R. v. McCullough (G.B.), (2002) 216 Sask.R. 61 (QB)

• Judge: Zarzeczny, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: March 01, 2002
• Jurisdiction: Saskatchewan
• Citations: (2002), 216 Sask.R. 61 (QB);2002 SKQB 70

R. v. McCullough (G.B.) (2002), 216 Sask.R. 61 (QB)

MLB headnote and full text

Temp. Cite: [2002] Sask.R. TBEd. MR.009

Her Majesty the Queen v. Gerald Bernard McCullough

(1997 Q.B.C. No. 62; 2002 SKQB 70)

Indexed As: R. v. McCullough (G.B.)

Saskatchewan Court of Queen's Bench

Judicial Centre of Regina

Zarzeczny, J.

March 1, 2002.

Summary:

The accused was charged with two counts of fraud exceeding $5,000 for his conduct respecting a privately administered investment syndicate under the Immigrant Investor Program.

The Saskatchewan Court of Queen's Bench convicted the accused of both counts.

Criminal Law - Topic 2001

Fraudulent transactions - Fraud - What constitutes fraud - The accused was charged with two counts of fraud exceeding $5,000 for his conduct respecting an investment syndicate under the Immigrant Investor Program - The Crown argued, inter alia, that, because the accused failed to make full and complete disclosure of material events or circumstances, the immigrant investors had no ability to monitor the operation of the fund and protect their investment - Therefore, the accused was guilty of a fraud by failure to disclose and the investors were put at further risk by not having the ability to intervene or otherwise take action to reduce their risk or loss - The Saskatchewan Court of Queen's Bench characterized these actions more as elements of the frauds or the ways and means by which they were committed as opposed to independent frauds directly or indirectly resulting in loss or deprivation to those defrauded - See paragraphs 224 to 226.

Criminal Law - Topic 2001

Fraudulent transactions - Fraud - What constitutes fraud - The accused was charged with two counts of fraud exceeding $5,000 for his conduct respecting an investment syndicate ("Royal Fund") under the Immigrant Investor Program - The Crown alleged that the accused set up corporations and exercised sole and exclusive control of their activities in order to commit the frauds alleged - Further, he handled the cash flow and money of the Royal Fund and the various corporations involved, so as to conceal his fraudulent misappropriation of funds - The accused argued, inter alia, that he placed reliance upon his accountants and lawyers and the financial statements for the Royal Fund and the working papers of the auditors reflected that all transactions were properly accounted for - Money owing to the Royal Fund was a civil or contractual issue of debt not involving any elements of the criminal law - The Saskatchewan Court of Queen's Bench rejected the argument and convicted the accused of both counts - See paragraphs 229 to 230.

Criminal Law - Topic 2001

Fraudulent transactions - Fraud - What constitutes fraud - The accused was charged with two counts of fraud exceeding $5,000 for his conduct respecting an investment syndicate ("Royal Fund") under the Immigrant Investor Program - The Crown alleged that the accused set up corporations and exercised sole and exclusive control of their activities in order to commit the frauds alleged - Further, he handled the cash flow and money of the Royal Fund and the various corporations involved, so as to conceal his fraudulent misappropriation of funds - The accused argued, inter alia, that he personally did not benefit from some of the money he transferred or directed from the Royal Fund to various third party corporate, legal, accounting or other entities - The Saskatchewan Court of Queen's Bench held that this argument did not raise a reasonable doubt about the accused's guilt - The accused alone controlled the Royal Fund and related companies and directed to whom the impugned payments were made - See paragraph 231.

Criminal Law - Topic 2005

Fraudulent transactions - Fraud - Elements of fraud - The accused was charged with two counts of fraud exceeding $5,000 - The indictment listed 15 particulars or "ways and means" by which the fraud alleged in the first count was committed and eight particulars relating to the second count - The Crown argued that the first two particulars of each count were most descriptive of the illegal conduct alleged and they constituted the broad categories of fraudulent conduct to which the additional particulars were referrable - The Crown urged the court to consider all of the evidence taken together as opposed to a discrete analysis of each individual transaction to determine guilt - The Saskatchewan Court of Queen's Bench stated that "notwithstanding this suggested approach the court concludes that considerable effort must nevertheless be expended to identify and thereafter apply the evidence adduced to the counts in the indictment including the particulars in order to determine whether or not the Crown has proven its case beyond a reasonable doubt. This approach is necessary in order to satisfactorily address the issues of proof, beyond a reasonable doubt, of the elements of actus reus and mens rea of fraud as articulated by the authorities ..." - See paragraphs 59 and 60.

Criminal Law - Topic 2005

Fraudulent transactions - Fraud - Elements of fraud - [See first Criminal Law - Topic 2001 ].

Cases Noticed:

R. v. Théroux (R.), [1993] 2 S.C.R. 5; 151 N.R. 104; 54 Q.A.C. 184, refd to. [para. 27].

R. v. Zlatic (Z.), [1993] 2 S.C.R. 29; 151 N.R. 81; 54 Q.A.C. 161, refd to. [para. 27].

R. v. Olan, Hudson and Hartnett, [1978] 2 S.C.R. 1175; 21 N.R. 504, refd to. [para. 27].

R. v. Berntson (E.A.) (2000), 199 Sask.R. 281; 232 W.A.C. 281 (C.A.), affing. (1999), 178 Sask.R. 1 (Q.B.), refd to. [para. 27].

R. v. Martin (A.) (1997), 152 Sask.R. 164; 140 W.A.C. 164 (C.A.), refd to. [para. 27].

R. v. Trotchie (1994), 116 Sask.R. 161; 59 W.A.C. 161 (C.A.), refd to. [para. 27].

R. v. Schafer (R.C.) (2000), 195 Sask.R. 161 (Q.B.), refd to. [para. 27].

Cox and Paton v. R., [1963] S.C.R. 500, refd to. [para. 31].

R. v. Ferguson (R.) (2000), 196 Sask.R. 275 (Q.B.), refd to. [para. 49].

Canadian Aero Service Ltd. v. O'Malley et al. (1973), 40 D.L.R.(3d) 371 (S.C.C.), refd to. [para. 55].

Authors and Works Noticed:

Ewart, J. Douglas, Criminal Fraud (1986), generally [paras. 28, 52, 222]; pp. 9 [para. 37]; 85 [para. 50].

Nightingale, Brenda L., The Law of Fraud and Related Offences (1996) (Looseleaf), generally [paras. 28, 33, 52, 222]; p. 3-26 [para. 51].

Counsel:

S.H. Pratchler and J.A. Tholl, for Her Majesty the Queen;

N. Williams and A. Williams, for Gerald Bernard McCullough.

This trial was heard before Zarzeczny, J. of the Saskatchewan Court of Queen's Bench, Judicial Centre of Regina, who delivered the following judgment on March 1, 2002.