r v. SY VENG CHUN, 2018 QCCQ 866

R. c. Chun 2018 QCCQ 866 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTRÉAL TOWN OF MONTRÉAL Criminal and Penal Division No: 500-01-017422-046 DATE: January 30, 2018 ______________________________________________________________________ IN THE PRESENCE OF THE HONOURABLE MANLIO DEL NEGRO, J.C.Q. ______________________________________________________________________ HER MAJESTY THE QUEEN Prosecutor v. SY VENG CHUN LENG KY LECH Accused ______________________________________________________________________ JUDGMENT [1] MOTION FOR WARRANT OF COMMITTAL FOR NON-PAYMENT OF FINES

SECTION 734.7 CRIMINAL CODE ______________________________________________________________________ INTRODUCTION [ 1 ] Ms. Leng Ky Lech and her husband, Mr. Sy Veng Chun, operated a business in Chinatown, dealing with currency exchange, precious metals, precious stones and jewellery. They appeared to be a law abiding, affluent couple in the Asian community: they didn’t have a criminal record, were the parents of four (4) children and were actively involved in their community while running their business. [ 2 ] This changed in the year 2000, when they met Mr.

Daniel Muir who was considered to be a well-established drug dealer both internationally and in the city of Montreal. [ 3 ] Shortly after their meeting with Mr. Muir, the couple began using their expertise in the field of money exchange and banking to launder the proceeds of Mr. Muir’s illicit gains in the drug trade. [ 4 ] A random verification at the Montreal airport in 2002, found Mr.

Chun carrying six hundred thousand American dollars (US$600,000) in his bag, which led to an international investigation resulting in charges against the accused, which emerged as one of the most complex prosecutions of its kind in the history of Canadian Criminal Law. [ 5 ] The amount of money laundered on behalf of Mr.

Muir was estimated to be one hundred million dollars ($100,000,000). [ 6 ] On September 15, 2014, the couple was convicted by Judge Patrick Healey, J.C.Q. (as he then was [2] ) on a multiple count indictment relating to laundering proceeds, possession of proceeds and various Income Tax offenses which were closely related to the offenses of laundering proceeds [3] . [ 7 ] The offenders were sentenced on March 18, 2015. In a written judgment, judge Healey levied a sentence which reads as follows at pages 15 to 17 [4] : MS. LECH Count 3 A.1 There will be a conditional stay of proceedings .

Counts 1 and 2 A.2 Eight (8) years concurrent on the two counts; and A.3 in lieu of an order for confiscation, a fine in the amount of $2,452,354.90, concurrent between the two counts and payable before 18 March 2017, and in default of such payment a consecutive term of imprisonme nt for a term of five (5) years .

Count 4 A.4 Eight (8) years, concurrent with any other term of imprisonment except that contemplated in paragraph A.3. Counts 5 and 6 A.5 Three (3) years, concurrent between the two counts and concurrent with any other term of imprisonment except that contemplated in paragraph A.3. Count 12 A.6 Three (3) years, concurrent with any other term of imprisonment except that contemplated in paragraph A.3. Count 13 A.7 Four (4) years, concurrent with any other term of imprisonment in this order except that contemplated in paragraph A.3. A.8 A fine in the amount of $603,422.00, payable before 18 March 2017. MR.

CHUN Count 3 B.1 There will be a conditional stay of proceedings. Counts 1 and 2 B.2 Eight (8) years concurrent on the two counts; and B.3 in lieu of an order for confiscation, a fine in the amount of $2,452,354.90, concurrent between the two counts and payable before 18 March 2017, and in default of such payment a consecutive term of imprisonment for a term of five (5) years. Count 4 B.4 Eight (8) years, concurrent with any other term of imprisonment except that contemplated in paragraph B.3.

