R. v. Fortune, 2023 ONCJ 193

CITATION: R. v. Fortune , 2023 ONCJ 193 DATE : May 3, 2023 ONTARIO COURT OF JUSTICE BETWEEN: HIS MAJESTY THE KING — AND — RAPHAEL FORTUNE Before Justice H. Borenstein Reasons for Sentence released on May 3, 2023 Mr. Matthew Giovanazzo ............. for the Crown Ms. Melanie Webb ................ for Raphael Fortune aka Raphael Kojukaro BORENSTEIN J.: [ 1 ] This is the sentencing decision in the Raphael Fortune, aka Raphael Kojukaro matter. He was found guilty after trial of fraud over $5,000 and possession over $5,000.00.

The possession charge will be conditionally stayed pursuant to the decision in Kienapple. [ 2 ] I incorporate the facts contained in my reasons for judgment and my ruling in relation to two motions to re-open the case. For east of reference, I repeat the

summary of the case from those earlier rulings. [ 3 ] “The complainant, Mike Rantissi, lives in the United States and was contacted by email by Mr. Fortune in regard to an investment opportunity. [ 4 ] Fortune told Rantissi that he had unique investing skills in the diamond industry, with an impeccable record, and would earn his clients huge profits with no risk. [ 5 ] The Crown alleges that Fortune ensnared Rantissi in a fraud that had two stages. First, he earned Rantissi’s trust with a small deal and then defrauded him in a large deal. [ 6 ] Mr. Rantissi decided to invest with Mr. Fortune.

He invested in the small deal. Fortune told him he earned a considerable profit on that investment in a very short time. He told Rantissi he had a large investment with no risk. Rantissi sent Fortune several wire transfer representing his life’s savings of about quarter of a million US dollars. Rantissi never heard from Fortune again. Mr. RANTISSI lost everything. He never received the diamonds, nor did not get his money back. Mr. Fortune stopped communicating with Rantissi after his last wire transfer. [ 7 ] Rantissi was the main crown witness.

Officer Lee, the officer in charge, testified as did two bank employees. Bank records were admitted on consent and an agreed statement of facts was filed. [ 8 ] No defence was called. [ 9 ] There is no issue Mr. Rantissi lost money investing in diamonds with Mr. Fortune. The issue is whether the Crown has proved beyond a reasonable doubt that the only reasonable inference at the end of the case was that Mr. Fortune wilfully defrauded Mr. Rantissi of an amount over 5,000. If so, the related possession of proceeds of crime count follows.

Conversely, if Fortune is not guilty of the fraud, he will be found not guilty of the possession of proceeds count.” [ 10 ] That was the overview. [ 11 ] I found Mr. Fortune guilty of both offences for the reasons expressed in my judgment which was released August 30, 2022. PERSONAL CIRCUMSTANCES [ 12 ] Mr. Fortune is 55 year old. He did not finish high school. He started several businesses. He has had four or five serious relationships in his life, the last one was with the woman he married. That marriage ended about 14 years ago. He is intelligent and persuasive.

I base that on the contents of the emails introduced in evidence in this case. [ 13 ] Mr. Fortune was born in Montreal and moved to Toronto when he was two or three years old. He had a good relationship with his parents. His father was an electrician and his mother did the books for his father’s business. His father died about 10 years ago. His

mother is now 82 years old and in poor health. Since his arrest, Mr. Fortune has been living with and caring for her. He also loves andcare for his 13 year old border collie which requires constant medical attention. He advises no one in his family can care for his dog. Hehas no addiction issues. He has no criminal record. Rather curiously, when asked if Fortune was working, his lawyer was unable toadvise the Court whether he is working. She is not opposing a free standing restitution Order but thinks it is unrealistic he will be in aposition to pay. He has severe migraines for which he takes monthly injections.

