R. v. Klyne Date:, 2017 BCPC 26

Citation: R. v. Klyne Date: 20170131 2017 BCPC 26 File No: 243042-1 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA (Criminal Court) REGINA v. SHIRLEY KLYNE REASONS FOR SENTENCE OF THE HONOURABLE JUDGE M.F. GIARDINI Counsel for the Crown: K. Marks Counsel for the Defendant: S. Hutchison Place of Hearing: Vancouver , B.C. Date of Hearing: December 2, 2016 Date of Judgment: January 31, 2017

INTRODUCTION [ 1 ] On September 19, 2016, the accused, Shirley Maureen Klyne, elected trial before a Provincial Court Judge and pled guilty to one count of theft over $5,000 from the BC Credit Union Employees’ Pension Plan #100068064, contrary to s. 334 (

a) of the Criminal Code . The amount stolen was approximately $282,000. ISSUES [ 2 ] The general issue that arises in this case, as in all sentencing cases, is the determination and imposition of a fit sentence on Ms. Klyne in the specific circumstances of this case. The specific issue raised by the parties is how that sentence, once imposed on Ms. Klyne, ought to be served. As will become evident in the review of the background circumstances, the offence in question took place between 2010 and the end of 2012.

Accordingly, the amendments of November 2012 to s.742 of the Criminal Code limiting the availability of conditional sentences in certain circumstances do not apply retroactively in this case. [ 3 ] The Crown submits a period of imprisonment in a correctional facility is appropriate. In particular, it submits I should sentence Ms. Klyne to 18 months in jail and place her on probation for one year once she has served the jail sentence. The Crown also seeks a restitution order and a DNA order. [ 4 ] Ms.

Klyne submits that in all the circumstances I should impose a conditional sentence; namely, a jail sentence served in the community rather than a jail sentence served in a correctional facility. She takes no issue with the length of the sentence or the imposition of a probation order and a restitution order. However, she disputes the need for an order to provide a DNA sample in the circumstances of her case. BACKGROUND CIRCUMSTANCES OF THE OFFENCE [ 5 ] The Crown provided the Court a detailed written submission setting out background information regarding Ms.

Klyne’s actions and the investigation that followed the discovery of the thefts. I have relied on that written submission in setting out the background circumstances below. Defence counsel, in the main, did not raise any issues regarding the Crown’s recitation of the background circumstances regarding the offence. Those instances where he did so are noted accordingly.

Employment at CCU [ 6 ] The accused worked for Central 1 Credit Union (“CCU”), an organization which provides financial products, investment banking services, payment processing services, and direct banking services to member credit unions in British Columbia and Ontario. CCU has its head office in Vancouver, British Columbia. During the time period covered by the offence in this case, CCU administered a pension plan called the BC Credit Union Employees’ Pension Plan (“the Pension Plan”).

The persons covered by the Pension Plan were current and retired employees of certain credit unions in British Columbia that had agreed to participate in the Pension Plan. [ 7 ] Ms. Klyne was employed by CCU since 1986. She stopped actively working at CCU in June 2013 when she began receiving disability benefits under her employment benefit plan. However, she continued to be an employee until the age 65 when she retired. During the time period covered by the offence, she was the Senior Pension and Benefits Coordinator for CCU. As such she had direct access to the Pension Plan trust account. Additionally, Ms.

Klyne had access to the computer system used by CCU as well as computer access to the employees’ benefit system and the Pension Plan computer program. [ 8 ] Ms. Klyne’s duties as the Senior Pension and Benefits Coordinator for the CCU included the following: administering pensions for retired and current employees of the participating credit unions, administering benefits for retired and current employees of the participating credit unions, and managing dormant pension accounts of former credit union employees who no longer contributed to the Pension Plan. Discovery of the thefts [ 9 ] In 2014 Ms.

SP, a former employee of Envision Credit Union (now First West Credit Union), made an inquiry about her pension. She spoke to a CCU pension administrator. Ms. SP was told that, according to the information in CCU’s computer system, her pension account entitlement had been transferred to her RRSP account at Vancity Credit Union (“Vancity”) in 2012. Ms. SP did not have any accounts at Vancity and she had never received her pension entitlement. [ 10 ] The CCU pension administrator obtained additional information about Ms. SP’s pension, including a cheque dated November 21, 2012, which showed that $19,104.50 from Ms.

SP’s pension account had been deposited to Vancity account #549907. The CCU pension administrator found other documents including a Pension Plan election form which had apparently been signed by Ms. SP. The election form is a document used by the Pension Plan which allows former employees to access their pension funds and transfer funds that are not locked-in to an RRSP account. Ms. SP said the signature on that election form was not her signature. [ 11 ] The CCU pension administrator also obtained a Canada Revenue Agency (“CRA”) T2151 form.

This is a form issued by the CRA which allows a transfer of funds from a registered pension plan to an RRSP. That form had been completed and contained Ms. SP’s pension plan account number, her social insurance number, and the number of a Vancity RRSP account. Ms. SP said that account did not belong to her. [ 12 ] It was later determined that the cheque dated November 21, 2012, in the amount of $19,104.50 was deposited into an RRSP account at Vancity which was in the name of Ms. Klyne. It was also determined there were other transfers from the Pension Plan, in addition to the transfer from Ms.

SP’s pension account, that had been made and directed into Ms. Klyne’s RRSP account at Vancity. Investigation by CCU security

[ 13 ] The CCU security and loss prevention team became involved and conducted an investigation. They subsequently notified the Vancouver Police Department of the thefts. The CCU investigation included an internal audit, a forensic audit of Ms. Klyne’s computer workstation, an analysis of CCU’s online administrative computer system and an analysis of CCU documentation pertaining to a number of its Pension Plan holders. As a result of the CCU investigation, the following information was discovered. [ 14 ] Between August 20, 2010, and December 21, 2012, Ms.

Klyne transferred a total of $282,264.42 from 15 employee pension accounts into her own accounts at Vancity. The transfers were made using two methods; namely, the double spend method and the single spend method. [ 15 ] The double spend method was used in relation to six Pension Plan holders’ accounts which had previously been paid out in full to the pension account holders. Ms. Klyne was able to duplicate the final account balance in those pension accounts and make unauthorized withdrawals of funds by cheque and deposit the cheque into her own Vancity accounts.

The six Pension Plan holders, the date, and the amount taken using the double spend method are as follows: KC August 20, 2010 $39, 018.45 NS August 20, 2010 $30, 305.13 CF September 10, 2010 $27, 388.14 JS March 16, 2011 $15, 585.72 DS June 28, 2011 $16, 703.51 CR June 28, 2011 $12, 083.76 [ 16 ] The single spend method was used in relation to nine Pension Plan holders’ accounts. Those accounts were dormant and had no withdrawals. The pension fund amounts were withdrawn without authorization by Ms. Klyne and transferred to her own Vancity accounts.

The nine Pension Plan holders, the date, and the amounts taken using the single spend method are as follows: JD December 21, 2010 $23, 972.14 CK December 21, 2010 $23, 300.26 MQ April 13, 2011 $20, 025.48 RG June 26, 2011 $12, 268.80 KS July 25, 2012 $7, 990.64 AH August 23, 2012 $15, 852.50 SP November 21, 2012 $19, 104.50 JM December 19, 2012 $8, 482.42 LT December 19, 2012 $10, 182.97 [ 17 ] The CCU investigation established that Ms.

