



COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Solleveld, 2014 ONCA 418

DATE: 20140522

DOCKET: C55023, C55024 & C54972

Sharpe, Cronk and Rouleau JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Robert Solleveld, Desiree Solleveld and Robert
    Cranston

Appellants

Robert Solleveld, Desiree Solleveld, and Robert
    Cranston, acting in person, assisted by Michael Dineen and Matthew Gourlay,
    duty counsel

Christine Tier, for the respondent

Heard: March 11 and 13, 2014

On appeal from the convictions entered on September 29,
    2011 and the sentence imposed on January 27 and 30, 2012 by Justice Alan C.R.
    Whitten of the Superior Court of Justice, sitting with a jury.

By the Court:

[1]

The appellants were convicted of fraud (Robert and Desiree Solleveld two
    counts; Robert Cranston one count) and conspiracy to commit fraud (Robert
    Solleveld and Robert Cranston) and sentenced as follows; Robert Solleveld  six
    years concurrent on each count; Desiree Solleveld  three years concurrent on
    each count; Robert Cranston  two years concurrent on each count. Restitution
    orders were also made.

[2]

Cranston abandoned his conviction appeal and has served his sentence.
    However, as the issues raised on his conviction appeal overlap with those
    raised by the Sollevelds, the Crown asked that his conviction appeal not be
    dismissed as abandoned.

[3]

The appellants were found guilty of running a high yield investment scam
    which attracted several millions of dollars from a large number of investors
    or joint venture partners (JVPs).

[4]

The Sollevelds solicited $7,637,041.17 from JVPs using an entity called
    Club TCSI. They used a document describing a high yield investment scheme
    purportedly backed by the U.S. Federal Reserve, the International Monetary Fund
    and the World Bank. They cited investment returns of 10% per month or more.
    Forensic accounting evidence indicated that no investment income was earned and
    that less than 10% of the money was returned to investors. Most of the money
    invested was depleted to cover corporate and personal expenses.

[5]

Cranston recruited investors through his company Island Holdings using
    similar documentation. He collected some $700,000 which he transferred to TCSI
    accounts.

[6]

The Sollevelds and Cranston were self-represented at trial and on this
    appeal although before this court they were ably assisted by duty counsel.

Issues

[7]

While Robert and Desiree Solleveld filed lengthy written submissions, in
    oral argument and with the assistance of duty counsel, the issues that we need
    to address were narrowed as follows:

1.

Did the trial
    judge err in admitting certain opinion evidence?

2.

Did the trial
    judge err in his instructions to the jury relating to conspiracy?

3.

Did the trial
    judge err by giving a confusing jury charge that failed to distinguish between
    the Sollevelds and Cranston?

4.

Did the trial
    judge err in admitting evidence from the preliminary inquiry pursuant to s. 715(1)(a)
    of the
Criminal Code
?

5.

Did the trial
    judge err as to the sentence he imposed?

1. Did the trial judge err in admitting certain opinion
    evidence?

[8]

The Crown led evidence from James Byrne, a law professor who was
    qualified as an expert in international banking practices and high yield
    investment fraud. Professor Byrne testified as to normal banking practices and
    he described the hallmarks or common elements typically found in high yield
    frauds. These included the promise of unrealistically high returns, the
    insistence on the need for secrecy, the exploitation of religious or cultural affiliation;
    and the lack of a clear and professional approach to trading and investing. He
    examined the documents and methods used by the appellants to attract investors
    in their scheme and testified that those documents were similar to and bore the
    hallmarks of a high yield investment fraud.

[9]

For example, the appellants scheme purported to involve trading in
    letters of credit. Professor Byrne testified that such trades were spoken of [o]nly
    in the world in commercial fraud. There is no such thing in the real world.
    Similarly, with respect to secret or obscure markets he stated: [t]hese are
    typical allegations in the world of, of high yield frauds and other commercial
    frauds that theres some secret hidden. He explained that by definition
    markets cannot be secret or hidden. When shown a confidentiality,
    non-disclosure, non‑circumvention agreement used by the appellants he
    testified: this is a document which Ive seen in one form or another in
    virtually all of the high yield investment scams that Ive studied. One of the
    documents used by the appellants spoke of returns of 12.5% per month. Byrne
    described that as preposterous and just simply beyond the realm of anything
    normal. He testified that describing high yield investments as federally approved
    was very common and a clear indicator that this is an instance of high yield
    scam. He testified that several other documents and terms used by the
    appellants were typical of high yield investment scams or frauds.

