CITATION:
R. v.
Eizenga
, 2011 ONCA
          113

DATE: 20110209

DOCKET: C49991

COURT OF APPEAL FOR ONTARIO

Weiler, Laskin and Goudge JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Mark
Eizenga

Appellant

Daniel A. Stein, for the appellant

Gregory J.
Tweney
, for the
          respondent

Heard: September 24, 2010

On appeal from the conviction entered by Justice John L.
Getliffe
of the Ontario Court of Justice on November 4,
          2005, and the sentence imposed on July 17, 2007, with reasons reported at
          2007 ONCJ 372.

Weiler J.A.:

[1]

The appellant Mark Allan
Eizenga
pled guilty to one count of fraud over $5000. Following his plea, his counsel
    advised the court that he and
Eizenga
had reviewed
    the Crowns draft of the facts and were satisfied that the essence of the count
    that hes pleaded to will be substantiated by the facts. The draft that
Eizenga
and his counsel had seen was consistent with facts
    that
Eizenga
had already admitted to in an agreement
    he had reached with the Ontario Securities Commission (OSC).

[2]

Although
Eizenga
was
    represented at the time he pled guilty, he was unrepresented at his sentencing
    hearing some 19 months later. At that time, he made submissions challenging a
    number of the Crowns factual assertions. Many of his disagreements directly
    contradicted what he had admitted in his agreement with the OSC; other
    assertions had to do with minimizing his legal liability. In response to
    questions from the trial judge,
Eizenga
said he
    didnt believe he was guilty. The trial judge indicated he would not exercise
    his discretion to strike the plea. He held that [t]he elements of the offence
    pleaded to are clearly apparent and [b]y anyones arithmetic
Eizenga
had perpetrated a massive fraud on the investing
    public and breached the trust of those persons who invested money with him. The
    trial judge sentenced
Eizenga
to 8 years
    imprisonment and ordered him to pay restitution to the victims of the fraud in
    the amount of $35,639,395.05.

[3]

Eizenga
appeals. The issues
    raised in relation to his conviction are:

·

Was the guilty plea valid?

·

Was
Eizengas
right to
    a fair trial infringed because (a) the trial judge did not hear from
Eizenga
before deciding he would not strike the plea or (b)
    he did not provide sufficient assistance to
Eizenga
when he was unrepresented?

·

What facts was the trial judge entitled to rely
    on in sentencing
Eizenga
?

[4]

I would dismiss the conviction appeal. At the time
Eizenga
entered his plea, he was represented by experienced
    counsel and so there was a presumption that his plea was valid. For the reasons
    that follow, I would hold that this presumption has not been rebutted, and that
    the trial judge was correct in finding that the plea met the requirements of a
    valid plea, namely that it was voluntary, unequivocal and informed. Having
    regard to the record as a whole,
Eizenga
has failed
    to convince this court on a balance of probabilities that the plea is invalid
    and should be set aside. I would reject
Eizengas
submission that the plea was equivocal in that it was conditional on an agreed
    statement of facts being worked out as well as not informed. The trial judges
    decision not to strike
Eizengas
plea was a valid
    exercise of his discretion, given the history of the proceedings and the fact
    that
Eizenga
never asked to withdraw his guilty plea
    although he was aware he could do so. While
Eizenga
was not represented by counsel at the sentencing hearing, the hearing was fair.
    Furthermore, although
Eizenga
took issue with certain
    facts, the facts that were undisputed satisfy every element of the offence of
    fraud, and his disagreements with how the Crown characterized the facts do not
    affect his legal liability.

[5]

I next address
Eizengas
application
    for leave to appeal his sentence.
Eizengas
primary
    contention is that the restitution order should be quashed because the trial
    judge did not consider his ability to pay restitution. In addition, he submits
    that the order was disproportionate to his involvement in the fraudulent scheme
    as he transferred $17.6 million to his deceased co-accused. Finally,
Eizenga
submits that the trial judge failed to consider
    whether, having regard to
Eizengas
sentence of
    imprisonment, the overall sentence was fit.

[6]

I would agree with these submissions. Given the trial
    judges errors in principle, I would hold that the restitution order is
    excessive, that it renders the overall sentence unfit and that it must be set
    aside.

[7]

It therefore falls to this court to decide whether, as
    part of a fit sentence, a restitution order is appropriate and, if so, in what
    amount. For the reasons that follow, I would hold that a restitution order is
    appropriate. I would, however, vary the amount of the restitution order to $20
    million. This figure reflects
Eizengas
degree of
    criminal responsibility in a massive fraud that involved a significant breach of
    trust. It also reflects both the funds that
Eizenga
transferred offshore whose disposition is unaccounted for and amounts that
Eizenga
admits to taking as income.

I.

The Conviction Appeal

a.

History and
    Procedural Background

[8]

In assessing the validity of
Eizenga's
guilty plea, I have considered the background to the plea, the record of the
    court proceedings both on September 27, 2005, and when the plea was entered on
    November 4, 2005, and the lengthy history that followed. That history includes
Eizengas
statement to the author of his pre-sentence
    report that he accepts responsibility for the offence as he was in charge of
    the company. The pre-sentence report is dated June 5, 2007, a week before
Eizengas
sentencing hearing on June 12, 2007, at which he
    disputed many of the Crowns allegations. For the sake of completeness a
    summary of these events is detailed below.

i.

The Charges

[9]

Following an investigation that began in
    September 1998,
Eizenga
and James Edward Sylvester (James
    Sylvester) were jointly charged on May 8, 2003, with one count of fraud
    exceeding $5000 contrary to s. 380(1) of the
Criminal Code
, and one count of theft over $5000 contrary to s. 334
    of the
Criminal Code
.

The information
    alleged that the two offences were committed sometime between January 12, 1995
    and December 31, 1998, but otherwise provided no other details relating to the
    offences.

[10]

The fraud and theft charges arose out of
    allegations surrounding a group of corporations that
Eizenga
controlled called the Saxton Group.
[1]
The Saxton Group encompassed a large network of related companies that included
    at least: (1) 34 offering corporations that sold securities to the public; (2)
    Saxton Investments Ltd. (Saxton Investments), the main managing entity; (3) Saxton
    LMD, a private company owned by
Eizenga
and his wife,
    Lisa; and (4) various Cuban businesses operating under the name Sussex Admiral
    Group Limited (later Sussex Group Ltd.), of which
Eizenga
was once president. Overall,
Eizenga
incorporated at
    least 40 corporations in Ontario and two in the Bahamas. The Saxton Groups
    core business was the development and manufacturing of beverage and food
    products in Cuba and elsewhere the Caribbean.

[11]

The Saxton Group marketed and sold shares in the
    offering corporations to the investing public, improperly exploiting the seed
    capital prospectus exemption so that Saxton would not have to give full
    disclosure of information to investors. Saxton misrepresented these shares to
    investors as GICs, Fixed Dividend Accounts and Equity Dividend Accounts,
    suggesting they were low-risk investments when they were not. Although the
    investors had to sign a subscription agreement which had a clause acknowledging
    that they had received and reviewed an Offering Memorandum, very few of them
    ever received one.

[12]

The money that was raised by the offering
    corporations was transferred to Saxton Investments. The funds were pooled and
    then diverted, directly or indirectly, to the Cuban and other offshore
    operations; some money was also diverted to Saxton LMD. Personal real estate,
    automobiles, and other assets that were owned or enjoyed by
Eizenga
and his family were paid for by either Saxton Investments or Saxton LMD
    cheques.

[13]

Investors were promised a high rate of return;
    however, there is no evidence that the Saxton Group ever made enough profit
    from its Caribbean operations to meet that rate of return. When investors
    redeemed their investment or realized their interest, it was taken directly
    from the funds that other investors had put in.

ii.

Ontario Securities Commission Agreement

[14]

On August 29, 2005,
Eizenga
signed a settlement agreement with the OSC (OSC Settlement Agreement).
    Section 4 of the agreement provides:

4. For the purposes of this proceeding, and of any
    other proceeding commenced by a securities regulatory agency,
Eizenga
agrees with the facts set out in Part III of this
    settlement agreement.

[15]

Section 47 of the
agreement
provides:

47. Staff and
Eizenga
agree that if this settlement agreement is approved by the Commission, neither
    Staff nor
Eizenga
will make any public statement
    inconsistent with this settlement agreement.

[16]

In the OSC Settlement Agreement, among other
    facts,
Eizenga
admitted to the following:

·

he controlled the Saxton companies and made all
    key business and management decisions relating to the distribution of
    securities while purporting to rely on a prospectus exemption that, in fact, was
    not available in the circumstances (
paras
. 8-11, 19);

·

he approved all promotional and investor
    relations material distributed by Saxton (
paras
. 19,
    21, 28);

·

he controlled the monies raised through the
    distribution of securities, and he possessed the authority to independently
    sign cheques and control the flow of funds from the offering corporations to
    Saxton Investments and from Saxton Investments to other parties (para. 23-25);

·

he made misrepresentations to salespeople,
    investors, and prospective investors about the true nature and risk of the
    investment (
paras
. 28-29);

·

Saxton distributed quarterly account statements
    to investors purporting a rate of return that had been promised to investors,
    even though there were no financial statements or record of any revenue
    generation by the Saxton operations and thus no means to establish these net
    financial results (
paras
. 30-34);

·

after receiving legal advice that the distribution
    of Saxton securities likely infringed Ontario securities law, and in the face
    of OSC inquiries in 1998,
Eizenga
continued to
    solicit investors and distribute securities (
paras
.
    35-37).

iii.

The Guilty Plea

[17]

Eizenga
initially elected for
    a trial by judge and jury at the Superior Court of Justice. However, prior to
    the preliminary hearing being held, a number of discussions took place between
    counsel and the court in the form of case management and focus hearings, which
    resulted in the case being moved to the Ontario Court of Justice.

