R. v. McConnell, 2011 ONCJ 476

Information No(s). 10-5167 Citation: R. v. McConnell , 2011 ONCJ 476 ONTARIO COURT OF JUSTICE HER MAJESTY THE QUEEN v. WESLEY MCCONNELL REASONS FOR SENTENCE BEFORE THE HONOURABLE MADAM JUSTICE E. SCHNALL on March 16, 2011 at LONDON, Ontario Delivered Orally

APPEARANCES : B. White Counsel for the Crown R. Sheppard Counsel for Wesley McConnell R E A S O N S F O R S E N T E N C E WEDNESDAY, MARCH 16, 2011 SCHNALL, J. (Orally): I’ll begin then with the charge . Over a period of almost ten years, from December 6 th , 1999 to October 1 st , 2009, Mr. Wesley McConnell defrauded the Thames Valley District School Board, by which he was employed, in the amount of $836,739.56, in what can only be described as an egregious breach of trust in a large scale fraud case. He has pleaded guilty to one count of fraud in excess of $5,000.00, contrary to section 380(1) (

a) of the Criminal Code of Canada . By way of background, Mr. McConnell was employed as a teacher since 1984. When a number of local school boards amalgamated to form the Thames Valley District School Board, the Thames Valley Region Athletic Association was also formed. I’ll refer to it in these reasons as the T.V.R.A.A. Its purpose was to assist with the coordination of athletic events for the schools in the Thames Valley region. Mr.

McConnell was appointed to the position of learning coordinator of secondary school athletics for the T.V.R.A.A., which was under the supervision of the Thames Valley District School Board in London. The T.V.R.A.A. encompassed four school boards, the Thames Valley District School Board, London District Catholic School Board, London District Christian Secondary School and Ecole Secondaire Monsignor Briere.

It was his duty to manage the finances of the T.V.R.A.A. and, in that position he was in charge of administering substantial funds to run the school athletic programs for all secondary school students in this very large geographical area. As part of his duties, Mr. McConnell would prepare invoices or letters to the athletic department heads of each secondary school, advising of the amounts owed to the T.V.R.A.A. Mr. McConnell prepared a worksheet that indicated, for each school, the number of teams entered in athletic activities and the cost per team. He would establish this cost per team himself.

In addition, Mr. McConnell would manage the payments for the cost of fields, venue rentals, referees, medics that attended the games, athletic awards and financial assistance for teams participating in events of the T.V.R.A.A. Some of the school boards were charged an annual fee to help offset the cost of championships and tournaments. The details of his duties are spelled out in the Agreed Statement of Facts, which I have read, filed as exhibit one. Dealing then with the background of the offence. In December 1999, Mr. McConnell opened an account in the name of the T.V.R.A.A.

He had sole signing authority and was issued a debit card. He opened it to facilitate the deposit of monies from the various school boards that made up the T.V.R.A.A. and to expedite payment of expenses relating to the operating expenses of the T.V.R.A.A. As the Learning Coordinator of Secondary School Athletics, Mr. McConnell was responsible to maintain the T.V.R.A.A. accounting records. From January 2000 to September 2009, a total of $835,391.05 was deposited to this account. In the same period, there were expenditures of $777,595.63.

The break-down of this expenditure amount reflects debit card and cash withdrawals of $461,962.87, including regular withdrawals in increments of one thousand to twelve-hundred dollars. There was no justification for these withdrawals except, what appears to be, for Mr. McConnell’s personal benefit. An example of note is that he made withdrawals totaling in excess of $79,000.00 during the months of July and August, from 2000 to 2009, when there were no athletic events held.

It was Board policy the T.V.R.A.A. activities and goods and services were to be paid by cheque or electronic transfer of funds. Payment by cash was contrary to Board policy. In addition to the cash withdrawals, Mr. McConnell withdrew a total of $217,877.00 by way of cheques and bank drafts from the T.V.R.A.A. account. Only $38,424.00 of this was for legitimate expenses. The remaining amount was spent by Mr. McConnell for luxury items for his home. These included an elaborate saltwater pool and hot tub, retaining walls, interlocking pathways and related construction and significant expensive plantings.

Details of these items are set out in exhibit one. In April 2003, Mr. McConnell opened another account, this one in the name of the London and District Referees Association, which I will refer to as the L.D.R.A. Money for the L.D.R.A. came from the Thames Valley District School Board. Money for the T.V.R.A.A. account came from the other three boards. The existence of one account was unknown to the respective boards who contributed to the other account. This enabled Mr. McConnell to conceal what he was doing.

Again, he was the sole signing authority on the L.D.R.A. account and was issued a personal access debit card. Amounts were deposited by the Thames Valley District School Board to this account totaling $97,568.00 over a period of about two-and-a-half years to December, 2005. Copies of invoices from the L.D.R.A. were obtained from Mr. McConnell’s computer. These showed that he approved payments to the L.D.R.A. totaling $70,884.00. These payments were unjustified because all officiates, referees and the like were paid directly by the Thames Valley District School Board and not out of this account.

As an example of his fraud, there was a debit card transaction by Mr. McConnell in favour of the Blue Mountain Ski Resort for $1,060.00, unrelated to his employment position and with no supporting documentation. A very concrete example of the impact of his fraud on the finances of the Athletic Program is reflected in documents that have been filed. For example, in his proposal for additional funding, Mr. McConnell drafted a list of priorities of what could be funded if there were additional monies.

