COURT OF APPEAL FOR ONTARIO

CITATION: R v. Beauchamp, 2015 ONCA 260

DATE: 20150417

DOCKET: C51916, C51918, C51949, C52248

Cronk, Blair and Watt JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Henry Charles Beauchamp, Catherine Margaret Brunet,

Robert Cattral and Ravi Rabbi Shanghavi

Appellants

Stuart Konyer, for the appellant Henry Beauchamp

Ian Smith and Amy Ohler, for the appellant Catherine Brunet

Marie Henein and Christine Mainville, for the appellant Robert Cattral

Ian Carter, for the appellant Ravi Rabbi Shanghavi

Randy Schwartz, Peter Scrutton and Holly Loubert, for the respondent

Heard: October 14 and 15, 2014

On appeal from the convictions entered by Justice Robert J. Smith of the Superior Court of Justice, sitting without a jury, on November 16, 2009 and the sentences imposed on April 6, 2010, with reasons reported at [2009] O.J. No. 4872, and 2010 ONSC 1973.

BY THE COURT:

OVERVIEW

[1] The appellants were each convicted of a number of fraud-related offences arising out of a widespread credit and debit card skimming scheme. In addition, all except Mr. Shanghavi were convicted of participating in a criminal organization and committing an indictable offence for the benefit of a criminal organization. They received sentences ranging from 15 months’ to 7 years’ imprisonment.

[2] Crimes relating to fraudulent debit and credit card skimming schemes cost Canadians several hundred millions of dollars each year.

[3] All four appellants were involved in a business operated through Canadian Barcode and Plastic Card Supply Inc. Canadian Barcode sold devices and software used to transfer data from credit or debit cards onto fraudulent cards. The appellants Cattral and Brunet were the co-owners and founders of the company. The appellant Beauchamp was an employee, and the appellant Shanghavi was a customer.

[4] The charges against the four appellants arose out of a police investigation into the operations of Canadian Barcode, called “Project Instrument”.

[5] Project Instrument was initiated in 2002 after devices sold by Canadian Barcode were recovered by police in credit and debit card forgery schemes in Canada. The investigation was lengthy. It involved undercover operations, the input of confidential informants, physical surveillance of the targeted individuals and, eventually, authorized wiretap interceptions of their communications. The investigation concluded in July 2004.

[6] At that time, a number of search warrants were executed. Thousands of documents and other items were seized. During the course of the investigation, investigators had amassed many thousands of intercepted communications.

[7] The appellants and several other (then) co-accused were arrested.

[8] The Crown alleged that the appellants sold devices and materials through Canadian Barcode knowing the devices and materials were intended be used to forge credit cards, that they fraudulently possessed credit card data, that they forged and conspired to forge credit cards, and that they participated in the activities of and committed offences for the benefit of a criminal organization.[1] The Crown also alleged that the appellants carried on these activities with a common design and purpose of encouraging, facilitating and committing credit card fraud.

[9] The trial was lengthy and complex. There were a number of pre-trial motions, including an unsuccessful Garofoli application[2] to exclude the wiretap evidence and an unsuccessful challenge to the constitutionality of one of the sections of the “criminal organization” provisions in the Criminal Code. The trial itself extended over 45 days with over 500 wiretap intercepts and about 400 exhibits filed.

[10] At the conclusion of trial, the trial judge entered 36 convictions (on a 32-count indictment, although there were acquittals on some individual counts). None of the appellants was convicted on fewer than six counts.[3]

[11] The appellants contest their convictions. Their arguments fall into three categories:

• a) all attack the trial judge’s failure to exclude the wiretap evidence on the

Garofoli application;

• b) Cattral, Brunet and Beachamp contest their convictions on the “criminal

organization” charges; and

• c) all seek to overturn their convictions on certain counts relating to them

individually.

[12] In addition, all appellants contest the sentences imposed on them.

[13] For the reasons that follow, the conviction appeals are dismissed. The sentence appeals of Cattral and Brunet are also dismissed. Beauchamp’s sentence appeal is allowed in part, and Shanghavi’s sentence appeal is allowed in accordance with these reasons.

