r V. JACCO Laurie, 2016 QCCQ 1072

R. c. Jacco 2016 QCCQ 1072 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL CITY OF MONTREAL « Criminal Division » N°: 500-01-071525-122

(010) DATE : February 29, 2016 ______________________________________________________________________ BY THE HONORABLE MYRIAM LACHANCE, J.C.Q. ______________________________________________________________________ HER MAJESTY THE QUEEN Prosecutor V. JACCO Laurie Accused ______________________________________________________________________ JUDGMENT ON SENTENCE ______________________________________________________________________ [ 1 ] Mrs. Jacco pleaded guilty to two (2) offences of having, by deceit, falsehood or other fraudulent means, defrauded the Government of Canada and the Government of Quebec of a value exceeding five thousand dollars ($5,000) contrary to

section (s.) 380 of the Criminal Code ( Cr. C .) [1] . [ 2 ] She also pleaded guilty to two (2) counts of having conspired with other persons to commit those frauds, contrary to s. 465 of the Cr. C . [ 3 ] Those offences were committed by dealing illegal cigarettes from her residence on the First Nation reserve of Kahnawake. [ 4 ] She was arrested on May 31 st , 2012, after several months of physical and electronic surveillance. [ 5 ] Laurie Jacco did not have the permits required by the Agence du Revenu du Québec to trade in tobacco products.

She did not declare any income connected to the sale of tobacco nor did she remit any tobacco taxes to neither levels of government. SENTENCING POSITIONS [ 6 ] Counsel for the accused suggests that a period of 18 months of imprisonment to be served in the community, followed by a probation of two years, would be appropriate. [ 7 ] The Crown contends that 18 months of detention should be imposed to deter and denounce this type of smuggling.

CONTEXT [ 8 ] In 2010, the ACCESS Brigade for Concerted Action against the Underground Economy of the SPVM is informed that tobacco products from a First Nation reserve in Toronto are smuggled in the Montreal area. [ 9 ] A tobacco smuggling investigation starts in January 2011, under the name of project Mission II. [ 10 ] Between January 2011 and April 2012, various investigative techniques are used: physical monitoring, video surveillance, tracking devices, intrusive surveillance (sneak and peek) and wiretap authorization. [ 11 ] Laurie Jacco is identified as one of the 21 subjects taking

part in stratagems to avoid paying tobacco related taxes. [ 12 ] She is the subject of a wiretap surveillance between February 17 th and April 16 th , 2012. [ 13 ] This organization defrauded both governments for over 4 million $ during the project Mission II. [ 14 ] The evidence reveals that Laurie Jacco is involved in this organization: she buys cigarettes from three different suppliers, who even gave her credit on the purchase price. [ 15 ] She has regular clients and over the period of 60 days covered by the wiretap authorization, she runs that business almost every

day. [ 16 ] Solely taking into consideration the orders she placed over the phone to her suppliers during the period in which she was wiretapped, the total amount defrauded is 1 613 304, 00 $. [ 17 ] Despite what counsel for the defense submits, this amount reflects the reality. Furthermore, the amount is rather conservative because the accused admits having started the smuggling after the death of her spouse, who passed away in 2011, hence, before the wiretap authorization. [ 18 ] This amount was calculated by an expert in fraud evaluation, Mr.

Dany Dufour, and his opinion is well supported by the investigation. [ 19 ] The evidence is clear about the orders Mrs. Jacco made to her suppliers regarding 792 boxes of different kinds of cigarettes. The evidence also establishes that she was dealing with regular customers on a daily basis. [ 20 ] The wiretap conversations demonstrate that she was ordering large quantities of tobacco, almost every week.

She frequently placed orders of up to 100 cigarette boxes to her suppliers. [ 21 ] The charts prepared by the expert Dany Dufour leave no doubt that this amount is a minimum of what has been defrauded. [ 22 ] She made profits estimated at 16 000, 00 $ during that period. [ 23 ] Given that Mrs. Jacco belongs to a First Nation group, counsel acknowledged that she is entitled to have her sentence considered according to the factors enunciated by the Supreme Court in the Gladue [2] judgement. [ 24 ] Therefore, a Gladue report was prepared. SITUATION OF THE ACCUSED [ 25 ] Mrs.

Jacco is a member of the Mohawk First Nation. She was born on the reserve of Kahnawake and has been living there all of her life, except for a period of one year and a half, when she resided in the United States, in her early life. [ 26 ] She lived in a proper family environment and suffered from no apparent problems or addiction. [ 27 ] At 17 years old, she got pregnant and quit school. [ 28 ] She had three children before she separated from their father who still lives in Kahnawake. [ 29 ] Afterwards, she met a man with whom she lived for 12 years.

