R. v. Noseworthy, 2022 NLSC 7
Opinion
court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : R. v. Noseworthy , 2022 NLSC 7 Date : January 21, 2022 Docket : 202001G5514 Her Majesty The Queen v. Steven Noseworthy Before: Justice Valerie L. Marshall Place of Hearing: St. John’s, Newfoundland and Labrador Dates of Hearing: November 22, 23, 24, 26, 2021 December 9, 2021
Summary: The Accused was charged with the offence of laundering proceeds of crime, contrary to
section 462.31(1) (
a) of the Criminal Code of Canada , R.S.C. 1985, c.C-46 . At trial, the Crown did not prove the mens rea of the offence. The Accused was therefore found not guilty. Appearances:
Brenda P. Boyd, Q.C. Appearing on behalf of the Crown Averill J. Baker Appearing on behalf of the Accused Authorities Cited: CASES CONSIDERED: R. v. Lifchus, (SCC), [1997] 3 S.C.R. 320; R. v. Starr, 2000 SCC 40; R. v. Barna, 2018ONCA 1034, leave to appeal refused [2019] S.C.C.A. No. 40; R. v. Barna, 2014 ONSC 1011; R. v. Sansregret, (SCC),[1985] 1 S.C.R. 570; R. v. Jorgensen, (SCC), [1995] 4 S.C.R. 55; R. v. Garnett, 2016 NSSC 131; R. v. Tejani (1999), (ON CA), 123 O.A.C. 329 (C.A.); United States v. Dynar, (SCC), [1997] 2 S.C.R. 462; R. v. Green,2020 NSSC 148; R. v.
Villaroman, 2016 SCC 33 STATUTES CONSIDERED: Criminal Code of Canada, R.S.C. 1985, c. C-46; Controlled Drugs and Substances Act, S.C. 1996, c.19;Canada Evidence Act, R.S.C., 1985, c. C-5 REASONS FOR JUDGMENT Marshall, J.: INTRODUCTION [1] The Accused, Steven Noseworthy, is charged with the offence of laundering proceeds of crime, contrary to section462.31(1)(
a) of the Criminal Code of Canada, R.S.C. 1985, c. C-46 (the “Code”). This money laundering charge was one of manycharges laid against several individuals as a result of an investigation by the RCMP’s Federal Serious and Organized Crime (FSOC)Unit. The investigation was conducted in 2017 and 2018, and was referred to as “Project Broken”. [2] Project Broken was an investigation of serious illegal activities including offences under the Controlled Drugs and SubstancesAct, S.C. 1996, c.19, weapons offences, as well as proceeds of crime and money laundering offences.
As a result of the investigation,there were convictions of several persons, including Jonathan Mahon. Mr. Mahon was referred to as the leader of the group. [3] In December of 2018, Steven Noseworthy was charged with the offence of money laundering. He was initially charged as aco-accused along with Jonathan Mahon. Mr. Mahon subsequently entered a plea of guilty to that charge, in addition to several othercharges, including drug trafficking. [4] The indictment described the charge against Steven Noseworthy as follows: Steven Noseworthy of 1285A Torbay Road, St.
John’s, in the Province of Newfoundland and Labrador, stands charged that he: Count #1: STEVEN NOSEWORTHY on or between June 19, 2017 and March 20, 2018, at or near the City of St.
John’s in the Province ofNewfoundland and Labrador, did use, transfer the possession of, send or deliver to any person or place or otherwise deal with property, towit: Canadian currency with the intent to conceal or convert that property, knowing or believing that all or a part of the property wasobtained or derived directly or indirectly as a result of the commission in Canada of a designated offence, to wit: trafficking in acontrolled substance contrary to Section 5(1)(
a) of the Controlled Drugs and Substances Act, thereby committing an indictable offencecontrary to
Section 462.31(1)(
a) of the Criminal Code. DATED this 24th day of November, 2020, at St. John’s, Province of Newfoundland and Labrador. [5] The reference in the charge to the designated offence of drug trafficking pertains to Jonathan Mahon’s drug traffickingactivities. Mr. Noseworthy is not charged with drug trafficking. [6] Mr. Noseworthy’s trial proceeded with the Crown entering exhibits, and calling several witnesses. Consent exhibits includedan agreed statement of facts. The Defence did not call any witnesses.
[ 7 ] The trial issue to be determined is whether the Crown has proven beyond a reasonable doubt the offence of money laundering.
SUMMARY OF EVIDENCE AT TRIAL [ 8 ] At the commencement of trial, the Crown entered as consent exhibit #1 a lengthy agreed statement of facts, with attachments. The agreed statement of facts detailed the extensive investigation into Jonathan Mahon and his associates. Steven Noseworthy’s name appears in the document, as follows: • At paragraph 60 of the agreed statement of facts, it indicates that Jonathan Mahon, Steven Noseworthy, and two females travelled to Jamaica. The trip was paid for by a credit card belonging to Jonathan Mahon’s mother. • At paragraph 96(
a) of the agreed statement of facts, one of the items seized from a search of Jonathan Mahon’s residence at 71 Roche Street, St. John’s, included what is described as mail addressed to Steven Noseworthy. • At paragraph 104 of the agreed statement of facts, there is a reference to information obtained from production orders, including Mr. Mahon’s bank account.
This information indicated that there were three e-transfers from Steven Noseworthy to Jonathan Mahon’s bank account in 2017; one for the amount of $60.00, one for the amount of $165.00, and another for $75.00. • At paragraph 112 of the agreed statement of facts, there is a reference to an Income Tax Disclosure Order being granted in order to obtain income tax information on several individuals, including Steven Noseworthy. Paragraph 112(
b) of the agreed statement of facts indicates the results of the Income Tax Disclosure Order, including, as follows: “NOSEWORTHY filed tax returns for 2014, 2015 and 2016. He did not file 2017 at the time of the results from the Income Tax Disclosure Order were obtained.
The highest income he reported was in 2016 with a total income of $28,011.” • At paragraph 115 of the agreed statement of facts, there is a reference to Thomas Brown entering a guilty plea to the offence of conspiring with Jonathan Mahon, Nicklaus Travis along with “Steven Noseworthy, Michael Smith, Charlotte Toomey and other persons” to traffic in a controlled substance.
The Crown clarified in the same paragraph of the agreed statement of facts that although Steven Noseworthy was named as a co-conspirator, there was “no evidence sufficient to charge Steven Noseworthy with conspiracy to traffic in a controlled substance and the Crown is not alleging that he was involved in such a conspiracy”. • At paragraph 117 of the agreement statement of facts there is a reference to Jonathan Mahon’s guilty plea to the charge of conspiracy to traffic, as well as the money laundering charge laid against Jonathan Mahon and Steven Noseworthy. [ 9 ] The agreed statement of facts detailed the drug trafficking convictions which resulted from the investigation.
These included the convictions of Thomas Brown (paragraph 115 of the agreed statement of facts), Michael Smith (paragraph 116), Jonathan Mahon (paragraph 117), and Charlotte Toomey (paragraph 118). Jonathan Mahon was sentenced to 7 years for offences described at paragraph 117 of the agreed statement of facts, as follows: 117. On December 11, 2020, Jonathan Mahon plead guilty and was sentenced on the following charges to a global sentence of 7 years: a. Jonathan Mahon, Thomas Brown and Nicklaus Travis on or between May 1, 2017 and March 20, 2018, at or near St.
John’s, and elsewhere in Canada, conspired with Steven Noseworthy, Michael Smith, Charlotte Toomey and other persons known or unknown to commit the indictable offence of trafficking in a controlled substance, cocaine, a substance included in
Schedule I of the Controlled Drugs and Substances Act , thereby committing an offence contrary to Section 465(1) (
c) of the Criminal Code in respect of Section 5(1) of the Controlled Drugs and Substances Act – received 5 years b. Jonathan Mahon on or about March 20, 2018, at or near St. John’s, Newfoundland and Labrador, possessed a restricted firearm, a handgun, knowing that he was not the holder of a licence or registration certificate under which he may possess it, contrary to Section 92(1) of the Criminal Code – received 6 months consecutive c. Jonathan Mahon on or about March 20, 2018, at or near St.
John’s, Newfoundland and Labrador, possessed without lawful excuse a firearm, a handgun, knowing that the serial number on it had been removed, thereby committing an offence contrary to Section 108(1) (
b) of the Criminal Code – received 18 months concurrent
d. Jonathan Mahon on or about March 20, 2018, at or near St. John’s, Newfoundland and Labrador, stored in a careless manner firearms, a shotgun and a rifle, contrary to Section 86(1) of the Criminal Code – received 12 months concurrent e. Jonathan Mahon and Steven Noseworthy on or between June 19, 2017 and March 20, 2018 at or near the City of St.
John’s in the Province of Newfoundland and Labrador did use, transfer the possession of, send or deliver to any person or place or otherwise deal with property, to wit: Canadian currency, with the intent to conceal or convert that property, knowing or believing that all or a part of the property was obtained or derived directly or indirectly as a result of the commission in Canada of a designated offence, to wit: trafficking in a controlled substance contrary to Section 5(1) of the Controlled Drugs and Substances Act , thereby committing an indictable offence contrary to
Section 462.31(1) (
a) of the Criminal Code – received 2 years consecutive f. Jonathan Mahon on or between April 6, 2016 and May 7, 2018 at or near the City of St.