He has ADHD and anxiety. And tendonitis I have readhis mother’s letter as well as his doctor’s and the related attachments. His doctor opines that jail will be difficult for Mr. Fortune. Hismother is very worried about him going to jail as well. And Mr. Fortune’s comments at the end of the sentencing hearing speak about hisworry for his mother and his dog should he go to jail. Impact on the victim [14] The impact on Mr. Rantissi was significant. He lost over $300,000.00 Cdn to this fraud. It created financial stress andhardship.

The fact he did not sell his investment properties, which were all heavily encumbered, and which would have triggered taxconsequences, does not undermine the quantum of the loss, nor diminish its impact significantly. His conduct more generally, asadduced by the defence on the sentencing says little about the impact of the loss on Mr. Rantissi. PRINCIPLES OF SENTENCING INVOLVING FRAUDS [15] Deterrence and denunciation are to be given significant weight when sentencing in relation to large, well planned frauds.

Thatis what this was. [16] Almost 25 years ago, the Ontario Court of Appeal in Gray (L.V.) et al. (1995), (ON CA), 76 O.A.C. 387 at398-99 held: “our court again stressed the need for general deterrence in fraud cases: there are few crimes where the aspect of deterrenceis more significant. It is not a crime of impulse and is of a type that is normally committed by a person who is knowledgeable and shouldbe aware of the consequences.

That awareness comes from sentences given to others”. [17] However, sentences must be also be as restrained as possible consistent with the principles and objectives of sentencing,especially given the accused is a first offender. [18] At bottom, s. 718.1 provides that a sentence must be proportionate to the gravity of the offence and the degree of responsibilityof the offender. But people who commit well planned frauds calculate, and assess, and deliberate. They should know that, when caught,they will likely face significant sanctions.

Positions of counsel [19] Both counsel recognize that a sentence of imprisonment is warranted. [20] The Crown submits Fortune should be sentenced to imprisonment in the peni​tentiary in the range of 24-30 months and ordered to make $303,059.75 Cdn restitution, a fine in lieu of forfeiture in the same amount, an Order prohibiting him from employ​mentor volunteering in areas where he would have authority over the property of others pursuant to s. 380.2 of the Criminal Code and, finally,that he be ordered to provide a sample of his DNA. [21] The defence submits a conditional sentence would be appropriate but acknowledges those are often imposed in differentcircumstances such as where the amount of the fraud is less, some restitution paid and /or where guilty pleas occur.

In the alternative,counsel submits a prison sentence of 12-18 months would appropriate. THE RANGE [22] Both counsel submitted cases demonstrating a range of sentence from a condi​tional sentence to a sentence of about three and ahalf years acknowledging no two cases are alike. The more recent cases involving large frauds tend to result in sentences from very highreformatory to about three and a half years. I append the schedules of cases provided by both counsel demonstrating the range. [23] Courts should not depart from the range advanced by counsel absent exceptional circumstances.

There are no exceptionalcircumstances in this case. [24] The following cases some provide further guidance in determining the sentence in this case. [25] In R v Fiorilli

(2015) Ont. CA, 328, the accused was found guilty of a $213,000 fraud and was sentenced to one year incustody. He was ordered to pay a $110,000 fine in lieu of forfeiture within six years failing which he would receive a further custody asprescribed. The objectives of deterrence and denunciation were not met by a conditional sentence in that case. [26] In Manickam, (Ont. SC), the accused deposited fake cheques in the bank and withdrew monies which he used to purchasesupplies for his business and for gambling. The bank lost $277,000.00. Manickam was convicted after trial and had no prior criminalrecord.

He was sentenced to 18 months imprisonment, ordered to pay restitution and a fine in lieu of forfeiture. AGGRAVATING FACTORS [27] Justice C. Hill in R. v. Williams, (ON SC), [2007] OJ No. 1604 (SCJ), sets a non-exhaustive list of aggravating and mitigating factors in relation to significant frauds which provides helpful guidance. Many of the aggravating factorsnoted by Hill, J. are present in this case. These include the following: [28] This fraud was well planned out and deliberate. It was not spontaneous or a momentary lapse of judgment to quote Atwell. Itwas designed to lure in the victim with multiple stages.

