R. v. Dube, 2011 ABQB 299

Court of Queen ’ s Bench of Alberta Citation: R. v. Dube, 2011 ABQB 299 Date: 20110502 Docket: 080465297Q1 Registry: Calgary Between: Her Majesty the Queen Crown - and - Gilles Dube, Jaimee Jie Tong Yu, Jean Pierre Bellefeuille Accuseds _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice K.M. Eidsvik _______________________________________________________ The charges [ 1 ] Mr. Pierre Bellefeuille, posing as Dr. Ben Gagnon, and Ms. Jaimee Yu are charged with defrauding Dr. vanRooyen between the 1 st of April and 31 st of July 2006. Mr.

Gilles Dube was also charged on the same indictment, but he failed to show for trial so a warrant was issued for his arrest and the trial proceeded against Mr. Bellefeuille and Ms. Yu. Overview

[ 2 ] The Crown alleges that Mr. Bellefeuille used a fraudulent scheme, aided and abetted by Ms. Yu, wherein he would mislead potential investors into believing that he was a retired medical doctor (a dermatology specialist), with an MBA in finance and that he had run several successful medical clinics in Montreal. He said that he wanted to come out of retirement to use his experience to open similar clinics in western Canada. He would get the investors to invest money and effort into the development of the clinics.

The paperwork behind the business deals would not be finalised, the clinics would never be finished, and Mr. Bellefeuille would, in all essence, disappear. [ 3 ] The Crown’s position is that this is what happened to Dr. van Rooyen in April 2006. Mr. Bellefeuille asked Dr. vanRooyen, a general physician who practised in Didsbury, Alberta, to join a new medical clinic in Calgary that had recently opened - the Westview Medical Clinic. He promised him a position as medical director with a salary of $188,000 of this and other clinics, as well as 60% of his revenue from his medical practice. [ 4 ] Mr.

Bellefeuille sought an investment in the clinics from Dr. vanRooyen in the amount of $500,000. In return, Dr. van Rooyen was to own 5% of the holding company of the Westview clinic and many other clinics that were in Calgary (Westbrook), Vancouver, Kelowna and Quebec (either operating or under construction). The name of this so called holding company was The Medical Dental & Pharmacy Experts Group Ltd. - “the MDPE company”. Dr. van Rooyen was told that the value of the investments in the projects owned by MDPE exceeded $20 million. [ 5 ] Mr.

Bellefeuille showed Dr. van Rooyen a Business Plan for the Westview Clinic that Dr. vanRooyen then used to get financing from a bank. It had glowing financial predictions. Mr. Bellefeuille also provided him with a letter with “our doctors’ last four years tax returns” that showed salaries well in excess of those used in the statistics of the Business Plan - claiming that the next statement would show a 28 - 33 % increase. [ 6 ] The $500,000 was invested in The Medical Dental & Pharmacy Experts Group Ltd. in May 2006.

Documents were prepared to transfer five shares from Chateau Elegance Estate Ltd.’s 100 shares in MDPE to Dr. van Rooyen. A MDPE share certificate for five shares in favour of Dr. van Rooyen was signed by Dr. Gagnon as “CEO”. The share transfer was never registered. [ 7 ] Chateau Elegance Estate Ltd. (“Chateau Elegance”) was a company wholly owned by a Mr. Dube - a colleague of Mr. Bellefeuille’s. Mr. Dube was introduced as a catholic priest and retired psychiatrist who had run clinics in Quebec. Mr. Bellefeuille said that “Dr.” Dube (as he was called by Mr.

Bellefeuille) was holding the shares in Chateau Elegance for Mr. Bellefeuille (known to Dr. van Rooyen as “Dr. Gagnon”) because Mr. Bellefeuille was going through a divorce. Chateau Elegance owned all the shares of MDPE and it was its shares that Dr. van Rooyen was buying. [ 8 ] There were other investors in the clinics, who pre-dated Dr. van Rooyen, a Mr. Norm Wilkinson and Mr. Gary Mummery. Both understood that the companies that they had set up with Mr. Bellefeuille also owned part of the Westview clinics and would own part of the other clinics.

Chateau Elegance was also a shareholder in the companies that they owned as well. Mr. Bellefeuille had sold them each basically the same thing. Each of Mr. Wilkinson, Mr. Mummery and Dr. van Rooyen knew that the others were “involved” in the clinics, but none knew what the others were told what they owned, or what they were going to own. And none of these deals were in writing. [ 9 ] Dr. van Rooyen started practicing at the Westview Medical Centre at the beginning of May 2006. He was never paid as a medical director. Indeed a different doctor, Dr.

Yep, also thought that he was the medical director of the Centre. [ 10 ] In July, 2006 the Westview Medical Centre was locked and closed. The rent had never been paid and there were many outstanding bills. Dr. van Rooyen was terminated by a lawyer, Mr. Brent Hemington, purporting in his letter to be acting for the Westview Medical Centre Group Ltd. [ 11 ] The Crown led evidence to show that Mr. Bellefeuille is not a medical doctor and does not have an MBA from where he said he did. There is no evidence that he had an MBA at all.

There is also no evidence that he had any involvement in any medical clinics in Quebec - either working in them or owning them.

[ 12 ] MDPE had no ownership interest in the Westview clinic or the proposed Westbrook clinic, or in any of Messrs. Wilkinson or Mummery’s companies that also had claims to, or in fact arguably owned parts of the Westview clinic because of their respective investments in building the Westview Centre. The Westview Centre Group company also had an agreement with the pharmacist Mr. Lee, and with at least one income producing doctor, Dr.