FACTUAL BACKGROUND

[14] Canadian Barcode operated openly out of offices in Ottawa, selling hardware, software and other supplies associated with magnetic stripe cards used in the credit card industry. Over the years, its principals, Cattral in particular, provided assistance to the RCMP and other police forces in relation to fraudulent credit card schemes.

[15] The appellants asserted that Canadian Barcode was a legitimate storefront business operation engaged in supplying product to people operating legally in the magnetic stripe card market. The Crown contended that Canadian Barcode’s operations were substantially a front for illicit trade in devices and materials that the appellants knew were being used in large scale credit card fraud.

[16] The evidence proved the Crown’s contention to be correct.

[17] Serious credit card fraud is a sophisticated type of crime involving a number of inter-related participants. These include: (i) those who manufacture devices used to acquire the data on magnetic stripes of credit cards; (ii) the distributors of those devices;

(iii) those who write software programs and provide technical assistance relating to the extraction and deciphering of the data from the devices; (iv) the end-users of the devices (usually retail sales workers, or others who install the devices on Automatic Teller Machines (“ATMs”)); (v) those who recruit the end-users of the devices; (vi) those who manufacture counterfeit cards and encode the cards with the stolen data; (vii) those who recruit “runners” or “shoppers” to use the fraudulent cards; and, (viii) the runners or shoppers themselves.

[18] The evidence showed that the appellants Cattral, Brunet and Beauchamp were in the upper echelons of this hierarchy. They were distributors of the devices, wrote software for the devices, and provided technical assistance to the users of the devices. Others involved in the scheme – including the appellant Shanghavi – fulfilled one or more of the manufacturing, recruiting, counterfeiting, encoding and recruiting roles. The following is a brief description of the devices and the parties involved in this case, and the roles they played.

The Devices and Software Programs

[19] The devices sold by Canadian Barcode were designed to be able to copy, read and store data found on the magnetic stripe on the back of credit cards. Some of the devices could be attached to ATMs in order to capture data from cards inserted into those machines. Others were designed to capture card information or data typed into a PIN pad at point of sale terminals in stores.

[20] The data captured by these devices could then be transferred onto a blank card with a magnetic stripe. Once the data was transferred, the person holding the blank card would essentially have a duplicate of the information on the original card – the cards were dressed up to look like legitimate bank cards – and could be used to make purchases or to withdraw cash from ATMs.

[21] A detailed description of the devices involved is not necessary. However, a reference to the following, which were sold by Canadian Barcode, may be useful for ease of reference. They are known as the MIR38, the KT100 (and its more advanced sibling, the KT104), the data loggers (data loggers #3207 and #3225 are particularly relevant), and the PMR600.

[22] The principal device was the MIR38.[4] It was designed by Specialty Sensor Technologies Inc. (“SST”) to be installed on an ATM so that it would fit over the normal card slot and still allow the credit card to pass through it into the ATM. When this occurred, the cardholder’s financial data would be read and stored by the MIR38, while at the same time the ATM would operate normally so that the cardholder would be unaware of the theft.

[23] The KT100 and the KT104 were the inner workings of the MIR38, developed with the assistance and advice of Cattral and Beauchamp. The KT104 was an upgraded device, improved after Beauchamp provided customer feedback to SST.

[24] A data logger – particularly relevant to Shanghavi’s charges – is a small electronic device that can record and store data keyed into the keyboard or keypad of a point of sale terminal and the information on a credit card if it is swiped through the point of sale terminal.

[25] Finally, the PMR600 – relevant to the charges relating to Beauchamp – is another small electronic device that can record and store the data contained on a card’s magnetic stripe when the card is swiped through the device. The PMR600, and others in the PMR series of devices, preceded the development of the MIR38. The devices were capable of storing the data of over 100 credit cards.

The Dramatis Personae

[26] Whatever legitimate activities it may have had, Canadian Barcode was a distributor and supplier of the devices, software and other related supplies to operatives lower in the skimming chain. These operatives purchased the items and used them to commit credit card fraud by performing some or all of the other tasks outlined above.

[27] Kurt Gehmlich and Greg Winslow designed, manufactured and sold skimming devices through their corporation, SST. Gehmlich and Winslow were originally charged as co-accused with the appellants, but the charges were withdrawn when SST pled guilty to a charge of selling devices knowing they were intended for use in forging credit cards. Gehmlich reluctantly testified as a Crown witness against the appellants. He acknowledged that he manufactured and sold skimming devices knowing they were sometimes used by fraudsters.

