R. v. Clarke, 2011 ONCJ 89

Ontario Securities Commission v. Robinson 105 O.R. (3d) 120 2011 ONCJ 89 Ontario Court of Justice, Cole J.

February 18, 2011 Securities regulation -- Offences -- Sentence -- Defendant pleading guilty to trading in securities while prohibited from doing so --Defendant repeatedly breaching cease trade order and defrauding vulnerable investors -- Defendant having no criminal record but havingbeen found in contempt of court for failing to attend for examination by Ontario Securities Commission staff -- Dominant sentencingprinciples deterrence and denunciation -- Defendant sentenced to 30 days' incarceration followed by two years' probation and ordered toperform 240 hours of community service.

The defendant pleaded guilty to trading in securities at a time when he was prohibited from doing so, contrary to s. 122(1)(

c) of theSecurities Act, R.S.O. 1990, c. S.5. He had never been registered by the Ontario Securities Commission to trade in securities andrepeatedly breached a cease trade order. He was found guilty of contempt of court when he failed to attend for examinations by OSCstaff and was sentenced to four months' incarceration (subsequently reduced when he complied with the order to attend theexaminations). He had no criminal record.

Counsel for the prosecution took the position that in light of the duration of the defendant'sbehaviour, his refusal to co-operate with the Commission until he was incarcerated for contempt, the vulnerability of his victims, theamount of money stolen from the victims by the defendant and his associates (over $1.5 million), a sentence of 90 days' incarcerationwould be appropriate. Held, the defendant should be sentenced to 30 days' incarceration followed by two years' probation. The dominant sentencing principles were denunciation and deterrence. The position taken by the prosecution was reasonable.

However,the imposition of a substantial community service requirement would make it unnecessary to impose the full custodial sentence proposedby the prosecution. While on probation, the accused was ordered to perform 240 hours of community service. [page121] SENTENCING for trading in securities while prohibited. Cases referred toR. v. Clarke, [1982] 3 All E.R. 232, [1982] 1 W.L.R. 1090, 75 Cr. App. Rep. 119, 4 Cr. App. R. (S.) 197 (C.A.); R. v.Lawrence (1982), 4 Cr. App. R. (S) 69 (C.A.); R. v. M. (C.A.), (SCC), [1996] 1 S.C.R. 500, [1996] S.C.J.

No. 28, 194N.R. 321, J.E. 96-671, 73 B.C.A.C. 81, 105 C.C.C. (3d) 327, 46 C.R. (4th) 269, 30 W.C.B. (2d) 200, consd Other cases referred toFlintoff v. Von Anhalt, [2010] O.J. No. 4963, 2010 ONCA 786; Lydia Diamond Exploration of Canada Ltd. (Re), 2003 LNONOSC 144,26 OSCB 2511; M.C.J.C. Holdings (Re), 2002 LNONOSC 94, 25 OSCB 1133; M.C.J.C. Holdings Inc. (Re), 2003 LNONOSC 606, 26OSCB 8206; Ontario Securities Commission v. Robinson (2009), (ON SC), 99 O.R. (3d) 614, [2009] O.J. No. 4515(S.C.J.); Ontario Securities Commission v. Robinson (2010), 100 O.R. (3d) 451, [2010] O.J.

No. 144, 2010 ONSC 225, 85 C.P.C. (6th)387; Prydz (Re), 2000 LNONOSC 279, 23 OSCB 3399; R. v. Castaneda, [2008] O.J. No. 712, 2008 ONCJ 69; R. v. DaSilva,unreported, September 7, 2010, Bigelow R.S.J.; R. v. F. (D.G.) (2010), 98 O.R. (3d) 241, [2010] O.J. No. 127, 2010 ONCA 27, 250C.C.C. (3d) 291, 259 O.A.C. 364, 72 C.R. (6th) 299; R. v. Gladue, (SCC), [1999] 1 S.C.R. 688, [1999] S.C.J. No. 19,171 D.L.R. (4th) 385, 238 N.R. 1, J.E. 99-881, 121 B.C.A.C. 161, 133 C.C.C. (3d) 385, [1999] 2 C.N.L.R. 252, 23 C.R. (5th) 197, 41W.C.B. (2d) 402; R. v. Gray, [1995] O.J.

No. 92, 76 O.A.C. 387, 95 D.T.C. 5262, , 26 W.C.B. (2d) 209 (C.A.); R. v.Landen, [2009] O.J. No. 2411, 2009 ONCJ 261; R. v. Poorman, (SK CA), [1991] S.J. No. 274, 93 Sask. R. 1, 66C.C.C. (3d) 82, 6 C.R. (4th) 364, 13 W.C.B. (2d) 439 (C.A.); R. v. Proulx, [2000] 1 S.C.R. 61, [2000] S.C.J. No. 6, 2000 SCC 5, 182D.L.R. (4th) 1, 249 N.R. 201, [2000] 4 W.W.R. 21, J.E. 2000-264, 142 Man. R. (2d) 161, 140 C.C.C. (3d) 449, 30 C.R. (5th) 1, 49M.V.R. (3d) 163; R. v. Sisto Finance N.V., [1994] O.J. No. 4187, 7 C.C.L.S. 223 (C.J.); R. v. Sisto Finance N.V., [1994] O.J. No. 4191,7 C.C.L.S. 240 (C.J.); R. v.

Suhr, (ON CA), [2002] O.J. No. 4315, 166 O.A.C. 97, 55 W.C.B. (2d) 639 (C.A.), affg(March 12, 2002), Cole J. (Ont. C.J.); R. v. Von Anhalt, [2007] O.J. No. 2745 (C.J.); R. v. Von Anhalt, [2007] O.J. No. 3903, 73 W.C.B.(2d) 484 (S.C.J.); Rash (Re), 2006 LNONOSC 777, 29 OSCB 7403 Statutes referred to Criminal Code, R.S.C. 1985, c. C-46, ss. 718,724(3)(b), (d), 732.1(3)(

f) Provincial Offences Act, R.S.O. 1990, c. P.33, s. 72(2), (3), (b), (4),

(6) Securities Act, R.S.O. 1990, c. S.5, ss.122(1)(c), 127(1) [as am.],

(5) Authorities referred to Doob, Anthony N., and Cheryl Marie Webster, "Sentence Severity and Crime:Accepting the Null Hypothesis" (2003), 30 Crime and Justice: A Review of Research 143 M. Boswell, for prosecution. L. Adler, for defendant. COLE J.: -- Issue [1] What is the appropriate sentence to be imposed on an offender who knowingly and repeatedly breaches an order from [page122] theOntario Securities Commission to stop selling securities to the public while prohibited from doing so?