John’s in the Province of Newfoundland and Labrador did use, transfer the possession of, send or deliver to any person or place or otherwise deal with property, to wit: Canadian currency, with the intent to conceal or convert that property, knowing or believing that all or a part of the property was obtained or derived directly or indirectly as a result of the commission in Canada of a designated offence, to wit: trafficking in a controlled substance contrary to Section 5(1) of the Controlled Drugs and Substances Act , thereby committing an indictable offence contrary to
Section 462.31(1) (
a) of the Criminal Code – received 2 years concurrent. A fine in lieu of forfeiture of $196,255 was imposed g. Jonathan Mahon on or between April 6, 2016 and May 7, 2018, did have in his possession property, to wit: property of a value exceeding five thousand dollars, including a Rolex watch and a black Mercedes bearing Vehicle Identification Number WDDSJ4GB7EN080255, knowing that all or part of the property was obtained or derived directly or indirectly by the commission in Canada of an offence punishable by indictment contrary to
Section 355 (
a) of the Criminal Code – received 2 years concurrent [ 10 ] The agreed statement of facts attached a forensic accounting report entitled “Project Broken” dated July 19, 2018, and prepared by Mark Grenon, forensic accountant. At trial, Mr. Grenon testified as an expert in forensic accounting and his document will be referenced in the
summary of his testimony. [ 11 ] Consent exhibit #2 entered by the Crown at trial included documents obtained through various court orders. One of the documents was a rental agreement dated June 19, 2017, between Pine Bud Investments and Steven Noseworthy for Unit 409, 100 Elizabeth Avenue (Elizabeth Towers). According to the agreed statement of facts and witness testimony, that apartment was apparently used as the “stash house” for Jonathan Mahon’s drug operation.
There is also a rental receipt for $13,500 to Steven Noseworthy for Unit 409, and what appears to be a deposit slip for $13,500 cash, both of which are dated June 19, 2017. [ 12 ] Further included in consent exhibit #2 were Steven Noseworthy’s banking records from RBC, as well as another report prepared for the RCMP by Mark Grenon. That report was dated April 18, 2018, with the subject: “Project Broken –
Summary of Transactions Related to Steven Noseworthy”. [ 13 ] The Crown also entered consent exhibit #3, which was a book of photographs; and consent exhibit #4, which was the resume of Mark Grenon. In addition, consent exhibit #5 was a supplementary correspondence, dated August 19, 2021, to the Crown from Mr. Grenon pertaining to his April 18, 2018 report. [ 14 ] A further documentary exhibit was entered by the Crown through Constable Harris. C.H. #1 was an affidavit from Patricia Allan of Pine Bud Investments, with attached business records.
The business records included the above mentioned rental agreement dated June 19, 2017 between Steven Noseworthy and Pine Bud Investments, for Unit 409 at 100 Elizabeth Avenue. The records also included the bank deposit slip for $13,500 (cash) for Unit 409, dated June 19, 2017, and indicating rent of $12,000 with damage (deposit) of $1,500. There is also a receipt to “Steve Noseworthy” for $13,500, dated June 19, 2017.
In addition, the records included a further receipt from Pine Bud Investments to “Steve Noseworthy”; it appears to be dated January 2, 2018, for the amount of $12,000 for rent of Unit 409 from January 2018 to June 2018. Also attached was a bank deposit slip for $12,000 dated January 2, 2018, showing Pine Bud Investments deposited on that date $12,000 (cash) in relation to Unit 409 for “January 2018 – June 2018”. [ 15 ] The affidavit of Patricia Allan further attached an email exchange which occurred between Steven Noseworthy and Patricia Allan pertaining to rent for Unit 409.
In one of the emails dated December 17, 2017, Steven Noseworthy wrote to Patricia Allan stating as follows: “Hi again Patricia change of dates we are landing abit sooner than I thought we get in the 28-29 so I was looking to pay another half year up front if that works with you because I am gone so often I’d rather just have everything paid up to date so when I land I can call you or just come to the office…I just have to pick my phone up it was sent away befor I went off to work so when I get back I have to pick it up it will be the same number…thank you see you when I land” [ 16 ] In another email from Patricia Allan to Steven Noseworthy dated January 2, 2018, sent at 1:54 p.m., Ms.
Allan stated: “Hi Steven, Nice to see you this afternoon! The remaining half months rent is 789$.
Thanks! Patricia [ 17 ] In addition to documentary evidence, the Crown called several police officers who had been involved in the investigation, as well as Mark Grenon. Inspector Adam Palmer [ 18 ] Inspector Palmer was the Crown’s first witness. He is employed with the RCMP, and he previously worked with the FSOC Unit in St. John’s. In May of 2017, he was assigned as the team commander for Project Broken; and he was responsible for overseeing all aspects of the investigation. [ 19 ] According to Inspector Palmer’s evidence, the Project Broken investigation started in May of 2017.
The investigation was of a group he referred to as the “John Mahon group”. The investigation was based on information that the group was involved in drug trafficking at the kilo level, with drugs coming from Quebec to St. John’s, and money going to Quebec from St. John’s. The investigation focussed on Mr. Mahon and his primary associates. The investigation included surveillance and interviews, as well as execution of warrants, production orders and disclosure orders. The primary targets were Jonathan Mahon, Thomas Brown, Charlotte Toomey, Michael Smith and Steven Noseworthy. Jonathan Mahon was the group leader.
In addition to the investigation being characterized as a drug trafficking investigation, the RCMP also ran a parallel proceeds of crime/money laundering investigation focussing on Mr. Mahon in St. John’s, as well as Charlotte Toomey and Michael Smith in Quebec. [ 20 ] Inspector Palmer’s evidence was that the RCMP team had initially thought that Mr.
Noseworthy was a primary member of the group; however, that opinion changed around October 2018, when they realized that Steven Noseworthy’s involvement was not as in depth as they had initially thought. [ 21 ] Inspector Palmer indicated that in October and December of 2018 criminal charges were laid against the above-described members of the group. He added that Nicklaus Travis was also charged in relation to the investigation. [ 22 ] In cross-examination, Inspector Palmer acknowledged that March 21, 2018 was the “takedown day” when several places were searched pursuant to warrant.
Jonathan Mahon was arrested that day along with his associates. Steven Noseworthy was not arrested at that time. Inspector Palmer confirmed that as of March 21, 2018, there was no plan to arrest Steven Noseworthy, and there were no grounds to lay a charge against him at that time. He added that from March to October of 2018, follow-up investigation continued with implementation of production orders. He indicated that the arrest warrant for Jonathan Mahon was not issued until October, 2018; and that Mr. Noseworthy was first charged on December 17, 2018. [ 23 ] Inspector Palmer’s evidence was that Mr.
Noseworthy was away during much of the time subject to the period of investigation. He agreed that Steven Noseworthy was never charged with drug trafficking, and that there were no reasonable and probable grounds to do so. [ 24 ] Inspector Palmer indicated that his belief was that Steven Noseworthy laundered money on behalf of Mr. Mahon. His evidence was that he believed that Mr. Mahon was involved in drug trafficking, and that on two occasions Mr.
Mahon gave Steven Noseworthy cash, which Steven Noseworthy used to pay rent on behalf of Jonathan Mahon to Pine Bud Investments for a drug stash house at Unit 409, 100 Elizabeth Avenue. Inspector Palmer believed that the money for the rental came from Jonathan Mahon’s illicit activities.
Inspector Palmer suggested that this belief was based on his knowledge of the investigation; it was not based on information from either Jonathan Mahon or Steven Noseworthy. [ 25 ] Inspector Palmer confirmed that there was no witness who saw Jonathan Mahon give Steven Noseworthy cash; and no evidence that a witness heard Jonathan Mahon tell Steven Noseworthy to go pay the rent with the cash. Rather, his evidence suggested that he presumed such was the case. He further confirmed that with all the intercepts in this investigation, there was no evidence of Jonathan Mahon discussing with Mr.
Noseworthy his taking cash to pay the rent for Unit 409. Inspector Palmer did not know whether Mr. Mahon had threatened Mr. Noseworthy. Corporal Kelly Skanes [ 26 ] Corporal Skanes has worked with the RCMP’s FSOC Unit since 2013. In 2017 and 2018, she worked on Project Broken as the lead investigator for the surveillance team. She was also involved in general investigative tasks. Her evidence was that she became aware of Steven Noseworthy through the investigation, and she was tasked to do surveillance of him. [ 27 ] According to Corporal Skanes, she was tasked on August 14, 2017 to attend at J.W.
Allan’s office for the purpose of obtaining the tenants’ list for Elizabeth Towers. She was aware that the targets of the investigation were going to Elizabeth Towers, and she was interested in whether any of the targets owned, or rented, an apartment there. Through subsequent conversations with Patricia Allan, Corporal Skanes determined that as of June 19, 2017, Unit 409 of Elizabeth Towers was rented to Steven Noseworthy. She passed this information to the lead investigator, Corporal Sean Tipple. [ 28 ] Corporal Skanes described her surveillance of Steven Noseworthy.