Costs to assist 12 schools with transportation costs of $28,000.00 could have been paid for with the $31,000 he stole and used for landscaping, patio and stairs at his home. Costs for championship funds, support for school teams traveling to Ontario tournaments of $15,000.00 could have been paid for with the $13,490.00 he stole and used to pay for trees and landscaping at his home. Other similar examples are found in the Crown Document Brief, filed as an exhibit. Mr.

McConnell’s duplicity is manifested in his direct, overt representations to the Board in written budget proposals and reports, expounding on the needs for increased funding and “to preserve the tradition and move forward for the T.V.R.A.A. legacy”, while at the same time, he was stealing from those funds. The fraud came to light in September 2009, when two citizens demanded to see the accounting statements and reports of the T.V.R.A.A. Mr. McConnell was suspended effective October 1 st , 2009. A police investigation was commenced the same day and Mr. McConnell resigned his position on October 22 nd , 2009.

He was charged with this offence in January 2010. He pleaded guilty to the charge on October 5 th , 2010. The matter was adjourned briefly for the preparation of an Agreed Statement of Facts and a conviction was registered on October 26 th , 2010. Dealing then with submissions on sentence . At the sentencing hearing, the Crown submits that the range of sentence is three to five years and that a sentence of four years in the penitentiary should be imposed.

Mr. Sheppard is counsel for Mr. McConnell and he does not disagree with the range but urges the Court to consider a sentence of less than two years so a conditional sentence could be ordered, followed by a period of probation. In the alternative, he suggests a range of two to two-and-a-half years, if a penitentiary term is deemed appropriate. As I reviewed above, the prosecution and defence agree that the total amount by which the Board was defrauded was $836,739.56. Only $60,300.00 was recovered from the account and items worth about $5,000.00 were returned.

Therefore, the amount sought by the Crown, and not disputed by the defence, for a restitution order, which is to go on consent, is $771,439.56. Dealing then with the effect of the fraud. In making his proposals for extra funding, Mr. McConnell himself noted those who would be affected if additional money was not allocated. In one report, submitted to the executive of the T.V.R.A.A., he referred to the key stakeholders who would be affected by budget cutbacks or the reduction in funding: students, athletes, coaches, athletic directors, sports advisory committees, principals, senior administration and parents.

And indeed, these are the persons affected by his fraud. Evidence of the effect of the fraud is found in the document brief filed by the Crown as exhibit four, which I have read. As well, I heard the oral testimony, which elaborated on these documents. The Court heard from three witnesses as to the operation of the T.V.R.A.A., the impact of the fraud on the complainant school board and the larger community of taxpayers, parents and students that was affected by this offence and the costs to parents of students engaged in the athletic program. I’ll deal then with the evidence of the three witnesses. Mr.

Tim Orr, O-R-R, has been a secondary school teacher in London for 22 years; he is also a coach. He has been on the sports advisory committee for hockey since the amalgamation. He testified as to the background of the formation of the T.V.R.A.A. and what happened over the years to the hockey athletic program with cutbacks by the Board. A reduction in the number of games in the season meant a reduced ability to attract the best players and thus a decline in the commitment of the community to the program.

To maintain the viability of the program, significant fundraising efforts had to be made by students, parents and community sponsors. In addition, parents were required to pay increasing fees for the athletes to play games and participate in tournaments. When Mr. McConnell resigned, Mr. Orr took over the learning coordinator position from October 2009 to February 2010. He testified that he had to start from scratch for ten years of budgets, as he was unable to find written information. The computer was missing but it was subsequently seized in the investigation, from Mr. McConnell. Mr.

Orr noted that there was no record of gate receipts, which should have been turned over to the T.V.R.A.A., being deposited. Nor was there record of deposit of monies that were charged for extra games that should have been turned over to the T.V.R.A.A. He saw that the expenses did not add up to the income generated. In other words, the cuts did not have to happen to the extent that they were made. The second witness was Ms. Laura Elliott, E-L-L-I-O-T-T. She is the superintendent of program services of the Thames Valley District School Board. She started in that position in February 2007. When Mr.

McConnell first applied for the position of Learning Coordinator, his letter had gone to Ms. Elliott. She noted, and said, that he was hired because of his professional experience and what she described as a number of opportunities he had in athletics and within the province. He had been involved personally and professionally in athletics and related activities and had experience in extensive athletic endeavors. He had received awards for volunteerism. In 2004, he reapplied for this position and again in 2009. On both occasions, as Ms.

Elliott testified, he was re-appointed because of his good standing with the Thames Valley District School Board, through his employment skills and his status and reputation in the community. In his applications for re-appointment, Mr. McConnell stressed the role and importance of school sports and athletics and the education of students, even as he has done today, from counsel table. And he did so at those times while at the same time he was stealing from those very programs. Ms.

Elliott said that when he was required to appear before the administrative counsel of the T.V.R.A.A. to give reports and propose budgets, his information was accepted. There was no reason not to trust him because of his experience and, she felt, her experience with him. This makes his breach of that trust so much more acute.