Yep. [ 13 ] MDPE had one agreement with a doctor for his services at the Westview Centre (who hadn’t started working yet) and there were draft agreements in MDPE’s name to buy clinics in Vancouver, but that never came to pass. [ 14 ] Dr. van Rooyen lost his investment. The accuseds disappeared from Dr. van Rooyen’s life. The Crown’s position [ 15 ] The Crown alleges that Dr. van Rooyen invested on the basis of the misrepresentations by Mr. Bellefeuille and that Ms. Yu aided Mr. Bellefeuille in the deception. Further, that Dr. van Rooyen received nothing for his $500,000 investment.

Accordingly, both are guilty of fraud as charged. Mr. Bellefeuille’s position [ 16 ] Mr. Bellefeuille contends that he had no intent to defraud anyone. Instead he alleges that he worked very hard and transparently to make the business a success. In this regard the Business Plan was prepared by not only him but also other investors, Mr. Wilkinson and Mr. Mummery, along with a chartered accountant. Financial assumptions were taken from the internet and doctors’ average salaries by the accountant and worked up from there.

Every step was discussed and had lawyers involved. [ 17 ] He used his mother’s maiden name, Gagnon, and another of his given names, Ben, because he had people pursuing him who wanted to destroy him. [ 18 ] He alleges that Dr. van Rooyen invested in the business because he saw that the Westview Clinic was state of the art, it was a good concept, and it was up and running with doctors and a pharmacy. He saw the future Westbrook Clinic plans and knew about the plans to take over clinics in Vancouver. Dr. van Rooyen spoke with many people - not just him.

He is an intelligent man and knew what he was investing in. [ 19 ] Mr. Bellefeuille contends that Dr. van Rooyen got what he bargained for, five shares in MDPE, and that ultimately he did not lose any money. Mr. Bellefeuille denies running away after the clinic closed but tried valiantly to save it. [ 20 ] Ultimately Mr. Bellefeuille was of the view that Westview failed because it was undercapitalised and people got afraid of malicious rumours. He states that he didn’t take any money out and indeed he didn’t have any signing authority for any of the companies or bank accounts. He and Ms.

Yu are the ones who have been left without anything despite all of their hard work. [ 21 ] He believes that Dr. van Rooyen is mad because he was terminated. This happened after he illegally locked Mr. Dube and Ms. Yu out of a hangar that stored their goods and Dr. van Rooyen’s airplane - which led to their arrest when they tried to get into it. Ms. Yu’s position [ 22 ] Ms. Yu’s position is that there is no evidence that she defrauded anyone or that she assisted in any fraud. She said that several witnesses confirm that she was known only as Mr. Bellefeuille’s girlfriend.

The evidence shows that the business arrangement was very complicated and that there is no evidence that she knew what was going on in this regard. At the end, the worst that could be said is that she was a delivery girl.

Issues [23] 1. Whether the Crown has proven beyond a reasonable doubt the essential elements of fraud (section 380 (1) (

a) of theCriminal Code of Canada) of Dr. van Rooyen by Mr. Bellefeuille ? More specifically, did Mr. Bellefeuille deliberately and dishonestlydeprive Dr. van Rooyen of his investment in MDPE ? [24] 2. Whether Ms. Yu did or omitted to do anything for the purpose of aiding Mr. Bellefeuille to commit fraud or did she abethim in committing fraud (section 21 of the Criminal Code of Canada). Analysis 1. Allegations against Mr. Bellefeuille The applicable law on fraud [25] Section 380 (1) (

a) of the Criminal Code reads as follows: 380

(1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of thisAct, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service, (

a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of theoffence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; [26] The Crown argued that a trilogy of Supreme Court of Canada fraud cases sets out the necessary tests and law applicable inthis case. I agree. They are: R. v. Olan, (SCC), [1978] 2 S.C.R. 1175, R. v. Theroux, (SCC), [1993] 2S.C.R. 5, and R. v.

Zlatic, (SCC), [1993] 2 S.C.R. 29. [27] The tests for the actus reus and mens rea of fraud has been summarised as follows at pages 20 - 21 in R. v. Theroux when Mr.Justice Sopinka said the following: These doctrinal observations suggest that the actus reus of the offence of fraud will be 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 victim's pecuniary interests at risk. Correspondingly, the mens rea of fraud is established by proof of: 1. subjective knowledge of the prohibited act; and 2. subjective knowledge that the prohibited act could have as a consequence the deprivation of another (which deprivation may consist inknowledge that the victim's pecuniary interests are put at risk).

Where the conduct and knowledge required by these

definitions are established, the accused is guilty whether he actually intended the prohibited consequence or was reckless as to whether it would occur. [ 28 ] The test to determine if something is dishonest was also discussed in R. v.

Zlatic by Justice McLachlin wherein she emphasized that the test about whether something is to be determined dishonest is an objective one - whether a reasonable person would consider whether something done was dishonest. [ 29 ] Finally, as discussed in Theroux at 17, it is not necessary that there be proof that the accused profited from the deceit. [ 30 ] In order to do the analysis of this case against Mr. Bellefeuille, I will break down the above noted tests into questions to be answered.

I) Were there deliberate acts of deceit, falsehood, or other fraudulent means perpetrated by Mr. Bellefeuille against Dr. van Rooyen ? [ 31 ] In my view, I have no doubt that Mr. Bellefeuille perpetrated many instances of deceit and falsehoods in connection with his relationship with Dr. van Rooyen. To properly understand these instances and overall dishonest scheme Mr. Bellefeuille was engaged in that led to Dr. van Rooyen’s investment in MDPE, I need to step back a bit in time from when Dr. van Rooyen came on the scene. [ 32 ] A large part of the situation was related by Mr. Wilkinson in his testimony.