Count 7 B.5 Four (4) years, concurrent with any other term of imprisonment in this order except that contemplated in paragraph B.3. Count 8 B.6 Four (4) years, concurrent with any other term of imprisonment in this order except that contemplated in paragraph B.3. Count 9 B.7 Four (4) years, concurrent with any other term of imprisonment in this order except that contemplated in paragraph B.3. Count 10 B.8 Three (3) years, concurrent with any other term of imprisonment in this order except that contemplated in paragraph B.3.

Count 11 B.9 Three (3) years, concurrent with any other term of imprisonment in this order except that contemplated in paragraph B.3. Count 13 B.10 Three years, concurrent with any other term of imprisonment in this order except that contemplated in paragraph B.3. B.11 A fine in the amount of $603,422.00, payable before 18 March 2017. [ 8 ] Counts 1 to 6 concern the counts for the laundering/possession of proceeds offenses, whereas counts 7 to 13 relate to the income tax offenses. [ 9 ] The offenders appealed both their conviction and sentence.

In a brief judgment (one sentence) their appeals to the Quebec Court of Appeal were dismissed [5] . PROCEEDINGS BEFORE THE COURT OF QUEBEC-COMMITTAL HEARING [ 10 ] The prosecution seeks a warrant of committal against both offenders for their default of not discharging themselves of their obligations to pay the fines levied by the sentencing judge.

[ 11 ] When the offenders appeared before this court for the first time on August 16, 2017 they were not in custody because after having served a portion of their eight (8) years prison term behind bars they were granted parole by the parole board of Canada. They are currently residing at a transition home as part of the conditions of their release from the penitentiary. [ 12 ] According to the evidence, both offenders have failed to pay their fine in the amount of $2,452,354.90 imposed as a fine in lieu of forfeiture and a fine in the amount of $603,422 imposed for the Income Tax offenses.

The delay to pay these fines expired on March 28, 2017 that explains why the prosecution seeks a warrant of committal against both offenders in the circumstances. THE PRINCIPAL ISSUES BEFORE THE COURT CAN BE SUMMARIZED AS FOLLOWS: 1. Has the prosecution established that the court should issue a warrant of committal against both offenders for having failed to discharge themselves of their obligation to pay the fine of $2,452,354.90 which was imposed as a fine in lieu of forfeiture under

section 462.37(3) Criminal Code ? If so, should the warrant of committal be for a term of imprisonment of five (5) years consecutive to the sentence of eight (8) years? 2. Has the prosecution established that the court should issue a warrant of committal against the offenders for having failed to discharge themselves of their obligation to pay the fine of $603,422 for the Income Tax offenses? If so, what should be the quantum of imprisonment that this court should impose for the failure to pay and should this sentence be ordered to be served consecutively? 3.

Have the offenders provided a reasonable excuse, to justify that an order of committal not be issued? POSITION OF THE OFFENDERS [ 13 ] The offenders argue that their current situation is substantially different from when these offenses occurred (2000-2004). They both claim that their finances were literally knocked down following their arrest and prosecution for this case. Following their conviction, they were incarcerated for some time and have not worked since then. During his testimony, Mr.

Chun said that before his arrest he and his wife were millionaires having assets valued in excess of nine million dollars ($9,000,000) but following their arrest they were practically left without two pennies to rub together. They currently manage to get by with small pensions. [ 14 ] Following their summons to appear in court for the warrant of committal hearing, they have turned to their community for help in order to raise the necessary sums to pay their fines.

Evidence was presented that donations varying from three hundred to one thousand dollars ($300-$1,000) were secured from members of their community to help them pay their fines, which total a sum in excess of six million dollars ($6,000,000). They have managed to raise approximately four thousand one hundred dollars ($4,100) thus far. They ask the court to grant them an extension to pay their fines so they can continue with their fund-raising campaign. POSITION OF THE PROSECUTION 1.

The prosecution argues that the warrant of committal be issued since the offenders have the necessary means to pay but choose voluntarily not to pay. 2. The delay for payment has expired so no further delay should be granted [6] . 3. In consideration of the amount of money that was laundered by the offenders, one hundred million dollars ($100,000,000), that the drug dealer (for whom they were laundering the funds) was now deceased, enabled them to have complete control of the funds that were transferred to Cambodia. 4.

