R. v. Solleveld

R. v. Solleveld Collection Decisions of the Court of Appeal Date 2014-05-22 Neutral citation 2014 ONCA 418 Docket numbers C54972, C55023, C55024 Judges Sharpe, Robert J.; Cronk, Eleanore Ann; Rouleau, Paul S. Subject Criminal Decision Content 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” (“JVP’s”). [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 there’s 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 I’ve seen in one form or another in virtually all of the high yield investment scams that I’ve 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 expert’s 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 expert’s 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 expert’s 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 Byrne’s evidence does not amount to the kind of profiling evidence precluded by Sekhon. [15] The admission of Byrne’s 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 Byrne’s 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 Byrne’s 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 Byrne’s 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: It’s been very interesting to hear these comments but they are in a sense observations by this gentleman from a fairly specialized position. That doesn’t 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 expert’s 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 judge’s instructions to the jury on conspiracy. [26] There are two related problems with the trial judge’s 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 judge’s second error. The trial judge’s 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 you’re 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 Cranston’s or Solleveld’s 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 judge’s 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 Hamilton…and elsewhere in the Province of Ontario”. Nor do we see any error on the part of the trial judge in keeping Cranston’s 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 Cranston’s 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 jury’s 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 judge’s 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 Cranston’s restitution order by reducing the amount ordered by two-thirds. This will reduce Cranston’s 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.”