R v Banayos and Banayos, 2018 MBCA 86

Citation: R v Banayos and Banayos, 2018 MBCA 86 Date: 20180913 IN THE COURT OF APPEAL OF MANITOBA Coram: Chief Justice Richard J. Chartier Madam Justice Diana M. Cameron Madam Justice Jennifer A. Pfuetzner Docket: AR17-30-08940 ) BETWEEN : ) ) HER MAJESTY THE QUEEN ) K. E. Smith ) for the Appellant Respondent ) Carol Banayos ) - and - ) ) E. J. Roitenberg CAROL BANAYOS ) for the Appellant ) Oliver Banayos (Accused) Appellant ) ) - and - ) S. C. Cawley and ) J. A.

Hyman Docket: AR17-30-08952 ) for the Respondent BETWEEN : ) ) HER MAJESTY THE QUEEN ) Appeal heard: ) May 1, 2018 Respondent ) ) - and - ) Judgment delivered: ) September 13, 2018 OLIVER BANAYOS ) ) (Accused) Appellant ) On appeal from 2017 MBQB 114 ; and R v Banayos (O) , 2017 MBQB 175 chartier cjm : Introduction and Issues [ 1 ] The accused Carol Banayos (the sister) and Oliver Banayos (the brother) (collectively, the accused) are siblings. They were tried together.

The brother was convicted on six counts relating to trafficking cocaine, possessing proceeds of crime and laundering his drug money through the sister’s ATM business. The sister was convicted on four counts relating to money laundering and possessing proceeds of crime in relation to the ATM business. [ 2 ] The accused, along with other co-accused, had previously appealed a pre-trial motion ruling. That ruling was in regard to the validity of a series of authorizations to intercept private communications.

That appeal, which focussed on the motion judge’s ruling dismissing the claim that there existed a reasonable apprehension of bias in respect of the judge who granted the first six wiretap authorizations, was dismissed earlier this year (see R v Baldovi et al , 2018 MBCA 64 ).

[ 3 ] The accused had also raised a number of issues relating to conviction and sentence. This appeal deals with those issues. [ 4 ] The brother was convicted of six offences: trafficking in cocaine; conspiracy to traffic cocaine; possession of proceeds of crime exceeding $5,000; conspiracy to possess proceeds of crime exceeding $5,000; laundering proceeds of crime exceeding $5,000; and conspiracy to launder proceeds of crime exceeding $5,000.

He received a sentence of nine years’ imprisonment on the two trafficking offences and two and one-half years’ imprisonment on the other four proceeds of crime offences to be served consecutively to the nine-year sentence. After taking into account totality considerations, the total sentence of 11 and one-half years was reduced to ten. The sentencing judge also imposed a fine in lieu of forfeiture.

After reducing the fine by the amount seized on arrest, he set the fine at $51,040, to be paid within 18 months following his release, with 18 months’ imprisonment in the event of default. [ 5 ] The brother now appeals three of his six convictions: possession of proceeds of crime exceeding $5,000; laundering proceeds of crime exceeding $5,000; and conspiracy to launder proceeds of crime exceeding $5,000. He raises four grounds with respect to the conviction appeal. The grounds were argued together and can be reframed as follows:

a) Did the trial judge misapply the law governing the analysis of circumstantial evidence by improperly shifting the evidentiary burden? and

b) Were the verdicts unreasonable? [ 6 ] The brother also seeks leave to appeal his sentence. He raises the following five issues, claiming that the sentencing judge erred:

a) by mischaracterizing his level of involvement in the drug trafficking hierarchy, thereby imposing a demonstrably unfit sentence;

b) by using his prior criminal record as an aggravating factor;

c) by imposing a consecutive sentence on certain offences;

d) by not imposing a lower sentence than sentences imposed on others involved in these drug transactions;

e) by ordering a fine in lieu of forfeiture. [ 7 ] The sister was convicted of four proceeds of crime offences: possession of proceeds of crime exceeding $5,000; conspiracy to possess proceeds of crime exceeding $5,000; laundering proceeds of crime exceeding $5,000; and conspiracy to launder proceeds of crime exceeding $5,000. She received 15 months’ imprisonment concurrent on all counts. [ 8 ] The sister appeals all of her convictions. In essence, she argues the same two previously mentioned grounds as the brother (see para 5 above). She does not appeal her sentence.

