R. v. Gaugler Date:, 2011 BCPC 412

Citation: R. v. Gaugler Date: 20110421 2011 BCPC 0412 File No: 213998-1 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. VICKY LYNN GAUGLER REASONS FOR SENTENCE OF THE HONOURABLE JUDGE M. R. McMILLAN Counsel for the Crown: T. Shaw Counsel for the Defendant: M. Rowan Place of Hearing: Vancouver, B.C. Date of Hearing: February 8, 2011 Date of Judgment: April 21, 2011 INTRODUCTION [ 1 ] Ms. Gaugler has pleaded guilty to counts 3 and 4 of Information 213998-1: Count 3: Between the period December 1, 2003, to March 31, 2008, in Vancouver, B.C., she committed theft of the property of Mr.

Gordon Diamond in excess of $5,000; and Count 4: Between the period January 1, 1998 to December 31, 2004, in Vancouver, B.C., she committed theft of the property of Mrs. Rose Franks and/or of a trust to the benefit of Mrs. Franks in excess of $5,000. [ 2 ] Mr. Diamond, the CEO of West Coast Reduction Limited (“West Coast”), employed Ms. Gaugler. Mrs. Franks was his elderly mother-in-law. Ms. Gaugler worked for West Coast since 1986. For the last 18 years of her employment, she worked directly for Mr. Diamond as his executive assistant. As a result of that position, Ms.

Gaugler had unrestricted access to a number of personal and family bank accounts. [ 3 ] In fact the amount which Ms. Gaugler stole was far in excess of $5,000. It was $2,548,000 over that 10 year period – January 1, 1998 to March 31, 2008. She stole the money through various unauthorized transfers of funds for her personal benefit. [ 4 ] Ms. Gaugler had no prior criminal record nor does she have any substance abuse or other financial issues which might explain her actions.

[ 5 ] The offences are contrary to s. 334 (

a) of the Criminal Code . The maximum penalty where, as here, the Crown has proceeded by indictment, is imprisonment for 10 years. [ 6 ] The matter is for sentencing today. I heard counsels’ submissions on February 8, 2011 and reserved my decision at that time. These are my Reasons for Sentence. [ 7 ] The issue in this case is this: what is a fit sentence for Ms. Gaugler given the circumstances of the offences, her personal circumstances, and the relevant sentencing principles. Mr.

Shaw, for the Crown, submits it is a period of incarceration of between 3 to 5 years in a conventional jail, given the sentencing principles which the case authorities emphasize in a case of this type: a large scale well planned theft by a trusted employee. [ 8 ] By contrast, Mr. Rowan, on Ms. Gaugler’s behalf, submits while the Crown had “a solid traditional position on the range of sentence” available to the Court, the case law does, in fact, recognize that even in a case of this sort, a conditional sentence may be imposed where there are sufficient unique or extreme mitigating factors of the offender. Mr.

Rowan urges me to find Ms. Gaugler is one of those rare cases. Therefore, he submits Ms. Gaugler ought to be subject to a Conditional Sentence Order of 2 years less a day to be served in the community, and then to be followed by a 3 year period of probation. [ 9 ] The defence’s sentencing position requires me to review the many case authorities before me to determine what the appropriate range of sentence is. If it is greater than 2 years, then a conditional sentence is foreclosed pursuant to s. 742.1 of the Criminal Code . [ 10 ] I will start by setting out the circumstances of the offence, then those of Ms.

Gaugler. I will then consider the case authorities to which I have been referred to determine the range of sentence which is appropriate in the circumstances. That analysis will determine whether a conditional sentence may be available to Ms. Gaugler in the circumstances. The Circumstances of the Offence [ 11 ] Counsel have put before me an Agreed Statement of Facts pertaining to the events of these thefts. I have reproduced below the essential facts from it: 1. Ms. Gaugler was employed by West Coast, a leading animal rendering company. She was employed with West Coast since 1986.

She worked directly for the Chief Executive Officer, Mr. Diamond, as his executive assistant for approximately 18 years until she was dismissed on March 18, 2008 as a result of the thefts being uncovered. As the executive assistant to Mr. Diamond, Ms. Gaugler had unrestricted access to a number of his personal and family accounts. 2. Due to her long employment, Ms. Gaugler was viewed as a family friend by Mr. Diamond and his wife, Leslie. As such, Ms. Gaugler attended charity functions with the Diamonds and was given personal favours. As an example, Mr. Diamond bought out the balance of Ms.

Gaugler’s mortgage on her home and allowed her to pay him back interest free at a set monthly payment. 3. Ms. Gaugler was also paid $1,000 a month over her regular salary to oversee various personal accounts for the Diamond family. She was responsible for the day to day activity on these accounts and was given signed blank cheques to carry out paying bills and expenses in Mr. Diamond’s absence. At no time was Ms. Gaugler given permission to take money from the accounts for her personal use. 4. One of these accounts was for Mrs. Rose Franks, Mr. Diamond’s mother-in-law. During these offences, Mrs.

Franks was in her nineties and unable to care for herself. Mrs. Leslie Diamond purchased a condominium for her mother to live in and arranged for caregivers to come in and care for Mrs. Franks. 5. In November, 2007, Mrs. Diamond discovered over $3,000 cash in her mother’s room. This was an unusually large amount, especially since Ms. Gaugler was supposed to be managing Mrs. Franks’s accounts. This and other anomalies in Ms. Gaugler’s behaviour caused the Diamonds to look further into her accounting. 6. It was discovered Ms.

Gaugler was using her access to the Diamonds’ personal accounts to write cheques, drafts or transfers to her own accounts, or to her credit card balances, for her own personal advantage. The bulk of the funds were misappropriated in this fashion. At no time did Ms. Gaugler have permission to take money from these accounts for her personal use. 7. Ms. Gaugler used the misappropriated funds to pay for a much higher lifestyle which enabled her to live beyond her means. Ms.

Gaugler indulged herself, her family and her friends with expensive dinners and parties, international travel, clothes, accessories, jewellery, art, home furnishings and the like. 8. A table of expenditures for each of the years 2004, 2005, 2006, 2007 and early 2008 are included in the Agreed Statement of Facts. Those tables collectively are appended to these Reasons for Sentence as “Appendix A”.

I have summarized below the tables: Year Travel Restaurants Retail Total 2004 $137,403.53 $7,504.15 $ 43,239.98 $188,147.66 2005 $143,155.51 $6,306.08 $ 46,744.68 $196,206.27 2006 $112,657.28 $5,991.94 $181,442.19 $300,091.41 2007 $153,179.29 $4,897.02 $364,786.39 $522,862.70 2008 $ 6,305.04 $ 295.97 $ 23,686.88 $ 30,287.89

Mr. Diamond 9. Between January 7, 2004 to April, 2007, Ms. Gaugler wrote 46 cheques to “Cash” on Mr. Diamond’s personal account. Those cheques totalled $425,284.37. Mr. Diamond had signed the cheques for the purpose of paying his bills while he was away on vacation. He had not given Ms. Gaugler authority to write cheques to “Cash” for her own benefit. 10. Ms. Gaugler wrote a number of cheques to various banks such as the TD, Bank of Montreal, and CIBC in order to pay for various credit cards which she held in her own name at those financial institutions.

The cheques’ “Re” line showed only the credit card number to which the funds were to be applied. 11. Ms. Gaugler wrote 27 cheques to the TD bank between the period January 29, 2004 to January 7, 2008, in the total amount of $272,723.40; 13 cheques to Bank of Montreal between the period April 19, 2005 to December 6, 2007, in the total amount of $260,034.89; and a single cheque to CIBC on April 20, 2006, in the amount of $20,000.00. Again, Mr. Diamond had signed the cheques for the purpose of paying his bills while he was on vacation. Ms.

Gaugler had no authority to write any of these cheques for her own benefit. 12. A number of bank drafts in the total amount of $795,500.00 were drawn 39 different times on Mr. Diamond’s personal account between the period June 9, 2004, and January 9, 2008, and distributed to four different recipients. Various bank officials signed off on these bank drafts and believed them to be legitimate on the strength of a delegation given to Ms. Gaugler over the Diamond accounts and/or representations made by Ms. Gaugler herself.

The 4 recipients of the bank draft funds were a CIBC line of credit, a CIBC Visa card, a Bank of Montreal MasterCard and an Enroute card. All recipient accounts were registered in Ms. Gaugler’s name. 13. Again, Mr. Diamond had previously signed the cheques for the purpose of paying his bills while he was away on vacation. Mrs. Rose Franks 14. Ms. Gaugler also misappropriated funds from Mrs. Frank’s trust account. This account had been established to care for Mrs. Franks. 15. Ms. Gaugler caused bank drafts to the CIBC to be issued and disbursed to a CIBC line of credit and CIBC Visa both registered to her.

