R. v. Djambazov Date:, 2011 BCPC 255

Citation: R. v. Djambazov Date: 20110906 2011 BCPC 0255 File Nos: 210283-1; 222180-1 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. MARIO ELIEV DJAMBAZOV EXCERPTS FROM PROCEEDINGS REASONS FOR SENTENCE OF THE HONOURABLE JUDGE F. E. HOWARD Counsel for the Crown: P. Stabler Counsel for the Defendant: M. Bozic Place of Hearing: Vancouver , B.C. Date of Judgment: September 6, 2011 [ 1 ] THE COURT: Following a trial on Information 210283-1, this accused was found guilty of six offences relating to debit card fraud. The offences were committed in June, July, and early August 2009.

Convictions were entered on Count 1, unlawful possession of a skimmer knowing that this device had been used or was intended for use in forging credit cards, and Count 5, defrauding Coast Capital Savings of money. Conditional stays were entered on the remaining four counts relating to the actual use of the skimmer, the making of the forged cards, and the use of the forged debit cards at various banking institutions in the Vancouver Lower Mainland. [ 2 ] The accused has now also pled guilty under Information 222180-1 to the offence of attempting to forge or falsify a debit card contrary to s. 342(1) (

b) of the Criminal Code . This offence occurred in Toronto on December 2nd, 2009. THE VANCOUVER CHARGES [ 3 ] The accused was a party to a criminal scheme that operated as follows. He would attend at a Coast Capital Savings ATM machine in the Lower Mainland, sometimes alone, sometimes in the company of one or two other men. He would install a pinhole camera and card reader onto the machine. As customers came in to use the ATM machine, they would insert their debit cards into the appropriate slot.

The card reader or skimmer would capture the customers' personal data that is embedded in the magnetic strip on the back of the debit cards. The pinhole camera would capture their PIN numbers as the customers punched those numbers into the number pad. Approximately an hour later, the accused or one or two of his accomplices would come back to the ATM and remove the camera and skimmer.

[ 4 ] The personal data that was collected including the debit card numbers and the related PIN numbers was then used to create forged debit cards bearing otherwise legitimate debit card numbers. Then the accused and his two accomplices would take turns using the forged cards along with the related PIN numbers at various ATM machines in the Lower Mainland to withdraw cash from the personal accounts of the debit card holders. These activities have been referred to as "fraud-spends." On occasion, the debit cards were also used to make small purchases from retail merchants.

These fraud-spends appear to have begun on July 1st, 2009, and they continued up until July 21st, 2009. [ 5 ] All of the debit cards used by legitimate Coast Capital customers during the install period, 2,161 in total, were compromised. Once Coast Capital discovered the illegal operation, the debit cards belonging to these 2,161 customers had to be cancelled and replaced. [ 6 ] Of the thousands of cards that were compromised, the data from 72 cards was used to produce forged debit cards that were ultimately used in fraud-spends or attempted fraud-spends.

Forty of those 72 forged cards made their way to Bulgaria. [ 7 ] The fraud-spends totalled $53,757.80. The primary victim of this fraud was Coast Capital Savings, where all the skimming operations occurred. Coast Capital was required to reimburse all of the parties whose accounts were depleted by the fraud-spends. However, this accused cannot be connected to any of the skimming operations that occurred prior to June 15th, 2009. In the result, I was satisfied beyond a reasonable doubt that the accused was a party to the fraudulent operation described above from June 15th to July 21st, 2009.

The fraud-spends associated to the debit cards skimmed during this period of time total $42,133.61. THE TORONTO CHARGES [ 8 ] After a very time-consuming investigative operation by staff at Coast Capital Savings and the police in Ontario and B.C., the accused was identified as one of the possible suspects in the fraud. An Information was sworn on December 1st, 2009, charging him and one other man, who is not before me, with the offences described above. [ 9 ] On December 2nd, 2009, members of the Toronto Police Department attended at the accused's residence in Toronto to arrest him on a Canada-wide warrant.

When they entered the residence to effect the arrest, they discovered a large number of items associated with the manufacturing of forged credit and debit cards including a computer, software for use in reading and writing credit card data, a credit card reader, battery packs, a digital camera, a Scotia Bank PIN pad shield, a soldering iron, double-sided tape, lead lights, magnetic stripe information for a number of credit cards and blank HSBC credit cards. [ 10 ] In relation to the discovery of these items in his Toronto residence, the accused has pled guilty to the additional count of attempting to forge or falsify a credit card.