Overview of the Factual Findings [ 9 ] The Winnipeg Police Service began investigating the cocaine trafficking activities of a number of individuals. The brother was one of the targets; the sister was not. As a result of this investigation, the police intercepted the brother’s private communications (telephone calls, emails and texts) on five different lines, from January 24, 2013 to December 31, 2013. [ 10 ] From these intercepts, it became clear that the brother was involved in two types of businesses: a drug trafficking business as well as an ATM business, which consisted of a number of ATMs.

While the intercepts showed that the sister was also involved in the ATM business, there was no evidence that she was in any way involved in the drug trafficking business. [ 11 ] An agreement of facts was filed pursuant to

section 655 of the Criminal Code . It was agreed that, because of the co- conspirators’ exception to the hearsay rule, all intercepted communications that related to the ATM business would be admissible against the sister irrespective of whether she was a party to the call. [ 12 ] The agreement of facts encompasses a sizable book of evidence that contains transcripts of the intercepted communications, as well as covert entry and surveillance reports prepared by the Winnipeg Police Service. This material was eventually admitted into evidence.

Also admitted into evidence by consent was a binder of material referred to as the financial evidence. That evidence includes the following documentation:

a) the income tax records of the accused;

b) the personal bank records of the accused;

c) banking records of the sister’s company, Cash Connect Inc.;

d) documents from Calypso (a service provider whose ATM services are explained later) relating to its association with the sister;

e) documents relating to the seizures of the ATMs; and

f) transactions involving the brother and three different entities (Money Mart, Visa and West Jet). [ 13 ] In addition to this documented evidence, the trial judge heard from six witnesses: two witnesses from two financial institutions; two police officers involved in the surveillance, and two expert witnesses (one as an expert in proceeds obtained by crime and money laundering and the other as an expert on the Winnipeg drug trade during the relevant timeframe).

[ 14 ] The accused chose not to testify nor to call evidence. [ 15 ] As already mentioned, the issues relating to the conviction appeals of the accused are mainly in regard to the money laundering offences surrounding the ATM business. That business involved the use of white label ATMs. The agreement of facts sets out the manner in which a white label ATM business usually operates. White label ATMs are not associated with a major financial institution and are typically found in bars, restaurants and convenience stores.

Any cardholder on the Interac network can withdraw funds from a white label ATM by paying two fees: a surcharge fee charged by the owner of the ATM and an interchange fee charged by the cardholder’s financial institution. Generally, the owner of the white label ATM would pay a share of the surcharge fee to the owner of the premises. Typically, the interchange fee would be divided between the financial institution, Interac and a third party service provider, whose services allowed these white label ATMs to interface with the Interac network. [ 16 ] In the case at bar, Calypso was the third party service provider.

It paid a portion of the interchange fee back to the ATM business owner. Calypso also reimbursed the owner of the white label ATMs for the cash dispensed from the machines, plus any appropriate fee. [ 17 ] On the basis of the evidentiary record (the viva voce evidence and the agreement of facts, which included the book of evidence and the financial evidence), the trial judge made the following factual findings that are relevant for the purposes of this conviction and sentence appeal:

a) With respect to the cocaine trafficking business: - The brother was the cocaine supplier to three mid-level traffickers and he generally used couriers to deliver the cocaine in exchange for cash; - The brother was supplying cocaine “at least” at the quarter-kilogram level and being paid approximatively $15,000 per quarter kilogram; - The cocaine trade is a cash-based business; - The brother received $91,000 in cash through six cocaine sale transactions; - The brother would have a significant amount of cash on hand;

b) With respect to the ATM business: - Notwithstanding documentation showing that the sister was the owner and operator of the ATM business, in fact, the brother operated the ATMs. Given that a criminal record check was required by Calypso, the sister became the brother’s nominee for the ATM business; - On October 17, 2012, the sister opened an RBC personal account. She had sole control over the money in that account; - On October 18, 2012, the sister completed an Interac source of funds declaration. This declaration allowed the ATMs to interface with the Interac network.

The sister falsely indicated to the banks and Calypso that she was the owner of the ATM business. In addition, the sister falsely indicated in this declaration that the cash that was going to be used to initially load the ATMs would be taken from her RBC account; - The brother was the one that set the amount of the surcharge fee for each transaction; - Farhad Walji (Walji), a resident of British Columbia, owned a business called Connect Cash Services Inc. The intercepts establish that Walji communicated with the accused about the ATM business.

He was involved in the supplying of the ATMs and their maintenance, helped with the bank paperwork and provided advice when the bank was investigating them. The agreement of facts states that Walji’s company, Connect Cash Services Inc., received from Calypso some interchange fee deposits relating to the ATM business; - Calypso would send various automatic text messages to the brother that referenced identification numbers for the ATMs and specified the cash balance contained in the respective machines. The text messages also provided warnings to the brother to load the ATMs when they were low on cash.