This occurred 31 times between July 9, 1998, and April 26, 2004. The total amount misappropriated was $464,877.94. 16. Similarly, Ms. Gaugler caused eight bank drafts to be issued and disbursed to the Bank of Montreal in the total amount of $109,326.00 between the period December 2, 1998, and February 4, 2004; and six bank drafts in the total amount of $ 80,750.00 to Enroute. 17. Moreover, the bank was unable to physically locate a number of drafts which were shown as deposited on Ms. Gaugler’s bank statement.

Between the period February 9, 2001, to January 22, 2003, seven such deposits are shown in the total amount of $119,500.00. 18. Neither Mr. Diamond nor Mrs. Franks authorized any of these transfers to Ms. Gaugler’s advantage, nor can they be accounted for by any legitimate expense. [ 12 ] Apparently, when Ms. Gaugler’s thefts were discovered, she told the CFO of West Coast she “felt sick” and offered to pay the money back. She later admitted to the thefts. West Coast terminated Ms. Gaugler’s employment before the scope of the thefts was discovered. Ms.

Gaugler’s Circumstances [ 13 ] I have the benefit of a pre-sentence report dated January 21, 2011 (the “pre-sentence report”) as well as a psychiatric/psychological report dated February 3, 2011 (the “Assessment”). Both of these reports are appended to these Reasons for Sentence as Appendix “B” and “C” respectively. [ 14 ] Ms. Gaugler, age 53, an only child, was born and raised in Vancouver. By all accounts, she enjoyed a positive and supportive upbringing. Currently, her relationship with her parents is strained as a result of these proceedings. [ 15 ] In 1974, Ms. Gaugler graduated high school in Vancouver.

She apparently “loved” her schooling. She was a good student who made the honour roll. Ms. Gaugler worked in the library but apparently did not have any friends. She told the psychologist who interviewed her, she did not fit in with other students; she kept to herself and enjoyed reading. [ 16 ] After graduating from high school, Ms. Gaugler first secured a job with a flooring warehouse doing secretarial work. She worked there briefly before she moved to a position with the City of Vancouver. In total, Ms. Gaugler spent seven years with the City working in its health and police departments.

Of those seven years, she worked for five of them indexing crime bulletins. She then moved to a position with the Mercantile Bank of Canada, was laid off from that position, and eventually, in 1986, got her job with West Coast. For the last 18 years prior to her dismissal from the company’s employ, Ms. Gaugler enjoyed a position as Mr. Diamond’s executive assistant. [ 17 ] Mr. Rowan, defence counsel told me Ms. Gaugler enjoyed her job. Her duties included stock trades, attending to interest on Mr.

Diamond’s accounts, preparing his income tax and taking care of his personal properties located in both Shaughnessy and Palm Springs. Ms. Gaugler’s job also entailed duties outside the office. She made banquet arrangements, ensured Mr. Diamond got to where he needed to on the appointed time and date, and drove Mr. Diamond’s grandchildren to school. As well, she assisted with matters for Mrs. Franks. [ 18 ] The authors of the Assessment note Ms. Gaugler told them Mrs. Diamond described her as “Mr. Diamond’s second wife.” She

added, “He’s so high maintenance he needs two of us.” Ms. Gaugler told them the job was “stressful and demanding”; that “Mr. Diamond knew no boundaries.” Ms. Gaugler also told Ms. Prynn, the probation officer who prepared the pre-sentence report, her relationship with Mr. Diamond was “unusual ...[that] he was a complex person to work for.” [ 19 ] Ms. Gaugler’s annual compensation for this job was $70,000. She apparently did not feel it “fairly reflect[ed] the position.” In addition to her salary, Mr.

Diamond also paid her $1,000 per month for child care as well as provided the interest free mortgage loan noted above. Family Relationships [ 20 ] Turning to her family relationships, in approximately 1978, Ms. Gaugler was first married at age 20 to a long time family friend who was 10 years older than herself. Although the marriage failed after two years or so, it ended amicably. From 1980 to 1986, Ms. Gaugler had another serious relationship. It too ended when that man left Ms. Gaugler to pursue a relationship with his secretary. [ 21 ] In 1988, Ms. Gaugler met her current husband, Mr. Peter Dixon Bowe.

In 1989, they married. Mr. Bowe is from Australia and worked there as an architect. He was unable to qualify here in Canada in his field, although he did work for various architectural firms. [ 22 ] According to Ms. Gaugler, Mr. Bowe had no prior knowledge of her criminal offending. Mr. Bowe’s Medical Situation [ 23 ] In 1993, Mr. Bowe was diagnosed with Myotonic Dystrophy. Since 1995, he has been off work and on disability. I have the benefit of a medical report dated January 17, 2011 from Dr. I. Karagiozov, Mr. Bowe’s family doctor, which I have read and considered as well as a brief letter from Mr.

Dave Bryer, Mr. Bowe’s auto mechanic. The letter attests to the deterioration he has witnessed in Mr. Bowe’s over the last 15 years as a result of this degenerative medical condition. [ 24 ] Myotonic dystrophy is a multisystem disorder which affects skeletal and smooth muscles, as well as the eye, heart, endocrine system and central nervous system. According to Dr. Karagiozov, Mr. Bowe’s condition: “...is characterized “by muscle weakness, and wasting, myotonia, eye cataracts and often cardiac conduction abnormalities.....Ms.

Gaugler plays a significant role in the care and support of her husband She is the primary and only caregiver and without her he will not be able to cope with his daily living activities. The progression of his disease has led to significant muscle weakness and he has already had two falls. During the last one, he sustained a fracture of his left knee cap and had to undergo a surgical procedure and internal fixation of patella. With regards to dressing, Mr. Bowe cannot button up his shirts, he cannot put his pants on, and he cannot pull his socks on.

He has difficult [sic] with overhead activity like putting on T-shirts, sweaters, as well as taking them off. He cannot cut his own toenails, nor can he cut his fingernails. Eating: due to previously described weakness of the smooth muscles, he chokes easily....He can only eat soft foods and he must be frequently fed because food falls out of his mouth. In terms of walking, he loses balance easily, falls easily, walks very slowly and he cannot lift his feet properly. His speech is difficult to comprehend. Overall, he has very limited use of his left and right hand.

He cannot lift objects, groceries, pots, pans, etc. His speech is hard to understand due to the advancement of the disease. He feels very tired and fatigued throughout the day and he cannot hear very well. He also has bowel problems that are typical of the disease.... ...Mr. Peter Bowe has an advanced disease that requires day long and night long care...Ms. Gaugler is the primary caregiver of Mr. Peter Bowe. [S]he has been providing him with the care necessary for him to have a comfortable lifestyle.

She has been providing him with the assistance for the daily living activities....basically taking care of all the activities of daily living that have been affected by the myotonic dystrophy. In other words, Ms. Gaugler has been a vital part of her husband’s life, and without her he would have to be urgently admitted in an assisted living institution. The admission will have to be pretty urgent due to the fact that the disease in Mr. Bowe’s case is advanced. His gait is very unstable; he loses balance easily; falls easily...and lately broke his knee cap.

Any time without assistance will expose him to a very high risk of fall or fatal choking with very significant life threatening consequences.” [ 25 ] In terms of a prognosis for Mr. Bowe, Dr. Karagiozov states: “Obviously, if Mr. Bowe is admitted to an assisted living [sic], the cost of his daily care is going to be significantly increased due to the fact he will need 24/7 care.... In

summary, Mr. Bowe has a condition which requires him to be observed and cared for on a daily basis. That condition is chronic and advancing. He is receiving good and vital care from his wife.... As the disease progresses, he will end up being more and more disabled and bound to a wheelchair, thus he will become more and more unable to perform any activities of the daily living [sic], and will therefore become more and more dependent on external help.

Hopefully, that help will be provided by...his wife since she has proven pretty capable of handling his needs and looking after this chronic condition.....If that is impossible, he will have to be urgently admitted to an assisted living facility, a permanent care institution and the cost of his care will increase significantly.” Other Family Relationships [ 26 ] Ms. Gaugler and Mr. Bowe have a son, William. He is 17 years of age. Ms. Gaugler told Ms. Prynn that William “has difficulty understanding and is often embarrassed by his father’s condition.” [ 27 ] Turning to Ms.

Gaugler’s relationship with her son, although she initially described it as “pretty good,” in a subsequent telephone call with Ms. Fusco, the psychologist who assisted Dr. LaTorre, the co-author of the Assessment, Ms. Gaugler admitted there had been recent conflict her son. He had stolen his parents’ credit cards at least twice. Moreover, he had pushed and hit Mr. Bowe when he refused to give over those cards.