[18]

On September 27, 2005,
Eizengas
counsel Mr. William
Trudell
informed the court that
Eizenga
had advised him that he intended to plead guilty
    for the record. Mr.
Trudell
stated that his clients
    instructions [were] clear that he wanted to plead guilty. He also advised that
    he and Crown counsel intended to negotiate an agreed statement of facts. Mr.
Trudell
stated: We hope that it becomes an agreed
    statement of facts and were going to be working towards that. He advised that
    Mr.
Eizenga
would get independent legal advice after
    the facts have been worked on.
Counsel did not suggest
    that the purpose of getting independent legal advice had anything to do with
    the elements of the offence before the court or that the plea was in any way
    conditional on a future agreed statement of facts. The trial judge would later
    note in his reasons for sentence that the purpose of having
Eizenga
get independent legal advice was related solely to an issue involving the
    Canada Revenue Agency.
[2]
The formal plea hearing was put off until November 4, 2005.

[19]

On November 4, 2005,
Eizenga
appeared at his plea hearing at the Ontario Court of Justice. Mr.
Trudell
advised the court that his client wished to
    re-elect to be before the Ontario Court of Justice, and the Crown consented.
Eizenga
then pled guilty to fraud over $5000. The following
    exchange occurred:

THE COURT: Now as I understand that Mr.
Trudell
, in keeping with your comments that youre
    satisfied that your client has entered this plea after reviewing the facts
    eventually that will be confirmed before the Court, then youre satisfied the
    gravamen of the offence supports the plea?

MR. TRUDELL: Ah, Your Honour, I am and my client
    has reviewed the Crowns draft of the agreed statement of facts and so hes
    aware of the allegation, but were satisfied that the essence of the count that
    hes pleaded to will be substantiated by the facts that you have before you,
    sir.

[20]

As a result of the guilty plea, the Crown withdrew the
    theft over $5000 charge. The matter was put over to be spoken to on December 2,
    2005, so that Mr.
Trudell
and the Crown could
    negotiate an agreed statement of facts for the sentencing hearing, which was
    scheduled for March 6, 2006.

iv.

The record following the guilty plea

[21]

Following
Eizengas
guilty
    plea on November 4, 2005, the plea was maintained for over a year and a half throughout
    the many court appearances detailed below:

·

December
    2, 2005: an agent of Mr.
Trudell
appeared to
    obtain an adjournment. The case was rescheduled for December 20, 2005.

·

December
    20, 2005: Crown counsel advised the court that he spoke with Mr.
Trudell
for the first time about the facts and were not together yet. The Crown
    also advised that both parties wanted the matter adjourned to January 20, 2006,
    so that they could continue the e-mail process by which we are exchanging
    drafts of the facts that were trying to arrive at.

·

January
    20, 2006: Crown counsel advised that he and defence counsel were
    reasonably close upon the statement of facts and we figured by the end of
    today, we will be there. Mr.
Trudell
also
    acknowledged that he and Crown counsel were very, very close to finalizing the
    agreed statement of facts. Crown counsel anticipated that the facts will be
    finished today and sent the most recent version to Mr.
Trudells
office, so that
Eizenga
could receive independent
    legal advice. Mr.
Trudell
stated that there are just
    some things in the agreed statement of facts that we have to be very careful
    of, but were 99 percent there. The matter was adjourned to March 29, 2006.

·

March
    29, 2006: Mr.
Trudell
advised the court that
    he and the Crown had been working very hard to put together an agreed
    statement of facts, in order to avoid a
Gardiner
hearing (pursuant to
R. v. Gardiner
,
[1982]
    2 S.C.R. 368)
or other contested hearing. He advised that were almost
    there in terms of the agreed statement of facts and that
Eizenga
had been sent to a Toronto firm for independent legal advice. Mr.
Trudell
had to put together a brief for the Toronto firm,
    so he requested an adjournment. He anticipated that all matters could be
    resolved by then. The court adjourned the matter to June 23, 2006.

·

May 16,
    2006: Mr.
Trudell
appeared before the court to
    ask that he be removed as counsel of record. He advised the court that there was
    a collapse of the solicitor-client relationship. The court granted his request
    and removed Mr.
Trudell
as
Eizengas
counsel of record.

·

June 23,
    2006:
Eizenga
personally advised the court
    that he had spoken to a few lawyers and was in the process of retaining one of
    them. The matter was adjourned to August 25, 2006, to give time for
Eizenga
to get matters together.

·

August
    25, 2006:
Eizenga
advised that he was still
    working on the retainer, but that otherwise his counsel was now Ms.
Anida

Chiodo
. The matter was
    rescheduled for September 22, 2006.

·

September
    22, 2006:
Eizenga
advised that he was still
    working on the retainer. The matter was adjourned again to November 27, 2006,
    to give time to
Eizenga
to get a hold of his lawyer
    and to finish off this retainer.

·

November
    27, 2006: Ms. Bella
Petrouchinova
, acting on
    behalf of Ms.
Chiodo
, requested an adjournment. Ms.
Petrouchinova
explained that
Eizenga
had retained Ms.
Chiodo
only very recently, and there
    were eight boxes of disclosure to sort through. Crown counsel stated that for
    the purposes of the sentencing hearing, he was intent on proceeding with the
    last draft of the facts that was provided to Mr.
Trudell
that was given to Mr.
Eizenga
to take to other
    counsel for independent legal advice. Crown counsel advised the court that he
    would ensure that Ms.
Chiodo
received a copy of that
    last draft. The matter was adjourned so that Ms.
Chiodo
could review the disclosure and court transcripts.

·

January
    12, 2007: Ms.
Chiodo
appeared before the court
    and advised that she was retained only for the limited purpose of (a) reviewing
    the transcript with the view to consider whether there was a basis in law to
    strike the plea that was entered in 2005, and (b) arriving at an agreed
    statement of facts with the Crown if an application to strike the plea was
    unsuccessful. She explained that she was not retained to assist in a
Gardiner
hearing or to deal with any issues regarding aggravating factors in the
    statement of facts that
Eizenga
disputed.
Eizenga
confirmed the scope of her retainer in court. Ms.
Chiodo
also advised that she had not received all the transcripts yet and that
Eizenga
was not in a position to agree to anything in the
    Crowns statement of facts. Crown counsel advised the court that if the parties
    could not come to an agreed statement of facts, then they might have to proceed
    to a
Gardiner
hearing. Ms.
Chiodo
then stated that she would be content to
    continue discussions with the Crown in order to arrive at an agreed statement
    of facts, but if that did not happen by the next court appearance, then she would
    bring an application to strike the plea. The matter was adjourned to January
    15, 2007, and then again to March 2, 2007.

[22]

At the hearing on March 2, 2007, Ms.
Petrouchinova
appeared in court again on behalf of Ms.
Chiodo
. She advised that there had been a significant
    breakdown in communication between Ms.
Chiodo
and
Eizenga
, which has not made it possible for her to receive
    the significant input she requires on the agreed statement of facts. Ms.
Petrouchinova
advised the court that Ms.
Chiodo
had not received any input from
Eizenga
,
    could not proceed in any fashion, and therefore requested that she be removed
    as counsel of record.
Eizenga
then stated in court
    that since Ms.
Chiodo
was not retained to represent
    him in a
Gardiner
hearing, it was
    understandable that she be removed as counsel of record. The trial judge granted
    the application to remove Ms.
Chiodo
from the record,
    set the matter over to another date for facts and sentence, and ordered a
    pre-sentence report to be prepared.

[23]

Crown counsel then advised the court that when he and
    Mr.
Trudell
were negotiating the agreed statement of
    facts, the statement had been distilled from a 150 page document down to about
    a 40 page document. He advised the court that on November 1, 2005, Mr.
Trudell
told him that he would send the defences proposed
    changes to the Crown;
Eizenga
would then get
    independent legal advice once the agreed facts are complete. On January 20,
    2006, Crown counsel sent back a copy of the agreed statement of facts incorporating
    all

the changes that Mr.
Trudell
had requested on
Eizengas
behalf. The Crown did not hear back until March 21, 2006, when Mr.
Trudell
told him that he sent
Eizenga
out for independent legal advice.

[24]

The Crown took the position that there had been an
    agreed statement of facts between the parties in March 2006. Mr.
Trudells
correspondence in November 2005 meant that he was
    going to send
Eizenga
out for independent legal
    advice only when the facts were agreed upon. The Crown submitted that when Mr.
Trudell
told him on March 21, 2006, that
Eizenga
was now looking for independent legal advice, it
    implied that
Eizenga
had agreed to the version of the
    statement of facts that had incorporated the defences proposed changes.

[25]

Eizenga
stated in court that
    he did not agree to any statement of fact either before or after Mr.
Trudell
told him to seek independent legal advice. The trial
    judge then advised
Eizenga
that he would have the
    opportunity to oppose the facts as read in by the Crown on June 12, 2007, during
    submissions on sentence.

v.

The pre-sentence report

[26]

A pre-sentence report was prepared and dated
    June 5, 2007. The officer who prepared the report noted that
Eizenga
accepts
r
esponsibility for the offence as he was in charge of
    the company. He was at a loss to explain where the reported $42 million [sic]
    disappeared.

vi.

The sentencing hearing

[27]

The sentencing hearing finally began on June 12,
    2007. Crown counsel read the statement of facts into the record and
Eizenga
responded with point-by-point disagreements on the
    Crowns facts.
Eizenga
then stated that he wanted to
    challenge the victim impact statements as well.

[28]

In his reply, Crown counsel noted that many of
Eizengas
disagreements with the facts were in direct contradiction
    to what he had previously admitted to in the OSC Settlement Agreement. In
    particular,
Eizenga
had admitted that he directed the
    implementation of the business plan at the Saxton Group, that he controlled the
    money, that there were no financial statements or record of any revenue
    generation, that Saxton operated at a loss, and that
Eizenga
continued to solicit investors and distribute securities after failing to
    respond to OSC inquiries.

[29]

Crown counsel also reminded the court that he
    and Mr.
Trudell
had negotiated the statement of facts
    that was read into the record, and that the Crown had incorporated all the
    changes that the defence wanted. The Crown submitted that the version that was
    forwarded to Mr.
Trudell
can be assumed to be an
    agreed statement of facts, and that it was not open for
Eizenga
to now retract those facts nor back away from the admissions he made in the OSC
    Settlement Agreement.

[30]

Eizenga
then stated
    the following:

I directed
    the company. I made the decisions.
Perhaps I made the wrong decisions. I
    brought on professional people that were licensed to manage sales people and I
    made the decision to entrust that portion to them. I decided to bring on the
    accountants. Bring on other people with more experience and was I at the head?
I was at the helm. I was directing the
    company. Theres no disagreement.
[Emphasis added.]

