Attorney General of Canada v. Mohammed Ehteshamul Huq, 2025 ONSC 876

Court File No.: 24-11389-MO
Date: 2025-02-11
Ontario Superior Court of Justice

Between:
Attorney General of Canada (Applicant)
and
Mohammed Ehteshamul Huq (Respondent)

Applicant Counsel: Jeannine Plamondon
Respondent Counsel: Andrew Edgar

Heard at Ottawa: January 13, 2025

Reasons for Decision
Robyn M. Ryan Bell

Overview

[1] The RCMP and the Canada Revenue Agency are engaged in an investigation involving allegations of fraud, laundering proceeds of crime, unauthorized use of computer, mischief in relation to data, and offences under the Income Tax Act. The allegations are in relation to the Canadian Emergency Wage Subsidy (“CEWS”) implemented to assist businesses during the COVID-19 pandemic.

[2] On November 3, 2021, search warrants were executed, and items seized from the respondent’s residence and vehicle. The seized items were ordered detained. Since the initial detention order, there have been a series of further detention orders. The most recent order under s. 490(3) of the Criminal Code authorizes the detention of eight of the seized items until November 3, 2024.

[3] The applicant seeks further detention under s. 490(3) in respect of six of the items. In its written application, the request is for further detention until August 3, 2025, a period of nine months from the expiry of the most recent order. In the affidavit filed in support of the application and in oral submissions, the applicant requests that the items be retained for a further 12 months, that is, until November 3, 2025.

[4] The previous orders under s. 490(3) were on consent. The order now requested by the applicant is opposed by the respondent. The respondent argues, in essence, that there is “no complexity argument left” to justify further detention of the items seized.[1]

[5] For the following reasons, the applicant is permitted to retain the items seized until April 3, 2025.

Chronology

[6] The CEWS was one of the emergency benefit programs made available by the Canadian government in response to the COVID-19 pandemic. Under the CEWS, businesses could claim up to 75 per cent of employee wages to ensure employee retention. CEWS benefit applications could be accessed and submitted online through the CRA’s My Business Account (“MyBA”).

[7] The investigation involves allegations that between October 9 and November 26, 2020, individuals used stolen credentials to access MyBA profiles and to modify data in order to make fraudulent CEWS claims. It is alleged that in one instance, an accountant’s credentials were fraudulently added to 36 businesses, with CEWS claims being filed in respect of 14 of the businesses. Eight of these received CEWS payments totalling over $7 million.

[8] The CRA made a formal criminal complaint to the RCMP in January 2021. The RCMP’s Sensitive and International Investigations and the CRA entered into a formalized Joint Forces Operation to investigate the alleged offences.

[9] In total, 74 production orders were authorized for bank accounts, email addresses, and telephone numbers. Five search warrants were authorized for a residence, vehicle, and cell phones. Transmission data recorders warrants, and tracking warrants were also authorized for two cell phones. Judicial authorizations have been granted. The Forensic Accounting Management Group (“FAMG”) was contracted to analyze financial data disclosed by the CRA and to trace funds based on the production order results.

[10] On November 3, 2021, the respondent’s residence and vehicle were searched pursuant to two search warrants. In total, 26 items were seized. On November 8, 2021, two reports to a justice were made; modified reports were made on November 9, 2021. On November 10, 2021, Wadden J. of the Ontario Court of Justice ordered the items detained until February 1, 2022. On February 1, 2022, Wadden J. ordered the items detained for a further nine months, until November 3, 2022.

[11] On November 18, 2022, Parfett J. made an order for the further detention of 18 of the items until November 3, 2023. Subsequently, investigators determined that 10 of the items could be returned to the respondent.

[12] On November 1, 2023, Phillips J. ordered the further detention of the remaining items until November 3, 2024.

[13] Investigators have conducted more than 30 witness interviews and four suspect interviews. During the last suspect interview in March 2023, four folders were seized. Additional judicial authorization and follow-up was required. FAMG was provided with the information from the four folders in the summer of 2023.

[14] At the hearing of the application, Sergeant Kyle Dawson of the RCMP testified that investigators received FAMG’s report “the week before Christmas.” The report has been reviewed; no follow-up with FAMG is required. Sergeant Dawson also testified that the Report to Crown Counsel (“RTCC”) has been drafted and is in the process of being reviewed by an RCMP supervisor. The draft RTCC will then need to be reviewed by the CRA. Sergeant Dawson anticipates that this review will take about three months.

Analysis

[15] The Criminal Code sets out a scheme for the “detention of things seized.” After the initial seizure, a justice may order the items returned unless they are required for an investigation. A justice may then order detention for up to three months: Criminal Code, s. 490(1)(b), s. 490(2)(a). The Crown may make further applications to a justice for further detention for up to one year following the execution of the warrant.

[16] If charges are laid, no further applications for detention are required: Criminal Code, s. 490(2)(b), s. 490(3)(b).

