Source: http://blog.myleakycondo.com/index.php?op=Default&Date=200406&blogId=1060
Timestamp: 2019-04-22 20:39:58+00:00

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Part 2: Regina v. Lisa Fortier, 2004 BCPC 0189.
 To defraud ordinarily means: "to deprive a person dishonestly of something which is his or of something to which he is or would or might but for the perpetration of the fraud, be entitled" (Scott v. Metropolitan Police Commissioner (1974), 60 Cr. App. R. 124 (H.L.)).
 The standard to be applied in considering whether the acts of an accused can properly be classified as dishonest is that of a reasonable person.
(f)	to promote a sense of responsibility in offenders, and acknowledgment of the harm done to victims and to the community.
Section 718.1 directs that a "sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender."
 In this case, the Court heard evidence relating to misconduct by Fortier when she took money from another employer when she was around age nineteen. The Ontario Court of Appeal in R. v. Edwards (2001), 155 C.C.C. (3d) 473 considered the admissibility and use of evidence of other criminal acts in determining the sentence to be imposed on an individual. The Edwards appeal required the Court to consider two apparently conflicting principles of sentencing.
On the one hand, a sentencing court may not punish an offender for other untried offences. On the other hand, this and other appellate courts have held that a sentencing court may take into account evidence of other criminal acts as that evidence may shed light on the background or character of the accused or explain the circumstances of the offence (Rosenberg, J.A. at paragraph 1).
...evidence of uncharged and untried offences is admissible for the limited purpose of showing the background and character of the offender. The trial judge has discretion to refuse to admit evidence of other uncharged and untried offences.
	Ultimately, prior misconduct is evidence of character, not evidence of a criminal past.
 Both Crown and defence counsel submitted extensive books of authority to assist the Court at sentencing. A number of the cases included set out extensive reviews of the law relating to sentencing individuals who come before the court charged with large scale fraud. Those cases are instructive, but none of the cases counsel were able to provide mirror these unique circumstances wherein Fortier manipulated the company books and allowed for the strata money to be misappropriated and yet she did not benefit financially from the fraud herself.
 The Court of Appeal for the Yukon Territory recently was called upon to consider the appropriateness of a conditional sentence of 18 months imposed on a woman who used her position as head cashier to steal $212,000 from her employer. The case of H.M.T.Q.. v. Reid ( Y.K.C.A. 4) is instructive as it is a very recent decision with some factual similarities to the case at bar.
 In considering applicable sentencing principles for "white collar" criminals, Hall, J.A., speaking for the Yukon Court of Appeal, noted (at paragraph 7) that in cases involving large scale frauds with serious consequences for the victims, general deterrence is central to the sentencing process. Denunciation has also been repeatedly cited as the other key sentencing principle to be considered in crimes of this nature. Specific deterrence does not play a significant role in these types of cases due to the fact that white collar crime is almost always committed by persons who take advantage of their positions of trust and power to victimize others. Indeed, other courts have noted that persons who use their good character to enable themselves to commit fraud cannot also use that same good disposition as a mitigating factor at sentencing.
...the danger which the community has to be protected from is not the danger posed by the accused individual, but rather other individuals in a position of trust who may be inclined to commit such a crime. The purpose of imposing a significant jail term is to deter those other individuals from committing a similar crime.
 The primary sentencing factor to be considered in cases of this nature is general deterrence. Although general deterrence is most often associated with imprisonment, jail is not the only means by which others might be deterred. For example, loss of employment, loss of a career, community disgrace and being a convicted criminal all can work to deter others from committing these types of crimes.
	In R. v. Hoy,  B.C.J. No. 1649, Chief Justice McEachern, speaking for the B.C. Court of Appeal (in dismissing the appeal of an individual who had taken $370,000 from clients connected with his business and received a three year jail sentence), noted "this is an offence where there may be more value or usefulness in the principle of general deterrence than in many other types of offences."
	Ryan, J.A. observed in R. v. Johnson (1996), 112 C.C.C. (3d) 225 (B.C.C.A.) that deterrence operates in a general way so that those that would be encouraged to break the law must know and all law abiding citizens must be assured that law breakers will receive sentences which will reflect the seriousness of their crimes.
