R. v. Dastani, 2013 ONCJ 165

WARNING The court hearing this matter directs that the following notice should be attached to the file: A non-publication and non-broadcast order in this proceeding has been issued under subsection 486.5(1) or (2) of the Criminal Code . These subsections and subsection 486.6(1) of the Criminal Code, which is concerned with the consequence of failure to comply with an order made under subsection 486.5(1) or (2) , read as follows: 486.5 Order restricting publication — victims and witnesses. —

(1) Unless an order is made under

section 486.4, on application of the prosecutor, a victim or a witness, a judge or justice may make an order directing that any information that could identify the victim or witness shall not be published in any document or broadcast or transmitted in any way if the judge or justice is satisfied that the order is necessary for the proper administration of justice.

(2) Justice system participants. — On application of a justice system participant who is involved in proceedings in respect of an offence referred to in subsection 486.2(5) or of the prosecutor in those proceedings, a judge or justice may make an order directing that any information that could identify the justice system participant shall not be published in any document or broadcast or transmitted in any way if the judge or justice is satisfied that the order is necessary for the proper administration of justice. . . . 486.6 Offence. —

(1) Every person who fails to comply with an order made under subsection 486.4(1), (2) or (3) or 486.5(1) or (2) is guilty of an offence punishable on

summary conviction. COURT FILE NO.: 62793/02 DATE: 20130313 Citation: R. v. Dastani , 2013 ONCJ 165 O N T A R I O C O U R T O F J U S T I C E BETWEEN: HER MAJESTY THE QUEEN — AND — AFSHIN DASTANI Before Justice P.N. Bourque Reasons for Sentence released on March 13, 2013 C. Bond................................................................................................................. for the Crown A. Gold................................................................................... for the accused Afshin Dastani BOURQUE J.: [ 1 ] The defendant has pled guilty to 8 separate criminal offences:

(

a) P ossession of ephedrine for the purposes of exporting pursuant to section 6(2) of the Controlled Drugs and Substances Act, and 2 other related C.D.S.A. charges; (

b) An offence of selling a natural health product without a licence; (c) 2 counts of possession of proceeds of crime involving over $1.3 million and a house at 30 Little Natalie, Vaughan, contrary to section 354(1) (

a) of the Criminal Code of Canada ; (

d) Laundering proceeds of crime in the amounts of $8.9 million, contrary to

section 462.31 (1) of the Criminal Code of Canada ; (

e) Fraud against the Canadian government by filing false tax returns, contrary to section 380 (1) of the Criminal Code . FACTS [ 2 ] An agreed Statement of Facts was filed. Some of the factors are as follows: (

a) The acts which form the substance of these charges took place over an extended period, from 2007 through to 2010; (

b) This was an extensive history of various acts, with criminal intent involved in each one with many varied steps taken to achieve each specific purpose; (

c) The proceeds of crime counts total over $1.3 million; (

d) The acts of money laundering involved over $8.9 million; (

e) The defendant cheated the C.R.A. (the Canadian taxpayers) the sum of $500,000.00. [ 3 ] The R.C.M.P., at the request of Australian authorities, who were investigating crystal meth labs in Australia, conducted a search of the defendant's home which contained $990,420.00 Canadian cash and a bank draft payable to his company TICO Solutions Inc. of $354,340.04 U.S. [ 4 ] A bedroom in the house had been turned into a repackaging room which contained a large quantity of ephedrine, caffeine and other items and products related to the ephedrine operation.

Another search warrant was executed the next day at 16th Avenue, Richmond hill which was the warehouse used to store large shipments of ephedrine (1,715,000 ephedrine tablets.). [ 5 ] Between June 7, 2006 and May 25, 2010, the defendant sold and shipped 53,072,160 ephedrine tablets. Total gross sales exceeded $3 million (para 20). [ 6 ] The defendant was operating a large ongoing commercial operation of repackaging, relabeling and then shipping products.

Various subterfuges were used to hide the true nature of the products shipped (false labels et cetera), and a large number of false names and companies were used to hide the source of the products. Some customers were advised not to disclose the nature of the products as PayPal would cancel the payment accounts. [ 7 ] The defendant used a series of different companies in order to launder the proceeds. Deposits into three accounts used by the defendant to launder the proceeds total over $8 million.

Proceeds from these accounts have been used for payments at 30 Little Natalie Court, Vaughan and 113 Shadow Falls Drive in Richmond Hill. [ 8 ] The defendant utilized the services of [an “unnamed person” [1] ] to create companies, open bank accounts, and process funds through various accounts and companies.

The unnamed person was a knowing participant in these schemes and the defendant has provided evidence implicating the unnamed person, and continues to cooperate in that regard. [ 9 ] The defendant did not file tax returns for several years and some returns filed contained inflated expenses to reduce or eliminate taxable income. The defendant is now taking steps to regularize his outstanding obligations with the C.R.A. [ 10 ] The motivation for these crimes was entirely financial. The defendant, along with another, set up an E-Commerce business for the export of ephedrine.

