15,780 CAD in two bundles from under a drawer on top of the desk in the heated portion of the garage;

c. $1,750 CAD from a toolbox located in the heated portion of the garage, and;

d. $4,800 CAD in two flat bundles from a shelf in the cold garage, near where the Camaro was located;

e. Rubbermaid tub, buried in the dirt floor of the cold garage, together with $1,235,620.00 in Canadian currency and $100.00 in US currency that was found therein;

[45] I understand Mr. Breton has a cross application outstanding for all the above noted funds in addition to the monies found in the vent in his house and those found on his person. I understood the Crown was not objecting to the return of the funds found on his person and perhaps that has already been taken care of. Subject to any further submissions I would make an order that the Crown forthwith return to Marcel Breton 2 bundles of currency totalling $15,000 which were found in a heating vent in the floor of Mr. Breton's residence in December 2009. The balance of Mr. Breton’s application would then be dismissed.

[46] Counsel may contact the trial coordinator to arrange a case conference by Zoom if one is necessary to finalize any orders necessary arising from this disposition of this application.

“original signed by” The Hon. Mr. Justice F.B. Fitzpatrick

Released: September 26, 2023