Court File and Parties
COURT FILE NO.: CR-22-70000172-0000 CR-22-70000133-0000 DATE: 20240927
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
HIS MAJESTY THE KING – and – BRENDA ANDREW Defendant
Counsel: Sandra Duffey, Counsel for the Crown Pierre Bonsu, Counsel for the Defendant
HEARD: February 2, July 31, and September 25, 2024
M.A. CODE J.
Reasons for SENTENCE
A. Overview
[1] The accused Brenda Andrew, a.k.a. Brenda Checkley (hereinafter Andrew) was charged on August 7, 2020 with four counts alleging fraud, forgery, and use of a stolen credit card. She eventually elected trial by jury and was committed for trial in this court on January 27, 2022. The case came before me on January 19, 2024 when I heard Andrew’s s. 11(b) Charter Application, seeking a stay of the scheduled trial proceedings due to unreasonable delay. I dismissed the s. 11(b) Application. There had been nine months of “defence delay” in the Ontario Court of Justice and ten months of Covid-19 pandemic “discrete event” delay in this Court. The remaining delay of 24 months was below the 30 month Jordan presumptive ceiling for s. 11(b) delay. See R. v. Andrew, 2024 ONSC 607.
[2] I released the above Reasons dismissing the s. 11(b) Application on January 26, 2024. The two week jury trial in this case was scheduled to proceed one month later, on February 26, 2024. Counsel requested a resolution JPT before me. It proceeded over Zoom on January 30, 2024. The resolution discussions at the JPT were successful. On February 2, 2024, the parties appeared before me and re-elected trial by judge alone. Andrew pleaded guilty to Count One in the Indictment, which alleged a fraud against Vertechs Design Inc. during a four year period, from March 1, 2016 until February 20, 2020. Facts relating to the other three counts in the Indictment, alleging forgery and use of a stolen credit card, were read in by the Crown and admitted by the defence.
[3] The defence requested a six month adjournment of the sentencing hearing, in order to allow Andrew time to raise a substantial amount of restitution. This proffer of substantial restitution was an integral part of the resolution discussions that had taken place at the JPT. Mr. Bonsu advised the Court that there was a reasonable prospect that Andrew could raise the restitution monies in the time requested. Accordingly, I allowed the adjournment.
[4] On July 31, 2024, the sentencing hearing resumed. The total loss to Vertechs Design Inc. caused by the fraud was $210,719.12. Two weeks prior to the resumption of the sentencing hearing, Andrew had deposited a cheque for $150,000 into Mr. Bonsu’s trust account. On the morning of July 31, 2024, before court commenced, Mr. Bonsu provided a trust account cheque for $150,000 to the owners of Vertechs Design Inc., who were present in court. I made inquiries as to whether there was any realistic prospect of raising the remaining $60,000 in restitution that was still outstanding. Mr. Bonsu was reasonably confident that his client could raise the remaining restitution, if a further eight week adjournment was granted. I granted this further adjournment.
[5] On September 25, 2024, the sentencing hearing resumed. Mr. Bonsu advised the Court that he had received a $60,000 bank draft from his client at the beginning of the week. He was awaiting confirmation from his own bank, that the draft from Andrew’s bank had cleared. He would then write a trust cheque for the remaining $60,000 in restitution monies. In these circumstances, I instructed counsel to proceed on the assumption that $210,000 restitution would be made. I then heard sentencing submissions from the Crown and the defence. At the end of submissions, I reserved judgement for two days. These are my Reasons for Sentence.
B. Facts
(i) Facts relating to the offence
[6] The facts relating to the offences are set out in an Agreed Statement of Fact. In addition, Victim Impact Statements were read by the husband and wife who own and operate Vertechs Design Inc. After these statements had been read into the court record, I asked the husband a few questions about the nature of Vertechs Design’s business. Finally, Crown counsel fleshed out some additional details about the offence during her submissions. The defence agreed with these additional details.
[7] Andrew became an employee of Vertechs Design in November 2015. At that time, the business was owned by Mary Jane Lovering and another partner. Andrew’s job responsibilities at Vertechs Design were payroll, bookkeeping, and payments to vendors and suppliers. She was the sole responsible authority and contact person for the company’s accounts. These accounts included payroll which utilized software known as “ADP”. Andrew had online access to this account through her username and password. No one else at the company had access to this username and password. Andrew also had the company’s Amex business credit card.