From year to year, as reflected in the minutes of the executive council of the T.V.R.A.A., Mr. McConnell was requesting more money to fund the sports because of a projected shortfall. He would report that increased costs would result in program cuts or require a user pay system. Obviously, throughout all that time he was siphoning off funds from the T.V.R.A.A. account and, for two-and-a-half years as well, the L.D.R.A. account. Ms. Elliott reviewed and explained the documents filed by the Crown as exhibit four. I have read them all but do not intend to refer to them further, in any detail.

She described the inter-relationship between the Thames Valley District School Board and the T.V.R.A.A. and Mr. McConnell’s role. The Learning Coordinator reported to the Learning Supervisor who, in turn, reported to her.

She pointed out in various documents and reports presented by him that he had forecast a shortfall in the budget and for athletics and was requesting more money from the Thames Valley District School Board and the money would have to come from another budget line or there would have to be cuts to athletic programs, to transportation to tournaments or implementation of fees to be paid by the athletes or their parents.

When speaking of the impact that the fraud has had, she described that the Thames Valley District Board, a Board with a reputation for high-quality education in Ontario, has lost credibility, has suffered a dark stain on its reputation in this district and that it has been difficult to regain its good reputation. She described as well, the expressions of public backlash against the Board as stewards of public funds who have to be held accountable. She has met with coaches who have expressed disbelief, shock, denial and anger at what Mr. McConnell did and the impact that it has had on the athletics program.

She said from the public’s perception, there is a dark cloud over the Thames Valley District School Board. The third witness was Mr. Mark Mandich, M-A-N-D-I-C-H. He has coached high school boys’ basketball and has been involved as a volunteer in athletics for many years. He is also the parent of seven children, all of whom participated in athletic programs at their school. He is also a coach with many years of experience in this school board system. While it was not in his oral evidence, the fact emerged through defence counsel’s submissions, that Mr.

Mandich was one of the two individuals who demanded to see the accounting records for the T.V.R.A.A. Mr. Mandich described how, with the financial reductions, those who wanted to play on school teams had to contribute more and more money to be able to sustain their sports competition, including limitations on the number of games that could be played in a season and the limitations on the number of competitions that the teams could enter.

While some reduction in the season games was due to amalgamation and an effort to attain resource equity among the three divisions in the school board region, it would be specious to suggest that the theft of over $800,000.00 did not have an impact on the ability of the school board to provide adequately for its athletic program. General funding cuts and budget restraints reduced the resources but the extent of the cuts would not have been necessary were it not for the thefts by Mr. McConnell. However, as Ms.

Elliott pointed out, if there’s a shortfall in one part of the Board’s mandate to provide education, money would have to be diverted from another department, such as computers or art. To put it another way, Mr. McConnell’s depletion of the financial resources of the school board and, in particular, the athletic program, affected all students in the Thames Valley District School Board area. Dealing then with the background of Mr. McConnell. Mr. McConnell is 57 years of age. The pre-sentence report indicates he enjoyed a positive family life and a good upbringing as a child.

He has been married for 31 years and they have five children, ranging in age from 18 to 30 years. The youngest is 18 years old and resides at home. The Court was informed that two of the older children, who are not dependents, are also currently living in the home. Mr. McConnell’s wife is also a teacher with this school board. Mr. McConnell faced a battle with bladder cancer in 2004 but, he is now cancer free. His counsel says that this added a lot of stress because of a history of cancer in his family and Mr.

McConnell’s great fear that if he died, having committed this fraud, his family would be left in a horrible situation. His counsel suggests that Mr. McConnell always hoped for the big win to be able to pay the money back. I do not accept that the stress related to his bout with cancer is a mitigating factor. Mr. McConnell had already been defrauding the school board for several years by then. I note from documents filed that Mr. McConnell had contracted for major renovations and landscaping before his cancer diagnosis. Mr. Sheppard, on behalf of Mr. McConnell, submits that Mr.

McConnell’s family was not aware of the fraudulent activity and that this criminal case has been devastating for his family, particularly for his wife, as a teacher and youngest son, who is still a high school student. His entire family, both immediate and extended, have been and continue to be supportive of him. Since his employment was terminated, Mr. McConnell has devoted himself to many hours of volunteer work with his church. He has found much support from his involvement with the Celebrate Recovery program. I have read the entirety of the defence document brief, which has been filed as exhibit five.

Twenty-four character letters have been provided on his behalf, including those from his church community, previous letters with accolades from former colleagues, describing Mr. McConnell in very positive, indeed glowing terms. As well, I have had the benefit of the pre-sentence report. He was described by his counsel as an exemplary educator who well understood and believed in the value and importance of sports and athletics in education.

The nature of his criminal activity and the scope of it, seen against that backdrop, is hard to believe. I have also read correspondence from his doctors and his counselor at the addiction center, filed in the defence document brief. Some ofthese letters and reports suggest that, with the assistance of his pastor and his involvement with counseling, Mr. McConnell has managedto stop gambling. That is not quite accurate. He stopped gambling before he started counseling; I’ll refer to this later in my reasons. Mr.

McConnell reported that the gambling started in 1995, with a weekly purchase of $20.00 in lottery tickets. Once he had access to theT.V.R.A.A. money, this increased over time until he was buying 20 tickets, twice per day, on two specific days per week, except in thesummer months. Mr. Sheppard advised that, as he spent more money on lottery tickets, Mr. McConnell was depleting money that wasbeing saved for the renovations he and his wife had been planning.

