)) HER MAJESTY THE QUEEN – v. –, 2013 ONSC 1385

CITATION : R. v. Takeshita, 2013 ONSC 1385 COURT FILE NO.: 30000416/10 DATE: 20130312 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: )) HER MAJESTY THE QUEEN – and – KOICHI TAKESHITA Defendant )) )) )) )) ) ) Peter Fraser , for the Crown Appearing in Person HEARD: March 1, 2013 SPIES J. REASONS FOR SENTENCE Overview [ 1 ] On November 29, 2012, following a trial before me, I convicted Koichi Takeshita of one count of fraud over $5,000, contrary to s. 380(1) (

a) of the Criminal Code , R.S.C., 1985, c. C-46. I found that between January 29, 2002 and June 2, 2006, Mr. Takeshita did by deceit, falsehood, and other fraudulent means, defraud the Wesley Chapel Japanese Church (the “Church”), of the sum of $80,154.75. He now appears before me for sentencing. Mr. Takeshita is still representing himself although he did file a brief setting out submissions and case law prepared for him by a lawyer (the “Brief”). The Facts (

a) Circumstances of the Offence [ 2 ] The circumstances of the offence are set out in my Reasons for Decision [1] and so I will only set out a

summary of the main findings relevant to sentence. Mr. Takeshita and his wife were long time active members of the congregation of the Church. Mr. Takeshita became the Treasurer of the Church on April 30, 2001, and continued in this position until 2006. Mr. Takeshita resigned as Treasurer in April 2006, but continued on until July 2006, as his successor had health issues. [ 3 ] Mr. Takeshita’s position as Treasurer was a volunteer position; he was elected to this position by members of the congregation. He was a trusted member of the congregation and was to receive no remuneration for his work as Treasurer.

While Mr. Takeshita was Treasurer he was also a member of the Church Board. [ 4 ] As Treasurer, Mr. Takeshita and the Church Pastor, Reverend Edward Yoshida (the “Pastor”), had co-signing authority for the Church’s cheques in that both had to sign each cheque. [ 5 ] At trial Mr. Takeshita admitted that he arranged to have the Pastor sign blank cheques drawn on the Church’s bank account that he then filled in and made payable to himself directly and indirectly. There were 95 of these cheques and they totalled $80,154.75. Mr.

Takeshita admitted that he concealed the payments to himself and falsified the bank statements that he showed to the Board so that Board members would not become alarmed at the lack of funds in the Church’s bank account. [ 6 ] Mr. Takeshita’s main defence was that he had previously paid a significant amount of money to the Church and that when he wrote various cheques to himself he was simply trying to pay himself back. In

summary, Mr. Takeshita testified that he had no intention of depriving the Church of funds, that the Church had no money to steal, and that his only intention was to support the Church. He said he was well to do and had no reason to defraud the Church for small amounts of money. However, Mr. Takeshita also testified that he ran out of his own money after he had spent about $20,000 on behalf of the Church and that he then decided he had to get as much money back as possible. Mr.

Takeshita admitted that in his head he justified this on the basis that he had some sort of right to get the money back when he needed it. He said that he wasn’t able to because the Church didn’t have much money. Mr. Takeshita said he did not have a sense of stealing the money and knew the congregation might not be happy but that they would understand. With the

payments back to the Church that Mr. Takeshita alleges that he made, he testified that he did not know that he still owed the Church money. [ 7 ] Mr. Takeshita made a number of admissions when he testified at trial which are relevant to sentencing. He testified that the moment he wrote the first cheque to himself he felt very guilty because it was “God’s money” and people trusted and respected him.

He admitted that what he was doing was wrong and that he wanted to remedy it as soon as possible but claimed that one of the factors that prolonged the resolution of this issue was that he was really afraid of the Pastor’s reaction. I found as a fact that Mr. Takeshita knew at the time that what he was doing was wrong and that he knew the Pastor and the Board would not tolerate this conduct. [ 8 ] Mr. Takeshita continues to blame the Pastor and some of the letters he filed at the sentencing hearing tend to do the same.

The Pastor’s motivation however, was not a matter that I dealt with at trial because I accepted the submission of Mr. Fraser that the credibility of the Pastor was not an issue that I needed to decide. The Pastor’s evidence with respect to the unauthorized cheques was essentially admitted by Mr. Takeshita. The only area where their evidence differed was how the cheques in issue were signed and on that issue, for the purpose of my analysis, I accepted Mr. Takeshita’s evidence. Accordingly, Mr.

Takeshita needs to understand that whatever he believes the Pastor did or did not do is not relevant to my finding him guilty of fraud. [ 9 ] I found that the unauthorized cheques to Mr. Takeshita started in January 2002 and the payments back to the Church by Mr. Takeshita started in April 2002. I found that Mr. Takeshita was using funds in the Church bank account for his own purposes and then from time to time paid money back in order to ensure the Church account did not go into overdraft and result in NSF cheques.

All of this was done without a record, apart from what the bank records disclose, and was done in secret. To avoid detection, Mr. Takeshita admitted he was making sure the Church’s account did not go into overdraft so that the Pastor and others would not find out what he was doing. On a year by year basis, Mr. Takeshita was in a deficit situation with respect to payments received and payments returned until 2005 when he started to pay more money back than he was taking from the Church.

He was, however, always in a net deficit, particularly before two $8,000 payments made in the summer of 2006. [ 10 ] The two payments made to the Church on behalf of Mr. Takeshita each in the amount of $8,000 were made on July 26, 2006, and the other on August 15, 2006. These amounts were paid after the Pastor challenged Mr. Takeshita on the irregularities in his accounting. Mr. Takeshita gave a number of explanations for why he paid the $16,000 to the Church but his evidence was clear that this payment was not intended as restitution.