He died in 2011, following an illness. [ 30 ] The latter invested in cigarette smuggling to raise money for the family. Upon his death, she decided to continue this illegal activity until her arrest on May 31 st , 2012. [ 31 ] She opened a restaurant in April 2012. Her business is now generating enough income, allowing her to be financially independent. She even plans to open another one with an associate. [ 32 ] Her whole life evolves around taking care of her family and running her restaurant. [ 33 ] She has the custody of her three children.

Her nephew is also under her care. [ 34 ] Her son goes to high school and her youngest daughter works part-time in her restaurant. [ 35 ] Her older daughter is 25 and she is disabled. She has special needs and necessitates constant assistance. [ 36 ] Laurie Jacco has three previous convictions in 1993 for offences related to tobacco. She was imposed fines under the Excise Act [3] . [ 37 ] The same year, she was also found guilty under s. 14.2 (

b) of the Tobacco Tax Act [4] and a fine of 3 000 $ was imposed. [ 38 ] The accused explains that these offences were committed while she was on the road transporting illegal tobacco. ANALYSIS [ 39 ] Defence suggests that Mrs. Jacco was blind to this situation in the sense that she did not really know the illegal character of her smuggling activities because no one pays taxes on her reserve. [ 40 ] But this submission cannot stand. [ 41 ] Fraud is an offence of general scope.

It can encompass a wide range of dishonest dealings. [ 42 ] The personal feeling of the accused about the morality or honesty of the act or its consequences is not relevant in the analysis of the mens rea of a fraud. Neither is the fact that the accused may have hoped that the deprivation would not take place, or may have felt that there was nothing wrong with what she was doing [5] .

[ 43 ] Several wiretapped conversations show that she knew her activities were illegal, particularly when she speaks to her accomplices after having been intercepted by the police with contraband cigarettes in their vehicles. [ 44 ] Her accomplices immediately contacted her and they planned to move her stash elsewhere. [ 45 ] Moreover, Mrs. Jacco committed these serious offences when she obviously knew they were illegal, even on the reserve: aboriginal offenders of her community had been incarcerated regarding the same kind of smuggling. [ 46 ] Defence argues that Mrs.

Jacco does not live a criminal lifestyle and that her criminal record, even if similar to the present case, goes back to 1993. [ 47 ] Counsel for the Crown indicates that six co-accused, non-Aboriginal, had already pleaded guilty in the present file. [ 48 ] The amounts defrauded in their situation go from 858,14 $ for a courier who was sentenced to 160 hours of community service, up to 315 735,00 $ for one of Mrs.

Jacco’s regular clients who received a conditional sentence of 21 months, considering two months of provisional custody. [ 49 ] The Crown submits different judgments where imprisonment was imposed to denounce and deter those kinds of large scale commercial frauds [6] . [ 50 ] In Provost [7] , 14 months of jail were imposed to an accused, who was non-Aboriginal, and who smuggled cigarettes into Canada, contrary to the Custom Act [8] .

The amount defrauded was 2 325 348,00 $. [ 51 ] In the case of Lottin [9] , the Court imposed 40 months to a non-Aboriginal supplier of illegal tobacco who performed his illegal activities over a period of two years. [ 52 ] In Deng [10] , the Superior Court imposed sentences from 12 to 21 months regarding tobacco smuggling all across Canada. The amount of the fraud was 223 783,00 $ and it was committed by non-Aboriginals.

Sentencing principles [ 53 ] Proportionality is the fundamental principle of sentencing and includes both the gravity of the offence and the objective of denunciation to ensure public confidence in the justice system [11] . [ 54 ] The gravity of the offence refers to the potential penalty imposed by Parliament and specific features of the commission of the crime. [ 55 ] The degree of responsibility refers to any specific aspects of the offender's conduct or background that tend to increase or decrease the offender's personal responsibility for the crime. [ 56 ] The Tribunal has to tailor an appropriate sentence taking into account the circumstances of this particular case without placing to much emphasis on certain relevant factors. [ 57 ] Denunciation and general deterrence most often find expression in the length of the jail term imposed. [ 58 ] A conditional sentence in the community only partially deprives an accused of his freedom and some serious offences need denunciation, where incarceration will be the only suitable way to provide more deterrence [12] . [ 59 ] However, house arrest may provide sufficient denunciation and deterrence, if accompanied with proper duration and specific conditions imposed [13] .

Aboriginal offender [ 60 ]

Section 718.2e) of the Cr.