[ 28 ] Mr. William Gaugler wrote a character reference for his mother which the defence has filed. I have read and considered it. Moreover, the defence filed two separate letters from each of Mr. Bowe’s sisters, both of whom live in Australia. They each note Ms. Gaugler’s expressed remorse in relation to these events; that she has learned her lesson, and how she has diligently cared for their brother, Mr. Bowe. [ 29 ] Ms. Gaugler apparently has no supportive relationships. She could not provide the names of any collateral contacts to Ms. Prynn. No one testified in court in support of her.

Apparently those individuals who received some of the largesse of the stolen funds have all deserted and now shun Ms. Gaugler. Ms. Gaugler’s Work History and Education since May, 2008 [ 30 ] Since these events, Ms. Gaugler was unemployed for a period of time. Then, from September 2, 2008, to October 9, 2009, Brightwater Floating Home Village Ltd. employed Ms. Gaugler as the administrative assistant to Ms. Donna Neufeld, its office manager. The defence filed a letter of reference dated October 9, 2009, from Ms. Neufeld regarding Ms. Gaugler’s job performance. It is clear Ms. Neufeld was very pleased with Ms.

Gaugler’s administrative capabilities. The company found it necessary to let Ms. Gaugler go, through no fault of her own. It is also apparent from the letter the company likely had no inkling of Ms. Gaugler’s theft from West Coast and the Diamond family. I say that since there is no reference to that in the reference letter itself. [ 31 ] Currently, Ms. Gaugler is unemployed and supports herself and her family through social assistance. Mr. Bowe receives a monthly disability pension. Ms.

Gaugler has outstanding debts of approximately $100,000. [ 32 ] In terms of education, from November 1, 2010, to April 8, 2011, Ms. Gaugler has been enrolled in a “Customized Business Diploma Program offered through MTI Community College as confirmed in a letter dated October 22, 2010, of Ms. R. Santamaria, admissions representative for the college. The college’s materials indicate Ms.

Gaugler will have received training in “word processing, spreadsheets, databases, presentations, business math, business English, bookkeeping, payroll and computerized accounting concepts.” [ 33 ] The aim of the program is to ensure the graduate is able “to thrive in any business environment.” In addition to the core courses, students have the option of completing a practicum of up to four weeks in length in a business environment.

The materials indicate, upon completion, the student “will be prepared to begin a career in medium and large size businesses or...can utilize [the] skills within [his or her] own business. As the successful graduate [the student] will be prepared to work in public and private companies, community organizations and educational and financial institutions.” [ 34 ] In fact, the sentencing was adjourned from February 8, 2011, to today’s date in order to allow Ms. Gaugler to finish that program. Had she not completed it, she would have forfeited the tuition and book fees for it of approximately $5,100.

To February 8, 2011, Ms. Gaugler appears to have done well on her tests of the diploma materials. The Assessment [ 35 ] It is comprehensive. The defence did not challenge any of its contents. I have summarized below the essential commentary. (

a) Ms. Gaugler’s Account of the Index Offence [ 36 ] Ms. Gaugler told Ms. Fusco she did not recall any details of the thefts; “I didn’t even realize when or what amount I had taken until I looked at the report.” She tried to justify her expenses with her son’s orthodontic work, dress code expectations at work and different functions, and travel. [ 37 ] I note parenthetically this sort of justification appears consistent with what Ms. Gaugler told Ms. Prynn, the probation officer who prepared the pre-sentence report. According to Ms. Prynn, when asked to account for the stolen money, Ms.

Gaugler “initially claimed she used the funds to provide basic support for her family. She reluctantly admitted to vacationing and purchasing jewellery and high end clothing.” Ms. Prynn also noted Ms. Gaugler “could provide no insight or explanation for her actions. ...She admitted the offences were for personal gain however was evasive when asked to account for the funds. Her self-reported spending habits do not equate for [sic] the amount defrauded.” [ 38 ] Ms. Gaugler told Ms.

Fusco her actions: ...were “not in [her] character” and she “truly [doesn’t] know why [she] did it....I knew I was doing the wrong thing, but I still did it, didn’t I. She added it was “easy to do” and also there was an honest side to her as she only took from individuals and not the company. She voiced some animosity and resentment towards Mr. Diamond.” [ 39 ] Ms. Gaugler then detailed some specific complaints she harboured against Mr. Diamond and some of his family members. [ 40 ] The authors of the Assessment conclude it “appears that this resentment and general negative feelings contributed to the offences. (

b) Additional Clinical and Related Observations [ 41 ] The psychologists interviewed Ms. Gaugler for approximately 3 hours. The authors’ assessment was she was cooperative, candid and appeared to be forthright. [ 42 ] The authors asked Ms. Gaugler to rate her mood on a scale of 1 to 10, where 10 indicated an elevated mood. Ms. Gaugler responded she functioned at a 7 “which [represents] her typical mood.

She denied feeling down or depressed, but admitted to feeling “worried” about her financial situation.” She described some anxiety attacks in the summer of 2008 for which she sought medical treatment; she was prescribed Ativan which she now takes occasionally. In the late fall of 2010, when she entered her guilty plea, Ms. Gaugler admitted to having had a “bad anxiety attack.” Ms. Gaugler denied having loss of interest in pleasurable activities, weight changes, changes in appetite or energy level and sleep disturbances. She also denied suicidal ideation. The authors of the Assessment

state the “mental status assessment revealed no signs or symptoms of any major (psychotic) psychiatric disorder.” (

c) Psychological Testing [ 43 ] The authors of the Assessment administered the Minnesota Multiphasic Personality Inventory-2 (MMPI-2). In terms of the validity scale, Ms. Gaugler’s pattern suggested “she may be somewhat defensive and attempting to create a favourable impression....She demonstrated a somewhat dysfunctional morality in, for example, her paraprosdokian minimization that she had an honest side in that she only stole from individuals and not from the company.” [ 44 ] Moreover, Ms. Gaugler’s “response profile did not indicate any acute psychological distress despite her self reports of, at times, intense anxiety.’ (

d) Assessment of Risk [ 45 ] In terms of general recidivism, Ms. Gaugler’s score suggested “she has relatively low risk/needs. Offenders with similar scores showed a low likelihood of returning to crime, based on female inmate norms.” (

e) Diagnostic Impressions [ 46 ] The authors opined as follows: 1. Axis I: Ms. Gaugler did not appear to meet the criteria for any major psychiatric disorders. 2. Axis II: While Ms. Gaugler reported some compulsive behaviours, and possibly avoidant traits, based on the information available, there was no evidence of any personality disorder. Ms. Gaugler’s intelligence appeared to be at least average. (

f) Summary and Treatment Recommendations [ 47 ] The authors of the Assessment state the following: “Her motivation for the index offence appeared to be one of the three most common for thefts or embezzlements from companies (although she did not take the money from the company but from the company’s owner or director). That is, resentment with respect to some aspect of the job. Her subsequent spending of the money somewhat lavishly is relatively common for such individuals.

There appears no deficit of intellect, personality or mental health that has contributed to the offence. [emphasis added] On the basis of the present evaluation, which included the scoring of a device formulated to assess risk for criminal recidivism, Ms. Gaugler appeared to be at a relatively low risk of criminal recidivism. Ms. Gaugler emphasized her desire to be sentenced to community supervision so she can continue to care for her husband. Based on the limited information available for the present assessment...it is...likely she could be successfully managed in the community.

Signs and/or symptoms that may indicate Ms. Gaugler is at higher risk to commit a criminal act include: (1) conflict with her parents or son; (2) negative affect, particularly resentment; (3) lack of social support’ (4) deteriorating financial situation; (5) frustration/dissatisfaction with work; and (6) sense of being mistreated at work. In order to address Ms. Gaugler’s needs and reduce the risk of criminal recidivism, the following recommendations are offered: 1. It is recommended that Ms. Gaugler not work in settings that allow her to have unsupervised access to finances; [and] 2. Ms.

Gaugler would likely benefit from cognitive-behavioural psychological treatment to address her stressors, her coping strategies to deal with these, the cognitive errors she used to justify her offence and her inability or reluctance to have asserted herself in the workplace.” [ 48 ] In submissions, in response to the court’s query, defence counsel advised me Ms. Gaugler had just the day before February 7, 2011, entered into counselling with a registered psychologist. (

g) The Impact of the Offences on Mr. Diamond and Mrs. Franks [ 49 ] There is no formal victim impact statements from either Mr. Diamond or Mrs. Franks before the Court. Ms. Prynn, the author of the pre-sentence report tried to contact the victims but stated “efforts were unsuccessful as a result of an extensive travel schedule.” That said, defence counsel did advise of some reaction which the Diamond family and Mrs. Franks had to the thefts as a result of speaking to one of the investigating officers. [ 50 ] Apparently, Mr. Diamond stated, “It’s over. It didn’t hurt me.