Facts [2] This matter proceeded by way of a guilty plea to a charge that between and including July 1, 2009 and August 31, 2009, in the City of Toronto, in the Toronto Region, Peter Robinson did contraveneOntario securities law by trading in securities at a time when he was prohibited from trading in securities by order of the OntarioSecurities Commission dated February 20, 2009, and extended on March 6, July 10, and November 30, 2009 and did thereby commit anoffence contrary to s. 122(1)(

c) of the Securities Act.

[ 3 ] The following Agreed Statement of Facts (Exhibit 1) were filed with the court consequent upon the defendant's plea of guilty: Background In 2008, Staff of the Ontario Securities Commission ("OSC Staff") commenced an investigation pursuant to the provisions of the Securities Act, R.S.O. 1990, c. S. 5 , as amended (the "Act") relating to Uranium308 Resources Inc. and affiliated persons and companies (collectively the "Uranium308 Investigation"), which pertains to a suspected boiler room operation in the Toronto area.

Staff analyzed bank records held in the name of Uranium308 Resources Inc. ("Uranium308") from the Canadian Imperial Bank of Commerce ("CIBC"), the Royal Bank of Canada ("RBC") and TD Canada Trust ("TD"), and identified $61,500 paid to Platinum International Investments Inc. ("Platinum") from the Uranium308 Bank Accounts. Platinum was incorporated on June 12, 2007 and Peter Robinson is the sole Director. Platinum's registered address is 4325 Steeles Avenue West, Suite 215, Toronto, Ontario. Robinson opened a bank account at RBC for Platinum (the "Platinum RBC Account") on June 13, 2007.

Robinson has always been the sole signatory on the Platinum RBC Account. During the course of the Uranium308 Investigation, several witnesses indicated that Robinson was selling shares of Uranium308 from premises in the greater Toronto area. Robinson has never been registered to trade in securities with the Commission in any capacity. On February 20, 2009, the Commission issued a temporary cease trade order (hereinafter the "TCTO"), pursuant to subsections 127(1) and 127(5) of the Act , ordering, among other things, that Robinson cease trading in all securities.

The TCTO was extended on March 6, July 10, and November 30, 2009 and on [date 2010] and remains in effect until the conclusion of the hearing on the merits before the Commission into the allegations that Uranium308 Resources Inc., Robinson and others breached Ontario securities laws, including committing securities fraud. The hearing on the merits has not been scheduled. [page123] The Uranium308 Investigation was delayed because of Robinson's refusal to attend and answer questions in an examination, in July and August 2009, as required by a summons served on him pursuant to

section 13 of the Act . On August 12, 2009, Staff initiated a contempt of court application in the Superior Court with respect to Robinson's refusals and, on October 27, 2009, Robinson was found to be in contempt of Court by Mr. Justice Newbould of the Superior Court of Justice. Mr. Justice Newbould ordered Robinson to attend for examinations on November 12, 13, and 16, 2009 by Staff with respect to the Uranium308 Investigation and two other Staff investigations. Robinson did not attend on any of those dates. As a result, on January 14, 2010, Robinson was sentenced, by Mr.

Justice Cameron of the Superior Court of Justice, to four months incarceration for his contempt of Court. Robinson was ordered to attend for examinations on January 19, 20 and 21, 2010. Robinson attended for these examinations, while in custody, and subsequently Robinson's sentence for contempt of court was reduced by Mr. Justice Cameron. Robinson's Breach of the Order On August 6, 2009 at 4:39 p.m., RBC forwarded an e-mail to Staff from Peter Munday ("Munday") that was received by RBC on August 3, 2009 (the "Munday RBC E-mail").

The Munday RBC E-mail stated: "[Munday] was contacted by William Morris / Ali Booth of Platinum International Investments Inc regarding various US company shares. They agreed to sell some shares on [Munday's] behalf and requested that [Munday] send a performance bond, value [pound]14023, as this was a guarantee that [Munday] would assign over the said shares . . . ." The Munday RBC E-mail also indicated that on July 28, 2009, Munday sent the performance bond "by urgent transfer" to an RBC account in Toronto, Ontario.

The beneficiary name on that account is Platinum International Investments Inc., IBAN Number: 003103824906722, Beneficiary Account Number: 1038249. On August 14, 2009, Staff was advised that RBC was terminating its relationship with Robinson and Platinum. RBC had requested a meeting with Robinson and asked for an explanation of the business activity in the Platinum RBC Account, and he was unable to offer a satisfactory explanation for the activity in the Platinum RBC Account. RBC further advised that all of Robinson's RBC accounts were to be closed.

Munday advised Staff of the following and provided supporting documentation where indicated: a. Munday is a senior citizen and a resident of High Wycombe, Buckinghamshire, in the United Kingdom; b. Sometime in the middle of July 2009, Munday received an unsolicited call from William Morris ("Morris"). Munday did not know Morris; c. Morris had an "American-sounding" accent, but Morris thought he was calling from the Bahamas. [page124] d. Morris told Munday that he was aware that Munday held investments in several shares that were "de- registered".

Morris told Munday that he could "re-register" these shares and sell them on Munday's behalf. The shares in question were: Green Machine Development Co., Santeon Corporation and El Dorado Explorations (collectively the "Three Companies"). Munday had purchased shares in each of the Three Companies over the telephone a few years prior. His total investment in the Three Companies was approximately [pound]38,141; e. Morris told Munday that he could sell Munday's holdings in the Three Companies for [pound]280,000. Munday agreed; f.

A few days later, Morris called Munday to say that he required a 5% performance bond to ensure that neither side dropped out of the deal. Munday asked Morris to deduct this amount from the proceeds from the sale of the shares of the Three Companies. Morris told Munday that this was not possible; g. On July 24, 2009, Munday received an e-mail with an agreement attached from Platinum International (the "Platinum International Agreement"). The e- mail was sent by "ali booth".