There were many opportunities for Fortune to stop this fraud yet he only stoppedwhen Rantissi had no more to give.

[ 29 ] The scale of the fraud and loss is large being just over $300,000. [ 30 ] The impact on the victim and his family was significant. [ 31 ] The fraud was motivated by greed, for personal gain. MITIGATING FACTORS [ 32 ] Mr. Fortune is a first offender. He is 55 years old. He overcame difficulties including ADHD and Anxiety. He has managed to do well despite not finishing high school. He has a supportive mother who he is actively engaged in helping as he is with his dog which he stressed in his comments before sentencing. [ 33 ] There is an absence of much else that is mitigating in this case.

Length of Sentence [ 34 ] Bearing in mind all the above and mindful of the principle and need for restraint, in my view, a sentence of 15 months imprisonment is appropriate. I consider this at the low end of the range but seek to balance the aggravating and few mitigating factors but also recognizes Fortune is a first offender. Like in Manickam , I do not assess Fortune, a first offender, as someone who needs to go to the penitentiary. [ 35 ] Given the length of this sentence, a conditional sentence is available. I must consider whether, in my view, it is appropriate in this case. In my view, it is not. [ 36 ]

Section 742.1 provides that the Court, may, for the purpose of supervising the offender’s behaviour in the community, order that he serve the sentence in the community, subject to certain conditions, if I am satisfied that the service of the sentence in the community would not endanger the safety of the community and would be consistent with the fundamental purpose and principles of sentencing set out in sections 718 to 718.2. [ 37 ] In my view, a conditional sentence is not appropriate. It does not adequately denounce and deter this conduct.

While a conditional sentence, especially one that contains punitive terms and is lengthened beyond the sentence otherwise imposed can provide a measure of deterrence and denunciation, a “real” jail sentence usually provides more. And in this case, Fortune’s conduct needs to be denounced more than a conditional sentence would denounce it and others who would commit this type of offence need to know they will face significant terms in jail. Fortune’s conduct was planned and deliberate and he deprived the victim of over $300,000.00. That money disappeared.

There is little prospect of restitution though I will order restitution on consent and will make an order of a fine in lieu of forfeiture which should incentivize Fortune to repay the money. He conduct was calculated. The need to deter Fortune and others from engaging in this planned and deliberate fraud warrants a sentence of actual imprisonment in my view, albeit a restrained one given Fortune is a first offender. There are significant aggravating factors in this case and almost a complete absence of mitigation.

As defence counsel candidly acknowledged, conditional sentences usually are given where there are lesser amounts, monies paid back, offences fuelled by addiction or mental health issues or guilty pleas or some combination. [ 38 ] Accordingly, I sentence Mr. Fortune to 15 month imprisonment followed by one year probation. I will also make a free standing restitution Order in favour of Mr.

Mike Rantissi in the amount of $303,059.75 an Order prohibiting him from employment or volunteering in areas where he would have authority over the property of others pursuant to s. 380.2 of the Criminal Code . and I will impose a fine in lieu of forfeiture pursuant to s. 467.37 (3)of the Code. That Order is warranted in view of that

section and the criteria noted by Justice Doherty in Abdulrazek. He will have five years to pay that fine in lieu. Any payments made in restitution will reduce the amount of the fine in lieu of forfeiture. If he fails to pay that fine in lieu assuming any amount is still owing, he will be incarcerated for the period prescribed by law. I will also make a DNA Order. Released: May 3, 2023 Justice H. Borenstein R. v. FORTUNE: Sentencing Chart Crown cases Case Sentence Notes

R v Fiorilli , 2015 ONCA 328 . 1 year custody $213, 084 restitution $110,000 FIL 6 years to pay Although a lower amount than other cases, a low penitentiary sentence was available. Objectives of deterrence and denunciation not met by a CSO. R v MacLeod , 2020 ONCA 596 . 3 years custody. Sentence appeal dismissed. Offender fraudulently withdrew money from client accounts. Total loss $350,000. Fraud occurred over lengthy period of time (para 18) A CSO was rejected. R v Manickam , 2021 ONCA 668 . 18 months custody. 3 years probation. Restitution. Deposited fake cheques. Loss to banks of $250,000.