It didn’t hurt my company. [ 51 ] The defence asks the Court to accept Mr. Diamond’s statements at face value. [ 52 ] A few months later, according to defence counsel, Ms. Leslie Diamond, Mrs. Franks’s daughter, was interviewed. In relation to the issue of sentencing, she apparently said: “I want to tell you this. I want this woman to have a criminal record. To me, going to jail is not necessarily my vendetta you know, for what she has done to Gordon and my mother. It’s horrific but she travels. She loves to travel. She could be going now on the next vacation.

She needs to lose her passports and the only way to do that is a criminal record.” [ 53 ] In reply, Mr. Shaw, for the Crown, provided the Court with further information as to Mr. Diamond’s statements to the police on

November 27, 2008, regarding these thefts: “I trusted her [Ms. Gaugler] with my life. I had discussed if I passed away that she would make sure all my bills and everything would be paid for. So I’m still in shock 6 months later. I had no inclination that she would steal from me, and that’s the part, as I said, that hurts....I thought about the criminal charges and I think it’s such a violation if other people are abused the way I was abused.

Not used, no abused, and mistreated, and stolen from, then they will not be ashamed to stand up and say, “Hey, I’ve been abused because this is a betrayal of trust of the highest degree.” Restitution [ 54 ] Ms. Gaugler had made some restitution. Her counsel, Mr. Rowan, advised that very shortly after the thefts were uncovered and Mr. Diamond and Mrs. Franks had launched a civil action for recovery of the misappropriated property, Ms. Gaugler was questioned and ‘told all.” Mr. Rowan submits “this was an easy case to put together” because of the paper trail which Ms.

Gaugler had left. [ 55 ] Thereafter, arrangements were made for Ms. Gaugler to divest herself of any assets which she had. Her home was assigned a value of $766,000 and ultimately assigned to Mr. Diamond; jewellery was turned over; RRSPs were cashed out; Ms. Gaugler’s company pension plan was signed over as was her car. This was all done by September, 2008. Ms. Gaugler signed a judgment in favour of Mr. Diamond for $1.7 million dollars as well as for Mrs. Franks less the amount recovered through the liquidation of any of Ms. Gaugler’s assets.

To early September, 2008, this matter had only proceeded civilly. [ 56 ] The information was sworn July 29, 2010. On November 9, 2010, Ms. Gaugler entered a guilty plea. According to defence counsel, Ms. Gaugler never had any intention of taking this matter to trial. Moreover, she was “surprised” when the criminal proceedings were commenced due to the time which has passed since the civil proceedings. [ 57 ] After realization of Ms. Gaugler’s assets, the amount still owing is $1,191,910.99. The Crown’s Position [ 58 ] As stated at the outset, Mr.

Shaw, for the Crown, submits a fit sentence is in the range of 3 to 5 years, bearing in mind the sentencing principles at play as reflected in the case authorities. Mr. Shaw relied on a number of case authorities which I have both read and considered, and the index to which is attached to these Reasons for Sentence as Exhibit “D.” To justify the range of sentence sought, which Mr. Shaw submits is the “tightest sentencing range for theft of monies greater than $1 million dollars,” he points to, among others, the following factors: 1.

The offence is a breach of trust, and as such, an enumerated aggravating factor pursuant to s. 718.2(a)(iii) of the Criminal Code ; 2. The amount of money stolen – more than $2.5 million dollars; 3. The lengthy period of time over which the offence was committed; 4. The evident pattern of concealment of the theft inasmuch as the cheques transferring the funds were made out to “Cash” and not Ms. Gaugler personally; 5. A number of “disturbing factors” noted in the Pre-Sentence Report including: (

a) Ms. Gaugler knew at the time she embarked on these thefts her husband’s medical condition; (

b) Ms. Gaugler has embarked on a business diploma program notwithstanding the Pre-Sentence Report clearly states she ought not to handle money in the future; (

c) Ms. Gaugler has limited insight into her actions; (

d) Ms. Gaugler denies these thefts are part of her “character” yet they occurred over a very lengthy period of time; this indicates they were part of her nature and not an isolated incident; (

e) The Assessment indicates Ms. Gaugler, by her own self-report, has a normal mood and is neither depressed nor plagued by addictions which could explain the thefts; (

f) Moreover, the Assessment refers to Ms. Gaugler as having a “dysfunctional morality” as well as presenting with the enumerated risk factors consistent with re-offending; (

g) In any event, Mr. Bowe’s medical condition, offered as a reason for a conditional sentence, will eclipse Ms. Gaugler’s ability to care for him over the short term. [ 59 ] Further, the Crown seeks an ancillary order that the Court make a restitution order in the amount of $1,196,910.99. Finally, the Crown takes no position on whether a victim fine surcharge should be imposed. The Defence Position [ 60 ] Although Mr.

Rowan acknowledges the Crown has taken a “solid traditional position on sentence, he submits firstly, the case law allows for the imposition of a conditional sentence in cases involving the theft of significant amounts of money where there are extreme or unique mitigating circumstances of the accused person – here, Ms. Gaugler; second, those extreme mitigating circumstances are present in this case. [ 61 ] Mr. Rowan relies on a number of case authorities, all of which I have read and considered, and the index for which is attached to

these Reasons for Sentence as Appendix “E”. [ 62 ] Mr. Rowan submits the extreme mitigating circumstance in this case is the effect which a conventional period of incarceration for Ms. Gaugler would have on her husband and son. Firstly, Ms. Gaugler is Mr. Bowe’s sole caregiver. If she were sent to jail, then Mr. Bowe would have to access state funded medical facilities for his care. The cost of such care, submits the defence, is relevant for sentencing purposes. [ 63 ] Second, he submits, should Ms. Gaugler be incarcerated in a conventional jail, who would care for William, their son, age 17?

He is struggling in school. His grandparents have shown no inclination to take care of him. Mr. Rowan submits “No doubt the state would have to intervene”. [ 64 ] Mr. Rowan mused as to what the general public would think if they knew the Court had simply sent Ms. Gaugler to a penitentiary because she had stolen a very significant amount of money in the result that now the state would not only have to bear the cost of her care, but also that of her husband and son. He submitted the community would be specifically harmed if Ms.

Gaugler went to a penitentiary since the community would have to bear the costs of not only Mr. Bowe’s care but also William’s. This consideration of cost of care, the defence argued, must be balanced against the principle of general deterrence. Moreover, the Court ought to also consider the fact this family has spent the last 3 years rebuilding itself when it considers the principle of general deterrence. [ 65 ] In terms of the mitigating factors, the defence submits they are the following: the very early guilty plea; Ms.

Gaugler’s remorse and shame for her actions; the fact she has undertaken counselling; and the thefts were not sophisticated and she signed over the assets purchased with the stolen funds within months of discovery of the thefts. [ 66 ] Moreover, there is no evidence Mr. Diamond and Mrs. Franks are seeking retribution nor is there evidence Mr. Diamond and Mrs. Franks were harmed financially by the theft of the monies in this case. [ 67 ] The defence submits given the significant personal consequences which these thefts have had for Ms.

Gaugler – the loss of all her worldly possessions and the enormity of the financial judgment from which she shall never recover – there is a substantial element of both general and specific deterrence such that that sentencing principle can be met. [ 68 ] In short, the defence submits the only issues which engage the possibility of a sentence in excess of 2 years are the size and duration of the theft. When those factors are weighed against the many extreme mitigating factors in Ms.

Gaugler’s case, it is submitted a fit sentence is a conditional sentence for a period of 2 years less a day to be followed by the maximum probationary period of 3 years. Such a sentence, Mr. Rowan argues, would give the state more control over Ms. Gaugler for a longer period of time than would be the case if a conventional jail sentence in the range of 3 to 5 years were imposed, and would also be consistent with the overarching sentencing principle of protection of the public.

The Law [ 69 ] The issue I have to decide is what is a fit sentence in all the circumstances of the case, bearing in mind the nature of the offences to which Ms. Gaugler has pleaded guilty, her personal circumstances and the purpose and principles of sentencing as they are set out in the Criminal Code . I am to weigh all these considerations in the balance. [ 70 ] I have carefully considered the purpose and principles of sentencing as they are set out in each of ss. 718 , 718.1 and 718.2 of the Criminal Code .

