R. v. Kaba Date:, 2016 BCPC 62

Citation: R. v. Kaba Date: 20160127 2016 BCPC 0062 File No: 932-3-C Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. SHIRAZ KABA EXCERPTS FROM PROCEEDINGS REASONS FOR SENTENCE OF THE HONOURABLE JUDGE F. HOWARD BAN ON PUBLICATION 486.5(1) CCC; 486.5(9) CCC

Counsel for the Crown: G.S. Sair Counsel for the Defendant: M. Tammen, Q.C. Place of Hearing: Vancouver , B.C. Date of Hearing: January 27, 2016 Date of Judgment: January 27, 2016 [ 1 ] THE COURT: Mr. Kaba has pled guilty to Counts 5, 7, 8, and 9 on Information 932-3-C as follows: Count 5 Wilful evasion or attempt to evade payment of taxes imposed by the Income Tax Act in the amount of $21,553, by filing false T1 General Income Tax and Benefit Returns of 15 clients for the 2010 taxation year, which returns included false expense claims. (S. 239(1)(

d) of the Income Tax Act ) The offence date was between December 31, 2010 and November 26, 2012. Count 7 Wilful evasion or attempt to evade payment of taxes imposed by the Income Tax Act in the amount of $25,839 by filing false T1 General Income Tax and Benefit Returns for 17 clients for the 2011 taxation year, which returns included false expense claims. (S. 239(1)(

d) of the Income Tax Act ) The offence date was between December 31, 2011 and November 26, 2012. Count 8 Wilfully obtaining for his clients excess Canadian Child Tax Benefits of $18,365 by making false or deceptive statements in the T1 General Income Tax and Benefit Returns of 15 clients for the 2010 and 2011 taxation years. (S. 239(1.1)(

e) of the Income Tax Act ) The offence date was between December 31, 2010 and November 26, 2012. Count 9 Wilfully obtaining for his clients excess Goods and Services Tax Credits of $6,263 by making false or deceptive statements in the T1 General Income Tax and Benefit Returns of nine clients for the 2010 and 2011 taxation years. (S. 239(1.1)(

e) of the Income Tax Act ) The offence date was between December 31, 2010, and November 26, 2012. [ 2 ] The Crown has proceeded summarily. In relation to each offence, s. 239 of the Income Tax Act provides for, upon

summary conviction, a minimum fine of 50 percent of the refund or credit sought and a maximum fine of 200 percent, or both a fine and a term of imprisonment not exceeding two years. [ 3 ] In this case, the Crown is seeking a global jail sentence of 15 months, plus a fine equal to 100 percent of the amounts in issue, that being $72,020: Count 5: $21,553 Count 7: $25,839 Count 8: $18,365 Count 9: $ 6,263 Total: $72,020 [ 4 ] The defence is seeking a conditional sentence order for two years less a day, plus a fine equal to 100 percent of the amounts in issue.

Alternatively, the defence is proposing a traditional jail sentence of six months plus a fine equal to 75 percent of the amounts in issue, that being $54,015. [While delivering this decision, I erroneously stated that the defence position was 6 months jail plus a fine of 50 percent. The actual position was 6 months jail plus a fine of 75%. I have amended this ruling to correctly reflect the position of the defence.] [ 5 ] The primary aggravating circumstance is that Mr.

Kaba committed these offences while he was serving a two-year less a day conditional sentence for precisely the same offences. [ 6 ] The primary mitigating circumstance is that Mr. Kaba is in very poor health, both from a physical and psychological perspective. THE OFFENCES [ 7 ] The offences are detailed in the Agreed Statement of Facts filed as Exhibit 1 at this sentencing hearing. They are to be attached

as an Appendix to these reasons. In

summary: The accused has an incorporated accounting practice, Shiraz Kaba & Company Ltd., which was and is located on South Fraser Street in Vancouver, B.C. During the material time, Mr. Kaba operated as a tax preparer. In this capacity, he prepared and filed personal tax returns for his clients. His client base was ethnically diverse. Many of his clients had only a limited ability to read or speak English. They also had a limited understanding of the Canadian tax system. They relied on Mr. Kaba to prepare their returns properly. Generally, they neither reviewed nor questioned the returns that Mr.

Kaba prepared on their behalf. Typically, Mr. Kaba asked his clients very few questions. He provided the clients with copies of their completed personal tax returns, but rarely, if ever, reviewed the returns with his clients. In most cases where he made false expense claims on behalf of his clients, Mr. Kaba did not ask for nor did he receive from his clients any information, documents, books, or records regarding the false expenses claimed. The current offences deal with the taxation years of 2010 and 2011.