Among other things, the Platinum International Agreement indicated that: "A total of 280,461 GBP has been wire transferred to us by the purchaser under escrow conditions". The e-mail indicated that Munday was to sign and date the agreement to acknowledge his acceptance. A copy of the Agreement along with a completed bank transfer was to be faxed to: 416-276- 0934. Attached to the Platinum International Agreement was a Confirmation Note indicating that 14,023 GBP were due ASAP and

payable to an RBC account in Toronto, Ontario. The beneficiary name on the account is Platinum International Investments Inc., IBAN Number: 003103824906722, Beneficiary Account Number: 1038249; h. On July 28, 2009, Munday sent [pound]14,023 via wire transfer to an RBC account in the name of Platinum International; i. Morris told Munday that within 7 days of sending the performance bond, Munday would receive his money. These terms are also set out in the Platinum International Agreement. Munday has never received any of the promised funds; j.

Munday tried to telephone Morris at 561-261-1886, the telephone number that appears on the Platinum International Agreement. No one answered this line and a message indicated that the voice mail was not yet set up; k. Munday then called 561-216-1886, a phone number that Morris had previously given him. This was a generic voice mail saying the person is unavailable. Munday left a message on the unidentified voicemail: l. Morris called Munday back about a week later. Morris told Munday that he could not release the money because Munday had to pay a 12% non-resident tax equal to [pound]33,655.

Munday refused. [page125] m. The next time Munday heard from Morris was on August 24, 2009. Morris called Munday to advise that the 12% non-resident tax was still owed. Morris told Munday that he owed [pound]33,655 less the performance bond of [pound]14,023 less another [pound]5,000 because Munday was over 65 years old. Of the balance, [pound]14,632, Morris was willing to pay 49%, which meant that Munday only had to pay the remaining 51%, which equalled [pound]7,463. Munday refused.

Morris told Munday that he would have to go before a "district judge" on September 15th to try and get Munday's performance bond returned; n. Munday has never had his funds reimbursed and never received the promised funds for the sale of the shares. On August 24, 2009, Staff called 561-261-1886, the telephone number that appeared on the Platinum International Agreement. An automated voice indicated that the voice mail for this account had not yet been set up. A reverse search of this telephone number indicates that it relates to a cell phone in Belle Glade, Florida.

On August 24, 2009, Staff called 561-216-1886, the telephone number that Morris had provided to Munday. The call went to an unidentified voice mail. A reverse search of this telephone number indicates that it relates to a cell phone in Belle Glade, Florida. On August 28, 2009, Staff obtained and executed a search warrant for the RBC bank records (the "RBC Bank Records") relating to the Platinum RBC Account.

The RBC Bank Records revealed the following: -- The Platinum International Bank Account was opened on June 13, 2007 with Robinson as the only signatory; -- Between July 9, 2009 and August 25, 2009 four victims sent funds to the account, as follows: [QL:GRAPHIC NAME="105OR3d120-1.jpg"/] [page126] All of the funds from the victims were removed from the account shortly after they were deposited into the account, as follows: [QL:GRAPHIC NAME="105OR3d120-2.jpg"/] -- Photographs taken at RBC automated teller machines show Robinson as the individual at the ATM who is withdrawing money from the Platinum RBC Account.

Sheila Rosher ("Rosher") paid $69,218.45 to Platinum International and she advised Staff of the following: -- Rosher is 77 years old and lives in Surrey, England; -- Rosher received an unsolicited call from William Morris ("Morris") of Platinum International who said that he could help her sell some of her "American investments". Rosher had never spoken to Morris before; -- Morris told Rosher that he could sell her shares for [pound]504,250, but she would have to pay a performance bond of [pound]12,587.

When another one of her securities was added to the agreement with Platinum International, she had to pay an additional performance bond of [pound]11,147. All of these amounts were paid by Rosher to the Platinum International Bank Account; -- Over and above the performance bonds, Morris told Rosher she would also have to pay a non-resident tax equal to [pound]14,870. This amount was also paid to the Platinum International Bank Account; and -- Toward the end of August 2009, Morris called Rosher again and said she would have to pay an additional [pound]17,000 to complete her contract. Rosher refused.

She has not heard from Morris since this time. Rosher provided a copy of her contract with Platinum, which is very similar to the Platinum International Agreement provided to Staff by Munday. Rosher only corresponded with Morris over the telephone and via mail. The letters she received from Platinum had an address of 6021 Yonge Street, North York, Ontario. The phone number for Platinum was shown to be 416-512-8746. This address and phone number are actually the address and phone number for a UPS Store.

Alethea Balderstone is 67 years old and resides in Northamptonshire, United Kingdom she is the sister of Geoffrey Branfield and she sent the funds to Platinum International Bank Account on behalf of her brother. [page127] Geoffrey Branfield is also 67 and resides in Northampton, U.K. Branfield was contacted in early August, 2009 by Andrew Murray from Platinum. Murray told Branfield that he could sell certain shares owned by Branfield but that Branfield would have to first pay a performance bond equal to 10% of the amount of money that Murray claimed he would receive from the sale of the shares.

The performance bond was reduced, according to Murray, because Branfield received a senior's discount. Balderstone wired the funds to the Platinum International Bank Account. Branfield was subsequently contacted by Murray and told that he also had to pay a certain Canadian tax before the sale of the shares could close. Murray did not send further funds to Platinum. Branfield never received a refund of the monies he sent to Platinum and he also never received the promised funds for the promised sale of his shares. Anthony Ford is another elderly resident of the United Kingdom.

He also transferred funds to Platinum International Bank Account in advance of Platinum selling certain shares owned by Ford.

An internet search revealed that Platinum was operating from 3545 Lakeshore Boulevard West, Unit 301. Staff executed a search warrant on these premises on December 17, 2009. Robinson attended at the premises while the search was being executed and admitted to Staff that Platinum was his private company. The premises at 3545 Lakeshore Boulevard West, Unit 301 were leased by a provincially incorporated numbered company of which Robinson was the sole director.

Robinson admits that his activities in relation to Platinum constituted acts in furtherance of a trade and, as such, he was breaching the terms of the cease trade order made by the Commission. Robinson also states that David O'Brien ("O'Brien") was one of the persons communicating with the victims in the United Kingdom and O'Brien used an alias when he did so.