Klyne had changed the demographic information listed for the affected pension holders including: the contact name of the pension holders’ employer, the city, the province, the address, and the postal code. These changes permitted Ms. Klyne to make the transfers from the pension holders’ account to her own accounts. Ms. Klyne’s interview and statement [ 18 ] Ms. Klyne was interviewed by the CCU in August 2014. She was co-operative and stated that:

a) She transferred unauthorized pension funds to her benefit.

b) She paid taxes on the RRSPs she cashed.

c) She made payments to her credit cards.

d) She helped family members by giving them some of the pension funds.

e) She blamed her actions on the harassment she received from a supervisor.

f) Vancity account #549907 was her mortgage account.

g) She made an offer to pay the CCU monthly payments. [ 19 ] In addition to providing a statement when interviewed by the CCU, Ms. Klyne also provided a written statement. In that statement she wrote:

a) She had transferred unauthorized pension funds to an RRSP in her name.

b) She offered to reimburse the funds.

c) She was bullied by a manager. [ 20 ] After being interviewed by the CCU and providing a written statement, there was also a teleconference call between Ms. Klyne and the CCU. During that call Ms. Klyne said that :

a) She mainly used the most recent pension accounts.

b) Her fraudulent activity started in the last five years of her employment with the CCU.

c) She carried out a few frauds a year.

d) She chose “unlocked pension” holders’ accounts which already had been paid out. These were accounts of former employees who were not making contributions to their pension or receiving employer contributions. Accordingly, they were able to apply to CCU to transfer their pension into an RRSP.

e) Some of the pension holders’ accounts had already been paid out.

f) Some of the pension holders’ accounts had not been paid out.

g) She reconciled funds at year-end by changing them back to cover the loss.

h) The system was too easy as it was not audited. [ 21 ] The CCU investigation showed that Ms. Klyne took a number of steps to make the unauthorized withdrawals; namely:

a) She used a CCU computer program called Pension Path Canada to identify dormant unlocked pension accounts.

b) She manipulated the pension account holders’ profiles and account data.

c) She forged the election form to request the transfer of funds from the pension holders’ accounts to her personal accounts at Vancity.

d) She forged CRA form T2151 to direct pension funds to her Vancity accounts.

e) She processed the files and forwarded unendorsed cheques and stubs to CCU’s team leader of pensions and benefits for signature.

f) She deposited the unendorsed cheques into one of her Vancity accounts. The VPD investigation [ 22 ] In addition to the investigation carried out by the CCU, the Vancouver Police Financial Crime Unit also conducted an investigation. This included a review of 15 separate cheques drawn from the CCU’s Pension Plan account. The police obtained production orders and discovered that Ms. Klyne had two accounts at Vancity. However, the funds that had been transferred to those accounts were actually held in four separate RRSP accounts in Ms. Klyne’s name. See the chart below:

A) RRSP 50001498

B) RRSP 50001567

C) Chequing 651828 Husband co- holder

D) Visa 4789 0111 0104 2119

E) Visa 4789 0109 9999 2165

F) RRSP 5375329

G) RRSP 5375347

H) Chequing 549907 Son co-holder $96,711.72 from 3 of 15 cheques $47,272.40 from 2 of 15 cheques The two total amounts from RRSP A & B minus tax $100,816.63 Paid to that Visa card $65,125.00 Paid to that Visa card $40,610.89 $122,694.58 From 9 of 15 cheques $15,585.72 From 1 of 15 cheques The two total amounts from RRSP F & G minus tax $97,710.00 [ 23 ] The police interviewed Gerald Klyne, Ms. Klyne’s husband. He was shown as a co-account holder on Vancity account #651828. Mr. Klyne told the police he was unaware his wife stole pension funds. He said his wife did all the banking.

He had no knowledge of the day-to-day activity in the account. His wife did not tell him about this matter involving CCU. His wife has a gambling problem. She is a diabetic and in poor health. Between 2010 and 2013 he worked out of town. [ 24 ] The police also interviewed Robert Klyne, Ms. Klyne’s son, as he was shown as a co-account holder on Vancity account #549907. Mr. Klyne told the police that account was set up with his mother in April 2001. The account was for the purchase of his mother’s house in the Guilford area of Surrey. He assisted his parents with payments for the house.

He did not receive any funds when the house was later sold. He had no knowledge of his mother’s activities at CCU. CCU actions after discovery of fraud [ 25 ] The CCU made payments to each of the 15 pension account holders who were the victims of Ms. Klyne’s thefts. Accordingly, they were made whole. The CCU had insurance coverage and the funds it paid to the 15 pension account holders were reimbursed save for a deductible of $28,226.44.

BACKGROUND CIRCUMSTANCES OF MS. KLYNE [ 26 ] Ms. Klyne was born in the United States in 1950 and returned to Canada with her parents, who were Canadian citizens, when she was still a young child. She lived in the Lower Mainland and graduated from a Vancouver high school in 1968. Following graduation she worked as a clerk in a BC liquor distribution centre. She subsequently moved to Prince George and worked with Co- operators Insurance. She continued to work with Co-operators Insurance when she returned to Vancouver. In 1986 she began working with the predecessor of CCU and continued working there for 27 years.

At some point she stopped working because of a back problem and received disability benefits through her employer’s disability benefit plan until January 2015, her 65 th year, when she retired. [ 27 ] Ms. Klyne has been married to her husband since 1970. They have two children, a son and a daughter who are now adults, and four grandchildren. Ms. Klyne and her husband owned a home in Surrey which they sold in 2013. They subsequently bought a trailer where they currently live. They pay $860 per month for pad rental. She was first interviewed by the CCU in August 2014.

She admitted to the thefts when she was confronted by her employer. She was not charged until early July, 2016. She has been on bail, albeit not onerous bail, since that time. Ms. Klyne’s general health [ 28 ] At the sentencing hearing, Ms. Klyne submitted a letter from her family doctor and a record of medications she is currently taking. The information she provided sets out Ms. Klyne has the following health conditions:

a) uncontrolled diabetes which requires that she self-inject insulin on a daily basis;

b) macular degeneration which requires visits to an ophthalmologist every four or five weeks to get an injection which controls bleeding in the back of her eye and allows her to see;

c) a congenital hole in her heart which was being investigated at the time of the sentencing hearing;

d) back surgery in 2009 which required fusion of several vertebrae;

e) removal of kidney cancer which may have left scar tissue on the kidney;

f) she is not able to walk long distances and uses a scooter to get around. [ 29 ] Ms. Klyne is also taking various medications including: medication for diabetes, medication for pain management, medication to thin her blood, medication for high blood pressure, and medication for high cholesterol. Pre-sentence psychological assessment [ 30 ] In preparation for the sentencing hearing, Ms. Klyne was seen by a psychologist on November 10, 2016, at her lawyer’s request. The purpose of the referral to a psychologist was to determine whether Ms. Klyne suffered from any psychological issues at the time of the offence.

Dr. Arthur Lindblad, a registered psychologist, undertook a psychological assessment which included a 3½ hour interview with Ms. Klyne, psychometric testing, a review of Ms. Klyne’s letter to the CCU dated August 14, 2014, and a review of the report to Crown counsel dated May 24, 2016. Dr. Lindblad’s assessment was filed by the defence at this sentencing hearing. I have read the report in its entirety but have only summarized some, not all, of Dr. Lindblad’s observations. [ 31 ] Ms. Klyne provided Dr. Lindblad her account of the offence.

She told him that before beginning to defraud any money, she had approached her supervisor on several occasions and told him about the inadequacies of the system and how open the system was to fraudulent activity. She noted her advice went unheeded opening the door for her to engage in defrauding her employer of thousands of dollars. [ 32 ] During her interview with Dr. Lindblad, Ms. Klyne attributed her criminal activity to two primary factors. One was that she had a long-standing disregard for “Farouk”, one of her supervisors.

She developed considerable animosity towards him over the course of approximately 15 years when he was her supervisor. She recounted several incidents to Dr. Lindblad concerning her supervisor. She told Dr. Lindblad she felt guilty toward her employer but she hoped her supervisor would get in trouble over her actions. She said she hated him so much and wanted to get back at him. [ 33 ] Dr. Lindblad quoted from her letter of August 14, 2014 to the CCU. In that letter Ms. Klyne wrote that one of the reasons “for doing this” was that she felt bullied by her manager and this was a way of getting back at him. Dr.

Lindblad quoted from the August 2014 letter: “My reason for doing this was basically I felt bullied by my manager which in itself doesn't mean I should have done this but it was a way of getting back at him. Farouk would torture me mentally any way he could, I did have several altercations with him over the years as did other employees no (one) has been able to help us with this”. [ 34 ] In his report Dr. Lindblad discussed this factor and his impression. He wrote: Although Ms.

Klyne states that “I shouldn't have done it", this is almost invariably mentioned within the context of "I hate to say it was revenge on my boss", or "I knew the gambling thing was wrong, I knew using all this money, I knew taking all this money was wrong, but in the back of my head I was saying, hey big guy, I told you the system was wrong”. Even at the end of the interview when Ms. Klyne was asked if she wanted to add anything she stated, “I don't have anything to add except this really went against my boss, but I know it was him and not me.” [ 35 ] The second factor, which Dr.