They involve false tax returns that resulted in the evasion of taxes and the creation of false refunds and credits for 24 clients. These clients stated that they were unaware that Mr. Kaba had been making false claims on their T1 returns. They only found out about the fraud when audited by the CRA or contacted by an investigator working on the investigation into Mr. Kaba's activities. [ 8 ] A

summary of the fraudulent claims is as follows: Taxation Year 2010 There were 18 client T1 returns with: • one false rental loss • four false business losses • eight false childcare expense deductions • seven “other employment expense” deductions The false claims totalled $144,986. These resulted in: • $21,553 of federal income tax being evaded • $9,709 in ineligible Canada Child Tax Benefits for 10 clients • $3,799 in ineligible GSTC payments to seven clients Mr. Kaba also knowingly prepared and filed one 2010 T1 return for an undercover RCMP officer.

In this return, he inserted one false rental loss claim and one false 'other employment expense' deduction, which would have resulted in the evasion of $3,486 of federal income tax had the T1 return been acted upon by the CRA. Taxation Year 2011 There were 20 T1 client returns with: • three false business losses • nine false childcare deductions • ten false 'other employment expense' deductions The false claims totalled $160,126. These resulted in • $25,839 of federal income tax being evaded • $8,656 in ineligible Canada Child Tax Benefits for 10 clients • $2,464 in ineligible GSTC payments to six clients Mr.

Kaba also knowingly prepared and filed two 2011 T1 returns for two undercover RCMP officers. In these returns, he inserted two false rental loss claims, one false 'other employment expense' deduction, and one false caregiver tax credit which would have resulted in the evasion of $5,034 of federal income tax had the T1 returns been acted upon by the CRA. [ 9 ] Mr. Kaba prepared the false 2010 T1 returns between February 28, 2011, and October 6, 2011. He prepared the false 2011 T1 returns between March 2, 2012, and June 15, 2012.

He prepared the false T1 returns for the two undercover RCMP officers on October 12, 2012, and November 5, 2012. [ 10 ] The false expense claims operated to reduce the federal tax burden of the clients. In some cases this resulted in the CRA paying a refund to a client who actually owed tax. In other instances, it increased the amount of the client refund.

[ 11 ] As for the false rental loss claims, most of the clients had no rental operation whatsoever. As for the false business losses, none of the clients in question even had a business. As for the childcare expenses, most of the clients in question used the services of an unpaid family member, such as a parent, to look after their children. [ 12 ] The Canadian Child Tax Benefits (CCTB) are tax-free monthly payments made to eligible families to help them with the cost of raising children under the age of 18.

The quantum of CCT Benefits paid during a 12-month cycle depends on the net family income reported on the income tax returns for the tax year prior to the start of the 12-month payment cycle. Mr. Kaba was aware that the false claims regarding rental losses, business losses, and employment expenses, and childcare expenses would effectively reduce the federal taxes owing. They would also increase, where applicable, the quantum of CCTB payments made to his clients. [ 13 ] GST credits are non-taxable quarterly payments to help individuals with lower or modest incomes offset all or part of the GST that they pay. Mr.

Kaba was aware that the false deductions noted above would also increase, where applicable, the quantum of GST credits that would be paid to his clients. [ 14 ] The motive behind Mr. Kaba's actions are contained in paragraph 23 of the agreed statement of facts: 23. Kaba's motive for committing the fraud was to increase the profitability of his business. He hoped that getting "good results" for his clients would enhance his business reputation, attract new clients and retain existing ones.

In this regard, Kaba accomplished a degree of success given that many of his clients said that they were referred to Kaba by a friend. [ 15 ] It is common ground that, beyond the fee that he charged for the preparation of each tax return, and beyond earning a reputation as a good tax preparer, Mr. Kaba derived no personal gain from preparing and filing false returns on behalf of his clients. PERSONAL CIRCUMSTANCES OF SHIRAZ KABA [ 16 ] Mr. Kaba is a 63-year-old businessman who resides in Vancouver, B.C. He was born in Tanzania. In May 1981, he came to Canada, bringing his wife with him.

They have three children who are now adults. He and his wife separated in 1994 and subsequently divorced. He has remained very close to his children. They eventually came to live with him after the break-up with his wife. [ 17 ] Mr. Kaba studied accounting in Kenya for two years, but returned to Tanzania without completing his degree. He did accounting work in both Kenya and Tanzania before moving to Canada. He also did accounting work once he arrived in Canada.

He was eventually hired by his wife's uncle, who employed him as a bookkeeper/accountant for four years, after which he decided to open his own business on Main Street in Vancouver, B.C. He became quite busy and was eventually able to hire approximately six people in the 1990s. [ 18 ] With no degree or diploma, Mr. Kaba is not a licensed accountant or CGA and is not subject to disciplinary action by the professional body or bodies governing such persons. [ 19 ] I have received numerous reference letters filed on behalf of Mr. Kaba.