They have failed to abide by the order of forfeiture of their shares in PHSME SPECIALED BANK IN CAMBODIA issued by Judge Healy on November 2014, following their convictions. 5. The money laundered, according to the evidence tendered at trial, had been transferred to the above-mentioned bank in Cambodia by the offenders. 6. The offenders have, from the outset, deceitfully hidden their assets in order to hide their funds and assets from the government in order to avoid confiscation. 7.

The offenders have voluntarily chosen not to pay their respective fines. [ 15 ] Consequently, the prosecution urges this court to issue a warrant of committal against both offenders in order to satisfy the portion of their sentence that they have not complied with. ANALYSIS [ 16 ] In a nutshell, the offenders entered into an agreement with Mr. Muir in early 2000. In its simplest terms it was agreed that Mr.

Muir would supply the offenders with millions of dollars in Canadian cash in exchange for services by the offenders and the payment of interest in the amount of eighty thousand dollars ($80,000) by the offenders to Mr. Muir. The evidence revealed that the offenders had experience as bankers in Cambodia and that they also needed cash to resume their banking activities. Ms. Lech said that she could exchange Mr. Muir’s Canadian cash for American cash if he needed it. Ms. Lech would take care of business in Montreal and Mr.

Chun would transport the cash to the bank that the offenders intended to open in Cambodia, or otherwise transferred [7] . [ 17 ] Their agreement continued for approximately four (4) years. According to the agreement, the offenders would launder the proceeds of the funds entrusted to them by Daniel Muir. The process of laundering involved elaborate schemes for the transfer of money to a bank in Cambodia that was controlled by the offenders. [ 18 ] As mentioned before, the value of the sums laundered was estimated to be one hundred million dollars ($100,000,000).

At paragraph 18 of his judgment, the sentencing judge describes the case as being one of the largest and most complex of its kind in the

history of Canadian Criminal Law [8] . [ 19 ] For the purpose of this case, the court will accept, at face value, all the conclusions of fact and law that have been accepted by the trial judge as having been proven beyond a reasonable doubt. It is not up to this court to review these findings except in respect of the offender’s ability to pay the fines imposed by the sentencing judge. This court will not and cannot re-evaluate the conclusions of fact and law reached by judge Healey. [ 20 ] The offenders were keenly aware that the provenance of the monies received by Mr.

Muir was from his involvement in drug trafficking on a large scale. As part of their agreement with Mr. Muir they had agreed to pay him a sum of eighty thousand dollars ($80,000) per month as interest for the money they were holding for him. The evidence revealed that the offenders cheated Mr. Muir by not paying him his interest as they had agreed. Furthermore, at a point in time when they were in possession of a considerable amount of Muir’s money in Cambodia, Muir died a violent death in 2004 when he was hacked to death by two unknown men in downtown Montreal. His assassins have yet to be identified.

THE FINE IN LIEU OF FORFEITURE-SECTION 462.37(3) CRIMINAL CODE - MECHANISM Fine instead of forfeiture 462.37

(3) If a court is satisfied that an order of forfeiture under subsection (1) or (2.01) should be made in respect of any property of an offender but that the property or any part of or interest in the property cannot be made subject to an order, the court may, instead of ordering the property or any part of or interest in the property to be forfeited, order the offender to pay a fine in an amount equal to the value of the property or the part of or interest in the property. In particular, a court may order the offender to pay a fine if the property or any part of or interest in the property (

a) cannot, on the exercise of due diligence, be located; (

b) has been transferred to a third party; (

c) is located outside Canada; (

d) has been substantially diminished in value or rendered worthless; or (

e) has been commingled with other property that cannot be divided without difficulty. [ 21 ]