When that would occur, the brother would contact the sister and direct her to withdraw cash from her RBC account. He would then direct one of his associates to meet the sister to pick up the cash necessary to load the ATMs, or he would fill the machines himself; - One of the ATMs was located at the Opera Lounge nightclub.

The owner of that club was Merhdad (Jack) Moslehi (Moslehi); - Between October 18, 2012 and October 23, 2012, the Opera Lounge ATM was loaded with cash because, by October 23, 2012, Calypso started making reimbursement deposits into the sister’s RBC personal account for the cash dispensed from that ATM, plus any appropriate fee. Prior to those deposits being made, the sister’s RBC personal account balance was $0; - On October 30, 2012, the first withdrawals from the sister’s RBC personal account occurred.

They totalled $8,000; - A cheque from Walji’s company in the amount of $5,000 dated November 16, 2012 was made payable to the brother. That cheque was negotiated on November 19, 2012. On the cheque was the notation “Balance Wpg Property”; - The manager of RBC client care received an inquiry about the sister’s account from the bank’s internal security unit. The inquiry arose because of the Calypso deposits, which were a “red flag” to that unit. The concern was that she was running an ATM business through her personal account. The sister was told the account had to be changed to a business account.

Several months later, in July 2013, when the account had not been changed, it was frozen. This prevented her from being able to withdraw any cash during that month;

- On March 5, 2013, Cash Connect Inc. was incorporated. The sister was the sole director and shareholder of the company; - During a 22-week period between January 23, 2013 and June 28, 2013, the sister withdrew over $415,000 in cash from her RBC account in 22 separate transactions. This averages to approximately a $19,000 cash withdrawal every week during the 22-week period; - On June 25, 2013, the sister opened a business bank account with BMO for Cash Connect Inc.

She identified the nature of the business “Financial Service – White-label ABMs”; - During the month of July 2013, the RBC bank froze the sister’s RBC account; - On July 18, 2013, Moslehi texted the brother complaining that the Opera Lounge ATM was not working.

The brother texted back saying that he did not “want to put any money in the machines when the account [was] frozen” and that he would go by the machine later. - On July 19, 2013, despite the fact that the sister’s RBC account was frozen, the ATM at the Opera Lounge location was loaded with $2,940; - On July 23, 2013, $122,994 was withdrawn from the sister’s RBC account via an RBC bank draft. On July 24, 2013, that bank draft was deposited in the sister’s company Cash Connect Inc.’s BMO account.

Two days later, once the draft cleared, the sister attended to the bank to withdraw $100,000 in cash; - Between July and November of 2013, the sister transferred $448,000 from her RBC account, which continued to receive Calypso deposits, to Cash Connect Inc.’s BMO account on eight separate transactions; and - Over approximately a 25-week period between July 26, 2013 to January 24, 2014, the sister withdrew $523,000 in cash from the BMO account in 23 separate transactions. This averaged to approximately a $23,000 cash withdrawal every week during the 23-week period.

Analysis A: The Conviction Appeals of the Accused

a) Did the trial judge misapply the law governing the analysis of circumstantial evidence by improperly shifting the burden to the accused? [ 18 ] The accused both criticise the trial judge’s reasoning. The case against them was largely circumstantial. They claim that the trial judge took an incorrect approach to the circumstantial evidence and wrongly shifted the burden to them.

T he standard of review on whether the trial judge erred in his reasoning process with respect to the law governing circumstantial evidence is correctness. [ 19 ] The theory the Crown presented to the trial judge was straightforward and involved asking him to draw two critical inferences. First, that the brother laundered some of his drug money through the sister’s ATM business; and second, that the sister acted on the brother’s instructions regarding the ATM business while being wilfully blind to the fact that the brother’s funds came from an illegitimate source.

It argued that the guilt of each of the accused was the only reasonable inference that could be drawn from the whole of the evidence. The accused each submitted that there were alternative inferences to guilt. The trial judge rejected the alternative inferences and convicted them. [ 20 ] On appeal, the accused argue that the trial judge erred in his analysis of the circumstantial evidence when he found that the alternative inferences suggested by them were, at best, theories because there was, as he stated, “an absence of evidence” with respect to them (at para 124).