I found that he gave his evidence in a forthright and reliable way and made a very credible witness. [ 33 ] Mr. Wilkinson related that Mr. Bellefeuille started working on the Westview clinic in Calgary in early 2005. Mr. Wilkinson met Mr. Bellefeuille in early 2005. Mr. Wilkinson was a realtor in Calgary. Mr. Bellefeuille asked Mr. Wilkinson to help him find a house and help with the leasing of medical clinics for the business that he was starting in Calgary. [ 34 ] Mr. Bellefeuille introduced himself at that time as “Dr.” Bellefeuille.

He said that he was a retired dermatologist and had operated a clinic in Vancouver. He was going through a divorce and had moved to Calgary for a fresh start. [ 35 ] Mr. Wilkinson had no experience in the medical clinic business but Mr. Bellefeuille asked Mr. Wilkinson to get involved as his partner. Mr. Wilkinson was intrigued with the idea so he agreed. Mr. Wilkinson was told by Dr. Bellefeuille that they would set up a company that each would have an interest in.

This company would be the holding company for the Westview clinic and revenue would come into it from doctors, dentists, and pharmacy income. [ 36 ] A company was incorporated called Westview Centre Medical Group Ltd. (“the Westview Group”) in February 2005. Chateau Elegance owned 80% of the shares and Mr. Wilkinson, through a company he incorporated, NBW Holdings Ltd., owned 20%. He understood that Dr. Gilles Dube (who he was told was a priest and psychiatrist colleague of Dr. Bellefeuille’s from Quebec) was the shareholder of Chateau Elegance and that he held these shares in trust for Dr. Bellefeuille. Mr.

Wilkinson became the director and President of the Westview Group. Lawyer Clint Clark prepared the appropriate corporate documents. [ 37 ] Westview Medical Centre (Westbrook Group) Ltd. (“the Westbrook Group”) was incorporated in September 2005 with the same 20/80 split of shares. Gilles Dube, as well as Mr. Wilkinson, were made directors of that corporation. [ 38 ] Two accounts were set up for the Westview Group at the RBC - one for GST and one for operating. Mr. Wilkinson found the accounts convoluted - in hindsight he felt that there should have been a third account for the revenue stream.

He was promised that an accountant would be hired for the company that would straighten these things out - but that never happened.

[ 39 ] A lease for the Westview Clinic was signed by the Westview Group. The deal was that they would have free rent on the premises for a year - up to February 2006. [ 40 ] Mr. Wilkinson understood from Dr. Bellefeuille that he was busy finding investors for the Westview clinic - however importantly - Mr. Wilkinson was told that it would be “private financing” and that they would not be giving up any shares.

He was never kept apprised about what was happening there, although he was somewhat involved in the preparation of part of the Business Plan by providing his c.v. and reviewing some internet numbers about doctors’ salaries. He called this Plan “a dream” - not something that he budgeted or counted on. [ 41 ] The clinic went from the design stage to the construction stage. Mr. Gary Mummery came on the scene as someone “involved” in the construction of the clinic. Mr. Wilkinson didn’t know what the business deal was with Mr. Mummery, although he knew that an initial proposal of Mr.

Mummery’s to invest in the Westview and Westbrook Clinics did not go through because Mr. Mummery was not given the guarantees he required. [ 42 ] Mr. Wilkinson also understood that the pharmacist had made a financial deal with Dr. Bellefeuille - an investment to the extent of $200,000 but there were strings attached and he wasn’t aware of the details. He also was told that there were many doctors signed up and that as a result there would be a good revenue stream coming in once they opened up.

He never saw any of those alleged contracts (there were no written contracts at that time as far as can be surmised at this time). [ 43 ] Interestingly, there was a written contract signed with the pharmacist, Mr. Lee, dated March 2005, on behalf of the Westview Group. It was signed by “Dr. Ben Gagnon” as President of the Westview Group - which was not true. It did not have any investment commitments in it but did have a revenue sharing plan with the Westview Group. [ 44 ] At around this time Mr. Bellefeuille advised Mr. Wilkinson that he was going to change his name from Dr. Bellefeuille to Dr.

Gagnon because his wife was after him. He explained that he was going to use his mother’s maiden name instead as that was common in Quebec. [ 45 ] Mr. Wilkinson was not sure at all what was going on with the finances, although he was the one who signed the cheques. He invested some money of his own into the account, his realtor fee of around $6000, and also put money in from his line of credit and paid some bills on his personal visa - about $32,000. He would get paid back little amounts from time to time but never got an accounting. He was unclear who was putting money in although he was told by Mr.

Bellefeuille that Chateau Elegance, Mr. Bellefeuille, Jamie Yu and others were putting money in. [ 46 ] Mr. Wilkinson co-signed with the Westview Group for cell phones and for a lease on a BMW for Dr. Gagnon’s use. [ 47 ] The Westview Centre opened in February 2006. There were only three doctors there, a G.P., Dr. Yep, and two podiatrists. There was also a receptionist, a nurse, a manager, Bernice Paul, and a person he thought was the medical director, Jim Roy. They had trouble keeping up with the bills even though he thought that revenue should be coming in.

Although he didn’t learn this until later, no lease payments were being made. Nobody was taking care of the bookkeeping still as far as he was aware. Somehow for a few months they sort of scraped through. [ 48 ] Mr. Wilkinson was very stressed both because of the problems at the Clinic but also because his young son became very ill and was in the hospital and the cleaning staff quit because it was not being paid so he wound up cleaning at night. He was concerned about his personal liability as a director and concerned when Mr.

Bellefeuille suggested that they take money from the GST trust account to pay some bills. Mr. Jim Roy also quit around this time (March 2006). [ 49 ] Mr. Wilkinson gave notice to Mr. Bellefeuille that he had to quit as a director in April 2006. These documents were finalised by Clint Clark in June 2006 and signing authority on the RBC bank accounts were transferred to Ms. Paul in June or July. He was hoping that Mr. Gary Mummery would buy out his shares based on representations from Mr.