[8] Some five months after Andrew began work at Vertechs Design, the company was bought by Viive Kittask. This was in March 2016. Andrew’s fraudulent transactions began one month later, in April 2016. Ms. Kittask took out a significant loan to purchase the company. She also made payments to the previous owners for a few years, pursuant to the purchase agreement. Vertechs Design is a small landscape architecture firm with about ten employees, including the owner Ms. Kittask and her husband, Mark Leppik who is the Director of Operations. The company was not profitable when Ms. Kittask bought it in March 2016 and it remained unprofitable for the approximately three year period of Andrew’s ongoing fraud. Since about 2022, through their hard work and financial prudence, Ms. Kittask and her husband have turned Vertechs Design into a profitable small business.
[9] Ms. Kittask trusted Andrew and thought that she was a reliable employee who was good at her job. The approximately $210,000 fraud was committed by Andrew between April 2016 and January 2019. It had two separate components. The first component involved Andrew’s use of an American Express business credit card in the name of Vertechs Design and its previous owner (Mary Jane Lovering). Andrew kept this credit card and used it, after Ms. Lovering had sold the company and after Andrew had been told to destroy the credit card and close the account. Andrew used the Amex card repeatedly over a two year and four month period (from April 2016 to July 2018) to purchase clothing from various stores, to pay for travel (including a trip to Belize with her daughter), and to pay for personal discretionary expenses like a spa, restaurants, and concert tickets. The Amex credit card bills were paid by Andrew with cheques drawn on Vertechs Design’s bank account. The total amount of this Amex credit card aspect of the fraud was $39,646.24.
[10] The second component of the fraud involved Andrew’s use of the “ADP” payroll system at Vertechs Design in order to pay herself unauthorized income. The net unauthorized income paid to Andrew, after deductions, was $171,072.88. She covered up these unauthorized payments by forging and then keeping Canada Revenue Agency T4 documents, showing other employees receiving inflated income and reducing her own income by the same amount. There were 45 of these fraudulent “ADP” payments made to Andrew between April 2016 and January 2019.
[11] As noted above, Vertechs Design was not profitable during the period when it was being defrauded of the above amounts. The business was financed by its line of credit. In addition, Ms. Kittask had a home equity line of credit which she used to finance her payments to the prior owners. She and her husband were raising their two small children at the time.
(ii) Facts relating to the offender
[12] Andrew is 66 years old. She has been on bail on an undertaking since August 10, 2020. The only restrictive bail condition required that she not be in a position of “sole authority over any other party’s finances” and that she not possess “financial instruments that are not in your name.” She lives in Toronto with her 38 year old daughter. She is presently working remotely in an administrative capacity for a recruitment company. She does not have any financial responsibilities in this work. She earns about $5,000 a month and shares living expenses with her daughter. She had a stroke last year and lost some movement in her left hand but she can still type with her right hand. She is on medication for diabetes, high cholesterol, and high blood pressure. Her father and her brother are both deceased. Her 86 year old mother lives in Winnipeg and is presently in hospital. Andrew has travelled to Winnipeg at least ten times this year to visit her mother and to help her mother move into a private long term care home in Winnipeg. Her mother will be moving from the hospital and into this private long term care home in Winnipeg on October 4, 2024. The initial $150,000 in restitution monies paid to the victim were obtained by Andrew from her mother, as a gift. Her mother has an estate with liquid assets. In addition to her own daughter, Andrew has one sister, although they are estranged.
[13] Andrew has a prior criminal record with five entries, as follows:
- On September 5, 1980, at age 22, she was convicted of theft over and sentenced to six months in jail and 18 months probation;
- On July 4, 1984, at age 26, she was convicted of false pretences and sentenced to a $100 fine;
- On January 8, 1983, at age 34, she was convicted of theft under and sentenced to a $50 fine;
- On April 13, 2012, at age 53 and after an almost 20 year gap in her criminal record, she was convicted of three separate counts of fraud over $5,000, relating to three separate victims. She received a one year conditional sentence and Nakatsuru J. made a $35,070 restitution order in relation to one of the three frauds. That restitution order has not been paid;
- On February 23, 2015, at age 56, she was convicted of theft under $5,000 and sentenced to a $1,000 fine and one year probation. One of the terms of probation that was ordered by Clements J. was that she not possess any cheques or credit cards “except for that which is lawfully issued in your own name.”