Section 462.37(1) provides that fines can be levied against offenders in lieu of forfeiture where the proceeds of crime have been withheld or concealed in such a way that they are inaccessible to the government. In such instances the court may, instead of ordering the forfeiture of the property, order the offender to pay a fine equal to the value of the property. [ 22 ] The provision’s purpose is twofold: firstly, it contributes to the general principles of sentencing of deterrence and denunciation and, secondly, it serves to deprive the offender of the proceeds of his crime and to reinforce the notion that crime does not pay or at least that it will pay less [9] . [ 23 ]

Section 462.37(3) C riminal Code provides that when forfeiture is not possible because the property cannot be seized or identified or, as in this case, when the proceeds are out of the country the court may, instead of ordering the property or any part of or interest in the property to be forfeited, order the offender to pay a fine in the amount equal to the value of the property. As such, the fine in lieu of forfeiture is considered an enforcement procedure rather than being part of the sentence. [ 24 ]

Section 462.37(4)

b) Criminal Code provides that the court shall direct, should the offender default in making the payment that the term of imprisonment be served “consecutively” to the term of imprisonment levied or that the offender is serving. [ 25 ] In this case, the default for not paying the fine in the amount of $2,452,354 for the money laundering offenses was established to be five (5) years consecutive according to

section 462.37(4) vii Criminal Code . The term was ordered to be served consecutively to the term of eight (8) years levied following conviction at trial for both offenders. [ 26 ] The fine levied takes the place of forfeiture and the amount of the fine must be equal to the value of the property or part of the interest in the property. For the purposes of forfeiture, the court may not take the offenders ability to pay into consideration as a basis for deciding to impose a fine or to reduce the amount of the fine [10] . [ 27 ] It should be noted that

Part XII.2 of the Criminal Code relating to proceeds of crime does not provide the necessary mechanisms regarding the delay for the payment of a fine or for the process of issuing a warrant of committal for non-payment. As previously mentioned, the ability of the offender to pay may not be taken into consideration by the court either in deciding to impose a fine instead of forfeiture or in determining the amount of the fine. [ 28 ] In the case of Lavigne [11] , it was determined that

Part XII.2 of the Criminal Code does not render inapplicable other provisions of the Criminal Code regarding the offenders ability to pay or the issuance of a warrant of committal should the offender not pay his fine without any reasonable excuse. Consequently, the court will revert to the other mechanisms provided by the Criminal Code in order to assess the offender’s capacity to pay the fine that was levied by the sentencing judge in lieu of forfeiture.

HAS THE PROSECUTION ESTABLISHED THAT A WARRANT OF COMMITTAL BE DELIVERED AGAINST BOTH OFFENDERS FOR NON-PAYMENT OF THEIR FINE IN LIEU OF FORFEITURE- SECTIONS 462.37(4) AND 734.7 CRIMINAL CODE ? [ 29 ] The amount, which the court decided to be forfeited, was established to be $4,904,709.90, which is why the fine under

section

462.37(3) of the Criminal Code was levied against each of the offenders in the amount of $2,452,353.90. [ 30 ] Considering that the judge was not bound to take the ability of the offenders to pay in imposing the fine in lieu of forfeiture he nonetheless made the following observations regarding the offenders’ ability to pay a fine at paragraph 33 of his judgment [12] : 33] Given the findings of fact in this case concerning the amounts of money transferred by the offenders to Cambodia, there is nothing in the evidence to suggest that the offenders are unable to pay fines that may be impos ed by the sentence of the court .

To the contrary, there is compelling evidence that the offenders retained millions of dollars that they had received in the execution of their agreement with Mr. Muir. On the strength of this evidence I am confident that they have the means to pay any financial penalty that may be assessed and it would appear that they have the means to pay more than the prosecution seeks. This observation is equally applicable to fines that may be imposed upon the corporate offenders under

section 734 and fines imposed in lieu of a forfeiture order under

section 462.37 of the Criminal Code , even though as regards the latter the ability to pay is not a relevant concern at this stage . [Emphasis added] [ 31 ] The sentencing judge concluded that despite that the offender’s ability to pay was not relevant for the fine in lieu of forfeiture component of his sentence, the time within which the fine was to be paid and the offender’s ability to pay the income tax fine component was clearly taken into consideration. His conclusion, based on the evidence before him, was that they were able to pay more than what the prosecution was asking.