[28] Canadian Barcode was one of SST’s largest customers. The wiretap intercepts showed that Gehmlich and Winslow knew that Canadian Barcode’s customers were using SST’s skimming devices for fraudulent purposes.

[29] As we have said, Cattral and Brunet were the founders, owners and operators of Canadian Barcode. Beauchamp was an employee. In the division of labour that characterized the structure and operation of Canadian Barcode, each had their respective areas of responsibility.

[30] Cattral was the mastermind and the face of the operation to authorities and others, as well as the organization’s technical expert. He developed the RenCode software program (“RenCode”) that was a key tool and widely used in the forging of credit cards. He also provided technical assistance and advice to customers and suppliers and participated in the marketing and sales of devices. Brunet was responsible for the financial management of the organization and kept the financial

records; she was also involved in the marketing and sales of devices and at times provided technical assistance to customers. Beauchamp was dedicated to the sale of the devices, but also provided technical assistance to Canadian Barcode’s customers.

[31] We will refer to Cattral, Brunet and Beauchamp together, from time to time, as the “Canadian Barcode Group” or the “Group”.

[32] Canadian Barcode’s primary customers in the credit card skimming endeavour were Baruk Krespine, Gary Persaud and Ravi Shanghavi, although there were others as well. Krespine, Persaud and Shanghavi were lower-level operatives who used the devices sold to them by Canadian Barcode to acquire data from others’ credit cards, store the data, and transfer the data to counterfeit cards they had (or had caused to be) manufactured. In short, they were the recruiters, the counterfeiters and the encoders. Krespine and Persaud at least were major and prolific credit card fraudsters – Krespine in Montreal and Persaud in the Toronto area. Shanghavi was perhaps newer to the intrigue.[5]

The Business Records at Canadian Barcode

[33] Canadian Barcode used two different databases to keep track of its business records – the SSS database and the ACT database. Both were in electronic format and recorded information relating to sales of the various devices. The ACT database contained information about Canadian Barcode’s contacts and detailed customer interactions. The SSS database contained a record of sales and information about Canadian Barcode’s inventory. The SSS database entries were made beginning in 1999 and continuing to April 2004.

[34] The Crown sought to have these databases, along with other documents seized from Canadian Barcode’s offices and SST, admitted at trial for the truth of their contents. The defence opposed admission of the SSS database. The trial judge held the SSS database admissible for the truth of its contents against Cattral and Brunet – because it was in their possession and control – but not against Beauchamp or Shanghavi, as neither possessed the database.

What the Evidence Showed

[35] The wiretap intercepts demonstrate frequent contacts among Krespine, Persaud and Shanghavi, and as between Cattral, Brunet and Beauchamp and those individuals. A large proportion of the over 500 intercepts that were made exhibits at trial contain conversations, involving various combinations of them all, about credit card fraud.

[36] The evidence establishes that Cattral, Brunet and Beauchamp were aware that Krespine, Persaud and Shanghavi were engaged in illegal activities. Not only were they

aware of these activities, but Cattral, Brunet and Beauchamp actively took steps to assist their customers in these illicit activities beyond the sale of devices. They did so in a number of ways:

• a) They provided technical support and expertise on ways to commit credit card

crime. For example, Cattral assisted Shanghavi by providing an updated version of

software and other advice to assist in solving a problem relating to the “dumping” of

data from a data logger. Beauchamp similarly provided Shanghavi with technical

assistance. Cattral helped Persaud to get a time-stamped data logger to work.

These data loggers allow fraudsters to correlate information skimmed from credit

cards with corresponding images from adjacent pin-hole cameras that capture a

user’s PIN number. Brunet advised Shanghavi about a problem he was having

printing cards from his specialized card printer.

• b) They used aliases and nicknames in their conversations and in Canadian

Barcode’s sales records to conceal the names of their customers (Persaud was

“Steve”, “Sean Brown” or simply “G”; Shanghavi was “Shylok”; Krespine was

“Daniel”, “Wheeler” or “Hill”).