[14] The transcript and synopses relating to the last two entries on Andrew’s above criminal record indicate the following: the three convictions for “fraud over” in April 2012 included transactions related to Andrew’s employment during 2009 in an accounting and administration position at a company known as Reia Studio; in addition, there were transactions related to her employment in 2010 at a company known as Luxury Life Brands where she had access to the company cheque book and wrote unauthorized cheques for her own benefit; and the conviction in February 2015 related to Andrew’s employment in 2013 as a secretary at the Toronto Centre for Sports Medicine where she failed to deposit a quantity of cash into the Centre’s business account. In other words, Andrew’s employment at two businesses in 2009 and 2010 (Reia Studios and Luxury Life Brands) led to fraud convictions in April 2012 for which she received a one year conditional sentence. Upon completing that sentence in April 2013, she began employment in May 2013 at a third business (Toronto Centre for Sports Medicine). Almost immediately, in June 2013, she stole money from this third business and was convicted in February 2015 and sentenced to a fine and one year probation. While still on probation, she began work at Vertechs Design in November 2015. She began the present ongoing fraud offence in April 2016, which was two months after her probation had ended. The present offence continued until January 2019. It therefore appears that there has been a continuous pattern of fraud and theft from four separate small business employers, starting in 2009 and ending in early 2019.
[15] The final $60,000 restitution payment was not obtained by Andrew as a gift from her mother. Rather, Andrew raised the money herself by selling her two cars, selling her jewelry, and setting aside savings from her work.
[16] At the end of the sentencing hearing, Andrew made an emotional statement expressing regret and remorse. She asserted that she has changed and is now an honest person, as a result of “losing everything”. She was particularly concerned that her mother may not have long to live. I am satisfied that certain aspects of this unsworn “allocution” were sincere, as will be discussed below.
C. Positions of the Parties
[17] The Crown submits that a three year penitentiary sentence is appropriate in this case. There are no exceptional mitigating circumstances, in the Crown’s submission, that would justify a sentence below the normal three to five year range for this kind of large-scale breach of trust fraud. A three year sentence would be at the bottom end of the range and would reflect mitigation for Andrew’s guilty plea and restitution payments. A conditional sentence would be inappropriate in light of the gravity of the offence, the required length of the sentence, and Andrew’s criminal record (which includes an earlier conditional sentence in 2012 for three fraud convictions).
[18] The defence submits that a maximum conditional sentence of two years less a day, with “house arrest” and minimal exceptions, is the appropriate sentence. The defence submits that Andrew is entitled to significant mitigation, in light of her guilty plea, substantially full restitution, her age and present health issues, and her remorse and assertion that she has changed.
[19] The only ancillary Order sought by the Crown relates to Andrew’s future employment, pursuant to s. 380.2(1). The defence does not oppose such an order for life. In light of the substantially full restitution, the Crown is not seeking any fine in lieu of forfeiture.
D. Analysis
[20] The principles of sentencing are set out in ss. 718, 718.1, and 718.2 of the Criminal Code and I am bound by those principles. The most fundamental principle is “proportionality”, that is, the sentence “must be proportionate to the gravity of the offence and the degree of responsibility of the offender.”
[21] A long line of binding authority has held that cases like this one, involving large scale frauds facilitated by a breach of trust, must be met with jail sentences and usually with penitentiary sentences in the range of three to five years. This is because frauds of this nature are not crimes of impulse but are rationally planned and premediated and are, therefore, the kind of crime that is most likely to be susceptible to general deterrence. In addition, they are generally committed by persons of otherwise good character who are knowledgeable and who use their training, their position, and the trust of their employer in order to plan, deliberate, and then facilitate the crime. Accordingly, offender-based considerations are generally less important in these kind of cases because it is the offender’s personal characteristics that enabled the crime.
[22] This same line of authority has held that conditional sentences will generally be inappropriate. This is partly because the appropriate range of sentence exceeds the two year less a day maximum for a conditional sentence. It is also because of the often “pressing” need to achieve general deterrence through jail sentences, in this particular kind of case. In other words, a conditional sentence is generally not “consistent with the fundamental purpose and principles of sentencing” in such cases, as required by s. 742.1 of the Criminal Code. Nevertheless, in some exceptional cases, conditional sentences or reformatory jail sentences of less than two years have been imposed in large-scale, breach of trust frauds where particularly strong mitigating circumstances exist. For example, where an accused has pleaded guilty and has made full restitution, or where an accused has a credible plan in place to make full restitution through lawful employment, or where an elderly accused has already suffered greatly as a result of the offences and has dependents who are minors or are in ill health. See generally: R. v. McEachern (1978), 42 C.C.C. (2d) 189 (Ont. C.A.); R. v. Pierce (1997), 114 C.C.C. (3d) 23 (Ont. C.A.); R. v. Bogart (2002), 167 C.C.C. (3d) 390 (Ont. C.A.); R. v. Dobis (2002), 163 C.C.C. (3d) 259 (Ont. C.A.); R. v. Suhr (2002), 166 O.A.C. 97 (C.A.); R. v. Wilson (2003), 174 C.C.C. (3d) 255 (Ont. C.A.); R. v. Clarke (2004), 189 O.A.C. 331 (C.A.); R. v. Davatgar-Jafarpour, 2019 ONCA 353 at para. 34; R. v. Plange, 2019 ONCA 646 at paras. 40 and 49.