As authority for their argument, they cite R v Villaroman , 2016 SCC 33 , where Cromwell J explained that, “In assessing circumstantial evidence, inferences consistent with innocence do not have to arise from proven facts” and that, “Requiring proven facts to support explanations other than guilt wrongly puts an obligation on an accused to prove facts” (at para 35). They identify the following two paragraphs in the trial judge’s reasons to make their point (at paras 124, 134): However, in my view, based on the evidentiary record , defence counsel’s arguments are, at best, theories.

There is an absence of evidence that Walji was the source of the initial funds for the first ATM (at Opera Lounge). There is no credible evidence of another legitimate source of the funds used for the initial set-up of the first ATM (at Opera Lounge) or the actual source of cash used to load the ATM on July 19, 2013, when the RBC account was frozen. Appreciating defence counsel’s argument, for the reasons discussed above, I am satisfied that the only rational inference based on the evidentiary record is that Ms Banayos was wilfully blind about the source of these funds. [emphasis added]

[ 21 ] The accused submit that the above statements show that the trial judge wrongly required them to establish a factual underpinning for the alternative inferences they advanced and thereby incorrectly shifted the burden of proof to them. This, they argue, runs contrary to the presumption of innocence. [ 22 ] I would not give effect to this ground.

I do not read the trial judge’s comments as requiring one or both of the accused to present an evidentiary basis to raise a reasonable doubt. [ 23 ] The test a trial judge has to apply to determine innocence or guilt, where the evidence is based solely or primarily on circumstantial evidence, is whether he or she was satisfied beyond a reasonable doubt that the guilt of the accused was the only reasonable inference that could be drawn from the evidence.

This analysis requires a trial judge to consider other plausible theories that are inconsistent with guilt and to draw the line that separates reasonable doubt from speculation.

In drawing the line between reasonable doubt and speculation with respect to the alternative inferences, a trial judge must review the totality of the evidence (direct and circumstantial) adduced at trial, not simply the proven facts (see R v Bui , 2014 ONCA 614 at para 28 ; and Villaroman at para 35 ). [ 24 ] An accused is under no obligation to present an evidentiary foundation to raise a reasonable doubt or to prove their alternative inferences. An accused may choose to present evidence or not.

However, when an accused chooses not to testify or to call evidence, that decision carries the risk of not providing the trial judge with the necessary evidentiary foundation which, if accepted, could have precluded the impugned inferences from being drawn (see R v Oddleifson (JN) , 2010 MBCA 44 at para 25 , leave to appeal to SCC refused, 33756 (28 October 2010)). [ 25 ] In making the comment about “an absence of evidence”, the trial judge, in the case at hand, was considering the alternative inferences in light of all the evidence. This includes the absence of evidence.

A reasonable doubt is not inevitably raised simply because an accused presents other possible inferences. More is needed. While a gap or an absence in the evidence may support an alternative inference, to be successful, any alternative inference “must be reasonable given the evidence and the absence of evidence, assessed logically, and in light of human experience and common sense” (see Villaroman at para 36 ).

T he trial judge had to decide if any of the alternative inferences were reasonable enough to raise a doubt and that is what he did. [ 26 ] In my view, a fair reading of the trial judge’s reasons as a whole and in context shows that he did not shift the burden to the accused by requiring them to present an evidentiary foundation to raise a reasonable doubt or to prove their alternative inferences.

His impugned comment that there was “an absence of evidence” was in line with Villaroman that an alternative inference must be reasonable and cannot be based on speculation. [ 27 ] In the end, I have not been persuaded that the trial judge misapplied the law governing the analysis of circumstantial evidence. The question of whether the trial judge erred when he found that the alternative inferences were speculative will be considered in the unreasonable verdict analysis below.

b) Was the verdict unreasonable? [ 28 ] Having found that the trial judge did not misapply the law governing the analysis of circumstantial evidence by shifting the burden to the accused, I now turn to whether the verdict was unreasonable. [ 29 ] The accused largely agree on the facts. What is in dispute is whether the inferences were capable of being drawn from the evidence.

The principal concern raised by the accused is the reasonableness of two inferences drawn by the trial judge: first, that the brother laundered a portion of his drug money through the sister’s ATM business, and second, that the sister was wilfully blind to that fact. I will now consider, in turn, the reasonableness of these two inferences.

i) Brother Laundering Drug Money Through the ATM Business [ 30 ] The Crown argued before the trial judge that the funds that were used to load the ATMs when the ATMs were first obtained (the ATM start-up funds) came from the brother’s drug business.