C. provides that all available sanctions other than imprisonment that are reasonable in the circumstances should be considered, particularly for Aboriginal offenders. [ 61 ] High rates of incarceration of persons of Aboriginal heritage people in Canada led to enact this provision to encourage judges to take a restorative approach to sentencing [14] . [ 62 ] Because the systemic or background factors may have played a role in bringing an Aboriginal person before the Court, the types of sentencing should pay attention to different or alternative restorative sanctions [15] . [ 63 ] The Court must take note of the systemic factors affecting Aboriginal persons in general as well as those related to a particular offender [16] .

Systemic and Background factors [ 64 ] Systemic or background factors are mitigating in nature and may play a

part in appreciating the Aboriginal offender’s conduct [17] .

[ 65 ] The Supreme Court of Canada described these factors in the case of Gladue [18] : « 67. (…) Years of dislocation and economic development have translated, for many aboriginal peoples, into low incomes, high unemployment, lack of opportunities and options, lack or irrelevance of education, substance abuse, loneliness, and community fragmentation. These and other factors contribute to a higher incidence of crime and incarceration (…) 68. It is true that systemic and background factors explain in part the incidence of crime and recidivism for non-aboriginal offenders as well.

However, it must be recognized that the circumstances of aboriginal offenders differ from those of the majority because many aboriginal people are victims of systemic and direct discrimination, many suffer the legacy of dislocation, and many are substantially affected by poor social and economic conditions (…) » [ 66 ] There is no onus on an offender to establish a causal link between background factors and a particular offence [19] . [ 67 ] But those factors are not an excuse for a criminal behavior [20] . [ 68 ] On the Kahnawake reserve, the economy relies heavily on the tobacco industry. [ 69 ] First Nations retailers are authorized to sell tax-free tobacco to aboriginal individuals on the reserve [21] . [ 70 ] However, those cigarette stores, called « smoke-shacks », have many non-First Nations customers who don’t pay taxes as they should [22] . [ 71 ] The cigarettes smuggled by the accused were not approved by both levels of Government. [ 72 ] The provisions of s. 87 of the Indian Act [23] do not have the effect of giving any advantages or special privileges in the marketplace [24] . [ 73 ] Accordingly, there is nothing which would exempt Mrs.

Jacco from complying with the general provisions of the Tobacco Tax Act [25] and the 2001 Excise Act [26] , regarding the payment and collection of tax [27] . [ 74 ] To date, the taxes that must be paid by the Natives who sell tobacco to non-Natives have been inconsistently and arbitrarily applied. [ 75 ] This situation reflects a serious lack of coordination between the authorities present on the reserve of Kahnawake and the police force surrounding the area. [ 76 ] The sale of tobacco products to foreigners through many shops on the expressways are tolerated by the local administration and the reserve police. [ 77 ] Meanwhile, investigations are ongoing by other police detachments. [ 78 ] Investigator Lafontaine testified that the situation has been the same for several years and that the peacekeepers do not take

part in those kinds of investigations. [ 79 ] Consequently, we cannot deny that Mrs. Jacco’s community plays an important role in the way she perceives her offending behavior. [ 80 ] The author of the Gladue report observed no remorse in Mrs.

Jacco, as if she had the right to perform these actions as a member of the Native community. [ 81 ] However, the author underlines that the smuggling of tobacco products is an activity approved by the Mohawk community without stigma. [ 82 ] The tolerance of the members of the community, specifically the authorities, who are blind to this large scale of tobacco smuggling on their land, is a non systemic factor, though poor social and economic conditions are. [ 83 ] It is surely not a justification for Mrs.

Jacco’s criminal conduct, even if it is a unique circumstance present on different First Nation reserves, where local police departments choose not to apply the law regarding tobacco smuggling.

Appropriate sentencing procedures and sanctions [ 84 ] A sentence should not exceed what is appropriate, given the moral blameworthiness of the offender [28] . [ 85 ] Sentencing procedures do not focus on the degree of culpability of the offender, but on the effectiveness of the sentence itself and take into account the unique circumstances of Aboriginal offenders [29] . [ 86 ] The trivialization of this type of crime within the community is not a systemic factor that affects Mrs. Jacco’s moral blameworthiness as a mitigating factor playing a significant

part in her conduct [30] .

[ 87 ] But the socioeconomic factor may be tied in some way to Mrs. Jacco and it provides the context to enable the Court to determine what will be the appropriate sanction [31] . [ 88 ] In the case of Lacasse [32] , the Supreme Court mentioned that sanctions may be adapted to the local characteristics. The frequency of a type of offence is a relevant factor, not an aggravating one. [ 89 ] The need to denounce the unlawful conduct must not lead to a sentence that is demonstrably unfit [33] . [ 90 ] Tobacco smuggling is a scourge in the area of Kahnawake.