In his sentencing submissions he characterized it as a penalty for what he did. [ 11 ] At trial I found that Mr. Takeshita intended to defraud the Church, that he essentially used the Church’s bank account as his own, that he acted in a systematic way over five years and that this was not a spur of the moment single payment back to himself. I found that the payments Mr. Takeshita made back to the Church between March 28, 2002 and August 15, 2006 totalled $57,113.64 which includes the $16,000 payment. As a result, I found that the net deprivation to the Church was $80,154.75 minus $57,113.64 or $23,041.11. (

b) Impact on the Pastor and the Church [ 12 ] Reverend Edward Yoshida read a victim impact statement stated to be on behalf of the Church. Mr. Takeshita challenged this since the Pastor was no longer the Pastor at the Church at the time of the sentencing hearing. I have considered the statement in any event as it sets out the obvious impact of Mr. Takeshita’s conduct. According to the Pastor, the Church was impacted financially which is obvious given my findings. He stated that the money taken by Mr. Takeshita was siphoned from special pledges to support six missionary families and other charities abroad.

It also included some money donated to victims of the South Asian Tsunami Fund in early 2005. In addition, the Church had to pay $15 for each cancelled cheque retrieved for the proceedings. [ 13 ] The statement goes on to state that the loss to the Church was also felt by tension within the congregation as to how to deal with the matter, that three families withdrew from the membership of the Church as a result and that this matter affected the morale of the Church.

In addition, many hours were spent preparing for the case including meetings with members of the Toronto Police Fraud Squad and the Crown Attorney lawyers. In addition, the Pastor stated that he had to juggle his own holiday plans in order to give the case priority. (

c) Circumstances of Mr. Takeshita [ 14 ] A pre-sentence report was filed. Mr. Takeshita took no issue with the contents of the report save that he advised me that he had, in fact, informed his daughters of the conviction. That report is favourable to Mr. Takeshita. [ 15 ] Mr. Takeshita is 68½ years old. He says he does have some health problems namely high blood pressure and requires some medication to treat a cardiac condition. This was not referred to in the report and no medical evidence was provided. In any event it was not suggested that these issues are particularly serious. [ 16 ] Mr.

Takeshita has three children with his wife. His daughters are in their thirties and forties and his relationship with them is positive. Mr. Takeshita has an engineering degree from Japan and has been steadily employed since he moved to Canada at the age of 35. For the last few years Mr. Takeshita has been working as a self-employed interpreter/translator. He confirmed that at the time of the sentencing hearing he is still working freelance.

His hours vary and he continues to travel for work predominantly within Canada but occasionally to the United States. [ 17 ] Sources that the probation officer contacted reported that Mr. Takeshita is a religious and ethical person. Mr. Takeshita has no criminal record and as such has been a law abiding citizen for most of his life. The probation officer concluded that Mr. Takeshita appears to be an individual with strong ties to the community, family and employment. There is no evidence of any significant issues that would indicate a risk of Mr.

Takeshita committing further offences and in the opinion of the probation officer he would be a suitable candidate for community supervision although he expressed concern regarding Mr. Takeshita’s ongoing minimization and denial of the offence. In that regard the probation officer states in his report that with respect to the offence Mr. Takeshita “continued to minimize and justify his actions despite the conviction.”

[ 18 ] At the outset of the sentencing hearing I was advised by Mr. Fraser that Mr. Takeshita had written letters to my attention dated December 4, 2012, December 6, 2012 and February 27, 2013, which had been copied to Mr. Fraser. For some reason I had not received any of those letters. Although Mr. Fraser quite properly took the position that much of the information in these letters was not admissible on the sentencing hearing, he agreed that since Mr. Takeshita is self-represented that I should receive them and consider to what extent I could rely upon the contents. Mr.

Fraser fairly submitted that the letters could, in fact, hurt Mr. Takeshita’s position but Mr. Takeshita still wanted me to consider them and so I have read them. [ 19 ] Mr. Takeshita’s letter of December 4, 2012 attached a submission that he thought might persuade me to “reconsider and be receptive to another short trial session” so that he would not have to appeal my decision. He stated that if that was not possible he would file his appeal. The submission attached to Mr. Takeshita’s cover letter is another letter of the same date which sets out Mr.

Takeshita’s disappointment with my decision and my perception that he was “somehow dishonest and deceitful”. In the opening paragraph of that letter it is his position that the complainant, namely the Pastor, was the one who was actually dishonest and deceitful. That letter sets out in general terms various issues with my decision and Mr. Takeshita’s position that he was wrongly convicted.

Attached to that letter is a memo headed “My Comments on Reasons for Decision” setting out further submissions intended to clarify his concerns and correct “any misunderstanding that might have stemmed from my poor explanations.” That document single-spaced and nineteen pages long, sets out issues with respect to my Reasons for Decision in considerable detail. Needless to say, this letter and attachments do not contain relevant information on the sentencing hearing, save that it does make it very clear that Mr.

Takeshita believes he has been wrongfully convicted although he doesn’t deny that he committed some offence at some point in the course of his involvement in the Church finances. [ 20 ] In the letter dated December 6, 2012, Mr. Takeshita writes to inform me of new developments and still requests a reconsideration and reevaluation of the trial and conviction. This letter appears to describe various events that occurred after the conviction and sets out some support that Mr. Takeshita has received from the Japanese Christian community.

He stated this letter was his “last petition” before proceeding to the next step, namely his appeal. [ 21 ] Mr. Takeshita’s first letter of February 27, 2013, sets out advice from counsel which neither I nor Mr. Fraser appreciated when the letter was made an exhibit. I have not read that portion of the letter as it is not admissible. I am certain Mr. Takeshita did not intend to waive solicitor-client privilege. In that letter Mr. Takeshita stated he wanted to send the letter in order to report some of the things he wanted to deal with prior to the sentencing hearing.

By this time he had received legal advice and acknowledged an understanding on court procedure. He apologized for the faxes sent to the court right after my decision and acknowledged some might not have been appropriate. He stated in this letter that he understood the sentencing hearing would not be a re-trial but rather to determine mitigating and aggravating factors. Nevertheless the letter goes on to explain why he felt the Pastor “needed to lie”. Although the letter states that Mr.