The judge correctly guided himself in verifying the offenders’ ability to pay the income tax fines before sentencing the offenders in view of section 734(2) Criminal Code . [ 32 ] In view of the above comments, I am entirely satisfied that the sentencing judge was convinced of the offenders’ ability to pay the fine for the income tax offenses before he levied sentence. [ 33 ] In the case of Topp [13] the issue of ill-gotten gains was addressed as follows by Judge Fish: [7] Past receipt of illegally obtained funds does not impose an evidential burden on offenders to prove they no longer possess their ill- gotten gains.

In the absence of a credible explanation, however, it will often be open to the court to infer that the offender is able to pay a fine. But the court is not legally bound to do so. The probative weight of the inference will depend on the circumstances, and therefore vary from case to case. [ 34 ] The offenders, as was their right, testified before me during their hearing to explain their reasons for not having paid their fines within the prescribed delays. [ 35 ] Both offenders appeared their respective ages; it was obvious to me that this case has taken its toll on them.

They seemed frail and fragile to say the least. It was difficult not to have compassion for this elderly couple who had just spent time in jail away from each other and, now while being on parole, live apart when they are supposed to be living what is commonly known as ones’ golden years. Barely out of jail, once again, have they been summoned to face the court for the issues of their unpaid fines. [ 36 ] While both offenders complained of their health problems, the offender, Ms. Lech, testified about having experienced three near- death experiences.

She explained how she began a fundraising campaign in her community to raise funds for her and her husband’s behalf in order to initiate some payment for their fines, which are in excess of $6,000,000.00. However, despite their commendable efforts, it is obvious to the court that her objectives are not realistic in the circumstances in view of the enormity of their debt to the government.

It seems that she managed to raise about four thousand and one hundred dollars ($4,100) thus far. [ 37 ] She stated that following her arrest, her homes, business and personal assets were seized which she estimates the value to be at seven million five hundred thousand dollars ($7,500,000). [ 38 ] Mr. Chun also testified before me; his testimony was brief. His testimony alluded to his persistent health problems that he endured throughout his incarceration. He also spoke with pride about his previous life as a businessman and of his real estate holdings that he owned before his arrest.

The court was able to ascertain that this gentleman was a proud man but, sadly, the court did not hear any expression of remorse for the enormity of the crime for which he was convicted. I say sadly because it does not appear as if this man thinks he did anything wrong. [ 39 ] It pained him to admit that he now lives on a small pension, that he is essentially penniless.

The court acknowledges that it must be difficult for this man to be in this situation as the court was able to discern that he was, at some point in his life, an eloquent, worldly individual of significant wealth and stature. [ 40 ] During his cross examination, he testified that the bank in Cambodia, which the judge found was used to launder the ill-gotten funds, did not exist which is why he has failed to remit the shares of this bank to the authorities in contravention of the order of forfeiture of these shares issued on November 24, 2014.In view of the overwhelming evidence adduced during the trial, the court does not accept his testimony as credible or reliable in the circumstances. [ 41 ] Considering the evidence accepted by the trial judge as having been proven beyond a reasonable doubt, especially with regards to the origin and transfers of tainted money to the bank in Cambodia, it would not be judicious for this court to arrive at a different conclusion than the trial judge did in this case. [ 42 ] The proof revealed that they had not made any arrangements to negotiate a payment

schedule before the delay for the payment expired, which confirms their unwillingness to pay. The offenders now ask for an extension to pay, which is contemplated by

section 734.3 of the Criminal Code . In the case of R . v. Cook , it was decided that this

section applies before the expiration for the delay in which the fine must be paid [14] . In view of the decision in Cook , the request for an extension is not accepted. Even if the court decided to grant the offenders an additional delay, this delay would not change anything to the situation of the offenders, as the offenders have the ability to pay their fines but have voluntarily chosen not to. Furthermore, the fund-raising campaign within their community, in the courts’ view, does not have any reasonable expectation to succeed in raising sufficient funds to pay the offenders’ fines.

