United States of America v. Prudenza

United States of America v. Prudenza Collection Decisions of the Court of Appeal Date 2006-10-30 Docket numbers C43493, C43494, C43562, C44386, C44474, C44475 Judges Doherty, David H.; Simmons, Janet M.; Rouleau, Paul S. Subject Criminal Decision Content DATE: 20061030 DOCKET: C43562, C43493, C43494, C44386, C44474 and C44475 COURT OF APPEAL FOR ONTARIO DOHERTY, SIMMONS and ROULEAU JJ.A. B E T W E E N : THE UNITED STATES OF AMERICA and THE MINISTER OF JUSTICE Respondents Andrew M. Czernik for the applicant/appellant Prudenza Bhupinder Nagra and Oleg Roslak for the applicant/appellant Dalglish Leslie Anderson appearing in person - and - LLOYD PRUDENZA, DAVID DALGLISH and LESLIE ANDERSON Applicants/Appellants David A. Littlefield for the respondents Attorney General of Canada Heard: September 29, 2006 On appeal from the committal order of Justice Sandra Chapnik of the Superior Court of Justice dated May 9, 2005, and on application for judicial review of the surrender order issued by the Minister of Justice for Canada dated October 20, 2005. DOHERTY J.A.: I OVERVIEW OF THE PROCEEDINGS [1] The applicants/appellants appeal from the order committing them for extradition to the United States made in May 2005 and apply for judicial review of the October 2005 order of the Minister of Justice ordering them to surrender to the United States. [2] During the oral hearing, counsel advanced two arguments to this court on behalf of Prudenza and Dalglish. One argument alleged that the extradition judge erred in refusing to stay the extradition proceedings as an abuse of process. The second argument alleged that the Minister of Justice violated Prudenza’s and Dalglish’s constitutional rights under s. 6(1) of the Canadian Charter of Rights and Freedoms (the “Charter”) when he ordered them surrendered to the United States. The court did not call on the Crown to respond to either submission. Following oral arguments, the appeals and applications for judicial review of Prudenza and Dalglish were dismissed with reasons to follow. [3] The applicant/appellant Anderson was in a somewhat different position. He represented himself before this court, although Mr. Czernik, counsel for Prudenza, provided assistance to Mr. Anderson in the course of his submissions. [4] Mr. Anderson raised an argument that did not apply to Prudenza and Dalglish. He submitted that the extradition judge erred in law when she refused to allow his counsel to call a person named Mark Lennox as a witness at the extradition hearing. Mr. Lennox is an alleged co-conspirator and a former co-accused of Mr. Anderson and the other applicants/appellants. He was intimately involved in the events giving rise to the charges underlying the extradition request. A statement given by Mr. Lennox to American investigators as well as his Grand Jury testimony in the United States are heavily relied on by the authorities in support of the extradition request. Without Mr. Lennox’s statement and testimony, it is arguable that there was not enough evidence to justify Mr. Anderson’s committal for extradition. [5] Mr. Anderson’s argument that he should have been allowed to call Mr. Lennox relies heavily on the recent judgment of the Supreme Court of Canada in United States of America v. Ferras (2006), 209 C.C.C. (3d) 353 (S.C.C.). The extradition judge did not have the benefit of the reasons in Ferras when she ruled that Mr. Anderson could not call Mr. Lennox. [6] After hearing from Mr. Anderson, Mr. Czernik, and the Crown, the court decided, for reasons which need not be repeated here, that Mr. Anderson should have a further opportunity to retain counsel to advance the argument that he should have been allowed to call Mr. Lennox. Mr. Anderson’s appeal and application for judicial review were adjourned on conditions set out in an endorsement. [7] The remainder of these reasons address the two grounds advanced on behalf of Prudenza and Dalglish. For ease of reference, I will refer to them as the appellants. II OVERVIEW OF THE FACTS [8] It is alleged that the appellants operated a telemarketing scheme in Toronto between September 2001 and the end of December 2002. The appellants hired telemarketers to contact people in the United States who had poor credit records. These individuals were told that the company represented by the telemarketers could obtain pre-approved MasterCard and Visa credit cards for them in exchange for an advance fee. The amount of the advance fee varied, but was usually around $200. [9] It is alleged that the operation never provided pre-approved credit cards to any of the individuals who paid the advance fee. According to Mr. Lennox, the operation was “a complete and total scam”. At its peak, there were 250 telemarketers making calls from six to eight different locations in Toronto. The calls were made exclusively to residents of the United States. Victims of the scheme were defrauded of more than $7,000,000. [10] A joint investigation by Canadian and American authorities into the telemarketing