[10]

Mr.
    Dineen submits that to the extent Byrne testified that the documents and
    methods used by the appellants were typical of those used by fraudsters and
    indicated a fraudulent intent, it should not have been admitted.

[11]

First,
    it is submitted that such evidence amounts to profiling and second, such
    evidence usurps the role of the jury to determine whether the appellants had
    the requisite intent for the offence of fraud.

[12]

Reliance
    is placed on
R. v. Sekhon
, 2014 SCC 15, at para. 46:

Given the concerns about the impact expert evidence can have on
    a trial  including the possibility that experts may usurp the role of the
    trier of fact  trial judges must be vigilant in monitoring and enforcing the
    proper scope of expert evidence.  While these concerns are perhaps more
    pronounced in jury trials, all trial judges  including those in judge-alone
    trials  have an ongoing duty to ensure that expert evidence remains within its
    proper scope.  It is not enough to simply consider the
Mohan
criteria at the outset of the experts testimony and make an initial ruling as
    to the admissibility of the evidence.  The trial judge must do his or her
    best to ensure that, throughout the experts testimony, the testimony remains
    within the proper boundaries of expert evidence.  As noted by Doherty J.A.
    in
R. v. Abbey
,
2009 ONCA 624 (CanLII)
,
    2009 ONCA 624, 97 O.R. (3d) 330, at para. 62:

The admissibility inquiry is not conducted in a
    vacuum.  Before deciding admissibility, a trial judge must determine the
    nature and scope of the proposed expert evidence.  In doing so, the trial
    judge sets not only the boundaries of the proposed expert evidence but also, if
    necessary, the language in which the experts opinion may be proffered so as to
    minimize any potential harm to the trial process.
A
    cautious delineation of the scope of the proposed expert evidence and strict
    adherence to those boundaries, if the evidence is admitted, are essential.
The case law demonstrates that overreaching by expert witnesses is probably the
    most common fault leading to reversals on appeal.  [Emphasis added and
    citations omitted by S.C.C.]

[13]

Sekhon
involved the evidence of a police officer who testified that he had never
    encountered a drug courier who was blind to the fact that he or she was
    carrying drugs. This was held to be inadmissible evidence, at para 49:

The fact that [the police officer] did not personally encounter
    a blind courier over the course of his investigations is neither relevant nor
    necessary, within the meaning ascribed to those terms by this Court in
Mohan
,
    to the issue facing the trial judge  namely, whether Mr. Sekhon himself had
    knowledge of the drugs.  The Impugned Testimony, though perhaps logically
    relevant, was not legally relevant because the guilt or innocence of accused
    persons that [the police officer] had encountered in the past is legally
    irrelevant to the guilt or innocence of Mr. Sekhon (see
Mohan
, at pp.
    20-21).  In other words, the Impugned Testimony was of no probative value
    in determining whether
Mr. Sekhon
knew about the cocaine in the hidden
    compartment.  It is trite to say that a fundamental tenet of our criminal
    justice system is that the guilt of an accused cannot be determined by
    reference to the guilt of other, unrelated accused persons.  Moreover, the
    Impugned Testimony was not necessary because determining whether Mr. Sekhon
    knew about the drugs is not beyond the knowledge and experience of the judge,
    and it is certainly not a matter that is technical or scientific in nature. [Emphasis
    in original.]

[14]

In
    our view, Professor Byrnes evidence does not amount to the kind of profiling
    evidence precluded by
Sekhon
.

[15]

The
    admission of Byrnes evidence met the four criteria set out in
R. v. Mohan
,
    [1994] 2 S.C.R. 9: i) relevance, ii) necessity in assisting the trier of fact,
    iii) the absence of any exclusionary rule, and iv) a properly qualified expert.
    The appellants do not challenge the qualification of Professor Byrne, nor are
    there any applicable exclusionary rules. The evidence as to the nature and
    character of the methods and documents used by the appellants was plainly
    relevant to the issue of whether or not their investment scheme was a
    fraudulent scam. In our view, the evidence was also necessary given the
    inherent complexity of international banking and the esoteric nature of
    documents used by the appellants to attract investors. International banking
    practices and purportedly sophisticated and obscure investments of the kind
    used by the appellants are not matters within the knowledge and experience of
    the ordinary juror. Professor Byrne had specialist knowledge that could assist
    the trier of fact in understanding the obscure terminology and jargon of the
    financial world.