He apparently used the stolen funds to pay for the renovations andthose things in his and his family’s life that he would otherwise not have been able to cover because he was spending the money onlottery tickets. No documents were filed to support this information as to the depletion of family money. It is hard to believe that his wife would nothave been aware of depletion of family savings, if that had been the scenario. There was no attempt by Mr.

McConnell in that entirealmost ten-year period to address his gambling, except for one aborted attempt in 2007, when he was about to disclose his criminalactivity to a good friend and colleague. Those who wrote on his behalf note that he has turned from his gambling addiction, has devoted himself to helping those in thecommunity who are less fortunate and that since he is not in a position to be employed and earning income, he helps in the community asbest he can. All who wrote on his behalf describe this matter as something very much out of character for Mr. McConnell.

He isdescribed as intelligent, knowledgeable and trustworthy. He was the recipient of numerous awards for his teaching and communityaccomplishments, in particular, in the field of sports and education. It is exactly persons like Mr. McConnell, because they have these excellent, professional and personal skills, and are trusted andconsidered worthy of high positions of trust, that they are able to perpetrate frauds like this. He was trusted and therefore he was in aposition to steal and breach that trust. As Mr. Justice Hill said in R. v. Williams (ON SC), [2007]O.J.

No. 1604(S.C.J.), starting at paragraph 25: “The sentencing materials convincingly establish Ms. Williams’ history as a respected educator and community volunteer. It is, ofcourse, this very type of character profile which allows an individual to attain a position of trust. One need only look across arepresentative sample of fraud sentencing jurisprudence to see that it is frequently those successful in employment and comfortableincome persons with spotless reputations who, through a character flaw, succumb to supplementing their compensation throughdishonest means.

Most people who get caught stealing from their employer are unlikely to reoffend.” Dealing then with sentencing factors. The Williams case, to which I just referred, was a breach of trust fraud case. It dealt with a 60-year-old school board superintendent who stole public funds of $190,000.00 over a three year period. Even after being convicted aftertrial she refused to accept responsibility. At page nine of the decision, Justice Hill listed factors that are considered aggravating in breachof trust fraud cases. I propose to list them and then apply them to the facts of Mr. McConnell’s case.

Number one, the nature and extent of the loss. This was an egregious breach of trust.

Section 380.1 of the Criminal Code of Canadadeals specifically with fraud cases and lists further aggravating factors. Paragraph a) of that

section lists loss in excess of one milliondollars as a factor. In this case, though the loss of more than three quarters of a million dollars is not at that level, such a huge loss mustbe considered as a serious aggravating factor. The size of the loss distinguished this case from others to which I was referred, whereconditional sentences were granted, where the loss was significantly smaller. As Mr. Mandich noted, in order to try to maintain theathletic programs, students and schools held fundraising campaigns.

Parents had to pay for their children to play on teams, $150.00 perchild and as much as $300.00 per child for some sports. Meanwhile, Mr. McConnell was spending T.V.R.A.A. money paying forlandscaping in his yard. The Association instituted gate fees - these went directly to Mr. McConnell, he pocketed the gate receipts. Factor number two. The dishonest attainment of public monies is a serious crime with its own effects, even though the institution on itsface seems able to bear the loss. Here, Mr.

McConnell stole public money from four school boards that affected students and parentsand taxpayers, resulting in a huge loss when taxpayers could not afford costs of providing athletic programming without more funds. Asnoted in the Williams case, the prosecution of a school board superintendent involving public monies, places this type of fraud in a

different classification from other types of fraud. Factor three, as noted by Justice Hill. The degree of sophistication of the dishonesty and the degree of planning, skill and deception. Here, this was not a spur of the moment offence. It was a very sophisticated operation with detailed planning and overt deception. Mr. McConnell concealed from one Board what he was doing with the other Board. He provided reports and budget proposals to deflect the deceit and fraud and made direct representations to the executive committees of the organizations to effect his fraud.

The fourth factor, whether the sole motivation is greed. Mr. McConnell’s gambling addiction is a factor and I’ll refer to it later. And as Mr. McConnell says in the pre-sentence report, he was buying lottery tickets but, “I wanted more, I wanted bigger and better”, obviously, referring to a lifestyle he wanted for himself and his family. In his position, Mr. McConnell was earning about $90,000.00 per year, yet he wanted more. Greed was a primary factor. The fifth factor, a lengthy period of dishonesty. Here, it involved criminal activity protracted for a period of almost ten years when Mr.

McConnell systematically and regularly committed this offence. As such, it is distinguishable from many of the cases to which I was referred, which involved only a handful of transactions or a much shorter period of time. The sixth factor is the number of dishonest transactions undertaken in the commission of the offence. Here, the exact number is difficult to ascertain, likely many, many hundreds. More than $460,000.00 cash was withdrawn in increments, regular increments, of one thousand or twelve hundred dollars, in addition to cheques, bank drafts and the L.D.R.A. account.

The seventh factor, where there exists little hope of restitution. No restitution has been paid to date with the exception of the proposal that I will refer to later. Paragraph eight, or the eighth factor, where the offender was caught as opposed to voluntarily terminating the criminality. Here, Mr. McConnell’s fraud showed no signs of abating. He had been reappointed in 2009 for another term of four years and the fraud would have continued, had he not been discovered. He only admitted his wrongdoing when he was confronted.