Takeshita understands he cannot make certain arguments anymore in the sentencing hearing, he makes the arguments anyway in his letter. He states that is why he wanted to point them out in his letter rather than in court. Again, I conclude that the contents of this letter are not relevant to sentencing. [ 22 ] Finally with respect to the second letter dated February 27, 2013, that letter appears to deal with one matter Mr. Takeshita failed to bring up which he did not want to bring up in the sentencing hearing as he admits it is not relevant.

In this letter he stated he wanted the court to know that he was not challenging the court but rather the dishonesty of the Pastor. The letter sets out information from Mr. Takeshita’s daughters as to whether or not he should appeal given the impact of an appeal on the family. Again, I have concluded that the contents of this letter are not relevant to sentencing. [ 23 ] Mr. Takeshita provided a number of letters at the time of the sentencing hearing which Mr. Fraser agreed could be marked as exhibits notwithstanding the fact that they also contain a great deal of inadmissible evidence.

I have reviewed those letters and a

summary is as follows: (

a) The letter dated February 25, 2013 from the Pastor of the Toronto Japanese Seventh Day Adventist Church sets out his personal opinion that Mr. Takeshita is a trustworthy person and that his character is very good. He states that Mr. Takeshita has remorse over the mistakes he committed and never says any excuses for them to him. The latter statement is not admissible on the sentencing hearing and in any event is contradictory to the statements made directly by Mr. Takeshita. The letter does state that Mr. and Mrs.

Takeshita have been an indispensable part of the Japanese Christian community and have actively promoted and participated in various volunteer services not only with their own congregation and that they also regularly visit seniors’ nursing homes. This statement is consistent with the evidence at trial. (

b) The letter dated February 27, 2013, is from a former congregation member of the Church, who served as Chairperson of the Board of the Church from 1995 to 1999. This letter sets out some information concerning the Church in that timeframe and is not admissible or relevant on the sentencing hearing. (

c) The letter dated February 28, 2013 from a congregation member of the Church who was Secretary of the Board and served on the Board with Mr. Takeshita also sets out information concerning the Church which is not admissible or relevant at the sentencing hearing. Although it appears to be a personal opinion, the author of this letter does state that Mr. Takeshita is a devout Christian whom he believes is not the type of person who embezzles God’s money for his personal benefit. He believes Mr. Takeshita is aware that the Church and offerings belong to the Lord. This letter confirms Mr. Takeshita’s otherwise exemplary reputation in the Japanese Christian community. (

d) In another letter dated February 28, 2013, the Reverend of Grace Toronto Japanese Church, reports that both Mr. and Mrs. Takeshita have been indispensable members of the Japanese Christian community for a number of years also serving and volunteering for the local community. The Reverend also expresses his personal view that Mr. Takeshita is a very honest person and was raised and trained not to tell lies particularly in a judicial system. He states that Mr. and Mrs. Takeshita have always helped the Christian community unselfishly by opening their house or contributing their resources to events or good causes.

This reputation evidence is admissible. However, the letter goes on to criticize the Pastor and attempts to justify Mr. Takeshita’s position and, in fact, states that he was a “victim” because he was made to work hard in extremely difficult circumstances to improve the Church which is not admissible. [ 24 ] In

summary, I have not considered the information in these letters that is not admissible or relevant to sentencing. Although

the opinions as to Mr. Takeshita’s reputation tend to be framed as personal opinions, I have considered these views as reflecting Mr.Takeshita’s reputation in the community and in particular the Japanese Christian community, at least as it was before the conviction. Legal Parameters [25] Fraud over $5,000 is a serious offence and the maximum sentence is now fourteen years pursuant to section 380(1) of theCriminal Code. At the time of Mr. Takeshita’s offence the maximum sentence was ten years. Positions of Crown and Defence [26] Mr.

Fraser seeks a 12 month reformatory sentence and, in addition, a period of probation for one year. The terms of theprobation are to include no contact directly or indirectly with Reverend Yoshida, that Mr. Takeshita not attend the Wesley ChapelJapanese Church and that he pay restitution in the amount of $24,000. This amount is calculated on the basis of the net deprivationamount as found at trial of $23,041.11 and the fact that the Church had to pay $15 per cancelled cheque which, for 95 cheques, was$1,425. Mr. Fraser advised he is not seeking interest on behalf of the Church. [27] Mr.

Fraser conceded that a conditional sentence is available to Mr. Takeshita given when the offence was committed. Hesubmitted that the range of sentence for this case, which he described is at the low end of a large scale fraud with a breach of trust, wouldbe anywhere from a conditional sentence to the low penitentiary range of just over two years. It is his position that a conditional sentenceis not appropriate in this case as it is only appropriate in cases of this type where there are special circumstances and that conditionalsentences in these cases are rare. [28] Mr. Takeshita seeks a conditional sentence.

He is only agreeable to paying more money to the Church if it is not consideredrestitution and it is the only sentence imposed. Case Law [29] The cases relied upon by Mr. Fraser are primarily in support of his position that a conditional sentence ought not to beimposed in this case. At my request he also included cases where conditional sentences have been imposed as at the time I expected Mr.Takeshita would not be represented by counsel and would not be able to find helpful case law. I thank Mr. Fraser for fairly responding tothis request and providing that case law. [30] Although counsel who assisted Mr.

Takeshita in preparing his Brief did not know what cases the Crown would rely upon,counsel submitted that they would likely be cases that should be distinguished on the basis that they involved vastly higher amounts or“qualitatively different positions of trust”, for example, CEOs, doctors, lawyers and investment advisors. Specific mention is made of theSupreme Court of Canada decision of R. v. Bunn, 2000 SCC 9 , [2000] 1 S.C.R. 183, one of the cases Mr. Fraser included in hiscasebook to assist Mr. Takeshita. [31] Not surprisingly, the cases relied upon by Mr.

