R. v. Fast (R.J.) et al., (2014) 441 Sask.R. 92 (QB)

• Judge: Danyliuk, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: May 30, 2014
• Jurisdiction: Saskatchewan
• Citations: (2014), 441 Sask.R. 92 (QB);2014 SKQB 161

R. v. Fast (R.J.) (2014), 441 Sask.R. 92 (QB)

MLB headnote and full text

Temp. Cite: [2014] Sask.R. TBEd. JN.011

Her Majesty the Queen v. Ronald Jerry Fast and Danielle Fast-Carlson

(2012 Q.B.N.J. No. 27; 2014 SKQB 161)

Indexed As: R. v. Fast (R.J.) et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Danyliuk, J.

May 30, 2014.

Summary:

The accused father and daughter were involved with a company owned by the father (Marathon) that allegedly defrauded investors by operating as a Ponzi scheme. Investors were given promissory notes with high interest rates. As revenues were insufficient to pay interest, initial investors were paid from monies provided by subsequent investors. As a result, Marathon's deficit increased over the relevant years (2005 to 2008) until it went bankrupt because it could no longer access investor monies. Almost $17 Million was owed to the unsecured investors. Investors were denied access to financial statements. The limited financial information provided was misleading and hid actual financial performance. When the Saskatchewan Securities Commission ordered that Marathon cease receiving monies from investors, related companies (including one co-owned by the daughter) acted as conduits to funnel needed investor funds to Marathon. Investors were not told of the securities investigation or Marathon's insolvency. The accused were charged with fraud (Criminal Code, s. 380(1)(a)), making false statements respecting Marathon's financial status with intent to enter a security for Marathon's benefit (s. 400(1)(c)(ii)) and possession of the proceeds of crime (ss. 354(1)(a) and 355(a)). The father pleaded guilty to all three counts. The daughter pleaded not guilty.

The Saskatchewan Court of Queen's Bench, in a judgment reported (2014), 441 Sask.R. 23, found the daughter guilty of fraud and making false statements. She was acquitted on the charge of possession of the proceeds of crime. Both the father and daughter sought conditional sentences.

The Saskatchewan Court of Queen's Bench sentenced the father to seven years' imprisonment for each offence (concurrent) and restitution in the amount of $16,742,441.12. The daughter was sentenced to 30 months' imprisonment for fraud and restitution in the amount of $1,000,000.

Criminal Law - Topic 5720.4

Punishments (sentence) - Conditional sentence - When available or appropriate - The Saskatchewan Court of Queen's Bench stated that "The current jurisprudence from this province indicates one must proceed cautiously when considering the granting of a conditional sentence when a serious fraud is involved." - See paragraph 57.

Criminal Law - Topic 5720.4

Punishments (sentence) - Conditional sentence - When available or appropriate - [See Criminal Law - Topic 5859 ].

Criminal Law - Topic 5792

Punishments (sentence) - Restitution - When appropriate - The Saskatchewan Court of Queen's Bench stated that "The Criminal Code contemplates restitution orders being made in appropriate circumstances. As with other sentencing considerations, the concept of proportionality applies. It will not always be appropriate to assess an accused for the entire amount of a fraud where others have participated in the same. As well, ... , it was noted a restitution order is not automatic. It may be that the core of the sentence is sufficient and that a restitution order may be tantamount to 'judicial piling on'. The totality principle must be considered, as must an offender's ability to pay, although the latter is not determinative because restitution orders also address the principles of denunciation and deterrence." - See paragraph 65.

Criminal Law - Topic 5792

Punishments (sentence) - Restitution - When appropriate - [See Criminal Law - Topic 5859 ].

Criminal Law - Topic 5831.1

Sentencing - Considerations on imposing sentence - Offences involving breach of trust - [See Criminal Law - Topic 5859 ].

Criminal Law - Topic 5833

Sentencing - Considerations on imposing sentence - Deterrence - [See Criminal Law - Topic 5859 ].