The ninth factor, running the risk that others would fall under suspicion - that is not a factor here. The tenth factor, the impact on victims of the fraud, including members of the public, the employer and fellow employees.

Section 380.1(

c) provides that the fact that there is a large number of victims is an aggravating factor. As I noted above, the fraud has an impact on many persons. The fraud has had a profound widespread and pervasive effect financially, emotionally and psychologically, not just on those identified stakeholders but also on the Thames Valley District School Board itself, tarnishing its reputation. The final factor noted by Justice Hill is the quality and degree of trust reposed in the offender. Here, as I have referred to it before, this was an egregious breach of trust.

Section 718.2 lists breach of trust as an aggravating factor.

Section 380.1 (

d) provides, as an aggravating factor, the fact that in committing the offence, the offender took advantage of the high regard with which he was held in the community. This is exactly what Mr. McConnell did. I will deal then with the mitigating factors. Number one, he has entered a guilty plea. I accept that any delay in so doing since he was first charged should be ascribed to the complexity of the case. Number two, he has expressed remorse. Mr.

McConnell this morning, from counsel table, at my invitation, spoke eloquently and compellingly, indicated he recognized the depth and severity of the fraud he has committed and expressed that he was ashamed and embarrassed and felt great remorse and was apologizing to those whom he had defrauded. I accept that. His remorse and potential for rehabilitation are reflected in the guilty plea and the pre-sentence report. Next, he has accepted responsibility from the start but I note, only after the fraud was discovered.

Next, he is a first offender and has no criminal record. He has very strong community support, as evidenced by the material filed, as wellas that of his family and his wife. He is actively participating in a group recovery program to continue abstaining from gambling and heis actively engaged with his church to deal with his issues. Paragraph six, I believe. He has been forthright since the crime was discovered and has cooperated fully with the investigation of thismatter. He has stated his intention to pay restitution and I will deal with this further in these reasons.

I want to address, as well, the absence of mitigating factors. In his submissions, Mr. Sheppard urges the Court to consider section718.2(d), which provides that in imposing sentence, the court should consider that an offender should not be deprived of liberty if lessrestrictive sanctions may be appropriate in the circumstances. Mr. Sheppard stresses the exemplary record of the defendant as aneducator, of his excellent employment skills in his position, his status in the specific education community as well as his status in thegeneral community, when he invites me to consider a conditional sentence and probation.

However, I note

section 380.1(2), whichprovides that the court shall not consider, as mitigating circumstances, the offender’s employment, his employment skills or status orreputation in the community if those circumstances were relevant to, contributed to or were used in the commission of the offence. Inthis case, Mr. McConnell’s employment with the Board, his employment skills in the performance of his duties and the trust reposed inhim because of his status and reputation in the community were all factors that enabled him to commit this offence. None therefore, canbe considered as mitigating factors.

Justice Hill in Williams identifies three additional mitigating factors or categories. These include substantial recovery of the proceeds ofthe fraud, paying restitution before sentence and, whether there are any factors that mitigate the breach of trust such as an addiction. None of these are present here. Is a custodial sentence required in this case? I do not propose to review the details of

section 718 and the principles of sentencing indetail that I have to consider. I do note and accept that in large scale fraud cases, the principles of general deterrence and denunciationare primary. Specific deterrence and rehabilitation have less weight, if any. As early as 1978, Justice of Appeal Howland in Regina v.McEachern (ON CA), [1978] O.J. No. 987(C.A.), stated: “It has long been established that the most important principle in sentencing a person who holds a position of trust is that of generaldeterrents.

The public interest requires that it be made very clear to one and all that, in the absence of exceptional circumstances, theperson holding a position of trust, who steals from his employer, must expect a term of imprisonment.” In R. v. Bertram [1990] O.J. No. 2013 (C.A.), the court observed that most major frauds are committed, as is the case with Mr.McConnell, by well-educated persons of previous good character. At page 319 of the decision, the court said: “The sentences in such cases are not really concerned with rehabilitation.

Instead, they are concerned with general deterrents and withwarning such persons of substantial penetentiary sentences will follow this type of crime. To say nothing of the serious disgrace to themand everyone connected with them and their probable financial ruin.” In 1995, in R. v. Gray[1995]O.J. No.92(C.A.), again, the Ontario Court of Appeal stressed the need for general deterrence in fraud cases. And I quote: “There are few crimes where the aspect of deterrents is more significant.

It is not a crime of impulse and is of a type that is normallycommitted by a person who is knowledgeable and should be aware of the consequences. That awareness comes from sentences given toothers.” Since that time, numerous other cases have affirmed the view that in large-scale frauds involving a breach of trust, the factors of generaldeterrence and denunciation are paramount. In R. v.

Pierce, P-I-E-R-C-E, in 1997, decided shortly after the conditional sentencingprovisions were enacted, Justice Finlayson in the Ontario Court of Appeal, said: “Given that the offence involved a serious breach of trust, it would be inappropriate for the court to exercise its discretion and favour theaccused serving her sentence in the community. Despite the passage of

section 742.1 of the Criminal Code, that’s the conditionalsentence provisions, the principles of general deterrence and public denunciation required a custodial term.”