Bellefeuille, but that never came to pass. [ 50 ] Although the MDPE company was incorporated in February 2006 (by a different lawyer - Heenan Blaikie LLP), Mr.

Wilkinson knew nothing about it. He learned about it only later when he started going through some documents that he had brought home when cleaning at the Clinic and found a blank contract between MDPE and doctors. He went and had a search done of the company only to learn that it had nothing to do with him - it was registered and owned by Gilles Dube. [ 51 ] It is an obvious inference from this evidence that he was not approached while he was a director or President of the Westview Group or Westbrook Group to transfer his own shares of the Westview or Westbrook Groups to MDPE.

Nor did he know if Chateau Elegance’s shares were to be transferred to MDPE. Nor was he aware that MDPE was to be the “holding company” of all of the clinics including Westview and Westbrook. [ 52 ] Meantime, while Mr. Wilkinson was being kept in the dark, Mr. Gary Mummery was approached by Mr. Bellefeuille to invest in the clinic business sometime in early 2005. Mr. Mummery testified and also gave his evidence in a forthright and credible way. [ 53 ] Mr. Mummery was told all along that Mr. Bellefeuille was “Dr. Gagnon”, a retired dermatologist from Quebec, with an MBA in finance.

He understood that he had run eight successful clinics in Quebec and had sold them to the Quebec government. [ 54 ] The deal he agreed to with Mr. Bellefeuille was that they would incorporate two new companies, Pharm-Med Investments Ltd. and Pharm-Med Construction Ltd. wherein he (through his own holding companies) and Chateau Elegance would each own 50% of the shares. Chateau Elegance would then transfer its 80% ownership of the Westview Group company to Pharm-Med Investments so that he would own in essence 40% of the Westview Group along with Mr. Wilkinson.

He also understood that Pharm-Med Investments would then own 100 % of all future clinics. Pharm-Med Construction was to be in charge initially of construction of the Westview Clinic. [ 55 ] The companies were incorporated (by a different lawyer than Clint Clark - possibly Gowlings Mr. Mummery thought) but despite constant prodding, this agreement was never drafted or signed and the shares were never transferred. In my view, this was because Mr. Bellefeuille did not want Mr. Wilkinson to know about this deal as it obviously would be in conflict with what Mr. Wilkinson understood what his deal was.

Further, considering that Mr. Wilkinson and Mr. Bellefeuille agreed that further investment would not be done by way of share transfers, it is questionable if Mr. Wilkinson would have agreed with this structure. In my view, Mr. Bellefeuille deliberately withheld this information from both Mr. Wilkinson and Mr. Mummery. [ 56 ] Mr. Mummery also helped put together the Business Plan that Dr. van Rooyen was ultimately shown. He understood that everything in Mr.

Bellefeuille’s resume was true and that it accurately reflected what he thought the state of affairs was in November 2005 (including the fact that a number of doctors - and their revenue stream - had been signed up). [ 57 ] Over the next several months, “because of the lack of funds promised” the construction of the Westview clinic was funded mainly through his holding companies via Pharm-Med Investments, Pharm-Med Construction and the Westview Group. He believed that some money may have come from Chateau Elegance but he also put money into Chateau Elegance.

He never received any accounting from them so he didn’t know what that company put in. He summarised all of the payments that he and his holding company made between April 2005 and July 2006 and it came to $1,129,327. [ 58 ] He went to Vancouver with Mr. Bellefeuille a few times. Once was to hire a professional in the medical centre business, Mr. Jim Roy. They looked at medical clinics called “Care Point” clinics in Vancouver while they were there. Also he was shown property in Vancouver in a wealthy neighbourhood that Mr. Bellefeuille said he was selling.

He was waiting for those funds - but they never came in. [ 59 ] He met Dr. van Rooyen when he came to work there but was unaware of any financial arrangement or investment that Dr. van Rooyen made. He certainly never saw an influx of $500,000 into the Pharm-Med companies directly, via Chateau Elegance or any other company. He had also never heard of MDPE until after the clinic was closed in July and he met with Mr. Wilkinson and Dr. van Rooyen.

He never saw any influx of money from MDPE into the Westview Centre or elsewhere either. [ 60 ] With this backdrop, I turn now to the specific misrepresentations that were made to Dr. van Rooyen in order to get him to invest. Dr. van Rooyen’s testimony was credible and believable, if not somewhat (understandably) bitter. It was corroborated by the

evidence of the other Crown witnesses and the written exhibits that were entered including most importantly, the Business Plan and handwritten representations made to him in Mr. Bellefeuille’s writing. [ 61 ] Turning to the misrepresentations, firstly of course, he misrepresented his name, his training, and his experience. Dr. van Rooyen took him for his word that he was “Dr. Ben Gagnon” having no reason to disbelieve this. Mr. Bellefeuille admitted that this was not correct - indeed it was a lie as he himself entered his birth certificate.

This difference in name, by itself, may not have been necessarily problematic to Dr. van Rooyen if it had been explained to him. [ 62 ] The misrepresentation of his training, i.e. that Mr. Bellefeuille was a medical doctor with specialist training however was significant to Dr. van Rooyen. Dr. vanRooyen testified that he thought the everything in Mr. Bellefeuille’s C.V. attached to the Business Plan was accurate. In his C.V. (under the name “Dr Benjamin Gagnon”) it stated that “Dr.

Gagnon” had a “Medical Doctor degree” from the University of Montreal in 1975 and a “Specialist in Dermatology” from the University of Montreal in 1981. Dr. Van Rooyen testified at page 11: Q Now, this whole time did you think that you were dealing with a real doctor ? A I did. Q Was this influential on your decision to invest ? A Yes, to some extent it was. Q How so ? A Well, he looked like a trustworthy person. He was supposed to be a professional medical doctor, as well as a specialist, so I trusted him. [ 63 ] In addition, Mr. Bellefeuille said that he had an “MBA in Finance” from the University of Montreal.