Counsel have agreed that the attempted forgery of credit cards, in Toronto on December 2nd, 2009, is to be treated as part of an ongoing criminal operation that began with the events in Vancouver in June, July, and August 2009 and ended with the accused's arrest on December 2nd, 2009. THE ACCUSED [ 11 ] The accused is a 44-year-old man with no criminal record. He came to Canada from Bulgaria in 1990. He became a Canadian citizen in 1995. He lives with his girlfriend in a residence in Toronto.

In Toronto, he has had a number of employment positions including as a driver for Swiss Chalet, a self-employed position running a hotdog stand, and then as a salesman at a kiosk in a Toronto mall. [ 12 ] He was arrested in December 2009. He was released on bail. He has not worked since his arrest. He is supported by his girlfriend. He is in good health and has no substance abuse issues. His bail supervisor has reported that the accused reported weekly and was always courteous and compliant.

Upon his conviction, he went into custody pending the imposition of sentence and he has been in pretrial detention now for approximately three months. THE ISSUE ON SENTENCING [ 13 ] The Crown's position is that the appropriate range of sentence is three years imprisonment. The accused's position is that the sentencing range is less than two years imprisonment and that a conditional sentence order would be appropriate for this accused. Alternatively, if there is to be an actual jail sentence, the appropriate range is 18 months imprisonment. THE LAW 1.

General Principles [ 14 ] The general principles of sentencing are set out in ss. 718 , 718.1 , and 718.2 of the Criminal Code .

Section 718 defines the fundamental purpose of sentencing, that being to impose a just sanction that has as its objectives denunciation, specific and general deterrence, protection of society, rehabilitation, reparations for harm done, and promotion of a sense of responsibility in the offender. [ 15 ]

Section 718.1 sets out the requirement that a sentence be proportionate to the seriousness of the offence and the moral culpability of the offender. [ 16 ] The relevant principles in s. 718.2 include parity in the sentencing process and the requirement that the sentencing judge consider all available sanctions other than imprisonment that are reasonable in the circumstances.

Section 718.2(

d) is of particular importance when dealing with a first-time offender like the accused before me: ... an offender should not be deprived of liberty, if less restrictive sanctions may be appropriate in the circumstances ... [ 17 ] The conditional sentence regime is set out in s. 742.1 of the Criminal Code . Where a person is convicted of an offence that is not punishable by a minimum term of imprisonment and a sentence of imprisonment of less than two years is imposed, the court may order that the offender serve the sentence in the community subject to the offender's complying with the terms of a conditional sentence order,

if the court is satisfied that: 1. serving the sentence in the community would not endanger the safety of the community; and 2. such a sentence would be consistent with the fundamental purpose and principles of sentencing set out in ss. 718 to 718.2. 2.

Range of Sentence [18] The legal authorities are unanimous in their determination that general deterrence and public denunciation are of paramountimportance in fraud cases involving the theft of personal debit card information, the use of that information to manufacture forged debitcards, and the use of those forged cards to withdraw funds from the bank accounts of the individual victims.

The gravity of this type ofoffence is such that imprisonment is generally considered the only form of sentence that will adequately address these objectives evenwhen dealing with a first-time offender. [19] At the outset, I can say that in the present case, I am satisfied that the only appropriate sentence is a term of imprisonment. Theissues are: How long should the term of imprisonment be and is a conditional sentence appropriate? [20] Defence counsel has provided me with a trilogy of cases wherein conditional sentences were imposed. These are R. v. Coman2004 ABPC 18; R. v. Onose 2004 ABPC 44; and R. v.

Grecu 2004 ABPC 61, all from the Provincial Court of Alberta in 2004. Thesecases are related in that all three accused were part of the same nine-member debit card forgery ring. They each pled guilty and werethen sentenced one after the other by three separate Provincial Court judges on February 4th, February 26th, and March 29th, 2004. [21] The offences occurred over a five-day period in September 2003. Actual losses attributed to the activities of this group of ninewere approximately $38,000.

Potential losses based on the amount of stolen data and counterfeit cards found in possession of the groupwas over $600,000. There is no indication in any of the three decisions that this "potential" loss actually materialized. [22] In Coman, a 36-year-old man with no criminal convictions on his record, received an effective sentence, inclusive of a nine-month credit for time served, of two years imprisonment.

He was placed on a conditional sentence order for the remaining 15 months ofthe sentence. [23] In Onose, the judge acceded to a joint submission, noting the need for parity with the sentence imposed on Coman; see paragraph22. This female accused with no prior criminal record was given a 22-month conditional sentence on top of a small amount of remandtime. [24] In Grecu, Judge Semenuk also imposed an effective sentence of two years imprisonment, inclusive of a one-year credit for timeserved.