The trial judge held that the offence called for a penitentiary sentence but declined because this was a first offender. R v Ogier , 2016 ONCJ 363 . 30 months custody. $306, 221 restitution to Canada and $7,903 to CIBC. FIL for same amounts. Internal fraud at Service Canada. Total loss approximately $313,000. First offender. Indigenous offender. R v Roberts , 2017 ONSC 1071 . 2 years custody. $277, 787.78 restitution. FIL for same amount. 10 years to pay. Guilty plea. Sophisticated bank employee fraud. First offender. Chronic and accused mental health difficulties.

Court observed that CSOs typically reserved for unique / exceptional cases where there would be an adverse impact of custody on vulnerable third parties. Frauds in range of $270,000 are lower end of large-scale frauds. Restitution is part of a fit sentence. R v Sharma , 2019 ONCA 274 . CSO 2 years less one day. Fine $96, 946. Upheld on appeal: 1. Similar outcomes had Crown’s sentence been imposed; 2. No error in principle; 3. Would require reincarcerating offender. Guilty plea. Tax fraud, potential loss of $488,178.37. Personally benefitted of $96, 946. Offender 67 years old with health issues.

Criminal record from early 1990s and 2000s for fraud. R v Singer , 2013 ONSC 4035 . 2 years less one day custody. Restitution $215, 773. Approximate loss $300,000. First offender personally, but had companies found guilty before. Offender had a medical disability: bipolar disorder. Defence cases

Case Offence & Sentence Imposed Trial or Guilty Plea Notes R. v. Gibb , 2014 ONSC 5316 (TAB 3) Fraud over $5000 Gibb & Grigorovsky: Conditional sentence of 2 yrs less a day 2 yrs probation , weapons prohibition, no contact order, fine in lieu of forfeiture & restitution Trial Offenders (James G. Gibb and Petros Grigorovsky) falsely informed victims that $100,000 would be invested in a property transaction. Money remained unpaid as of sentencing. Gibb: 58 yrs old, divorced; ongoing business rel’ship with Grigorovsky.

Gibb claimed to be victim of fraud and extortion that resulted in his bankruptcy in 2012; portrayed self as being a victim in circumstances of present crime. Denied any responsibility for fraudulent conduct; maintained was innocent victim of fraud and minimized his involvement in losses of the victims. According to police, had not held legitimate employment in last 20 yrs. Unemployed; no dependents. Prospects for obtaining remunerative employment following release limited. Aggravating factors: size of fraud, planning involved, significant impact on vulnerable victims.

Mitigating factors for Gibb: No prior record. (* However, subsequent to the trial, Gibb was sentenced to 18 mos. in custody in respect of another fraud (see Tab 4). Considered a first offender.) R. v. Gibb , 2013 ONSC 5680 (TAB 4) Fraud over $5000 18 mos. imprisonment, 2 yrs probation, $200,000 restitution order Trial Offender had induced complainant to provide $200,000 to invest in what the offender falsely represented as a safe investment. No restitution made. PSR concluded offender did not take matters before the court seriously, did not take responsibility for his conduct and showed no regard for the victim.

Offender was close friend of the complainant and family who had been affected financially and emotionally. Offender stated he had no ability to pay restitution and had declared bankruptcy. 57 yrs old. Had a positive childhood. Viewed self as victim and the person who was taken advantage of by others. Insisted he was not guilty and blamed others; appeared insensitive to adverse impact of conduct on victim and victim’s family. Victim lost a substantial portion of his retirement savings. Mitigating factors: No prior record.