Takeshita are all cases where conditional sentences were imposed. All of thosecases are distinguishable because in each case the defendant pleaded guilty to the charge of fraud and in some of the cases there was, inaddition, a joint submission. I, therefore, did not find them of much assistance. [32] Although each case must be decided on its own facts, most of the cases the Crown relies upon are from the Court of Appealand so I must consider them carefully and determine to what extent they apply to the facts of this case. Those cases are as follows. R. v. Pierce, (ON CA), [1997] O.J. No. 715 (Ont.

C.A.) [33] In this case the offender, who was the comptroller of her employer corporation, pleaded not guilty to a charge of fraudinvolving 42 cheques which totalled $270,000. The offender used her authority to sign these cheques but failed to account for them in theemployer’s books. The funds were used to purchase expensive personal items and pay for a car lease. The sentence appeal was allowedand a sentence of incarceration was reduced to 12 months having regard to the offender’s personal circumstances and the Crown’sconcession that she would not likely re-offend.

At para. 39 the court stated as follows: Major criminal frauds and offences involving commercial or professional breaches of trust will usually involve offenders who pose littleor no further risk to the safety of the public. As stated by the Court of Appeal in England, R. v. Barrick [citations omitted]: The type of case with which we are concerned is where a person in a position of trust, for example, an accountant, solicitor, bankemployee or postman, has used that privileged and trusted position to defraud his partners or clients or employers or the general public ofsizeable sums of money.

He will usually, as in this case, be a person of hitherto impeccable character. It is practically certain, again as inthis case, that he will never offend again and, in the nature of things, he will never again in his life be able to secure similar employmentwith all that that means in the shape of disgrace for himself and hardship for himself and also his family. Our courts have routinely recognized this reality when sentencing offenders who engage in crimes of this nature and consequently haveemphasized that the paramount objective is the deterrent effect which the sentence will have on others.

In this regard it should beemphasized that breach of trust or authority in relation to a victim is an express aggravating circumstance in the newly enacted section718.2 of the Code. [34] In my view the fact that the offender was an employee and not in a volunteer position is not material as it was a position oftrust. Factually this case has some similarity to the case at bar although the total amount defrauded is larger. That said, it is important tonote that the court referred to R. v.

McEachern (1978), (ON CA), 42 C.C.C. (2d) 189 where the court considered thefitness of a suspended sentence with an order to perform 240 hours of community service and a restitution order imposed on a bank

manager with an unblemished past who was convicted of stealing $77,000 from his employer.

At para. 40 of Pierce the court stated: “Inincreasing the sentence to eighteen months imprisonment, this court reiterated the longstanding objective in sentencing offenders whohave committed crimes of this nature.” (Emphasis added.) The court went on to quote a passage from the McEachern decision wherethe court in that case referred to the $77,000 as a “large sum of money” and had stated in part at p. 191that: …the gravity of the offences called for the imposition of a custodial term, and there were no exceptional circumstances which wouldjustify a lesser punishment. …The public interest requires that it be made very clear to one and all that in the absence of exceptionalcircumstances a person holding a position of trust who steals from his employer must expect a term of imprisonment. [35] At para. 41 the court in Pierce went on to state as follows: What the authorities make clear is that the purpose of incarcerating these offenders is not to protect the community from any dangerposed by the particular offender, but to protect the community from the danger posed by those who may be inclined to engage in similarconduct.

In the context of crimes of dishonesty, and particularly those involving a breach of trust, for the purposes of resolving the issueof whether “serving the sentence in the community would … endanger the safety of the community”, the risk of endangering the safetyof the community must not only be measured by an assessment of the danger which the particular offender may pose if permitted to servethe sentence in the community.

The risk must also be measured by an assessment of the dangers which others may pose if the offender ispermitted to serve the sentence in the community. [36] The court concluded at para. 48 that abuse of a position of trust or authority in relation to a victim is an express aggravatingcircumstance set out in the sentencing guidelines under

section 718.2 and that this factor has traditionally drawn a severe custodial termeven for first offenders. R. v. Dobis, (ON CA), [2002] O.J. No. 646 (Ont. C.A.) [37] In this case the offender was a senior and trusted employee of a mid-size family corporation and pleaded guilty to what wasclearly a large scale fraud and theft that involved over $2 million. The issue on appeal was the appropriateness of a conditional sentencein those circumstances. [38] The court made it clear, at para. 49, that a conditional sentence is a possible sentence even in a large scale fraud case, relyingon Bunn.

The court found, however, that it is also clear that “certain offences” will usually lead to custodial sentences. At para. 51 thecourt stated as follows: This court has said repeatedly that general deterrence is central to the sentencing process in cases involving large scale frauds withserious consequences for the victims [citation omitted]. Importantly, the court has said the same thing since the introduction of theconditional sentencing regime.

Conditional sentences have been rejected in large scale fraud cases such as Pierce, supra, and Ruhland,supra, and commented on adversely in the leading Ontario case dealing with conditional sentences, R. v. Wismayer (1997), (ON CA), 115 C.C.C. (3d) 18 (Ont. C.A.). [Emphasis added] [39] The court in this case concluded that there were none of the “extreme personal mitigating circumstances that were central tothe decisions to impose conditional sentences in two large scale fraud cases” referring to R. v. Underys, [1999] O.J. No. 4372 (Ont. C.A.)and Bunn.

In Dobis the court concluded that the sentence at a minimum ought to have been the lowest point in the range suggested bythe Crown, namely three years, but imposed a different sentence as the offender had served nine and a half months of his conditionalsentence. R. v. Williams, (ON SC), [2007] O.J. No. 1604 (S.C.J.) [40] This is a decision of Justice Hill who carefully reviewed a number of cases before imposing a custodial sentence of 18 monthsand a restitution order in the amount of $159,000 having found the offender, the Superintendent of Program for a school board, guilty offraud in the amount of $194,357.