She had initially identified the Accused through the RCMP’s profile information, which included his photo. She confirmed that in accordance with the profile information Mr. Noseworthy did not have a criminal record; and at no time did she see Mr. Noseworthy do anything against the law. [ 29 ] Corporal Skanes’ evidence was that on the afternoon of September 26, 2017, she observed Steven Noseworthy driving in
Jonathan Mahon’s Hummer vehicle; Mr. Noseworthy was a passenger. She observed them stopping off at a few places, including the residences of Jonathan Mahon’s mother, and Steven Noseworthy’s mother; Steven Noseworthy resided with his mother at the time. Corporal Skanes further observed Mr. Mahon and Mr. Noseworthy later return to Jonathan Mahon’s residence at 71 Roche Street. [ 30 ] Corporal Skanes again conducted surveillance on October 20, 2017. She and Constable Noble were tasked with attending Raymond’s Restaurant in St. John’s with the knowledge that there was a reservation there for Jonathan Mahon.
In the course of her surveillance that evening, she observed Mr. Mahon arrive with Steven Noseworthy and two other persons. She further observed them enter a private dining room along with more associates of Mr. Mahon. [ 31 ] In addition to providing the above surveillance evidence which confirmed that Steven Noseworthy knew and spent time with Jonathan Mahon, Corporal Skanes identified Steven Noseworthy in Court as the same person she had observed during her surveillance. Constable Chris Harris [ 32 ] Constable Harris has been an RCMP officer since 2005, and he has worked with the FSOC Unit since 2016.
Constable Harris was involved in the Project Broken investigation as the exhibit custodian, and he also conducted surveillance. [ 33 ] Constable Harris gave evidence of the surveillance he conducted during which he observed Steven Noseworthy. This evidence again confirmed that Steven Noseworthy knew and spent time with Jonathan Mahon. Constable Harris confirmed that he knew what Steven Noseworthy and Jonathan Mahon looked like after observing profiles and photographs of the targets and associates.
Constable Harris also identified Steven Noseworthy in Court. [ 34 ] On August 7, 2017 Constable Harris and Corporal Laura Purchase were conducting surveillance of Jonathan Mahon’s residence at 71 Roche Street. During that afternoon, Constable Harris observed the Hummer vehicle belonging to Jonathan Mahon leave 71 Roche Street, and go to Steven Noseworthy’s address on Torbay Road. He further observed Jonathan Mahon leave Torbay Road with Steven Noseworthy as a passenger. [ 35 ] On September 22, 2017, Constable Harris again conducted surveillance at Jonathan Mahon’s residence.
Constable Harris was advised by Constable Colleen Noble that she saw Mr. Noseworthy leave 71 Roche Street, and get into a Honda CRV belonging to another associate, Nicklaus Travis. About 20 minutes later, Constable Harris observed Mr. Noseworthy return to 71 Roche Street carrying a takeout bag. Constable Harris next observed Mr. Noseworthy leave the address, but again return back to the address. [ 36 ] Constable Harris’ evidence was that he again observed Steven Noseworthy on November 15, 2017.
On that day, he had observed Jonathan Mahon’s Hummer parked at the Service Canada building on Elizabeth Avenue, and he observed Steven Noseworthy at a wicket talking to an employee. According to Constable Harris, it sounded like Mr. Noseworthy was applying for E.I. benefits. Steven Noseworthy then left the building, and got into the Hummer before driving off. [ 37 ] Constable Harris’ evidence was also that he was also involved in the search of Unit 409, Elizabeth Towers, in March of 2018. His evidence was that the place did not look like anyone was actually living there.
Specifically, there were no clothes, and no food in the cupboards. As well, there was a spare bedroom which did not look like it was lived in. [ 38 ] Constable Harris seized the exhibits from Unit 409, and he was the photographer of the scene. These photographs were contained in consent exhibit #3.
Constable Harris reviewed the photographs in his testimony, and he described them as depicting the following: several bricks of cocaine, a box cutter, a Coleman cooler, vacuum bags, vacuum bag sealer, a duffle bag, an opened safe with a key chain, a scale covered in cocaine, baggies of cocaine, duct tape, a Glock handgun, keys, a Blackberry, cash, a torn up scoresheet, and a money counter. [ 39 ] Constable Harris also provided exhibit C.H. #1 which was the affidavit from Patricia Allan of Pine Bud Investments, with attachments, including the rental agreement.
He described it as a Canada Evidence Act , R.S.C., 1985, c. C-5 affidavit provided to him from Inspector Palmer. [ 40 ] In cross-examination, Constable Harris confirmed that to his knowledge, Steven Noseworthy was a seasonal fisherman. [ 41 ] He further confirmed in cross-examination that it was his understanding there was not enough evidence to charge Mr. Noseworthy with drug trafficking, or conspiracy to traffic. Corporal Laura Purchase [ 42 ] Corporal Purchase has been with the FSOC Unit for several years, and she was also involved in the Project Broken investigation.
On three occasions, she observed Steven Noseworthy while conducting surveillance of Jonathan Mahon. [ 43 ] As with the other officers, Corporal Purchase indicated that she was able to identify Mr. Noseworthy because the investigation team had photos of all the individuals subject to surveillance. She also identified Mr. Noseworthy in Court. [ 44 ] Corporal Purchase testified that on August 7, 2017, she and Constable Harris observed Mr. Mahon’s Hummer depart 71 Roche Street, and drive to Mr. Noseworthy’s residence on Torbay Road. She observed Mr.
Noseworthy get in the Hummer, and the Hummer next proceeded to Mary Brown’s on Torbay Road. [ 45 ] On September 22, 2017, while conducting surveillance of Jonathan Mahon, Corporal Purchase observed Mr. Mahon’s Hummer travel to a gym on Torbay Road. She further observed Steven Noseworthy and Jonathan Mahon go into the gym at about 3:10 p.m. About 45 minutes later, she observed them leave the gym, they got back in the Hummer, and then proceeded to Elizabeth Towers. Five or ten minutes later, she observed Jonathan Mahon coming out of Elizabeth Towers carrying a small black bag.
She believed that Steven Noseworthy had remained in the vehicle. The Hummer then proceeded to 71 Roche Street, and then to various other locations before ultimately ending up at Mr. Noseworthy’s residence.
[ 46 ] On October 18, 2017, Corporal Purchase again observed Mr. Noseworthy in the course of conducting surveillance of Jonathan Mahon. At approximately 1 p.m. that day, she observed a black vehicle arrive at 71 Roche Street. A male and female went inside the house, and about five minutes later the female left in the black car. At about 2 p.m., she further observed Jonathan Mahon, Steven Noseworthy and Michael Crowe leave the house, and they then drove in the Hummer to a gym on Torbay Road.
Retired Constable Christopher Read [ 47 ] Retired Constable Christopher Read worked with the RCMP FSOC Unit during the course of this investigation. He also conducted surveillance during which he observed Steven Noseworthy. [ 48 ] On October 20, 2017, Constable Read was involved in surveillance at 71 Roche Street and Raymond’s Restaurant. However, in his testimony he was unable to identify the individuals he observed in the course of this surveillance. [ 49 ] On January 2, 2018 Constable Read had been assigned to conduct surveillance at the business referred to as J.W. Allan, located downtown.
His evidence was that at 13:39 p.m., a Honda CRV arrived at J. W. Allan. He observed Steven Noseworthy get out of that vehicle. He was able to identify Steven Noseworthy because of RCMP photographs. According to Constable Read’s notes, at 13:48 p.m., Steven Noseworthy exited J.W. Allan. His evidence was that Mr. Noseworthy was a passenger in the vehicle, which was driven by Jonathan Mahon. [ 50 ] Constable Read was referred to the book of photos which included surveillance photos from January 2, 2018. Constable Read confirmed that the photo of the CRV resembled the one he observed on January 2, 2018.
He further confirmed that the photos depicted Steven Noseworthy outside of J.W. Allan, and Jonathan Mahon in the car in the driver’s seat. Constable Shannon McEntegart [ 51 ] Constable McEntegart also worked with the RCMP FSOC Unit in St. John’s, and she was also involved with the Project Broken investigation. She became aware of Steven Noseworthy as a result of this investigation. Her evidence was that she observed Steven Noseworthy on three occasions. [ 52 ] On October 17, 2017, Constable McEntegart was tasked with conducting surveillance of Jonathan Mahon in St. John’s.
Her evidence was that she checked his known addresses, being 71 Roche Street and Elizabeth Towers. She drove by 71 Roche Street and saw a Hummer, a CRV and a Honda Civic parked in his driveway. At 12:35 p.m. she observed two males come out of 71 Roche Street, and then drive in the Honda Civic to Elizabeth Towers. She observed the males exit the car and go into Elizabeth Towers. Her notes indicated that at 13:57 p.m. she observed two males coming out of the north exit of Elizabeth Towers, and walking towards the Honda Civic. Both males were in dark hoodies, and they left and proceeded to drive on Elizabeth Avenue.