This accused was placed on a CSO for the remaining 12 months of the sentence. [25] The sentencing decisions that postdate the above trilogy of cases reflect a greater appreciation by the courts of the enormousgravity of these offences. It is clear that fraud cases involving the forging of debit cards have become widespread, so widespread thatthey amount to nothing less than an attack upon the reliability and security of the country's electronic banking system. [26] The gravity of the offence, as a primary consideration, is apparent in a number of subsequent decisions including R. v.

Naqvi,2005 ABPC 339 (Alta.Pr.Ct.); R. v. Singh, [2006] A.J. No. 686 (Alta.Pr.Ct.); R. v. Mayer, [2006] A.J. No. 324 (Alta.Pr.Ct.); R. v. Saade,2006 NSSC 279 , 2006 N.S.S.C. 279 (N.S. Sup.Ct.); and R. v. Maerkoff, Unreported, Vancouver Registry Number 209160-3-C,2010, (B.C. Pr.Ct.).

These authorities are particularly alert to the apparent ease with which credit and debit cards are forged and thenused to drain the bank accounts of unsuspecting bank customers. [27] The cases also highlight the difficulties that the authorities have in preventing these crimes, the difficulties that the banks face ininvestigating such crimes and bringing the perpetrators to justice, and the staggering losses suffered by the financial institutions who arevictimized; see paragraph 16 in Saade, supra: In my view, this type of offence goes right to the reliance the average member of the public has in its electronic banking system.

Theability of this type of activity to throw havoc into our banking system is tremendous and dangerous. This criminal activity is more andmore on the rise. You read and hear about it almost everyday. Citizens are having their credit cards and personal banking cards illegallyused by criminals more and more. Citizens can have their bank accounts accessed by others to find little or no money remaining in theiraccounts. In some cases this activity even leads to identity theft.

The public requires protection in this area from the courts. [28] In the 2006 decision in Singh, Judge Semenuk had occasion to revisit the issues arising in sentencing cases of this kind. In thiscase, the accused installed skimming devices in three gas stations where another party was employed. He alleged that he was hired bypeople in Toronto and sent to Calgary to engage in this criminal activity. He was provided with the equipment and the locations wherehe was to use the equipment. He was paid for the skims that he installed, but he did not participate in the fraud-spends that totalled some$92,000.

The sentence imposed was 20 months imprisonment less credit for pretrial detention. Judge Semenuk declined to impose aconditional sentence order. [29] In this case, Judge Semenuk had before him a victim impact statement that was filed by the Financial Institution Members of theInterac Association. That statement provided some insight into how widespread and costly the credit/debit fraud industry actually is.

The following are excerpts from this victim impact statement as set at paragraph 20 in the Singh decision, and I quote: THE IMPACT OF BANKING CARD FRAUD The initial group affected by debit card fraud is cardholders. Money is taken directly from their chequing or savings accounts. In somecases cardholders are burdened in the short term by being unable to meet basic living requirements, for example they may be unable tomake rent or mortgage payments.

They may suffer immediate “on the spot” inconvenience and embarrassment, particularly given thewidespread use and acceptance of debit cards, when their card cannot be used to pay for goods or other services. Cardholders must then

take steps to lodge an inquiry with their financial institution, which leads to an investigation regarding the missing funds. Their financial institution will reimburse them if they are the victims of a proven fraud, but in the meantime they are inconvenienced. In 2003 our Members collectively reimbursed $44 Million to approximately 28,000 cardholders who were victims of debit card fraud resulting from skimming.

In 2004 this figure increased to $60 Million reimbursed to over 48,000 cardholders. [ 30 ] In the Maerkoff case, I had occasion to sentence an accused for offences similar to the ones committed by the accused before me now. Maerkoff was a 30-year-old man with no prior criminal record. He participated in the installing and removal of the skimming devices at ATM machines in Montreal where the total loss was some $17,000; the Royal Bank in Ontario, total loss of $32,000; and the CIBC in both Ontario and B.C., total loss of $502,000.

The offences occurred over a two-year period. [ 31 ] The case proceeded on the basis that the accused was not a major player. He received $200 for each successful skim, plus some $12,000 that he obtained when he personally used one of the forged credit cards. The information obtained from the skims was passed on by the accused to others who participated more directly in the larger fraud-spends.

Still, I was satisfied that the facts of the wider fraud could not be ignored and, at paragraph 29, I noted: I appreciate that the accused may not have received a great deal of the $552,000 that was ultimately taken, but he was a direct party to a fraud in this amount.