The offender used fraudulent invoices and other means to commit the fraud. The offender was 60 yearsold, married with three adult sons and suffered depression on account of loss of employment. Based on the authorities reviewed by HillJ., at paras. 23-29, he found the relevant sentencing principles to be as follows:

a) The most important factor in sentencing persons who have occupied positions of trust is general deterrence and it is the paramountfactor even for first offenders of otherwise good character.

b) General deterrence tends to have greater impact in cases where persons plan and deliberate to some extent.

c) Law-abiding persons with good employment records and families are the ones most likely to be deterred by the threat of severepenalties.

d) Most people who get caught stealing from their employer are unlikely to reoffend.

e) In addition to general deterrence, denunciation and accountability for one’s actions are the controlling principles of sentencing.

f) Many of the cases where conditional sentences have been imposed include exceptional mitigating circumstances.

g) A conditional sentence, with properly tailored punitive conditions, can effect a measure of general deterrence and denunciation.

h) Large-scale frauds by persons in a position of trust will almost inevitably attract a significant custodial sentence.

[41] At para. 30 Justice Hill set out a non-exhaustive list of aggravating factors in “white collar” breach of trust cases which I willconsider. Similarly at para. 31 he sets out a helpful list of the usual mitigating factors to be considered where applicable. R. v. Lall, [2007] O.J. No. 5213 (S.C.J.) [42] In this case Justice Durno reviewed many of the authorities dealing with fraud in breach of trust cases.

He was dealing with afirst time offender who was an auditor for the Canada Revenue Agency and had pled guilty to defrauding the government ofapproximately $143,000 by filing tax returns and claiming refunds and benefits on behalf of deceased or non-existent persons. JusticeDurno concluded that a conditional sentence would not be consistent with the purposes and principles of sentencing and imposed aperiod of incarceration of 18 months. R. v. O’Neil, [2009] O.J.

No. 5999 (S.C.J.) [43] The first time offender in this case, an employee of the Bank of Nova Scotia, pleaded guilty to improperly removing over$173,000 from customer accounts over a three year period by means of 43 separate withdrawals. Restitution was agreed upon directlywith the bank.

Justice Smith concluded that there were no special circumstances notwithstanding the “tragic consequences” of the crimeon the offender and at para. 67 stated that: …for this court to impose anything less than a term of incarceration without the existence of special circumstances would send a messageto others similarly inclined that, if caught, they will not go to jail. This is not a message that would … accord with the sentencingprinciple of denunciation. Justice Smith imposed a sentence of 12 months incarceration followed by a two year period of probation.

No restitution was orderedpresumably as it had already been agreed upon. [44] Mr. Fraser included the decision of R. v. Proulx, 2000 SCC 5 , [2000] S.C.J. No. 6 for the assistance of Mr.Takeshita, along with the following cases where conditional sentences were imposed. R. v. Bunn, 2000 SCC 9 , [2000] 1 S.C.R. 183 (S.C.C.) [45] The first time offender in this case, a lawyer, had converted $86,000 from his trust account.

The Supreme Court noted the ruinand humiliation that the offender had brought down upon himself and his family, together with the loss of his licence to practice andconcluded that would provide sufficient denunciation and deterrence when coupled with the conditional sentence of two years less a daywith house arrest and 200 hours of community service imposed by the Court of Appeal. The court also noted the offender was the soleprovider and caregiver for his wife, who suffered from multiple sclerosis and was confined to a wheelchair, and their teenage daughter. R. v. Davies, (ON CA), [2005] O.J. No. 4829 (Ont.

C.A.) [46] In this case a lawyer pleaded guilty to four counts of fraud and breach of trust. He had diverted funds totalling $48,355. Oneof the causes was a mental illness. Most of the money defrauded had been used for altruistic purposes from which the offender receivedno personal benefit whatsoever.

The sentencing appeal was allowed to vary the sentence to impose a sentence of incarceration of 12months less one day concurrent on each of the breach of trust charges and a conditional sentence of 12 months consecutive on the fraudcharge related to one of the clients and a concurrent conditional sentence of 12 months with respect to the other fraud charge.

The courtnoted that it is legally permissible to blend a custodial sentence with a conditional sentence, when an offender is being sentenced formore than one offence, so long as the sentences, in total, do not exceed two years less one day and the court is satisfied that thepreconditions in

section 742.1(

b) have been met in respect of one or more of the offences (at para. 37). R. v. Underys, [1999] O.J. No. 4372 (Ont. C.A.) [47] Although the offender had been motivated by greed and had planned his fraudulent scheme over a long period of time, thetrial judge found that it was not a well planned scheme designed with larceny in mind and that he always intended to pay the CreditUnion back when he made his “big score”.

The court did not interfere with the conditional sentence imposed by the trial judge and heldthat although the case may well have merited a custodial term, bearing in mind the deference to be accorded to the trial judge, and hisreasons reflecting the “many mitigating circumstances of the offender” and the appropriately restrictive conditions the trial judgeimposed, that the sentence was not demonstrably unfit. By the time of appeal, the offender had completed most of the 240 hours ofcommunity service. The mitigating circumstances are not noted in the decision. R. v. Campbell, [2005] O.J.

No. 4696 (O.C.J.) [48] The offender, a lawyer, pled guilty to defrauding elderly clients of almost $1.4 million. The offender was 65 years of age withno record and suffered from heart disease which had required triple bypass surgery the prior year. The court found that given theoffender’s age of 65, his mental health issues and his heart ailment, that special circumstances existed to depart from “the normalsentence of imprisonment”.

Determination of a Fit Sentence [49] In addition to the guidance offered by the cases I have been referred to, the principles of sentencing set out in ss. 718, 718.1and 718.2 of the Criminal Code must be considered. I addition, in this case, I must have regard to s. 380.1 of the Code although I note anumber of amendments were made to that

section that were not in force during the time this offence was committed.

