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SENTENCING - Fraudulent transactions relating to contracts and trade

Friday, September 27, 2019 @ 6:23 AM  


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Appeal by the Crown from a sentence of 18 months’ imprisonment for fraud of $41 million. The respondent admitted that he redirected GST refunds, properly payable by the Canada Revenue Agency to various corporations, to bank accounts he controlled. The respondent filed 28 fraudulent forms he obtained from the internet purporting to change the direct deposit. The trial judge found that the two-year mandatory minimum sentence was unconstitutional. The respondent described his year-long effort to fraudulently divert the funds as an impulsive response to learning about a tax loophole. Despite this entirely self-serving and inaccurate description of his conduct, the trial judge accepted that the respondent was remorseful and took full responsibility for his actions. He reasoned that because the respondent’s fraudulent scheme was unique and unsophisticated as it was accomplished simply by downloading a form available from the internet, this mitigated in favour of a lower sentence being imposed. The respondent had served his sentence.

HELD: Appeal allowed. Sentence increased to three years’ imprisonment. Re-incarceration was not in the public interest. The judge’s use of the hypotheticals to declare the minimum sentence unconstitutional was in error. The mandatory minimum punishment could not be struck down on that basis. It was not this court’s function in this case to construct a hypothetical in order to declare the mandatory minimum unconstitutional. The onus was on the party challenging the validity of the legislation to establish the hypothetical. The parties, particularly the Crown, should have the opportunity to fully address the hypothetical and there was no prejudice because the issue remained to be determined on a proper record in the future. The sentence imposed by the trial judge was demonstrably unfit when compared to other large-scale frauds. The sentencing judge also erred by characterizing the fraud in a manner that was not supported by the evidence, and mitigating the respondent’s sentence on that basis, understating the moral blameworthiness of the respondent. The respondent’s rehabilitation demonstrated that this case did not require re-incarceration to uphold the sentencing principles. Sentence: Three years’ imprisonment.

R. v. Plange, [2019] O.J. No. 4097, Ontario Court of Appeal, D.H. Doherty, J.C. MacPherson and M.L. Benotto JJ.A., August 7, 2019. Digest No. TLD-September232019013