[31]

The trial judge asked
Eizenga
if he still took the position that he was guilty, and
Eizenga
responded: I feel very guilty. I feel very badly about what has happened. The
    trial judge inquired further, and
Eizenga
stated, I
    dont believe Im guilty.

[32]

The trial judge
responded by saying that
Eizengas
new position flew in the face of written
    documentation. He stated that he was now in the difficult position to consider
    whether or not to strike the
accuseds
plea. The
    Crown reminded the court that the Crowns statement of facts was consistent
    with much of what
Eizenga
admitted to in his
    settlement agreement with the OSC.

[33]

After hearing this submission, the trial judge
    held that it would be contrary to the proper administration of justice to
    strike the plea at this late date. Theres been no suggestion whatsoever from
    any direction that the plea was in any jeopardy ... the matter on this of
    striking the plea is brought up by myself [and] ... that door is closed.

[34]

The Crown then made submissions as to the
    appropriate sentence, citing case law involving massive fraud schemes. He
    argued for a nine-year sentence with a restitution order for all of those
    individuals set out in the investor list, which was filed as an exhibit.

[35]

In response to the Crowns submissions,
Eizenga
acknowledged that he made monthly drawings from the
    Saxton coffers as income:

When the accountant said, you know, you shouldnt
    be taking out your income in drawings and doing it at the end of the year, you
    should take it out as a monthly draw, we changed it. I took out a monthly draw.

...

I took out  what I took out in income, I declared
    it and it was in keeping with the amount that was taken out by the Court appointed
    managers over their four years was period about the same [sic]. People like
    Rick
Fangeat
and Luke McGee took out very generous
    amounts as well and it was taken into income. I did not perceive that I can
    that
its my company, my money
and I want to make a point of that
    before I get into individual cases. [Emphasis added]

[36]

He also clarified that he accepted
    responsibility for my role and for the sales people that were involved. Later
    he stated again: I know that as the head of Saxton, ultimately Im responsible
    for what happened or what didnt happened [sic] and I  I accept that.

[37]

Eizenga
then cited a
    long list of mitigating factors: he had already been dealt with severely by the
    OSC, he felt remorse, he had no criminal record, he had health problems, the
    fraud charge wreaked havoc on his family life, and he cooperated with law and
    regulatory enforcement agencies. He argued for either an absolute or
    conditional discharge.

vii.

The reasons on sentence

[38]

In his reasons for sentence dated July 17, 2007,
    the trial judge summarized the procedural history of the case, including what
    had happened at the sentencing hearing on June 12, 2007.

[39]

He held that
Eizengas
disagreement over the Crowns statement of facts was nothing more than the
    extreme rationalization and an obvious self-serving interpretation that was
    contradicted by the settlement agreement that
Eizenga
had entered into with the Ontario Securities Commission. The trial judge quoted
    large portions of the OSC Settlement Agreement and found that the agreement was
    consistent with the Crowns statement of facts.

[40]

The trial judge noted that the Crown alleged
    that the fraud encompassed $40 million from 799 investors and
Eizenga
alleged that the true amount was $37 million from
    no more than 400 investors. The trial judge held that, in any case, [b]y
    anyones arithmetic this was a massive fraud on the investing public and a
    major breach of trust. He held: The elements of the offence pleaded to are
    clearly apparent. The trial judge noted that
Eizenga
never brought an application before the court to strike or question the guilty
    plea. Indeed,
Eizenga
had stated that he feels
    guilty and was sorry for the loss to investors.

b.

Was the guilty plea valid?

i.

A valid guilty plea must be voluntary, unequivocal and informed

[41]

Section 606 of the
Criminal Code
governs pleas. The relevant portion provides:

Pleas permitted

606. (1) An accused who is called on to plead may
    plead guilty or not guilty, or the special pleas authorized by this Part and no
    others.

Conditions for accepting guilty plea

(1.1) A court may accept a plea of guilty only if
    it is satisfied that the accused

(a)
    is making the plea voluntarily; and

(b)
    understands

(
i
)
    that the plea is an admission of the essential elements of the offence,

(ii) the nature and
    consequences of the plea, and

(iii) that the court
    is not bound by any agreement made between the accused and the prosecutor.

Validity of plea

(1.2) The failure of the court to fully inquire
    whether the conditions set out in subsection (1.1) are met does not affect the
    validity of the plea.

...

Allowing time

(3) An accused is not entitled as of right to have
    his trial postponed but the court may, if it considers that the accused should
    be allowed further time to plead, move to quash or prepare for his defence or
    for any other reason, adjourn the trial to a later time in the session or
    sittings of the court, or to the next of any subsequent session or sittings of
    the court, on such terms as the court considers proper.

[42]

It is not open to an accused person to enter a
    conditional plea of guilt. Section 606(1) only allows an accused person to
    plead guilty or not guilty, or the special pleas authorized by this Part
and no others
 (emphasis added). See
    also
R. v. Lucas
(1983), 9 C.C.C.
    (3d) 71 (Ont. C.A.). A guilty plea must be unequivocal.

[43]

A guilty plea is an admission of guilt to all
    the legal ingredients necessary to constitute the crime charged:
Lucas
at p. 76. That admission means
    that the accused waives his or her right to require the Crown to prove its case
    beyond a reasonable doubt and also constitutes a waiver of any related
    procedural safeguards, some of which are constitutionally protected:
R. v. T.(R.)
(1992), 10 O.R. (3d) 514
    (C.A.), at p. 519.

[44]

A trial judge has the discretion to
    accept or not to accept a guilty plea. Up until the time of sentencing, a trial
    judge also has the discretion to permit an accused person to withdraw a guilty plea
    and to enter a new one. Provided the trial judge has exercised his or her
    discretion judicially, an appellate court will not lightly interfere:
R. v.
Adgey
,
    [1975] 2 S.C.R. 426.

ii.
Eizengas
plea was voluntary

[45]

Eizenga
asserts that
    his plea was involuntary. However, a plea entered in open court is presumed to
    be voluntary unless the contrary is shown:
R.
    v.

T.(R.)
at p. 520
.
Nothing in the record suggests that
Eizengas
plea was involuntary.
Eizenga
was present in court and pled guilty. He did not express any disagreement when
    Mr.
Trudell
informed the court that
Eizenga
had reviewed the Crowns draft of the agreed
    statement of facts and understood the allegations. He said nothing when Mr.
Trudell
assured the court that
Eizenga
was admitting enough to substantiate the gravamen or essential elements of the
    fraud charge.
Eizenga
has not filed an affidavit as
    fresh evidence that any discussions off the record rendered his plea
    involuntary, nor does he submit that he was under any disability which affected
    the voluntariness of his plea. Mr.
Trudell
was a very
    experienced defence lawyer and the appellant makes no claim of ineffective
    assistance of counsel.
Eizenga
has therefore not
    displaced the presumption that his plea was voluntary.

iii.

Eizengas
plea was unequivocal and informed

[46]

In

addition
    to the requirement of voluntariness, s. 606(1.1)(b) of the
Criminal Code
states that a court may accept a plea of guilty only
    if it is satisfied that the accused understands he or she is admitting to the
    essential elements of the offence and the nature and consequences of the plea.
    In other words the plea must be informed.

[47]

To assist the court in coming to a conclusion that an
accuseds
guilty plea is informed, the Crown should read in
    a statement of alleged facts to justify the plea that has been entered and ask
    the accused to admit that those facts are substantially correct:
R. v.
Corkum

(1984),
    64 A.R. 354 (C.A.). However, this procedure is not required by s. 606. In fact,
    s. 606(1.2) provides that the omission of the court to enquire into whether the
    accused understands that he or she is admitting to the essential elements of
    the offence and understands the nature and consequences of his or her plea does
    not affect the pleas validity. Thus in the case at bar, the Crowns failure to
    read in an agreed statement of alleged facts and to obtain
Eizengas
admission that those facts were substantially correct at the time he pled
    guilty did not, in and of itself, affect the validity of his plea.

[48]

Eizenga
alleges that
    his plea was conditional on an agreed statement of facts being worked out with
    the Crown and that no agreement was ever reached. He submits that as a result, his
    plea of guilt was equivocal and was not informed.

[49]

However, there is nothing on
    the record that suggests that the guilty plea was ever predicated on there
    being an agreed statement of facts. There was never any
guarantee that
    the statement of facts would be as
Eizenga
wanted it.
    Indeed, the parties had always contemplated that
Eizenga
may contest the facts at the sentencing hearing. At the court appearance on
    September 27, 2005, in
Eizengas
presence, Mr.
Trudell
informed the court that having an undisputed
    statement of facts was only an aspiration to be worked on by counsel after the
    plea was entered:

MR. TRUDELL: My friend
    [Crown counsel Mr. Forrester] and I and my associates will work diligently
    between now and then starting this afternoon on a statement of facts that will
    assist the Court.
We hope that it becomes
    an agreed statement of facts
and were going to be working towards that.
    Mr.
Eizenga
has indicated to me that his intention is
    to plead guilty  is that correct sir?

EIZENGA: Yes.

MR. TRUDELL: Hes indicating yes for the record.
    ... So Im asking that it go to November 4th, plea will be entered on that day,
facts will be put before you on that day
     hopefully agreed
and then were going to ask that it go further.
    [Emphasis added.]

[50]

The appellants submission that his guilty plea
    was premised on the condition that the facts would be agreed upon is therefore
    unsupported by the record.

[51]

Although
Eizenga
took
    issue with the Crowns precise version of the facts two years later at the
    sentencing hearing, this does not rebut the presumption that, at the time that
    he pled guilty, he was properly informed and fully understood the nature of the
    fraud charge. Before
Eizenga
entered his plea, the
    charges were read to him. When an accused personally enters a plea, as
Eizenga
did in this case, it tends to demonstrate the
    unequivocal character of the plea: see
R.
    v. T.(R.)
at pp. 520-521;
R. v.
Eastmond
, [2001] O.J. No. 4353 (C.A.), at para. 6; and
R. v. Moser
(2002), 163 C.C.C. (3d) 286
    (Ont. S.C.), at para. 32
.
Where, as
    here,
Eizenga
was represented by counsel at the time
    of his plea, then in the absence of any unusual circumstances (such as a
    challenge to the competence or professionalism of trial counsel) the court may
    infer that counsel took the necessary steps to ensure that his client
    understood the nature and consequences of a guilty plea.  See
Eastmond
at
paras
. 6-7;
R. v. Dallaire
,
[
2001]
    O.J. No. 1722 (C.A.), at para. 2;
R. v.
Thissen
,
[
1998]
    O.J. No. 1982 (C.A.), at para. 6; and
Moser
at
paras
. 34, 37-39.