[ 43 ] In view of these reasons, this court has no other choice but to arrive to the inescapable conclusion that the offenders have gone to considerable length to keep their assets out of the reach of the government’s hands. This court has considered the amount of funds received and the time that has passed since the reception of the funds. However, considering the amount of funds received, the court cannot close its eyes and not draw an inference that the offenders are still in possession of a portion of the ill-gotten gains they laundered for Mr.

Daniel Muir, especially since he was killed while they were in possession of his ill-gotten funds.

Regrettably, the offenders refuse to discharge themselves of their obligation to pay their fines. [ 44 ] The prosecution’s evidence during this hearing has also established the following elements which are summarized at page three (3) of their factum, which the court has accepted as credible and reliable reads as follows [15] : ➢ Faux bail [Pièce R-3, onglet Fet onglet G, témoignage de Ghislain Laporte p.16]; ➢ Faux prêts pour expliquer le transport des 600 000 USD de Montréal à Phnom Phen en octobre 2002 [Pièce R-3, onglet G, témoignage Chen Dara le 1er février 2010, page 3]; ➢ Signature de contre lettre entre Muir et Lech [Pièce R-3, onglet 3, témoignage Chen Dara, le 29 janvier 2010, page 2]; ➢ Prétendent agir comme prête-nom pour des tiers concernant la Banque [Pièce R-3, onglet 3, page portant le no. 384 et 390]; ➢ Faux prêts d’une tante pour justifier des dépenses [Pièce R-3, onglet G, témoignage de Ghislain Laporte, p.20]; ➢ Faux prêt, d’un faux immigrant investisseur, de 600 000 par Juge Healy [Pièce R-2, cahier de sources, onglet 1 et verdict p.51]; ➢ Utilisation de prête-noms achat 1093 Béique [Pièce R-3, onglet 3, témoignage Chen Dara 29 janvier 2010, p. 1-2]; ➢ Acquièrent une propriété, en novembre 2009, au nom de leur fils Justin : nous prétendons que Chun et Lech agissent comme les propriétaires du bien (y habitent etc.) et que Justin avait peu de moyens connus pour acheter ce bien à son nom [Pièce R-4, documents concernant l’acquisition des condos 815 Muir puis 795 Muir par rapport aux revenus contemporains de Justin Chun]; ➢ Octobre 2014 : 1901-795 Muir hypothéqué à hauteur de 920 000 $ [pièce R-4, contrat d’hypothèque collatérale inscription 21 132 885 de la circonscription foncière de Montréal]. [ 45 ]

Section 734.7 Criminal Code read as follows: Warrant of committal 734.7

(1) Where time has been allowed for payment of a fine, the court shall not issue a warrant of committal in default of payment of the fine. (

a) until the expiration of the time allowed for payment of the fine in full; and (

b) unless the court is satisfied (

i) that the mechanisms provided by sections 734.5 and 734.6 are not appropriate in the circumstances, or (ii) that the offender has, without reasonable excuse, refused to pay the fine or discharge it under

section 736. Reasons for committal

(2) Where no time has been allowed for payment of a fine and a warrant committing the offender to prison for default of payment of the fine is issued, the court shall state in the warrant the reason for immediate committal. Period of imprisonment

(2.1) The period of imprisonment in default of payment of the fine shall be specified in a warrant of committal referred to in subsection (1) or (2). Compelling appearance of person bound

(3) The provisions of Parts XVI and XVIII with respect to compelling the appearance of an accused before a justice apply, with such modifications as the circumstances require, to proceedings under paragraph (1)(b). Effect of imprisonment

(4) The imprisonment of an offender for default of payment of a fine terminates the operation of sections 734.5 and 734.6 in relation to that fine. [ 46 ] The purpose of imposing imprisonment in default of payment is to incite the offenders with the means to pay to, in fact, make payment. The court finds that this is not a case where the offenders genuinely cannot pay. The evidence established that the offenders obtained substantial funds from their criminal activities but have voluntarily concealed their assets in order to keep these funds out of the reach of the government. [ 47 ] In considering

section 734.5 Criminal Code regarding license-permit suspensions and revocations, the court finds that in view of the amount of the fine imposed in lieu of forfeiture ($4,904,709.90) the measure contemplated for the recovery process for this amount is not an appropriate measure for the prosecution to secure payment of the fine imposed-

section 734.7(1) (b)(

i) Criminal Code .