• c) They provided introductions and promoted continuing connections among the

criminal actors involved in the scheme. Cattral and Brunet introduced Shanghavi to

Ghemlich and Winslow at SST; Cattral organized a meeting at the Canadian

Barcode premises where he and Brunet introduced Shanghavi and Persaud to

Krespine, in part at least to facilitate further contact and a working relationship

among the three. The wiretap intercepts reveal regular communications among all

these individuals, passing along contact information and details and alerting each

other to potential problems with their products and even to potential incidents of

police surveillance.

• d) They offered preferential pricing and even extended credit to known

fraudsters, including Shanghavi and Persaud, and avoided identifying their

customers in transaction records by completing their sales in cash.

• e) Cattral, Brunet, Beauchamp, Krespine, Persaud and Shanghavi put

additional measures in place to conceal and protect their illegal activities. They

shared intelligence relating to the identities of suspected confidential informants as

well as information about police surveillance and counter-surveillance techniques

and bank anti-fraud countermeasures. Cattral warned Shanghavi that one of “his”

devices (data logger #3225, sold to him by Canadian Barcode) had been seized by

police (information he had learned from the RCMP) and gave advice on how to avoid

detection. In various combinations, Cattral, Brunet, Beauchamp, Krespine, Persaud

and Shanghavi also worked together to determine who was responsible for the theft

of a laptop computer and a card printer stolen from Krespine; assisted an American

customer of Canadian Barcode to retrieve a parcel containing an MIR38 device that

he believed was being watched by American authorities; and may have arranged for

a lawyer to provide counsel on the arrest to two operatives in the scheme.

• f) Significantly, just prior to the arrests, Cattral was inadvertently tipped off by

an Ottawa journalist about a planned police raid the following day. He spoke to

Brunet about it and, with Cattral’s agreement, she immediately contacted Shanghavi

and Persaud to warn them. She told Persaud that the Canadian Barcode Group

planned to remove all stock by the next day and shut everything down. She also told

Shanghavi in an MSN chat that she was giving him a warning about someone

getting busted the next day and that they were “cleaning out this place tonight”.

• g) The police became aware of Brunet’s calls. Two hours after her chat with

Shanghavi, a police tactical unit raided the Canadian Barcode premises and

arrested Cattral, Brunet and Beauchamp. Because of Brunet’s tip, Persaud – who

took immediate flight – was able to avoid arrest for another six months.

Concessions at Trial

[37] At trial, Brunet consented to a finding of guilt with respect to Count 7 (the sale of a data logger and plastic cards to Persaud) and Count 12 (the sale of the MIR38 portable magnetic stripe reader). The trial judge said that Brunet had also consented to a finding of guilt with respect to Count 15 (concerning the sale of magnetic stripe readers), but she disputes this.

[38] Beauchamp invited findings of guilt (but did not formally plead guilty) on Counts 12 and 15. Both counts related to the sale of magnetic stripe readers knowing they were intended for use in forging credit cards, contrary to s. 342.01(1)(b) of the Criminal Code.

Project Instrument

[39] Project Instrument began in December 2002.

[40] For some time prior to that, Det. Andrew Buchan of the Ottawa Police Service had been collecting materials and looking at the activities of Cattral and Canadian Barcode. In September 2002, he obtained and executed a general warrant seeking access to Canadian Barcode’s bank records. He believed these records would: (i) provide police with information identifying Canadian Barcode customers who might be engaging in fraudulent credit card use; and (ii) provide them with more information about Canadian Barcode, Cattral and Brunet.

[41] The records seized proved to be less useful than expected. Project Instrument – drawing in a wider range of police officers – was set up as the next stage in the investigation. It involved further investigations culminating in the decision to try to obtain an authorization for wiretap interceptions. By that time, Det. Sgt. Marc Bedard of the Ontario Provincial Police had come on board.

[42] During the course of Project Instrument, and prior to seeking the wiretap authorization, the investigators did the following:

• a) They obtained information from at least five confidential informants relating to

the interactions among Canadian Barcode, the Canadian Barcode Group,

Shanghavi, Persaud and his parents and other credit card skimming fraudsters.

• b) They obtained various occurrence and arrest reports regarding the targets of

the investigation.

• c) They conducted background checks on corporate clients of Canadian

Barcode.