The letters come from his family members, both close and extended, and close friends. They include a letter from his former wife. These letters are unanimous in their praise of Mr. Kaba as a man of otherwise good character, a man involved in the community, a good father, a mentor to other younger individuals, and as a man of generous spirit. [ 20 ] The letters reveal that he has, on a number of occasions, opened his home to others in need of a place to stay, and that he frequently prepared tax returns for elderly and poor clients for free. The Criminal Record [ 21 ] On September 6, 2011, Mr.

Kaba entered guilty pleas to all 16 counts on Information Number 644-2-C. These counts alleged the making of false claims on personal income tax returns that he prepared for his clients in relation to eight tax years from 2000 to 2007 inclusive. There were a total of 77 false returns. The total amount of the false claims was $1,188,684 and the total tax evaded through these false returns was $203,895.80.

There was also some $30,000 in overpayments of GST and childcare benefits. [ 22 ] The false tax returns that he provided to his clients over this eight-year period were virtually identical to the false returns that are currently before me. As in the present case, the false claims related to rental losses, business losses, childcare deductions, the caregiver credit, and education credits, as well as child tax benefits. [ 23 ] On December 9, 2011, the presiding Judge Ehrcke imposed sentence. The Crown had sought a global sentence of 27 months in jail plus fines equal to 100 percent of the amount of tax evaded.

In the end, Judge Ehrcke imposed a strict conditional sentence order for two years less a day. In coming to this conclusion, she took into account Mr. Kaba's lack of a criminal record and his up-front payment of $100,000 towards the fines. She also took into account Mr. Kaba's serious health issues. At paragraph 7 of the Reasons for Sentence, Unreported, Vancouver Registry No. 644-2-C, (PCBC), December 9, 2011, she stated: [7] He has serious health issues including recent open heart surgery. This condition is currently unstable and he takes many medications.

He also has hepatitis, diabetes, arthritis, and a fractured vertebra. He requires close medical surveillance and sees his physician every two weeks. There is concern about what will happen to the business, its employees, and his family if he goes to jail as well as the effect on his health. [ 24 ] The conditional sentence order included 16 months of house arrest that was subject to certain specified exceptions.

Thereafter, for the balance of the CSO, a curfew was imposed from 10:00 p.m. to 6:00 a.m. every day, unless he otherwise had the written permission of the supervisor. [ 25 ] The fine imposed was 100 percent of the amount of tax evaded, $203,895.80, plus 100 percent of the fraudulent Child Tax Benefits paid out, $33,821.37. A payment

schedule was set up to deal with the balance of the fine. He was to pay $700 a month,

commencing February 1, 2012. Mr. Kaba has successfully adhered to that payment

schedule up until today's date. [ 26 ] While on bail awaiting trial on this earlier information, Mr. Kaba resumed his practice of preparing false tax returns for his clients. The false 2010 T1 returns that are the subject of the current hearing were filed between February 28, 2011, and October 6, 2011. [ 27 ] After the December 9, 2011, sentencing on the earlier Information, Mr. Kaba continued to prepare false returns for his clients. The false 2011 T1 returns were prepared and filed between March 2, 2012 and June 15, 2012, within months of being placed on the two-year CSO. [ 28 ] Given the above activities, Mr.

Kaba was arrested on an alleged breach of the conditional sentence order on November 28, 2012. He was released on a bail order that included a term that he not participate, directly or indirectly, in the preparation of any tax returns. [ 29 ] In the end, the Crown elected not to proceed with the conditional sentence breach allegation and instead swore a new Information charging the offences that are now before me. [ 30 ] On July 3, 2014, the restriction prohibiting the preparation of tax returns was removed from Mr. Kaba's bail order.

On-Going Health Issues [ 31 ] In addition to having suffered a heart attack in 2010, followed by open-heart surgery, Mr. Kaba suffered a more recent cardiac event in September 2015, this being the day that was originally set for sentence submissions in the present case. That incident has been described as a heart attack and required him to be hospitalized for some three days. See the Medical Certificate and attached records from his physician, Dr.

Niou, dated September 18, 2015 (Tab 3 of the Sentencing Materials of the Accused, Exhibit 2): "His current medical status is very fragile and he could experience drastic decompensation during his time in jail. Furthermore, Mr. Kaba has exhibited severe symptoms of anxiety and posttraumatic stress disorder. The symptoms have become extremely unstable as the threat of him going to jail becomes nearer." [ 32 ] I also have a letter from Dr. Niou dated January 12, 2016, Exhibit 3, confirming that Mr. Kaba suffers from "multiple complex medical issues": "He has unstable angina and ongoing chest pain.