As Mr. Mummery testified, that would clearly lead any reasonable person to believe that Mr. Bellefeuille had a good handle on accounting and finances. [ 64 ] As indicated above, the Crown led evidence that showed that Mr. Bellefeuille was never a practising medical doctor, let alone a specialist. Nor did the University of Montreal who he professed to have his MBA from have any knowledge of him. These representations were out and out lies. [ 65 ] With respect to Mr. Bellefeuille’s experience, Dr. van Rooyen thought that he had successfully developed and owned eight medical clinics in Montreal which had been sold.

He had run his practice out of one of them. He was coming out of retirement to start the clinics in Western Canada. [ 66 ] It is clear that Mr. Bellefeuille didn’t have a medical practice to run out of one of these so called clinics since he was not a medical doctor. No evidence was led ultimately about his experience before he was in Vancouver in 2003 (where the evidence led was that he had been involved in a clinic there that ultimately went under - the Ocean Wind Medical Centre Group - as a CEO). [ 67 ] Dr. van Rooyen was told by Mr. Bellefeuille that Dr.

Gilles Dube had been his partner in the clinics in Montreal and was his partner in these new clinics. He was a psychiatrist and catholic priest. Mr. Bellefeuille did not tell Dr. van Rooyen how much he had sold the clinics for but he told him that he had “millions” in the bank and as a result Dr. vanRooyen understood that “Dr. Gagnon” would be investing personally in the clinics and he would know how to run them. [ 68 ] Although many witnesses met “Dr.” Gilles Dube and he was introduced as a priest and psychiatrist - no evidence showed that that was indeed the case or not.

[ 69 ] The most important misrepresentation however is the value and set up that Dr. van Rooyen thought he was investing in. He understood that MDPE was a holding company for all of the medical centres that were in existence or were being created.

He knew that there were other companies involved but as he said at page 6: “it wasn’t quite clear on what the roles of the several other companies were, but they were all involved and intertwined with the holding company, MDPE.” In the letter Dr. van Rooyen wrote to his bank he said : “A holding company, the Medical Dental & Pharmacy Experts Ltd. was registered in February 2006. The holding company will own all the shares of the medical centres, pharmacies, dental, optometry and surgery centres.” [ 70 ] In this same letter dated May 4, 2006, Dr. van Rooyen represented to the bank, based on Mr.

Bellefeuille’s representations, that there were the following clinics associated with MDPE : - the Westview Medical and Dental Centre - worth $3.2 M - 9 clinics in Vancouver - worth $3.2 M - the Westbrook Specialist & surgical Centre, under construction worth $3.2 M - Brossard Centre, Quebec, under construction worth $5.8 M - Bromont Centre, Quebec, construction starting in Aug 06 - worth $2.7 M - medical centre in Kelowna (18,000 sq ft) under construction - $8.3 M [ 71 ] He was told that the total investment exceeds $20 million and that he had been offered 5% of the shares for $500,000. [ 72 ] To cap it all off he was to become “part of the management of the team that generates extra income”.

There was a separate letter confirming his appointment and income as medical director at $188,000 a year dated May 12, 2006 signed by “Dr. Gagnon”. [ 73 ] If we go through the evidence that was lead about these last representations it is clear that they were deliberate and deceitful lies - but cloaked in enough reality to make them look believable. [ 74 ] Firstly, with respect to the Westview Medical Centre being worth $3.2 M. Mr. Mummery testified that by that time he had put in $1.129 M to pay for construction and Mr. Wilkinson had put in approximately $40,000 but was not clear into exactly what in Westview.

However, in April 2006, the Westview Clinic’s rent had not been paid and there were many outstanding invoices to contractors and to the medical equipment supplier. The cleaner had discontinued its services and that job had gratuitously been taken over by Mr. Wilkinson. There was only one physician and two podiatrists working there, (along with the pharmacy) - not the 14 GPs, 3 specialists and 2 dentists (along with their allegedly conservative revenue stream) that apparently were committed to working there according to the Business Plan.

Accordingly, it is highly unlikely that at that time the Westview Clinic was worth anywhere near $3.2 M - rather, unbeknown to Dr. van Rooyen, it was undercapitalised, mismanaged and heading towards failure. [ 75 ] Further, as the evidence now shows, MDPE didn’t own anything in any of the investing companies involved in the Westview clinic at that point - i.e no shares in the Westview Group or the Pharm-Med companies. Nor would it be likely that MDPE would own any shares in those companies considering the investment conditions Mr. Wilkinson and Mr. Mummery were under - i.e. that Mr.

Wilkinson thought that there would be no more shares transferred to investors and that Mr. Mummery thought that Pharm - Med was going to own all future clinics on a 100% basis. Dr. van Rooyen appears to have had no idea that Mr. Wilkinson and Mr. Mummery had already been sold the same thing. [ 76 ] Secondly, the Vancouver clinics were hardly “in operation”. The evidence led by Mr. Bellefeuille showed that Heenan Blaikie LLP (the new lawyers who were retained to incorporate MDPE) had prepared documents to purchase clinics in Vancouver for $750,000. An initial draft agreement was sent to “Dr.

Ben Gagnon” in April 2006 and a draft Letter of Intent was sent to him on June 28, 2006. We also know that Mr. Jim Roy had worked for these clinics in the past and that they were in financial trouble. There was some suggestion that Mr. Roy gave Mr. Bellefeuille information about the clinics in November. There remain many unanswered questions but what is crystal clear is that MDPE as of early May did not own these clinics as represented and there was no evidence that they were worth anywhere near $3.2 M.