I am to apply these legislatively enshrined principles in determining what is a fit sentence in this case. [ 71 ] The fundamental purpose of the criminal law generally and of sentencing in particular is the protection of the public. The governing

section of the Criminal Code ,

section 718, provides that the fundamental principle of sentencing is to contribute, along with crime prevention initiatives, to respect for the law and the maintenance of a just, peaceful and safe society by imposing just sanctions that have one or more of the various enumerated sentencing objectives. Those codified sentencing objectives declared by Parliament are the following: (

a) to denounce unlawful conduct; (

b) to deter the offender and other persons from committing offences; (

c) to separate the offender from society where necessary; (

d) to assist in rehabilitating offenders; (

e) to promote reparation for harm done to victims or to the community; and (

f) to promote a sense of responsibility in offenders and acknowledgement of harm done to victims and to the community. [ 72 ] There is another principle which is set out in s. 718.1 of the Criminal Code . It is this: a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender. [ 73 ] Finally, there are sentencing principles enshrined in s. 718.2 of the Criminal Code . The ones which are relevant to this case are the following: (

a) a sentence should be increased or reduced to account for any relevant aggravating or mitigating circumstances relating to the offence or the offender including evidence that the offender, in committing the offence abused a position of trust or authority in relation to the victim (see: ss. 718.2(a)(iii)); this is a deemed aggravating circumstance; (

b) a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances (see: ss. 718.2(b));

(

c) an offender should not be deprived of liberty if less restrictive sanctions may be appropriate in the circumstances (see: ss. 718.2(d));and (

d) all available sanctions other than imprisonment that are reasonable in the circumstances should be considered for all offenders (see:ss. 718.2(e)). [74] The conditional sentence sentencing scheme is set out in s. 742.1 of the Criminal Code. Under this section, a court may order anaccused person to serve a sentence of imprisonment in the community provided 4 preconditions are met: (

a) the offence must not be punishable by a minimum term of imprisonment; (

b) the sentence of imprisonment imposed must be less than 2 years; (

c) the court must be satisfied that serving the sentence in the community would not endanger its safety; and (

d) the court must be satisfied that serving the sentence in the community would be consistent with the fundamental principles andpurposes of sentencing. [75] In R. v. Proulx, 2000 SCC 5 , [2000] 1 S.C.R. 61, the Supreme Court of Canada set out the principles which govern theimposition of a conditional sentence order. Those principles have been conveniently summarized by my sister judge Howard in R. v.Datsko, [2009] BCPC 106: 1.

A conditional sentence is available for all offences in which the statutory prerequisites are satisfied (para. 79); 2. the setting of “starting points” in respect of specific offences to provide guidance as to the proper use of conditional sentences isunnecessary and unwise (para. 87); 3. there is no presumption either for or against a conditional sentence, no matter what the offence (para. 85); 4. neither the Crown nor the defence bears an onus of establishing that the offender should or should not receive a conditionalsentence (para. 120); and 5. in some circumstances, the objectives of general deterrence and denunciation can be achieved through the imposition of aconditional sentence containing strict terms governing the conduct of the offender in the community (paras. 102 and 107). [76] However, as the case of R. v.

Fice, supra, makes clear, the threshold question is whether the sentence to be imposed is one whichis less than 2 years. [77] That being the case, let me then turn to a consideration of the sentencing principles which are at play in a case of this type andwhether the range of sentence is less than 2 years such that Ms. Gaugler could be considered eligible for a conditional sentence. [78] It is important to note no two cases are alike. Sentencing is an individualized process, and the Court has the flexibility to dojustice with respect to the individual who stands before it.

The Court’s goal is to craft a fit sentence for the particular accused personbefore it after taking into account the principles and purposes of sentencing. Sentencing Principles Applicable to Theft/Fraud Cases [79] Both the Crown and the defence have put before me a number of authorities, many of which are from our Court of Appeal. Ihave set out below the guiding sentencing principles from those cases. [80] In R. v. Spiller (1969), (BC CA), 4 C.C.C. 211 (B.C.C.A.), the Crown appealed the sentence of 3 years jailafter the accused, a bank teller, pleaded guilty to theft and falsifying books of account.

Between the period April, 1964 to September,1968, Ms. Spiller stole the sum of $492,000. On appeal, the Court of Appeal allowed the appeal and substituted a sentence of 6 years jailin place of the 3 years imposed by the court below. Mr. Justice Robertson, for the Court, stated the following principles: 1. Good character may be a mitigating circumstance in some kinds of crimes, e.g., an isolated case of criminal negligence or anunpremeditated assault in a fit of anger. But, ...this is not so where the offence is a series of acts, planned and carried out over a lengthyperiod.

The person of good character, who can appreciate to the full how wrong what he is doing is, seems to me to be just as culpable asa person of poor character who appreciates less clearly the wrongness of his acts.... She used her apparent good character to enable her toperpetrate her crime....; 2. Little, if any, significant weight should be given to the plea of guilty where the respondent knew that she was inescapably caught; 3.

The fact the respondent cooperated with the bank and the police in tracing where the monies had gone and turning over to the bankall her real and personal property may deserve some consideration, but [the accused] cannot claim the right to buy a year or two off hersentence nor is the attempt to do so consistent with the submission [the respondent] feels remorse; 4.

The court rejected the argument that had the bank been more alert, the respondent would have been caught sooner and she shouldbe judged as though she had been caught before the monies stolen reached any large proportion, and the sentence need only be sufficientto deter simple, unsophisticated thefts. The court stated, “In fact, the thefts were carefully thought out, they were executed over a periodof more than 4 years, elaborate steps were taken almost daily to prevent detection, and the sums stolen aggregated to an astronomicalamount.” 5.

The particular class that must be deterred here includes employees of banks, trust companies, savings and loan associations...in fact,the employees of all corporations where large sums of money and the indicia thereof come in and go out and opportunities for thefts of

large sums [of money] exist or may appear to the employee to exist....[A] sentence of three years imprisonment for the theft of a financialinstitution of almost half a million dollars over about a period of four and a half years is....grossly inadequate to deter others from tryingthe same thing....[I] have come to the conclusion that a term of six years should be sufficient to deter others and is not too heavy apunishment for the respondent.” [81] More recently, in R. v. Khan (2002), 2002 BCCA 676 , 181 B.C.A.C. 1, our Court of Appeal re-emphasized theseguiding principles. In Khan, both Mr.

Khan and his co-accused, Mr. Ali pleaded guilty, following their committal to stand trial after apreliminary inquiry, to defrauding a company of sums exceeding more than $2.2 million dollars over a period of more than 14 months. Mr. Ali received a sentence of 2 years less a day. Mr. Khan was sentenced to 3 years. In addition, an order for compensation for onehalf the amount stolen was imposed on each accused. [82] Mr. Khan submitted his sentence was not fit on the basis of the principle of parity. He submitted the trial judge erred in findinghe had a more serious level of participation in the fraud than did Mr.

Ali. [83] The court rejected that submission. Referring to R. v. Schneider (H.) (2002), 2002 BCCA 143 , 166 B.C.A.C. 206(BCCA) it stated: “In my view, the sentencing judge was correct to give emphasis to general deterrence.

This court has consistently said that generaldeterrence is of prime importance of crimes of this sort because it is important for persons in business positions...to know that there willbe serious consequences if they misappropriate the monies of innocent participants in their business ventures.” [84] The court concluded there were none of the extreme personal mitigating circumstances in that case as there had been 2 largescale fraud cases: R. v. Undersys and R. v.

Bunn, such that a conditional sentence order was a fit sentence in the circumstances. [85] My sister Judge Howard in the Datsko case reviewed the legal principles at play generally in fraud cases of this type. I considerthem apposite in theft cases of this magnitude. I have set out her comments below which I adopt as an accurate statement of the law: “The legal authorities establish that a large scale fraud involving a breach of trust will generally attract a period of imprisonment. Specific deterrence and rehabilitation are often given less weight in these cases.

General deterrence and denunciation tend to be thedriving principles. They are the very same principles that lead the courts to conclude that imprisonment is often the only just andeffective sanction. See R. v. Dickson, 2007 BCCA 561, [2007] B.C.J. No. 2472 at paragraph 63: This Court has said more than once that general deterrence is central to the sentencing process in cases involving large scale frauds withserious consequences for the victims. In many cases, convictions for serious frauds have led to the imposition of custodial sentences: see R. v. Khan, [2002] B.C.J. No. 2950, 2002 BCCA 73 and R. v.

Autenreith, [2003] B.C.J. No. 2291, 2003 BCCA 521. The above passage was cited with approval by the British Columbia Court of Appeal in a more recent decision, R. v. Bodnarchuk, 2008BCCA 39, [2008] B.C.J. No 219, para. 11. In an earlier decision, R. v. Hoy (BC CA), [1998] B.C.J. No. 1649 (B.C.C.A.), McEachern C.J. expressed the viewthat a large scale fraud is just the sort of case “where there may be more value or more usefulness in the principle of general deterrencethan in many other types of offences” (para. 6). The Ontario Court of Appeal has expressed similar views. See R. v.

