Focus On

SENTENCING - Fraud over $5,000 - Particular sanctions - Seriousness of offence

Tuesday, August 17, 2021 @ 6:13 AM  

Lexis Advance® Quicklaw®
Appeal by the Crown from a conditional sentence of two years less a day imposed for fraud over $5,000. The respondent created and marketed a unique RRSP to 300 investors. In total, the respondent, a Chartered Accountant, facilitated the transfer of over $22 million and failed to declare the income received from facilitating these transactions and failed to remit the GST/HST he should have charged the investors. The trial judge found the Crown did not prove that the quantum of this fraud exceeded $1 million. In reaching his conclusion on the appropriate sentence, the trial judge said, on more than one occasion, that this was not a tax evasion case. He also noted that, where conditional sentences were imposed in major-scale fraud cases, there were exceptional circumstances. The trial judge also found that the sole motivation for the offence appeared to be greed. The respondent was a first-time offender.

HELD: Appeal allowed. A sentence of three years’ imprisonment less time served was imposed. The trial judge imposed a sentence that was outside the range of three to five years established by this court for major frauds, and he did so without explaining the basis for departing from that range. The trial judge also failed to follow the necessary analytical process and consider all the factors required before imposing a conditional sentence. The fact that the appellant was a first-time offender and of good character did not operate to reduce the sentence in a fraud case below the usual range. Even assuming that the mitigating factors relied upon by the trial judge could justify a sentence below the low end of the three to five-year range, they still would not justify less than a penitentiary term of imprisonment. If the trial judge had first considered what an appropriate sentence was for the offence committed, he would have had to conclude that a penitentiary term of imprisonment was required. The choice to prosecute the offence as fraud over $5,000, rather than as tax evasion, did not change the seriousness of the conduct and the fact that the respondent was convicted of orchestrating a large-scale fraud on the federal government and, thus, on the taxpayers of Canada. Sentence: One year and 10 months’ imprisonment.

R. v. Scholz, [2021] O.J. No. 3790, Ontario Court of Appeal, B. Miller, D. Paciocco and I.V.B. Nordheimer JJ.A., July 13, 2021. Digest No. TLD-August162021004