[ 50 ] I agree with the submission set out in the Brief that the amount of the fraud in this case is important as it did not involve a sum of money in the millions as some cases do. That said, the Court of Appeal in Pierce (at para. 40 ) and in Dobis (at para. 38 ) included the McEachern case which involved a fraud of $77,000, as one of a number of cases dealing with large scale fraud that were considered relevant to sentencing. I conclude on this authority that the fraud in this case was, as submitted by Mr. Fraser, at the lower end of a large scale fraud.

The amount of $80,154 is a significant amount and certainly was a very significant amount for a small church congregation that on the evidence did not have a lot of cash flow. [ 51 ] Although none of the cases I was referred to involve a voluntary Treasurer of a Church, that is a position that most, if not all, churches require and it is clearly a position of trust. I do not accept the submission in the Brief that Mr. Takeshita should be treated differently than what is characterized as “qualitatively different positions of trust” such as CEOs and doctors.

What is clear from the cases is that a breach of trust is sufficient to attract a higher penalty and although the quality and degree of trust reposed in the offender is relevant; in this case, both of those factors are significant. Mr. Takeshita secured the trust of the Pastor who was prepared to give up his power to insist on signing completed cheques. As a result, there were no other checks or supervision of Mr. Takeshita; he was trusted to perform his role as Treasurer honestly and as Mr.

Takeshita put it, he was responsible for “God’s money”. [ 52 ] Although it may be that no one else was prepared to take on the role of Treasurer, Mr. Takeshita would not have been asked to do so but for the trust the Pastor and the members of the Church Board had in him. Furthermore, he would not have been able to execute this fraud had he not been Treasurer of the Church and enjoyed the trust of the Pastor. I, therefore, find that the case law I have been referred to does provide the general principles that ought to guide me in deciding the appropriate sentence in this case.

In particular, given the abuse of trust by Mr. Takeshita who was entrusted with the Church’s funds, to be consistent with the principles set out in the various decisions by the Court of Appeal that I have referred to, I have concluded that the factors of general deterrence and public denunciation must be paramount and that unless there are special mitigating circumstances, a custodial term would be the usual sentence imposed in these circumstances. [ 53 ] I find that the following factors are aggravating: (

a) As already stated, this is a breach of trust case. Mr. Takeshita was a trusted member of a small church community. Pursuant to

section 718.2 (a)(iii) the fact that Mr. Takeshita abused a position of trust in relation to the Church is deemed to be an aggravating circumstance. Mr. Takeshita submitted that he was not elected as Treasurer because he was trusted but rather because no one else wanted to do the job. I do not accept that submission. Although it is true that it appears no one wanted the job, Mr. Takeshita would not have been entrusted with the Church’s finances had he not had the reputation he enjoyed in the Church community. No doubt the Pastor would not have signed blank cheques either but for that reputation. (

b) Mr. Takeshita took advantage of the high regard in which he was held in the Church community in committing the offence; see subsection 380.1(1) (

d) of the Criminal Code . This is why he was selected as Treasurer. That position and the trust he had allowed him to commit the crime in that he was able to get blank cheques signed by the Pastor. (

c) There were a considerable number of victims; see subsection 380.1(1) (c). Although the congregation may not have been large, clearly the Pastor and the entire congregation were impacted by the fraud. Furthermore, Mr. Takeshita’s conduct also deprived beneficiaries of the missions the Church was supporting of funds that undoubtedly were needed to support those missions. (

d) The offence was premeditated. At trial I found that Mr. Takeshita acted in a systematic way over the years and that this was not a spur of the moment single payment back to him. There was nothing impulsive about the offence; it was deliberate and ongoing and involved 95 unauthorized cheques over a period of 4½ years. (

e) Mr. Takeshita submitted that his motivation was not greed. Although his motivation may not have been to accumulate wealth, his motivation was clearly for personal financial gain. Whether his motive was, as he characterized it at trial, to pay himself back money he had previously donated to the Church, or as submitted in the Brief and as I found at trial, financial stress, is not material in this case. The money misappropriated went to Mr. Takeshita personally or to his company or his wife’s company. It was presumably used to cover his cash shortfall. I do not accept Mr. Takeshita’s submission that he did not benefit personally or that he had no net gain “after all this ordeal”. (

f) Although perhaps this was not a sophisticated fraud I do not accept Mr. Takeshita’s submission that his scheme was not well planned or that it was a mistake or that he was seeking an exit all the times. In my view it took a great deal of planning in that Mr. Takeshita got the Pastor to sign 95 blank cheques over the 4½ year period, not to mention the steps he took to avoid detection. (

g) Mr. Takeshita went to great lengths to conceal the fraud including falsifying statements presented to the Board and depositing his own funds into the Church’s bank account to ensure there were no NSF cheques that would uncover his fraud. (

h) Mr. Takeshita was caught; he did not voluntarily terminate his criminal activity. Although Mr. Takeshita resigned as Treasurer of the Church in April 2006, he did not disclose his crime until after the Pastor challenged him on irregularities in his accounting. After this occurred he made the two $8,000 payments. (

i) Mr. Takeshita’s conduct put the financial well-being of the Church, its congregation and the charities it supported at risk. Harm was caused; not only financial but non-pecuniary as well. [ 54 ] Turning to the mitigating factors, Mr. Takeshita is a first time offender and he has a favourable pre-sentence report. He also is fortunate to have the support of his wife and his daughters. The substance of the letters of reference filed attest to Mr. Takeshita’s good character and reputation. I am satisfied, not only from the letters filed but the evidence I heard at trial, that Mr.

Takeshita was an upstanding member of the Church community, the Japanese community and that he had led a exemplary life with his wife and children. However,

section 380.1(2) of the Criminal Code provides that in these circumstances the court shall not consider as mitigating circumstances the offender’s status or reputation in the community if those circumstances were relevant to, contributed to or were used in the commission of the offence. I have already found that Mr. Takeshita’s reputation and the trust the Pastor and members of the Church Board had in him allowed him to commit this offence.