Robinson was aware of O'Brien's actions. [ 4 ] It was also agreed between counsel that a few weeks prior to this guilty plea, the defendant (and others) settled three other allegations of violations of Ontario securities law, relating to his involvement in the activities of Uranium308 Resources Inc., York Rio Resources Inc. and Global Energy Group Ltd.

Settlement agreements entered into between OSC staff and the defendant were filed with the court, as were the formal orders approving the settlements by the Commission. (A draft settlement agreement and Commission order respecting Platinum International Investments Inc. have been prepared, and I was told the order will be executed by a Securities Act commissioner once the proceedings before me have been completed.) [ 5 ] Both counsel agreed that these other allegations largely or completely pre-dated the offence dates in question here; consequently, they both agreed that the offender should receive some "acknowledgement of credit" for these settlements.

Not surprisingly, counsel differed on how much credit the offender should receive. [page128] [ 6 ] In addition to various clauses directing (

a) that the corporate entities and the defendant desist from trading in securities, (

b) that the corporate entities and the defendant be prohibited from acting as a registrant to sell securities, as an investment fund manager or as a promoter, and (

c) that the corporate entities and the defendant be reprimanded, the companies and the defendant are directed (

d) to "disgorge" moneys obtained by their breaches of Ontario securities law, (

e) to pay administrative penalties and (

f) to make contributions for the costs of investigations of these matters. However, the prosecution accepts that the defendant is currently impecunious and supports himself through occasional manual labour, so the various orders requiring the defendant to make these payments are likely illusory -- meaning that neither the duped elderly investors nor the Ontario public has any real chance of being reimbursed by the defendant for his fraudulent activities.

For this reason, both parties agree that though I could impose a fine (either in lieu of or in addition to any other penalty I may impose), it is highly unlikely that the offender will ever be in a position to pay. The Statutory Framework Respecting Penalty [ 7 ] Section 122(1) (

c) of the Securities Act (R.S.O. 1990, c. S.5 as amended) provides that any person who "contravenes Ontario securities law is guilty of an offence and on conviction is liable to a fine of not more than $5 million or to imprisonment for a term of not more than five years less a day". [ 8 ] The Securities Act also falls under the general aegis of the Provincial Offences Act, R.S.O. 1990, c. P.33 ("POA"), which additionally authorizes me to impose a period of probation of up to two years.

One of the optional conditions of probation that I am authorized to impose is a period of community service of up to 240 hours to be performed over a period of up to two years. [See Note 1 below] I mention this at this stage because one of defence counsel's submissions was that I should make an order for community service, either in lieu of or to reduce a period of imprisonment that I [page129] may decide to impose. Thus, the statutory preconditions established by s. 72(3) (

b) of the POA have been met, in that (

a) the defendant consents to such an order being made and (

b) that the offence of which he has been convicted is punishable by imprisonment.

The Positions of the Parties [ 9 ] Counsel for the prosecution took the position that in light of the duration of the offender's behaviour, his refusal to co-operate with the Commission until he was incarcerated for contempt, the vulnerability of the victims, the amount of money stolen from the victims by this offender and his confederates (over CDN$1.5 million), a sentence of 90 days' custody would appropriately recognize his guilty plea and his lack of previous involvement with OSC disciplinary proceedings (other than those outlined in para. 4, supra). [ 10 ] Commission counsel indicated that he had no opposition to me making an order that this sentence be served on an intermittent basis, upon the court receiving appropriate evidence that the offender requires such a sentence to maintain employment or to continue with mental health counselling or medical treatment.

Defence counsel fairly conceded that he could make no showing that his client should receive an intermittent sentence, should I come to the conclusion that Mr.

Robinson should be incarcerated. [ 11 ] Beyond arguing that a probation order containing an order that the offender perform community service could not be an adequate substitute for a prison sentence, Commission counsel took no position regarding the imposition of an order of probation for any other purpose, no doubt because the various settlement orders already contain adequate and enforceable prohibition and desistance orders, and that therefore there is no need to make optional probation conditions under s. 72(2) and (3) of the POA . [ 12 ] Defence counsel first argued against the imposition of any prison sentence, having regard to what he submitted was this offender's level of involvement in the various unlawful activities.

He further submitted that I should keep in mind that while the Agreed Statement of Facts detailed involvement in numerous breaches of various provisions of Ontario's securities legislation over a period of many months, the prosecution was bound by the fact that the information before the court restricted the allegations against this defendant to a period of two months (July 1-August 31, 2009). Mr.

Adler argued in the alternative that the period of custody proposed by Commission counsel was too high. [page130] The Background and Present Circumstances of the Offender [ 13 ] Neither counsel requested (and defence counsel -- no doubt for strategic reasons -- resisted) an order that a pre- sentence report be prepared. Thus, while I of course accept that Mr.

Adler has accurately reflected what his client has instructed him about his background and has produced some considerable documentation in support of his client's personal history and present circumstances, I have little independent verification of many of the offender's "facts in mitigation". Given that the offence itself is based on a pattern of ongoing fraudulent deception and outright lies, I must say that I have found it necessary to approach the mitigating factors presented by the offender with some caution, except to the extent that any such factors are confirmed by independent evidence.

[14] It is agreed by counsel that the offender is now 54 years old and that he has no previous criminal record. His mother and one of hissisters have been present in court for several of his appearances. He now lives with his mother and supports himself through occasionalmanual labour. [15] Various letters were filed with the court by his mother and sisters (one older and one younger). They describe that, from a relativelyearly age, the offender did not perform well at school (either academically or socially), to the point where it was recommended that he beassessed "by a psychiatrist".

That assessment concluded that "in no way was Peter retarded, but in fact had an extremely high IQ and wasprobably smarter than . . . the Dr.". However, as one sister aptly put it in her letter, "[this finding] did not answer the question as to whyPeter was different and having so much trouble in school".