He has poorly controlled diabetes. He is under the regular care of a Cardiologist Dr. Johnny Jue and Endocrinologist Dr. Thompson. On January 12, 2016, Mr. Kaba presented to emergency for chest pain review. His CK was elevated at 933 (normally < 275). Mr. Kaba is at high risk for medical decompensation were he to go to jail … Mr. Kaba suffered from unstable angina and is at very high risk for having another MI event." [ 33 ] Dr. Niou listed a number of health issues affecting Mr.

Kaba, including arthritis osteoarthritis, coronary artery disease, ulnar nerve injury, gallstones, peptic ulcers, colon polyp adenoma, asthma, chronic gastritis, alcohol hepatitis. He went on to list the numerous medications that Mr. Kaba requires. I am advised that he takes some 28 to 29 pills on a daily basis. [ 34 ] Crown counsel forwarded a copy of the January 12, 2016, medical letter from Dr. Niou (including the list of health issues, plus the medications that Mr.

Kaba requires) to Tony Porter, Contract Manager, Adult Custody Division, Corrections Branch, to inquire as to the ability of the corrections institution to manage Mr. Kaba's health issues. Mr. Porter forwarded the same information to the chief medical officer, Dr. Paul Henry of Chiron Health Services Inc., which is the healthcare service provider for the Corrections Department. Corrections is apparently already in possession of electronic medical records for Mr. Kaba due to a five-day period of incarceration prior to his release on bail on the current charges. Dr.

Henry's response to the query was as follows, Exhibit 4: “While this man certainly has a multitude of health issues, there are none that we do not deal with on a regular basis. While his coronary heart disease is an issue for him, both within and without a correctional system, there is no reason to hold him from being accommodated in corrections. The medications he is taking are all available to him within Corrections. [Our] nursing staff are all very well versed in dealing with his diabetes and his heart disease. The health care in all our centres have emergency care equipment if the need arises.

I see no reason to have him not be incarcerated.” On-Going Psychological Issues [ 35 ] I have the benefit of a psychological report from Dr. Michael Elterman dated November 4, 2011. This was the report filed with the court for the sentencing hearing conducted by Judge Ehrcke in December 2011: see Tab 2 of the Sentencing Materials of the Accused (Exhibit 2). I also have the benefit of an updated report from a psychiatrist, Dr. Paul Devlin, dated September 30, 2015, Tab 1 of the Sentencing Materials of the Accused. [ 36 ] I note the following conclusion at page 4 of Dr. Elterman's report: “Opinion . … Mr.

Kaba is someone who was going through a fairly major depression and experiencing considerable anxiety and fear at the prospect

that he may be incarcerated. What comes through in speaking to him is his concern for his physical health as he has had a heart attack, bypass surgeries and he reports problems with his liver and kidneys. Mr. Kaba is showing symptoms of quite severe depression including both cognitive, affective and behavioural aspects of depression … I note in speaking to Mr. Kaba that he is not on medication but likely should be. He says that much of his health problems derive from the abuse of alcohol over a number of years although he has not used alcohol for about 3 years. My recommendation in this case is that Mr.

Kaba consult with a psychologist or psychiatrist in order to seek some relief from the extreme anxiety and depression that I find in him … He is someone who at the present time is both physically and emotionally fragile and I believe that if he is to serve any sentence that this would be best done in the community. [ 37 ] Dr. Devlin's report is very much to the same effect. Some comments of note are as follows. • In relation to the prior conviction, he was "acutely embarrassed when his charges and conviction became public and felt that he lost a big chunk of his reputation.

He was very depressed at this point …" • … His demeanour was calm until discussing the prospects of incarceration … • He does appear to have some insight into his problems, but not as great as one might have expected and his judgment is certainly questionable. • [Dr. Elterman] concluded that Mr. Kaba was a profoundly depressed man who was extremely frightened at the prospect of incarceration and he described psychomotor slowing, confusion, distractibility, difficulty concentrating, difficulty with sleep, appetite, energy and motivation. He concluded quite correctly that Mr. Kaba was profoundly depressed.

I concur with that opinion. • [Dr. Elterman] opined that Mr. Kaba would benefit from ongoing psychiatric therapy and probably an antidepressant. This has not happened. [ 38 ] Later in his report at p. 6, Dr. Devlin concludes: “It is my opinion that Mr. Kaba: 1. Shows considerable genuine remorse for his actions. 2. Understands the seriousness of his actions. 3. Is very unlikely to reoffend. … It is quite probable that this man's depressive state and subsequent impaired cognition may have played some role in the repetition of his offences after his initial conditional sentence.