Without his attendance at the banks and his installation of the skimmers and the cameras, whoever it was whom he was working for could not have committed the fraud on this scale. [ 32 ] In the end, I imposed an effective sentence of two years and 10 months imprisonment less credit for time served of 10 months. [ 33 ] Actual jail sentences were also imposed in the following cases. R. v. Naqvi (supra) The accused used a skimmer on customer credit and debit cards used at two gas stations where he was employed. While doing so, he tried to observe as many PIN numbers as he could.

He sold the information to a high school friend for $100 for each skim which netted him $17,000. The buyer of the credit card data used the information to create and use 109 false cards. The fraud committed by the buyer of the data exceeded $117,000. The accused did not participate in the manufacturing of the forged cards and he did not share in the latter fraud. He was a young man, 23 years of age, with no prior record. He cooperated with the police on the arrest. He pled guilty. He had since enrolled in school and there was a positive presentence report before the court. An 18-month jail sentence was imposed.

R. v. Saade (supra) The accused was a 53-year-old man with no prior criminal record. He and two others participated in a scheme whereby they obtained credit and debit card data and PIN numbers from unsuspecting customers of the Petro-Can stations where they worked. The information was used to create forged debit cards that were then used to withdraw funds from the customers' bank accounts. The debit card losses over a three-month period were close to $250,000. The accused pled guilty. The sentence was two years imprisonment in a federal institution. R. v.

Mayer (supra) The accused, a 33-year-old man with no prior criminal record, came from Montreal to participate with others in a counterfeit debit card operation for approximately seven months. His activities included the use of forged debit cards that caused a direct loss of some $45,000. The actual losses attributed to the parties to the operation as a whole were in excess of $1 million. The sentencing judge concluded that the accused posed a risk to the community in that he was not likely to abide by the terms of a court order.

This conclusion was based upon a number of aggravating circumstances in the case that are not present in the current case before me. He also concluded that a conditional sentence would not be consistent with the fundamental purpose and principles of sentencing. He noted the gravity of the offence and the need for a denunciatory and deterrent sentence in the circumstances of the case. The effective sentence was 18 months imprisonment.

He noted at paragraph 70: Other individuals who are like-minded to the accused must know that engaging in this type of criminal activity will result in a sentence of actual imprisonment. Merchants, debit card holders and financial institutions must be protected from this type of crime. ANALYSIS [ 34 ] There can be no doubt as to the gravity of the crimes committed by the accused before me. Here, I refer back to the above discussion. The accused's moral culpability for these crimes stands at the very high end of the scale. He was a willing participant in the criminal operation.

He was not a minor player who was paid a small fee for his skimming operations. He was a full participant. He installed and removed the skimmers. Within days of doing so, he was in possession of forged debit cards containing the data that he had skimmed from the ATM machines. He immediately put the forged debit cards to use, to his financial benefit. [ 35 ] Further aggravating factors include the following: 1. The criminal enterprise was a sophisticated one that took time and resources to implement.

Forty of the 72 debit cards forged from the debit card data skimmed by this accused and his associates ended up back in his homeland of Bulgaria where they were used to extract funds from bank customers residing in British Columbia. The accused obviously had international contacts who were prepared to pay for the debit cards that he had helped to forge or who were extracting funds from customer accounts at his behest. 2. The accused was involved in the scheme in British Columbia for just over one month.

Some four months later in early December 2009, he was still involved in this illegal activity when he was arrested in Toronto on December 2nd, 2009. At that time, his home was stocked with some of the equipment associated with and necessary for the creation of forged debit cards. In relation to these

circumstances, he has, of course, pled guilty to the additional offence of attempting to forge a credit card. 3. The accused did not cease his criminal activity voluntarily. His criminal conduct was brought to an end only by his arrest. 4. The accused left his home in Toronto to come to British Columbia to commit his crimes, thereafter returning to Toronto. The identification and apprehension of this accused was made more difficult by this behaviour. 5. During the brief one-month period in B.C., the accused and his associates netted approximately $42,133. This is an indication of how lucrative this type of crime can be. 6. There were multiple victims: (

a) the 72 customers of Coast Capital Savings whose personal bank accounts were raided by the accused and his associates; (

b) the 2,161 customers of Coast Capital Savings whose debit cards were cancelled because they had been compromised by the skimming operations of the accused; (

c) Coast Capital Savings who was required to reimburse all of their customers for the funds stolen from their accounts; and (

d) the public at large who ultimately will pay for the losses suffered by Coast Capital Savings through higher banking charges. 7. In addition to the direct losses, Coast Capital Savings obviously had to expend considerable time and resources to determine precisely what debit cards had been compromised and, thereafter, time and resources for viewing hundreds and hundreds of hours of ATM videotapes to determine who the culprits were. 8. I have no information as to how or why this accused became involved in these crimes.