[52]

Furthermore
,
as indicated earlier, the
    Crowns allegation of fraud largely reflected
Eizengas
agreement with the OSC.
Eizenga
was certainly
    informed. At the time of his plea on November 4, 2005, he knew the Crowns
    position on the facts; he was also aware that, in response to his request,
    changes to some of the details were being worked out between the Crown and Mr.
Trudell
, who was acting as his agent. On November 4, 2005,
    Mr.
Trudell
stated that he would send the defences
    proposed changes to the Crown. When Mr.
Trudell
delivered
    these proposed changes to the Crown, Crown counsel sent back a copy of the
    agreed statement of facts on January 20, 2006, incorporating all

the changes that Mr.
Trudell
had requested on
Eizengas
behalf.
Eizenga
was then sent to get independent
    legal advice. Although
Eizenga
was aware that he
    could bring a motion to strike his plea, he never did so.

[53]

At
Eizengas
sentencing hearing on June 12, 2007, the sentencing judge commented that the
    purpose of allowing
Eizenga
to obtain independent
    legal advice was not in relation to the guilty plea or the agreed statement of
    facts but to Canada Revenue Agency issues. In effect, the trial judge was
    saying that his original understanding that the plea was unequivocal was confirmed
    by correspondence between the Crown and defence as to the purpose for obtaining
    legal advice. Assuming that there was no evidence before the court as to the
    purpose for which
Eizenga
was sent for independent
    legal advice, there was no evidence that the purpose was to confirm the guilty
    plea. The presumption that the plea was unequivocal would therefore apply.

[54]

In my opinion, however, nothing turns on the
    purpose for which
Eizenga
was sent for further legal
    advice. The fact that
Eizenga
sought and obtained
    further legal advice means that he was aware of the contents of the document
    that had been worked out. . While
Eizenga
would have
    us infer that he expressed disagreement to Mr.
Trudell
respecting the document, there is no evidence supporting this inference. Nor
    did he bring a motion to strike his plea although he was aware that this was
    one of his options.

[55]

The effect of a plea of guilt entered with an
    indication that an agreed statement of facts is to come is discussed in
R. v. Newman
(1993),

12 O.R. (3d) 481 (C.A.).

[3]
As in the case at bar, the appellants contention in
Newman
was that there was no consensus between himself and the
    Crown as to the scope and reach of the facts to which the guilty plea applied. The
    only issue was whether the plea was informed. In effect, the court placed the
    onus on the appellant of establishing two things: (1) that he did not
    appreciate the consequences of the actions of his trial counsel, and (2) that
    despite pleading guilty he did not accept as accurate a necessary factual
    foundation for the offence. The court held at p. 487:

If the
    appellant was deprived of the effective right to counsel, and if we were
    satisfied that his plea of guilty embraced a factual foundation that he was not
    prepared to accept for the purposes of the sentencing procedures, it would be a
    matter of concern to this court, with or without the
Charter
. If we were of the view that the sentencing procedures were
    so unsatisfactory that the appellant was deprived of a fair trial and the
    result was unreliable because the accused did not accept the agreed statement
    of facts as accurate, then the obvious remedy is to permit the appellant to
    withdraw his plea of guilty.

[56]

In the end, the court was not persuaded that there was
    any lack of competence on the part of counsel for the accused. The court
    further held that an evidentiary threshold must be met in order to set aside a
    plea of guilt and the accused had failed to meet it. The court stated at pp.
    490-91:

[H]e would
    have to swear that he would not have pleaded guilty to such a statement of
    facts had it been available to him prior to his plea. I think that the
    appellant was simply trying to improve on his situation

[57]

Eizenga
does not meet either
    of the two criteria articulated by the Court of Appeal in
Newman
for setting aside a guilty plea. First,
Eizenga
makes no allegation that he was deprived of the effective assistance of
    counsel. Second, the evidentiary threshold required to set aside his plea of
    guilt has not been met. He has not filed an affidavit as fresh evidence stating
    that he would not have pled guilty to the agreed statement of facts put forward
    by the Crown had it been available to him prior to his plea, nor does the
    record support such an assertion. I would add that an
accuseds
bald assertion that he or she did not have a full understanding of the nature
    of the charges and consequences of entering a guilty plea will not suffice to
    set aside a guilty plea when it is not supported by the circumstances and the
accuseds
subsequent actions: see
R. v. T.(R.).

[58]

The jurisprudence which
Eizenga
has put forward illustrates the requirements in
Newman.
Negligent or improper conduct on the part of counsel for
    the accused is at the heart of four of the seven decisions cited by
Eizenga
in which the court permitted a guilty plea to be
    withdrawn. In
R. v.
Yarlasky
(2005), 195 O.A.C. 188 (C.A.), defence counsel recommended a guilty plea and
    did not tell the accused that she had a possible defence to the charge against
    her. In
R. v. N.C.
(2001), 151 O.A.C.
    249 (C.A.), the accused was charged with sexual interference; however, his counsel
    did not explain to him that by pleading guilty to inappropriately touching his
    granddaughter,
he was admitting that his touching
had
    a sexual purpose, a necessary element to the offence charged against him.
    Similarly, in
R. v. Mitchell
(1997), 97
    O.A.C. 69 (C.A.), counsel did not explain the elements of intimidation to the
    accused prior to advising him to plead guilty. In
R. v.
Lamoureux

(1984), 13 C.C.C. (3d)
    101 (Que. C.A.), the appellants counsel pressured him to plead guilty. In a
    fifth decision,
R. v.
Rajaeefard

(1996),
27 O.R. (3d) 323
(C.A.), the trial judge
    improperly pressured the accused to plead guilty.

[59]

The case before us, however, is distinguishable in that
    ineffective assistance of counsel is not alleged and there was no pressure by
    the trial judge on
Eizenga
to plead guilty.

[60]

The cases put forward by
Eizenga
to illustrate the second requirement, that there be a credible evidentiary
    basis on which to set aside the plea, are also distinguishable.

[61]

In
R. v.
Yarlasky
(1999),
140 C.C.C. (3d) 281
    (Ont. C.A.),
the accused pled guilty to defrauding a town of monies by
    failing to disclose a change of address which would have disentitled her to the
    benefits received. Immediately after her plea she added that she did not pick
    up the cheque intentionally and that she had not had the chance to change her
    address. The Court of Appeal allowed the
accuseds
appeal
    on the basis that her plea was not unequivocal and could not stand.

[62]

Here, during the many months following
Eizengas
plea of guilty, he was well aware of the
    statement of facts that had been worked out between the Crown and Mr.
Trudell
. Although
Eizenga
considered bringing a motion to strike his guilty plea as Ms.
Chiodo
, who succeeded Mr.
Trudell
as counsel, confirmed in open court, he did not do so.
Eizenga
chose not to pursue an option he knew he had. Indeed,
Eizengas
comment to the author of the pre-sentence report a week before his sentencing
    hearing indicates that he accepted responsibility for his crime.

[63]

In
R. v. K. (S.)
(1995), 24 O.R. (3d) 199 (C.A.), the accused pled guilty but had always
    maintained his innocence to the charges against him and steadfastly did so
    afterwards. That is not this case here.
Eizenga
admitted his guilt to the OSC and never refuted the veracity of the admissions
    made in the OSC Settlement Agreement. It was only at his sentencing hearing on
    June 12, 2007, that he made some submissions that contradicted the agreement.
    Even then, he did not say that his admissions to the OSC were untrue or explain
    why he was now taking a contrary position on the facts.

[64]

Eizenga
submits that the
    trial judge was not entitled to rely on the OSC Settlement Agreement in any
    way. Quite apart from the fact that the Crowns statement of facts had incorporated
    all the changes that
Eizenga
and his counsel had put
    forward,
Eizengas
admission to certain facts at the
    sentencing hearing are sufficient to ground his guilty plea regardless of
    whether the OSC Settlement Agreement can be used in court (see below, The
    Undisputed Facts on which
Eizenga
was Sentenced).
    However, I will summarily address
Eizengas
four
    submissions relating to the OSC Settlement Agreement:

(1)

Eizenga
submits that he did not adopt the settlement
    agreement as a statement made by him but by both him and others for the
    purposes of settlement. However, most of the facts given in the agreement speak
    specifically to
Eizengas
personal actions and
    misrepresentations that he personally made. He therefore cannot be said to be making
    these statements on behalf of others.

(2)
Eizenga
points out
    that the OSC Settlement Agreement contains an explicit proviso that the facts
    contained in the agreement are admitted for the purposes of the OSC proceedings
    and not any other proceeding. I note that clause 47 of the OSC Settlement
    Agreement also forbids
Eizenga
from making any
    public statement inconsistent with this settlement agreement. Clearly,
    statements made in open court at a sentencing hearing are public statements. I also
    note that on a number of points
Eizenga
provides no
    explanation as to why his position on the facts now contradicts his position in
    the OSC Settlement Agreement.

(3) The agreement contained an exculpatory
    paragraph which appellants counsel characterizes as describing
Eizengas
intentions as well meaning and his actions as
    unintentional. The appellants counsel submits in his factum that the OSC
    Settlement Agreement contained an exculpatory paragraph that described
Eizengas
role as well meaning and his consequences as
    unintentional. However, he fails to cite which paragraph in the agreement this
    was. I can find no paragraph that can be described as exculpatory in this
    fashion. To the contrary, the OSC Settlement Agreement, read as a whole, leaves
    the inference
Eizenga

s
actions were intentional.  In any case,
    the law with respect to fraud is that the
accuseds
belief that the conduct is not wrong or that no one will be hurt in the end
    affords no defence to a fraud charge. See
R.
    v.
Théroux
, [1993] 2 S.C.R. 5.