[23] The effect and the rationale of this consistent line of authority extending over the past 45 years, all of which is binding on me, is summarized in the judgement of Laskin J.A. on behalf of the Court of Appeal in R. v. Bogart, supra at paras. 29 – 31 and 36, where he stated the following:
Two aspects of the need to give effect to general deterrence come into play in this case. First, general deterrence is the most important sentencing principle in major frauds. Second, when general deterrence is "particularly pressing", as it is here, the preferable sanction is incarceration.
This court has affirmed that in cases of large-scale fraud committed by a person in a position of trust, the most important sentencing principle is general deterrence. Mitigating factors and even rehabilitation become secondary. In R. v. Bertram and Wood (1990), 40 O.A.C. 317, this court observed that most major frauds are committed -- as this one was -- by well-educated persons of previous good character. Thus the court held, at p. 319,
The sentences in such cases are not really concerned with rehabilitation. Instead, they are concerned with general deterrence and with warning such persons that substantial penitentiary sentences will follow this type of crime, to say nothing of the serious disgrace to them and everyone connected with them and their probable financial ruin.
In R. v. Gray (L.V.) (1995), 76 O.A.C. 387 at pp. 398-99, our court again stressed the need for general deterrence in fraud cases:
… there are few crimes where the aspect of deterrence is more significant. It is not a crime of impulse and is of a type that is normally committed by a person who is knowledgeable and should be aware of the consequences. That awareness comes from sentences given to others.
Both before and after Parliament's introduction of conditional sentences, cases of large-scale fraud by persons in a position of trust have typically resulted in substantial jail sentences. In his recent judgment in R. v. Dobis (2002), 163 C.C.C. (3d) 259 (C.A.), my colleague MacPherson J.A. has thoroughly reviewed these cases. His review shows that ordinarily these frauds merit a penitentiary sentence in the range of three to five years. Even where mitigating considerations have reduced the sentence to the reformatory range, a jail term, not a sentence served in the community, has usually been imposed. [Italics of Laskin J.A., underlining added for emphasis].
[24] In the case at bar, the mitigating circumstances include the following three:
- First, Andrew pleaded guilty and admitted substantially all of the Crown’s allegations. The guilty plea came at the eleventh hour, on the eve of trial and in the face of a strong Crown case. In addition, Andrew had caused significant delays in the Ontario Court of Justice. Nevertheless, these delays were often in aid of her efforts to resolve the case. Most importantly, in my view, her guilty plea on February 2, 2024 came at a time when the criminal trial list in this Court was seriously overbooked, due to the pandemic backlog and a number of other contributing causes. As a result, the judges of this Court have acknowledged that guilty pleas are entitled to significant mitigation because of their benefit to the administration of justice;
- Second, Andrew has made substantially full restitution to the victims of the fraud. The initial $150,000 restitution monies were given to Andrew as a gift, by her mother, and so they are not actual proceeds of crime being paid back by Andrew or monies that she earned from her own lawful employment. However, the subsequent $60,000 payment was the result of Andrew’s own lawful employment, her savings, and the sale of her assets. In all these circumstances, the restitution is a significant mitigating factor and it has substantially made the victims whole; and
- Third, Andrew is 66 years old, she had a stroke last year, and she is taking medication for various conditions that affect her health. Nevertheless, Andrew is employed, she is able to work remotely in her field as an administrative assistant, and she has been able to travel back and forth to Winnipeg many times this year to assist her elderly mother. In my view, her age and health is not a mitigating factor that carries significant weight. In terms of Andrew’s relationship with her elderly mother, her mother is financially independent and is being moved to a private long term care home on October 4, 2024. Andrew is neither the “sole provider” nor the “caregiver” for her mother. See: R. v. Dobis, supra at paras. 37-9 and 54. In my view, the relationship between Andrew and her mother is also not a mitigating factor that carries significant weight.