And more recently, in 2002, in R. v. Bogart (ON CA), [2002] O.J. No. 3039 (C.A.), Mr. Justice Laskin of theOntario Court of Appeal said in paragraph 30: “This court has affirmed that in cases of large-scale fraud committed by a person in a position of trust, the most important sentencingprinciple is general deterrents. Mitigating factors and even rehabilitation become secondary.” In order to consider a conditional sentence, which I’m being asked to by defence counsel, the Court must first consider the range ofsentence that would be appropriate.

It must be one in the reformatory range, that is, less than two years. Notwithstanding the mitigatingfactors on the facts of this case and, mindful of

section 718.2(d), such a sentence would not be in the appropriate range and any lessrestrictive measure than incarceration would not be appropriate in all the circumstances. In R. v. Dobis (ON CA), [2002] O.J. No. 646(C.A.), again, Ontario Court of Appeal, the court reviewed a number ofcases and I don’t propose to deal with them in detail, and found that ordinarily breach of trust frauds merited a penitentiary sentence inthe range of three to five years. Mr.

Justice McPherson said, in paragraph 42: “There is a real need to emphasize denunciation and especially general deterrence in the realm of large-scale frauds committed bypersons in position of trust with devastating consequences for their victims, which is how he would characterize the offences in thatcase.” In R. v. Dirisio [2005] O.J. No. 1410 (S.C.J.), Justice Nordheimer held that in the case of a serious fraud involving a breach of trust inexcess of $500,000.00, a conditional sentence would be inconsistent with the fundamental purposes and principles of sentencing.

Quoting from paragraph 14 through 17 of his judgment, Justice Nordheimer stated: “I have concluded that a conditional sentence is not appropriate in this case because, in my view, such a sentence would not be consistentwith the fundamental purposes and principles of sentencing that I have mentioned. Firstly, the imposition of a conditional sentence inthese circumstances would fail to achieve the necessary objective of deterrence, both individually and generally.” It is a principle of sentencing that a sentence must be proportionate to the gravity of the offence and the degree of responsibility of theoffender.

Here, this was a most serious offence and Mr. McConnell is solely responsible for the act.

Section 718.2(

d) provides that a sentence should be similar to sentences imposed on similar offenders for similar offences, committed insimilar circumstances. I have reviewed a number of cases, including those from this jurisdiction, submitted by defence counsel, including some of my owndecisions. Cases where the sentence was the result of a joint submission for something less than two years, should be distinguished,such as that of R. v. Vitek (unreported) September 18, 2007, at London, Schnall, J. I propose to deal then, with restitution.

In determining what constitutes a fit sentence, I also have to consider that a restitution order is also a form of punishment. On March the 14th, I received from Mr. Sheppard further written submissions in the way of a defencememorandum of restitution, on behalf of Mr. McConnell. We have now filed it this morning as exhibit eight. It includes a proposal fromMr. McConnell setting out certain circumstances about the home and other aspects. I note however, that Mr. McConnell did not sign it.

He proposes that he and his wife plan to list the home in April and to sell it and that his wife has agreed to contribute part of her share,along with his half toward restitution, an amount which could be approximately $100,000.00. Their real estate solicitor has submitted a letter indicating that they have given him those instructions. When I first received thosedocuments, two days ago, I noted that there was no irrevocable direction signed by the McConnell’s included with the documents Ireceived. I am informed this morning by Mr.

Sheppard that they have signed a direction; I don’t know if it is an irrevocable direction. Ido acknowledge that Mr. and Mrs. McConnell have made the commitment for restitution to the extent that it is reflected in thedocuments filed. In Mr. McConnell’s memorandum – I will call it that – as to why they did not do that, in other words, list the house inApril 2010, almost a year ago, that explanation is weak.

As well, Mr. McConnell has a significant retirement pension with the Board. It is not referred to in this proposal but, I am informed during sentencing submissions, that once Mr. McConnell turned 50 and chose to leave his pension in place, that pension may not be available now to pay for restitution. As at the last day of the sentencing hearing, which was on February the 15 th , 2011, Mr. McConnell, through counsel, was still inquiring into the availability of this pension fund. In his proposal, Mr.

McConnell proposes to apply his 2009 income tax refund of approximately $4,000.00 toward restitution, if allowed to do so by Canada Revenue Agency. Based on information given to the Court on the last court date, Canada Revenue has agreed to take second place to the payment of any restitution funds. As well, Mr. McConnell has provided photocopies of a series of 12 post-dated monthly cheques, each of $500.00 from his monthly pension income of $2,700.00, payable to the Thames Valley District School Board. These were attached to the Memorandum. The first one is dated March the 1 st , 2011. Mr.

Sheppard advises this morning that he is in possession of those cheques and will forward them to the appropriate recipient. Mr. McConnell proposes to make further monthly payments in that amount, which he hopes to increase, once he finds employment, if possible. No explanation is given as to why Mr. McConnell failed to make such payments in the 17 months since his charge and arrest in October of 2009. The Court is not unmindful that a period of incarceration would impair his ability to earn an income to pay for restitution above what can be gleaned from the assets and proposals that I have referred to. Mr.