Section

734.6 Criminal Code concerns the civil component of the recovery process open to the prosecution is clearly an untenable option in this case as the offenders have put their assets out of reach of any civil recourse. Even if this

section enables the prosecution to register the unpaid fine as a civil judgment that can be renewed indefinitely, it is highly unlikely that the offenders will ever repatriate their funds from abroad. [ 48 ] Lastly, the fine option program contemplated by sections 734.7(1)

b) ii and 736 Criminal Code is not applicable in Quebec [16] . As a result, the offenders cannot work off their debt over a period of time through community service. [ 49 ] In view of the above, the court concludes that the prosecution has established that the offenders have, without lawful excuse, refused to discharge themselves of their obligation to pay their fine for the money laundering conviction. COSEQUENTLY THE COURT DIRECTS: FOR MS. LECH The court hereby issues an order of committal against Ms.

Lech for a term of imprisonment of five (5) years that should be served consecutively to any sentence of imprisonment to which the accused is subject at the time of sentencing. FOR MR. CHUN The court hereby issues an order of committal against Mr. Chun for a term of imprisonment of five (5) years that shall be served consecutively to any sentence of imprisonment to which the accused is subject at the time of sentencing.

SHOULD THIS COURT ISSUE AN ORDER OF COMMITTAL FOR THE FINES LEVIED FOR THE INCOME TAX OFFENSES AND, IF SO, SHOULD THE TERM OF IMPRISONMENT LEVIED BE ORDERED SERVED CONSECUTIVEY? [ 50 ] For the same reasons mentioned above, regarding the non-payment of the fine in lieu of forfeiture for the money laundering offenses, the court is satisfied that the prosecution has met all the elements mentioned in

section 734.7 Criminal Code for the issuance of an order committal for a term of imprisonment for non-payment of the income tax fines. [ 51 ] The sentences levied for the income tax offenses by the sentencing judge read as follows [17] : MS. LECH Count 13 A.7 Four (4) years concurrent with any other term of imprisonment in this order except for that contemplated in paragraph A-3. A.8 A fine in the amount of $603,422 payable before 18 March 2017. MR. CHUN Count 13 B.10 Three years, concurrent with any other term of imprisonment in this order except that contemplated in paragraph B-3.

B.11 A fine in the amount of $603,422 payable before 18 March 2017. [ 52 ] The sentence contemplated at paragraph B.3 was the sentence imposed as a fine in lieu of forfeiture where the default for non- payment specified a term of imprisonment of five (5) years consecutive. [ 53 ] For both offenders regarding their sentence for Count 13 the sentencing judge specified that the imprisonment levied be a term of four (4) years for Ms. Lech and three (3) years for Mr.

Chun concurrent (A.7 and B.10) with all other counts in the order, except for count B.3, which specified that in default of payment of the fine in the amount of $2,452,354.90, a term of imprisonment of five (5) years consecutive be levied.

At the risk of repeating myself, the sentencing judge did not specify that a consecutive term of imprisonment be levied should the offenders not pay the fine contemplated in A.8 and B.11 for the income tax offenses. [ 54 ] The sentencing judge, certainly considered that the income tax offenses had a sufficiently close nexus with the money laundering offenses to consider not levying a consecutive term of imprisonment should the offenders not pay their fine for the income tax offenses (A.8 and B.11). [ 55 ] By virtue of section719 (1) of the Criminal Code , a sentence commences when it is imposed, except where a relevant enactment provides otherwise. [ 56 ] Consequently, if sentences are intended to be consecutive, a direction to that effect must be specifically made [18] .