R. v. Garrick, 2012ONSC 2528 (TAB 5) Fraud over $5000X 3 Conditionalsentence of 23mos. less 10 mos. presentencecustody, 3 yrsprobation,restitution Trial Offender convinced complainants to givehim money to invest in an IPO, which hepromised would yield significant returns. Three complainants invested various amountstotalling $139,000. Complainants asked fortheir money back. Offender promisedrepayment but no money returned. Offences spanned timeframe of January May2007. 42 yr old offender. Denied responsibility andminimized the offences for which he hadbeen convicted.

Saw charges andconvictions as a misunderstanding rather thancriminal conduct. No remorse. Attempted topersuade probation officer that was expectingto receive over $4M with which he intendedto repay the victims, which nevermaterialized (“willingness” to pay restitutionnot seen as a mitigating factor). Norestitution made. Vague regarding his prioremployment or means of income; noinformation on his employment history.

Aggravating factors: Amount of fraud,multiple victims, significant planninginvolved, very significant impact on victims,motivation was agreed Mitigating factors: No prior record.* Hadcomplied with bail conditions. Had supportof family and friends. (*However, seedecision at Tab 6 involving same offender.) R. v. Garrick, 2013ONSC 1798, aff’d2014 ONCA 757, 2014ONCA757 (TABS 6 & 7) Fraud over $5000X 4 18 mos.imprisonmentless 6 mos. creditfor PSC; 2 yrs probation,restitution,$172K fine inlieu of forfeiture Trial Offences occurred over 3-year period endingin Jan. 2007.

Method of deceit was to pose asa wealthy, well-educated person withprominent and powerful friends, knowledgeand connections. Presented self as personwho wanted to give back to the community. Victims included two Toronto Argonauts(Michael “Pinball” Clemons defrauded of$57K, Damon Allen defrauded of $45K), ayoung former model/actor defrauded of $59KUSD, and a young doctor, defrauded of$90K. (Offender held himself out to be amedical doctor to the last victim and metwith Sick Kids Foundation VP.) At the time of the commission of the offence,had no criminal record.

However, had beenconvicted by Richetti J. of three furtherfrauds committed in the three monthsimmediately following these offences(decision in Tab 5). Treated as first offender. 43 yr old offender with loving, responsiblefamily, who had been profoundly hurt by hisconduct. Failed to acknowledge that hisconduct was criminal. Absence of remorse;“staggering” lack of insight into theseriousness of his actions. Not employed inmany years; no credible evidence heard ofother legitimate source of funds. Appeal of conviction and sentence dismissed.

R. v. Callender , [2009] O.J. No. 5510 (S.C.J.) (TAB 8) Fraud over $5000; use of forged document Conditional sentence of 9 mos., 1 yr probation Trial (jury) Charges arose from attempted purchase of residential property – Callender and other individuals committed a fraud on the Bank of Nova Scotia of approx. $280,000, through a fake agreement of purchase and sale for the property 44 years old; first offender. Had a nine year- old son from a previous marriage whom he spoke with regularly but does not live with. Currently unemployed and on social assistance.

Aggravating factors: large amount of money placed at risk, significant degree of planning and deliberation involved in the commission of the offence (not a spontaneous or momentary lapse in judgment, rather he engineered the fraud and took some time and several steps to perpetrate it) Mitigating factor: No prior record Risk of Callender re-offending fairly low. No suggestion he had re-offended any time during approx. five years that followed this charge while he was out of custody. Crown sought a conditional sentence of 69 months; defence suggested suspended sentence. R. v. Victorino , [1999] O.J. No. 1782 (Gen.

Div.) (TAB 9) Fraud-related offences Imprisonment of 9 mos.; compensation order Not guilty plea; admission of facts following which finding of guilt made Crime was planned and deliberate; involved loss of nearly $309K from her employer. Was in a position of trust and control by virtue of her position as payroll manager. Conduct continued over almost 5.5 years. Numerous transactions. Discontinuation not on the offender’s own initiative. Offender vehemently maintained her innocence. Refusal to accept responsibility put into question legitimacy of realistic prospect of rehabilitation. No prior record.

Strong family support.