The accused argued that there was no direct evidence as to the source of the ATM start-up funds and that there were alternative inferences that could be drawn that they came from legitimate sources, such as from the sister or from Walji. [ 31 ] After assessing the whole of the evidence, the trial judge concluded that the brother laundered a portion of his drug money through the ATM business. There was no direct evidence on point. It was an inference drawn from the circumstantial evidence.

In reaching this conclusion, the trial judge rejected the alternative inferences and was satisfied beyond a reasonable doubt that the guilt of both of the accused was the only reasonable inference that could be drawn from the whole of the evidence. [ 32 ] The accused argue on appeal that the trial judge’s inference that the brother laundered a portion of his drug money through the sister’s ATM business was not reasonable.

They also submit that the trial judge erred when he found that the alternative inferences they put forward (that there were other legitimate sources of the ATM start-up funds such as from the sister or from Walji) were speculative.

I note that neither the sister nor Walji testified. [ 33 ] I cannot accept the submission of the accused. [ 34 ] Since the Crown’s case depended largely on circumstantial evidence, the standard of review is whether the trier of fact, acting judicially, could reasonably be satisfied that the accused’s guilt was the only reasonable conclusion available on the totality of the evidence (see Villaroman at para 55 ).

Moreover, the trial judge’s decision, as to whether the evidence excluded all reasonable inferences other than guilt, will be set aside only where it is unreasonable ( Villaroman at para 71 ). [ 35 ] While there were numerous times when the ATMs were loaded with cash, the trial judge focussed his assessment of the evidence on two moments in time. Both times involved an ATM at the Opera Lounge location bearing Calypso terminal ID number CO100057. The first instance was when that ATM was initially loaded with cash in October 2012. There was direct evidence that:

- the ATM was able to hold 700 twenty-dollar bills or $14,000; - the Interac source of funds declaration states that the sister’s RBC account was to be the only source of funds for the ATMs; - on October 17, 2012, the RBC account balance was “0”; - the first deposit into the sister’s RBC account was made by Calypso on October 23, 2012 in the amount of $2,200 and referenced terminal ID number CO100057, the terminal number of the Opera Lounge location; and - t he first withdrawal from the sister’s RBC account was on October 30, 2012, by which point the balance exceeded $14,000 based solely on Calypso deposits referencing terminal ID number CO100057.

The trial judge concluded that the only available inference was that the source of the ATM start-up funds for the ATM located at the Opera Lounge was from a source other than the sister’s RBC account. [ 36 ] The second event was when the sister’s RBC account was frozen by the bank in July 2013. The trial judge inferred from the direct evidence that the brother accessed funds other than from the sister’s RBC account to load the Opera Lounge ATM on July 19, 2013.

The direct evidence available to draw this inference is set out below: - The Interac source of funds declaration states that the sister’s RBC account was to be the only source of the funds for the ATMs; - From July 1, 2013 to July 22, 2013, no funds were withdrawn from the sister’s RBC account; - July 3, 2013 text from the brother to the sister stating, “Try to take as much pera out. All machines need a refill.” “Pera” in Tagalog means “money” or “cash”; - The July 18, 2013 intercepts (see below) show that the ATMs were now sitting empty because the sister’s RBC account had been frozen by the bank:

a) the brother texts Walji at 12:58:21—“I cant put anything in any machine they gotta have to wait till this is cleared up”;

b) the brother receives a text from someone called Hua at 12:10:26—“Can u fill the machine on sat” and at 13:14:34—“Kk sry to bug u I jus chq the machines today an thought I let u kno its empty”;

c) the brother receives a text from Moslehi at 15:50:50—“Bro, are the machines good to go for tonight? I noticed the sign is still on the machine downstairs”;

d) the brother texts Moslehi at 15:51:59—“Bro I got issues with the bank it froze the account” and at 15:52:11—“I gotta go by there and see what’s in the machine” and at 15:55:49—“Ive been trying too. I don’t want to put any money in the machines when the account frozen”;

e) Moslehi at 15:56:29—“So what do you recommend I do?”