According to her evidence, she was advised by Corporal Pilgrim that Michael Crowe was driving, and Steven Noseworthy was a passenger. Corporal Pilgrim did not testify at trial. [ 53 ] Constable McEntegart next observed the vehicle stop at the liquor store at Sobey’s. She observed a female who had been parked in a pickup truck, get into the back of the Honda Civic. She then observed the female get back into the pickup truck.
The Honda Civic was then driven back to 71 Roche Street. [ 54 ] Constable McEntegart indicated that on October 20, 2017, she was again conducting surveillance at 71 Roche Street where the Hummer, the CRV and the Civic were parked. Her evidence was that Steven Noseworthy arrived, and he went inside. A pizza was eventually delivered. [ 55 ] Further, on January 2, 2018 at 13:28, Constable McEntegart observed a CRV backing out of 71 Roche Street with two males inside. That vehicle was ultimately surveilled by her at J.W. Allan downtown.
She got out of the car to confirm who was in the vehicle, as she had been informed that Steven Noseworthy had gotten out of the vehicle. She wanted to identify the male in the vehicle. She identified Jonathan Mahon as the driver of the vehicle. Subsequently the vehicle proceeded onto Torbay Road. Retired Corporal Reagh Ellis [ 56 ] Retired Corporal Ellis also worked with the RCMP FSOC Unit in St. John’s, and he was also involved in the Project Broken investigation from 2017 to 2018.
He was involved in surveillance duties, and was the affiant on documents, including production orders. [ 57 ] Retired Corporal Ellis first observed Steven Noseworthy on September 26, 2017. He observed Jonathan Mahon’s Hummer drive north on Torbay Road from Roche Street, and it then proceeded to Elizabeth Towers. His evidence suggested that he next observed that Jonathan Mahon was not in the car, but that Steven Noseworthy remained in the front passenger seat, while the Hummer was parked by Elizabeth Towers. At 4:10 p.m. he observed a man walk back toward the car carrying a small black bag.
He then observed the Hummer vehicle proceed onto various places with the two males, being Jonathan Mahon and Steven Noseworthy. [ 58 ] Retired Corporal Ellis next observed Steven Noseworthy on September 29, 2017. In the course of his surveillance of Jonathan Mahon, he observed a CRV vehicle at an Esso station in Mount Pearl; Jonathan Mahon pumped gas, and Steven Noseworthy went into the store. He observed them subsequently leave in the CRV. Constable Colleen Noble [ 59 ] Constable Colleen Noble has been with the RCMP for over 23 years.
She is an investigator with the RCMP FSOC Unit, and she was also involved in the Project Broken investigation. As a result of the investigation, she was also aware of Steven Noseworthy, and she was familiar with his photo as a result of the surveillance profile book. [ 60 ] Constable Noble referred to her observation of Steven Noseworthy on September 22, 2017, while conducting surveillance of
Jonathan Mahon. Some time after 6 p.m. she observed Steven Noseworthy exit Jonathan Mahon’s residence, and then get into a CRV vehicle registered to Nicklaus Travis. She later heard on her radio that Constable Harris had said Steven Noseworthy had returned with a bag of takeout. Her evidence was that Constable Harris subsequently said Steven Noseworthy had left with an unknown male in a vehicle. She followed them to the corner of Carpasian Road and Pinebud Avenue. A male got out, and she then followed Steven Noseworthy back to 71 Roche Street, and he went inside. Mark Grenon [ 61 ] Mr.
Grenon is a Chartered Professional Accountant. Following a voir dire , Mr. Grenon was deemed qualified to testify at this trial as an expert in forensic accounting. He is employed with the Forensic Accounting Management Group with Public Services and Procurement Canada. [ 62 ] According to Mr. Grenon’s evidence, in February of 2018 the RCMP requested that he conduct a forensic accounting analysis with respect to Project Broken. Two reports were entered through Mr. Grenon.
The first report was dated July 19, 2018 and was prepared for the purpose of providing a forensic accounting analysis of the financial activities of Jonathan Mahon (the “Mahon Report”). The second report entered was dated April 18, 2018 for which the subject is identified as “Project Broken –
Summary of Transactions Related to Steven Noseworthy” (the “Noseworthy Report”). The Noseworthy Report was supplemented with a letter from Mr. Grenon dated August 19, 2021. [ 63 ] The analysis under the Mahon Report covered the period from April 6, 2016 to May 7, 2018. At page 2 of the Mahon Report, Mr. Grenon described his mandate, as follows: “Specifically, I was asked to: 1. Determine Mr.
Jonathan Mahon’s total spending during the Period; to accomplish this, I was asked to consider the bank accounts and credit card transactions that occurred in Caron-Ann Mahon’s and Linda Mahon’s Financial Accounts working with the presumption that some of the transactions were conducted on his behalf; 2. Summarize Mr. Mahon’s bank account transactions; 3. Summarize Mr. Mahon’s assets seized by the RCMP and determined how they were acquired; 4. Identify and summarize receipts or invoices relating to Jonathan Mahon that were obtained by the RCMP; 5.
Summarize the credit card account transactions of Carol-Ann Mahon (mother); 6. Summarize the bank account and credit card account transactions of Linda Mahon (grandmother); and 7. Provide any information, if available, about unusual bank account activity or potential money laundering indicators.” [ 64 ] At page 3 of the Mahon Report, Mr.
Grenon identified the following documents and sources of information, which were provided to him by the RCMP: • Bank statements, cancelled cheques, drafts, withdrawal details, deposit details, credit card statements, and other information provided by banks and credit card companies; • Vehicle purchase and sale information; • Supporting documents relating to assets, and expenditures; • Documents obtained by the RCMP while executing search warrants and productions orders; • Witness statements obtained by the RCMP during the investigation; • RCMP investigation summaries and notes; and • A forensic accounting letter relating to Steven Noseworthy, dated April 18, 2018 and prepared by Mark Grenon (the “April Letter”). [ 65 ] Mr.
Grenon testified that of all the documentation he had reviewed, there was nothing which suggested that Mr. Mahon had a legitimate source of income coming in on a monthly basis, with the exception of some government benefits.
[ 66 ] At page 7 of the Mahon Report, Mr. Grenon indicated that during the period covered by his report (April 6, 2016 to May 7, 2018), Mr. Mahon spent, or others spent on his behalf, the total amount of $250,445; and “65% of his spending is attributable to withdrawals from his bank account (24%) or items that were paid for in cash (41%)”. He further indicated that during the period, there were deposits of around $65,809 and withdrawals of $65,194 in respect of two separate bank accounts for Mr. Mahon. [ 67 ] Mr. Grenon did an analysis as to how seized assets were paid for by Mr.
Mahon (at page 8 of the Mahon Report). Mr. Grenon concluded that a Mercedes Benz, Rolex watches and an iPhone were all paid for in cash. By reviewing receipts and invoices provided by the RCMP, Mr. Grenon summarized other items paid for in cash by Mr. Mahon, including travel by Mr. Mahon and his friends or associates. [ 68 ] Mr. Grenon also conducted an analysis of the sources and uses of funds pertaining to Mr. Mahon’s mother and grandmother. Based on his analysis, Mr. Grenon concluded that significant expenditures were made from their bank accounts and/or credit cards for the benefit of Mr.
Mahon (pages 8 to 10 of the Mahon Report). [ 69 ] In the Mahon Report, Mr. Grenon also described potential money laundering indicators. He determined that Mr. Mahon’s use of “nominees” was an indicator of money laundering. Based on his analysis, he concluded that Mr. Mahon appeared to use “at least three nominees to facilitate purchases for: rental payments on properties he either occupied or controlled, travel expenses, payments to a power utility and payments to his cellular phone provider” (at page 10 of the Mahon Report). Mr.
Grenon further concluded that another potential indicator of money laundering arose from the pattern he observed with respect to the frequency and timing of cash being deposited prior to withdrawals which ultimately benefitted Mr. Mahon (page 10 of the Mahon Report). He elaborated that he observed frequent and continuous cash deposits, as well as currency refinements on two occasions. He explained “currency refinement” as depositing smaller bills and withdrawing larger ones (page 25 of the Mahon Report). [ 70 ] Mr.
Grenon further concluded that structuring deposits, or “smurfing”, was not apparent as a potential money laundering indicator (page 10 of the Mahon Report). [ 71 ] Mr. Grenon also described the three stages of money laundering. In the Mahon Report at page 14, he stated: “This Report was structured to document how these issues might be considered to be evidence of the three stages of money laundering: 1) placement , 2) layering and 3) integration ”. [ 72 ] In his evidence Mr. Grenon described the first stage of money laundering as being identified as “placement”.
He indicated that “placement” is typically characterized as a circumstance where proceeds of crime are put into the financial system, usually cash going into a bank account. [ 73 ] He described the second stage of money laundering as “layering”, which may involve the use of nominees. He described this as the movement of money around in the financial system between accounts, or from person to person, for the purpose of confusing or obscuring an audit trail. [ 74 ] The third stage he described as “integration”, which is the movement of money back into the economy so that the money appears to be legitimate.
He indicated this stage typically involves the use of profits from criminal activity; and often involves purchasing of items such as jewellery or vehicles, or making payments such as credit card payments. [ 75 ] Mr. Grenon clarified that all three stages need not be present. For example the layering stage may be skipped; or the banking stage may be skipped when banking is bypassed before buying assets.