[ 77 ] Thirdly, with respect to the Westbrook clinic, Mr. Wilkinson advised that a lease had been signed for this clinic under the Westbrook Group corporation and that designs had been completed. Dr. van Rooyen, Mr. Mummery and others had seen the property. However, like the Westview clinic, MDPE did not own any part of this clinic, nor would it have, for the same reasons. [ 78 ] Fourthly, there was no evidence led that the Quebec or Kelowna clinics were owned, in construction or even contemplated by MDPE, other than brief scouting trips to Kelowna made by Mr. Bellefeuille and others.

Considering that the other representations about ownership were lies, I infer that it is unlikely that there was any truth, beyond pipe dreams, about these clinics either. [ 79 ] As discussed above, Mr. Bellefeuille argues that Dr. van Rooyen invested in MDPE because he saw that the Westview clinic was an up and running clinic that was the state of the art and a good concept. He was aware of the Westbrook and Vancouver plans and that Dr. van Rooyen was aware and understood that these were future, not present plans.

He had a full opportunity to speak with many people about the investment and took advantage of this. [ 80 ] The fallacy with Mr. Bellefeuille’s argument is that although Dr. van Rooyen was impressed with the Westview Clinic, he thought he was buying part of it with his investment when he wasn’t.

And although Dr. van Rooyen may well have known that the Westbrook and Vancouver plans were future ones, (which I do not accept with respect to Vancouver - the letter to his banker is clear), again, he thought that he was investing in these clinics, when in reality he wasn’t. [ 81 ] Further, although he may well have had an opportunity to speak to others - as it turns out, these others were also under incorrect understandings of the underlying structure of the proposed and actual ownership of the clinics - only Mr. Bellefeuille knew the full picture in that regard.

Indeed the fact that different lawyers were retained to incorporate and do business on behalf of the different companies is also telling - since it is quite likely that none of them knew about the other companies. [ 82 ] In sum, in reply to this first part of the analysis, it is without any doubt that there were acts of deceit and falsehood perpetrated by Mr. Bellefeuille against Dr. van Rooyen. Although the company MDPE existed, at the time the five shares of it were sold to Dr. van Rooyen, it was worth nothing.

And it was being run by a man who had lied about his name, his education, his profession, his wealth and his professional experience. ii) Was there deprivation to Dr. van Rooyen caused by the acts of deceit and falsehood perpetrated by Mr. Bellefeuille ? [ 83 ] As discussed, I have no doubt that Mr. Bellefeuille’s web of misrepresentations that led to a pretty facade with a failing underbelly, led to Dr. van Rooyen’s investment and ultimate losses, in the amount of $500,000. [ 84 ] Mr.

Bellefeuille attempted to argue that Dr. van Rooyen did not actually suffer any losses because of some legal steps that he took after the collapse of the clinic wherein he recouped his investment. [ 85 ] Dr. van Rooyen did take some legal steps once he learned that he had been deceived, including the seizure of some items in a hangar that were owned by Mr. Bellefeuille or Chateau Elegance. He was able to recover approximately $60,000 in this endeavour.

He also took legal steps to have a piece of land owned by Chateau du La Estate Ltd (another company owned by Gilles Dube) that Dr. van Rooyen had invested a further $75,000 in, transferred to him free and clear. He was also successful in this regard.

This property may now be worth approximately $330,000. [ 86 ] Accordingly, even if this argument was correct at law, which it is not as I will explain, Dr. vanRooyen is still out approximately $185,000 very roughly. [ 87 ] This argument is not correct at law because the law is quite clear that once an investor’s funds are even put at risk based on deceit, this element of fraud has been proven. The facts and outcome in the Theroux case are an example on point.

Here, there was actual loss beyond risk, accordingly Dr. vanRooyen suffered a deprivation of his funds by the acts of deceit and falsehood perpetrated by Mr. Bellefeuille.

[ 88 ] In sum, the actus reus of fraud has been made out here beyond a reasonable doubt. I must turn now to the mens rea element. iii) Did Mr. Bellefeuille have subjective knowledge of the acts of deceit and falsehood ? [ 89 ] There is little question that Mr. Bellefeuille had full knowledge of the acts of deceit and falsehood that he perpetrated on Dr. van Rooyen. The Crown has proven this question beyond a reasonable doubt. Mr. Bellefeuille did not argue that he was unaware of what was going on - his argument was that others were also aware.

The Crown’s more difficult onus with these facts lays in the next question. iv) Did Mr. Bellefeuille know that his misrepresentations could have the consequence of the deprivation of Dr. van Rooyen’s investment ? [ 90 ] Mr. Bellefeuille argued that he never intended to defraud anyone but instead was working hard and transparently to make the business a success. Throughout the trial Mr. Bellefeuille. solicited answers from the various witnesses called by the Crown who were involved in the Westview Clinic wherein they agreed that Mr.

Bellefeuille put in a lot of effort to try and make the Westview clinic a success. [ 91 ] Mr. Bellefeuille points out that lawyers were hired for every step. Dr. van Rooyen got what he bargained for - his five shares in MDPE. The business was halted in its tracks because it was undercapitalised and a victim of malicious rumours against him that undermined his investors’ confidence in him. [ 92 ] Further he argued that he was not the signing authority for any of the companies’ bank accounts and that he did not profit from the clinic’s demise.

He questioned how this could add up to fraud. [ 93 ] As discussed in the trilogy of fraud cases referenced above, and as summarised by Justice Verville in R. v. Ellis 2007 ABQB 722 at paras 170 and 171 : In some cases, the subjective knowledge of the risk of deprivation may be inferred from the act itself, barring some explanation raising a doubt with respect to such inference. Where the conduct and knowledge required by these

definitions are established, the accused is guilty whether she actually intended the deprivation or was reckless as to whether it would occur. The accused’s 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. [...] Guilt on a charge of fraud can also be proven on the basis of recklessness or wilful blindness. [...] [ 94 ] In my view, “subjective knowledge of the risk of deprivation” of Dr. van Rooyen’s investment can be inferred by the acts of deceit and falsehood alone. Simply put, when Mr.