f) the brother texts Moslehi at 15:56:57—“I will go by the machine today”; - On July 19, 2013, the ATM at the Opera Lounge location was loaded with $2,940 in cash; From this direct evidence, the trial judge inferred that the brother had the ability to get twenties in cash from a source outside of the sister’s RBC account to load the Opera Lounge ATM on July 19, 2013. [ 37 ] In my view, the following pieces of circumstantial evidence, when combined with the trial judge’s findings respecting the specific two moments in time at the Opera Lounge ATM location, support the reasonableness of the trial judge’s inferences that the cash to load the machines came from the brother’s drug business and not from either the sister or Walji: - The brother’s drug business was a cash-based business in which the brother received at least $91,000 in cash; the brother had a significant amount of cash on hand; the brother was the de facto owner and operator of the ATMs; it was the brother or one of his associates, and not the sister, that would load the ATMs with cash; and, the brother’s income tax return printouts show that, from 2009 to 2013, no assessment information was found; - The sister falsely indicated that the ATM start-up funds would be taken from her RBC account; and, the first withdrawal from that account occurred after the first ATMs were first loaded with cash and after Calypso started making reimbursement deposits into her account; - The $5,000 cheque from Walji’s company was negotiated after the ATM start-up funds were initially loaded and after Calypso started making reimbursement deposits; and, despite numerous intercepts involving Walji and both accused, none involve discussions about Walji offering to provide or supply cash to load the ATMs. [ 38 ] It is clear from his reasons that the trial judge applied the correct standard to convict where the evidence is solely or primarily circumstantial: he had to be satisfied beyond a reasonable doubt that the guilt of the accused was the only reasonable inference that could be drawn from the evidence.

It is also clear that he considered the alternative inferences inconsistent with guilt put forward by the accused. [ 39 ] In the end, there was strong circumstantial evidence to support the trial judge’s inference that the brother laundered a portion of his drug money through the sister’s ATM business. In my view, the trial judge’s assessment that this evidence excluded all

reasonable inferences other than guilt of both accused is reasonable, is owed deference and should not be set aside. [40] I am strengthened in my view knowing that, on appeal, an accused’s failure to testify can be used to assess the accused’sclaim of an unreasonable verdict and, more specifically, the absence of an innocent explanation can be considered at the appellate levelas a factor in assessing the reasonableness of the verdict (see R v Noble, (SCC), [1997] 1 SCR 874 at para 103; andOddleifson at paras 24-27).

In this case, neither of the two accused chose to testify, nor did they choose to call Walji. ii) Sister Wilfully Blind to the Money Laundering [41] I now turn to the last issue with respect to the conviction appeals. The Crown submitted to the trial judge that the sisteractually knew that drug money was being laundered or was wilfully blind about the source of the ATM start-up funds. The sisterconcedes that the trial judge correctly stated the law with respect to the doctrine of wilful blindness. A finding of wilful blindness acts asa substitute for actual knowledge.

However, she argues that he erred in its application to the facts. [42] The sister submits that the evidence used to infer that she was wilfully blind must bear some direct relation to thetrafficking offences. She points out that the evidence considered by the trial judge for the wilfully blind inference referred to the sourceof the ATM start-up funds being from an illegitimate source, not that they came specifically from drug trafficking.

She submits thatthere must be a specific piece of evidence to show that the source of the funds arose from the commission of the offence of traffickingunder the Controlled Drugs and Substances Act, SC 1996, c 19 (the Act), as opposed to simply any illegitimate source.

As authority forher submission, she cites R v Sankar, 2012 ONSC 1498 (at para 133): Turning next to the Crown’s argument that Picard was ‘willfully blind,’ a concept frequently encountered in criminal law, wilfulblindness acts as a substitute for actual knowledge, by imputing knowledge to an accused person whose suspicions are sufficientlyaroused to the point that he or she sees the need to make further inquiries, but deliberately decides not to do so, because he or she doesnot want to know the truth, preferring to remain ignorant.

Put differently, a finding of wilful blindness involves an affirmative answer tothe question: did the accused shut his eyes because he knew or strongly suspected that looking would fix him with knowledge.” Wilfulblindness is distinct from recklessness. A finding of wilful blindness can only be made where it can almost be said that the personactually knew. He suspected the fact and realized its probability. R. v. Briscoe, 2010 SCC 13 at para. 21, 22 and 23. The question is notwhether he or she should have been suspicious, but whether they were in fact suspicious of the fact. R. v. Malfara, (ON CA), [2006] O.J.

No. 2069 (C.A.) [emphasis added] [43] I disagree that the trial judge erred in the manner suggested. The law does not require such specificity. The portion ofpara 133 of the Sankar decision that I have emphasised is the part that was quoted in the factum prepared by counsel for the sister. Neither Sankar, nor R v Malfara, 2006 CarswellOnt 3164 (which is a six-paragraph appeal endorsement for the Ontario Court ofAppeal), state that there must be a specific piece of circumstantial evidence related to the predicate offence (in this case drug trafficking)to uphold an inference of actual knowledge.