It is hard to believe that most people of at least average intelligence would repeat such offences particularly when no direct benefit was observable to them. I would most respectfully therefore suggest that his depressed mental state may well have contributed to his poor judgment in this regard.” [ 39 ] In relation to the issue of remorse, Mr. Kaba did speak to me briefly in court after counsel had completed their sentencing submissions. At that time, he expressly acknowledged the harm that he had done to his clients and apologized for that.

I appreciated his comments in this regard, since this was not a sentiment that he ever expressed to Dr. Devlin. [ 40 ] As to Dr. Devlin's comment to the effect that Mr. Kaba "is very unlikely to reoffend", I have difficulty sharing this view. I note that earlier in his report, at the bottom of page 1, Dr. Devlin noted: “It is also my understanding that he was given a conditional sentence in 2011 on very similar charges and prohibited from practicing for two years. These new charges have arisen since that period of time.

He tells me that during that period of time, he lived only on savings.” This information is incorrect. Mr. Kaba was not prohibited from practising for two years under his prior conditional sentence order. Moreover, he continued to work while awaiting disposition of the prior charges and he continued to work even after sentencing. He did not live only on savings.

The only point in time at which he was prohibited from working was later in November 2012, when he was arrested on these new charges, and that prohibition was subsequently lifted in 2014. [ 41 ] The suggestion that these new charges arose after completion of the prior sentence is also incorrect. Mr. Kaba began committing these offences while on bail for the earlier ones and while still subject to the two-year conditional sentence that was eventually imposed. [ 42 ] Had Dr. Devlin been apprised of the fact that Mr.

Kaba was committing further offences while serving the two-year conditional sentence, he may not have been so quick to suggest that Mr. Kaba was unlikely to re-offend. THE LAW [ 43 ] I am governed by the principles of sentencing set out in ss. 718 to 718.2 of the Criminal Code . In particular, I am mindful of the overriding principle requiring me to impose a sentence that is proportionate to the gravity of the offence and the responsibility of the offender, s. 718.1. [ 44 ] I am particularly mindful of s. 718.2(a)(iii) which dictates that evidence that the offender abused a position of trust in relation to

the victim must be considered as an aggravating factor. [45] Also of importance are ss. 718.2(

d) and (

e) which provide that an offender not be deprived of liberty if less restrictive sanctionsmay be appropriate in the circumstances, and that all available sanctions, other than imprisonment, that are reasonable in thecircumstances be considered. [46] The conditional sentence regime is contained in s. 742.1 and 742.3 of the Criminal Code.

In brief, if the jail sentence to beimposed is less than two years, I may direct that the offender serve the sentence in the community, if I am satisfied that this would notendanger the safety of the community and would be consistent with the fundamental purpose and principles of sentencing as set out ins. 718 to 718.2 of the Code. [47] I have been provided with numerous sentencing authorities by Crown and defence counsel. These sentencing decisions doprovide some guidance with respect to the appropriate range of sentence in a case such as the one before me.

Several principles can bederived from these authorities. [48] To summarize, • The critical sentencing objective in any case involving large-scale and ongoing fraudulent activities by a tax preparer designed toevade the payment of federal income tax or to increase the payment of child tax credits or GST credits are general deterrence anddenunciation.

Rehabilitation remains an important factor, but attracts less weight in these cases. • These cases involve a breach of trust in relation to the government, the Canadian public, and the clients of the tax preparer. • A jail sentence is generally imposed in cases of this kind, even for the first-time offender. The length of the sentence is largely afunction of the quantum of the fraud.

The larger and more protracted the fraud, the longer the jail sentence. • Where the quantum and duration of the fraud is at the lower end of the scale, the direction that the jail sentence be served in thecommunity under the terms of a conditional sentence order is a common disposition for a first-time offender. • There is no rule that prevents an offender from receiving two CSOs where the circumstances warrant. • See R. v. Hofbauer, 2004 BCSC 1810; R. v. Banhaw, October 3, 2014, Vancouver Registry No. 921-1 (BCPC); R. v. Marienburg,Unreported, Vancouver Registry No. 664-3-C, April 4, 2011 (BCPC); R. v.

Nisbet, Unreported, Vancouver Registry No. 434-3-C,December 13, 2007 (BCPC); R. v. Bulua, 2006 BCSC 1234; R. v. Crischuk, 2010 BCSC 1165; R. v. Luoma, 2010 BCSC 1600; R. v.Klundert, 2011 ONCA 646; R. v. Baudais, 2014 BCSC 2161; R. v. Tyskerud, 2013 BCPC 277 , 2013 BCPC 0277. [49] As to the range of sentence, the court in R. v. Hofbauer, supra, dealt with a large-scale fraud involving 14 counts of false ordeceptive statements in GST returns.