Criminal Law - Topic 5848.3

Sentencing - Considerations on imposing sentence - Medical - [See Criminal Law - Topic 5859 ].

Criminal Law - Topic 5848.7

Sentencing - Considerations on imposing sentence - Denunciation or repudiation of conduct - [See Criminal Law - Topic 5859 ].

Criminal Law - Topic 5849.25

Sentencing - Considerations on imposing sentence - Large number of victims - [See Criminal Law - Topic 5859 ].

Criminal Law - Topic 5859

Sentence - Fraud - The accused father and daughter were involved with a company owned by the father (Marathon) that defrauded approximately 250 unsecured investors of $17 Million by operating a Ponzi scheme over a number of years - Investors were given promissory notes with high interest rates - As revenues were insufficient to pay interest, initial investors were paid from monies provided by subsequent investors - As a result, Marathon's deficit increased over the relevant years (2005 to 2008) until it went bankrupt because it could no longer access investor monies - Investors were denied access to financial statements - The limited financial information provided was misleading and hid actual financial performance - When the Saskatchewan Securities Commission ordered that Marathon cease receiving monies from investors, related companies (including one co-owned by the daughter) acted as conduits to funnel needed investor funds to Marathon - The father pleaded guilty to fraud, making false statements respecting Marathon's financial status with intent to enter a security for Marathon's benefit, and possession of the proceeds of crime - The daughter was convicted of fraud and making false statements - The 71 year old father was not remorseful - He continued to defend his business and his daughter - He had significant mental and physical health problems, including morbid obesity, diabetes and depression - Aggravating factors included the magnitude of the fraud (one of the largest in Saskatchewan history), the breach of trust and his use of the monies to fund his lifestyle - The daughter was brought in after the scheme was well underway and knew or should have known of the fraud, yet continued to assist her father - Approximately $6 Million was defrauded during her involvement - The daughter earned the salary she obtained and obtained no personal gain from the fraud monies - The average age of the investors was over 70 and most were financially and emotionally devastated - Neither attempted restitution out of personal funds, nor did they present a realistic plan for restitution - The Saskatchewan Court of Queen's Bench rejected conditional sentences as inappropriate - Denunciation and deterrence were the primary sentencing factors - The father was sentenced to seven years' imprisonment for each offence (concurrent) and restitution in the amount of $16,742,441.12 - The daughter was sentenced to 30 months' imprisonment for fraud and restitution in the amount of $1,000,000.

Criminal Law - Topic 5897

Sentence - False statements (Code, Income Tax Act, etc.) - [See Criminal Law - Topic 5859 ].

Criminal Law - Topic 5972

Sentence - Money laundering or proceeds of crime - [See Criminal Law - Topic 5859 ].

Cases Noticed:

R. v. C.A.M., [1996] 1 S.C.R. 500; 194 N.R. 321; 73 B.C.A.C. 81; 120 W.A.C. 81, refd to. [para. 8].

R. v. Knott (D.W.) et al., [2012] 2 S.C.R. 470; 433 N.R. 38; 324 B.C.A.C. 1; 551 W.A.C. 1; 2012 SCC 42, refd to. [para. 9].

R. v. Ipeelee (M.), [2012] 1 S.C.R. 433; 428 N.R. 1; 288 O.A.C. 224; 318 B.C.A.C. 1; 541 W.A.C. 1; 2012 SCC 13, refd to. [para. 10].

R. v. Proulx (J.K.D.), [2000] 1 S.C.R. 61; 249 N.R. 201; 142 Man.R.(2d) 161; 212 W.A.C. 161; 2000 SCC 5, refd to. [para. 49].