[16]

Professor
    Byrnes analysis of the document and methods used by the appellants did not, as
    in
Sekhon,
depend for its relevance on the guilt or innocence of
    accused persons that [the witness] had encountered in the past but rather upon
    Byrnes expert knowledge of international banking and the types of documents
    that are properly and improperly used in that highly specialized sphere of
    activity.

[17]

Nor,
    in our view, should the impugned evidence have been excluded because it tread
    near the ultimate issue for the jury.

[18]

The
    Supreme Court of Canada has repeatedly affirmed that the common law rule
    precluding expert evidence on the ultimate issue no longer applies in Canada:
R.
    v. Burns
, [1994] 1 S.C.R. 656, at para. 25:

While care must be taken to ensure that the judge or jury, and
    not the expert, makes the final decisions on all issues in the case, it has
    long been accepted that expert evidence on matters of fact should not be
    excluded simply because it suggests answers to issues which are at the core of the
    dispute before the court:
Graat v. The Queen
, [1982] 2 S.C.R. 819. See
    also
Khan v. College of Physicians and Surgeons of Ontario
(1992), 9
    O.R. (3d) 641 (C.A.), at p. 666 (per Doherty J.A).

See also
R. v. Bryan
(2003)
,
175
    C.C.C. (3d) 285, at para. 16: there is now no general rule precluding expert
    evidence on the ultimate issue.

[19]

It
    was appropriate for the Crown to lead generic evidence as to legitimate and
    illegitimate international banking practices and documents. As Goudge J.A.
    observed in
Bryan
, at para. 19, (dealing with evidence about the
    indicia of possession of cocaine for the purpose of trafficking) where generic
    evidence is necessary to assist the jury, it is hard to resist the same
    conclusion when that evidence is brought down to the specifics of this case.

[20]

Mohan
holds, at paras. 24-25, that increased scrutiny of relevance and necessity are
    called for the closer one comes to the ultimate issue. In our view, the
    impugned evidence survives that increased level of scrutiny.

[21]

Professor
    Byrnes evidence was highly probative of the issue the jury had to decide. Appropriate
    steps were taken to ensure that he did not usurp the function of the jury as
    the ultimate fact finder.

[22]

Professor
    Byrne explicitly testified that he could only comment on the characteristics of
    the documentation used and that he had no direct knowledge of whether any fraud
    had actually been committed. When Byrne was testifying, the trial judge told
    the jury:

Its been very interesting to hear these comments but they are
    in a sense observations by this gentleman from a fairly specialized position.
    That doesnt necessarily mean that the three people before you have committed
    such a crime. All right? These are if anything, I guess specialized
    generalizations

[23]

In
    his jury charge, the trial judge gave a similar instruction: The professor
    emphasized that he could not venture an opinion in this case aside from the
    nature of the documentation he reviewed The jury was also instructed that
    they were not required to accept the opinions of expert witnesses and cautioned
    that how much or little you believe or rely upon the experts opinion is
    entirely up to you.

[24]

We
    see no error in the admission or the treatment of the expert evidence.
    Accordingly, we would not give effect to this ground of appeal.

2. Did the trial judge err in his instructions to the jury
    relating to conspiracy?

[25]

While
    she did not concede the point, in her very fair and able argument, Ms. Tier
    acknowledged that Mr. Gourlay had raised serious and significant issues as to the
    trial judges instructions to the jury on conspiracy.

[26]

There
    are two related problems with the trial judges conspiracy instructions.

[27]

First,
    at various points, trial judge instructed the jury that, as between Robert
    Solleveld and Cranston, conspiracy was an all or nothing proposition  they
    were either both guilty or both not guilty. This is wrong as a matter of law:
    see
R. v. Bogiatzis,
2010 ONCA 902, 285 C.C.C. (3d) 437, at para 25.