However, in cross-examination he confirmed that money is not considered laundered until the integration stage has occurred; and he clarified that the money is not cleaned until the integration step is completed. [ 76 ] In the Mahon Report (at page 12), Mr. Grenon had indicated under the heading “Nominee Analysis” that the RCMP had alleged that Steven Noseworthy, Mr. Mahon’s mother, and Mr. Mahon’s grandmother, had paid for a number of expenses on Mr. Mahon’s behalf. Further, in Mr. Grenon’s findings commencing at page 15 of the Mahon Report, he included a table breaking down Mr.
Mahon’s total spending of $250,455 for the period covered by the analysis. One item in that table he described as “Rent Paid by Steven Noseworthy on behalf of Mr. Mahon’s”. With respect to the rent allegedly paid by Mr. Noseworthy, Mr. Grenon stated in the Mahon Report (at pages 15 and 16), as follows: “ Rent paid by Steven Noseworthy Information obtained by the RCMP indicated that property located at 409-100 Elizabeth Ave. was rented by Steven Noseworthy. However, the RCMP allege that this property was in fact rented and paid for by Mr. Jonathan Mahon.
Based on interviews with the property owner, it was determined that they received two cash payments for an advance payment of rent in 2017 and 2018. The first cash payment occurred on June 19, 2017 when the landlord said they received $13,500 from Mr. Noseworthy. The second cash payment to the landlord occurred on January 2, 2018 for $12,000. The April Letter provided a
summary of Mr. Noseworthy’s bank account information between August 31, 2016 and January 24, 2018. The conclusions reached in the April letter indicate that Mr. Nosewoerthy (sic) did not appear to have the financial means to pay the first one-time cash rental payment of $13,500 in 2017 nor the $12,000 one-time cash rental payment in January 2018. Consequently, it has been assumed that the rent paid by Mr. Noseworthy was in fact a payment made on Mr. Jonathan Mahon’s behalf
and has been reflected as such in this Report (see
Schedule 6.0).” [ 77 ] In cross-examination, Mr. Grenon confirmed that his characterization of Steven Noseworthy as a “nominee” was based on his reliance on the RCMP’s assumption that the cash Mr. Noseworthy allegedly used to pay for the rent of Unit 409, Elizabeth Towers came from Jonathan Mahon. Further in cross-examination, Mr. Grenon also confirmed that he had no evidence that the money that Steven Noseworthy received actually came from Jonathan Mahon, and that he was simply working on the assumption from the RCMP that the rent for Unit 409 at Elizabeth Towers was paid for by Jonathan Mahon. [ 78 ] Mr.
Grenon further stated under the heading “Use of Nominees” (at page 23 of the Mahon Report) that there were a “number of instances where Mr. Mahon appears to have used nominees to pay for expenses that benefit him personally”. At page 28, Mr. Grenon concluded that during the period of analysis of Jonathan Mahon’s total spending of $250,455, this included “Spending by Steven Noseworthy that was conducted on his behalf ($25,200) ( sic )”. His full conclusion at page 28 of the Mahon Report stated, as follows: “ 7.
CONCLUSION The conclusions reached in this Report are based on the analysis of information relied upon as of July 19, 2018. The amounts calculated and the conclusions reached may change if additional information becomes available. 1) During the Period Jonathan Mahon’s total spending was $250,445, which included: i. spending in his bank accounts ($64,194); ii. spending on Carol-Ann Mahon’s Visa card that was conducted on his behalf ($21,825); iii. spending in Linda Mahon’s Financial Accounts that was conducted on his behalf ($49,121); iv. Assets seized by the RCMP and paid for in Cash ($69,825); v.
Cash items identified on receipts or invoices and paid by Jonathan Mahon in cash $41,729); and vi. Spending by Steven Noseworthy that was conducted on his behalf ($25,200). vii.
Less adjustments for cash withdrawals during the period of $21,449. 2) During the Period, Jonathan Mahon’s Financial Accounts had Deposits totalling $65,809 and withdrawals totalling $65,194. 3) During the Period, Carol-Ann Mahon’s credit card had payments totalling $73,514 and spending totalling $73,709. 4) During the Period, Linda Mahon’s Financial Accounts had Deposits totalling $122,273 and withdrawals totalling $138,322. 5) There were a number of money laundering indicators identified: i. Use of nominees; ii. Pattern of continuous and variable cash deposits; and iii.
Currency refinement.” [ 79 ] Further with respect to the
section of the Mahon Report entitled “Use of Nominees” (at pages 23 and 24), Defence Counsel brought to Mr. Grenon’s attention that he had characterized the transactions which he described in relation to the “Use of Nominees” as being part of the “layering” stage of money laundering. He stated (at page 23 of the Mahon Report) that the “use of a nominee is a common technique used for both legitimate and non-legitimate means as a way to distance or hide the beneficiary of a transaction”. He further stated at page 23 of the Mahon Report, as follows: “Based on available information in Mr.
Mahon’s case, there appears to be an absence of business or investment structure in the transaction being facilitated on his behalf. Furthermore, the transactions undertaken by the nominees appear to be a means to hide the original source of payment, which in most cases is cash. The underlying structure of Mr. Mahon’s nominee relationships appear to facilitate the layering of transactions that are occurring and not to facilitate a business or investment objective.” [ 80 ] Mr. Grenon explained that nominees can relate to both the layering and integration stages of money laundering. Mr. Grenon
appeared to be suggesting that while he said in the Mahon Report that the use of nominees was part of the layering stage, the activities he described as layering could also be “integration”. More specifically, Mr. Grenon explained it is difficult to identify the stage without having full knowledge of the entire picture. It was then put to Mr. Grenon that the reason why he described Mr. Mahon’s use of nominees as “layering” was based on the information that he had. He conceded that was correct, and that he did use his professional judgement when identifying Mr.
Mahon’s use of nominees as being part of the layering process. [ 81 ] In cross-examination, Mr. Grenon was also questioned on whether there was a clear example of integration identified in the Mahon Report. His response suggested that an example of integration is not contained within the Mahon Report; however, in his view there was evidence of integration. [ 82 ] In cross-examination, Mr. Grenon was also asked whether there was any information indicating that Steven Noseworthy would have benefitted from what was alleged to have occurred with respect to the monies paid for rent. Mr.
Grenon’s response was that he did not have any information with respect to same. Nevertheless, he added that he was aware that Mr. Noseworthy went on trips with Mr. Mahon which were paid for by Mr. Mahon, but that he did not see any e-transfers from Mr. Mahon to Steven Noseworthy. Rather he saw e-transfers going the other way with Mr. Noseworthy paying a total of about $300 to Mr. Mahon. [ 83 ] Mr. Grenon also testified with respect to the Noseworthy Report.
He confirmed that his two mandates were described at page 1 of the Noseworthy Report, as follows: “For this analysis, FAMG was asked to summarize the Royal Bank of Canada (RBC) banking information of Steven Noseworthy for the period from August 31, 2016 to January 24, 2018 (the “Period”). In addition to summarizing the sources and uses of funds from the RBC bank account, FAMG was asked to determine if the cash paid towards the down payment of the apartment rental at 409-100 Elizabeth Ave. (“Elizabeth Towers”) can be linked to Mr. Noseworthy’s RBC bank account.” [ 84 ] Mr.
Grenon’s mandates for the Noseworthy Report did not include providing information on potential money laundering indicators attributable to Mr. Noseworthy. In cross-examination, Mr. Grenon confirmed that the two mandates described in the Noseworthy Report did not change. Mr. Grenon’s evidence was that he was asked by the RCMP to determine whether upon reviewing Mr. Noseworthy’s banking records, he could discern that the two rental payments of June 19, 2017 and January 2, 2018 came from Mr. Noseworthy’s accounts. [ 85 ] In keeping with the mandates of the Noseworthy Report, Mr.
Grenon reviewed the bank account documents of Mr. Noseworthy. He examined supporting information for these accounts, including e-transfer information and cheques; he also examined documents relating to the rental of Unit 409, 100 Elizabeth Avenue, as well as income tax information. [ 86 ] For the Noseworthy Report, Mr. Grenon conducted a source and use analysis for the period August 31, 2016 to January 24, 2018. He noted that unlike Mr. Mahon, Mr. Noseworthy had payroll deposits, in addition to deposits in his account for government funds from E.I. and HST refunds. A total of $32,713 was deposited into Mr.
Noseworthy’s RBC bank account during the period examined, and $32,936 was withdrawn from that account during that period. With respect to withdrawals, the largest use of funds were cash withdrawals totalling $20,521, and e-transfers to individuals totalling $5848. [ 87 ] Further, with respect to the alleged rental payments allegedly made by Mr. Noseworthy for the Elizabeth Towers’ apartment, Mr.
Grenon referenced the email correspondence between Patricia Allan and Steven Noseworthy respecting payment of rent for Unit 409, 100 Elizabeth Avenue, along with the cash deposit slips and the receipt book documents showing the landlord had received money from Steven Noseworthy. Mr. Grenon’s evidence was that such constituted documentary proof of cash coming from Steven Noseworthy, and going into Pine Bud Investments’ bank account. Mr. Grenon’s supplementary correspondence dated August 19, 2021 indicated, as follows: “Down Payments for Elizabeth Towers Information obtained by the RCMP indicated that Mr.