operation began in the fall of 2002. In October 2002, the appellants were arrested by Canadian authorities and charged with a number of fraud counts and with making false representations contrary to the Competition Act, R.S.C. 1985, c. C-34. The charges were prosecuted by counsel on behalf of the Attorney General of Canada. The appellants were released on bail. [11] On July 15, 2003, the Minister of Justice for Canada received an extradition request from the United States. The request related to the same charges that were being prosecuted in Canada. A “Cotroni assessment” was completed for the Minister of Justice in November 2003. On December 3, 2003, the Minister of Justice issued an authority to proceed with the extradition request. The appellants were arrested on an extradition warrant and released on bail. The Canadian charges were stayed about two weeks later. [12] In the course of the extradition proceedings, the appellants brought a disclosure application in the Superior Court seeking the production of documentation in the possession of Canadian and American authorities that the appellants argued could support their argument that the extradition proceedings amounted to an abuse of process. The appellants contended that the Canadian authorities never intended to proceed with the Canadian criminal charges, but had used them as a means of keeping the appellants on bail until the extradition request was made and approved. The disclosure motion was denied in June 2004. An appeal to this court was quashed on the basis that the court had no jurisdiction to hear the appeal. [13] In the extradition hearing itself, the appellants brought an abuse of process motion on the same grounds as those advanced on the disclosure motion. The appellants also sought an order requiring the Crown to disclose the material that the appellants had sought in the earlier motion. The extradition judge allowed the appellants to call evidence in support of their disclosure request and their claim that the extradition proceedings amounted to an abuse of process. The appellants called one witness, Gordon Goldman, the lawyer who acted for Prudenza in the Canadian criminal proceedings. [14] The extradition judge, like the judge who heard the disclosure motion, found there was no air of reality to the abuse of process claim. She dismissed the motion for disclosure and the motion to stay the extradition proceedings. [15] The appellants conceded there was ample evidence to justify their committal for extradition. III THE ABUSE OF PROCESS ARGUMENT [16] Counsel for the appellants renewed their abuse of process claim in this court. In oral argument, counsel narrowed their positions somewhat from those advanced in their facta. They argued that the abuse of process lay in the misuse of the Canadian criminal proceedings. Counsel submitted that from at least July 2003, when the American authorities requested extradition, the Crown had no intention to proceed with the criminal proceedings in Canada. Counsel described these proceedings as a “sham” continued only to maintain a bail order on the appellants pending a final decision on the extradition request. Counsel submit that this misuse of the Canadian criminal process is sufficiently offensive to warrant a stay of the extradition proceedings. [17] Counsel for the appellants point to two facts to support their claim that the Canadian authorities had no intention of proceeding with the Canadian prosecution after July 2003. First, counsel refer to the Canadian prosecutor’s “refusal” to negotiate a guilty plea with Prudenza. Second, counsel submit that the record filed on the abuse of process motion reveals that disclosure on the Canadian charges “dried up” in late July 2003, at almost the exact same time that the extradition request was made. [18] As indicated above, on the abuse of process motion the appellants sought production of materials in the possession of the Canadian and American authorities which the appellants alleged could assist them in establishing an abuse of process. After the production motion failed, the appellants argued the merits of the abuse of process motion based on the motion record and Mr. Goldman’s evidence. [19] The burden on the appellants on the production motion is significantly lower than the burden placed on the appellants to justify a stay of proceedings. I will address the abuse of process claim in the context of the motion for production. As I am satisfied that the production request was properly rejected, it follows that there is no merit to the claim that the proceedings should have been stayed as an abuse of process. [20] An extradition judge has the power to stay extradition proceedings as an abuse of the court’s process: see United States of America v. Cobb (2001), 152 C.C.C. (3d) 270 at paras. 36-39 (S.C.C.). The power to stay proceedings as an abuse of process can arise where fairness of the hearing itself has been compromised, or where the conduct of the prosecutorial authorities has brought the administration of justice into sufficient disrepute to require that the proceedings be stayed to maintain the integrity of the judicial process: R. v. Larosa (2002), 166 C.C.C. (3d) 449 at paras. 