On appeal, the global sentence of three years' imprisonment was upheld, but the fine was reducedto $358,761, this being 50 percent of the amount of the total fraud of $717,522. In this case, the court focused on arguments regardingmitigating factors, including the appellant's poor health and his lack of a criminal record.

At paras. 25 and 28: [25] I agree that the range of sentences for similar offences with the mitigating factor of a guilty plea and without significantaggravating factors is between 18 and 36 months, and with aggravating factors the range is between three to five years as commented onin Rodney [2004 BCSC 1780] at ¶ 13 and 14.

In Rodney, Holmes J. noted a serious breach of trust is an important aspect in cases in thethree to five year range, ¶ 15. … [28] … The appellant's health problems were taken into account in imposing three as opposed to four years imprisonment. [50] The decision of Judge Ehrcke on the earlier charges to which Mr. Kaba pled guilty is also of assistance with respect to generalprinciples. She reviewed a number of sentencing authorities dealing with accused persons who had been tax preparers. As to the rangeof sentence, she cited the above decision of R. v.

Hofbauer, supra, indicating that with a guilty plea and no aggravating factors, the lowend of the range was 18 months to three years, and with significant aggravating factors the range would be three to five years. See alsoparas. 22 and 23: [22] A sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender. The casesemphasize the need for denunciation and deterrence in tax evasion cases. The Canadian tax system is an honour system.

People whoevade taxes break our social contract which is based on the proposition that we all pay taxes as determined by our electedrepresentatives. The taxes are used to fund our government and services which are essential to maintaining our society. [23]

Section 718.2 of the Criminal Code refers specifically to a breach of trust as an aggravating circumstance. The seriousness of thebreach of trust is important in this case. The victims include Mr. Kaba's clients as well as the Canadian taxpayers as a group. The lengthof time over which the offences took place is also an important factor. On the other hand, Mr. Kaba is otherwise a person of goodcharacter and he has serious health issues. As previously noted, Mr.

Kaba received a two-year less-a-day CSO from Judge Ehrcke on these prior offences. [51] In seeking a second CSO, defence counsel relies upon the comments of the Supreme Court of Canada, R. v. Proulx, 2000 SCC5, to the effect that in appropriate circumstances a CSO can indeed satisfy the principles of deterrence and denunciation: para. 41. [52] The defence is seeking a sentence below the range in this case on what he has termed "compassionate grounds". He has cited R.v.

Luoma, supra, as an example of a case wherein the appellate court imposed a one-year conditional sentence order in place of a 90-dayjail sentence, given new medical information regarding the fragile mental health of the appellant and her high suicide risk. Ms. Luoma

had evaded payment of income tax due from her personally for the years 1996 to 2001 in the amount of $60,960. At paragraph 58, the court noted: [58] The extent of the frailty of the appellant's mental health is much greater than it was (understandably) found to be by the trial judge. In my opinion, it would not only be far more difficult for the appellant to endure a jail [sentence] than the average person, but a jail sentence would put her life at risk, to some extent.

The medical evidence concerning the risk of suicide would also place an onerous responsibility on the correctional authority which would be made responsible for her care while in custody. I think the principle of restraint weighs in favour of a conditional sentence. [ 53 ] Defence counsel also cited R. v. Baudais , supra , in support of the same compassion principle. In Baudais the court dealt with an accused who personally concluded, on principle, that the banking system in Canada was a fraud and that income taxes were somehow linked to the "corrupt banking system".

The accused decided that income taxes were unlawful and began to structure his affairs in a manner so as to avoid paying taxes. He also began teaching others how to avoid payment of taxes. He effectively avoided paying his own taxes of some $13,364 and he failed to remit $11,052 worth of Goods and Services Taxes.

More importantly, he was convicted of counselling the commission of the offence of fraud in an amount in excess of $5,000 in relation to his activities that were directed at teaching others how to evade paying their taxes. [ 54 ] In Baudais , supra , the court concluded that a conditional sentence order would not adequately serve the goal of general deterrence on the 'counselling fraud' charge. As to the length of the jail sentence for this offence, the court was satisfied that a shorter sentence than what would otherwise have been imposed was appropriate, given the medical needs of Mr. Baudais' wife. Mrs.

Baudais relied upon Mr. Baudais for her day-to-day needs, including assistance with meals and driving to and from medical appointments. The court cited R. v. Verma , [1996] O.J. No 3670 , and R. v. Simons , 2002 SKCA 90 , in support of this approach. In the result, the length of the jail sentence was reduced to six months "on compassionate grounds". At para. 46: [46] I accept that compassion has a role to play in the determination of a fit sentence. I also accept that it can operate to render a conditional sentence fit, when one would not otherwise be appropriate. I do not accept Mrs.