I can only assume that his motive was greed. [ 36 ] The mitigating factors in the present case are as follows: 1. The accused has no criminal record. 2. He was released on bail following his arrest in early December 2009 and was compliant with his bail terms. 3. There is no indication that he has had any further difficulties with the law over the last 19 months. 4. Through his counsel, he has expressed remorse. CONCLUSION [ 37 ] In the circumstances of this case, I am satisfied that the appropriate sentence is a federal sentence of two years imprisonment.

In coming to this conclusion, I have taken into account the inherent gravity of the offences, as noted above, the accused's role as a full party to the offences, the fact that the accused was still involved in this criminal activity in Toronto some four months after his crime spree in British Columbia, the quantum of the fraud, the impact on the victims, including Coast Capital Savings and the 2000-plus customers of this banking institution, and the personal circumstances of the accused. [ 38 ] I have not acceded to the Crown's request for a three-year sentence.

I cannot find a principled basis upon which to impose a sentence equal to or longer than the sentence that I imposed in the Maerkoff case (two years and 10 months). The circumstances of the offences in Maerkoff were more aggravating that the ones before me. [ 39 ] I have considered whether a conditional sentence might be appropriate should the sentence be reduced to two years less a day. In my view, such a sentence would not be consistent with the fundamental purpose and principles of sentence.

Given the accused's lack of a criminal record and his compliance with the bail order, I might be satisfied that he would not endanger the safety of the community were he to serve his sentence on a conditional sentence order.

However, I am satisfied that an actual jail sentence is required in order to address the pressing need for a strong deterrent sentence that carries with it a meaningful message of denunciation. [ 40 ] In this case, there are simply no compelling mitigating circumstances either in relation to the offences or the accused himself that might diminish the weight that must generally be given to the principles of general deterrence and denunciation in cases of this kind. [ 41 ] The rehabilitation of the accused is, of course, an important factor to be considered.

However, in the present case, I am dealing with a mature individual, a 44-year-old man, who willingly involved himself in a serious criminal enterprise for personal financial gain. His decision to do so remains unexplained. He appears to have taken no personal steps towards rehabilitation. Indeed, he has been unemployed for the last 19 months since his arrest. He is financially supported by his girlfriend. He appears to have no express plan for his life should he be released on a conditional sentence order or indeed following an actual jail sentence.

In my view, in the circumstances of this case, it would not be appropriate to release such a directionless person on a conditional sentence order. [ 42 ] The accused has been in pretrial detention for three months. He must be given credit for this time. The sentence therefore will be as follows. [ 43 ] I am going to pause here. We are down to 21 months additional time. I am just mindful of your comment that if it was close to a two-year sentence, he would prefer a federal sentence. So the question is, is it 21 months or two years? [ 44 ] MR.

BOZIC: Twenty-one months so that he would serve it in a provincial institution or two years? Yes, may I just have one moment? Your Honour, so the 21 months, I think --

[ 45 ] THE COURT: All right . [ 46 ] MR. BOZIC: -- suits us. [ 47 ] THE COURT: The sentence, then, will be as follows, time served plus 21 months imprisonment. The record will reflect time served three months, time credited three months.

This is the sentence to be imposed on Counts 1 and 5 on Information 210283-1 and on Count 1 of Information 222180-1, all to be served concurrently. [ 48 ] He will be exempt on the surcharge. [ 49 ] There will be a restitution order, a standalone restitution order, to the credit of Coast Capital Savings in the amount of $42,133.61. [ 50 ] This is an offence for which a DNA order can be imposed. [ 51 ] MR. STABLER: Yes, it is secondary. We would ask for that, please? [ 52 ] THE COURT: I imposed such an order in the Maerkoff case and -- [ 53 ] MR.

BOZIC: I have no submissions. [ 54 ] THE COURT: -- in my view, it is an appropriate order to make in this present case, as well. So there will be a direction that he provide a sample for deposit into the DNA databank. [ 55 ] MR. STABLER: That completes those matters. [ 56 ] THE CLERK: Your Honour, is this restitution only on file 210283 or -- [ 57 ] THE COURT: The first file, you are absolutely right. [REASONS FOR SENTENCE CONCLUDED]