[17] If no charges are laid and the police wish to continue the investigation, they must make an application, on notice to the person from whom the item detained was seized, to a judge of the Superior Court: Criminal Code, s. 490(3)(a). The issue under s. 490(3)(a) is whether the judge is satisfied, “having regard to the complex nature of the investigation”, that the further detention of the item seized is warranted. The onus is on the applicant to establish the complexity of the investigation and the need for further detention: Canada Revenue Agency v. Okoroafor, 2010 ONSC 2477, at para. 18.

[18] In assessing the complexity of the investigation, the judge may consider what work is yet to be done, the estimated time for completion, and whether the work should reasonably have been done earlier: Okoroafor, at para. 19, citing Tran, Re, [2004] B.C.J. No. 493, at para. 36; Canada v. Bromley, 2002 BCSC 149, at para. 22.

[19] In Okoroafor, at para. 21, Durno J. listed some of the factors that have supported a conclusion that the investigation was complex. The factors include:

• the number of police services and/or government departments involved;
• the involvement of foreign government;
• that the investigation requires the assistance of lawyers, accountants, computer technicians, and/or other professionals to decipher the documents or for other purposes;
• that the investigation requires the cooperation of police services other than the applicant and if so, whether those services are in Canada or elsewhere;
• that the investigation requires witnesses to be interviewed outside Canada;
• that the investigation covers an extensive timeframe and/or wide geographical area;
• that there is a confusing paper trail;
• that the offences were committed in more than one jurisdiction, by more than one person or with nominees;
• that complicated and time-consuming net worth calculations are required;
• that it is a paper case, or one where the “tentacles of evidence are wide ranging”;
• that the investigative agency has no control over the timely responses of third parties;
• that documents or communications must be translated; and
• that transcripts of intercepted private communications must be prepared.

[20] The applicant relies on a number of these factors in support of its position that this is a complex investigation, and that further detention of the items is warranted. That this has been a complex investigation is not seriously challenged by the respondent – there have been two previous orders under s. 490(3). The respondent consented to those orders.

[21] Now, however, the respondent argues the fact that the investigation is not complete is not due to the investigation’s complexity but rather the result of insufficient resources being dedicated to the investigation. The respondent highlights that there has been no new documentary evidence obtained by the investigators for at least a year. The four folders seized in March 2023 consist of 200-300 pages. FAMG was provided with this information in the summer of 2023, but their report was not completed until mid-December 2024. The draft RTCC is “in excess of 80 pages”; the respondent questions why it should take the CRA several months to review. The respondent argues that, “clearly”, insufficient human resources have been dedicated to the investigation.

[22] The applicant argues that the RCMP is “wrapping up” its investigation, and that they need time to consult with the CRA. The RTCC and the disclosure are being worked on at the same time. The applicant submits that the investigation has always been staffed with three investigators and the investigation “takes what [time] it takes”; s. 490(3) “does not place time limits on police investigations”: Okoroafor, at para. 18.

[23] It is clear that some of the factors associated with complexity are present in this case. Both the RCMP and the CRA are involved in the investigation. The case requires the assistance of professionals such as FAMG and digital forensic services. The “tentacles” of the evidence are wide ranging, as evidenced by the number of production orders, judicial authorizations, and search warrants. At the same time, this is not just a documents case; there have been numerous interviews conducted. There are two main targets of the investigation, with funds flowing through multiple accounts. The RCMP has no control over the timely response of FAMG.

[24] In R. v. Fortress Real Capital Inc., 2020 ONSC 4123, at para. 29, Justice Goldstein outlined the court’s “job” on a s. 490(3) application:

The court’s job is to say “yes” or “no” to the retention of seized material based on the complexity of the investigation. When items are seized pursuant to a warrant and the investigation remains unresolved, it is the court’s job to determine whether a reasonable investigation could have been completed any earlier. It is not the court’s job to determine whether the police have allocated sufficient resources. That said, if it becomes clear that an investigation is dragging because of insufficient resources – and not because of complexity – then the court does have a legitimate basis to refuse a further extension.

[25] It is not the court’s job to determine whether sufficient resources have been allocated to this investigation. I am unable to find that this investigation is “dragging” because of insufficient resources; it is clearly nearing completion. Nor is there any evidence of laches or bad faith: Okoroafor, at para. 31.

[26] However, I am not persuaded that the record supports a further retention of one year or even nine months. In his affidavit, Sergeant Dawson stated that “[b]arring unforeseen complications, I believe this process [supervisor and CRA review of the RTCC] will take approximately 4 additional months.” Sergeant Dawson’s affidavit was sworn on October 30, 2024 in relation to a detention order that expired November 3, 2024. Based on Sergeant Dawson’s anticipated timeline, it was expected that the review process would be completed by the end of February 2025. As of January 13, 2025, the draft RTCC was with the RCMP supervisor, with CRA review still required. Sergeant Dawson testified that he anticipated that the RTCC and the disclosure would be finalized around the same time.

[27] I am satisfied that the record supports a further retention period of five months from the date of the expired order, that is, until April 3, 2025.

Conclusion

[28] The application is allowed, and the detention period of the items listed in Appendix D to Sergeant Dawson’s affidavit is extended to April 3, 2025.

Madam Justice Robyn M. Ryan Bell
Released: February 11, 2025

[1] That is, the items that continue to be in the applicant’s custody only, and not to any items previously returned.