Baudais' medical condition and the needs that it gives rise to, needs that Mr. Baudais in large measure fulfills, is sufficient, whether as a matter of compassion or otherwise, to render a conditional sentence appropriate in this matter. This is not a conclusion I reach with alacrity; indeed, I reach it with some reluctance. Nevertheless, notwithstanding Mrs. Baudais' circumstances, I am of the view that a fit sentence of imprisonment in jail, as opposed to in the community, is appropriate in this case. Although I am not satisfied that Mrs.

Baudais' circumstances are such as to render a conditional sentence appropriate, they are a factor to be considered in determining the length of the jail sentence. [ 55 ] In response to the above decisions, the Crown has referred to R. v. Babcock , 2013 BCCA 368 . The facts are unrelated. The accused was convicted of criminal negligence causing bodily harm. He shot the victim in the leg. At the time of sentencing, the appellant was 53 years-old. He had serious and chronic health problems including full-blown AIDS, hepatitis, and sclerosis of the liver.

The defence submission was that the appellant's medical condition would require frequent medical attention and medication, and that a prison sentence would be a "death sentence" for him. The sentencing judge disagreed, concluding that the appellant would be able to receive adequate medical care if in custody. She had received no evidence that he would not receive appropriate medical treatment in jail. She imposed a two-year jail sentence.

At paras. 12 and 13 of the appellate decision, the Court of Appeal noted: [12] We must balance medical considerations with the gravity of the offence and this offender's particular circumstances. In my view, the protection of the public was the most important factor in Mr. Babcock's sentencing, together with the gravity of the offence. I am not persuaded that his condition and the treatment he is receiving warrant our reducing the sentence on compassionate grounds … [13] … I cannot accede to the argument that the sentence was unfit or that his medical condition justifies a reduction.

ANALYSIS [ 56 ] The offences to which this accused has pled guilty are very serious ones. He essentially committed a fraud upon the Canadian government and the Canadian public to the tune of some $72,000. He was fully cognizant of the criminal nature of his activities and bears full responsibility for his actions. [ 57 ] The aggravating circumstances include: 1. The scope of the fraud: 18 falsified returns for the taxation year of 2010 involving false claims totalling $144,986, and 20 falsified tax returns for the taxation year of 2011 involving false claims totalling $160,126. 2.

His actions amounted to a breach of trust insofar as his relationship with the Canadian government and the income tax system was concerned, and a breach of trust towards his clients who relied upon him to prepare proper returns on their behalf. 3. His approach to his criminal activities was premeditated and methodical. He knew precisely what he was doing. 4. He committed these offences while on bail for precisely the same fraudulent activities and while he was serving a two-year conditional sentence order for similar offences relating to the taxation years of 2000 to 2007. 5.

It is correct that the total amount of taxes that were effectively evaded and the excess Canadian Child Tax Benefits and GST benefits that were improperly paid out as a result of the tax returns that he prepared for the 2010 and 2011 tax years is, at $72,000, considerably less than the amounts in issue during the fraudulent tax activities that he engaged in for the tax years of 2000 to 2007, that being $237,717. However, this is hardly to his credit.

Had the CRA investigators not stepped in and arrested him for these new offences, there is, in my view, every likelihood that he would simply have continued engaging in the same activities throughout subsequent years, leading to even greater losses for the Canadian tax system. There is no evidence to suggest that he had any intention of putting an end to his practice of filing false tax returns for his clients. I also note that the average tax evaded or credits improperly paid out are $36,000 per year for the years 2010 and 2011.

This is actually higher than the $30,000 per year average for the eight-year fraud that occurred between 2000 to 2007.

[ 58 ] The mitigating circumstances in the present case are minimal: 1. There are his guilty pleas. Although the trial did begin with a challenge to the validity of the search warrant executed at Mr. Kaba's office, I am satisfied that this was a legitimate approach to the legal issues that arose in this case. Upon receiving an adverse ruling on that challenge, Mr. Kaba did enter his guilty pleas, thereby bringing the trial to a speedy conclusion. It would have been a protracted trial with upwards of 70 witnesses required. 2. Other than receiving modest fees for preparing the false tax returns, Mr.

Kaba received no direct financial benefit from his fraudulent activities. 3. It is clear that Mr. Kaba does have continuing support in the community from his immediate and extended family and close friends. Still, he has and will suffer collateral consequences insofar as his reputation in the broader community in which he lives and operates is concerned. His client base will likely be further eroded by these convictions and his business further imperilled. 4. Mr. Kaba suffers from multiple health issues. I accept that he is truly fearful about how well these issues will be dealt with if he is incarcerated.