As the activity was illegal, the monies generated from the enterprise were entirely proceeds of crime, and the further attempts to “cleanse” the monies received all constituted money laundering. The defendant set up and maintained several limited companies in order to further the enterprise. This was a very sophisticated enterprise involving a large amount of planning, over a several year time span.

FORFEITURE [ 11 ] The defendant has agreed to a forfeiture order of the following monies seized from his home during a search on May 25, 2010, which he agrees are proceeds of crime: $ 990,420.00 CDN Partial forfeiture of property at 113 Shadow Falls $ 354,340.04 US Partial forfeiture of property at 30 Little Natalie $ 150,000.00 CDN Forfeiture of accounts held by 2245933 Ontario Inc $ 144,000.00 CDN $ 111,361.38 US $ 3,127.67 CDN

$ 61,054.83 US Total $2,814,697.25 CDN [ 12 ] As per R. v. Wagner [2] , the consent to forfeiture orders can be seen as a further sign of remorse. It is not in itself a factor to consider since the money was ill gotten gain, that is being returned. However, like a plea before trial, it can be a sign that the defendant is not putting the crown to the time and effort needed to secure the order of forfeiture, like a conviction which is admitted.

COOPERATION WITH THE AUTHORITIES [ 13 ] After the defendant was found out and apprehended, he cooperated with authorities in the further investigation of the “unnamed person” who was his confederate. This is a mitigating factor and I need not make any determination of the motive of the defendant for the cooperation. Hill J., in R. v. John Doe [3] , set out the factors which provide the public policy reasons for encouraging this cooperation.

While the cases cited by defence counsel all involve cooperation and an eventual sentence of conditional imprisonment, I am not so sure that the law is that cooperation (even where it is extensive and fruitful) will always result in a conditional sentence. It is however a real mitigating factor. PLEA OF GUILTY [ 14 ] It not need be restated by me that a plea of guilty is always a mitigating factor in all but the most serious offences and offenders. The fact that this prosecution would be complex and not without some risk to the prosecution is a further enhancement to mitigation.

PERSONAL CIRCUMSTANCES OF THE OFFENDER [ 15 ] The defendant has no criminal record. The defendant is 34 years old. He was born in Germany to parents who came from Iran. He has an older sister. [ 16 ] He came to Canada in 1997, became a citizen in 2001 or 2002. He did not go to school beyond secondary school and worked as a driver and then became involved in the sales and trade of nutritional supplements. [ 17 ] He has continuing support from his parents and his sister. He presently works in the nutritional supplements industry in a business owned by his brother in law.

He is married and has a child born in August 2012. He is the primary breadwinner of his family. As stated previously, his motivation for these crimes was financial, and has no addictions or drug dependencies. [ 18 ] Through counsel, the family have expressed their collective shame and remorse at the actions of their family member, and express support for his rehabilitation. The defendant spoke directly and sincerely to the court of his remorse in terms of the shame it has caused him and his family POSITION OF THE CROWN [ 19 ] The crown seeks a global disposition of 3 years for all offences.

POSITION OF THE DEFENCE [ 20 ] The defence seeks the imposition of a conditional sentence of imprisonment for a period of two years, with strict conditions. PRINCIPLES OF SENTENCE [ 21 ] The fundamental purpose of sentencing is set out in the Criminal Code as follows: 718. … to contribute, along with crime prevention initiatives, to respect for the law and the maintenance of a just, peaceful and safe society by imposing just sanctions that have one or more of the following objectives: (

a) to denounce unlawful conduct; (

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

c) to separate offenders from society, where necessary; (

d) to assist in rehabilitating offenders; (

e) to provide reparations for harm done to victims or to the community; and, (

f) to promote a sense of responsibility in offenders, and acknowledgment of the harm done to victims and to the community. 718.1 A sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender. 718.2 A court that imposes a sentence shall also take into consideration the following principles: (

a) a sentence should be increased or reduced to account for any relevant aggravating or mitigating circumstances relating to the offence or the offender, and, without limiting the generality of the foregoing; . . .

(

b) a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances; (

c) where consecutive sentences are imposed, the combined sentence should not be unduly long or harsh; (

d) an offender should not be deprived of liberty, if less restrictive sanctions may be appropriate in the circumstances; and , (

e) all available sanctions other than imprisonment that are reasonable in the circumstances should be considered for all offenders, with particular attention to the circumstances of aboriginal offenders. LEGAL PRECEDENTS [ 22 ] The defendant cites the cases of R. v. Tulloch, [4] , R. v. John Doe , [5] , R. v. Massoudinia [6] , and R. v. MacDiarmid [7] , for the proposition that in cases of large white collar crime a conditional sentence is appropriate where there are "highly mitigating circumstances". [ 23 ] I note in R. v. John Doe , and R. v.