Noseworthy made two cash deposits, totalling $25,500, toward the rental of an apartment located at 409-100 Elizabeth Avenue. Based on available information, the source of both cash deposits, the first totalling $13,500 (paid on June 19, 2017) and the second totalling $12,000 (paid on January 2, 2018), cannot be found in the withdrawals from the RBC bank account.” [ 88 ] Mr. Grenon elaborated in cross-examination that he could not find in Steven Noseworthy’s banking records the source of the cash for the funds paid to Pine Bud Investments for the rental of Unit 409 at Elizabeth Towers. Mr.
Grenon’s evidence was that neither of the amounts of $13,500 and $12,000 could be found as having been withdrawn from Steven Noseworthy’s bank account. He was able to see from the documents that cash payments had been made by Steven Noseworthy to Pine Bud Investments for Unit 409, Elizabeth Towers; but he was not able to see where the cash came from. Further, based on the banking records, he could not say that the money came from Jonathan Mahon to Steven Noseworthy. There was no documentation or proof that the cash came from Jonathan Mahon. He indicated that all he knew was that the cash did not come from Mr.
Noseworthy’s RBC bank account; and that it was an unknown source of funds. It was the RCMP’s assumption that Jonathan Mahon was the source of the money used by Steven Noseworthy to pay the rent. [ 89 ] In cross-examination, Mr. Grenon was questioned as to whether there was evidence that Mr. Noseworthy had taken money from illegal activities, and was cleansing or processing the money for his own use. Mr. Grenon responded by referring to three cash deposits totalling about $5100 in the RBC banking records of Mr. Noseworthy. He first referred to a deposit into Mr.
Noseworthy’s RBC account for $2500, which was not an e-transfer from Mr. Mahon. The records indicated $2000 was sent to Alberta on the same day. He agreed that for all he knew the money could have come from Mr. Noseworthy’s mother, and was being sent to Alberta for a
family member. It was therefore not clear how this was evidence of Mr. Noseworthy laundering money, or why Mr. Grenon referencedsame. Further, Mr. Grenon suggested that the RCMP did not mention that particular transaction to him. [90] The second transaction referenced by Mr. Grenon involved monies going into Mr. Noseworthy’s RBC account, and thencoming out in US dollars at a time when, according to Mr. Grenon, Mr. Noseworthy was taking a trip with Mr. Mahon. The thirdtransaction was cash being deposited into Mr. Noseworthy’s account, and 700 euros being withdrawn, which Mr.
Grenon also seemed tosuggest coincided with a trip to Dublin that he thought Steven Noseworthy went on with Mr. Mahon. [91] With respect to these above-described three transactions, Mr. Grenon agreed that the source of the funds was unknown in allthree cases; and that the RCMP had never brought these transactions to his attention as being suspicious. Further, he agreed that whenpreparing the Noseworthy Report he had no mandate to look into money laundering indicators in relation to Mr. Noseworthy, other thanthe nominee situation through Mr. Mahon.
Further, he conceded that he had no reason whatsoever to believe that the RCMP weresuspicious of the $5100 to which he had referenced. There was no assumption put to him from the RCMP that the $5100 was fromillegal activity. As well, Mr. Grenon agreed that he did not choose to conclude that the $5100 was an example of money laundering inany report. I conclude that Mr. Grenon’s suspicions regarding these three transactions are speculative, and inconclusive.
THE POSITIONS OF THE CROWN AND THE DEFENCE [92] The Crown’s theory of the case was that the money laundering charge against Steven Noseworthy emanated from histransferring possession and/or delivery of $25,500 in cash to Pine Bud Investments. The Crown asserted that this cash was proceedsfrom a designated offence, being drug trafficking, and was used to rent an apartment (Unit 409, Elizabeth Towers) which was used as astash house by Jonathan Mahon.
The Crown submitted that the elements of the offence were established beyond a reasonable doubt bythe totality of the evidence at trial, including the agreed facts, the documentary evidence and witnesses’ testimony. [93] More specifically, the Crown submitted that the evidence established that Jonathan Mahon was a substantial trafficker ofcocaine in St. John’s, Newfoundland and Labrador, up to his arrest in March of 2018. In the Mahon Report, Mark Grenon suggested thatJonathan Mahon made profits from the sale of drugs (in the period Mr. Grenon reviewed) of at least $250,445.
Further, Jonathan Mahonused his mother, grandmother and Steven Noseworthy as nominees in order to distance himself from financial transactions whenspending these profits. [94] The Crown also submitted the evidence established that Steven Noseworthy leased the apartment at Elizabeth Towers on June19, 2017 for a period of one year, at a monthly rental of $2000 per month. As well, he paid for the rent in two cash instalments; the firstbeing the amount of $13,500 (rent plus damage deposit), and the second instalment being the amount of $12,000.
The Crown furthersubmitted that the evidence at trial, albeit circumstantial, established that the $25,500 for rent was provided by Jonathan Mahon toSteven Noseworthy, as Steven Noseworthy was Jonathan Mahon’s nominee. Steven Noseworthy did not use the apartment. Rather, theapartment was used as a drug stash house by Jonathan Mahon. [95] Defence Counsel submitted that the elements of the offence were not proven by the Crown beyond a reasonable doubt; andparticularly that there was an absence of evidence establishing the mens rea of the offence.
Further, Defence Counsel submitted that theCrown had not even established that Jonathan Mahon was the source of funds for Steven Noseworthy; and Defence Counsel questionedwhether the facts alleged by the Crown even constituted money laundering. ANALYSIS [96] The Crown must establish beyond a reasonable doubt the elements of the offence of laundering proceeds of crime. Thestandard of “beyond a reasonable doubt” was described by the Supreme Court of Canada in R. v. Lifchus, (SCC),[1997] 3 S.C.R. 320 at paragraph 36, as follows: 36 Perhaps a brief
summary of what the definition should and should not contain may be helpful. It should be explained that: • the standard of proof beyond a reasonable doubt is inextricably intertwined with that principle fundamental to all criminal trials,the presumption of innocence; • the burden of proof rests on the prosecution throughout the trial and never shifts to the accused; • a reasonable doubt is not a doubt based upon sympathy or prejudice; • rather, it is based upon reason and common sense • it is logically connected to the evidence or absence of evidence; • it does not involve proof to an absolute certainty; it is not proof beyond any doubt nor is it an imaginary or frivolous doubt; and
• more is required than proof that the accused is probably guilty — a jury which concludes only that the accused is probably guiltymust acquit. [97] In R. v. Starr, 2000 SCC 40, the Supreme Court of Canada indicated that the standard of reasonable doubt falls “much closer toabsolute certainty than to proof on a balance of probabilities”. [98] Steven Noseworthy was charged in 2018. In 2018,
section 462.31(1)(
a) of the Criminal Code stated, as follows: 462.31
(1) Every one commits an offence who uses, transfers the possession of, sends or delivers to any person or place, transports,transmits, alters, disposes of or otherwise deals with, in any manner and by any means, any property or any proceeds of any property withintent to conceal or convert that property or those proceeds, knowing or believing that all or a part of that property or of those proceedswas obtained or derived directly or indirectly as a result of (
a) the commission in Canada of a designated offence; or … [99] In 2019
section 462.31(1) of the Code was amended to add “or being reckless as to whether” after “knowing or believing that”. As agreed by both Counsel, the 2019 amendment does not operate retroactively. Therefore, recklessness shall not be considered as partof the offence charged, in this case. [100] The four elements of the offence of money laundering to be proven by the Crown beyond a reasonable doubt were clearlydescribed by the Ontario Court of Appeal in R. v. Barna, 2018 ONCA 1034 (leave to appeal refused at [2019] S.C.C.A. No. 40). TheOntario Court of Appeal stated at paragraph 12 of R. v.
Barna, as follows: 12 The essential elements of laundering proceeds of crime are: (1) that the accused dealt with property (in this case, the bank draft)or proceeds of property; (2) that the property was obtained by crime (in this case, fraud); (3) that the accused knew or believed that theproperty had been obtained by crime; and (4) that the accused intended to conceal or convert the property: R. c. Bois, 2004 SCC 6,[2004] 1 S.C.R. 217 (S.C.C.); R. v. Tejani (1999), (ON CA), 138 C.C.C. (3d) 366 (Ont.
C.A.). [101] Applying the foregoing to this case, the Crown asserted and was required to prove: that Steven Noseworthy dealt with theproperty, being cash in the amount of $25,500; that the money was obtained by crime, in this case the crime of drug trafficking(committed by Jonathan Mahon); that Steven Noseworthy knew, or believed, that the $25,500 cash had been obtained by crime; and thatSteven Noseworthy had intended to conceal or convert the cash. [102] Further, with respect to the actus reus of the offence, I refer to the Ontario Superior Court of Justice decision of Justice Pattillo inR. v.