[25] On the other hand, there are significant aggravating circumstances in this case, including the following five:
- First, Andrew is a recidivist. As summarized previously, she has been convicted on five prior occasions of crimes of dishonesty, at various points in her life. The most significant convictions are the recent ones, in 2012 and 2015. These four recent criminal convictions, when combined with the present fraud offence which occurred between 2016 and early 2019, show a consistent and apparently entrenched pattern of stealing from and defrauding a series of employers. This pattern of ongoing crimes of dishonesty against her employers extends from 2009 until 2019. The conditional sentence that Andrew received in 2012, for three separate frauds, clearly did not deter her. As a result, there is a strong need for both specific deterrence and general deterrence in this case;
- Second, Andrew made use of diverse and relatively sophisticated dishonest means, in order to carry out and then conceal the frauds. She converted a corporate credit card to her own use and she used payroll accounting software in order to pay herself unauthorized employment income. In addition, she became adept at forgery and prepared forged T4 documents which were available to conceal the unauthorized income paid to herself;
- Third, the fraud was ongoing over a significant period of time, lasting almost three years. There were numerous repeated fraudulent transactions and acts of forgery throughout this lengthy period. The repetition and duration of the fraud and forgery is a significant aggravating factor. Every time that Andrew used the corporate credit card to purchase clothes, or travel, or restaurant meals, or concert tickets, and every time she made an unauthorized income payment to herself and prepared a false T4 slip to conceal that payment, she had the opportunity to consider whether she should stop this course of criminal conduct or should carefully plan and continue that course of conduct. She repeatedly chose the latter course, which infers a particularly entrenched and determined kind of dishonesty that is not situational or momentary;
- Fourth, the fraud involved a breach of trust in relation to a small business. The new owner and her husband worked in the business and they had gone into debt when they recently purchased the company. The company had about ten employees, it was not profitable, and it was being financed by both personal and business lines of credit. In other words, the fraud took place at a time when the business was in a particularly vulnerable early stage of its development. As a result, the ongoing fraud caused significant harms to the owner and her husband, and to the business itself, as explained in the Victim Impact Statements. The albeit substantially full restitution that has now been paid to the victims does not compensate them for all of their expenses or for the hardship and sacrifice that they experienced as a result of the fraud; and
- Fifth, the proceeds of the fraud were not used to pay for necessities and the fraud was not motivated or caused by some addiction or disorder. In this case, the proceeds were used simply for non-essential personal indulgences and expenses like travel, restaurants, a spa, and entertainment.
[26] It can be seen that there are significant aggravating factors that make it difficult to move this case out of the normal three to five year range of penitentiary sentence for large-scale breach of trust frauds. On the other hand, Andrew’s guilty plea and the substantially full restitution that she has made are significant mitigating factors. In my view, the proper resolution of this close balance between aggravation and mitigation is to reduce the normal length of sentence to two years less a day, but to require that the sentence be served in jail. A conditional sentence is inappropriate, in my view, in light of Andrew’s response to the earlier conditional sentence that was imposed in 2012 for three separate frauds. This case requires a degree of both specific and general deterrence that can only be provided by a jail sentence.
[27] I should not leave this analysis of the appropriate sentence for this case without addressing Mr. Bonsu’s submission that Andrew has now changed and reformed as a result of growing older, pleading guilty, making full restitution, working lawfully, and helping her elderly mother. I agree that Andrew’s guilty plea, restitution, lawful employment, and help of her mother are all established facts and they are mitigating in varying degrees. However, the suggested inference or conclusion from these facts – that Andrew has now changed and reformed – is not one that I am ready to draw. Her past history is a formidable barrier to any such inference or conclusion, even on a balance of probabilities. Andrew asserted in her “allocution”, that she was now changed and reformed and has become an honest person. In my view, her regret and remorse is sincere, in light of what has happened to her, but it would require much more persuasive proof to be satisfied that she has fundamentally changed and reformed and has become an honest person. I, nevertheless, hope that this will happen over time, once she has served her sentence.
E. Conclusion
[28] For all the above reasons, Andrew is sentenced to two years less a day in prison. There will be an order pursuant to s. 380.2(1) for life, prohibiting Andrew from “seeking, obtaining, or continuing any employment, or being a volunteer in any capacity, that involves having authority over the real property, money, or valuable security of another person.”
[29] I would like to thank both counsel for their excellent work throughout these lengthy proceedings.
M.A. Code J.
Released: September 27, 2024