Lindblad said was “perhaps the most salient factor that contributed to Ms. Klyne’s criminal offending”, was the development of a gambling disorder. Ms. Klyne told Dr. Lindblad she started gambling before her surgery in 2009 but after the surgery her gambling intensified to the point that she was going once a week. Apparently the Klynes had agreed upon a limit they would spend before going to the casino. However, Ms. Klyne told Dr. Lindblad she was able to keep her husband in the dark

about the nature of her gambling because she maintained all of the financial records for the family. She would also make clandestine trips to the ATM when she was in the casino and withdraw money from her Visa account. Ms. Klyne told Dr. Lindblad she had no actual recollection of the amount of debt she incurred or the total amount she embezzled from her employer. [ 36 ] Ms. Klyne also completed the Personality Assessment Inventory when she met with Dr. Lindblad on November 10, 2016. This is a self-report measure of adult personality. Dr. Lindblad noted the results of the psychological test indicate that Ms.

Klyne may not have been entirely forthcoming in her responses. Some of her responses pointed to “positive impression management”. Individuals with similar profiles tend to deny common shortcomings that most individuals would more readily admit. Dr. Lindblad noted this result was not entirely surprising given the context of the assessment. However, he noted it raised concern regarding the overall validity of the test profile and would “dictate caution” in the

interpretation of the remaining clinical scales. [ 37 ] He noted that even taking into consideration the tendency to underreport there was no suggestion of the presence of major psychopathology. However, there was evidence of a focus on health concerns. Dr. Lindblad noted that while Ms. Klyne tended not to endorse cognitive and affective symptoms of depression, she reported a number of physical symptoms associated with depression. He also noted it is common for a depressed mood to develop under persistent health issues. Furthermore, he noted that during the interview Ms.

Klyne told him she had contemplated suicide in the past. Her test results were consistent with those claims. Dr. Lindblad noted, given Ms. Klyne’s reported health concerns and “her current predicament”, thoughts of suicide would not be entirely unexpected, but the risk of suicide seems to be relatively low at this time. [ 38 ] In terms of the gambling disorder, Dr. Lindblad opined “it would seem likely” that during the time Ms. Klyne was in recovery from surgery in 2009, she spent more time in the casino accruing debt. Then, upon her return to work in 2010 she began to embezzle money to repay her gambling debt.

He further opined that avoiding the detection of her fraudulent activity allowed her to continue gambling and embezzling money. He acknowledged it was unclear why the embezzlement (and probably the gambling) stopped in December 2012. However, he noted that in early 2013 Ms. Klyne was diagnosed with kidney cancer. He also noted Ms. Klyne told him she could not recall when she stopped gambling but said she had not been to a casino since the fraudulent activity at CCU came to light in the summer of 2014. [ 39 ] In his report, Dr. Lindblad pointed out Ms.

Klyne had no actual recollection of the number of times she was involved in fraudulently transferring money into her personal RRSP accounts from the CCU Pension Plan accounts. She claimed that until she was told about the amount stolen by the CCU, she had no idea how much money she had taken from the pension accounts. Dr. Lindblad wrote that Ms. Klyne denied using any of the money taken from the CCU pension accounts for payment of other debts. She acknowledged she used the money for gambling and gambling debts. [ 40 ] In his conclusions, Dr. Lindblad wrote that during the period 2010 to 2012, Ms.

Klyne met the criteria for a diagnosis of gambling disorder - mild severity as described in the Diagnostic and Statistical Manual of Mental Disorders – Fifth edition. This appears to be based on the self-reported narrative given by Ms. Klyne about the onset of her gambling, the time frame when she gambled and so on. Dr. Lindblad noted the disorder appeared to arise during a stressful period in her life and he opined that “gambling may have provided her from [sic] solace from this distress.” [ 41 ] Dr.

Lindblad noted it is unclear what happened at the end of 2012 that resulted in the discontinuation of her illegal activity at CCU. He opined “it would seem reasonable to assume” that it was around this time she stopped going to the casino. He acknowledged Ms. Klyne was not clear about the last time she went to a casino. Dr. Lindblad said, based on the information available to him (largely from Ms. Klyne), it appeared “that the gambling disorder was quite situation specific and limited only to those times that Ms. Klyne went to a casino”. [ 42 ] In addressing whether any treatment should be undertaken by Ms.

Klyne, Dr. Lindblad noted it was quite clear Ms. Klyne had adopted and continued to maintain the process of justification in explaining her actions. In particular he wrote: “She continues to project much of the blame for her difficulties on her supervisor. Although Ms. Klyne says she accepts responsibility for her actions, this tends to be a somewhat superficial assertion, as it takes no prodding for her to quickly digress into a discourse on the inadequacies/fault of her supervisor, and how she simply wanted to get back at him.” [ 43 ] Dr. Lindblad was also asked to comment on whether Ms.

Klyne poses of risk of committing such offences in future. He wrote that in his opinion the risk of “Ms. Klyne offending in a similar manner is minimal”. He opined it appeared the crimes she committed were crimes of opportunity during a period of financial stress brought about by an evolving gambling disorder. Therefore, with the gambling disorder apparently in remission and in the absence of opportunity, risk to re-offend in a like manner is negligible. In closing on the issue of risk, Dr.

Lindblad stated: “Although in my opinion the development of the gambling disorder does not relinquish one of personal responsibility, it does explain the emergence of a behaviour not previously observed”. Ms. Klyne’s address to the Court [ 44 ] Ms. Klyne addressed this Court as part of the sentencing hearing. She told this Court she was very moved when she read the victim impact statements. She feels sorry about what she put people through. She is sorry and remorseful. She did not want to hurt anyone. VICTIM IMPACT STATEMENTS [ 45 ] The Crown submitted eight victim impact statements for the Court’s review.

One impact statement was from CCU’s Director of Operational Risk. He noted Ms. Klyne’s actions affected the individual participants of the CCU Pension Plan, the employees of CCU, the board of trustees, and the organizations that constitute the insurer that covered the Pension Plan losses. [ 46 ] He noted that the individual participants in the pension plan (current or former employees of credit unions) felt increased emotional stress arising from the offence and more importantly the mishandling of their personal information.

Some of them noted additional concerns for the potential of future misuse of their personal information. Additionally, the employees of CCU who knew and worked with Ms. Klyne felt increased emotional stress associated with the offence and the ensuing investigation and the loss of trust

caused by Ms. Klyne’s actions. [47] The Director of Operational Risk noted the offence had a financial impact on CCU by way of direct financial costs associatedwith the investigation, the subsequent insurance claim, and the credit monitoring services that resulted in making the Pension Planholders whole. CCU also suffered indirect financial costs associated with the investigation of the fraud.

The offence had a directfinancial impact on the Master Bond Programme and the Stabilization Central Credit Union Programme in respect of the insurance claimpaid out to the affected Pension Plan holders. [48] The CCU was required to report the theft to the credit union system. Accordingly it affected the reputation of the CCU andcaused reduced confidence in CCU’s administrative capabilities.

As well, the offence had an impact on the reputation of the trustees ofthe Pension Plan and reduced the confidence of the members in the trustees’ oversight of management controls. [49] Seven of the account holders who were directly affected by Ms. Klyne’s fraud prepared victim impact statements. Rather thanreview those statements individually, I set out below an aggregate of the effect on these seven account holders. [50] The emotional impact described included:

a) a feeling of being victimized;

b) a violation of trust;

c) loss of trust in financial institutions and their ability to keep funds safe;

d) a feeling that nothing is truly safe in this world;

e) added concern and worry when asked to provide personal information;

f) feelings of stress and anxiety specifically related to identity theft;

g) fear that personal information and identity information may be used in the future or that there may be another occasion when theperson’s identity may be used in future for fraudulent purposes,

h) personal inconvenience caused by the events, including the time and effort spent dealing with credit reporting agencies, RevenueCanada, the RCMP, Vancouver police and so on;

i) personal inconvenience caused by additional vetting by financial institutions when requesting credit;

j) concern and worry about the potential impact on credit rating due to fraudulent activity; and

k) the pension holder who first discovered missing funds was particularly concerned that she was made to feel like she was the onewho was lying and had to prove her innocence. [51] The financial impact described included:

a) One of the victims indicated there was a loss of several hundred dollars tax for each year that the money had been held outside ofher account.