Bellefeuille solicited Dr. van Rooyen’s investment in the ownership of the Westview and other clinics by way of the purchase of shares in a company that had only recently been set up, and owned nothing at that point, it can be inferred, without any doubt, that he knew that Dr. van Rooyen’s $500,000 investment would be at risk. [ 95 ] Similarities to a case referenced in the R. v. Olan case is on point with the situation here.

In Olan , Justice Dickson referred to a situation at 1179 where “implicit in the entire transaction was the representation of the accused that this was a legitimate bona fide investment for [the victim] to make and with his view that there was ample evidence to warrant a finding that this representation of the accused was false to the knowledge of the accused”. That is exactly the case here in my view. [ 96 ] The fact that Mr. Bellefeuille worked hard to make the clinics a success, although true, made it look to Dr. van Rooyen that this was a legitimate bone fide investment - when in fact MDPE did not own them.

Indeed the company that did own interests in all of

the companies that arguably owned some interests in the clinics in April/May 2006 was Chateau Elegance - a company held in trust solely for Mr. Bellefeuille.

Even if the Westview and Westbrook Clinics had not been halted in their tracks - this would not have helped MDPE’s ownership issues. [ 97 ] The fact that lawyers were used in this situation is really no answer since it appears on the evidence before the Court that each set of lawyers used (Clint Clark for Westview Group and Westbrook Group, Gowlings for the Pharm -Med companies, and Heenan Blaikie for MDPE) did not know of the representations being made to others - or even of the existence of the other companies who each purportedly owned a part of the Westview and future clinics.

The inference that I draw is that Mr. Bellefeuille deliberately used different lawyers to set up a veneer of legitimacy to his proposals. [ 98 ] Finally, the fact that Mr. Bellefeuille argues that he did not profit personally has not been proven and indeed the evidence in front of the Court is the opposite. The investment of $500,000 went into a company owned by either Gilles Dube (as per Mr. Wilkinson’s search in early 2006) or Chateau Elegance (as per the Heenan Blaikie LLP minute book documents). Recall that Gilles Dube was holding all of the shares of Chateau Elegance in trust for Mr.

Bellefeuille. [ 99 ] Further, in the month of May 2006 for which records were sought for the MDPE bank account, $95,000 of cheques were written to Chateau Elegance (and a $20,000 cheque to Chateau Vancouver Estate Ltd.). Mr. Mummery testified that he never saw any injection of this cash or any of $500,000 (which he didn’t know had been invested in any event) into Westview directly from Chateau Elegance, or via Pharm- Med. [ 100 ] Mr. Bellefeuille was living in a nice estate home wherein the “rent” was being paid by Chateau Elegance and he and his girlfriend Ms.

Yu were driving a BMW, a new Chev truck and a Ford truck, all leased by various companies under their control (and co- signed by various investors including Dr. vanRooyen with respect to the Ford trucks). Also “coincidentally”, Chateau Du Lac Estate Ltd., a company also owned and controlled by Gilles Dube, purchased a property in the Bragg Creek area in the amount of $225,000 free and clear on June 7, 2006. [ 101 ] Mr. Bellefeuille may not have had signing authority on the bank accounts in question, but his partner and colleague who he trusted intimately (Mr. Gilles Dube) did.

The inference that I gather is that Mr. Bellefeuille tried to insulate himself from allegations of fraud in this way. [ 102 ] In the end, there was not enough evidence to categorically trace without doubt where the money went that Dr. van Rooyen invested. We know it didn’t go into the construction or outstanding accounts and rent owed by the Westview Centre as far as any of the investors knew for sure.

In any event, as I reviewed earlier, the law is clear that the Crown does not have to prove that the accused profited from the deceit - only that he knew that he was deceiving someone into putting his money at risk of being lost. This test, in my view has been met as against Mr. Bellefeuille beyond a reasonable doubt.

Summary with respect to Mr. Bellefeuille [ 103 ] I find that Mr. Bellefeuille knowingly, deceitfully, and dishonestly misrepresented himself, his education and qualifications, and most importantly, the state of affairs with respect to the Westview, Westbrook and future clinics to Dr. van Rooyen in order to solicit an investment in the amount of $500,000 into a company that he knew had no ownership interest to sell. He knew that Dr. van Rooyen would lose his investment and indeed he did. The Crown has proven beyond a reasonable doubt that Mr. Bellefeuille is guilty of fraud as charged. 2. Allegations against Ms.

Jamie Yu [ 104 ] The Crown is seeking a conviction against Ms. Yu on the basis that she was a party to the fraud perpetuated by Mr. Bellefeuille in that she assisted him. The Crown conceded that if the Court looked at any individual act of assistance in isolation that would not be enough to prove the case against Ms. Yu. However, that if the Court looked at the whole history of her involvement with Mr. Bellefeuille it is clear that she was assisting the fraud by helping Mr. Bellefeuille perpetrate the ruse and by creating an air of legitimacy around Mr.

Bellefeuille that would have aided in the deceit against Dr. van Rooyen.