• d) They searched the premises of a former employee of Canadian Barcode,

Darcy Petersen, where they seized a wide array of equipment designed for the

commission of credit card offences.

• e) They conducted surveillance on various targets.

• f) They obtained a preliminary accounting report based on the banking records

seized earlier.

• g) They attempted two undercover approaches to Cattral at a night club, but did

not otherwise pursue that type of option because their information was that Cattral

was very cautious about who he dealt with in such situations.

[43] As a result of these efforts, Project Instrument had yielded at least the following information that the police believed to be true, according to the material filed in support of the application to obtain the wiretap authorization:

• a) Canadian Barcode, the Canadian Barcode Group, Shanghavi, Persaud and

members of Persaud’s family, together with others, were all engaged in activities

involving the purchase, sale and use of fraudulent credit card skimming devices and

related materials (including the RenCode software program).

• b) Cattral, Brunet, Beauchamp and Persuad all had lengthy histories of being

implicated in skimming offences relating to the use of these products (Cattral was

said to have described himself as “one of the top ten fraudsters in Ottawa”, and had

been implicated by police in at least five separate skimming offences between 1995

and 1999; Brunet was implicated in three sets of offences between 1997 and 1999;

Beauchamp had a history of three charges for using forged credit cards; and

Persaud had what the Crown accurately called “a relentless pattern of criminal

offences” in that milieu).

• c) Cattral, Brunet, Beauchamp and Persaud were all closely associated with

each other as well as with other credit card skimming fraudsters.

• d) The devices and equipment sold by Canadian Barcode were both capable of

being used to commit credit card fraud and were regularly being used for that

purpose in Canada, the United States and overseas.

• e) Cattral and others at Canadian Barcode knew, as a result of repeated

forewarnings from law enforcement agencies, that their devices and equipment were

being used for those purposes.

• f) The affairs of Canadian Barcode were structured in a way that lent itself to

the commission of credit card skimming fraud (many large transactions were

conducted on a cash basis or using Western Union, and financial records were

unrevealing).

The Section 185 Wiretap Application

[44] On March 30, 2004 – with the background of these investigative results – the police sought authorization under Part VI of the Criminal Code to intercept the private communications of the targeted group – Cattral, Brunet, Beauchamp, Persaud and his parents, Petersen and several other “known targets”. Shanghavi was not included among either the “known targets” or “other known persons” categories. Authorization was also sought for a basket clause permitting the interception of private communications of persons whose identities were then unknown, provided they originated communications with a “known target” or “other known person”, or were found at one of 26 different “locations” (residences, vehicles, a cellular phone and a pager of the 7 targets and 10 known persons).

[45] The offences specified in the application were: fraud; forgery; theft, forgery, possession, use and/or trafficking in credit cards or forged credit cards; possession of property and proceeds of property obtained by crime; and conspiracy, attempt, counselling, procuring and inciting the commission of any listed offence.

[46] Det. Sgt. Bedard swore the supportive affidavit required by s. 185(1) of the Criminal Code in support of the application for authorization. He provided an overview of “Project Instrument”, identified Cattral and Brunet as active participants in credit card frauds since the mid-90’s and described the nature of their activities. He noted their prior arrests for various offences, including the use of forged credit cards and possession of fraudulent cards.

[47] Det. Sgt. Bedard described the purpose of the investigation in these terms:

This investigation will venture to identify the owners and employees of Canadian Barcode and Plastic Card Supply, as knowingly supplying the criminal element including the PERSAUD family and its associates with the goods, specialized criminal knowledge and experience in accomplishing payment card fraud.

[48] The specific investigative goals of the operation were said to be the following:

• a) to identify the owners and employees of Canadian Barcode who were

knowingly facilitating credit card skimming offences;

• b) to allow investigators to gather evidence that would reveal the roles and the

degree of involvement of the conspirators involved in the crimes;

• c) to determine the magnitude of the operation and its resulting proceeds; and

• d) to identify active and currently unknown forged credit card manufacturers,

traffickers, and users.

[49] The affidavit was based principally on information and belief since Det. Sgt. Bedard was not directly involved in the investigation. Among the sources of information on which he relied to satisfy the requirements of s. 186(1) of the Criminal Code were:

• a) the Director of Risk and Security for a major credit card company;

• b) five confidential informants, all involved in credit card fraud;

• c) police occurrence reports; and

• d) physical surveillance of the principals.