(4)
Eizenga
submits that
    because the OSC has broad investigative powers to protect the public, such as
    the authority to compel testimony under oath, any evidence arising out of an
    exercise of the OSCs powers should be inadmissible at a criminal proceeding
    and therefore
Eizengas
settlement agreement cannot
    be used in any way.
[4]
This is a generic overbroad submission. The question of how

an agreement can be evidence derived from the exercise of the
    OSCs powers is not answered by
Eizengas
bald
    submission that the settlement agreement was a product of his compelled
    cooperation with the OSC. The agreement was signed by
Eizenga
and witnessed by his counsel. Apart from
Eizengas
bald submission, there is no evidence on the record to the contrary. The
    agreement was evidence of
Eizengas
prior agreement
    to certain facts, was used by him as the basis for his submissions and forms
    part of the evidentiary record respecting the validity of his guilty plea.

[65]

I would hold that
Eizenga
has
    not discharged his burden of rebutting the presumption that his plea was
    unequivocal and informed.

iv.

The sentencing hearing was fair

[66]

I would also hold that the proceedings were fair.
    At the sentencing hearing, the trial judge provided
Eizenga
with adequate assistance as a self-represented litigant, and his decision not
    to engage in a further plea inquiry is of no import because overall the plea
    was valid.

[67]

The assistance a trial judge is obligated to
    provide to a self-represented litigant is part of a trial judges larger duty
    to ensure that an accused person receives a fair trial. How far a trial judge
    needs to go in assisting an accused must be determined contextually, having
    regard to the nature of the charges, the sophistication of the litigant,
    whether the litigant has expressed a desire for assistance, the stage of the
    proceedings and the overall circumstances of the case. The overall question to
    be answered is whether the proceedings were fair.

[68]

Eizenga
alleges that
    the trial judge ought to have: (1) explained the meaning of a valid plea to him;
    (2) informed him that he had the right to lead evidence and make submissions;
    and (3) heard from
Eizenga
before concluding that he
    would not allow the plea to be withdrawn.

[69]

My response to the first two submissions is: (1)
Eizenga
had legal counsel at the time he entered his
    plea and there is nothing on the record to support the submission that he did
    not understand the meaning of his plea; and (2)
Eizenga
was told at his court appearance on March 2, 2007, that he would have the
    opportunity to oppose the facts as read in by the Crown and he availed himself
    of that opportunity at the sentencing hearing on June 12, 2007.

[70]

The third submission, namely that the trial
    judge ought to have heard from
Eizenga
before closing
    the door on his inquiry into the plea, requires more elaboration. In the
    absence of special circumstances, there are strong policy reasons for
    dismissing an accused persons request to withdraw a guilty plea when the
    appropriate time for making such a request has clearly passed and there is no
    indication that the plea was invalid. A guilty plea is a waiver of the
accuseds
right to a trial:
Korponay
v. Canada (Attorney General)
,

[1982] 1 S.C.R. 41, at p. 49;
R. v.
    T.(R.).
at p. 519. The Crown stops devoting resources to the file and the
    evidence is no longer fresh. In the absence of special circumstances, it would
    be prejudicial to the publics interest in certainty, finality and the
    expeditious resolution of criminal matters to allow an accused to withdraw his
    plea: see
R. v. Duong
, 2006 BCCA 325,
    at
paras
. 9-10.

[71]

Here the special circumstances alleged are
Eizengas
dispute with some of the facts in the agreed
    statement of facts. As discussed below, the trial judge did not err in
    concluding that there were sufficient undisputed facts to support each element
    of the offence of fraud and, as a result, the validity of the plea is not in
    doubt. As this court stated in
R. v.
    T.(R.)
at p. 525, It would hardly serve the interests of justice to quash
    the convictions and permit the withdrawal of the guilty pleas based on an
    inadequate inquiry in the validity of the pleas at trial when, after a full
    inquiry in this court, their validity was established.

[72]

Eizenga
did not ask
    the trial judge to withdraw his plea.

Assuming
    that the trial judge ought to have heard from
Eizenga
before deciding to end his self-initiated inquiry into the plea, the
    proceedings that followed established the validity of the guilty plea. Overall,
Eizengas
right to a fair trial was not infringed.

v.

The undisputed facts on which
Eizenga
was
    sentenced

[73]

The respondent advises that the statement of facts that
    the Crown filed as an exhibit on March 2, 2007, and read into the record at the
    sentencing hearing on June 12, 2007, was an Agreed Statement of Facts that
    Crown trial counsel and Mr.
Trudell
had negotiated
    (ASF). Also within the exhibits is a document filed by
Eizenga
,
    titled, Changes for the Disputed ASF With Supporting Documentation (the
    Changes Document). The contents of this document details
Eizengas
point-by-point disagreements with the ASF.

[74]

Eizenga
wrote in the preamble
    of the Changes Document, There are many points [in the ASF] that contain
    transactions that I do not contest, but the interpretations and
    characterizations of the factual transactions are not true. In the Changes
    Document, if he agreed with a paragraph in the ASF he put OK beside it. For
    some paragraphs of the ASF,
Eizenga
partially agreed
    with the facts but added some qualifications.
Eizengas
oral submissions at the sentencing hearing on June 12, 2007, largely echo what
    he expressed in the Changes Document.

[75]

The trial judge heard submissions from both
    parties with respect to the facts, and found that [t]
he
    elements of the offence pleaded to are clearly apparent.

[76]

I have compared the ASF with both
Eizengas
statements in the Changes Document and the transcript of his submissions at the
    sentencing hearing. My review of these submissions and the record as a whole leads
    me to the same conclusion as the trial judge, namely that there were still
    enough undisputed facts to satisfy every element of the fraud offence to which
Eizenga
pled.

[77]

Below is a list of a number of major facts that
Eizenga
did
not
dispute
    at the sentencing hearing. I have also noted certain submissions that
Eizenga
made with respect to the facts and will deal with
    those separately.

Saxton
    Groups Corporate Structure

·

Eizenga
incorporated
    at least 40 Ontario corporations. At least 34 of them distributed securities to
    the public, relying on either the seed capital prospectus exemption or the private
    company prospectus exemption. (ASF
paras
. 7, 17, 18)

·

After incorporating these 40 companies,
Eizenga
maintained majority control of each corporation and
    passed bylaws exempting them from the audit requirements of the
Business Corporations Act
, R.S.O. 1990, c.
    16, (ASF para. 9)

·

He was the sole officer and shareholder of Saxton
    LMD from December 1995 to August 1997, when his wife became president and he
    transferred his interest in the company to her.

Eizenga
remained the lone director of Saxton
    LMD. (ASF para. 11)

·

Many of the Saxton companies that distributed
    securities had a variation of Saxton Export as their name. For each of these Saxton
    Export companies,
Eizenga
passed and signed bylaws
    that restricted the information that shareholders could access. For example, he
    signed a bylaw that stated: No shareholder shall be entitled to discovery of
    any information respecting any details or conduct of the Corporations business
    or affairs. (ASF para. 14)

·

The Saxton companies never held any shareholder
    meetings prior to the OSCs intervention in late 1998. (ASF para. 16)

·

In 1998,
Eizenga
told
    the OSC that he was the president of the Saxton Group and managed day-to-day
    operations. (ASF para. 29)

·

Eizenga
signed
    Management Service Agreements on behalf of both the Saxton Export companies and
    Saxton Investments. These agreements allowed investors funds that were
    invested into the various Saxton Export companies to be pooled into Saxton
    Investments.
Eizenga
had the authority to manage the
    business affairs of each Saxton company. His powers included maintaining bank
    accounts, making investment decisions, raising funds, and loaning funds.
    (However, in the Changes Document and at the sentencing hearing,
Eizenga
argued that under the Management Service
    Agreements, it was Saxton Investments, (and not him personally,) that managed
    the funds.) (ASF para. 38)

Breaches of
    Securities Legislation

·

Eizenga
did not
    dispute two of the four ways
[5]
in which the Crown said he breached Ontario securities law, namely: (1) that he
    exploited the Seed Capital Exemption 36 times over 40 months, when the law only
    permitted him to use it once every 12 months; and (2) that the majority of
    Saxton investors did not qualify for sophisticated investor status. (ASF
    para. 25)

·

Eizenga
told a
    chartered accountant that he had obtained a legal opinion on the seed capital
    prospectus exemption. This was in fact not true. (ASF para. 17)

·

Saxton Group advertised its investments via a
    telephone advertising campaign using a toll free number and a paid telephone
    solicitor, contrary to Ontario securities law, which prohibits advertising of
    securities distributed under the seed capital exemption.
Eizenga
admitted that he was the signatory of one of the cheques paying the telephone
    solicitor. (He only disagreed that Saxton ever advertised in a magazine.) (ASF para.
    53)

Misrepresentations
    Regarding the Security and Eligibility of the Investments

·

Some of the investments that Saxton offered were
    represented as Guaranteed Investment Certificates (GICs). Financial products known
    as GICs are commonly available in Canada and are insured by the Canadian
    Deposit Insurance Corporation (CDIC). They must meet the CDICs eligibility
    requirements for coverage in order to be considered a GIC. Saxtons GICs were
    not insured by CDIC. (The only disagreement that
Eizenga
expressed with respect to these facts was a bald assertion that he did not know
    that investors were misled. He said that Saxtons GICs were guaranteed by
    the company and that he never represented Saxtons product as being insured by the
    CDIC.) (ASF
paras
. 40-44)

·

Saxton mailed literature to investors asserting
    that the investments that Saxton sold were RRSP eligible. Investors received
    statements from the RRSP trustee bank, Laurentian Bank, which stated that the
    domestic content of the investment was 100% Canadian, even though the vast
    majority of the content was offshore. This gave investors the false impression
    that their money was still in Canada. (At sentencing,
Eizenga
stated that it was only later established that Saxton was not an RRSP eligible
    investment because most of its business activities were off shore. In other
    words, he claimed that he did not know that Saxtons investments were not RRSP
    eligible.
Eizengas
submission was belied by the fact
    he did not dispute that he once told Rob Davies that once they [the Saxton
    companies] go public it would correct the RRSP issue. If they went public
    before Revenue Canada looked at it, it would be OK.) (ASF
paras
.
    49, 51-52)