Indeed, a recent Ontario Court of Appeal decision, R v Downey, 2017 ONCA 789, dealt withan argument similar to the one put forward by the sister and concluded that such specificity is not required. [44] In Downey, that accused had been convicted of various firearm related offences because she drove a vehicle across theborder that had guns hidden in it. That trial judge convicted that accused concluding beyond a reasonable doubt that she had beenwilfully blind about what she was transporting.

On appeal, she alleged the trial judge erred because he failed to look for evidence fromwhich an inference could be drawn that she suspected that she had guns, as opposed to some other criminal contraband. The OntarioCourt of Appeal quickly dismissed the appeal. It concluded (at para 6): The trial judge did not have to find that the appellant knew or suspected there were guns, as opposed to another form of criminalcontraband, in the car.

To the contrary, wilful blindness was met by finding beyond a reasonable doubt that the appellant had hersuspicion aroused to the point that she thought there was a need for inquiry, but she deliberately chose not to inquire because she did notwant to know the truth. [45] In the case at hand, the trial judge carefully set out in his reasons the numerous pieces of circumstantial evidence heused to infer that the sister was wilfully blind to the fact that the source of the money being placed in the ATMs was from an illegitimatesource.

For example, he found that she had to know that the ATM start-up funds were not drawn from her RBC personal accountbecause evidence establishes the first transactions involving her account were reimbursement deposits from Calypso for customer cashwithdrawals from the ATM business.

The trial judge also noted that some of the intercepts involving the sister and the brother establishthat the brother was loading the ATMs with cash when she could not withdraw funds from her own accounts. [46] The sister is correct that the pieces of circumstantial evidence listed by the trial judge relate to the funds coming fromillegitimate sources and do not specifically refer to drug trafficking.

However, as long as the inference drawn is reasonable, given theevidence and the absence of evidence, assessed logically, and in light of human experience and common sense, it will not be set aside(see Villaroman at paras 36, 71). [47] In my view, the conclusion reached by the trial judge, that the sister made a considered decision to refrain fromobtaining the final confirmation that the source of the funds was from the sale of drugs because she wanted to be able to denyknowledge, was a reasonable one in all of the circumstances and should not be set aside. [48] In the result, I would dismiss all the appeals against conviction with respect to both of the accused.

B: The Brother’s Sentence Appeal [49] Appeal courts are slow to intervene in sentence appeals because of the high level of deference owed to a sentencingjudge’s decision. Only when a sentencing judge makes an error in law or in principle that has an impact on the sentence, or when thesentence is demonstrably unfit, is appellate intervention justified (see R v Lacasse, 2015 SCC 64 at para 11).

The same level ofdeference applies to a sentencing judge’s decision to order consecutive rather than concurrent sentences (see R v McDonnell, (SCC), [1997] 1 SCR 948 at para 46). [50] The sentencing judge, after concluding that the brother was engaged in high-level drug trafficking, sentenced him tonine years of imprisonment concurrent on all of the cocaine trafficking offences.

For the proceeds of crime offences, after finding thatthe brother’s moral culpability was higher than that of the sister (who received a 15-month period of imprisonment), he sentenced him totwo and one-half years of imprisonment concurrent on all proceeds of crime offences, but consecutive to the cocaine trafficking sentencefor a total sentence of 11 and one-half years. [51] The sentencing judge also imposed a fine in lieu of forfeiture based on his findings involving six occasions where thebrother received $91,000 for selling cocaine.

After reducing the fine by the amount seized on arrest ($7,960 from the ATMs and$32,000 from the bank accounts), he set the fine at $51,040, to be paid within 18 months following his release, with 18 months’imprisonment in case of default. [52] After taking into account the totality considerations, the sentencing judge reduced the 11 and one-half year totalsentence to ten years of imprisonment. Since the sentencing judge did not apportion the 18-month totality adjustment between thetrafficking offences and the proceeds of crime offences, this Court is left to determine what that apportionment would be.

As this courtstated in R v Ladouceur and Traverse, 2008 MBCA 110 at paras 27-28, it is important for sentencing judges, once they have taken thelast look and reduced the total sentence to address totality concerns, to apportion the reduction for each of the offences. [53] In my view, it is clear that, because of the brother’s higher moral culpability than that of the sister, his proceeds ofcrime sentence must remain significantly higher than the 15-month sentence the sister received.