48-52 (Ont. C.A.). The appellants rely on their claim of prosecutorial misconduct to establish the second form of an abuse of process. The fairness of the extradition hearing is not an issue. [21] The extradition judge may order production of materials relevant to issues properly raised at the judicial phase of the process and has discretion to order disclosure in relation to issues that arise at the Ministerial stage: see United States of America v. Kwok (2001), 152 C.C.C. (3d) 225 at paras. 99-100 (S.C.C.). Extradition proceedings are not, however, trials or even preliminary inquiries into charges that may be tried in Canada. Relevance to the ultimate charges is no basis for ordering production in an extradition hearing. Requests for production must be clearly linked to issues properly raised in the extradition context. Otherwise, the extradition process will become, at best, unwieldy and, at worst, unworkable. [22] In Larosa, supra, at para. 76, this court set out three criteria governing requests for production of material from Canadian or American prosecutorial authorities in support of a motion to stay extradition proceedings on the basis of prosecutorial misconduct: § the allegations must be capable of supporting the remedy sought [i.e., a stay of proceedings based on abuse of process]; § there must be an air of reality to the allegations; and § it must be likely that the documents sought and the testimony sought would be relevant to the allegations. [23] Bearing in mind the three criteria described in Larosa, supra, I turn to the two factual assertions underlying the appellants’ abuse of process allegation. First, counsel say that the Crown refused to negotiate a plea with Prudenza. They contend that this refusal demonstrates that the Canadian criminal proceedings were nothing more than a mechanism to hold the appellants on bail, pending an extradition request. [24] The appellants rely on the evidence of Gordon Goldman, Prudenza’s lawyer in the Canadian criminal proceedings. Mr. Goldman testified on the abuse of process motion with a waiver of the client/solicitor privilege from Prudenza limited to issues relating to the possible negotiation of a guilty plea. Mr. Goldman did not have his trial file with him when he testified on the abuse of process motion and his memory of dates and the chronology of relevant events was poor. Parts of his evidence were confusing and vague. [25] Mr. Goldman testified that he spoke informally on various occasions with counsel from the office of the Attorney General of Canada who had carriage of the criminal prosecution about the possibility of a negotiated guilty plea by Prudenza to the Canadian charges. Mr. Goldman regarded the case against Prudenza as overwhelming. Mr. Goldman testified that the first time he spoke with the Crown, Crown counsel suggested a jail term that Mr. Goldman thought was excessive. On subsequent occasions when Mr. Goldman raised the possibility of a guilty plea with a negotiated sentence, Crown counsel indicated that he was not prepared to negotiate a guilty plea with Prudenza unless all of the accused were prepared to plead guilty. It would appear that Crown counsel took this position well before July 2003. As I read Mr. Goldman’s evidence, he never discussed the possibility of pleas by all the accused with the other counsel. There is also no evidence that Prudenza raised it with any of the other accused. [26] Mr. Goldman testified that Prudenza was very aware of the possibility of extradition to the United States from the moment the criminal charges were laid in Canada. Prudenza had previously been convicted of telemarketing fraud in the United States and knew that he faced far more serious penalties if extradited to the United States and prosecuted for fraud in that country. According to Mr. Goldman, Prudenza was anxious to avoid extradition, but also wanted to get the best deal he could from the Canadian authorities. [27] Mr. Goldman testified that he believed he could have persuaded Prudenza to plead guilty even if the Crown was not prepared to agree on a joint submission on sentence. Mr. Goldman never raised this possibility with Prudenza. Prudenza never instructed Mr. Goldman to enter a guilty plea on his behalf. [28] In cross-examination, Mr. Goldman made it clear that Prudenza appreciated the disclosure problems that had developed in the Canadian prosecution and that these problems could enure to his benefit. Mr. Goldman indicated that Prudenza was of two minds insofar as delays in the Canadian proceedings were concerned. He worried that the delay in disclosure could open the door for extradition to the United States, but he also thought that the delay could result in him getting a better deal on a guilty plea in the Canadian criminal proceedings. [29] Mr. Goldman’s evidence gives no air of reality to the allegation that the Crown