Bogart (ON CA), 61 O.R. (3d) 75, [2002] O.J.No. 3039 (Ont. C.A.) at paras. 30 and 31: This court has affirmed that in cases of large scale fraud committed by a person of trust, the most important sentencing principle isgeneral deterrence. Mitigating factors and even rehabilitation become secondary. In R. v. Bertram and Wood (1990), 40 O.A.C. 317,this court observed that most major frauds are committed – as this one was – by well educated persons of previous good character. Thusthe court held at 319 O.A.C.: The sentences in such cases are not really concerned with rehabilitation.

Instead, they are concerned with general deterrence and withwarning such persons that substantial penitentiary sentences will follow this type of crime, to say nothing of the serious disgrace to themand everyone connected with them and their probable financial ruin. In R. v. Gray (L.V.), (1995), (ON CA), 76 O.A.C. 387 at pp. 398-99, our court again stressed the need for generaldeterrence in fraud cases: There are few crimes where the aspect of deterrence is more significant.

It is not a crime of impulse and is of a type that is normallycommitted by a person who is knowledgeable and should be aware of the consequences. That awareness comes from sentences given toothers. [86] It is important to note that a conditional sentence is not foreclosed in cases of this type. That is clear law. As Judge Howardnoted in the Datsko case: “In R. v. Biller, 2005 BCSC 1278, [2005] B.C.J.

No. 1941, Madame Justice Boyd summarized the authorities in these terms atparagraphs 69 and 70: The Crown has acknowledged that there is no category of case which is excluded for consideration of a conditional sentence. However,as our Court of Appeal recently pointed out in Regina v. Khan, certain offences will usually lead to a custodial sentence. This willparticularly be so where the need for deterrence warrants incarceration. In Khan, Esson J.A., speaking for the Court, adopted the remarksof MacPherson J.A. of the Ontario Court of Appeal who said this in Regina v.

Dobis, (ON CA), 58 O.R. (3d) 536: This court has said repeatedly that general deterrence is central to the sentencing process in cases involving large scale frauds with

serious consequences for the victims: ... Importantly, the court has said the same thing since the introduction of the conditionalsentencing regime. Conditional sentences have been rejected in large scale fraud cases such as Pierce (1997) (ONCA), 32 O.R. (3d) 321, Ruhland [1998] O.J. No. 781, and commented on adversely in the leading Ontario case dealing with conditionalsentences, R. v. Wismayer (1997) (ON CA), 115 C.C.C. (3d) 18 (Ont. C.A.).

In Dobis (supra), in declining to impose a conditional sentence, MacPherson J.A. further noted that "there were none of the extremepersonal mitigating circumstances that were central to the decisions to impose conditional sentences in two large scale fraud cases." [87] That said, Chief Justice Finch stated in R. v. Dickson, [2007} BCAC 207: “However, in cases of serious fraud or serious theft where there are extreme personal mitigating circumstances, the courts have held thatthe principle of general deterrence can be satisfied by a conditional sentence: see R. v. Bunn, 2000 SCC 9 , [2000], 1 S.C.R.183, R. v.

Kratky, [1997] BCJ 3167 and R. v. Anderson-Davis, 2000 BCSC 42 , [2000] BCJ No. 88, 2000 B.C.S.C. 42. [88] Moreover, as Judge Howard notes, “the presence of extreme mitigating circumstances is not a precondition to the granting of aconditional sentence (see: R. v. Burkart 2006 BCCA 446). [89] Let me now turn to the range of sentence. Range of Sentence [90] The Crown has provided the Court with a very helpful

summary entitled “Table of Cases”, which is attached to these Reasons forSentence as Appendix “F”. This accurate

summary catalogues all the important factors from the individual cases decided in BritishColumbia. It also indicates the range of sentence for fraud or large scale thefts is between 3 to 6 years conventional jail. The jailsentences meted out appear to cluster around 3 to 4 years with R. v. Spiller, and R. v. Coffey representing the upper or high end of therange with jail terms of 6 and 5 years respectively imposed on the individual offender. [91] I have also reviewed the cases referred to by Judge Howard in the Datsko case at paragraphs 42 through 46.

I agree with heranalysis that where a conditional sentence has been imposed, such sentences occur more frequently in cases where the fraud or theft is inthe range of $200,000 or less. [92] Let me know turn to the cases relied on by the defence in support of a conditional sentence. I have summarized the essentialfacts of each case below. [93] In R. v. Anderson-Davis, the accused pleaded guilty to 2 counts of defrauding the provincial Ministry of Social Services. He hadclaimed social assistance to which he was not entitled. Each count extended over a period of approximately 4 years. The amount atissue was $136,700.

Mr. Anderson-Davis had no prior criminal record and had an unblemished record of community and familyparticipation. [94] Mr. Justice Boyle concluded it was “highly improbable” Mr. Anderson-Davis would commit another offence. It also appears hesuffered from depression and frequent failure of his endeavours. The monies which he borrowed from the bank were not for an“aggrandized life style” but rather were largely channelled into unsuccessful business ventures. Restitution would be made through thesale of the family home. Mr. Anderson-Davis had the support of both his private counsellor, and many friends.

He now had a new jobas a school bus driver and was thus entrusted with the lives of young children. [95] The Crown proposed a sentence of 2 years less a day; the defence did not strenuously oppose a sentence in that range but rathersubmitted it should be served by way of Conditional Sentence Order. The court imposed an 18 month Conditional Sentence Order andrelied in part on R. v. Kratky, supra. [96] In R. v. Bunn, the accused, a lawyer, converted trust funds in the approximate amount of $86,000 to his own use and benefit. Ultimately, Mr. Bunn was disbarred.

He was convicted of 6 counts of breach of trust and, at trial, sentenced to 2 years conventional jail. At the time of sentencing, the accused was married with one teenager. His wife was confined to a wheelchair. Mr. Bunn was the solesupport for his family. [97] The Manitoba Court of Appeal allowed Mr. Bunn’s appeal from sentence and imposed a conditional sentence of 2 years less aday. The Crown appealed to the Supreme Court of Canada.

Notably, after trial but prior to appeal, s. 742.1 (the conditional sentenceprovisions) were enacted by Parliament. [98] The majority of the Court (4:3) held there was no reason to interfere with the findings of the Court of Appeal which had, inessence, resentenced Mr. Bunn in light of the new conditional sentence provisions.

The Supreme Court of Canada noted the Court ofAppeal had: “...reasonably concluded that the ruin and humiliation which the accused brought down upon himself and his family, together with theloss of his professional status, could provide sufficient denunciation and deterrence when coupled with a Conditional Sentence of 2 yearsless a day with house arrest. The court also imposed a condition of 200 hours of community service which was capable of achieving therestorative objective of reparation to the community. Moreover, the Court of Appeal noted important mitigating circumstances in thiscase.

The accused was the sole provider and caregiver for both his disabled wife [who had been confined to a wheelchair for manyyears] and their daughter. The Court of Appeal’s sentence provided sufficient denunciation and deterrence, and was notdisproportionately lenient.”[emphasis added] [99] In R. v. Burkart, Mr. Justice Thackray allowed the accused’s appeal and substituted a conditional sentence of 18 months durationfor a sentence of 18 months conventional incarceration. In that case, Ms. Burkart, age 38 at the time of conviction and without a priorcriminal record, was afflicted with a gambling addiction.

She stole $81,000 from her employer, TD Canada Trust, over a 1 year period. An issue of appeal was whether the sentencing judge had applied the wrong test. Were “unusual circumstances” of an accused person

required before the sentencing judge could consider imposing a conditional sentence? The Court of Appeal held they were not. [100] Moreover, but for the application of the wrong test in this case, Mr. Justice Thackray stated he “might have been inclined, for reasons of deference to dismiss [the] appeal.” [101] It is noteworthy, in my view, the Crown’s sentencing position was a sentence in the range of “the high end of provincial time or the low end of federal time”, coupled with the amount involved. [102] In R. v.

Coffin , the Quebec Court of Appeal allowed the Crown’s appeal of a 2 year less a day conditional sentence and substituted an 18 month period of imprisonment. The issue on appeal was whether the sentencing judge’s sentence was demonstrably unfit. The Court of Appeal held it was because the sentencing judge had failed to assign the proper weight to the sentencing objectives of the gravity of the offence ( s. 718.1 ); the objectives of denunciation and deterrence ( s. 718 (

a) and (b); and the principle of harmonization in sentencing ( s. 718.2 (b)). [103] In that case, the accused, Mr. Coffin, age 62 and without a prior criminal record, had pleaded guilty to 15 counts of fraud against the Government of Canada in what had become known as the “Sponsorship Scandal.” The parties filed an Agreed Statement of Facts. The loss to the Government of Canada was said to be approximately $1,556,625. Of that amount, Mr.