b) Several victims were concerned about how much interest may have been lost during the time the money was “missing” and theeffect this may have had on the value of the pension fund. POSITION OF THE PARTIES The Crown [52] The Crown relied on the following cases for guidance on various issues addressed in the sentencing:

a) Issue of the offender’s health – In R. v. Thomson (20 January 2005), Vancouver 155302-1-D (B.C.P.C.), the accused pled guiltyto fraud over 5,000 contrary to s. 380 (1) (

a) of the Criminal Code. The accused was branch manager of a Bank of Montreal. Therewere 87 fraudulent loans over a 10 year period totaling approximately $3.3 million. The bank’s actual loss was approximately $1.57million. In R. v. Samji (28 September 2016), Vancouver 232139 -1 (B.C.P.C.), the accused was found guilty of 14 counts of theft over $5,000contrary to s. 334 (

a) and 14 counts of fraud over $5,000 contrary to s. 381. She developed an investment opportunity scheme that waselaborate, deliberate and premeditated. She suffered from serious medical health issues including complications arising from amastectomy. She was 63 years old and had no prior criminal record. She was sentenced to six years on each of the fraud counts.

b) Issue of good character – In R. v. Spiller, (BC CA), [1969] 4 C.C.C. 211 (B.C.C.A.). a senior bank official stoleapproximately $500,000 from her employer over four and one half years. She pled guilty to the charge of theft under the Criminal Codeand was sentenced to three years imprisonment. The court held that previous good character was not a mitigating factor in circumstanceswhere her apparent good character enabled her to perpetrator crime. She was sentenced to six years imprisonment on the theft.

c) Issue of restitution – R. v. Nanos, 2013 BCCA 339. In that case the accused was convicted of arson. The trial judge sentencedthe accused to two years less a day imprisonment and ordered restitution of approximately $131,000. One of the issues was whether therestitution order was demonstrably unfit. The court reviewed the case law regarding restitution orders.

d) Issue of appropriate range of sentence/conditional sentence – In R. v. Dickens, 2003 BCSC 535, the accused, who was thedirector of finance at a hospital, pled guilty to theft of monies in the amount of approximately $173,000 contrary to s. 334 (a). Thescheme developed involved altering manual cheques. Between 1995 and 2001 he issued 52 manual cheques which he deposited into hisvarious bank accounts. The court noted the case law makes it clear that in circumstances where individuals who have abused position oftrust, general deterrence and denunciation are significant factors to be considered.

The fact an accused has no previous convictions fortheft is not a factor. Gerow J. noted that the British Columbia Supreme Court has consistently said general deterrence is of primeimportance in these types of crime because it is important for persons in business positions to know that there will be seriousconsequences if they misappropriate monies of innocent participants in the business ventures. The accused was sentenced to a term ofimprisonment for three years. In R. v. Reid, 2004 YKCA 4 (Y.C.C.A.), the accused, was a head cashier at a grocery store.

Between 1998 and 2001 she stoleapproximately $212,000 by essentially manipulating the end of day bank deposits. There were 277 separate acts of theft over the courseof three and one half years. The sentencing judge imposed an 18 months conditional sentence followed by two years’ probation. Onappeal, the court held that the imposition of a conditional sentence failed to give proper effect to the need for denunciation anddeterrence for this class of crime. The court believed that an appropriate sentence would have been in the range of two to three years.

However, because of intervening circumstances, the Court of Appeal imposed a sentence of 14 months incarceration. In R. v. Rinehart, 2004 BCPC 498 , 2004 BCPC 0498, the accused pled guilty of two counts of embezzling money from heremployer, a small business operating in Calgary. The accused was charged with using cheques that were forged and with theft of moneyover $5,000. The court was told the accused suffered from an active gambling addiction which had been fueled by deep-seateddepression that had been in existence for many years. The court declined to impose a conditional sentence order sought by the defence.

Instead, the accused was sentenced to two and one half years imprisonment. A stand-alone compensation order for approximately$293,000 was also issued. In R. v. Quinn (15 April, 2005), New Westminster 066517 – 2 (B.C.S.C.), the accused was found guilty of defrauding ICBC, her formeremployer, of approximately $424,000. The offences occurred over a period of four years from August 1996 to June 2000. The accusedcreated false authorizations to pay third parties for services rendered but the monies were eventually deposited into Ms. Quinn’s account. There were approximately 40 unauthorized cheques.

The court reviewed a number of cases provided by counsel and concluded that “incases such as this authority can be found for sentences ranging from less than 2 years, with a conditional sentence order, as much as fiveor six years’ incarceration.” A determination of the appropriate sentence in this case is therefore dependent upon an analysis of thetotality of the circumstances. The court concluded the general deterrence and societal condemnation demanded a significant sentence beimposed. Sentence less than two years was not appropriate. The accused was sentenced to three and one half years imprisonment.

Restitution order was also issued in the amount of approximately $424,000. In R. v. Elliott, 2010 BCPC 338, the accused, with the accountant and bookkeeper for a softball Association, pled guilty to stealingapproximately $406,000. She took the money over two and one half years and lost it all gambling at a casino. The issue in that case asin the case before me was whether a conditional sentence ought to be imposed instead of a term of imprisonment. The accused wassentenced to three years imprisonment. An order of restitution in the amount of approximately $406, 000 was also made. In R v.

Zolnasr, 2011 BCSC 1754, the accused was working as a sales manager in a car dealership pled guilty to fraud over $5,000. Hesold vehicles at auction below their expected sale price and concealed to the losses from his employer. The total loss sustained by thedealership was approximately $258,000. The accused was sentenced to 12 months incarceration. A restitution order of $77,000 was alsomade. In R. v. Dreger, 2014 BCCA 54, the accused, who worked as a bookkeeper for a small family construction company, pled guilty to fraudover $5,000. She appealed a five year sentence and restitution order imposed upon her.

She began taking small sums of money to payher personal expenses. In total she defrauded her employer of approximately $245,000 over a period of about seven years. The courtnoted that counsel had referred to a number of sentencing decisions from all courts in British Columbia. The court was provided withsentences within the range of three to five years. The court noted that while the offender in that case fit within the range, it would beincorrect to see this as an inflexible set of sentence. The Court of Appeal reduced her sentenced to four years.

That was in part donebecause the court found the sentencing judge began with the wrong premise and as a result did not give sufficient weight to the accusedguilty plea. The Court of Appeal did not disturb the restitution order made by the sentencing judge. [53] The Crown submitted that incarceration is appropriate in Ms. Klyne’s circumstances. It further submits that a conditionalsentence is not appropriate. The Crown also sought a restitution order for the full amount stolen and a DNA order.

As these offencesoccurred before the 2013 changes to the Criminal Code the imposition of a victim fine surcharge is not automatic. [54] The Crown said the aggravating factors in this case are the following: the length of time and the amount of the theft, the factthis was not an impulsive theft but one that was deliberate and premeditated, the fact that Ms. Klyne had to take a number of actions overa period of time in order to perpetrate the thefts and the fact she involved co-workers, albeit unknowingly, to assist her in perpetrating thethefts. [55] The Crown pointed out there is no question Ms.

Klyne took an amount of money and deposited into her accounts. The netamount that was used by Ms. Klyne, after federal tax was withheld when she withdrew the funds from her four RRSP accounts, was$198,526.63. The Crown asked me to look at the information provided at the sentencing hearing and to note that payments were made toher Visa accounts, to her chequing accounts, and according to the police, to her mortgage account (this is disputed by Ms. Klyne). [56] The Crown pointed out Ms. Klyne herself admitted to using money to make payments on her credit card and to help familymembers.

The Crown noted that attributing the money spent to specific items is not necessary. If all of the money was used, it is clearit was used for her personal benefit. The Crown acknowledged that Ms. Klyne claimed she had a gambling problem and she used a lot ofthe money she took from CCU to pay her gambling debts. The Crown emphasized that notwithstanding any gambling issue Ms. Klynemay have had, she used the money for her personal benefit. The Crown argued the theft in this case is aggravated because it was abreach of trust.