refused to negotiate a plea with Prudenza as part of a strategy to keep the Canadian charges alive until the extradition request was forthcoming. There is nothing wrong with a Crown taking the position that it would negotiate guilty pleas only if all persons charged were prepared to plead guilty. Negotiated settlements are often justified at least in part because they save time and judicial resources. Those savings are significant in a case like this only if all accused plead guilty. [30] There is also no evidence that the Crown’s position, that it required pleas from all accused before agreeing to any negotiated sentence, was in any way connected to the extradition request. On Mr. Goldman’s evidence, the Crown took this position very early in the Canadian criminal proceedings. [31] Mr. Goldman’s evidence also confirms that Prudenza was aware of the risk of extradition and the possibility of avoiding that risk by pleading guilty to the fraud charges in Canada. The Crown did nothing to prevent Prudenza from pleading guilty had he chosen to do so. Prudenza did not testify on the motion, and I certainly will not assume that he did not understand that he could plead guilty in the criminal proceedings without the Crown’s permission. Mr. Goldman’s evidence describing Prudenza’s state of mind makes sense only if Prudenza was aware of the option of pleading guilty to the Canadian charges when and if he desired to do so. [32] According to Mr. Goldman, Prudenza was aware that using disclosure problems to delay the plea in Canada could assist him in the Canadian proceedings if he eventually pled guilty to those charges and also that the delay placed him in jeopardy of extradition to the United States. As Crown counsel suggested to Mr. Goldman in the course of her cross-examination, “He [Prudenza] wanted to take his chances.” Mr. Goldman agreed with this suggestion. [33] The evidence in support of the second factual claim underlying the abuse of process allegation, that the Crown disclosure “dried up” in July 2003 after the extradition request was made, is found in the correspondence among counsel involved in the Canadian criminal proceedings. Mr. Goldman was not involved in this correspondence and none of the other lawyers testified on the abuse of process motion. [34] The Crown provided substantial disclosure on the Canadian charges beginning in December 2002 through July 2003. Crown counsel provided some twenty volumes of disclosure in addition to a copy of a computer hard disk drive containing the contents of the various computer disks seized from the appellants during searches. In July 2003, and again in September 2003, counsel for two of the accused in the Canadian criminal proceedings wrote to Crown counsel demanding further and far reaching disclosure. In a letter dated December 3, 2003, Crown counsel with carriage of the Canadian criminal prosecution advised counsel for the accused that he was aware of the outstanding disclosure requests and that it was taking some time to formulate his response. On the same day, the Minister of Justice authorized the extradition proceedings. [35] This record lends no air of reality to the contention that the Crown stopped providing disclosure in July because it had decided in July that it would not proceed with the Canadian prosecution. The Crown had obviously spent a great deal of time and money providing disclosure up to July 2003. That disclosure was sufficient to demonstrate an overwhelming case against, at least, Prudenza involving a fraud of around $6,000,000. Despite the extensive disclosure, Crown counsel was met with wide ranging requests for further disclosure. It does not seem unreasonable to me that these requests would not necessarily attract the highest priority by the Crown, and would take some time to consider and to respond on behalf of the Crown. [36] Crown counsel’s letter of December 3, 2003 speaks for itself. The appellants did not call any evidence to contradict what Crown counsel said. It also makes no sense that Crown counsel would deliberately mislead defence counsel on the disclosure issue as of December 3, 2003. On that date, the authority to extradite was given and the extradition proceedings were underway. Clearly, the Canadian charges were not going to proceed. There was no point in misleading anybody about the Canadian criminal proceedings on December 3, 2003. [37] The allegation that the Crown deliberately stopped providing disclosure in July 2003 because it had decided that the Canadian proceedings would not proceed rests on mere speculation. Indeed, counsel for Prudenza on the extradition proceedings acknowledged as much in his submissions. [38] I would add a further observation. The appellants’ submissions seem to assume that it is improper for a Canadian prosecutor to maintain a Canadian criminal prosecution while a request for extradition is being considered by the Minister of Justice. I see nothing wrong with maintaining the Canadian criminal charges, assuming that they were brought bona fide, until the