Coffin had reimbursed roughly $1,000,000. [104] In the case at bar the defence relies on the Coffin case for the table of cases appended to the decision wherein the defence in Coffin cited and relied on some lower court and appellate decisions where a conditional sentence had been imposed. I have reviewed and considered that table of cases. Many of the authorities cited therein are distinguishable even on a review of the brief facts given. [105] For example, in R. v.

Wellington , a decision of the Alberta Court of Appeal, there is a commentary the “accused cannot be compared to white collar employees who commit crimes out of greed.” [106] In R. v. Toman , a decision of the Quebec Court of Appeal, the table notes the accused “received no benefit from the fraud.” [107] In R. v. Cantin , the accused was said to have “done all he can in the last 12 years to re-establish himself [emphasis added].” [108] In R. v. Loewen , a decision of the Manitoba Provincial Court, the accused defrauded the Bank of Montreal and another entity of $1.5 million dollars.

The sentencing judge imposed a conditional sentence of 2 years less a day. Of note, the accused had committed the crime over a very short period of time. [109] In R. v. Tulloch , the accused, with no prior criminal record, received a conditional sentence of 2 years less a day after he pleaded guilty to fraudulently obtaining tax rebates by forging invoices and other documents. A factor in the sentence imposed appears to have been the fact the accused suffered from depression and psychological problems and took medications at the time the offences were committed. [110] Finally, in R. v.

Berenbaum , the accused persons, 3 chartered accountants, defrauded the company, not its clients, of an aggregate of approximately $1.9 million dollars. The accused repaid the stolen monies and had the support of their communities. They also suffered a loss of professional status. [111] In R. v.Kratky , the accused pleaded guilty to 3 counts of fraud. She had defrauded her employers, 3 local dental clinics, of $436,535 over a 4 year period. Ms. Kratky, age 52, had a previous criminal record for 3 counts of theft which were recorded when she was age 34. [112] The dentists commenced a civil action. Ms.

Kratky signed a consent order requiring her to pay the principal sum of $828,000, prejudgment interest of $145,061, punitive damages of $60,000 plus special costs and disbursements. Of those amounts, Ms. Kratky repaid $608,662, or more than the amount of the fraud admitted in the proceedings. The court concluded in Ms. Kratky’s unique circumstances that a conditional sentence of 18 months duration was consistent with the fundamental principles of sentencing – denunciation and deterrence.

Of particular note, the Crown took no position on whether a conditional sentence should or should not be imposed. [113] The case of R. v. Dickson supra , is distinguishable on its facts. In that case, the accused appealed her sentence of 12 months imprisonment following her guilty pleas to 2 counts of theft. Ms. Dickson had stolen from one employer $70,953 for her personal benefit over a period of approximately 8 months. She had later stolen from another employer the sum of $76,961 over a period of 6 months. The accused sought a conditional sentence to be followed by a period of probation. [114] Mr.

Justice Finch, allowed the appeal and substituted a conditional sentence of 12 months for the period of conventional incarceration. [115] Central to the Court’s decision is the fact that at the time these offences were committed, Ms. Dickson’s bipolar disorder was undiagnosed and untreated.

The Court stated, “It cannot be necessary in the interests of general deterrence for serious theft, to incarcerate someone who is mentally ill when the offences were committed, whose mental illness was a cause of her committing the offences, who pleads guilty, who makes restitution, and who undertakes an appropriate course of medical treatment.” That is clearly not the case with Ms. Gaugler.

There is no suggestion an undiagnosed mental illness or other psychiatric or psychological condition caused her actions. [116] Moreover, many of the cases relied on by the defence do not involve, as here, amounts of monies in the millions of dollars or are they ones where a federal term of imprisonment was imposed (on the latter point, see R. v. Chernoff and R. v. Schneider ). [117] In R. v. Underys , the issue was whether the 18 month jail sentence imposed should be served conventionally or by way of a conditional sentence. The Crown conceded in argument the range of sentence was within provincial time.

The Ontario Court of Appeal

upheld the conditional sentence of 18 months. [118] I also note that in those cases where conditional sentences were imposed and very large sums of money were involved, often the accused was a professional person who was prohibited from ever practicing his or her profession again. Thus, the deterrent effect of notifying other members of the public, including members of the professional governing bodies, of the very stiff penalties which flowed from large frauds or thefts had been achieved.

Analysis [119] Like Judge Howard in the Datsko case, I have concluded the case authorities “leave no room for doubt on the issue” a term of imprisonment is required in the present case. I agree with the Crown’s submission that, based on the applicable authorities, the appropriate range of sentence in this case is between 3 to 5 years. [120] Moreover, like the Datsko case, the real issue is whether Ms.

Gaugler’s unique personal circumstances are so extremely mitigating as to take her case out of the otherwise usual range of sentence such that this court could consider a conditional sentence. [121] Let me start by considering the aggravating factors in this case. I have concluded they are the following. [122] Firstly, there is the amount of the theft. It is extremely large – some $2,548,000. That is a vast sum of money and one of the largest amounts to be reflected in the case authorities. [123] Second, there is the duration of the thefts – over some 10 years - as well as the number of transactions which Ms.

Gaugler effected in order to steal that sum of money. [124] Third, Ms. Gaugler was a highly trusted employee of West Coast. As a result of her position as executive assistant to Mr. Diamond, she was privy to his personal affairs. Mr. Diamond and Mrs. Franks considered Ms. Gaugler to be a very close family friend. Rather than embracing those trusts, she repeatedly breached them by her unrelenting theft of funds over the 10 year period.

This breach of trust is a specific aggravating factor pursuant to s. 718.2 (a)(iii) of the Criminal Code . [125] Fourth, these thefts were not the product of a mere lapse in judgment. Rather, they reflect calculated and premeditated acts by Ms. Gaugler. Each separate act of theft repeated over and over again breached the trust during the 10 year period, whether Ms. Gaugler is willing to acknowledge that or not in these proceedings. I cannot accept her statement to Ms.

Prynn and the others who evaluated her that these acts of theft were “out of character for her.” Had these thefts been out of character, one might have only expected them to be committed once or twice, if at all. Rather, Ms. Gaugler repeatedly and relentlessly stole large amounts of money over a very long period of time. [126] Fifth and importantly, Ms. Gaugler’s motivation for the thefts appears to have been nothing more than pure greed. Her sole objective appears to have been her own personal gain. She used the stolen funds to furnish herself with a lifestyle that she would never have otherwise enjoyed.

While it appears her family enjoyed some of the benefits associated with the stolen funds such as trips, Ms. Gaugler herself seemed to have benefited the most with breathtakingly abundant amounts of clothing, accessories, jewellery and home furnishings, including art. [127] Sixth, there was an evident pattern of concealment by Ms. Gaugler. The cheques which transferred the stolen funds were made out to “Cash” and not Ms. Gaugler personally.

While the system used may not have been terribly sophisticated, as the defence noted, it was clearly sufficient to have accomplished the thefts over a 10 year period without detection. Further, the banks transferred funds, in some cases, based on Ms. Gaugler’s representations of authority to do so. [128] Seventh, there is no indication that Ms. Gaugler would have voluntarily ceased stealing the funds and brought these thefts to light herself. It was only because the $3,000 was discovered in Mrs. Franks’ suite that the thefts were discovered. I can only infer Ms. Gaugler would have continued to steal from Mr.

Diamond and Mrs. Franks had she not been caught. [129] Eighth, while there has been partial restitution made, there remains an amount outstanding of $1,196,910.99. It is clear that that amount will never be repaid to Mr. Diamond and Mrs. Franks because of Ms. Gaugler’s extremely limited employment prospects. Any money which she earns from future employment will likely be chiefly earmarked for her and her family’s support. [130] Let me now turn to factors in mitigation. [131] Firstly, Ms. Gaugler has no prior criminal record.

While I accept that, I think its mitigating effect is tempered somewhat by the fact that it was her unblemished record which no doubt played a

part in the position she achieved with the Diamond family. The comments noted earlier of Mr. Justice Robertson in the Spiller case are applicable . [132] Second, Ms. Gaugler pleaded guilty at a very early opportunity in the proceedings and by doing so, saved the court the time and expense of what would have been, no doubt, a lengthy trial as well as sparing the witnesses from the necessity of testifying. Her guilty plea is her public acknowledgment of taking responsibility for her actions.