[57] The Crown acknowledged there are mitigating factors; namely, Ms. Klyne entered a guilty plea at a very early stage, Ms. Klynehas no criminal record, she admitted the crime to the employer and she cooperated with the CCU investigators and provided both oraland written statements. The Defence [58] The defence relied on the following cases:

a) In R. v. Proulx, 2000 SCC 5 , [2000] 1 S.C.R. 61, the Supreme Court of Canada considered the issue of conditionalsentences and set out, in detail, the principles to be considered regarding the application and imposition of conditional sentences.

b) In R. v. Bunn, 2000 SCC 9 , [2000] 1 S.C.R. 183, the Supreme Court of Canada considered the Crown’s appeal from adecision of the Manitoba Court of Appeal substituting a conditional sentence for a two-year penitentiary term imposed by the trial judge. The offender, a lawyer, converted trust monies received for the benefit of beneficiaries from the estates of six deceased persons. Theoffender was convicted of six counts of breach of trust and six counts of theft, albeit the theft charges were stayed pursuant to theprinciple set out in R. v. Kienapple, (SCC), [1975] 1 S.C.R. 729.

The Supreme Court of Canada upheld the ManitobaCourt of Appeal’s sentence noting it provided sufficient denunciation and deterrence and was not disproportionately lenient. It alsonoted that the ruin and humiliation the offender brought upon himself and his family, together with the loss of his professional status,could provide sufficient denunciation and deterrence when coupled with a conditional sentence of two years less a day with house arrest.

c) In R. v. Burkart, 2006 BCCA 446, the offender appealed her sentence of 18 months imprisonment, a probation order andrestitution for theft in excess of approximately $81,000 from a financial institution. The offender worked in a management position atTD Canada trust for over 15 years. She became involved with gambling in casinos. This led her into debt. She appealed her sentence onthe basis that she should have been granted a conditional sentence order. The Court of Appeal allowed the appeal and substituted aconditional sentence in place of the custodial sentence and deleted the probation order.

The court noted that the circumstances of Ms.Burkart’s case were such that a conditional sentence was the form of sentence that would best recognize the purpose of the legislativescheme.

d) In R. v. Dickson, 2007 BCCA 561, the offender, who worked as a bookkeeper for two businesses, pled guilty to two counts oftheft in an amount totalling approximately $147,000. She wrote 23 cheques, forged signing authority signatures and destroyed theoriginal cheques. She had a prior criminal record. At the time the offences were committed, she was suffering from a bipolar disorderalthough she later began treatment for that disorder. The court found several factors in the sentencing judge’s approach to sentencing tobe an error.

However, the court noted that in cases of serious fraud or serious theft where there are extreme personal mitigatingcircumstances, the courts have held that the principle of general deterrence can be satisfied by a conditional sentence. The courtconcluded that in Ms. Dickson’s circumstances, a sentence of imprisonment was unfit. In reaching that conclusion, it took into accountthat she was mentally ill when the offences were committed and the mental illness was a cause for committing the offences. It alsonoted she had pled guilty, had made restitution, and had taken appropriate medical treatment.

In those circumstances, the court foundthat the principle of general deterrence and the ends justice were met by a conditional sentence order.

e) In R. v. Kratky, [1997] B.C.J. No. 3167, the offender was a manager and bookkeeper for three dental clinics. She pled guilty todefrauding those dental clinics of approximately $436,000. In the guise of paying legitimate clinic accounts, she used cheques to transfermoney to herself. She also altered the payees on some cheques in order to deposit money to her own credit. She manipulated financialbooks and records in her control to hide her misappropriations. After the discovery of her fraud, she was hospitalized for depression andremained deeply depressed. Upon pleading guilty to three counts of fraud she was sentenced to 18 months to be served by way of aconditional sentence.

f) In R. v. Potts, 2011 BCCA 9, the Crown appealed a sentence imposed on the offender following his guilty plea to conspiracy toproduce and traffic in methamphetamine, two counts of trafficking in cocaine, and unlawful possession of proceeds of crime. In thatcase, the court commented on an offender’s poor health as a factor in sentencing. The sentencing judge in Potts had considered hisparticular health problems would make serving his sentence more onerous than a healthy prisoner and as a result reduced Mr. Pottssentence by six months.

The court noted it is relatively rare for the health of an offender to be taken into account in sentencing. However, there are cases in which an offender’s health may be relevant. In general, however, these matters are best considered as partof the overall circumstances of the offender rather than as a basis for deducting time from an otherwise appropriate sentence. There arecases in which an otherwise fit sentence may be reduced on compassionate grounds, but such reduction must be based on current, clearand convincing evidence.

g) In R. v. McLean, 2016 BCSC 2191, the sentencing judge found there was uncontroverted evidence regarding the offender’smental health. He concluded that what occurred in this case was an isolated series of events by a woman with no previous criminalrecord who had developed a gambling addiction at a time when her mental illness was undiagnosed. Citing the case of R. v.

Horvath, (SK CA), [1997] 8 W.W.R. 357, the sentencing judge noted that the courts have recognized that gambling addictionsare a mental disorder where the person does not have the same power of control over his or her acts as someone who does not suffer fromsuch an affliction. The sentencing judge noted this was a difficult case. He described it as “a borderline case”. He concluded that theprinciples of sentencing, including denunciation and deterrence, would be achieved by the imposition of a sentence of two years less aday served under a conditional sentence.

h) In R. v. Hill,

(2016) B.C.J. No. 2306, the offender pled guilty to stealing various amounts of money, totalling approximately$282,000, from his employer, a business that provided fundraising services to various not-for-profit charities. The offender used hissigning authority to divert funds from corporate accounts to his personal accounts. The offender suffered from a bipolar disorder and wasprescribed medications. During the time that the thefts took place he had developed an addiction to sex, gambling and alcohol. He usedthe money he stole from his employer in part to maintain these addictions.

In that case, the Crown and defence agreed that despite theaggravating circumstances of the offender’s crimes, his bipolar disorder warranted consideration of the jail sentence of less than twoyears. Accordingly, the court considered whether the offender should be allowed to serve that sentence in the community. Thesentencing judge concluded, on the theft, that a sentence of two years less a day was appropriate, and on the forgery a sentence of six

months to be served concurrently with the theft sentence. The sentencing judge took into account the circumstances of the offender’soffending, and the fact the offender committed the offences while suffering a bipolar disorder which was causally linked to his offending,plus other mitigating factors and allowed the offender to serve his sentence in the community under a conditional sentence order. [59] Defence counsel reviewed Ms. Klyne’s personal history and her medical problems. He pointed out this matter has been hangingover Ms. Klyne since her initial interview with the CCU in August 2014. [60] Ms.

Klyne instructed defence counsel that she used the money to pay for a gambling problem she developed. She told him shewould get cash advances on her credit card and use the money for gambling. Defence counsel acknowledged Ms. Klyne clearly used themoney she took from CCU for personal purposes. She dissipated the money through the process of gambling. However, defencecounsel advised the Court that Ms. Klyne did not use any of the money she took from CCU to pay off her mortgage.

On this point Ms.Klyne disagrees with the Crown’s submission that she did so. [61] Defence counsel relied on the pre-sentence psychological assessment. He noted that although Dr. Lindblad identified twofactors that contributed to the fraud, he identified the “most salient” factor as being the development of a gambling disorder. Thedefence noted the genesis of Ms. Klyne’s gambling disorder is unknown. However, he urged the Court to accept Dr. Lindblad’sconclusion that Ms. Klyne suffered from a gambling addiction at the relevant period of time. [62] Defence counsel acknowledged Ms.

Klyne told both the employer and Dr. Lindblad that her actions were related to thedisregard she had for her immediate supervisor. He acknowledged that Dr. Lindblad’s report referred to a long-standing disregard andconsiderable animosity between Ms. Klyne and her supervisor. In responding to questions from the Court, defence counsel noted that atthe time Ms. Klyne saw her supervisor’s behaviour as part of the reason she did what she did. She had a supervisor who was bullyingand harassing. Defence counsel candidly acknowledged the bullying and harassing was not aimed at Ms. Klyne but was aimed at others.

However, it was very upsetting for Ms. Klyne when she saw others being harassed and bullied in the workplace. [63] Defence counsel submitted Ms. Klyne’s appreciation of the factors involved in the fraud has evolved over time. She nowrecognizes it is not appropriate to point to her supervisor and his relationship with her as justification for her actions. She recognizes shehas to take full responsibility for what she did. She also recognizes she cannot ignore and deflect her responsibility to others.

APPLICABLE LEGAL PRINCIPLES General Principles of Sentencing [64] The principles of sentencing which evolved in Canadian common law are now codified in the Criminal Code.

