



COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Piccinini, 2015 ONCA 446

DATE: 20150618

DOCKET: C59578

Weiler, Tulloch and van Rensburg JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Domenic Piccinini

Appellant

Jill Presser and Cate Martell, for the appellant

Michael Perlin, for the respondent

Heard: June 5, 2015

On appeal from the sentence imposed on March 5, 2013 by
    Justice Bruce Durno of the Superior Court of Justice.

ENDORSEMENT

[1]

The appellant and two co-accused pleaded guilty to fraud over $5,000,
    fraud for the benefit of a criminal organization and money laundering by
    transferring possession of proceeds of crime.  A fourth accused was found
    guilty after trial and sentenced separately. The appellant was sentenced to a
    total of six years imprisonment (prior to credit for pre-sentence custody) and
    a $500,000 fine in lieu of forfeiture.  The appellant seeks leave to appeal his
    sentence. The first ground of appeal concerns the amount of credit for
    pre-trial custody and is conceded by the Crown. The second ground of appeal and
     central issue is whether the sentencing judge erred in imposing a fine in lieu
    of forfeiture. A subsidiary issue is whether the amount of the fine imposed,
    $500,000, is arbitrary and unsupported by the evidence.

[2]

The offences arose from a telephone scam (a grandparent fraud) that
    targeted elderly individuals in the United States.  The scam ran out of a
    boiler room  a rented house - in Mississauga. The appellant and his
    co-accused, as well as three other people, used lists of names and phone
    numbers to call prospective victims. The caller would pose as the victims
    grandchild, claiming to have been arrested in Canada, and needing money for
    bail. Other callers in the boiler room would play the roles of police officers
    or lawyers. The victims were directed on how to send the required money to
    certain locations around the world using Western Union, and addressed to
    recipients  runners  identified by the callers.  In a call-back, the
    victim would provide the caller with the money transfer control number (MTCN)
    provided by Western Union, which was then communicated to the runner and used to
    collect the funds at the other end.

[3]

The appellant was the main boss of the organization; his domestic
    partner was second in command. The appellant paid rent on the house. He paid a
    weekly commission to the co-accused who made the phone calls. The appellant had
    the master phone list and provided the list of prospective victims to the
    callers. He directed the various locations around the world where the funds
    were to be transferred by the victims via Western Union.

[4]

The fraudulent activities took place over a six month period before the
    appellant and the others were arrested. Approximately $45,000 was seized from
    the appellants home and person at the time of the arrest. The police were
    unable to trace the majority of the funds and the total amount of the fraud was
    never established. For the purpose of the guilty plea and sentencing it was
    agreed that the total amount of the fraud was $900,000: the sum of $7,500
    multiplied by the number of days the scheme was carried out.

[5]

At the hearing of the appeal we gave effect to the first ground of
    appeal.   The sentencing took place before the Supreme Court of Canada decision
    in
R. v. Summers
, 2014 SCC 26. The parties agreed that the appellant
    was entitled to 1.5:1 days credit for each day of pre-sentence custody. We therefore
    varied the appellants custodial sentence to credit him with 1,116 days of
    pre-sentence custody instead of 864 days. His sentence was reduced by 252 days.
    As a result of the variation, the appellant had already passed his statutory
    release date, and we ordered his immediate release.

[6]

We reserved the second ground of appeal and indicated we would give
    reasons shortly. These are those reasons.

[7]

The appellant argues that there was no evidence that he had possession
    or control over $500,000; in the alternative, the appellant asserts that the
    sentencing judge ought to have exercised his discretion to impose a fine that
    was limited to the amount of the actual benefit he received.

[8]

Section 462.37 of the
Criminal Code
provides, in respect of
    certain designated offences, for the forfeiture of property of an offender
    that is the proceeds of crime.  Fraud over $5,000 is a designated offence. It
    is admitted in this case that the fraud generated proceeds of $900,000.

[9]

Pursuant to s. 462.37(3), a fine in lieu of forfeiture may be imposed if
    the sentencing court is satisfied that the property at issue cannot be made
    subject to a forfeiture order, because it cannot be located, has been
    transferred to a third party, is located outside Canada, has been substantially
    diminished in value, or has been comingled with other property that cannot be
    divided without difficulty.

[10]

In
    imposing a fine in lieu of forfeiture, the court must be satisfied that the subject
    of the fine is or was the property of the offender. In
R. v. Dwyer
,
    2013 ONCA 34, at paras. 23 and 24, this court held that it was not sufficient
    for the Crown to point to the amount of the fraud and the amount recovered and
    to conclude that the accused had possession or control of the balance. The
    sentencing judge may not infer that because an offender directed a fraud, he or
    she necessarily possessed, controlled or benefitted from the fruits of that
    fraud. The court must be satisfied on a balance of probabilities that the
    offender at some point had actual possession of or control over the targeted
    property.