·

Saxton agreed to buy surety bond insurance
    coverage from Liberty Insurance, but Saxton never paid the insurance premium.
    Liberty Insurance sent a cancellation notice to Saxton dated April 5, 1998.
Eizenga
proof-read and signed a letter dated April 14, 1998,
    that was sent to existing investors, stating: We have successfully negotiated
    with Liberty Insurance to issue Surety Bonds that fully guarantee our capital
    base and provide an additional level of security to shareholders. This letter
    was sent out to all existing investors. (
Eizengas
only dispute with this fact was the Crowns additional claim that the letter was
    used as a sales tool to solicit new investors. However,
Eizenga
admitted that neither he nor Saxton ever informed Saxtons investors or sales
    representatives that the surety bonds had been cancelled.) (ASF
paras
. 74-75)

·

In the spring of 1998,
Eizenga
met with a prospective investor named John Bradford, and told Mr. Bradford that
    Saxtons investment products were insured by Liberty Insurance Company. Mr.
    Bradford invested $34,689.78. (ASF para. 76)

Other
    Misrepresentations

·

In the Changes Document and at sentencing,
Eizenga
did not dispute the statement at ASF para. 55 that
    the funds used to pay interest and dividends to investors came from the
    invested funds and not from any revenues generated by a Saxton business. His
    only disagreement was the Crowns suggestion that all of the Saxton businesses
    were unprofitable.
Eizenga
argued instead that some
    divisions were still at the capital intensive phase [unprofitable] and other
    divisions were earning a profit.

·

Eizenga
also did not
    explicitly deny that he paid off investors using other investors money (ASF
    para. 62). He only took issue with the Crowns assertion that
none
of these payments to investors were
    from profits or revenue earned by any Saxton business venture.

·

Investors received quarterly statements from the
    Saxton Group indicating the amount they had invested and the purported increase
    in value of their investments. For example, the last Saxton quarterly statement
    was sent out on June 30, 1998, when
Eizenga
was
    Chairman of the Board and majority shareholder. The total value of the Opening
    Balance listed in this quarterly statement, indicating the value of all of the
    investments at the start of the quarterly period, was $43,028,165.76. The next
    column showed the increase in market value over the quarterly period:
    $1,760,542.98. The final column showed the new market value of the investments,
    at $45,109,528.80. The quarterly statement therefore suggested a 3.95% increase
    in value over the course of the quarterly period, or an annual rate of 15.81%. However,
    there were no financial records of any revenue generation by the Saxton
    operations, and thus no means to establish the net results given in these
    quarterly statements. The increase was calculated by a computer at an interest
    rate that the investors had been promised. (At sentencing,
Eizenga
did not dispute the numbers of the last quarterly statement, or that it was delivered
    to investors. His only disagreement was that he had control over sending out the
    quarterly statements. He claimed that he was just 1 of 6 board members, and
    that he had limited duties and no voting rights. He also claimed that some
    divisions of Saxton were profitable.) (ASF
paras
. 62,
    65)

·

Eizenga
did not
    dispute that he took responsibility in the OSC Settlement Agreement for things
    that I said to people and for things that sales representatives under Saxton
    [said]. Specifically, he did not disclaim making the following
    misrepresentations to investors:

1. That the Saxton investment was
    guaranteed;

2. That the government guaranteed the
    investment;

3. That the Laurentian Bank held their
    money; and

4. That it was guaranteed by surety
    bonds or gold deposits. (ASF para. 66)

·

At sentencing,
Eizenga
admitted that he told sales representatives that Saxton had an interest in gold,
    even though Saxtons interest was really in unrefined gold
dore
(which is worth considerably less than refined gold). He argued only that this representation
    was not meant to be misleading because
Optimax
Securities Corporation, the company from which he was getting the gold
dore
, had also referred to it as just gold. (I note,
    however, that the letters from
Optimax
Securities
    Corporation that
Eizenga
filed as exhibits at the
    sentencing hearing clearly state that the interest was in gold
dore
). In any case, it was not disputed that
Eizenga
was aware that Saxton did not have an interest in
    actual gold, and that he did not attempt to clarify this with his sales
    representatives. (ASF 78-82, 152)

The Use of
    Funds

·

At sentencing,
Eizenga
maintained that the gross amount raised from investors was $37 million, not $40
    million as stated by the Crown. Of this amount, $5.145 million was used to pay
    administrative expenses and commissions to salespeople, and about $23 million
    went directly back into operations. Of the $23 million, $17.6 million was
    transferred from Saxton Investments to a company owned by his deceased
    co-accused James Sylvester.
Eizenga
never explained
    why these funds were transferred other than to say that the funds were
    transferred pursuant to an agreement he had with James Sylvester. I note that this
    admission illustrates that
Eizenga
had control over
    the funds of Saxton Investments. (ASF
paras
. 84-85)

·

$3.8 million was used for operating various
    Caribbean businesses in which Saxton had an interest (i.e. Sussex Group Ltd.). Notably,
Eizenga
agreed that $5.8 million was transferred from
    Saxton Investments in Canada to Saxton SA in the Bahamas. (ASF
paras
. 86-87, 89)

·

Only a small portion of the funds Saxton
    collected was given back to investors in the form of interest payments,
    dividends or redemptions, although the exact amount of the returned funds was
    disputed. (ASF para. 57 stated that investors got back $4.5 million through
    dividend, interest and redemption payments.
Eizenga
disagreed, and referred the court to a table stating that while $4.5 million
    was redeemed through Saxton Investments, $5.7 million was redeemed overall.)

·

Eizenga
wrote out a
    large number of cheques from the Saxton Investments bank accounts for personal
    expenses including home furniture, mortgage payments, house renovations and
    improvements, landscaping, swimming pool maintenance, babysitting costs and
    real estate transactions. He also made cheques out for cash and to himself (ASF
paras
. 111-112). However, he submits that he was
    entitled to income from the corporations.

vi.

Eizengas
disagreements with the ASF do not affect his legal
    liability

[78]

Eizengas
disagreements with
    the ASF, as expressed in the Changes Document and in his oral submissions at
    the sentencing hearing, can be grouped into five broad categories: (1) he acted
    on the legal advice of his lawyers; (2) he believed that no one would be hurt
    by his conduct; (3) some of the investors funds went into a legitimate
    operating business in Cuba that made money; (4) the corporate entity did the acts
    in question and not him personally; and (5) he was entitled to withdraw
    personal income from the corporations. None of these disagreements draw into
    question the validity of his guilty plea.

[79]

First, it was not open to
Eizenga
to advance what amounts to a mistake of law defence based on the legal advice
    that he received. It is well established that reliance on legal advice is a
    mistake of law which affords no defence to the commission of an offence:
R. v. Pea
(2008), 93 O.R.
    (3d) 67 (C.A.), at para. 17;
R. v. Pontes
,
    [1995] 3 S.C.R. 44, at
paras
. 33-34;

R. v.
Kotch
(1990),
61 C.C.C. (3d) 132 (Alta. C.A.), at
p. 138; and
R. v.
Stucky
(2009), 240 C.C.C. (3d) 141 (Ont. C.A.), leave
    to appeal discontinued at
[
2009]
    S.C.C.A. No. 186.
Thus,
Eizengas
reliance on
    legal advice concerning the use of the seed capital exemption or the RRSP
    eligibility of the investments was no defence.

[80]

Given that
Eizenga
was in the
    business of finance and received an education in the area, his bald assertionsfor
    example, he claims that he did not know investors would be misled into thinking
    GICs were guaranteed by the CDIC like the ones sold by banks across Canadahave
    no air of reality.

[81]

Second,
Eizengas
assertion that
    he believed that no one would be hurt by his conduct is no defence, because a
    subjective intent to mislead is not an essential element of the offence of
    fraud. Instead, all that is required is subjective knowledge of the prohibited
    act, and that the act could have as a consequence the deprivation of another. In
Théroux
and
R. v.
Zlatic
,
[1993] 2 S.C.R. 29,
the Supreme Court of Canada
    considered the essential elements of fraud under s. 380(1)(a) of th
e Criminal Code.
The Court held that th
e
actus

reus

of fraud is established by proof of: (1) the
    prohibited act, be it an act of deceit, a falsehood or some other fraudulent
    means; and (2) deprivation caused by the prohibited act, which may consist in
    actual loss or the placing of the victims pecuniary interests at risk. What
    constitutes a lie, deceitful act, or other fraudulent act is judged on the
    objective facts by reference to what a reasonable
p
erson would consider a dishonest act:
Théroux
at p. 16.
    With respect to the
mens

rea
, the
    Court specifically rejected a definition that required subjective awareness of
    dishonesty and a belief that actual deprivation (as opposed to risk of
    deprivation) will result. The Court held at pp. 23: [T]he
accuseds
belief that the conduct is not wrong or that no one will in the end be hurt
    affords no defence to a charge of fraud. Recklessness as to the consequences
    of the prohibited act also attracts criminal responsibility:
Théroux
at p. 20.
    Furthermore, subjective awareness can be inferred from the act itself, barring
    some explanation casting doubt on such inference:
Théroux
at p. 18.

[82]

From the view of a reasonable person,
Eizengas
acts described above were dishonest.
Eizengas
subjective awareness of the consequences can be
    inferred from the acts themselves. At the very least they disclose a recklessness
    as to how his representations would be perceived by investors. These
    misrepresentations led to the deprivation of hundreds o
f
investors who transferred their money to Saxton
    in the mistaken belief that their investments were safe, when they were not.

[83]

Third, at the sentencing hearing
Eizenga
filed various documentary exhibits that detailed what happened to Saxtons
    Cuban operations (
i.e.
Sussex Group
    Ltd.) after he left Saxton in 1998. In 2002, the court appointed an Interim
    Manager,
Horwath
Orenstein Consultants Inc. (HOCI),
    to oversee a restructuring of Sussex Group Ltd. By 2006, pursuant to directions
    from the court, HOCI had sold off most of Sussex Group
Ltd.s
assets and seemed to be preparing a wind-up of the company.
Eizenga
submits that these documents showed that Sussex Group Ltd.

continued to operate as a profitable business. He argues that
    the Saxton Groups Cuban operations were not a
Ponzi
scheme, that the funds from Saxtons investors were neither exhausted nor
    lost and therefore that [t]he basis for the guilty plea did not exist.