Section 718 ofthe Code provides that the fundamental purpose of sentencing is to contribute for respect for the law and the maintenance of a just,peaceful, and safe society. That fundamental purpose is achieved by considering the following objectives:

a) the denunciation of unlawful conduct;

b) the deterrence of the offender and others from committing further offences;

c) the separation of the offender from society where necessary;

d) the rehabilitation of the offender;

e) reparation for harm done; and

f) promotion of a sense of responsibility in the offender, including acknowledgement of the harm done. [65]

Section 718.1 sets out the most important and perhaps the most basic principle of sentencing, that is, that a sentence imposed onan offender must be proportionate to the gravity of the offence and the degree of responsibility of the offender. [66]

Section 718.2 directs judges imposing a sentence to take into account: the aggravating or mitigating circumstances relating tothe offence or the offender, that the sentence imposed should be similar to sentences imposed on similar offenders, for similar offences,committed in similar circumstances, that an offender should not be deprived of liberty if less restrictive sanctions may be appropriate andthat all available sanctions other than imprisonment that are reasonable in the circumstances should be considered. [67]

Section 718.2 also sets out what a judge may consider as aggravating circumstances. One of the aggravating circumstances tobe considered in sentencing is evidence that the offender, in committing the offence, abused a position of trust or authority in relation tothe victim. Range of Sentence for Serious Fraud/Theft [68] The cases relied on by the Crown and the defence, as well as other cases noted below, clearly indicate there is a broad range ofappropriate sentences for the offence of theft over $5,000.

In particular, it is clear that in appropriate circumstances a sentence in theprovincial range of two years less a day may be imposed . The case authorities emphasize that denunciation and deterrence aresignificant factors to be considered. However, the authorities also emphasize that a determination of a fit sentence is a very fact-specificexercise. [69] In Zolnasr, the court sentenced the accused who pled guilty to fraud over $5,000. He was a sales manager at a local cardealership. While in that position, he engaged in a number of fraudulent transactions in the amount of $258,726.

Each transactionrequired the preparation of numerous false documents, some deception and considerable planning. The court in that case considered therange of sentences in serious fraud cases. It referred to the case of R. v. Reid, 2004 YKCA, where the court adopted a passage from R. v.Dobis (2002), (ON CA), 58 O.R. (3d) 536, which said that general deterrence is central to the sentencing process in

cases involving large-scale frauds with serious consequences for the victim. The court in Dobis noted it has said the same thing since theintroduction of the conditional sentencing regime. [70] In Zolnasr, the court said it must weigh the jurisprudence to the effect that fraud is considered to be an offence that results fromthe taking of measured risks by persons seeking financial gain and its prevalence is likely to be affected by sentences of imprisonment. The court further took into account that the accused was in a position of trust as an aggravating factor.

The cases presented to the courtin Zolnasr dealing with offences committed by individuals in a position of trust led the court to conclude that a period of one yearincarceration plus restitution was a fit sentence. [71] In Quinn the court reviewed a number of cases and noted that authority can be found for sentences ranging from less than twoyears, served under a conditional sentence order, to as much as five or six year terms of imprisonment to be served in a correctionalfacility. [72] In Dreger, the court considered a sentence appeal by the accused who was the bookkeeper for a small family company.

Shewas in a position of trust and over a period of approximately 7 years defrauded her employer of approximately $245,000. She wassentenced to five years imprisonment and the Court of Appeal reduced that sentenced to four years. The court noted that before 2004 themaximum penalty pursuant to s.380 of the Criminal Code was 10 years. As of September 2004 the legislation was amended and themaximum penalty was increased to 14 years. Additionally, s. 380.1 came into force. That

section codified aggravating circumstancesfor the purpose of sentencing in fraud cases. [73] In Dreger, the court noted that each case will turn on its own facts and while the accused fell within that range, “it would beincorrect to see this as an inflexible set range of sentences”. The court further noted that in R. v. Bodnarchuck, 2008 BCCA 39, (citingother decisions of the Court of Appeal) that it had examined the availability of different ranges of sentences for fraud. It acknowledgedthat conditional sentences should be considered in every case where the minimum criteria are met.

The Court of Appeal has said morethan once that general deterrence is central to the sentencing process in cases involving large-scale frauds with serious consequences forthe victims. In many cases, convictions for serious fraud have led to the imposition of custodial sentences. However, in cases of seriousfraud or serious theft where there are extreme personal mitigating circumstances, the courts have held that the principle of generaldeterrence can be satisfied by a conditional sentence. [74] In R. v.

Datsko, 2009 BCPC 106, the accused was sentenced to two years imprisonment for defrauding his employer ofapproximately $720,000. In that case, Howard P.C.J. reviewed a number of cases involving large-scale frauds upon employerscommitted by persons of otherwise good character, with no criminal records. She concluded those decisions clearly indicate thatimprisonment continues to be the norm in such cases.

However, the court in Datsko also reviewed a number of cases where conditionalsentence orders were imposed and noted it appeared from the authorities that conditional sentences were imposed more frequently incases where the fraud was in the range of $200,000 or less. [75] In R. v. Gaugler, 2011 BCPC 412, aff’d [2011] B.C.J. No. 2514, the court sentenced an offender who pled guilty to two countsof theft in excess of $5,000. In that case the accused stole approximately $2,500,000 from her employer over a period of 10 years.

Thecourt undertook a detailed review of a number of case authorities which addressed the sentencing principles as well as the range ofsentence applicable to fraud/theft cases involving large sums of money. In particular, the court relied on the analysis in the Datsko caseand noted that the principles considered therein were “apposite in theft cases of this magnitude”. [76] The cases cited by the defence, in particular Dickson, McLean, and Hill, show that in appropriate circumstance, sentences of lessthan two years have been imposed on offenders guilty of theft/fraud offences involving large amounts of money.

Gambling addiction [77] In Quinn, Brine J. commented on the impact of gambling or gambling addiction upon an appropriate sentence. He relied on R.v. McIvor (1996), 1996 ABCA 154 , 106 C.C.C. (3d) 285, in which the Alberta Court of Appeal noted that an addiction toalcohol or drugs is neither an exceptional circumstance justifying the imposition of a non-custodial sentence nor a mitigating factorwarranting a sentence less than what would otherwise be fit and proper.

Nevertheless, Brine J. accepted, for the purpose of thatsentencing, that whether or not the offender had a gambling addiction, she had spent a significant portion of the money at casinos. [78] In Elliott, the court dealt with the sentencing of an accused who pled guilty to stealing approximately $400,000 from a softballassociation when she was the association’s accountant and bookkeeper. She lost all the money gambling at a casino. The court notedthat whether the accused was a gambling addict or not, she was clearly obsessed with gambling.

The court also noted it is very easy forsomeone to play with other people’s money. It is a natural instinct to be conservative or to stop gambling with one’s own moneybecause one feels a possible loss of that money very keenly. That feeling does not exist when one has unlimited access to someone else’sfunds. The court further noted that while the offender’s psychological problems may explain why she was drawn to gambling, they didnot really explain why she would gamble such large sums of other people’s money. Ms. Elliott was sentenced to three yearsimprisonment.

While passing sentence, the court noted that one could not help but be sympathetic to her personal circumstances. Thefact she succumbed to heavy gambling was not surprising, but it was neither inevitable nor a cause of her offending. In the court’s view,the accused always knew that what she did was wrong and knew that every time she drew some money from the account of the employerto her own account. Analysis regarding a fit sentence in this case [79] In arriving at a decision about a fit sentence for Ms.

Klyne, I acknowledge my duty to undertake an individualized approach tosentencing as set out in the Criminal Code. Accordingly, I have considered the purpose and principles of sentencing, the circumstancesof the offence and the offender and the statutory pre-requisites. In addition, I have reviewed the cases provided by the parties and othercases cited above. Moreover, I have considered comments about the sentencing process made by of our Court of Appeal in the recentlyissued decision R. v. Carrillo, 2015 BCCA 192. That decision is not on point either on its facts or by virtue of the type of offencecommitted.