I think it would be fair to say that in light of a psychiatric diagnosis made inMarch 2010 that the offender manifests "Autistic Spectrum Disorder, associated with impairment in social interactions andcommunication", these letters reinterpret his past to suggest that family members now consider that he manifested autistic symptomsfrom an early age. Nevertheless, according to [his] mother's information, despite his various personal difficulties the offender hasobtained (

a) a certificate or a degree from Cambrian College (Sudbury) in mining engineering technology, (

b) a political science degreefrom Laurentian University (Sudbury) and (

c) an MBA from Webster University (Geneva, Switzerland). [16] This pattern of maladjustive social behaviours noted by his family appears to have continued into his adult life. The same sisterreported that over approximately a 25-year period:"After leaving home, Peter's life became very sketchy. Could [page131] never seem to get an accurate picture of what his life consistedof outside of work. As far as that goes, was not even sure what his work was. Asked many times, but the answers were always veryvague . . . . He would be in Europe one day . . . and the next would be in the Philippines.

Sounded like he was earning a living andhaving a good life, but when we would see him, he would look like he had been living in a cave. Things just didn't add up. He would beflying around the world, rides in the Concorde, but never had a dime in his pocket." [17] Defence counsel reports that his client instructs him that by June 2009, his financial circumstances had deteriorated such that he wasforced to live in his business premises as he could not afford to maintain an apartment.

As I have no direct independent verification ofthis assertion, [See Note 2 below] I would be reluctant to assume this to be a mitigating factor solely on the basis of the offender'srepresentation of his living conditions. However, qua R. v. Poorman, (SK CA), [1991] S.J. No. 274, 6 C.R. (4th) 364(C.A.), I am satisfied that there is an air of reality to his assertion that he was not coping or doing well, derived from the family'sobservations some months after June 2009. At some point in early 2010, "we [the family] learned about Peter's life. It was a shockhearing he really had no fixed home.

Lived in 6 different locations around Toronto. Carrying around two and three year old newspapersin green garbage bags with his clothes. We had no idea.

Don't know how 17 has survived." [18] The family's observations about the offender's apparently deteriorating situation over a number of months was compounded by twoevents that occurred within a few weeks of one another in the fall of 2009. (There is independent verification of both of these incidents,so I am content to rely on what was filed.) First, hospital and medical records filed at the sentencing hearing establish that the offenderfractured his right clavicle as a result of having been struck by a car on October 8, 2009. [19] The second, and perhaps more profound, medical event was that the offender self-referred to the Emergency Department at theCentre for Addiction and Mental Health ("CAMH") on November 23, 2009, complaining "that sometimes he was having difficultysleeping, his appetite has decreased and he had [page132] lost weight.

He found no pleasure in anything. His energy had decreased. Hisconcentration had decreased. He was unsure if he was experiencing psychomotor retardation. He described himself as someone whoworries and said that he experienced panic attacks that were precipitated by worrisome thoughts. He said that he had periods where hefelt of top of the world where he spent a lot of money, mainly when he was feeling successful . . .". He was immediately prescribedantidepressants and anxiety medication, and was admitted to hospital.

He told staff that he did not wish his family to be notified that hehad been admitted to hospital. [20] I have carefully read and re-read the Discharge

Summary prepared by a staff psychiatrist at CAMH on December 4, 2009. Thecontents of what the offender reported to medical staff I find quite troubling. First, while on admission the offender "described havingsome legal issues but would not elaborate", later in his hospital stay the offender reported to staff that he had been in contact with theSecurities Commission to advise them of his whereabouts, but that he had told those officials "that he was in hospital and seriously ill.He would not be able to attend any meetings for one or two months".

Second, at no time during his hospital stay did the medical staffconclude that he showed any evidence of delusional thinking -- "his thought process was coherent and logical . . . he had full insight andjudgment".

In my judgment, though there may well have been good reasons for the defendant to be admitted to hospital, he clearly andobviously tried to take advantage of his hospitalization to delay proceedings before the Commission, which demonstrates to me that theoffender continued to attempt to be manipulative -- consistent with the fraudulent activities and lifestyle he had embarked on over severalyears. [21] After listening to the offender's presenting symptoms, observing the offender's response to medication and his behaviour during hisstay at CAMH, and after conducting several interviews with Mr.

Robinson, the psychiatrist ultimately advised him on December 3 or 4,2009 "that the diagnosis would not be of a Serious Depression but probably of an Adjustment Disorder with Depressed and AnxiousMood", and that he had sufficiently recovered that he could be discharged. [22] The reason I have included the portions of the Discharge

Summary in the preceding paragraph is because of what appears to havehappened next in relation to his mental health status. On March 2, 2010, apparently at the behest of his mother and sister, Mr. Robinsonwas assessed by a psychiatrist in private practice in order to confirm or disprove the diagnosis of [page133] Asperger's disorder. Thepsychiatrist concluded that while he did not "meet the strict criteria of Asperger's Disorder, he meets the criteria for Autistic SpectrumDisorders (ASD)".

What I find quite astonishing about this diagnosis is that it makes absolutely no reference to the offender's recent stayat CAMH and only briefly to "the legal difficulties he has found himself to be involved with". Even more concerning is that thepsychiatrist concedes that "Mr.

Robinson has never had a recent psychological assessment done", and that her diagnosis appears to beentirely based on what the offender and family members told her: "from my interaction with him and his explanation on how he learnsand understands the world around him, I think that he has [ASD]". [23] In light of this lack of specific references to the offender's adult background, illegal activities and recent mental health history,

Commission counsel refused to accept the main conclusion of the psychiatrist's report, which reads: "he is too trusting and may easilybelieve false and erroneous information or promise (sic). He continues to have difficulties with social interactions, tends to be naïve andbelieves people when he needs to be cautious, does not have the ability to read people's nonverbal reactions and facial and bodylanguage, gets very easily frustrated with changes in the environment and when stressed looks at magical solutions" (highlighted inoriginal).

Commission counsel urged me instead to accept the facts found by Cameron J. in sentencing Mr. Robinson for contempt forfailing to attend and answer questions pursuant to summonses issued by the Securities Commission (Ontario Securities Commission v.Robinson (2010), 2010 ONSC 225 , 100 O.R. (3d) 451, [2010] O.J. No. 144 (S.C.J.)). He particularly suggested that I examineparas. 6-7, 12-14, where Cameron J. found that the respondent was personally continuing to manipulate the process through attempting toinvoke various delay mechanisms.

This I find to be entirely consistent with his behaviour while at CAMH, described in para. 20, supra. [24] The reason this is important is that defence counsel attempted to mitigate his client's fraudulent activities by suggesting that hisASD condition led him to be under the influence of one of his co-conspirators (regardless of legal labelling, that is exactly what theywere), which, if accepted, could lessen his overall "moral blameworthiness".