[84]

I would reject these submissions.
Eizengas
assertion that the Saxton Group had invested money in Sussex Group Ltd. in
    Cuba, and thatyears after
Eizenga
had committed the
    alleged fraudSussex Group Ltd. was profitable under the direction of a
    court-appointed interim manager does not absolve him of the fraud charge.

[85]

Even apart from the fact that
Eizengas
assertions that Saxton investors funds can all be traced to Sussex Group Ltd.
    is belied by the Interim Managers report
[6]
and that Sussex Group Ltd. was at some time profitable,
[7]
if an accused uses deceit, falsehood or other fraudulent means to deprive a
    victim of property or places the victims pecuniary interests at risk,  what the accused later does with the
    victims  property is immaterial  to

the determination that fraud has been committed.

[86]

The facts that
Eizenga
admitted to at sentencing confirm that he made misrepresentations and committed
    various acts of deceit in order to induce investors into giving him their
    money. He lied about the nature of Saxtons financial products and the risks
    associated with them. He gave investors the false impression that they were
    putting their savings into safe and insured investments. They extended their
    money to Saxton and suffered very real losses. Nothing that
Eizenga
has said with respect to Sussex Group Ltd. draws into question whether the
    facts he has admitted to substantiate the elements of fraud.

[87]

Eizengas
fourth type of
    disagreement with the Crowns facts is that he is not personally liable for the
    actions of the corporate entities. However, this submission is premised on the
    mistaken belief that the corporate veil cannot be pierced. It is well
    established that the court will not enforce the separate legal status of a
    corporation if to do so would be
too flagrantly
    opposed to justice:

Kosmopoulos
v.
    Constitution Insurance Co.
, [1987] 1 S.C.R. 2, at p. 10. More particularly,
the courts will disregard the separate legal
    personality of a corporate entity where it is completely dominated and
    controlled and being used as a shield for fraudulent or improper conduct:
Transamerica Life Insurance
    Co. of Canada v. Canada Life Assurance Co.
(1996),
28
    O.R. (3d) 423 (Ct. (Gen. Div.)), at pp. 433-434. Hence, where the accused is
    the directing mind of a corporate entity and uses the corporation to commit
    fraudulent acts, as in the present case,
the court will not hesitate to
    pierce the corporate veil. See e.g.
Théroux
at pp. 11-12;
R.
    v. Guay
, [1999] O.J. No. 3494 (S.C.), at para. 72.

[88]

Finally,
Eizenga
argues that
    pursuant to corporate by-laws and agreements he had with the Saxton companies,
    he was entitled to use the funds he had obtained from investors by fraudulent
    misrepresentation. He also argues that the funds were so comingled with
    legitimate business funds that they lost their identity. These submissions are
    not based on any legal authority and fly in the face of common sense.
Eizenga
cannot use the manner in which the money was
    processed to get around the fact that he benefitted personally from the illegal
    scheme he devised. The individual investors funds did not have to be traced.
Eizengas
misrepresentations caused investors who trusted
    him to lose their money.

[89]

The trial judge was entitled to reject
Eizengas
submissions as to the legal effect of his acts
    and to characterize those submissions as nothing more than extreme
    rationalization and a self-serving interpretation of the facts. There is no
    credible evidentiary basis for the appellants submission that there is reason
    to doubt
Eizengas
guilt on any essential element of
    the charge. As in
Newman
,

I am of the opinion that at the time of
    his sentencing hearing,
Eizenga
was simply trying to
    improve on his situation.

[90]

For the reasons I have given I would dismiss the appeal
    from conviction.

II.

The Sentence Appeal

[91]

A restitution order is part of a sentence. A
bsent an error in principle, failure to consider a relevant
    factor, or an overemphasis of the appropriate factors, an appellate court will
    only intervene to vary a sentence imposed at trial if the sentence is
    demonstrably unfit:
R.
    v. C.A.M.
,
[
1996] 1 S.C.R. 500
,
at para. 90.

In the context of a restitution order, the amount ordered to be
    paid as compensation cannot be excessive or inadequate:
R. v.
Devgan

(1999), 136 C.C.C. (3d) 238
    (Ont. C.A.), at
paras
. 23-28.

[92]

If the court concludes that the trial judge has
    erred in principle, for example, by failing to consider a relevant factor, the
    court must decide whether the overall sentence is nevertheless fit and proper:
    see e.g.
R. v.
Kakekagamick
(2006), 211 C.C.C.
    (3d) 289 (Ont. C.A.), at
paras
. 73-74.
If, as
    a result of the error, the sentence is no longer fit and proper, the court may
    vary the sentence within the limits prescribed by law, pursuant to s. 687(1) of
    the
Criminal Code.

[93]

Specific reasons for making a restitution order
    assist the court in determining whether a trial judge has taken all relevant
    factors into account and whether the sentence is fit and proper. The absence of
    specific reasons for making a restitution order may lead to the conclusion that
    the restitution order was imposed as a mechanical afterthought to the sentence
    of imprisonment and that the overall sentence amounts to excessive punishment.
    See
R. v. Siemens
(1999), 136 C.C.C.
    (3d) 353 (Man. C.A.).

[94]

In this case the trial judge gave no specific
    reasons for imposing a restitution order.  The order he imposed was for the full amount in an exhibit filed at the
    sentencing hearing. This amount was $35,639,395.05.

[95]

Eizenga
submits that the
    restitution order should be quashed because the trial judge failed to consider
    a relevant factor, namely his ability to pay restitution, and the amount
    ordered undermines his prospects for rehabilitation. In addition,
Eizenga
submits that the order was disproportionate to his
    involvement in the fraudulent scheme as he transferred $17.6 million to the
    deceased co-accused James Sylvester. Finally,
Eizenga
submits that the trial judge failed to consider whether, having regard to his
    sentence of imprisonment, the overall sentence was fair.

[96]

I would agree with these submissions. Having
    regard to the trial judges errors in principle, I would hold that the
    restitution order is excessive, that it renders the overall sentence unfit and
    that it must be set aside. I must, however, go on to consider whether, as part
    of a fit sentence, a restitution order is nevertheless appropriate and, if so,
    what amount should be ordered.

[97]

The broad objectives of a restitution order are
    discussed in
R. v.
Zelensky
,

[1978] 2
    S.C.R. 940, and
Devgan
at
para. 26. These objectives
include emphasizing the
    sanction imposed upon the offender, making the offender responsible for
    compensating loss to the victims, preventing the accused from profiting from
    crime, and providing a convenient, rapid and inexpensive means of recovery for
    the victim. A restitution order is appropriate where the amount that the
    victims have lost is capable of ready calculation. Conversely, a restitution
    order is not appropriate where the amount the victims have lost is uncertain
    and requires the court to interpret written documents or unravel involved
    commercial transactions. It is also inappropriate where there is a serious
    contest on legal or factual issues relating to restitution.

[98]

At his sentencing hearing,
Eizenga
stated that the amount raised from investors, the victims of the fraud, was $37
    million. I would accept this statement and would hold that, on
Eizengas
own admission, the amount lost by the victims of
    the fraud is not uncertain.

[99]

Among
    the factors to be considered in deciding whether to make a restitution order
    are
Eizengas
plea of guilt, the custodial portion of
    his sentence, the principle of rehabilitation, the magnitude of the fraud,
    whether it involved a breach of trust, his responsibility for the crime, and
    his ability to pay, which includes his assets, education and ability to earn
    income,

[100]

As I have indicated,
Eizengas
plea of guilt was valid although he sought to
    minimize his participation in the crime; the custodial portion of his sentence
    of eight years was not appealed; he has no prior criminal record and his
    prospects for rehabilitation appear good; the magnitude of the fraud is at
    least $37 million; and
Eizenga
committed a breach of
    trust.

[101]

I
    would agree with
Eizengas
submission that having
    regard to the fact that he transferred $17.6 million to his deceased
    co-accused, James
Sylvestre
, a restitution order
    holding
Eizenga
responsible for the entire $37
    million lost by investors would be disproportionate to his involvement in the
    fraudulent scheme.
Eizenga
did, however, retain
    control over $19.4 million.

[102]

Eizenga
submitted that he should not be responsible for any
    of the administrative expenses he incurred in furtherance of his illegal
    scheme, such as salaries and commission paid to his employees. I would not give
    effect to this submission. It is not
Eizengas
net
    profit, or how good a manager he was of the money he obtained by
    misrepresentation, that is determinative of his responsibility. It is the
    amount of his responsibility for investors loss.

[103]

Eizenga
also submits that he has no money and no ability to
    pay restitution. The court has very little evidence concerning
Eizengas
ability to make restitution. The pre-sentence
    report indicated that he was doing periodic consulting work.
Eizenga
told the trial judge that as a result of the OSC
    proceedings he had been barred from working in the capital markets for 22
    years. He referred to financial hardship and difficulty in obtaining any kind
    of employment, and stated that he was an
undischarged
bankrupt. Even accepting
Eizengas
submission,
    ability to pay is but one factor to consider in making a restitution
    order.  It is not a precondition to
    making an order.

[104]

The
    decisions on which
Eizenga
relies in support of his
    submission that no restitution order should be made on account of his inability
    to pay, such as
R. v.
Biegus

(1999), 141 C.C.C. (3d) 245 (Ont. C.A.), do not involve a breach of trust.
    Indeed, in
R. v. Yates
(2002), 169
    C.C.C. (3d) 506 (B.C.C.A.), where an egregious breach of trust was involved,
    the court ordered restitution although there did not appear to be any
    likelihood of repayment.

[105]

Recently
    in
R. v. Castro
, 2010 ONCA 718, this
    court had occasion to discuss two important factors that should be considered
    when deciding whether to impose a restitution order. They are the nature of the
    offence and, when money has been taken, what has happened to the money.