However, our Court of Appeal made a number of points about the sentencing process that bear repeating; namely:

a) Deciding a fit sentence is not a science.

b) Sentencing is a “profoundly contextual” process particularly suited to the sentencing judge.

c) There may not be a single appropriate sentence for a similar offender and a similar crime.

d) While the range of sentences emerging from earlier cases provides guidance, it is not conclusive of an appropriate sentence in agiven case.

e) Only substantial disparity that cannot be justified by reference to differences in offenders and the circumstances of their offenceswill lead to appellate intervention. [80] In R. v. C.A.M., (SCC), [1996] 1 S.C.R. 500, Lamer, C.J., , commented on the role of the sentencing judge incrafting “a just and appropriate sentence”: ...

The determination of a just and appropriate sentence is a delicate art which attempts to balance carefully the societal goals ofsentencing against the moral blameworthiness of the offender and the circumstances of the offence, while at all times taking into accountthe needs and current conditions of and in the community... (paragraph 91) The comments of Chief Justice Lamer have been adopted and referred to many times by various courts in Canada including the BritishColumbia Court of Appeal. [81] More recently, in Quinn, Brine J. noted that the passing of sentence is perhaps the most challenging task a judge faces.

Itinvolves the consideration of a multitude of factors, weighing those factors, comparing them and applying them. Crafting an appropriatesentence is an art, not a science. It does not involve the application of a formula or a mathematical calculation. [82] With those comments in mind, I turn to the factors I considered in Ms. Klyne’s case. The aggravating factors in Ms. Klyne caseare:

a) The amount of money stolen – Ms. Klyne stole $282,264.42 by manipulating the pension accounts of 15 credit union employeeswhose pension contributions were being administered by CCU.

b) The period of time offence committed – Ms. Klyne stole that amount between the period of August 20, 2010 and December 21,2012.

c) The breach of trust – During the period of the theft, Ms. Klyne was the Senior Pension and Benefits Coordinator for CCU and inthat capacity had direct access to the Pension Plan trust account. She also had access to the computer system used by CCU and computeraccess to the employees’ benefits system. It was part of her duties to administer pension and benefits and to manage dormant pensionaccounts. Additionally, Ms. Klyne was aware of the weaknesses of the system used by CCU and had brought those weaknesses to theattention of her supervisor. Accordingly, she exploited the position she held and the specialized knowledge she gained with the CCU tomake the unauthorized withdrawals.

d) The planning and deliberation – Ms. Klyne’s actions were neither impulsive nor momentary. In order to steal money from thepension holders’ accounts, she had to take a number of steps to complete the transfers from the CCU pension accounts to her personalaccounts at Vancity. She had to manipulate data and information. In some cases, she falsified information on pension accounts that hadalready been paid out in full. In others, she simply transferred funds on accounts that were dormant. She changed information ondocuments. She involved, albeit without their knowledge, one or more CCU employees who signed un-endorsed cheques.

e) The efforts to conceal –Ms. Klyne chose accounts that would allow her to conceal her actions; namely, unlocked accounts ordormant accounts. She also reconciled funds at year-end by changing them back to cover the loss that had occurred. She forged electionform requests and CRA forms. [83] The mitigating factors in Ms. KIyne’s case are:

a) Ms. Klyne’s age – Ms. Klyne is currently 67 years old.

b) Criminal record – This is Ms. Klyne’s first offence; she does not have a criminal record.

c) Ms. Klyne’s remorse – Ms. Klyne relayed to the Court, both through counsel and through the brief statement she made to theCourt, her sorrow and remorse about having committed this offence.

d) Early guilty plea – Ms. Klyne was only charged with this offence in July 2016 and her guilty plea was entered in September 2016.

e) Co-operated with employer once crime discovered – Once the theft was discovered in 2014, Ms. Klyne was interviewed. She alsoprovided a written statement and later participated in a teleconference with the CCU concerning her actions.

f) Provided information to CCU regarding mechanism of thefts – During her conversations with CCU security, she explained theactions she took to carry out the thefts.

g) Family support – Ms. Klyne’s immediate family and one sibling are aware of the criminal charge and remain supportive of her. [84] Additionally, I also considered the following circumstances:

a) Ms. Klyne’s various health issues – Ms. Klyne’s general health is poor and she suffers from a number of health conditionswhich have been detailed elsewhere in these reasons for sentence.

b) Ms. Klyne’s gambling addiction – Ms. Klyne points out that Dr. Lindblad in his pre-sentence assessment noted that perhaps the most salient factor that contributed to her criminal offending was the development of a gambling disorder. In this regard, I wish to note that while there was no agreement about whether Ms. Klyne actually had a gambling disorder, the Crown did not challenge Dr. Lindblad's conclusions per se .

c) Other motive – Defence counsel took great pains to explain to this Court that Ms. Klyne now takes responsibility for her actions. He emphasized she now recognizes that she cannot ignore and deflect her responsibility. I accept that at the time of the sentencing hearing Ms. Klyne was prepared to accept responsibility for her offence. I also accept her expression of remorse at the sentencing hearing was genuine. However, I cannot turn a blind eye to the fact that right from the beginning Ms.

Klyne admitted there was another motive (apart from the gambling addiction which was not diagnosed until November 2016 when she saw Dr. Lindblad) which motivated her criminal activity. That other motive was her desire “to get back at” her supervisor. That desire to get back at her supervisor was clearly evident years after the offence and noted by Dr. Lindblad in his pre-sentence psychological assessment. I note parenthetically that Ms. Klyne, both in her statements during the investigation in 2014 and when she spoke to Dr. Lindblad in November 2016, suggested she was being bullied and harassed by her supervisor.

During the course of the sentencing hearing, defence counsel properly acknowledged that Ms. Klyne herself was not bullied or harassed by her supervisor. What she described as bullying and harassment was aimed at others.

d) Ms. Klyne's moral culpability – On the evidence before me, particularly the observations made by Dr. Lindblad in his pre- sentence psychological assessment, I am satisfied Ms. Klyne knew that she should not have taken the money, and knew that taking the money from her employer was wrong. Is a jail sentence an appropriate sentence in this case? [ 85 ] Based on my review of the case authorities referred to me by counsel, I have concluded a term of imprisonment is appropriate in the circumstances of this case.

At the outset of this sentencing hearing, both counsel acknowledged a term of imprisonment, whether it is to be served in the community or in “real jail”, is appropriate in Ms. Klyne’s circumstances. They were also in agreement as to what the length of that term of imprisonment should be; namely, 18 months. [ 86 ] The issue to be decided is whether it is appropriate to grant a conditional sentence in this case.

Section 742.1 of the Code provides that in certain circumstances a judge who imposes a sentence of imprisonment may order the offender to serve the sentence in the community by imposing a conditional sentence order. [ 87 ] In Proulx , the Supreme Court of Canada set out the approach a judge should follow when considering the imposition of a conditional sentence. The judge should first make a preliminary determination about the appropriate range of sentences for the offence in question.

Conditional sentence orders can only be made in circumstances where the jail sentence imposed is less than two years. [ 88 ] As noted, in this case the only sentencing issue is whether the sentence imposed should be served in “real jail” or in the community. The Crown asked for a “real jail” sentence of 18 months. The Crown thereby acknowledged that a sentence of two years less a day is appropriate in the circumstances.

The defence also acknowledged that a term of imprisonment in the provincial range is appropriate in the circumstances. [ 89 ] After reviewing the circumstances of the offender and the circumstances of the offence, I am satisfied that the appropriate range of sentence for this offence falls within the provincial range. I next must consider whether the other pre-requisites set out in s.742.1 are met. Those pre-requisites are:

a) There is no minimum term of imprisonment.

b) The court is satisfied that serving the sentence in the community would not endanger the safety of the community.

c) Serving the sentence in the community would be consistent with the fundamental purpose and principles of sentencing set out in ss. 718 to 718.2. [ 90 ] First, there is no minimum term of imprisonment for the offence of theft over $5,000 under s. 334 (1) (

a) of the Criminal Code . The maximum term of imprisonment set out in the Code for theft over $5,000 is 10 years. [ 91 ] The second issue to be addressed is whether the safety of the community would not be endangered if Ms. Klyne is allowed to serve the sentence in the community. In other words, is there a risk Ms. Klyne would re-offend and, if so, what is the gravity of the damages which could ensue?

In Proulx , the court noted that rather than being an overarching consideration in the process of determining whether a conditional sentence is appropriate, the criterion of safety of the community should be viewed as a condition precedent to the assessment of whether a conditional sentence would be a fit and proper sanction in the circumstances. In Proulx , the court acknowledged there was an issue as to whether the term “safety of the community” referred only to the threat posed by the specific offender or whether it also extended to the broader risk of undermining respect for the law.