While I do not mean to sound critical of defence counsel --he has had a difficult brief -- I entirely agree with Commission counsel that the manipulative behaviours the defendant displayed atCAMH, combined with the entirely incomplete psychiatric report, demonstrate conclusively that the defence has not been able to showthat the [page134] offender was under the domineering influence of a co-conspirator; thus, the defence has not been able to discharge"the burden of proving . . . a relevant fact . . . on a balance of probabilities" within the meaning of s. 724(3)(

b) and (

d) of the Code. [25] Following oral argument, the offender wrote me (on notice to Commission counsel) what his counsel describes as a "Letter ofRemorse", in which the offender purports to apologize for "the hurt I have cause (sic) to many people, not the least of which (sic) is mymother, my sisters and their respective families". He says that he is "truly sorry for my actions" and that "I do pledge to (sic) in the futurethink before I undertake an action that cannot easily be reversed".

Even accepting that this letter can be characterized as something morethan yet another attempt to manipulate the process, the content is hardly evidence that the offender was a mere follower, as Mr. Adlerwould like to characterize him. [26] In sum, despite taking what I hope is a relatively generous view of the offender's historical personal difficulties, I am entirely unableto conclude that he is as gullible as his counsel would like me to infer.

The offender's various and ongoing attempts to delay his day ofreckoning with the Securities Commission in whatever way he could persuade me that his "moral blameworthiness" was significantlyelevated. While I am sorry for him (and his family) that his life seems to have come crashing down on him during the last 18 months,there can be no doubt that he was an active and engaged participant in defrauding numerous investors in flagrant and knowing breach ofOntario's security legislation. Frankly, about the only things going for him are (

a) he was by no means the leader of this cadre of scamartists, (

b) he has settled with the Commission, (

c) he has no previous criminal record or record of settlements with regulatory agenciesand (

d) he has entered a plea of guilty (however belatedly). [27] Counsel cited various Ontario and other case law in support of their positions (attached as an Appendix to this judgment is a list ofthe cases).

I have carefully reviewed these cases and have come to the conclusion that little purpose would be served in reviewing themin detail; instead, I have decided that it will suffice to highlight some of the core principles disclosed by the case law and to apply theseprinciples to the facts of this case. [28] Both counsel agreed that the statutory structure and the case law interpreting it (in Ontario and elsewhere) indicates that whilerehabilitation is always to be considered, the dominant principles of sentencing in cases of this nature are deterrence and denunciation.[page135] [29] Both counsel also agreed that specific and general deterrence are both to be considered.

Mr. Adler made the point that, having beensentenced by Cameron J., described supra, to a term of four months for contempt, the 26 days the offender actually served in custodyuntil he purged his contempt by appearing before the Securities Commission to answer questions, specific deterrence has already beenaddressed, and that my sentence should not therefore be based on considerations of specific deterrence.

He further proposed that theoffender's overall settlement with the Commission, his acceptance of his mental health difficulties, his reconciliation with his family, hisplea of guilty to this charge and his "Letter of Remorse" all indicate that the offender has recognized that his fraudulent lifestyle mustcome to an end, and that a jail sentence on that basis is not necessary to deter him from reoffending. [30] I did not understand Commission counsel to disagree with this aspect of the matter; he rather focused on general deterrence anddenunciation as indicating that incarceration was called for.

Thus, I am prepared to accede to Mr. Adler's argument about specificdeterrence. [31] Despite the ever-growing body of criminological research [See Note 3 below] and judicial commentary questioning the validity ofthe assumption that harsh sentences act to deter others who might otherwise be minded to engage in illegal activities, defence counsel didnot seek to challenge the paradigm that fraud is one of [at para. 32] "few crimes where the aspect of deterrence is more significant.

It isnot a crime of impulse and is of a type that is normally committed by a person who is knowledgeable and should be aware of theconsequences. That awareness comes from the sentences given to others" (R. v. Gray, [1995] O.J. No. 92, 1995, CanLII 18 (C.A.), perCarthy J.A.; emphasis added).

While I have some considerable doubt that the sentence handed out in that and other fraud sentencingcases would be based on the same unfounded assumptions as to the validity of general deterrence as a sentencing theory were it to bedecided today (see, for example, the concerns very recently expressed by the Ontario Court of Appeal in the recent child pornographycase of R. v. F. (D.G.) (2010), 2010 ONCA 27 , 98 O.R. (3d) 241, [2010] O.J.

No. 127 (C.A.), at paras. 21-22), in the absenceof any such challenge the principle of stare decisis requires that I act on the basis that [page136] general deterrence theory continues tohave some contemporary validity. How much role it should play is, frankly, difficult for me to ascertain. Insofar as I am aware there isno public interest in this case; apart from the immediate participants, no members of the public or the media seem to have paid anyattention to these court proceedings.

Assuming this to be the case, I have no idea how other "potentially like-minded fraudsters" wouldbecome aware of any sentence I impose, regardless of how harsh or lenient it might be. [32] I have much less difficulty imposing a sentence of incarceration primarily based on the principle of denunciation and its "legitimatesibling . . . retribution". As explained by Lamer C.J.C. in the important sentencing case of R. v. M. (C.A.), (SCC),[1996] 1 S.C.R. 500, [1996] S.C.J. No. 28, 46 C.R. (4th) 269 [at para. 81]:

Retribution requires that a judicial sentence properly reflect the moral blameworthiness of that particular offender. The objective ofdenunciation mandates that a sentence should also communicate society's condemnation of that particular offender's conduct. In short, asentence with a denunciatory element represents a symbolic, collective statement that the offender's conduct should be punished forencroaching on our society's basic code of values as enshrined within our substantive criminal law. As Lord Justice Lawton stated in R.v. Sargeant (1974), 60 Cr. App.

Rep. 74, at p. 77: "society, through the courts, must show its abhorrence of particular types of crime, andthe only way in which the courts can show this is by the sentences they pass." The relevance of both retribution and denunciation asgoals of sentencing underscores that our criminal justice system is not simply a vast system of negative penalties designed to preventobjectively harmful conduct by increasing the cost of the offender must bear in committing an enumerated offence. Our criminal law isalso a system of values.