[ 55 ] It is submitted in the Brief that general deterrence arguably assumes less significance in a fraud motivated by financial stress as Mr. Takeshita’s own money was depleted coupled with “fortuitous opportunity” in contrast with those cases where the offender actively orchestrates a fraudulent scheme and seeks out vulnerable and unsuspecting victims. I have already commented on financial stress as a motive but I do agree that there is no evidence that Mr. Takeshita sought out the role of Treasurer in order to defraud the Church.

That however can be said of the offenders in most if not all of the cases that I have reviewed. [ 56 ] Over most of the time Mr. Takeshita was taking funds from the Church he also paid money back and at trial I found the money paid by Mr. Takeshita to the Church totalled $57,113. This would ordinarily be a mitigating factor as it would be considered voluntary restitution. However, as Mr. Fraser pointed out, and as I found as a fact, Mr. Takeshita did not pay this money back as restitution but rather to avoid detection of the crime.

He would deposit funds to avoid NSF cheques and so in that sense he was really continuing the fraud on the Church. The exception to this pattern was the last $16,000 paid but this was paid once his actions became known. Furthermore, Mr. Takeshita has taken the position that this amount was paid as a penalty and was not restitution in that he alleges that he had already paid the Church back more than he had taken, that the Church did not suffer any financial damage and if anything is ahead. I did not accept this but his motive in making the payment is what is relevant for sentencing. Given that Mr.

Takeshita at no time was motivated simply to pay the Church back what he took, I find that the fact money was paid back does not reflect a mitigating circumstance save that it does reduce the amount of the net deprivation to the Church. [ 57 ] As Mr. Fraser pointed out this is an unusual case in that Mr. Takeshita acknowledged many of the acts that I relied upon in support of the conviction but he has failed to accept full responsibility for his actions. Mr. Fraser submitted that there is an absence of insight and appreciation of wrongdoing to the full extent. I agree with that submission.

The lack of insight into my findings and acceptance of my findings is clear from Mr. Takeshita’s submissions since I gave my Reasons for Decision. Although Mr. Takeshita made many statements when he gave evidence at trial that suggested he knew what he was doing was wrong and that he felt guilty about it, he continues to maintain the position that even his admitted conduct of making out checks to himself was not stealing from the Church or a fraud on the Church.

Furthermore he remains preoccupied with what he perceives was the vengeful conduct of the Pastor even though I made it clear in my decision that I did not rely on the Pastor’s evidence. [ 58 ] Mr. Takeshita, of course, has the right to appeal my decision and I understand that he will likely do so. The fact he does not accept my findings is of course not an aggravating factor; it is neutral. However, this fact is relevant to considering whether or not Mr. Takeshita might reoffend, something that is usually not a concern in these types of cases. In that regard I am very concerned that Mr.

Takeshita still does not believe that he defrauded or stole money from the Church given his admissions at trial. Simply put it does not matter how much money he had previously given to the Church – he had no right to take money back in this way. [ 59 ] However, Mr. Takeshita is not a professional bookkeeper or accountant and is apparently employed in a field where no access to and control of funds would likely take place. Furthermore, I doubt that Mr. Takeshita will ever be in a position of trust again where he could commit such a crime.

It is for that reason only that I can conclude the risk of re-offending is low. [ 60 ] During his sentencing submissions Mr. Takeshita told me that he does have genuine remorse and that under normal circumstances he would never touch anyone’s money let alone “God’s money”. He told me that he fears God and that he knows if he does anything wrong he will be punished by God. He also said that he knew that the congregation had people who were poor who could only offer $5-$10 a month. Mr.

Takeshita advised me that he has lost a lot in terms of his reputation and that his wife and family have suffered and the conviction has impacted his personal life. I accept that Mr. Takeshita’s actions nearly cost him his relationship with his wife and has no doubt strained his relationship with his daughters. I am sure it is also difficult given the fact that the Japanese community living in Toronto is small; some 20,000 people and the Japanese Christian community is even smaller. I accept that Mr. Takeshita is remorseful for the shame that he has caused his family and himself. That said, I cannot find that Mr.

Takeshita is sorry for his actions and their impact on the Church since he still maintains that he, in fact, benefitted the Church by his actions. Obviously Mr. Takeshita cannot be penalized for insisting on his right to a trial, but he does not get the benefit of a reduced sentence because of a guilty plea. This is a neutral factor. The fact he has not expressed remorse for his actions or the impact of his actions on the Church is also a neutral factor but does mean that unlike many of the cases I have reviewed, where the offender pleaded guilty, there is no mitigating factor in this regard for Mr.

Takeshita in deciding sentence. [ 61 ] I do accept as a mitigating factor, however, the fact that as Mr. Takeshita submitted, he cooperated with the authorities. He made a number of important admissions when he testified and although I did not accept all of his evidence, many of those admissions resulted in my findings of fact that underpin the conviction. [ 62 ] Mr. Takeshita was never incarcerated as far as I am aware and was released on bail conditions that permitted him to work. Nevertheless, as he submitted, he was arrested back in March 2007 and this matter has been weighing on him for a long time.

He advised me that he has made about 40 attendances in court. I accept that this is a mitigating factor. [ 63 ] Mr. Takeshita is 68½ years old. Although he reported some health concerns I cannot conclude that any of his health concerns are life-threatening or that there would be any issue with treatment if Mr. Takeshita were incarcerated. [ 64 ] Having considered all of the possible mitigating factors, I have concluded that there are no special circumstances here or as the court in Dobis put it: “extreme personal mitigating circumstances”. Mr.