This was not the case for theses counts. THE DETERMINATION OF EMPRISONMENT FOR DEFAULT OF PAYMENT (INCOME TAX OFFENSES) [ 57 ] The mechanism to calculate the default for payment is provided by the combined operation of sections 734 (4) (5) and 734(8) of the Criminal Code . [ 58 ] The Quantum of imprisonment for the unpaid fine for the Income Tax offenses is calculated according to the following formula provided by the operation of section 734(5) of the Criminal Code :

Unpaid amount of fine ($) Regulated costs ($) Minimum wage in Québec at time of default ($) Work hours (h/day) TOTAL (years) 603,422 300 10.75 8 19.2 ( 603,422 + 300 ) ÷ ( 10.75 x 8 ) ÷ 365 = 19.2 [ 59 ] The above calculation leads to a term of imprisonment of 19.2 years for the non-payment of this fine. However, by virtue of section 734(5)

b) of the Criminal Code the term of imprisonment is limited to a term of five (5) years for the non-payment of the fine of $603,422. [ 60 ] From the court’s viewpoint, the position of the prosecution in seeking a consecutive sentence of imprisonment for the non- payment of this fine during the committal hearing is not consistent with their position during the sentence hearing held in 2015.

The sentencing judge summarized their position in this regard as follows at page 7 of his judgment [19] : The prosecution propose that the terms of imprisonment be concurrent, with the exception of a submission for a consecutive sentence of six (6) years in default of non-payment of any fines in lieu of forfeiture. [ 61 ] To recap briefly, the prosecution did not make any submissions during the sentencing hearing requesting that the non-payment of the income tax fines result in the imposition of a consecutive term of imprisonment.

While this does not bar them for requesting a consecutive term of imprisonment during their submissions requesting the issuance for an order of committal, the court nonetheless questions the prosecution’s duty of fairness in the circumstances considering that their demand, if accepted, would result in a global sentence totalling eighteen (18) years imprisonment which appears clearly excessive and unreasonable even for this file.

It is my view that it was not the intention of the sentencing judge that his sentence be transformed into an eighteen (18) years term of imprisonment should the offenders be unable to pay their income tax fines (A.8 and B.11). [ 62 ] The principal of Totality is an important principle of sentencing, which is codified in

section 718.2 (

c) of the Criminal Code , and the prosecution should have considered the other principle of proportionality-

section 718.1 of the Criminal Code during its submissions.

In the court’s view, even if the judge did not address this issue specifically in his judgment, by not directing that the sentences for the income tax offenses be served consecutively should the offenders default in making the payment, the court infers that the sentencing judge’s intention was that the sentence for default in paying the fine not be consecutive. [ 63 ] For these reasons, the court concludes that the prosecution has established that the offenders have, without reasonable excuse, refused to discharge themselves of their obligation to pay their fines for the income tax offense convictions.

However, the prosecution has failed to convince this court that a consecutive sentence of imprisonment should be levied for the failure of the offenders to discharge themselves of their obligation to pay the income tax fines (A.8 and B.11). CONSEQUENTLY THE COURT DIRECTS: FOR MS. LECH The court hereby issues an order of committal against Ms. Lech for a term of imprisonment of five (5) years to be served concurrently to any sentence of imprisonment to which the offender is subject at the time of sentencing. FOR MR. CHUN The court hereby issues an order of committal against Mr.

Chun for a term of imprisonment of five (5) years to be served concurrently to any sentence of imprisonment to which the offender is subject at the time of sentencing. __________________________________ MANLIO DEL NEGRO, J.C.Q.

M e Fabienne Simon Service des poursuites pénales du Canada Crown attorney M e Stephen Angers Stephen Angers Avocat Inc. Stephen Angers, Attorney Defence attorney Dates of hearing: August 23, October 6 and November 10, 2017