McConnell appears to be sincere in his intentions towards restitution. He has said so again today. His remorse and desire to pay the money back are referred to in the pre-sentence report and in the report from the counselor at the Problem Gambling Services of Addiction Services of Thames Valley. The fact is however, that he has paid nothing to date. Noteworthy in that regard is that Mr. McConnell and his family have remained in the home, which he improved at the taxpayers’ expense, the entire time, benefiting from his fraud.

And, as I already mentioned, there’s no valid explanation that I can accept as to why they did not list this home in April of 2010. I do accept that a home such as this, with a swimming pool and improvements in the yard, sells better, not in January, February and March months but in the spring. But, as I say, this could have and should have been done a year ago. Mr. McConnell receives $2,700.00 per month from a pension and, up until March – two days ago – had paid not one dollar from this toward restitution.

His failure to make even token payments sends a message that the sincerity of his intention to pay restitution voluntarily must be scrutinized carefully to determine what weight it deserves as a mitigating factor. There was no banking evidence presented to the Court as to Mr. McConnell’s personal funds or any joint bank accounts with his wife to show that he could not have made some lump sum payment toward restitution during these last 17 months.

He has remained unemployed since his resignation because he has been reluctant to commit to any potential employer, not knowing if he would be sentenced to incarceration. He has devoted himself, and I acknowledge that, to doing volunteer work with his church and remaining involved in the Celebrate Recovery Program. I want to deal then with the issue of the gambling addiction as a factor.

I have held in other cases, as have other judges, that a pathological addiction to something like gambling can be considered an exceptional circumstance that, in an appropriate case, could give rise to consideration of a conditional sentence or a reduction in incarceration. As noted by Justice Durno, D-U-R-N-O, in R. v. Lall [2007] O.J. No. 5213 (S.C.J.) , the onus is on the party seeking to rely on a mitigating factor to satisfy the court on a balance of probabilities that the factor exists and the extent to which it should be considered in mitigation. In other words, Mr.

McConnell has the onus to show, on a balance of probabilities, to what extent his gambling addiction had a connection to the commission of the offence in this case, such that it could be considered as an exceptional circumstance. Mr. McConnell has not met that onus. While I accept that his habit of purchasing a number of lottery tickets grew to 20 tickets, twice a day, on certain days of the week, it was his choice and decision to start buying them in the first place, knowing that this may well lead to a compulsive habit or addiction. I acknowledge that a gambling addiction is considered an illness.

However, unlike pathological gambling addicts in other cases, as soon as he was caught, he stopped. There was no attempt to use any of his own money or assets to continue gambling, as one might expect from a heavy addict. No documentary evidence was filed of his or any joint bank accounts to demonstrate that he was depleting family money to keep gambling. He simply used the T.V.R.A.A. and the L.D.R.A. accounts as his own personal bank account sources.

In those ten years, he did not buy lottery tickets during July and August and yet continued to steal the money during those months, each year, totaling in excess of $79,000.00. If he was not buying lottery tickets, where did that money go, except for his own benefit? The fact that he could stop completely for two months at a time dilutes the strength of his argument that his gambling addiction should be considered as a prime motive.

There was no evidence that his addiction was so compelling that he depleted all his own assets, as did other defendants in cases referred to, to fuel his addiction. He did not use pilfered funds to fund alcohol abuse or a drug addiction; he used the money for his own benefit. Many addicts cannot take even the first step to admitting they have a problem but Mr. McConnell knew he had a problem yet still did not take advantage of free confidential counseling that was available to him through an Employee’s Assistance Program.

I accept that his gambling addiction is a factor but not the primary factor and not to be considered as an exceptional circumstance. What fueled Mr. McConnell’s fraud was greed and the desire for personal benefits. After a number of years, he saw he was not getting caught and he opened up the second account for two-and-a-half years and continued for almost ten years, stealing the funds to maintain a lifestyle that he wanted for himself and his family, and when caught, he stopped, cold turkey. What is significant is his statement in the Pre-Sentence Report that he stopped gambling in September 2009.

And this was before he had engaged in any counseling with the Addiction Centre or Celebrate Recovery programs. One therefore has to question the severity of the addiction. When he attended at the Addiction Centre at Thames Valley in October 2009, he self-described as a gambling addict. He had six counseling sessions there. His file was closed some months later, after he had reported that he had abstained for over a year. Letters filed indicate he has abstained from gambling and does not even experience the urge to gamble since he stopped.

This is not congruent with what might be expected from a pathological gambler. There is no formal psychological assessment of his gambling behaviour or personality nor the extent to which it affected his behaviour to confirm its integral relevance to the commission of this offence for such a long period of time. The report from his counselor at the Addiction Center uses the term “pathological gambler” because that is how Mr. McConnell described himself. That is insufficient evidence. Mr.

McConnell has engaged with the Celebrate Recovery Program with his church and has found that this has best suited his recovery needs. This is a faith-based 12-step program. Documents filed on his behalf from the organizer of the program confirm its purpose to assist those with various personal issues, including addictions, and confirm his active participation in the program. And, as he says today, he continues with that in the continuing recovery.

While I accept that he had some level of a gambling addiction, the evidence fails to place it in the category of exceptional circumstances and I give it less weight as a mitigating factor. The extent of his gambling addiction should be assessed based on the facts and circumstances of his actual gambling conduct and the timing of it rather than his self-description. I view it not as a pathological gambling addiction but an opportunistic one. When the opportunity ended, so did his gambling because he no longer had access to the T.V.R.A.A. and L.D.R.A. accounts. Dealing then with case law.