The testimony of investigator Lafontaine, the Gladue report and the jurisprudence tendered to the Court leave not doubt about this problematic situation. [ 91 ] The Court has to reconcile the principles developed in Lacasse [34] with those present in

section 718.2(

e) of Cr. C . , as elaborated in Gladue [35] and Ipeelee [36] . Mitigating factors [ 92 ] Mrs. Jacco pleaded guilty. She is well adapted socially. She is an independent and a responsible woman.

She is a devoted mother who is working hard to support her family. [ 93 ] Her social network is composed of her children, siblings and their children. [ 94 ] She was raised into a good environment and seems to have been provided life skills to become a contributing member of the society. [ 95 ] She no longer sees her friends involved in the present offenses. [ 96 ] The Gladue report indicates that she minimizes the importance of the crime by referring to the fact that many residents of her reserve are doing the same smuggling. [ 97 ] However, lack of remorse is not an aggravating factor [37] . [ 98 ] Furthermore, the Tribunal heard Mrs.

Jacco’s cousin, Mrs. Williams, who testified that the accused shows anxiety regarding this situation and that she has regrets. [ 99 ] Mrs. William is convinced that Mrs. Jacco will not reoffend and was not aware of her illegal activities. From now on, her siblings know. [ 100 ] The accused also testifies that she regrets what happened and understands that tobacco smuggling is illegal, even on her reserve.

A g gravating factors [ 101 ] The risk of reoffending is still present and the accused has prior convictions for similar offences. [ 102 ] Greed and financial opportunity after the death of her significant other explain her actions. [ 103 ] Her criminal activities lasted at least six months, almost on a daily basis. [ 104 ] She defrauded the Governments of over 1.6 million dollars in taxes and made profits. [ 105 ] The above mentioned considerations bear on Mrs. Jacco’s level of responsibility for her crimes.

CONCLUSION [ 106 ] The fact that an Aboriginal offender might receive a sentence which appears less severe than one imposed on a non-Aboriginal offender for a similar crime does not break the parity principle outlined in s. 718(2)

b) of the Cr. C. [38] . [ 107 ] Mrs. Jacco is not affected by systemic factors as alcoholism, drugs and violence but she has been living all of her life in a community where socioeconomic problems are still present. [ 108 ] She acted regardless of legal prohibitions in part because of the trivialization of this type of crime within the community of Kahnawake. [ 109 ] A n act which is « tolerated » in some way by the authorities does not immunize someone of being accused, if that person contravenes the law [39] . [ 110 ] Nevertheless, the context in which Mrs. Jacco committed the crimes is relevant to impose a proportionate sentence that will meet the objective of denunciation and respect

section 718.2e) of the Cr. C . [ 111 ] Due to her minimization of the offence and her low capacity of introspection, the Gladue report indicates that the risk of recurrence is still present and it contains the following observation regarding the restorative approach to sentencing:

« As a social reintegration project, she wants to increase her restaurant’s sales figure. This project is realistic and positive, but doest not diminish the risk of recurrence. Currently, no specific requirement is brought up, besides the professional support to question her values due to the trivialization as to this type of offenses. » [ 112 ] This sentence should assist Mrs. Jacco to take responsibility for her actions and reduce the probability of reoffending. [ 113 ] The Court considers that restorative justice can be a severe punishment with strict probationary conditions. [ 114 ] Mrs.

Jacco complied with all her bail conditions since her release in May 2012 and it was the first time she was detained. [ 115 ] The overemphasis on incarceration is a misperception that a restorative approach imposes a lighter burden on the offender than a custodial sentence [40] . [ 116 ] Taking into account the goals of denunciation and deterrence, the restorative-type sentencing, the nature of the offences committed and Mrs.

Jacco’s rehabilitative needs, the Court concludes that the sentence should be the following: [ 117 ] THE COURT IMPOSES a conditional sentence of two years less one day to be served concurrently on all four counts. [ 118 ] The following specific conditions will be included in the conditional sentence: ▪ house arrest for the first year; ▪ curfew from 10 PM to 6 AM the last year; ▪ 200 hours of community service to be performed within the first 18 months. [ 119 ] This conditional sentence is to be followed by a two year probation, with a follow-up for the first year. __________________________________ MYRIAM LACHANCE, J.C.Q.

Me Isabelle Doray Counsel for the Directeur des poursuites criminelles et pénales Me Jean-Marc Tremblay Counsel for the accused Date of hearing: 26 et 28 janvier 2016