Minister decides whether to authorize extradition proceedings. As indicated in Larosa, supra, at para. 60, it is only after the Minister of Justice has authorized extradition proceedings that the Canadian charges on the same offences cannot remain outstanding. [39] I also would not fault the Crown prosecuting the Canadian charges if he or she delayed expending substantial time and resources on the Canadian prosecution until the Minister of Justice had decided whether to authorize proceeding with the extradition. This approach seems to be a common sense use of limited resources. It goes without saying that once criminal charges are before the court, it is ultimately the court and not the Crown that will determine the pace at which the charges proceed. However, if the Canadian charges ultimately do proceed and delay becomes an issue, the prosecution may be held accountable under the analysis required by s. 11(b) of the Charter for delays caused by its response to disclosure requests. IV DID THE MINISTER VIOLATE THE APPELLANTS’ CONSTITUTIONAL RIGHTS UNDER S. 6(1) OF THE CHARTER WHEN HE ORDERED THEIR SURRENDER? [40] The appellants are Canadian citizens and by virtue of s. 6(1) of the Charter have “the right to enter, remain in and leave Canada.” It is well recognized that extradition is a reasonable limit on the right set out in s. 6(1). Before surrendering persons for extradition, the Minister of Justice must conduct what is known as a “Cotroni assessment”. The assessment derives its name from the United States of America v. Cotroni (1989), 48 C.C.C. (3d) 193 (S.C.C.), where the court recognized that a person’s s. 6(1) rights were engaged on an extradition request and that the Minister was obligated to consider a variety of factors, including a person’s rights under s. 6(1), in determining whether the Minister should surrender that person to a foreign jurisdiction. [41] The appellants submit that the Minister misapplied Cotroni by ordering the appellants’ surrender because, in the Minister’s view, an American prosecution would be “more effective and reliable” than the Canadian prosecution. Counsel submit that under the Cotroni principle, provided prosecution in Canada is a viable or realistic option, s. 6(1) of the Charter requires that the Minister should decline to surrender citizens of Canada to foreign jurisdictions. The appellants further argue, assuming the Canadian prosecution was bona fide, that the very existence of that prosecution for over a year before the extradition was authorized demonstrates that prosecution in Canada was a realistic option. [42] The appellants argue that this court should review the Minister’s decision on a correctness standard because it engages the appellants’ constitutional rights under s. 6(1) of the Charter. In R. v. Lake, [2006] O.J. No. 3485 at para. 22 (Ont. C.A.), Laskin J.A. set out the standard of review applicable to the Minister’s surrender decision: I read these paragraphs to mean that in assessing a Charter claim, the Minister must apply the correct test or the correct legal principles; if the Minister does not do so then the surrender order will be reviewable on the correctness standard. If, however, the Minister applies the correct test, the weighing of the factors relevant to that test is entitled to deference. [43] The Minister’s reasons for surrendering the appellants demonstrate that he applied the correct test in deciding whether extradition would result in an unconstitutional infringement of the appellants’ right to remain in Canada. Consistent with a host of authorities, he recognized that myriad factors had to be addressed in making his surrender decision, including, but not limited to, the viability of prosecution for the offence in Canada: see e.g. U.S.A. v. Kwok, supra, at paras. 90-91; U.S.A. v. Cotroni, supra, at p. 225. [44] Since the Minister of Justice properly identified the applicable test, his weighing of the various factors relevant to the application of that test in the circumstances of this case is entitled to deference in this court: Canada (Minister of Justice) v. Thomson, [2005] O.J. No. 762 at para. 10 (Ont. C.A.). [45] The Minister was clearly influenced by the fact that the impact of the alleged fraud was felt entirely in the United States where all the victims were located. These same individuals will be necessary witnesses in the prosecution of these offences. The location of witnesses and the place where the harm caused by the alleged offence occurs are important considerations in determining whether to surrender a Canadian citizen for extradition: see U.S.A. v. Cotroni¸ supra, at p. 225. There were ample grounds upon which the Minister could exercise his discretion in favour of ordering the appellants’ surrender to the United States. V CONCLUSION [46] As indicated at the end of oral argument, the appeals of Prudenza and Dalglish are dismissed and their applications for judicial review are dismissed. RELEASED: “DD” “OCT 30 2006” “Doherty J.A.” “I agree Janet Simmons J.A.” “I agree Paul Rouleau J.A.”