The particular class that must be deterred here includes employees of banks, trust companies, savings and loan associations and a number of other types of financial institutions: in fact, the employees of all corporations where large sums of money and the indicia thereof come in and go out and opportunities for thefts of large sums exist or may appear to the employees to exist.
In this ever-increasing computerized world of ours, access to large sums of money is often just a password away. The temptation may very well be overwhelming to employees if they thought when caught all the punishment they would receive would be a minimal sentence served in the community.
	As our Court of Appeal noted in R. v. Schneider,  B.C.J. No. 420 (at paragraph 23), while other cases are of some assistance in fixing a range of sentence, each case is unique. The Court of Appeal noted the cases suggest a range of six years at the high end (in Spiller supra) to one year at the low end (see R. v. Skalbania,  B.C.J. No. 2872).
	In R. v. Wilder et al.,  B.C.J. 644 (at paragraph 69) Romilly, J. adopted a set of factors to be considered in imposing sentences for cases involving fraud and false pretences articulated by the Quebec Court of Appeal.
The factors which permit one to measure liability of an accused on sentencing, in matters of fraud, were well set out in the decision of our court in R. v. Levesque (1993), 59 Q.A.C. 307 (Que.C.A.). These facts can be summarized as follows: (1) the nature and extent of the loss, (2) the degree of premeditation found, notably, in the planning and application of a system of fraud, (3) the accused's actions after the commission of the offence, (4) the accused's previous convictions, (5) the personal benefits generated by the commission of the offences, (6) the authority and trust existing in the relationship between the accused and the victim, as well as (7) the motivation underlying the commission of the offences.
Where these factors point to fraudulent wrongdoing with no indication of mitigating circumstances, the courts give preference to incarceration as the preferred means of protecting society and of general deterrence, and expressly reject consideration of rehabilitation.
See also R. v. Wilson (2003), 174 C.C.C. (3d) 255 (Ont.C.A.).
 As to the availability of conditional sentences for these types of crimes, it is clear from the decision of the Supreme Court of Canada in R. v. Proulx et al. (2000), 140 C.C.C. (3d) 449 that no category of offence is excluded from the new sentencing regime. The Supreme Court also noted that "the stigma of a conditional sentence with house arrest should not be underestimated" (at paragraph 105). Living under strict conditions in a community where the offender and the crime are widely known can be difficult and effective. The Supreme Court also cautioned that "Judges should be wary, however, of placing too much weight on deterrence when choosing between a conditional sentence and incarceration. The empirical evidence suggests that the deterrent effect of incarceration is uncertain" (at paragraph 107).
What the authorities make clear is that the purpose of incarcerating these offenders is not to protect the community from any danger posed by the particular offender, but to protect the community from the danger posed by those who may be inclined to engage in similar conduct. In the context of crimes of dishonesty, and particularly those involving a breach of trust, for the purposes of resolving the issue of whether "serving the sentence in the community would...endanger the safety of the community", the risk of endangering the safety of the community must not only be measured by an assessment of the danger which the particular offender may pose if permitted to serve the sentence in the community. The risk must also be measured by an assessment of the danger which others may pose if the offender is permitted to serve the sentence in the community.
There will also be a danger to the community if the sentence imposed is not of a nature to deter others from conduct analogous to that ...of the accused (at paragraph 8).
 Counsel for the crown here argued that an appropriate sentence for Fortier would be a sentence of imprisonment of 2 to 4 years duration, with the upper end of that range being most appropriate. Crown Counsel further argued that although this Court would have to make findings of fact as to the role Derrick played in the misappropriation of the money, regardless, Fortier orchestrated a complex and long-running fraud and should be sentenced to federal jail time.
 Defense counsel acknowledged that lengthy "real" jail sentences are ordinarily imposed for these types of white collar crimes, but said sentencing courts have made exceptions to this practice where there are extraordinary circumstances. He argued that this Court should find a conditional sentence of two years less a day combined with a three year probation term appropriate in the unique circumstances of this fraud.
 There are a number of aggravating factors that need to be taken into consideration in crafting a fit sentence on these facts. To begin, the fraud lasted for many years and only ended when the company ceased operations. A significant amount of money was misappropriated and none of the money has been, or is likely ever to be, recovered. Significant costs were incurred in investigating the fraud and in attempting to trace and prove the losses.