A sentence which expresses denunciation is simply the means by which these values are communicated.

Inshort, in addition to attaching negative consequences to undesirable behaviour, judicial sentences should also be imposed in a mannerwhich positively instils the basic set of communal values shared by all Canadians as expressed in the Criminal Code. (Emphasis added) [33] After giving due consideration to the concepts of general deterrence, denunciation and retribution as discussed in the case law citedby counsel, I have easily arrived at the conclusion that the position taken by Commission counsel advocating a 90-day sentence ofincarceration is extremely reasonable on the facts of this case.

In fact, though he probably does not see it now, Mr. Robinson should beaware that some judges might well consider that the Commission's views of sentence are too restrained, representing a positiondisproportionately favourable to the offender, having regard to his overall culpability, as expressed in the notion of his "moralblameworthiness".

I do not agree that this is the case, but it is certainly an argument that might be made against the backdrop of othercase law. [page137] [34] In the paragraph immediately following on from what I have just cited in M. (C.A.), Chief Justice Lamer usefully remindedsentencing judges that [at para. 82]: As a closing note to this discussion, it is important to stress that neither retribution nor denunciation alone provides an exhaustivejustification for the imposition of criminal sanctions.

Rather, in our system of justice, normative and utilitarian considerations operate inconjunction with one another to provide a coherent justification for criminal punishment. As Gonthier J. emphasized in Goltz, supra, at p.502, the goals of the penal sanction are both "broad and varied." Accordingly, the meaning of retribution must be considered inconjunction with the other legitimate objectives of sentencing, which include (but are not limited to) deterrence, denunciation, rehabilitation and the protection of society. Indeed, it is difficult to perfectly separatethese inter-related principles.

And as La Forest J. emphasized in Lyons, the relative weight and importance of these multiple factors willfrequently vary depending on the nature of the crime and the circumstances of the offender. In the final analysis, the overarching duty ofa sentencing judge is to draw upon all the legitimate principles of sentencing to determine a "just and appropriate" sentence whichreflects the gravity of the offence committed and the moral blameworthiness of the offender. [35] M. (C.A.) was decided before the 1996 revisions to Canada's adult sentencing legislation for Criminal Code offences came intoeffect.

The "Purpose and Principles of Sentencing" contained in s. 718 of the Code now provide that, in addition to specific and generaldeterrence, denunciation and rehabilitation, a court should consider "reparations for harm done to victims or to the community" and"promot[ion] of a sense of responsibility in offenders, and acknowledgment of the harm done to victims and to the community".

Thus, asI listened to counsel's arguments, I was initially attracted to the idea of imposing a period of community service as an optional conditionof probation, to commence after the 90-day period of custody proposed by Commission counsel had been served.

However, in its firsttwo decisions interpreting the new sentencing provisions of the Code, in language very reminiscent of the previously italicized commentof Lamer C.J.C. in M. (C.A.) to the effect that "our criminal justice system is not simply a vast system of negative penalties designed toprevent objectively harmful conduct by increasing the cost of the offender must bear in committing an enumerated offence", theSupreme Court of Canada stressed that, wherever feasible and reasonable, judges should try to promote "restorative" alternatives toincarceration. Though the factual and legislative contexts of R. v.

Gladue [ (SCC), [1999] 1 S.C.R. 688, [1999] S.C.J.No. 19] and R. v. Proulx [2000 SCC 5 , [2000] 1 S.C.R. 61, [2000] S.C.J.

No. 6] are obviously different from the case at bar, inthe absence of some general "purpose and principles of sentencing" for provincial offences or under Ontario's Securities Act specifically,I am of [page138] the view that it would be consistent with the views expressed in those Supreme Court of Canada decisions for me toconsider reducing the otherwise merited period of incarceration proposed by Commission counsel and to partially replace it by an orderthat the offender perform a significant period of community service. [36] Put another way, while I have come to the broad conclusion that the position taken by the Commission is mostly correct, I find Mr.Adler's most capable submissions on behalf of his client are helpful to the extent that I do not see that it is necessary to incarcerate theoffender for the full period proposed by Mr.

Boswell. [37] Arriving at a principled rationale for determining the extent of the reduction of the custodial term has caused me some considerableconcern.

Though the Ontario Court of Appeal has on numerous occasions substituted one penalty or another for incarceration -- say, forexample, where the court has replaced a custodial sentence with a conditional sentence (or the converse) -- I am not aware of any casewhere the court has offered substantial guidance to trial judges as to the appropriate methodology for so doing where community serviceis imposed to replace custody. [38] The English Court of Appeal has generally responded favourably to this concept of using community service as an alternative toincarceration. For example, in R. v.

Clarke, [1982] 1 W.L.R. 1090, [1982] 3 All E.R. 232 (C.A.), a case of credit card fraud, Lord LaneC.J. held that when a court has decided that [at p. 1095 W.L.R.] . . . a custodial sentence is really necessary . . . then the court should ask itself secondly this: can we make a community service order asan equivalent to imprisonment, or can we suspend the whole sentence? The court went further to consider a non-exhaustive list of thetypes of cases in which the combination of a short custodial sentence and a community service order (or other community disposition)might be appropriate.

Though the list is lengthy, I cite it in its entirety because I have found it to be of considerable assistance informulating my general approach to the issue of "equivalents" [at pp. 1095-1096 W.L.R.]: In general the type of case that we have in mind is where the gravity of the offence is such that at least six months' imprisonment ismerited, but when there are mitigating circumstances which point towards a measure of leniency not sufficient to warrant total

suspension.

Examples are always dangerous, but we venture very tentatively to suggest a few:first of all, some serious "one off" acts of violence which are usually met with immediate terms of imprisonment; some cases of burglarywhich at present warrant [page139] 18 months' or two years' imprisonment, where the offender is suitably qualified in terms of hisrecord; some cases of fraud on public departments or some credit card frauds, where a short immediate sentence would be insufficient;some cases of handling involving medium-range sums of money; some thefts involving breach of trust; some cases of stealing fromemployers.