[106]

Like
Castro
, the nature of the offence in
    the case at bar was a fraudulent taking of money that involved a breach of
    trust. The paramount consideration in cases involving breach of trust is the
    claims of the victims including the impact of the breach of trust on them: see
R. v. Fitzgibbon,
[1990] 1 S.C.R. 1005,
    at pp. 1014-15. In
Castro
, this court
    stated at para. 30:

In imposing a sentence where the offender has used
    his or her position to commit a breach of trust, the
primary
considerations are the protection of the public, general deterrence and the
    repudiation of the conduct of which the offender was found guilty.
    Relevant factors include the length of time over which the conduct took place,
    whether the offence was a sophisticated and well planned scheme, the amount
    involved, and, most importantly, the impact of the offenders conduct on the
    victims.  The
secondary
considerations are specific deterrence,
    rehabilitation and any mitigating circumstances such as a plea of guilty or
    co-operation with the authorities (in tracing the funds):
Scherer
[(1984),
16 C.C.C.
    (3d) 30 (Ont. C.A.)]
, per Martin J.A. at para. 34. [Emphasis in
    original.]

[107]

In
R. v. Wilder
, 2004 BCSC 644,
affd
2008 BCCA 370, the accused defrauded the Canadian
    government out of $38 million in taxes. The trial judge sentenced Wilder to
    make restitution in the amount of $5 million after noting that the accused has
    been very careful to divest himself of all of his assets, making tracing of
    the funds difficult. The amount of restitution ordered was not based on any
    specific tracing of profits but instead was calculated to broadly reflect
    Wilders degree of criminal responsibility for the damages suffered by the
    victim of his fraud. In upholding the restitution order, the British Columbia
    Court of Appeal found that the trial judge had correctly considered the
    egregious nature and magnitude of the frauds, Wilders means and ability to
    pay, and the fact that Wilder had personally received some of the missing $38
    million.

[108]

A similar approach should be taken here,
    since, like
Wilder
, the accused was
    the mastermind of a fraud, the amount of loss to the victims is ascertainable
    and the accused received some of the defrauded money, but actual tracing of
    individual investors funds is not possible due to the manner in which
Eizenga
dealt with those funds. In such situations, a
    restitution order may be made in an amount that generally reflects the
    culpability of the accused without slavishly relying on tracing or a strict
    calculation of the
accuseds
enrichment (as long as
    the amount ordered does not exceed the amount lost by the victims). This is in
    keeping with the principle that a restitution order is part of a sentence, and
    should not serve to displace the civil remedies necessary to ensure full
    compensation to victims:
R. v.
Zelensky
, [1978] 2 S.C.R. 940;
Devgan
at
para.
    26.

[109]

Eizenga
committed a sophisticated well-planned breach of
    trust over an extended period of time that defrauded investors out of $37 million.
    As his counsel concedes, There is no doubt that Saxton investors suffered
    greatly. Thus, the primary consideration in this case is the protection of the
    public, general deterrence and repudiation of
Eizengas
conduct from which he personally benefitted. For example,
Eizenga
does not dispute spending at least $700,000 from Saxton accounts on expenses
    related to a residence in Burlington where he and his wife lived,
[8]
plus purchasing at least one Porsche, two Mercedes, one Dodge Ram truck, a boat
    and two jet skis.
[9]

[110]

As
    in
Wilder
,

Eizenga
alleges that he cannot afford to
    pay as he has disposed of all the money. At the same time, the ultimate
    disposition of funds, including $5.8 million that
Eizenga
admits transferring from one of his Canadian companies, Saxton Investments, to
    another of his companies, Saxton SA in the Bahamas, is not known. The funds
    have been so co-mingled that tracing is impossible.
Eizengas
claim
that
he is
u
n
able to earn sufficient income to make any restitution and his
    bald assertion that he has no assets begs the question of what happened to the
    money. A restitution order, which survives bankruptcy, is the only realistic
    way in which the victims will recover anything. I would hold that a restitution
    order is appropriate and, as part of a fit sentence, I would order restitution
    in the amount of $20 million.  I believe
    this amount best reflects
Eizengas
culpability in
    the fraud based on the factors discussed above.

[111]

Accordingly,
    I would grant leave to appeal sentence, allow the appeal as to sentence, set
    aside the restitution order in the amount of $35 million and, in its place,
    substitute an order for restitution in the amount of $20 million.

[112]

I
    thank both counsel for their thorough and very helpful submissions.

RELEASED:  Feb. 9,
    2011

KMW                                                                                Karen
    M. Weiler J.A.

I
    agree John Laskin J.A.

I
    agree S.T. Goudge J.A.

[1]
The name
    The Saxton Group was a business name registered under Saxton Investments Ltd.

[2]
Counsel
    for
Eizenga
asserts that he was not present in court
    when the reference to obtaining independent legal advice was made. That was not
    the case.

[3]
In
Newman
, Newman pled guilty to one count
    of conspiring to import cannabis resin. At the plea hearing, in support of the
    guilty plea, the Crown filed a memorandum summarizing its proposed evidence at
    trial. The memorandum contained a number of allegations that Newman had
    expressly told his defence counsel that he would not admit. Crown counsel advised
    the court that the memorandum was subject to some probable finessing by the
    two parties between the date of the plea and the date of the sentencing
    hearing. Defence counsel responded by stating:

Yes, sir. I might add for the record, sir, that we
    would bein the interim period, of course, we will come up with a concise,
    precise statement of facts on this particular count that well both put before
    you. There are certain things that are in issue. But I think by filing that
    [the memorandum] as an exhibit, that will be sufficient for a conviction to be
    registered today, sir, or the finding today.

Defence counsel reviewed the Crowns proposed
    statement of facts with Newman and Newman expressly instructed him that he
    would not acknowledge certain allegations. The next day, defence counsel had a
    meeting with Crown counsel, who took a take it or leave it approach and said
    that he was not prepared to vary the statement of facts. Defence counsel swore
    that he believed he had advised Newman of this, but Newman provided no further
    instructions. Defence counsel also swore that it was his best judgment that
    Newman should still plead guilty, because he was concerned that Newman would
    not make a good witness if there were to be a trial. He also felt that if
    Newman pled guilty, he would likely receive a low penitentiary sentence because
    the pre-sentence report was positive.

Defence counsel signed the agreed statement of facts
    on behalf of Newman. The agreed statement of facts did not contradict the
    Crowns memorandum but indicated that Newman was a more active participant in
    the conspiracy than the memorandum suggested. At the sentencing hearing,
    defence counsel began to take issue with some of the matters in the agreed
    statement of facts. The Crown interjected and said that the record must be
    clear that the facts as alleged throughout the agreed statement of facts are
    facts that are agreed the Crown could prove beyond a reasonable doubt and are
    the facts that are before this court in terms of the standard in
R. v. Gardiner
, [1982] 2 S.C.R. 368. Defence
    counsel indicated he was content.

[4]
I note
    that the
Securities Act
, R.S.O. 1990,
    c. S.5, does not explicitly state that evidence gathered by the OSC is
    inadmissible at a criminal proceeding. However, s. 17(3) of the OSA provides:

Without the written consent
    of the person from whom the testimony was obtained, no order shall be made
    under subsection (1) authorizing the disclosure of testimony given under
    subsection 13(1) [the OSCs investigative powers under] to,

(a)    a municipal, provincial, federal or other
    police force or to a member of a police force; or

(b)    a person responsible for the enforcement of
    the criminal law of Canada or of any other country or jurisdiction.

The cases cited by the appellant discuss the broad
    investigative powers of the OSC, but otherwise do not support the idea that
    evidence gathered through an exercise of OSC investigative powers is
    inadmissible at a criminal proceeding.

[5]
The two
    alleged breaches with which
Eizenga
takes issue are: (1)
    that he gave inadequate disclosure of information about his companies to his
    investors; and (2) that the Saxton Group incurred considerable promotional and
    sales expenses, and paid out 5% commissions to sales representatives.
Eizenga
claims that all new investors had to sign a waiver
    stating that they had read the Offering Memorandum. He also claims that the
    Saxton companies exploiting the seed capital exemption did not pay out
    commissions, because any commissions actually came from the Saxton Groups
    management company, Saxton Investments Ltd.

[6]
I note
    that the Fifteenth Report of the interim manager of Sussex Group Ltd. (dated
    August 31, 2006, and filed by
Eizenga
at the
    sentencing hearing) reports that the Saxton Group was a creditor of Sussex
    Group Ltd. only in the amount of $6,744,000.00. This does not nearly account
    for the total amount that was taken from Saxtons investors.

[7]

Eizenga
continuously stated at the sentencing hearing that
    Saxtons Cuban operations (i.e. Sussex Group Ltd.) were legitimate and were
    running at a profit. In support of this claim, he filed as exhibits the Interim
    Manager reports prepared by HOCI from 2002 to 2006. However, HOCIs reports all
    unambiguously characterize the financial and business
affairs
    of Sussex Group Ltd. as being in confusion and disarray when HOCI took over as
    Interim Manager. In the first Interim Managers Report, dated April 26, 2002,
    HOCI wrote: There appears to have been very limited transparency,
    responsibility or accountability in respect of the financial operations and
    management of the Sussex business. ... The businesses are grinding to a halt.
    Concerns about the misdirection of Sussex funds and assets and inappropriate
    use of authority have prevailed.

In examining the companys accounting
    records for the purpose of the Stage One Review Report, HOCI found a number of
    large and inadequately documented transactions, such as a physical transfer
    of $1.2 million in cash from Cuba to Canada and large cash transfers between
    Sussex personnel. HOCI wrote: Given the various transfers of money and the
    large number of cash transactions, it is very difficult to trace the ultimate
    disposition of the funds. Furthermore, a document titled, Sussex Group
    Limited: Draft Summary of Statements of Operations and Deficit showed that the
    company ran at a net loss from at least July 1997 (no earlier records were
    filed) to September 1998.

[8]

Eizenga
admits making a deposit of $50,000 and a further
    payment of $477,783.21 towards the Burlington residence, using cheques from
    Saxton Investments. He further made mortgage payments totalling $113,091.04
    from Saxton Investments and Saxton LMD accounts. Finally, he admitted to
    spending $14,459.50 on bedroom furniture and $113,480.70 was spent on
    decorations on the Britannia residence and some Saxton offices (ASF
paras
. 117-120). This totals $768,814.45. The lower
    $700,000 figure compensates for funds spent on the Saxton offices, unrelated to
    the Burlington residence.

[9]
The
    ASF provides no valuation for these properties.