[28]

The
    all or nothing proposition becomes particularly problematic when combined
    with the trial judges second error. The trial judges
R. v. Carter
[1982]
    1 S.C.R. 938 instruction was confusing and failed to distinguish adequately
    between the second and third stages of the inquiry mandated by
Carter
.
Carter
holds, at p. 947, that the trial judge should instruct the jury:

[1] to consider whether on all the evidence they are satisfied
    beyond a reasonable doubt that the conspiracy charged in the indictment
    existed. If they are not satisfied, then the accused charged with participation
    in the conspiracy must be acquitted. [2] If, however, they conclude that a
    conspiracy as alleged did exist, they must then review the evidence and decide
    whether, on the basis of the evidence directly receivable against the accused,
    a probability is raised that he was a member of the conspiracy. [3] If this
    conclusion is reached, they then become entitled to apply the hearsay exception
    and consider evidence of the acts and declarations performed and made by the
    co-conspirators in furtherance of the objects of the conspiracy as evidence
    against the accused on the issue of his guilt. This evidence, taken with the
    other evidence, may be sufficient to satisfy the jury beyond a reasonable doubt
    that the accused was a member of the conspiracy and that he is accordingly
    guilty. [Numbering added.]

[29]

The
    trial judge failed to distinguish adequately between the second and the third
    stages when he instructed the jury as follows:

To determine whether youre satisfied beyond a reasonable doubt
    that Robert Cranston or Robert Solleveld were members of a conspiracy to commit
    fraud against their investors you are entitled to consider all of the evidence.
    You are not limited to Cranstons or Sollevelds own words or conduct. Besides
    that evidence, you may take into account what any other potential members of
    the conspiracy, namely Desiree Solleveld did or said while the conspiracy was
    going on for the purpose of achieving its object or purpose namely the fraud.

[30]

While
    this instruction is correct for stage three, it is wrong with respect to stage
    two. When combined with the all or nothing error, we are left with an
    instruction that creates a serious risk that the jury would not have understood
    the necessity to find, on the basis of only the evidence directly admissible
    against a particular accused, that that accused was probably a member of the conspiracy.
    Only then can the jury proceed to the final stage and, applying the hearsay
    exception, make a determination whether, on the basis of all the evidence, the
    Crown had proved beyond a reasonable doubt that the accused was a member of the
    conspiracy.

[31]

Accordingly,
    we would give effect to this ground of appeal. As the Crown does not ask us to
    direct a new trial on the conspiracy count, we set aside the convictions for
    conspiracy and substitute verdicts of acquittal on that count. It is conceded
    by duty counsel that the error in the jury charge with respect to conspiracy
    does not affect the verdicts on the other counts.

3. Did the trial judge err by giving a confusing jury charge
    that failed to distinguish between the Sollevelds and Cranston?

[32]

Cranston
    submits that the trial judge gave a confusing jury charge that failed to
    adequately distinguish between him and his co-accused. He submits that the
    evidence was, in effect, lumped together and that the jury would not have
    understood the need to consider the case against him independently and only to
    convict on the basis of evidence admissible against him.

[33]

We
    are unable to accept this submission. At several points in his instructions to
    the jury, the trial judge explained that each of the accused had to be tried
    separately and that none of the accused could be guilty of any offence unless
    the evidence relating to that accused proved his or her guilt beyond a
    reasonable doubt.

[34]

While
    the decision tree given to the jury did lump all three accused together in
    relation to fraud by putting their names in the same box, the trial judge
    expressly instructed the jury that while all three names were in the same box,
    they were to consider the evidence as against each of the accused and not to
    lump it all together.

[35]

We
    would not give effect to this ground of appeal.

4. Did the trial judge err in admitting evidence from the
    preliminary inquiry pursuant to s. 715(1)(a) of the Criminal Code?

[36]

Two
    witnesses who testified at the preliminary inquiry died before the trial. One
    was a former employee of TCSI who testified as to the roles played by the
    Sollevelds within the company and the steps taken by Robert Solleveld to foil
    the police. The other was an investor who was told he would earn 30 to 40% with
    no risk and was sworn to secrecy.

[37]

Robert
    Solleveld cross-examined both witnesses at length. Cranston, at the time
    represented by counsel, did not cross-examine them as one helped his defence
    and the other did not affect him.

[38]

At
    trial, the Sollevelds initially opposed the admission of the transcript of the
    two deceased witnesses testimony on the ground that they did not have
    sufficient opportunity to cross-examine them at the preliminary inquiry.
    However, they eventually acknowledged that they had had the opportunity to
    cross-examine and withdrew their opposition.