Barna, 2014 ONSC 1011. The above referenced Ontario Court of Appeal decision in R. v. Barna affirmed Justice Pattillo’sdecision. In the Ontario Superior Court of Justice decision of R. v. Barna, at paragraphs 184 and 185, Justice Pattillo described the actusreus of the offence of money laundering as being “very broad”. He stated, as follows: 184 The actus reus of the offence of laundering proceeds of crime is very broad and involves dealing with any property or theproceeds of any property in any of the enumerated ways set out in s. 462.31. See: R. v.
Tejani (1999), (ON CA), 123O.A.C. 329, 138 C.C.C. (3d) 366 (Ont. C.A.) at para. 26. 185 Although the words "or otherwise deals with" were in effect read out of s. 462.31 (1) by the Supreme Court in R. c. Bois, 2004SCC 6, [2004] 1 S.C.R. 217 (S.C.C.) [hereinafter Daoust], on the ground that similar wording did not appear in the French text of thesection, the French version was amended in 2005 to add wording comparable to "or otherwise deals with". Accordingly, those words arepart of the
section and in my view, operate to widen the type of dealing required beyond the specific acts mentioned in s. 462.31(1). [103] Justice Pattillo further provided a very helpful discussion of the mens rea of the offence, which can be established by either abelief or wilful blindness.
He stated at paragraphs 186 to 190, as follows: 186 The mens rea of the offence has two elements: the knowledge or belief that the property or proceeds were derived from thedesignated offence and the intent to conceal or convert the property or proceeds of property: Daoust, at 241-42; Tejani, at para. 27.The mens rea of money laundering can be satisfied by either a finding of belief or a finding of wilful blindness: Tejani, at para. 38.
TheCrown does not have to prove that either of the accused knew or believed the details of the designated offence, only that the property wasderived from the commission of fraud over $5,000: Tejani, at para 36. 187 As noted, wilful blindness can satisfy the mens rea component of the charge of money laundering. 188 The doctrine of wilful blindness imputes knowledge to an accused whose suspicion is aroused to the point that he or she sees theneed for further inquiries, but deliberately chooses not to make those inquiries: R. v. Sansregret, (SCC), [1985] 1 S.C.R.570 (S.C.C.); R. v.
Jorgensen, (SCC), [1995] 4 S.C.R. 55 (S.C.C.). 189 The doctrine has a very narrow scope. In Sansregret, at para 22, Justice McIntyre quoted the following excerpt on wilful
blindness from Glanville Williams (Criminal Law: The General Part, 2d ed. (London, England: Stevens & Sons, 1961), at 159): ".... Acourt can properly find wilful blindness only where it can almost be said that the defendant actually knew.
He suspected the fact; herealized its probability; but he refrained from obtaining the final confirmation because he wanted in the event to be able to denyknowledge...." 190 The question to be asked when considering whether an accused was wilfully blind was phrased by Sopinka J. at para. 103of Jorgensen, as follows: "Did the accused shut his eyes because he knew or strongly suspected that looking would fix him withknowledge?" [104] As stated above by Justice Pattillo, in reference to paragraph 22 of R. v. Sansregret, (SCC), [1985] 1 S.C.R. 570(at page 586), the doctrine of wilful blindness has narrow scope.
Further, as referenced above by Justice Pattillo (at paragraph 190 of hisdecision), the question to be asked in respect of wilful blindness is from R. v. Jorgensen, (SCC), [1995] 4 S.C.R. 55,paragraph 103 (at page 111). Consequently, the Crown in this case must establish that Steven Noseworthy knew or believed that themoney paid for renting Unit 409 was derived from Jonathan Mahon’s drug trafficking; or that Steven Noseworthy “shut his eyesbecause he knew or strongly suspected that looking would fix him with knowledge” (paragraph 103 of R. v.
Jorgensen). [105] Further, with respect to wilful blindness in the context of a money laundering case, the Crown referred to R. v. Garnett, 2016NSSC 131, where Justice Campbell stated at paragraph 13, as follows: 13 Wilful blindness is an inference upon which criminal liability can be founded. It must engage a sense of moral wrong. IfJacqueline Garnett enjoyed the benefits of a drug dealer's illegally obtained money but was deceived by him, however unreasonably orprofoundly naive she may have been, she would not have committed a criminal wrong.
If, on the other hand, she enjoyed those benefits,suspected their illegal source and made the deliberate decision to just carry on, she would be guilty. [106] Further with respect to the mens rea of the offence, and as submitted by Defence Counsel, the Crown must establish that StevenNoseworthy believed that the proceeds were derived specifically from drug trafficking. It would not be sufficient to merely establish thatthe Accused’s belief was that the money was derived from an “unspecified criminal activity”; see paragraph 34 of R. v. Tejani (1999), (ON CA), 123 O.A.C. 329 (C.A.).
Wilful blindness is a subjective requirement; paragraph 41 of R. v. Tejani. [107] In R. v. Tejani, the Ontario Court of Appeal also confirmed (at paragraph 36) that it is not necessary for the Crown to prove thatan accused knew the details of the offence.
The Crown in this case therefore does not need to prove that Steven Noseworthy knew thedetails of Jonathan Mahon’s drug trafficking; rather, the Crown must prove that Steven Noseworthy knew, or believed, that the moneywas derived from Jonathan Mahon’s drug trafficking, or was wilfully blind to same. [108] Finally, with respect to the mens rea of the offence of money laundering, an accused’s belief does not have to be correct. This wasstated in R. v. Tejani, in reference to the Supreme Court of Canada’s decision in United States v. Dynar, (SCC), [1997]2 S.C.R. 462. At paragraph 18 and 19 of R. v.
Tejani, the Ontario Court of Appeal stated, as follows: 18 The mens rea for money laundering under s. 19.2 of the Narcotic Control Act and under the similar provision in of the CriminalCode, was discussed extensively by the Supreme Court of Canada in United States v. Dynar. Dynar establishes that the mens rea ofmoney laundering is belief not knowledge. Thus, to prove the offence of attempting to launder the proceeds of crime, the Crown needonly show that the accused believed the money was derived from the commission of illegal drug dealing. The Crown does not have toshow that the accused's belief was correct.
Justices Cory and Iacobucci made this point in Dynar: Both s. 462.31(1) of the Criminal Code and s. 19.2(1) of the Narcotic Control Act require knowledge that the property being laundered isthe proceeds of crime. It is tempting to think that knowledge is therefore the mens rea of these offences. But "mens rea" denotes amental state. Mens rea is the subjective element of a crime. Knowledge is not subjective, or, more accurately, it is not entirely subjective. As we have already said, knowledge, for legal purposes, is true belief.
Knowledge therefore has two components — truth and belief —and of these, only belief is mental or subjective. Truth is objective, or at least consists in the correspondence of a proposition or mentalstate to objective reality. Accordingly, truth, which is a state of affairs in the external world that does not vary with the intention of theaccused, cannot be a part of mens rea. As one Canadian academic has said, [translation] "[t]he truth of the accused's belief is not part ofthe mens rea of s. 24(1) Cr.C.". Knowledge as such is not then the mens rea of the money-laundering offences.
Belief is. [citationsomitted] 19 Following Dynar, s. 462.31 of the Code and s. 9 of the Controlled Drugs and Substances Act were amended to read "knowing orbelieving", thus making explicit the belief requirement for the mens rea of the offence. [109] The foregoing principles are to be considered in the analysis of the elements of the offence. THE FIRST ELEMENT OF THE OFFENCE [110] As stated, the first element of the offence of money laundering to be proven by the Crown is that the Accused dealt with theproperty. The property in this case was the $25,500 in cash paid to rent Unit 409, Elizabeth Towers.
After considering the whole of the
evidence and the submissions of the parties, I am satisfied that the Crown has proven beyond a reasonable doubt that Steven Noseworthydealt with the $25,500 cash. [111] To begin with, I find that the Crown’s witnesses were credible, and their overall evidence was reliable. There was no directevidence that Steven Noseworthy dealt with the cash. Nevertheless, I find that there was compelling circumstantial evidence satisfyingthis first element of the offence. [112] With respect to the use of circumstantial evidence, the Crown referred the Court to the decision of R. v. Green, 2020 NSSC 148. In R. v.
Green, at paragraphs 32 and 33, the Nova Scotia Court referred to the Supreme Court of Canada’s decision in R. v. Villaroman,2016 SCC 33, and specifically Justice Cromwell’s guidance with respect to the use and assessment of circumstantial evidence. Atparagraphs 29 and 30 in R. v. Villaroman, Justice Cromwell stated, as follows: 29 An instruction about circumstantial evidence, in contrast, alerts the jury to the dangers of the path of reasoning involved indrawing inferences from circumstantial evidence: Berger, at p. 60.
This is the danger to which Baron Alderson directed his comments.And the danger he identified so long ago — the risk that the jury will "fill in the blanks" or "jump to conclusions" — has more recentlybeen confirmed by social science research: see Berger, at pp. 52-53. This Court on occasion has noted this cautionary purpose of acircumstantial evidence instruction: see, e.g., R. v.
Boucher (1954), (SCC), [1955] S.C.R. 16 (S.C.C.) per Rand J., at p.22; John , per Laskin J., dissenting but not on this point, at p. 813. 30 It follows that in a case in which proof of one or more elements of the offence depends exclusively or largely on circumstantialevidence, it will generally be helpful to the jury to be cautioned about too readily drawing inferences of guilt. No particular language isrequired.