R. v. L.F.W., [2000] 1 S.C.R. 132; 249 N.R. 345; 185 Nfld. & P.E.I.R. 1; 562 A.P.R. 1; 2000 SCC 6, refd to. [para. 49].

R. v. R.N.S., [2000] 1 S.C.R. 149; 249 N.R. 365; 132 B.C.A.C. 1; 215 W.A.C. 1; 2000 SCC 7, refd to. [para. 49].

R. v. R.A.R., [2000] 1 S.C.R. 163; 249 N.R. 322; 142 Man.R.(2d) 282; 212 W.A.C. 282; 2008 SCC 8, refd to. [para. 49].

R. v. Bunn (T.A.), [2000] 1 S.C.R. 183; 249 N.R. 296; 142 Man.R.(2d) 256; 212 W.A.C. 256; 2000 SCC 9, refd to. [para. 49].

R. v. Bethke (D.), [2014] 2 W.W.R. 627; 427 Sask.R. 135; 591 W.A.C. 135; 2013 SKCA 135, refd to. [para. 51].

R. v. Parkes (D.L.) (2014), 433 Sask.R. 305; 602 W.A.C. 305; 2014 SKCA 37, refd to. [para. 56].

R. v. Parkes (D.L.) (2012), 400 Sask.R. 175; 2012 SKQB 257, refd to. [para. 56].

R. v. Harding (R.E.) (2006), 285 Sask.R. 273; 378 W.A.C. 273; 2006 SKCA 118, refd to. [para. 61].

R. v. Gopher (G.) et al., [2006] 5 W.W.R. 659; 275 Sask.R. 226; 365 W.A.C. 226; 2006 SKCA 5, refd to. [para. 61].

R. v. Gopher (G.) et al. (2006), 285 Sask.R. 191; 378 W.A.C. 191; 2006 SKCA 86, refd to. [para. 61].

R. v. Link (K.) (2013), 420 Sask.R. 49; 2013 SKQB 163, refd to. [para. 61].

R. v. Johnson (J.R.) (2010), 493 A.R. 74; 502 W.A.C. 74; 2010 ABCA 392, refd to. [para. 62].

R. v. Wilder (D.M.) (2008), 259 B.C.A.C. 236; 436 W.A.C. 236; 2008 BCCA 370, leave to appeal denied [2009] 1 S.C.R. xiv; 395 N.R. 398; 283 B.C.A.C. 318; 480 W.A.C. 318, refd to. [para. 62].

R. v. Bellefeuille (J.P.) et al. (2011), 514 A.R. 317; 2011 ABQB 410, refd to. [para. 62].

R. v. Charbonneau (2008), 57 C.R.(6th) 324; 2008 QCCQ 251, refd to. [para. 62].

R. v. Thow, 2010 BCPC 378, refd to. [para. 62].

R. v. Penney (B.D.) (2008), 462 A.R. 314; 2008 ABPC 339, refd to. [para. 62].

R. v. DiGiuseppe, 2008 ONCJ 127, refd to. [para. 62].

R. v. Bjellebo (E.S.) et al., [2000] O.T.C. 119 (Sup. Ct.), refd to. [para. 62].

R. v. Castro (C.) (2010), 270 O.A.C. 140; 102 O.R.(3d) 609; 2010 ONCA 718, refd to. [para. 65].

R. v. Bird (Q.L.) (1999), 183 Sask.R. 119; 1999 SKQB 10, refd to. [para. 66].

R. v. Disbrowe (N.) (1993), 92 Man.R.(2d) 70; 61 W.A.C. 70 (C.A.), refd to. [para. 66].

R. v. Krieger (K.K.) (1995), 131 Sask.R. 226; 95 W.A.C. 226 (C.A.), refd to. [para. 66].

R. v. McCullough (G.B.) (2002), 227 Sask.R. 124; 287 W.A.C. 124; 2002 SKCA 124, refd to. [para. 67].

R. v. Yates (A.E.) (2002), 174 B.C.A.C. 119; 286 W.A.C. 119; 169 C.C.C.(3d) 506; 2002 BCCA 583, refd to. [para. 68].

Counsel:

Robin D. Ritter, for the Crown;

Michael D. Nolin, for the accused, Ronald Jerry Fast;

Mark R. Vanstone, for the accused, Danielle Fast-Carlson.

This matter was heard before Danyliuk, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following judgment on May 30, 2014.