All these are examples of cases where it may be possible to suspend part of the sentence without harm to the public and withbenefit to the prisoner. We would like to echo the words of the Advisory Council on the Penal System in their Sentences of Imprisonment; A review ofMaximum Penalties (1978). para. 282: ". . . we view the partially suspended sentence as a legitimate means of exploiting one of the few reliable pieces of criminologicalknowledge -- that many offenders sent to prison for the first time do not subsequently re- offend.

We see it not as a means ofadministering a 'short, sharp shock,' nor as a substitute for a wholly suspended sentence, but as especially applicable to serious firstoffenders or first-time prisoners who are bound to have to serve some time in prison, but who may well be effectively deterred byeventually serving only a small part of even the minimum sentence appropriate to the offence. This, in our view, must be its principalrole. (Emphasis added) [39] The reasoning in Clarke and related cases led almost inevitably to consideration of the relationship between months of imprisonmentand hours of community service.

In R. v. Lawrence (1982), 4 Cr. App. R. (S) 69 (C.A.), the accused had been sentenced following hisplea of guilty to concurrent terms of 18 months for his

part in stealing a car, driving to an electrical shop, breaking into that commercialestablishment and stealing several televisions and VCRs. The accused were chased by the police for several miles before they werearrested. This accused had a number of previous adult and youth convictions for offences involving dishonesty. Speaking for the Court ofAppeal, Lord Lane C.J. considered that, although within the appropriate range, "it is possible that the length of the custodial sentencewas a little high. It may be that nine to 12 months would have been sufficient".

Of more significance was the fact that the court wasprepared to go on to substitute a period of community service in lieu of the custodial period. In a passage which has apparently beenfrequently quoted as support for a penal "equivalent", Lord Lane C.J. said [at pp. 70-71 Cr. App. R. (S)]: In the present case, had he not already spent a little time in prison before he was released on bail, we would probably have ordered alength of community service of about 190 hours.

As it is, we think that 150 hours will suffice[.] [40] Attempting to apply this methodology to the Canadian context, I have on several occasions reduced otherwise appropriate custodialterms and substituted an order of probation requiring the offender to perform community service hours. In [page140] R. v. Suhr (March12, 2002, Cole J. (Ont.

C.J.), unreported), a case involving defrauding an employer, I found that the appropriate range of sentence wouldnormally have been about 9-12 months custody, but I elected to reduce the "denunciatory" term to six months and to replace theremainder of the custodial term with an order that the offender perform a significant number of hours of community service. Thatdecision was appealed to the Court of Appeal (R. v. Suhr, (ON CA), [2002] O.J.

No. 4315, 166 O.A.C. 97 (C.A.)).While the panel hearing the appeal expressly refrained from offering any general comment on the methodology I had employed, thecourt noted that it was open to me to do what I had done, approved of what I had done in the circumstances of the case and upheld mysentence. I interpret this case as authorizing a sentencing judge to replace a portion of an otherwise appropriate custodial sentence withsome period of community service.

For this reason, my disposition of this case is to impose what I consider to be the minimum"denunciatory term" of custody, followed by a lengthy period of probation, the major purpose of which is to require the offender toperform community service in lieu of additional custody. Disposition [41] The offender is sentenced to a term of 30 days in custody. [42] Upon release from custody, the offender is placed on a period of probation for two years.

In addition to the statutory conditionscommon to any order of probation, the following optional conditions of probation are imposed: -- The offender shall report in person to his probation officer within two days of his release from custody, and thereafter as directed. -- The offender shall perform 240 hours of community service work.

The work is to commence within 30 days of the commencement ofthis order and shall be completed at a rate of not less than 12 hours per month in consecutive months and shall be completed to thesatisfaction of the probation officer or designate within 21 months of the commencement of this order. Order accordingly. [page141] APPENDIX I Ontario Cases Cited by Counsel Ontario Security Commission v. Robinson (2009), (ON SC), 99 O.R. (3d) 614, [2009] O.J. No. 4515 (S.C.J.) Ontario Security Commission v. Robinson (2010), 2010 ONSC225 , 100 O.R. (3d) 451, [2010] O.J. No. 144 (S.C.J.) M.C.J.C.

Holdings (Re), 2002 LNONOSC 94, 25 OSCB 1133 M.C.J.C.Holdings Inc. (Re), 2003 LNONOSC 606, 26 OSCB 8206 Prydz (Re), 2000 LNONOSC 279, 23 OSCB 3399 R. v. Von Anhalt, [2007]O.J. No. 2745 (C.J.) R. v. Von Anhalt, [2007] O.J. No. 3903, 73 W.C.B. (2d) 484 (S.C.J.) Flintoff v. Von Anhalt, [2010] O.J. No. 4963,2010 ONCA 786 R. v. Castaneda, [2008] O.J. No. 712, 2008 ONCJ 69 Lydia Diamond Exploration of Canada Ltd. (Re), 2003LNONOSC 144, 26 OSCB 2511 R. v. Landen, [2009] O.J. No. 2411, 2009 ONCJ 261 R. v. Sisto Finance N.V., [1994] O.J. No. 4187, 7C.C.L.S. 223 (C.J.) R. v. Sisto Finance N.V., [1994] O.J.

No. 4191, 7 C.C.L.S. 240 (C.J.) Rash (Re), 2006 LNONOSC 777, 29 OSCB7403 R. v. DaSilva (Re), unreported, September 7, 2010, per Bigelow R.S.J. Notes ---------------- Note 1: Though s. 72(6) of the POA authorizes the enactment of regulations governing community service orders, I am advised that todate no such regulation has been passed in Ontario. While I note that s. 732.1 (3)(

f) of the Criminal Code, R.S.C. 1985, c. C-46 requiresthat a period of community service must be completed within 18 months of the commencement of a period of probation, I read s. 72(4) ofthe POA as authorizing me to order that community service be completed within two years, should I be of the opinion that 18 monthswould not be a sufficient period within which to complete community service.

Note 2: In fact, in a Discharge

Summary prepared by a staff psychiatrist at CAMH on December 4, 2009, the offender described himself as "homeless at the time of admission . . . but . . . having several good friends who had been providing him with a place to stay for a short period of time" -- no mention of being forced to live in his business office. Note 3: See, for example, the exhaustive review of this literature in A.N. Doob and C.M. Webster, "Sentence Severity and Crime: Accepting the Null Hypothesis" (2003), 30 Crime and Justice: A Review of Research 143. ----------------