In the result, I am of the view that thesentencing judge’s reduction of the brother’s total sentence would have resulted in an eight-year period of incarceration for thetrafficking offences and two years for the proceeds of crime offences. [54] The brother seeks leave to appeal his sentence arguing that the sentencing judge erred on five issues.

a) Mischaracterizing his level of involvement in the drug trafficking hierarchy, thereby imposing a demonstrably unfit sentence [55] The brother argues that the sentencing judge erred when he found him to be engaged in high-level trafficking. Hesubmits that the evidence established that he was trafficking at the multi-ounce level and was therefore engaged in mid-level trafficking,which would generally call for a sentence of imprisonment in the range of five to eight years (see R v Rocha, 2009 MBCA 26 at para64).

While he concedes that his previous criminal record could disentitle him to the lower end of the five to eight year range, he arguesthat it cannot be used as an aggravating factor to increase his sentence. [56] There is no merit to this ground. [57] The end result of the sentencing judge’s “last look”, to take into account totality considerations, resulted in the brother’ssentence being adjusted to eight from nine years which is within the range conceded by the brother as being reasonable, albeit at the highend.

Moreover, it cannot be said that this sentence should not have been at the high end of that range, or even a little higher, when youtake into account, not only his previous drug-related conviction, but the fact that he played a leadership role in the trafficking operation.

The brother’s role bore leadership hallmark traits such as: - negotiating the drug transactions; - determining the selling price for the drugs; - determining the size unit of the drugs that would be sold; - handling significant amounts of cash; - insulating himself from detection by employing couriers; and - enjoying a high-end lifestyle (private school for child, expensive vacations and an $18,000 cash purchase of a motorcycle).

b) Using his prior criminal record as an aggravating factor [58] There is also no merit to the brother’s argument that his prior criminal record of possession for the purpose oftrafficking cannot be used as an aggravating factor. In certain circumstances, a prior criminal record can be an aggravating factor (see R vWright, 2010 MBCA 80 at paras 6-16). In this case, the brother’s related criminal record is deemed to be an aggravating factor pursuantto section 10(2)(

b) of the Act, because his prior conviction (possession for the purpose of trafficking) is a “designated substance offence”as defined under

section 2 of that Act.

c) Imposing a consecutive sentence on certain offences [59] The brother argues that the sentence relating to possession of proceeds and the conspiracy to possess charges, that weremade concurrent to the money laundering charges, should not have been made consecutive to the trafficking charges. However, heconcedes that the money laundering offence should be consecutive to the trafficking offences. [60] I am not prepared to accede to this ground. Even had the sentencing judge not made the possession of proceeds and the

conspiracy to possess charges consecutive to the trafficking charges, the end sentence of ten years would have remained the same because of the brother’s concession that the two-year laundering sentence be consecutive to the eight-year trafficking sentence. Simply put, the sentencing judge’s decision on this alleged error would not have any impact on the overall sentence (see Lacasse at para 11 ).

d) Not imposing a lower sentence than the sentences imposed on others involved in these drug transactions [ 61 ] The brother submits that, given the circumstances of the offenders and the offences of the other persons involved in these drug trafficking offences, his sentence should have been lower. There is no merit to this argument. The brother argued before the sentencing judge that he should receive “no more than seven and a half to eight years on the drug offences”. He also argued for a sentence of up to two years for the “money offences”. In the end, he essentially received the sentence he was requesting: eight years on the drug offences and two years consecutive on the money offences.

e) Ordering a fine in lieu of forfeiture [ 62 ] Finally, the brother argues that the sentencing judge erred, first, in ordering the fine in lieu of forfeiture, and second, in setting the amount of the fine based on the total value of the drugs rather than limiting it to the profit the brother made on the sale. [ 63 ] The decision to order the fine in lieu of forfeiture is discretionary in nature and is owed significant deference. The brother argues that there was no evidence confirming that the money flowed directly to him.

The sentencing judge found as a fact that the brother received proceeds of crime on six different occasions. On the evidentiary record before him, that finding was open to him. [ 64 ] The decision with respect to the value assigned to the fine was in line with the conclusion reached in R v Lavigne , 2006 SCC 10 at para 16 , that the purpose of the forfeiture provision is to deprive offenders of the proceeds of their crime and to deter them from committing future crimes. In my view, limiting the value of the fine to the profit made would undermine the intent of the legislation.

The Ontario Court of Appeal also took this view in R v Piccinini , 2015 ONCA 446 at paras 17-19 . Appellate intervention is not warranted. Conclusion [ 65 ] In the result, I would dismiss the appeals against conviction with respect to each of the accused and, while I would grant the brother’s request for leave to appeal his sentence, I would dismiss his sentence appeal. CJM I agree: JA I agree: JA