On the other hand, the correctional authorities are confident that they can successfully manage Mr. Kaba's medical requirements. 5. Mr. Kaba's psychological health is also fragile. He suffers from depression that appears to have begun while awaiting disposition on the earlier charges back in 2011. His mental state was certainly not helped by the damage to his reputation and the decline in his business that followed his earlier convictions.

I accept that his judgment may have been impaired to some extent by virtue of his depression and this, in turn, may serve to mitigate to some degree his moral culpability in relation to these new offences. On the other hand, Mr. Kaba has taken no significant steps to deal with his mental health issues, even after receive the diagnosis of depression and a recommendation by the psychologist, Dr. Elterman, that he undertake counselling. He received this recommendation back in November 2011, just prior to the sentence being imposed upon him on the prior charges.

He appears not to have followed up on that recommendation, with the result that he has failed to take the steps that he needed to take towards his own rehabilitation. [ 59 ] After a consideration of the seriousness of the offences, in context with the aggravating and mitigating circumstances, the principles of sentencing, including the rehabilitation factor, and the relevant sentencing authorities, I have come to the conclusion that a term of imprisonment is required in this case. [ 60 ] I have also concluded that a conditional sentence order would not be appropriate.

Firstly, I am far from satisfied that service of the sentence in the community would not endanger the community. Given Mr. Kaba's track record, I am satisfied that there is a very real risk that he may reoffend. Should he reoffend, new and unsuspecting clients would be subjected to audits by the CRA and possible reassessments that might leave them in debt to the CRA. The damage suffered by these clients in the event that Mr.

Kaba should reoffend would consist of a degree of emotional and financial strain that they would not deserve. [ 61 ] More importantly, I am not satisfied that a conditional sentence order would be consistent with the fundamental principles and purpose of sentencing.

In this regard, a conditional sentence order would fail to adequately address the objectives of general deterrence and denunciation that are so important in this particular case. [ 62 ] It would also fail to properly address the objective of specific deterrence which, in my view, is a very important consideration in crafting a sentence for this offender and these offences.

It must be remembered that we are dealing here with a two-time offender who completely ignored the terms of the conditional sentence order that was imposed upon him for the very same offences committed by him prior to the offences with which I am now dealing. Mr. Kaba embarked upon a program of preparing and filing false income tax returns while on bail for the prior charges, and he continued to prepare and file false income tax returns immediately after receiving the two-year conditional sentence order. [ 63 ] It is clear from the psychological report of Dr.

Elterman that in the months prior to the December 2011 sentencing, Mr. Kaba was very, very frightened by the prospect of receiving a jail sentence. It played a role in his depression. Oddly, this did not deter him from continuing with his efforts to defraud the Canadian income tax system on behalf of his clients. In the end, I am unable to attach a great deal of weight to his current fear of incarceration as a factor that might deter him from further reoffending. [ 64 ] I must now determine what would be a fit and just term of imprisonment for this offender and the offences with which I am dealing.

The position of Crown counsel is 15 months' imprisonment. In arriving at that term, the Crown has taken into account the mitigating circumstances relating to Mr. Kaba's physical and mental health issues. Absent these issues, the Crown would be seeking a much longer jail sentence. In my view, a 15-month jail sentence would be well within the appropriate range for this two-time offender who has taken few, if any, steps towards his rehabilitation over the last few years. [ 65 ] Defence counsel has proposed a much shorter term of six months' imprisonment.

In my view, such a sentence would be well below the appropriate range. [ 66 ] The concerns that exist regarding Mr. Kaba's physical health and his mental health, while deserving of some consideration on compassionate grounds, are not so compelling as to justify what would otherwise be an unfit sentence. Correction authorities have indicated they are competent to deal with Mr.

Kaba's medical issues, and that would include not just his physical issues, but also his mental issues. [ 67 ] I do accept that being incarcerated will be much more difficult for this offender than it would be for someone who was less fragile. Taking this into consideration, I have concluded that an appropriate and just sanction in the circumstances described above can be at the lower end of the range, and in my view that would be one year in jail. [ 68 ] Accordingly, I sentence Mr.

Kaba to a term of imprisonment for one year on each count, to be served concurrently. [ 69 ] I am also satisfied that, given that this is his second conviction for offences involving a two-year fraud upon the Canadian tax

system, a fine amounting to 100 percent of the tax evaded and the GST and Child Benefit Credits falsely obtained is appropriate. [ 70 ] Accordingly, the fines will be: Count 5: $21,553; Count 7: $25,839 Count 8: $18,365; Count 9: $ 6,263. [ 71 ] He is entitled to time to pay. I will direct that he pay the total fines of $70,020 by way of payments of $200 per month made on the first day of every month, commencing February 1, 2017. Those payments will be made on the first day of every month thereafter until the fines are retired in full. (REASONS CONCLUDED)