[39]

The
    trial judge did not err in admitting this evidence pursuant to s. 715(1)(a).
    The trial judge gave the jury an appropriate warning, as suggested by
R. v.
    Potvin
, [1989] 1 S.C.R. 525, both before the evidence was admitted and in
    his final instructions in relation to this evidence.

[40]

We
    see no error and would not give effect to this ground of appeal.

Other issues

[41]

The
    Sollevelds raise a number of other issues, some difficult to discern. They
    complain that they were unrepresented at trial but fail to point to any error
    in the trial judges
Rowbotham
ruling. They say that the court lacked
    jurisdiction because the proceedings began in London and were transferred to
    Hamilton. We see nothing improper about the case being tried in Hamilton and we
    observe that the indictment alleges offences committed in the City of
    Hamiltonand elsewhere in the Province of Ontario. Nor do we see any error on
    the part of the trial judge in keeping Cranstons criminal record from the
    jury. The Sollevelds raise a number of alleged
Charter
breaches. There
    is no merit to their
Charter
challenges.

5. Did the trial judge err as
    to the sentence he imposed?

[42]

We
    see no error in the custodial sentences imposed by the trial judge. These were
    very serious frauds involving millions of dollars. The sentences were in line
    with principles enunciated by this court in
R. v. Drabinsky
, 2011 ONCA
    582, 274 C.C.C. (3d) 222 and
R. v. Eizenga
, 2011 ONCA 113, 270 C.C.C.
    (3d) 168. While we have set aside the convictions for conspiracy, the sentences
    for that offence were concurrent and we agree with the Crown that the gravamen
    of the appellants conduct was the fraud. We see no reason that would justify
    interference with the concurrent sentences imposed for fraud.

[43]

We
    conclude, however, that there was an error with respect to the restitution
    order made against Cranston. Cranston was convicted of fraud in respect of
    funds he solicited on behalf of his corporation, Island Holdings. The trial
    judge ordered Cranston to make restitution to six investors for losses
    totalling $228,900 incurred on investments they made in Island Holdings. Cranston,
    assisted by duty counsel, argues that the trial judge erred in that he did not
    consider that the Island Holdings monies were subsequently transferred to TCSI
    and that the Sollevelds were also convicted on account of the Island Holdings
    fraud. In Cranstons submission, the Sollevelds are principally responsible for
    the losses incurred. As a result, the Sollevelds should be the ones ordered to
    make restitution in respect of the Island Holdings investors or, alternatively,
    because all three bore responsibility for these losses, the restitution order
    made against him should be limited to one-third of the losses.

[44]

An
    important consideration in deciding whether and in what amount a restitution
    order should be made is the determination of what happened to the money: See
R.
    v. Castro,
2010 ONCA 718, 102 O.R. (3d) 609, at para. 27.

[45]

In
    the present case the evidence disclosed that the money was channelled through
    Island Holdings into TCSI. This provided the basis for the jurys finding that
    all three appellants were guilty of the fraud committed on the Island Holdings
    investors. The fact that all three appellants bore responsibility does not
    appear to have been raised by the Crown or Cranston in their submissions made
    at the sentencing hearing. It also does not appear to have been taken into
    account by the trial judge in fashioning his restitution orders. The trial
    judges failure to take this into account is, in our view, an error. Because
    all three accused bore responsibility for the losses we would, therefore, vary
    Cranstons restitution order by reducing the amount ordered by two-thirds. This
    will reduce Cranstons restitution order to a total amount of $76,300.

Disposition

[46]

For
    these reasons, the appeals from conviction for conspiracy brought by Robert
    Solleveld and Robert Cranston are allowed, those convictions are set aside and
    acquittals on that count are entered. The appeals from conviction are otherwise
    dismissed. Leave to appeal sentence is granted and the restitution order
    against Cranston is varied by reducing the amount ordered by two-thirds,
    resulting in a restitution order against him in the amount of $76,300. The sentence
    appeals are otherwise dismissed.

Released: May 22, 2014                                                    
    Robert J. Sharpe J.A.

(P.R.)                                                                     
    E.A. Cronk J.A.

Paul Rouleau J.A.