[11]

The
    appellant points out that in
Dwyer
, the court found that the accused
    did not have control over the entire amount of proceeds from a mortgage fraud
    that had been paid into a lawyers trust account but only the sum for which the
    accused had signed a direction to the lawyer (the court also referred to other
    supporting documents such as cheques).
[1]
The appellant submits that a direction or similar type of documentation is
    required in order to determine the necessary control over the proceeds of fraud
    sufficient to justify a fine in lieu of forfeiture.

[12]

The
    appellant contends that the sentencing judge erred in concluding that he
    exercised control over $500,000 of the proceeds of the fraud. At its highest,
    the appellant orchestrated the fraud, and he had control over the boiler
    room, but this did not mean that he had control over the funds that were
    generated by the fraud. The appellant contends that the evidence was capable of
    establishing that the appellant controlled only $86,400, the commission paid to
    the appellants two co-accused who made the phone calls.

[13]

In
    the present case, the sentencing judge was aware that a fine had to be based on
    evidence of the amount over which the appellant exercised control. He stated:

While he did not personally direct what happened to the money, [Piccinini]
    was in control of the entire operation, from where the money was to go, to the
    name of the supposed bail bondsperson, he provided the information. In my view he
    clearly had control of the proceeds. He was directing where it went; it was not
    like Dwyer where there was a gap and no evidence when it is his operation.

[14]

Not
    only was the appellant admittedly in control of the criminal organization that
    perpetrated the fraud in question, the evidence supported that he exercised
    control over the funds provided by the victims, which were the proceeds of the
    fraud. Each day he told his employees which Western Union location would be
    used as a destination for the funds, and the name of the person who was to
    retrieve the transferred funds (the runner).  The appellant would obtain the
    MTCN provided by the victim and pass it on to the runner, who would claim the
    money at the other end.  The appellant was the person who sent the runner to
    pick up the money. Whether or not the appellant personally received the money
    at the other end is irrelevant; the appellant clearly controlled the funds from
    when they left each victim until they were received.

[15]

In
    addition to the appellants control over the proceeds of the fraud, the appellants
    lifestyle, finances and expenses supported the finding that he had control over
    the funds. He had no other source of income; he funded the operating expenses
    of the criminal organization; he paid employees a small percentage of the gross
    proceeds; and he provided no explanation of what happened to the funds.

[16]

We
    therefore agree with the Crown that the evidence supported the sentencing
    judges finding that the appellant controlled the full amount that the offences
    grossed.

[17]

Finally,
    we do not accept the appellants argument that the sentencing judge erred in
    ordering a fine of $500,000, in the absence of evidence that he had profited by
    that amount. The appellant contends that the sentencing judge ought to have determined
    his actual benefit from the proceeds of the fraud and imposed a fine in that
    amount. The appellant points to the language of s. 462.37(3) which provides
    that the sentencing judge may order a fine in lieu of forfeiture. The
    appellant argues that the sentencing judge has discretion to impose a fine in
    cases where the purpose of the legislation is met; that is, in order to deprive
    the offender of his profit.

[18]

We
    do not agree with the appellants argument. In
R. v. Lavigne
, 2006 SCC
    10, the Supreme Court

recognized that the sentencing judge has a
    limited discretion to determine whether a fine in lieu of forfeiture is to be
    imposed, and to determine the value of the property: at para. 35. While the
    court may decide not to impose a fine in certain circumstances (including for
    example if the offender did not profit from the crime and if it was an isolated
    crime committed by an offender acting alone), once a decision is made to impose
    a fine, the amount of the fine is required to be equal to the value of the
    property over which the offender had possession or control:
Lavigne
at
    paras. 28, 34, 35, 43 and 44.

[19]

The
    value of the property as we have already discussed, is the value of the
    property that was possessed or controlled by the appellant. It is not the
    benefit received by the appellant: see
R. v. Siddiqi
, 2015 ONCA 374,
    where this court noted at para. 6, that the sentencing judge was not required
    to find that [the accused] personally benefitted from the funds he transferred
    to [a] third party, on a dollar-for-dollar basis, to impose a fine in lieu of
    forfeiture that included the amount of the transferred funds.

[20]

In
    the present case, the sentencing judge concluded that the value of the property
    over which the appellant had control was at least $500,000. He imposed a fine
    for this amount, rather than the entire proceeds that the appellant controlled,
    in order that the total amount of the fines imposed on all of the offenders did
    not exceed the gross proceeds of the fraud. If the sentencing judge was not
    entitled to apportion the amount (an argument raised by the appellant in his
    factum, but specifically abandoned in oral argument), this only benefited the
    appellant, and is not challenged by the respondent. It is therefore unnecessary
    to consider this issue in the present appeal.

[21]

Accordingly,
    leave to appeal is granted. The appeal is allowed on the issue of pre-sentence
    custody. The appeal of the fine in lieu of forfeiture is dismissed.

K.M. Weiler J.A.

M. Tulloch J.A.

K. van Rensburg J.A.





[1]
In
Dwyer
this court found that the direction and other supporting
    documents, including cheques, only accounted for $436,756.38, which was $10,700
    more than was recovered. The fine was therefore in the amount of $10,700.