Takeshita was in a position of trust, his fraud involved 95 different unauthorized checks and a number of payments back and altered bank statements intended to conceal his fraud. He does not have insight into his actions or take responsibility for them or the impact of his actions on the Church. Considering the cases I have referred to and all of the aggravating and mitigating circumstances of this case, in my view a sentence in the range of 18 months as submitted by Mr. Fraser would be a fair and fit sentence.

Given that this fraud is at the lower end of the scale and given the length of time this matter has been hanging over Mr. Takeshita’s head, and given the restitution order I intend to make, I have decided that the appropriate sentence in this case is 16 months. Having come to this conclusion I must go on to consider whether or not a custodial sentence or a conditional sentence should be imposed. [ 65 ] In determining whether or not to impose a conditional sentence, I am guided by the decision of the Supreme Court of Canada in Proulx .

In that case, the court confirmed that conditional sentences were introduced by Parliament to reduce reliance on incarceration

and to increase the use of restorative justice principles in sentencing. The court stated at para. 90 that when the necessary preconditions are satisfied “serious consideration should be given to the imposition of a conditional sentence”. [ 66 ] The first criterion for imposing a conditional sentence is met in this case given my conclusion that a term of imprisonment of less than two years is appropriate. The remaining considerations are whether permitting Mr.

Takeshita to serve his sentence in the community would not endanger the safety of the community and that a conditional sentence would be consistent with the fundamental purpose and principles of sentencing set out in sections 718 to 718.2 of the Criminal Code . [ 67 ] Although I have already expressed my concern about Mr. Takeshita’s lack of insight and its possible impact on whether he might re-offend, I do not believe a period of incarceration is necessary for specific deterrence. Although one can never rule out the possibility of re-offending, in all of the circumstances, given the impact this has had on Mr.

Takeshita personally and on his family, I am satisfied that the risk of re-offence is low. Nevertheless, the sentence imposed must bring home to Mr. Takeshita that this conduct will be treated seriously by this Court in order to deter him from ever engaging in this kind of criminal activity again. [ 68 ] More importantly, however, as the cases that I have referred to emphasize, is the real need for general deterrence. Many frauds are committed by well-educated persons of previous good character holding various positions of trust.

As in this case these types of crimes are not usually crimes of impulse and usually involve planning. As a matter of general deterrence, an educated person should be aware of the consequences and this awareness comes from sentences given to others. Otherwise law-abiding persons, who engage in this type of crime, are more likely to be deterred by the threat of severe penalties. [ 69 ] I recognize that Chief Justice Lamer stated in Proulx that the stigma of a conditional sentence with house arrest should not be underestimated.

Although incarceration, which is ordinarily a harsher sanction, may provide more deterrence than a conditional sentence, he cautioned that courts should be wary of placing too much weight on deterrence when choosing between a conditional sentence and incarceration. The empirical evidence suggests that the deterrent effect of incarceration is uncertain.

Moreover, a conditional sentence can provide significant deterrence if sufficiently punitive; see Proulx at paras. 105 and 107 . [ 70 ] In considering all of the circumstances, given the amount and nature of the fraud, and given there are absolutely no special circumstances, I have concluded that a conditional sentence would not be consistent with the principles of sentencing in this case that are set out in the cases that I have reviewed. Mr. Takeshita was entrusted with the funds of the Church, even to the point where the Pastor signed blank cheques for him to complete for payments on behalf of the Church.

Instead he directed funds to himself and then to avoid detection went to great lengths to avoid NSF cheques and falsify the Church’s bank statements. This occurred over a period of 4½ years and but for a challenge by the Pastor, he would not have been caught. Furthermore, Mr. Takeshita has not taken responsibility for his actions or the harm to the Church resulting from his actions. In these circumstances, to permit Mr.

Takeshita to avoid incarceration for his crime would in my view send the wrong message to anyone who is in a position of trust and might be similarly inclined. [ 71 ] Finally it is submitted in the Brief that restitution and community service if ordered are important components of the overall sentence and must be taken into account in assessing the totality of the sentence and can have the effect of reducing the length of sentence that would otherwise be imposed. I have taken this into account in imposing the 16 month sentence but in this regard I have also considered Mr.

Takeshita’s unwillingness to make restitution to the Church. As I found there was a net deprivation I do not accept his submission that the Church is ahead. In my view, since Mr. Takeshita is still working, and since he did not suggest he could not afford to pay money to the Church, a restitution order is appropriate. Disposition [ 72 ] Mr.

Takeshita would you please stand. [ 73 ] With respect to your conviction on count one for fraud over $5,000, I sentence you to 16 months of incarceration. [ 74 ] After you serve your sentence of 16 months, there will be a term of probation of one year with the following conditions: 1. Keep the peace and be of good behaviour; 2. Appear before the Court when required to do so by the Court; 3. Notify the court or the probation officer in advance of any change of name or address, and promptly notify the court or probation officer of any change of employment or occupation; 4.

Report within 2 working days in person, to a probation officer and, thereafter, report to the probation officer when required by the probation officer and in the manner directed by the probation officer; 5. Remain within the Province of Ontario unless written permission to leave the Province is obtained from the probation officer, or approval is given by the Court; 6. Do not have any contact directly or indirectly with Reverend Yoshida; 7.

Do not attend the Wesley Chapel Japanese Church. [ 75 ] In addition, there will be a restitution order directing that you pay the amount of $24,000 to the Wesley Chapel Japanese Church pursuant to

section 738 of the Criminal Code . This amount may be paid in installments of $2,000 per month during your one year period of probation. I ask that the Crown ensure that notice of this restitution order is given to the Church as required by

section 741.1 of the Code.

SPIES J. Released: March 12, 2013 CITATION : R. v. Takeshita, 2013 ONSC 1385 COURT FILE NO.: 30000416/10 DATE: 20130312 ONTARIO SUPERIOR COURT OF JUSTICE HER MAJESTY THE QUEEN – and – KOICHI TAKESHITA Defendant REASONS FOR SENTENCE SPIES J. Released: March 12, 2013