 Fortier's conduct jeopardized the viability of the company, her co-workers' jobs, and client money. The accused was in a position of trust in the company and in relation to some of the strata councils. The fraud involved a significant amount of deceit: the books of PDPM were false; bank records were concealed; and monthly statements for clients of PDPM were completely false.
 Finally, the accused was involved in previous dishonest conduct with an employer when she was 19 years old. I accept, in this regard, however, that she was in a physically abusive relationship at the time and the dysfunctional relationship was a factor in the improper conduct.
 There are, however, a number of mitigating circumstances. Firstly, the accused pled guilty to the offence, albeit at a very late date. Although the sentencing hearing was prolonged, a trial would have taken a tremendous amount of court time and caused far greater inconvenience to witnesses.
	Derrick and PDPM profited from the fraudulent scheme. Only Fortier was prosecuted.
 The accused did not benefit in a personal financial sense from the crime. Fortier was young at the time these offences were committed and is still quite young. She does not have a criminal record. Fortier has complied with her bail release conditions.
 Fortier appears to be pro-social and conforming in her attitudes, although she is intimidated in relationships and is easily swayed. She has the support of her family and a network of friends in Penticton. She and her family have been disgraced in the small community of Penticton.
 Fortier has a history of mental health issues that appear to have played a role in the offence at hand. Currently, she is suffering from a severe degree of depression. She expressed extreme guilt and shame about her past behaviours to Dr. Eaves, the author of the psychiatric assessment tendered at this hearing. I note, however, that some caution needs to be applied to Dr. Eaves' report given that it was based on interviews he had with Fortier and information she provided to him. No psychological or psychiatric testing appears to have been undertaken to corroborate the doctor's findings from the anecdotal information.
 Fortier sought out and accepted psychological and psychiatric assistance for her difficulties including daily attendance at a psychiatric day program in Penticton in the spring of 2004. She has expressed considerable remorse to the therapeutic staff she has been working with. Fortier has been in two motor vehicle accidents since 1996 and has struggled to recover from the injuries she sustained in these accidents. Her continued mental health treatment and treatment for her vehicle accident injuries would best be attended to out-of-custody.
 Lastly, since April 2000, Fortier has embarked on retraining and is in a new job. She has been described by staff at the hospital where she is now employed as a cheery and dependable worker. She is not employed in a job where she would have access to other people's money.
 In considering a fit sentence for Ms. Fortier, I have given careful consideration to the principles of sentencing set out in the Criminal Code including: the need to denounce unlawful conduct; general and specific deterrence; the need to separate offenders from society where necessary; rehabilitation; reparations for harm done to the victims or the community; and the promotion of a sense of responsibility in offenders and an acknowledgment of the harm done to the victims and the community.
 In the case at bar, there is a need to denounce Ms. Fortier's unlawful conduct. The question is how that ought to be done in the unique circumstances of this case. There is a need for general deterrence here, but not, in my opinion, for specific deterrence. There is no need to separate the accused from society nor is there a need to actively assist in her rehabilitation.
 The most difficult factor for consideration here is the determination of the role Derrick played in the loss of the money. Crown counsel stated at the end of this lengthy sentencing hearing that Derrick was willfully blind to the use of client money by herself and by the company. There is really no question that the company and Derrick consumed most of the money that disappeared.
 Defence counsel urged the Court to find Derrick was not willfully blind, but that she was deliberate in her actions and played a role in directing the fraud. The defence has the onus of proof on a balance of probabilities in proving this fact, in my opinion, since it would logically be a mitigating factor at sentencing (see s. 724 of the Code).
	On this difficult question, I find the following factors are significant when considering the role played by Derrick.
 To begin, Derrick and her company were the ones who profited from the fraud. It is almost inconceivable that the amount of money involved could have been squandered without some active direction by Derrick.
 PDPM was the only source of income for Derrick. She testified she had a pretty good sense of the revenue and expenses of the company. It is only logical that she must also have had a good sense of her own income as PDPM manager and what her personal expenses were. She had to have known she was spending far more than she was earning and the money she was spending over and above her "draw" was depleting company funds to which she was not entitled.