It noted that proponents of the broader view argue that in certain cases where a conditional sentence could be imposed, it would be perceived that wrongdoers are receiving lenient sentences thereby insufficiently deterring others who may be inclined to engage in similar wrongdoing. [ 92 ] The court said the debate on this point is academic in light of the fact that in deciding whether to impose a conditional sentence courts must take into account the fundamental purpose and principles of sentencing as set out in ss. 718 to 718.2.

This ensures that objectives such as denunciation and deterrence will be dealt with in a decision to impose a conditional sentence. Accordingly, since these factors must be taken into account later in the analysis, there is no need to include them at the stage where the court is considering the safety of the community.

Later in the Proulx decision, at paragraph 85 , the court made it clear that, once a judge has found the pre- requisites to a conditional sentence are met, it does not necessarily follow that a conditional sentence would presumably be consistent with the fundamental purpose and principles of sentencing. The court noted that just as it rejected the presumption against conditional sentences it also rejected the presumption in favour of them. Instead, the court noted the particular circumstances of the offender and the offence must be considered in each case.

[93] Ms. Klyne has no criminal record. She is a senior citizen who has retired from work at a financial institution and is currentlynot working. Dr. Lindblad, the psychologist who prepared the pre-sentence psychological assessment, wrote that in his opinion the “riskof Ms. Klyne offending in a similar manner is minimal”. He further expressed the view that it appeared the crimes that were committedwere crimes of opportunity.

He also commented that with the gambling disorder apparently in remission, and in the absence ofopportunity, the risk to re-offend in a like manner is negligible. [94] Based on the evidence presented at the sentencing hearing, I am satisfied that allowing Ms.

Klyne to serve the sentence in thecommunity would not endanger the safety of the community as defined in Proulx. [95] The final point, I must consider is whether serving the sentence in the community would be consistent with the fundamentalpurpose and principles of sentencing to which I have previously referred. [96] The Supreme Court of Canada in Proulx said serious consideration should be given to the imposition of a conditional sentence. In all cases where the first three pre-requisites are satisfied a conditional sentence may be an option to consider.

In fact, the court said itwould be an error in principle not to consider the possibility of a conditional sentence seriously when the statutory pre-requisites aremet. The court in Proulx further stated that a conditional sentence can meet the objectives of denunciation and deterrence. Moreover, aconditional sentence may be imposed even in cases where there are aggravating circumstances relating to the offence or the offender. [97] Many sentencing decisions have noted that the imposition of a conditional sentence is not necessarily less onerous than a periodof “real jail”.

It has also been noted that the terms of conditional sentence orders are generally longer in duration than the “real jail” termthat may be imposed. Moreover, with a conditional sentence the parole and/or remission provisions applied by the correctional servicesdo not apply. Further, the ramifications of a breach of the conditions of a conditional sentence order can be significant; see R. v. Holmes,[2009] O.J. No. 702 (Ontario Superior Court of Justice). [98] In R. v. Biller, 2005 BCSC 1278, Boyd J. acknowledged that there is no category of case which is excluded from considerationfor a conditional sentence.

However, she also noted that our Court of Appeal in R. v. Khan, 2002 BCCA 703 , [2002] B.C.J.No. 2950, pointed out that certain offences will usually lead to a custodial sentence.

This will particularly be so when the need fordeterrence warrants incarceration. [99] In Dickson, Finch C.J.B.C. noted that in cases of serious fraud or serious theft, where there are extreme personal mitigatingcircumstances, the courts have held the principle of general deterrence can be satisfied by a conditional sentence. [100] Howard P.C.J. referred to both the Biller and Dickson decisions in Datsko and cautioned that the reference to “extreme personalmitigating circumstances” must not be misconstrued.

She said: “It amounts to nothing more than a factual observation that, in a numberof decisions wherein conditional sentence orders were imposed, there were extreme and mitigating circumstances. However, thepresence of extreme mitigating circumstances is not a precondition to the granting of a conditional sentence order.” [101] As noted in Proulx, sentencing judges are often confronted with situations where some sentencing objectives militate in favourof a conditional sentence, whereas others favour incarceration. There is no easy test or formula that a judge can apply in weighing thefactors.

This case falls into that category. Accordingly, it is my duty to weigh the various objectives set out in the Criminal Code infashioning a fit sentence. On balance, in the circumstances of Ms. Klyne’s offence, I conclude a conditional sentence will not adequatelyserve the purpose of sentencing or the objectives of general deterrence and denunciation. [102] In reaching this conclusion, I have considered a number of factors including: Ms. Klyne’s personal circumstances, in particularthe state of her health and the pre-sentence psychological assessment prepared by Dr. Lindblad. In R. v.

Crimini, 2005 BCCA 431, thecourt noted the offender had a serious heart condition and had complained about the ability of the correctional facilities to accuratelyprovide his medications. The court noted that provincial correctional facilities must deal with patients who suffer from all types ofdiseases from HIV, AIDS and cancer to heart problems. They have a duty to inform themselves of their patients' health and properly carefor them.

The court further noted that the offender should also take it upon himself to provide the institution with letters from hisphysicians setting out all his legitimate requirements, including any medical appointments for which he may now have bookedappointments, in order to ensure his good care. [103] I appreciate that Dr. Lindblad, with the benefit of hindsight and based on Ms. Klyne’s self-reported narrative, concluded thatduring the period of 2010 to 2012 Ms. Klyne met the criteria for a diagnosis of gambling disorder.

However, he also noted in his reportthat she may not have been entirely forthcoming in her response when tested. He also noted she attributed her criminal activity to twoprimary factors; namely, her disregard and animosity to her supervisor and the development of a gambling disorder. Further, while thedevelopment of the gambling disorder explained the emergence of a behaviour not previously observed (presumably the thefts), thedevelopment of the gambling disorder “does not relinquish one of personal responsibility”. [104] The history provided in Dr. Lindblad’s assessment sets out the challenges Ms.

Klyne has experienced in recent years. Thosechallenges are certainly deserving of sympathy and compassion. However, as noted in Thomson: The majority of the individuals who come before this Court, however, have also experienced tragedy, including loss of loved ones,serious ill health, as well as addiction to alcohol, drugs, gambling and sometimes all of these. Many offenders before the court have beenvictims of physical and sexual abuse as children and adults.

Regrettably, these hardships seem to be part of the human condition andwhile the Court is empathetic and considers the background circumstances of each individual offender that comes before it, the Courtalso is mandated to consider the offence and the principles of sentencing as well as the relevant case law. [105] I have also considered the circumstances of the offence including; the degree of planning and preparation necessary to carry outthe thefts, the length of time over which the thefts occurred, the number of transactions involved, the deceit exhibited in carrying out thethefts and Ms.

Klyne’s breach of trust. As noted in Reid, the purpose of incarcerating such offenders is not to protect the communityfrom any danger posed by the particular offender, but to protect the community from the danger posed by those who may be inclined toengage in similar conduct. The sentence imposed on Ms. Klyne ought to denounce the serious breach of trust she committed against heremployer and the individual pension holders who were also the victims of her thefts.

The sentence [ 106 ] After considering the principles and purpose of sentencing, the nature of the offence, the circumstances surrounding the commission of the offence, as well as taking into account Ms. Klyne’s personal circumstances, I ha ve concluded that:

a) A fit and proportionate sentence for Ms. Klyne is 18 months to be served in a correctional facility.

b) Pursuant to s. 738 of the Criminal Code , I find that the imposition of a restitution order is appropriate in this case. In Nanos , the court noted that the case law is consistent on the consideration of restitution orders when the offence involves a breach of trust or other theft-related related offence where the stolen money is unaccounted for or not accounted for adequately. In 2014 when the theft was discovered, Ms. Klyne offered to pay back what she stole. However, no money has been paid back to CCU to date.

Furthermore, other than being told the money was spent, there has been no accounting, or at a minimum no adequate accounting, to explain where the money went or how was spent. Accordingly, Ms. Klyne is ordered to make restitution of the sum of $282,264.42.

c) Pursuant to s. 487.051(3)(

b) of the Code , Ms. Klyne shall provide a sample of her DNA. I am satisfied in all of the circumstances that such an order i

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