Telling the jury that an inference of guilt drawn from circumstantial evidence should be the only reasonable inference that suchevidence permits will often be a succinct and accurate way of helping the jury to guard against the risk of "filling in the blanks" by tooquickly overlooking reasonable alternative inferences. ... [113] Justice Cromwell further indicated in R. v. Villaroman that “other plausible theories” and “other reasonable possibilities” shouldbe considered when assessing circumstantial evidence; and that the Crown “may need to negative these reasonable possibilities”.
Hestated at paragraphs 37 to 42, as follows: 37 When assessing circumstantial evidence, the trier of fact should consider "other plausible theor[ies]" and "other reasonablepossibilities" which are inconsistent with guilt: R. v. Comba, (ON CA), [1938] O.R. 200 (Ont. C.A.) , at pp. 205 and211, per Middleton J.A., aff'd (SCC), [1938] S.C.R. 396 (S.C.C.); R. v. Baigent, 2013 BCCA 28, 335 B.C.A.C.11 (B.C.C.A.) , at para. 20; R. v. Mitchell, [2008] QCA 394 (S.C.C.) , at para. 35.
I agree with the appellant that the Crown thus mayneed to negative these reasonable possibilities, but certainly does not need to "negative every possible conjecture, no matter howirrational or fanciful, which might be consistent with the innocence of the accused": R. v. Bagshaw (1971), (SCC),[1972] S.C.R. 2 (S.C.C.) , at p. 8. "Other plausible theories" or "other reasonable possibilities" must be based on logic and experienceapplied to the evidence or the absence of evidence, not on speculation. 38 Of course, the line between a "plausible theory" and "speculation" is not always easy to draw.
But the basic question is whetherthe circumstantial evidence, viewed logically and in light of human experience, is reasonably capable of supporting an inference otherthan that the accused is guilty. 39 I have found two particularly useful statements of this principle. 40 The first is from an old Australian case, Martin v. Osborne (1936), 55 C.L.R. 367, at p. 375: In the inculpation of an accused person the evidentiary circumstances must bear no other reasonable explanation.
This meansthat, according to the common course of human affairs, the degree of probability that the occurrence of the facts proved would beaccompanied by the occurrence of the fact to be proved is so high that the contrary cannot reasonably be supposed. [Emphasis added.] 41 While this language is not appropriate for a jury instruction, I find the idea expressed in this passage — that to justify aconviction, the circumstantial evidence, assessed in light of human experience, should be such that it excludes any other reasonablealternative — a helpful way of describing the line between plausible theories and speculation. 42 The second is from R. v.
Dipnarine, 2014 ABCA 328, 584 A.R. 138 (Alta. C.A.) , at paras. 22 and 24-25. The court stated that "[c]ircumstantial evidence does not have to totally exclude other conceivable inferences"; that the trier of fact should not act on alternativeinterpretations of the circumstances that it considers to be unreasonable; and that alternative inferences must be reasonable, not justpossible.
[ 114 ] In this case, the Crown adduced ample circumstantial evidence supporting proof of the first element of the offence. This included the documents attached to the affidavit of Patricia Allan, who is employed by Pine Bud Investments. The documents included the rental agreement, deposit slips and receipts indicating that Unit 409, 100 Elizabeth Avenue was rented by a person named Steven Noseworthy. The deposit slips and receipts confirm that $13,500 in cash was paid for the apartment by a Steven Noseworthy on June 19, 2017; and a further $12,000 was paid on January 2, 2018.
Further, as submitted by the Crown, the surveillance evidence of Constable Read and Constable McEntegart confirmed that on January 2, 2018, the Accused, Steven Noseworthy, got out of the Honda CRV which was parked across from J. W. Allan; and he went into the J. W. Allan office. Jonathan Mahon was in the driver’s seat at the time. Minutes after Steven Noseworthy left J. W. Allan, Patricia Allan sent an email to Steven Noseworthy saying it was nice to see him.
The email address for Steven Noseworthy in emails to Patricia Allan respecting payment of rent is the same email address on the RBC bank records of Steven Noseworthy. [ 115 ] Considering the foregoing, and the whole of the evidence, I am satisfied that the only reasonable inference permitted by the evidence is that the Accused, Steven Noseworthy, dealt with the $25,500 in cash, which was paid in two instalments to Pine Bud Investments for the rent of Unit 409, Elizabeth Towers.
THE SECOND ELEMENT OF THE OFFENCE [ 116 ] The second element of the offence required the Crown to prove beyond a reasonable doubt that the money paid by Steven Noseworthy to Pine Bud Investments was obtained by crime. More specifically, that the money came from Jonathan Mahon, who had acquired the funds from trafficking in a controlled substance, which is a designated offence. [ 117 ] Again, the evidence adduced by the Crown in relation to this second element was circumstantial evidence.
The Crown submitted that while there was no direct evidence that Jonathan Mahon gave the $25,500 to Steven Noseworthy, there was sufficient circumstantial evidence to prove that fact.
The Crown submitted that when the whole of the evidence is considered, there is no other reasonable inference than that Jonathan Mahon must have given Steven Noseworthy the cash to pay the rent for the apartment at Elizabeth Towers, and that Jonathan Mahon had Steven Noseworthy put the lease in his own name. [ 118 ] In accordance with the agreed statement of facts, Jonathan Mahon entered a guilty plea, and was convicted and sentenced for several offences, including drug trafficking for the period from May 1, 2017 to March 20, 2018.
The agreed statement of facts sets forth the details of the investigation which support the Crown’s assertion that Jonathan Mahon was a high level drug trafficker in St. John’s.
More specifically, the Crown referred the Court to the following paragraphs in the agreed statement of facts: 9, 10, 11, 15, 16, 21, 24, 25, 26, 29, 39, 41, 42, 43, 45, 46, 50, 54, 65, 67, 68, 69, 71, 72, 81, 82, 86, 88, 89, 90, 91, 92, 95, 96, 97(a), 97(e), 102, 103 and 117. [ 119 ] Jonathan Mahon’s conviction confirmed that he was engaged in drug trafficking during the period of time that Steven Noseworthy paid the two instalments of cash for rent of Unit 409, Elizabeth Towers. The evidence is that apartment was ultimately used as a stash house for Jonathan Mahon’s drug operations.
The evidence is that Steven Noseworthy never resided at Unit 409, Elizabeth Towers. Rather, Steven Noseworthy’s address is shown on the bank documents as being on Torbay Road; and the evidence was that he resided on Torbay Road during the investigation. [ 120 ] The Crown referred the Court to the agreed statement of facts as providing insight into the extravagant lifestyle of Jonathan Mahon, which included purchasing trips, expensive jewellery and vehicles; yet, while being surveilled, Mr. Mahon was not observed attending any form of employment.
On this point, the Crown referenced the following paragraphs of the agreed statement of facts: 9, 27, 30, 31, 35, 37, 38, 47, 48, 51 to 53, 55 to 60, 70, 73 to 75, 77, 87, 96(a), 99, and 104 to 109. [ 121 ] Further on this, according to Mr. Grenon’s financial analysis, all of Mr. Mahon’s purchases occurred without any apparent source of income, for the period of April 6, 2016 to May 7, 2018. During that same period, according to the Mahon Report, Mr. Mahon spent a significant amount of money (or others spent on his behalf), being at least $250,455. Mr.
Grenon included in that amount the $25,500 rental payment to Pine Bud Investments for Unit 409, Elizabeth Towers. As pointed out by Defence Counsel, this amount was included by Mr. Grenon solely based upon the assumption from the RCMP that the rental payment for Unit 409, Elizabeth Towers originated from Jonathan Mahon; it was not based on any documentation reviewed for Mr. Grenon’s report. [ 122 ] In the Mahon Report, Mr. Grenon also described money laundering indicators attributable to Jonathan Mahon’s activities. Indeed, money laundering was one of the offences to which Mr. Mahon plead guilty (paragraphs 117(
e) and (
f) of the agreed statement of facts). As stated, Mr. Grenon’s evidence was that Jonathan Mahon had used “nominees” to facilitate purchases. In addition to Jonathan Mahon’s mother and grandmother, Mr. Grenon included Steven Noseworthy as a nominee. Again, the evidence was that Mr. Grenon’s inclusion of Steven Noseworthy as a nominee was based upon the RCMP’s assumption that the rent for Unit 409, Elizabeth Towers came from Jonathan Mahon; and Mr. Grenon agreed that there was no documentation supporting a finding that Jonathan Mahon was the source of the cash given to Steven Noseworthy. Further, Mr.
Grenon confirmed that the $25,500 cash was not reflected in Steven Noseworthy’s RBC bank account documents. [ 123 ] Further on this, the Crown referred to the evidence from the Noseworthy Report in which Mr. Grenon had indicated that there was no evidence that the two rental payments made by Steven Noseworthy to Pine Bud Investments came from Steven Noseworthy’s known bank accounts. As well, the evidence was clear that Steven Noseworthy did not personally have the financial means to pay for the apartment.
More specifically, the Crown pointed out that on June 19, 2017 when Steven Noseworthy paid the $13,500, his account had a balance of $27.74. On January 2, 2018, when Steven Noseworthy
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