A.B [8] , (Hill J.), the defendants were only couriers and not the driving mind behind the enterprise and his co-operation led to the prosecution of others for more serious crimes. [ 24 ] The Crown cites the case of R. v. Gray [9] , where sentence of between 2 and 2-1/2 years were upheld for first-time offenders who defrauded government sponsored tax incentive programs. [ 25 ] R. v. Pierce [10] speaks of the issues of a conditional sentence and reiterates the principle that “jail is to be reserved for those who truly require it”.

It also states that it is an overall process and with regard to crimes of financial dishonesty: What the authorities make clear is that the purpose of incarcerating these offenders is not to protect the community from any danger posed by the particular offender, but to protect the community from the danger posed by those who may be inclined to engage in similar conduct. This approach was adopted by Hill, J. in R. v. Wallace [11] . [ 26 ] In R. v.

Dobis [12] , the court re-stated the need for denunciation and deterrence for large scale frauds and imposed of sentence of 3 years for a person with no criminal past and not likely to re-offend. A conditional sentence was rejected. [ 27 ] In R. v. Onkar Travels Inc . [13] , a theft of $3-4 million from G.S.T. for a person with no record, who pled guilty and made restitution, resulted in a reduction in sentence from penitentiary to reformatory and a conditional sentence was rejected because of the need for denunciation and deterrence.

IS A CONDITIONAL SENTENCE APPROPRIATE? [ 28 ] In this case, I can consider the imposition of a conditional sentence. The following factors would support the imposition of a conditional sentence: (

a) Economic crime without actual violence although the drug supplied was to a Meth Lab in Australia and the defendant must accept some partial responsibility for the human misery which follows the injection of such a dangerous drug ; (

b) The defendant is a first time offender; (

c) The defendant has familial supports, although I note in this case that the defendant involved his family unwittingly it would seem in his criminal activities ; (

d) The defendant cooperated in the forfeiture of monies seized (over $1 million) cash and monies from two properties for a large recovery; (

e) The defendant is cooperating with police in providing evidence against his confederate in the money laundering scheme, an “unnamed person”; (

f) The defendant is cooperating in settling his debt to C.R.A. [ 29 ] The following factors would tend to lead to the imposition of a sentence of actual jail time: (

a) He was the directing mind of a large ephedrine exporting business - he was no mere "mule courier" in the pay of others ; (

b) He involved his family members in his enterprises ; (

c) He was involved in the laundering of over $8 million over several years ; (

d) He evaded over $500,000 in income taxes ; (

e) Notwithstanding the search of his premises in May 2010, he re- arranged his affairs to protect his ill gotten gains from police detection and for a time, continue with his operations; (

f) This was not a single offence but 8 separate offences involving several distinct criminal acts. The most serious distinct acts are the exporting of ephedrine, possession of the proceeds of crime, and the laundering of the proceeds of crime, and the defrauding the tax authorities. All offences involve very large quantities, and intentional activities over a long period of time.

[ 30 ] The question simply put is whether the mitigating factors present here would result in the conversion of what must be a period of custody from custody in a prison, to custody to be served in the community. The principles of sentence namely denunciation and deterrence and seeking alternatives short of jail for first time offenders must be balanced against each other to fashion an appropriate disposition. [ 31 ] Taking all the factors into account, I believe that a sentence in the range of two years to 3 years would be appropriate.

Balancing all the factors here, I do not believe that this is a case which has sufficient mitigating factors to allow the defendant to serve it in the community. The offences are too varied, over too long a period of time, involving too much money and drugs, and the defendant being a principal driving mind for all offences, to have sections 718 (

a) and (

b) be overcome by

section 718.2 (

d) and (e). WHAT IS THE APPROPRIATE LENGTH OF IMPRISONMENT? [ 32 ] The Crown seeks a period of 3 years, and it would be served in a Federal Penitentiary. [ 33 ] I am persuaded by the several cases cited where the special circumstances reduced a 3-year penitentiary term to a term of 2 years less a day, to reflect these circumstances where there are large scale frauds and thefts (of public and private funds).

In our case, while a penitentiary sentence is appropriate for the crimes, the factors noted above would allow me to give credit of a year and by virtue of the fact that the defendant is a young man and a first offender with familial supports, I believe denunciation and deterrence can be satisfied by having the defendant sent to a provincial reformatory.

I am also mindful that for a first time offender, imposing some useful probationary terms my assist in his eventual rehabilitation. [ 34 ] In conclusion, a term of imprisonment of 2 years less one day concurrent on all counts, to be followed by 2 years probation and a 10-year firearms ban under

section 109 of the Criminal Code . Signed: “Justice P.N. Bourque” Released: March 13, 2013 [11] [1996] O.J. No. 4697 .