That said, I bear in mind the Court’s comments in the Spiller case on this point which I consider applicable. [133] Third, once the thefts were discovered, Ms. Gaugler cooperated with the Diamonds’ lawyer. She acknowledged under oath at examination for discovery the thefts. She realized, to the extent she could, any assets which she had and paid those funds to Mr. Diamond and Mrs. Franks. She consented to judgment in favour of Mr. Diamond for the funds not already repaid.

By doing so, she saved time in not only the civil courts but also the criminal courts. [134] Fourth, albeit practically speaking, likely minimal and from a great distance, Ms. Gaugler nonetheless has the apparent support of Mr. Bowe’s family. It is a factor to which I give some weight.

[135] Fifth, Ms. Gaugler has undertaken counselling. However, any mitigating effect is tempered by the fact Ms. Gaugler did not startcounselling until the day before the sentence submissions in February, 2011. I have no explanation for that timing which is nearly 3years after the discovery of these thefts. [136] Sixth, through counsel, Ms. Gaugler has expressed her remorse and embarrassment. Her guilty plea and cooperation in the civilproceedings are evidence of that remorse. However, that does not end the matter. [137] In Sentencing, (seventh edition), by Clayton C.

Ruby, C.M., et al, the learned authors, citing R. v. Anderson, (BC CA), [1992] B.C.J. No. 1580 (B.C.C.A.) at pages 232 - 233, state as follows: “An otherwise fit sentence may be reduced if the court is satisfied that the steps taken by the offender represent a genuine turning awayfrom what brought the offender to court in the first place.

It all depends on what is meant by “remorse”: “Insofar as it might be suggested that the court should regard those who come before it in a submissive or contrite manner as deservingof more lenient treatment than those who accept their predicament with whatever fortitude they are able to summon, there would be littlein this factor which could assist the sentencing judge.

But to the extent that an accused person is able to demonstrate that he or she has,since the commission of the crime, come to realize the gravity of the conduct, and as a result has achieved the change in attitude orimposed some self discipline which significantly reduces the likelihood of further offending, the existence of remorse in this senseobviously has much importance.” [emphasis added] [138] That said, in my view, the real issue is whether Ms. Gaugler has genuine insight into what caused her behaviour such that shecan ensure, through counselling and other rehabilitative means, it does not happen again.

While one may be remorseful, without insightinto what caused the illegal behaviour in the first place, the likelihood of such illegal behaviour re-occurring is heightened. [139] The Crown submits the pre-sentence report suggests Ms. Gaugler has very limited insight into her actions; that she exhibitedsome evasiveness and lack of understanding as to why she committed these thefts. I agree with that assessment. For example, accordingto Ms. Prynn, the author of the pre-sentence report, Ms. Gaugler initially claimed she used the stolen funds to provide basic support toher family.

It was only later she admitted to spending the funds on vacation, jewellery and expensive clothing. Moreover, Ms. Gauglerwas unable to provide any explanation or insight into her actions; she was evasive when asked to account for the funds. [140] Another very troubling aspect of this case linked to this issue is the fact Ms. Gaugler appears to rationalize her actions as to whatoccurred. For example, she told Ms.

Fusco, “I knew I was doing the wrong thing....She added it was “easy to do” and also there was anhonest side to her as she only took from individuals and not the company.[emphasis added]” [141] I consider this to be a rationalization of the worst order. Ms. Gaugler seems to suggest that large scale thefts are more readilyexcused if the victims, as here, are people of abundant financial means such as Mr. Diamond and Mrs. Franks. In my view, the factWest Coast and its employees may not have been or were not financially harmed misses the mark. The fact remains Ms. Gaugler’svictims, Mr. Diamond and Mrs.

Franks, were betrayed in the worst way as a result of Ms. Gaugler’s actions. They had both welcomedher into their family sphere. Ms. Gaugler was far more than an employee to them; she was a very trusted family friend. They entrustedher with their family needs, including Mrs. Franks’ needs. That Mr. Diamond and Mrs. Franks may not have been as economicallyharmed as individuals of much lesser financial means does not make these relentless thefts any less blameworthy. [142] This is not a victimless crime or one of lesser proportions as Ms. Gaugler seems to have suggested. Ms.

Gaugler’s unrelentingtheft of funds from Mr. Diamond and Mrs. Franks monies appear to have affected them far more on an emotional level as opposed to afinancial one. However, that does not diminish in any way Ms. Gaugler’s moral culpability. She should not be heard to say that becauseMr. Diamond and Mrs.

Franks can better afford the financial losses than others that then should result in her receiving a more favourablesentence than if the victims of her relentless thefts had been impacted more unfavourably financially. [143] The defence submits the Court ought to consider that the Diamond family is not seeking retribution; Mrs. Diamond does notseek jail. While that is likely a testament to their gracious and forgiving spirit, that is not a chief factor for me to consider. The case lawis absolutely clear the most pressing sentencing consideration is general deterrence.

The message must be sent to others who mightconsider committing such crimes that they will not be tolerated. That message is conveyed, in a case of this magnitude and breadth ofgreed, by the imposition of a significant period of jail. [144] Further, as the authors of the Assessment state, accurately in my view, Ms. Gaugler clearly harbours resentment and animositytoward Mr. Diamond. Hopefully, any continued counselling may help Ms. Gaugler understand and deal with those destructive emotionsin a far more legitimate and productive manner so that her pattern of criminal behaviour does not repeat itself again.

Until that occurs, Iagree with the Assessment that she remains at an elevated risk to re-offend. [145] Moreover, I consider Ms. Gaugler’s moral culpability to be relatively high in this case given the pattern of concealment sheemployed, the betrayal of trust of both Mr. Diamond and Mrs. Franks, as well as the amount stolen over a very long period of time. Hermoral culpability is heightened by the fact she has rationalized her actions. Further, and of great concern, these thefts are unexplained byMs. Gaugler’s psychological state at the time or by other factors then operating in her life.

Indeed, inexplicably, the Assessment testsindicate Ms. Gaugler has a normal mood in the face of these proceedings where she is facing a significant period of jail. [146] Finally, let me turn to what is essentially the bedrock upon which the defence has constructed its case to argue Ms. Gaugler’ssituation is such that there are extreme mitigating circumstances which could result in the consideration of a conditional sentence: themedical condition of Mr. Bowe.

Admittedly, this is a very difficult aspect of this sentencing because, like the accused in the Kristensencase, the sentence which I impose today will have an significant impact on both Mr. Bowe and William, their son. [147] It is important to note the following. [148] Firstly, defence counsel submits the increased cost of care to Mr. Bowe which the state would have to incur if Ms. Gaugler isincarcerated is a relevant sentencing consideration for the Court to consider. Mr. Rowan makes this submission without presenting any

legal authority. I am not aware of nor has the Crown drawn to my attention, which it must, any authority which suggests such a consideration is or could be relevant in the circumstances. [149] Second, while the court imposed a conditional sentence in the Bunn case where Mr. Bunn’s disabled wife and son were dependant on him as both a caregiver and financial provider, the amount involved was significantly less than the amount which Ms. Gaugler stole. General and specific deterrence concerns were likely met through the disbarment of Mr.

Bunn from the practice of law. [150] In fact, there are many authorities before this court where the accused person had dependent family yet that factor was not sufficient to overcome the imposition of a conventional jail sentence where the amount of money stolen, as here, was significant (see: R. v. Kristensen, R. v. P.T., R. v. Neuenfeldt, for example). [151] Third, as the Crown points out, Mr. Bowe had already been diagnosed with myotonic dystrophy when Ms. Gaugler started to steal from Mr. Diamond and Mrs. Franks. It is true Mr. Bowe and William have also become innocent victims of Ms.

Gaugler’s rampant and abundant greed. I associate myself with the view expressed by my brother judge Bowden (now Mr. Justice Bowden), in the Kristensen case in relation to this issue. “The effect of incarceration on family members is something else Ms. [Gaugler] should have considered before embarking on [stealing these funds].” [152] Only Ms.

Gaugler can ever know or explain why she was prepared to and risked the welfare and wellbeing of her husband and son for her greed. [153] Moreover, I adopt the words of my former brother judge Bowden as follows: “In the final analysis, in my view, the societal objectives set out in the Criminal Code of denouncing this type of crime and deterring others from committing a crime of this magnitude outweigh the benefits to society of allowing [Ms.

Gaugler] to remain in the community.” In any event, to the extent it may have any relevance to the issue, I also agree with the Crown’s submission it appears likely, based on the medical information, that Mr. Bowe’s deteriorating medical condition will soon eclipse Ms. Gaugler’s ability to care for him. Conclusion [154] Therefore, I find Ms. Gaugler’s personal circumstances are not sufficiently mitigating to bring her case within a sentence range of 2 years less a day such that a conditional sentence could be considered. I say that having considered all relevant senten

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