Both counsel provided extensive case law briefs and I am grateful to them. I have reviewed all the cases and I do not propose to deal with them in detail in these reasons. I have already referred to some above, as they state general principles of sentencing in these kinds of cases. Many others are distinguishable on their facts.

Cases provided by defence counsel, for the most part, are distinguishable because the amount of loss was so much smaller or the conduct occurred over a much shorter period of time or involved far fewer transactions or the breach of trust circumstances were far less egregious, involving only a handful of victims and no public monies. For example, the Mark Lindsay case, R. v. Lindsay (unreported)October 18, 2010, London, Schnall, J. A case like Mr. McConnell’s cannot be compared to cases like Lindsay or R. v. Kemp (unreported) January 22, 2010, at London, Skowronski, J., or even R. v.

Deman(unreported) April 25, 2008, at London, Schnall, J. , to which I was referred. In the case of Deman , a decision of this court, involving a breach of trust fraud, Mr. Deman pleaded guilty to defrauding his union, of which he was treasurer, of funds in an amount agreed to by the victims for the purposes of the plea, of $250,000.00. He did this over a period of approximately three-and-a-half years. While the amount of fraud was significantly less and the period of fraud much shorter, Mr. Deman did not cooperate as fully as did Mr.

McConnell with the investigation and, indeed, had destroyed documents to cover his tracks. His intention to pay restitution was feeble. Mr. Deman was sentenced to 21 months in jail, followed by three years of probation and ordered to pay restitution. Mr. McConnell’s case is more similar to R. v. Bogart 2002 CanLII 41073 (ON CA) , [2002]O.J. No.3039 ( C.A. ) or R. v. Palantzas [2009]O.J. No.3862 (S.C.J.) , on its facts and circumstances. The cases cited on behalf of the defence address principles relating to imposition of a conditional sentence.

And, as I noted earlier, before I have to consider whether a conditional sentence is appropriate, I must first determine whether a sentence in the reformatory range is appropriate. In this case, it is not. Thus, R. v. Proulx [2002]S.C.J. No.6 (S.C.J.) , a leading case on conditional sentence, is not of assistance and as well, it involved a charge that was not a large scale breach of trust fraud. In conclusion, then . For almost ten years, Mr.

McConnell stole more than $836,000.00, while he brazenly lied to the T.V.R.A.A., misrepresented the financial picture and needs of the athletic programs, issuing warnings of increased costs and cut-backs and user fees, while spending the money to his own benefit. This was beyond unconscionable - it was evil.

Despite his expressed remorse, it is hard not to see his total failure to pay any restitution as a complete disrespect and disregard for those whom he defrauded, from the highest levels of administration in the Board, right down to the grass roots level of student athletes and the children in the secondary schools of the four boards. The combination of a huge amount of fraud, the extraordinarily long period of time over which it was perpetrated and the egregious extent of the breach of trust serve to trump the considerations for anything but a custodial sentence in the penitentiary.

Notwithstanding the mitigating factors, no other form of disposition would adequately address the two key factors, general deterrence and denunciation in cases of this nature, even with a first time offender like Mr. McConnell. The submission for a conditional sentence that would include community service work followed by probation would be grossly inadequate in this case to address the principles of sentencing here. The range of sentence for a breach of trust large-scale fraud is three to five years; the Crown is seeking a four-year term.

I find that this does not adequately give credit for the mitigating factors, especially the guilty plea and the extent of his cooperation. He was entitled to elect trial in the Superior Court and have a preliminary hearing that itself might well have consumed two to three weeks of court time, let alone any trial. Given the extent of the fraud and the complexity of the case, with his cooperation, this matter has proceeded in this Court with an Agreed Statement of Facts. Please stand, Mr. McConnell. Mr. McConnell, I sentence you to three years in the penitentiary. I make an order under

Section 738, this is a restitution order, that you pay the sum of $771,439.56 to the Thames Valley District School Board. This is an order that will survive any bankruptcy. It’s an order that can be enforced just like a civil judgment. This is a secondary designated offence. In the absence of a criminal record and this not being a crime of violence, the Crown’s application for DNA is denied. The victim fine surcharge is waived.

That completes my decision. * * * * * * * * * * FORM 2 Certificate of Transcript Evidence Act , Subsection 5(2) I, Shelly Morrison, certify that this document is a true and accurate transcription of the recording of R. v. MCCONNELL, Wesley in the Ontario Court of Justice held at 80 Dundas Street, London, Ontario taken from Recording No(s). 003-89/11 and 003-90/11, which has been certified in Form 1 by Shelly Morrison. ____________________ ________________________________ (Date) (Signature of authorized person)

ONTARIO COURT OF JUSTICE T A B L E O F C O N T E N T S W I T N E S S E S WITNESSES Examination in-Chief Cross- Examination Re- Examination E X H I B I T S EXHIBIT NUMBER ENTERED ON PAGE RULING REASONS FOR JUDGMENT REASONS FOR SENTENCE 1 Transcript Ordered: March 16, 2011 Transcript Completed: June 1, 2011 Ordering Party Notified: June 1, 2011