[105] Ms. Yu argued that there is no evidence to show that she committed any fraud or was assisting in that regard. The witnesses allsaid that she had no role in the business and was merely Mr. Bellefeuille’s girlfriend as far as they knew. She points out that the businessset up was very complicated and there is no evidence that she knew what was going on in that regard. [106] Ms. Yu pointed to the law that indicates that mere presence is not enough, and therefore seeks an acquittal on the charge againsther. Analysis [107] Section 21 (1) of the Criminal Code states that : s. 21 (1) Everyone is a party to an offence who (

a) actually commits it; (

b) does or omits to do anything for the purpose of aiding any person to commit it; or © abets any person in committing it. [108] In the Supreme Court of Canada case R. v. Dunlop (SCC), [1979] 2 S.C.R. 881 Justice Dickson said for themajority at 891 and 896: Mere presence at the scene of a crime is not sufficient to ground culpability. Something more is needed: encouragement of the principaloffender;

an act which facilitates the commission of the offence, such as keeping watch or enticing the victim away, or

an act whichtends to prevent or hinder interference with accomplishment of the criminal act, such as preventing the intended victim from escaping orbeing ready to assist the prime culprit. [...] A person cannot properly be convicted of aiding and abetting in the commission of acts which he does not know may be or intended: perViscount Dilhorne in D.P.P. for Northern Ireland v. Maxwell [[1978] 3 All E.R. 1140 at 1144 (H.L.)]. One must be able to infer that theaccused had prior knowledge that an offence of the type committed was planned... [109] The evidence before the Court showed that Ms.

Yu had been involved with Mr. Bellefeuille dating back as far as 2003. Sheintroduced a Mr. John Wong, her brother-in -law to Mr. Bellefeuille and they went on to do some business together in both Vancouverand Calgary which turned out badly. Mr. Wong believed that Ms. Yu helped Mr. Bellefeuille with the books and was involved in anofficer position in one of the companies that was set up. [110] Ms. Yu was also involved with Mr. Bellefeuille when he started into business with a Mr. Gary Trudell in Calgary in early 2004until that business also went badly by the end of August 2004. Mr.

Trudell testified that he confronted both Mr. Bellefeuille (who he knew as Dr. Bellefeuille) and Ms. Yu on September 1st, 2004 and outlined the representations that had been made by Mr. Bellefeuilleregarding his alleged wealth, and failed promised financing into the company that they had set up to invest and build medical clinics.Accordingly, she would have been aware of these problems. [111] Through the evidence of Mr. Wilkinson and Mr. Mummery we know that Ms. Yu was also around at the outset and throughoutthe construction and planning of the Westview and Westbrook clinics.

She entertained various people at home, helped with thedecorating of the Westview clinic, and may have taken some calls. She was around when people addressed Mr. Bellefeuille as “Dr.Gagnon”, which she would have known was not correct, but there is no evidence that she was further involved than that. [112] Mr. Bellefeuille told Mr. Wilkinson and Mr. Mummery various times that Ms. Yu had a financial background - but neithercould say that she was there when that was said or that they ever saw her actually do any accounting. There was some evidence that a

couple of people tried to help her with some books but that it didn’t amount to much. [ 113 ] So now we turn to the fraud perpetrated by Mr. Bellefeuille against Dr. van Rooyen. She may have taken a call from Dr. van Rooyen when he first followed up on a letter that had been sent to Dr. van Rooyen inviting him to join the Westview clinic. She may have helped show Dr. van Rooyen around the Westview clinic. She entertained Dr. van Rooyen and his wife in the home she shared with Mr. Bellefeuille. She stood by as Mr. Bellefeuille was referred to as Dr. Gagnon although most of the time she called him “Ben”.

She was with Mr. (“Dr.”) Dube and waited in the foyer of the bank when Dr. Dube opened the MDPE account. She drove the BMW co- signed by Mr. Wilkinson and Westview Clinic Group. [ 114 ] There is no evidence that she knew of the ownership and business representations made to Mr. Wilkinson, Mr. Mummery or Dr. van Rooyen. It is reasonable to infer that she knew Dr. van Rooyen was being solicited as an investor in the business possibly, but it could be that she thought that this time the business would work out and that it was legitimate.

Indeed, she would have seen that the Westview clinic was being built and indeed opened with a pharmacy and doctors for instance. [ 115 ] As noted in R. v. Dunlop , one of the key elements of proving that an accused is a party to an offence is that they knew that their compatriot was intending to defraud the target. Although I could speculate that she knew, there is not enough evidence to satisfy me beyond a reasonable doubt that she was aware and knew that the complicated facade of legitimacy that Mr. Bellefeuille had built up was really a dishonest scheme to defraud Dr. van Rooyen of his investment.

The fact that I have found that even those close to Mr. Bellefeuille and involved in the business such as Mr. Wilkinson and Mr. Mummery did not know of the different representations being made, makes it even more possible that Ms. Yu, as close as she was to Mr. Bellefeuille did not know either. [ 116 ] I have also considered whether Ms. Yu was wilfully blind or “deliberately ignorant” in order to fix her with impugned knowledge of Mr. Bellefeuille’s fraud.

I find that there is not sufficient evidence before me to suggest that she was suspicious but willfully shut her eyes to the situation (and failed for instance to look into the corporate structures that were being set up and check them against representations that there is no evidence she knew about) in order for the Crown to prove impugned knowledge beyond a reasonable doubt (as per the tests set out in the recent Supreme Court of Canada case, R .v. Briscoe 2010 SCC 13 ). [ 117 ] Accordingly, I find Ms. Yu not guilty of aiding and abetting the fraud as charged. Conclusion [ 118 ] In conclusion, I find Mr.

Bellefeuille guilty of fraud and Ms. Yu not guilty of aiding and abetting this fraud. Heard on the 7 th , 11 th , 14 th - 18 th , 20 th - 25 th days of March, and 4 th - 8 th days of April, 2011. Dated at the City of Calgary, Alberta this 2nd day of May, 2011.

K.M. Eidsvik J.C.Q.B.A. Appearances: Photini Papadatou and Andrew Koeman for the Crown Jaimee Jie Tong Yu - NRBC Accused Pierre Joseph Jean Benoit Bellefeuille - NRBC Accused Gilles Dube - did not appear