 Before Fortier became responsible for the company books, Derrick had directed Shirley Trowell, another bookkeeper, to take management fees ahead of when the company earned them. When Trowell refused to do so, Derrick herself arranged to do this. This prior act makes it far more believable that Derrick directed Fortier to take management fees early when she took over the bookkeeping duties. However, as crown counsel reminded the Court, had Fortier refused to manipulate the books, the company would likely have failed much earlier than it did. This is, of course, what ordinarily happens to companies that do not make enough money.
 Derrick's failure to declare any of the excess (unlawfully earned) revenue to the tax authorities is instructive. Had Derrick thought the money was legitimately earned, even if she was blind to whether she was in fact entitled to the money, one would have expected her to have declared the income. This failure calls her overall veracity for truthfulness into question.
 In a similar vein, Derrick's false declarations to the Real Estate Council in the subordination agreements calls her credibility into question. Additionally, that the financial status of PDPM was tenuous enough to require both the loan of money from the agent nominee and the unusual use of the shareholders loan accounts tends toward the conclusion that Derrick was more than simply blind as to the source of her money.
 The events surrounding the decision taken by the Bank of Nova Scotia to terminate its relationship with PDPM are noteworthy. The bank manager told Derrick in person and in writing about the abysmal state of the company books and bank accounts in October 1999. Yet Derrick apparently did almost nothing in response in terms of getting the company's finances in order.
 Derrick did not request a regular accounting of her personal expenditures from Fortier. It is interesting that Derrick testified she received quarterly financial statements from Fortier prior to her 1996 car accident and she recalled they may have shown expenses were out-stripping income.
 Derrick would have the Court believe she was unaware the money she was spending was unlawfully obtained. Yet, the evidence clearly established she had some business acumen and was familiar with real estate and property management business. She had a demonstrated ability to negotiate staff wages, strata management contracts, lease agreements and the like. In response to the complaint of Mr. Durman, she apparently retrieved all documentation necessary to conduct a review of the books and records and handled or deflected the concerns of her client.
 On many occasions during Fortier's employment with the company, Derrick was alerted to serious problems with the financial status and the records of the company. Although she did alert the postmaster to concerns about undelivered cheques and contacted the police in the spring of 1999 when she thought Fortier had written company cheques to herself, she did little else to address the problems.
 It needs to be born in mind, however, that PDPM's own accountants conducted a review of the corporate books each year as required, and the accountants did not detect the fraud. The accountants did note there were problems with the books that needed to be remedied. Derrick would have been aware of these yearly reviews and the problems noted.
 Other things point away from Derrick having directed the misconduct. She hired additional staff to help out in the accounting department when things got behind. As well, no other PDPM staff complained that Derrick instructed them to do anything unlawful. Derrick was away from the office a great deal, leaving Fortier essentially in charge. And, despite a massive seizure of documentation from the office, nothing of any substance was uncovered to corroborate Fortier's evidence that she put in writing to Derrick what Derrick had instructed her to do.
 Fortier's motivation to commit this crime is puzzling. She told the court she did what she did because Derrick told her to do it. In the earlier years at least, she believed Derrick was always going to come up with enough extra business to cover the money taken. Derrick was a woman almost old enough to be Fortier's grandmother. She was a mature, successful and sophisticated business person whom Fortier looked up to. She was in a position of power as Fortier's employer.
 Fortier did not receive a raise in pay the entire time she worked for Derrick and was paid quite modestly for her work. Fortier did not gain from the fraud in a financial sense. In my opinion, her conduct in manipulating the books is more consistent with acting at the direction and encouragement of Derrick than it is with doing what she did on her own.
 The Court must have reservations about some of Fortier's evidence. Her credibility is suspect. She lied to everyone about the state of the strata accounts and the financial statements. She lied to her co-workers repeatedly. She was not forthcoming as to her role in crafting the fraud and often only admitted to her role when cornered with significant documentary evidence. She created a completely fraudulent set of books of account and failed to keep track of where the misappropriated money was going, making it impossible to confirm her story as to where the money went. She seemed unprepared to acknowledge how early the "kiting" began or her role in this.