R. v. Christie , 2017 ONSC 4095 (TAB 10) Fraud over $5000, fraudulent use of credit card, possession of property obtained by crime, FTC with probation 12 mos. jail (21 mo. sentence reduced by 9 mos. for restrictive bail conditions), 3 yrs probation, DNA order, forfeiture order, restitution Guilty plea Series of frauds perpetrated by offender Christie and a co-accused. Obtained banking info of various persons and produced false ID in those person’s names to obtain credit. Total amount earned over $200K, of which $106,524.85 was Christie’s take. 51 yrs old.

Prior record – convicted on 6 separate occasions for 23 fraud and/or property offences. Committed these offences while still on probation for last set of convictions. Guilty plea was entered at outset of trial (did have a preliminary hearing). Had previously been employed steadily for 15 yrs; restrictive bail conditions prevented him from working. Had a 12 yr old son with whom he was quite close. Family provided pro-social support. Did express remorse and apologised to family and victims of fraud. R. v.

O’Shea , 2017 ONSC 736 (TAB 11) Fraud over $5000 18 mos. imprisonment; 18 mos. probation; restitution Trial Defrauded employer of nearly $200,000 over course of two years (2008-2010), while working as Chief Financial Officer. Due to fraud employer was unable to make payroll for first time its history, source deductions fell into arrears, resulting in a lien being put on business account. Breach of trust. Offender had been convicted for fraud against another employer (2011, 2012), and received 6-month conditional sentence (about one-third recovered in that case - $22,000 of $68,000).

However, treated as first offender in this case. Unclear what offender did with the money. No restitution made. Devastating impact on victims (included suicidal thoughts; significant financial impact; repercussions far-reaching and continued to struggle). Offender had personal issues, including childhood sexual assault. Involved in near fatal car accident that resulted in concussion in 2010. Admitted to crisis bed in 2012; diagnosed with bipolar disorder, major depression, hydrocephalus and celiac disease. Mitigating: First offender (had no convictions at time of offence).

R. v. Regnier , 2014 ONSC 3808 (TAB 12) 28 counts of fraud & fraud related charges 18 mos. imprisonment, 3 yrs probation, s. 380.2 order, restitution Guilty plea Conduct spanned over 4 years, the majority in 2011-2012. Involved 23 victims and 3 victim couples, whose losses totalled nearly $300K (ranging from $2000 to $75,500). Money was collected ostensibly to produce, promote, and market two feature films which was in some measure used to advance those purposes, but more significantly spent by the offender on travel, clothing, parties, rental of high end vehicles and other personal expenses.

Did not cease conduct on his own. Following his arrest, was released on fairly non-restrictive conditions and had not chosen to seek employment since. No restitution made. Enormous impact on victims. Personal savings depleted. Most significant was the offender’s uncle who lost $75,500; impact on his mental and physical health resulting in his having to see a psychiatrist and rely on antidepressants. Others had to finance their losses through debt. PSR and offender’s statement to court raised “serious questions” as to his level of remorse and concern for the victims, despite guilty plea.

Element of breach of trust. R. v. Mastromonaco , [2002] O.J. No. 4612 (S.C.J.) , aff’d, [2005] O.J. No. 501 (C.A.) (TABS 13 & 14) Fraud over $5000 21 mos. imprisonment; restitution Trial Convinced unsophisticated elderly couple to loan or invest $70K to facilitate high risk, complicated corporate financing. Had previously prepared income tax returns for the victims and provided estate planning advice. Stood in position of trust.

Very vulnerable victims given their age, health, lack of formal education, and reliance on accused for advice (husband was illiterate and had no formal education; wife had a grade 4 education and was hearing deficient). 51 yr old offender; minor unrelated criminal record. Had worked in financial sector for over 20 yrs. Cooperative with police; had complied with judicial interim release order. Refused to acknowledge guilt or express remorse for his actions. In PSR and comments to court demonstrated “total lack of remorse”. Not only refused to pay the money back but also refused to propose a method for doing so.

Accused testified at his trial. Appeal from conviction and sentence dismissed. Court of Appeal commented that it was a “particularly egregious fraud”.