 On balance, on the evidence before me, I find the only conclusion I can draw is that Derrick was not just willfully blind as to the source of the misappropriated money. Her conduct is consistent with a degree of knowledge and control beyond that of a passive beneficiary. Derrick and her company spent a tremendous amount of misappropriated money and I find Derrick must have appreciated she was spending money that was not hers and that was not lawfully obtained. The evidence supports Fortier's assertion that Derrick influenced and directed, beyond a minimal degree, the dishonest acts Fortier performed. That being so, the defense has established, on a balance of probabilities, that Derrick actively participated in the fraud.
 Although I have come to the conclusion that Derrick directed Fortier to misappropriate PDPM client money, I still need to carefully assess what the moral blameworthiness of Fortier was in relation to her own misconduct.
 As to the issue of her culpability, I find the evidence establishes Fortier was not simply a pawn of Derrick. Although Fortier was an employee and subservient to Derrick throughout the time of the fraud, Fortier had choices available to her that would have allowed her to avoid the unlawful conduct. Fortier is a bright young woman who could have left her job with PDPM and obtained other work. She had no dependents in the traditional sense and could have, in fact, turned to her own family to assist her financially if this was a concern in contemplating leaving PDPM.
 Fortier was not a victim of this crime. Fortier may feel that Derrick betrayed her in that Derrick and her company were the ones who profited from the crime and Fortier has been left to face the legal consequences alone. This does not, however, take away from Fortier's own moral culpability. Throughout the time in question, Fortier chose to continue to misappropriate client money and manipulate the books so as to disguise what was really going on in order to perpetuate the fraud. Fortier acted of her own free will and did not do what she did merely because she was directed to do so and had no alternatives.
 Finally, I note there is another unusual aspect of this case that needs to be considered. Fortier is only charged with misconduct in relation to a seven month period, from September 1999 to April 2000. The evidence is clear that Fortier's fraudulent conduct extended over a significantly longer period of time, starting in 1995/96. Her misconduct prior to September 1999 is to be considered by this Court for the purpose of determining the appropriate sentence for her fraudulent conduct during the time period in which she is actually charged. The early years of Fortier's fraudulent conduct with the company provide the context for the misconduct of Fortier as charged in the Information before the Court and the time frame set out therein.
 As counsel noted, the Court then is left to struggle with how much money was defrauded during the time period charged in the Information. The evidence was clear that most of the money was defrauded from the victims before September 1999 and that what was occurring afterward was really just a rapid movement of what little money remained (and what appeared to remain) in an effort to continue the ruse. It should also be noted that some new money was obviously received during this time and that money was blended into the "bad" and it too essentially became lost.
 Ultimately, I have determined it is unnecessary to try to establish how much money was taken from September 1999 and forward and that the Court would be unable to do so with any confidence even if it wished. What is clear is that the misconduct of Fortier ultimately allowed the misappropriation, to the benefit of Derrick and her company, of approximately one million dollars.
 This case involves a complex and unique course of fraudulent conduct. This is a difficult case to determine a fit sentence. I thank both counsel for their able submissions at the sentencing hearing. Both counsel advised the Court they were unable to find any reported cases with facts similar to this case in terms of large fraud committed by an employee which benefited the employer.
 Counsel for Fortier argued the fact Derrick and PDPM consumed the misappropriated money along with the participation by Derrick in the fraud (as I have found above), makes this case so exceptional as to make a conditional sentence and probation a fit sentence. Crown counsel argued that even if the Court were to find Derrick directed the fraud, Fortier was ultimately the person who did the complex and day-to-day activities necessary to carry out the fraud and should thus still be sentenced to jail for three and a half to four years.
 The fact that Derrick and PDPM consumed the misappropriated money along with the role played by Derrick in the fraud does make this case and Fortier's role in it unique. However, I have nonetheless come to the conclusion that Fortier's role in the fraud has a high degree of moral blameworthiness the effect of which is such that there must be a sentence of jail in the federal range.
 Accordingly, I have concluded that a fit and proper sentence on these facts for Fortier is two and a half years in jail. In my opinion, a two and a half year jail sentence recognizes that the misappropriated money was not spent by Fortier, the role played in the crime by Derrick, and the high degree of moral blameworthiness of Fortier. The victim fine surcharge will apply.
The Honourable N.N. Phillips, P.C.J.

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