[50] Det. Sgt. Bedard relied on information provided by the Director of Risk and Security to explain the credit card manufacturing process and the steps followed by fraudsters to produce forged credit cards, including how they surreptitiously obtained essential information from legitimate cards, purchased blank cards with a magnetic strip, and printed and embossed the essential features of a legitimate card on a forged card.

[51] From information provided by confidential informants, themselves involved in credit card fraud, Det. Sgt. Bedard described the nature and extent of the involvement of Cattral and Brunet in credit card fraud, including but not limited to the sale and supply of devices necessary to commit the offences and their knowledge of their use for fraudulent purposes.

[52] From information obtained from police occurrence reports, Det. Sgt. Bedard described investigations, arrests and seizures that had occurred in the decade immediately prior to the authorization being sought. These reports related to the activities of the known targets in Canada and elsewhere.

[53] Det. Sgt. Bedard included a summary of the bases upon which he contended that the probable cause requirement of s. 186(1)(a) of the Criminal Code had been met, then explained why several alternative investigative procedures had been tried and failed or were unlikely to succeed in achieving the investigative goals being pursued. The alternatives included:

• a) informants;

• b) undercover officers or agents;

• c) Crimestoppers tips;

• d) search warrants;

• e) physical surveillance;

• f) tracking warrants;

• g) interviews;

• h) forensic analysis; and

• i) lineups.

The Section 186 Wiretap Authorization

[54] The authorization was granted by a judge of the Superior Court of Justice on March 31, 2004 and later renewed by another judge of the same court. The authorization recited satisfaction of the conditions precedent of probable cause and investigative necessity on the basis of Det. Sgt. Bedard’s affidavit. The requirement of investigative necessity referred to the above-mentioned investigative procedures as having been tried and failed or as unlikely to succeed.

[55] The authorization permitted interceptions in relation to the various credit card related offences listed in the application. However, it did not permit interceptions in relation to the offence of dealing in instruments or things for copying credit card data or forging or falsifying credit cards under s. 342.01(1) of the Criminal Code. At the time the authorization was granted or renewed, s. 342.01(1) was not an “offence” as defined in s. 183 of the Criminal Code.

[56] Over the course of a four-month period, the police intercepted many thousands of private telephone and Internet-based “chats”. As indicated earlier, over 500 of the intercepts were made exhibits at trial.

The Garofoli Application

[57] The trial judge permitted trial counsel for the appellants to cross-examine the affiant on several issues related to the probable cause and investigative necessity requirements, including whether Det. Sgt. Bedard had misled the authorizing judge by seeking an authorization for various listed offences when the true purpose of the investigation was to gather evidence about an offence (s. 342.01(1) of the Criminal Code) for which an authorization could not then have been granted. The trial judge also permitted cross-examination on the issue whether Shanghavi was a “known person” who should have been included in the authorization either as a “known target” or as an “other known person”.

[58] In cross-examination, Det. Sgt. Bedard explained that he first became involved in Project Instrument in May 2003, sometime after the investigation had begun. He met with investigators and reviewed the investigative file to assess whether an application

should be made for an authorization to intercept private communications. He was not involved in the ongoing investigation, only in an assessment whether a Part VI authorization application could or should proceed.

[59] Det. Sgt. Bedard testified that he began drafting the supportive affidavit around May 20, 2003. He explained that his final assessment about whether to proceed with the application was not made until the affidavit had been completed. He was well aware that an authorization could not be sought, much less granted, for an offence under s. 342.01(1) of the Criminal Code.

[60] Det. Sgt. Bedard acknowledged that much of the information provided by confidential informants and police occurrence reports related to activities involving the appellants over several years prior to 2003. He testified that despite the stale nature of some of the information, it was also clear that similar activities continued through the operation of Canadian Barcode.

[61] Ultimately, the trial judge was satisfied that there was evidence before the issuing judge and the renewing judge on which they could have found the requirements of s. 186(1) met, and thus could have issued and renewed the authorization, despite some errors and omissions in the affidavit.

[62] The trial judge also concluded that Shanghavi should have been named as a “known person” in the authorization. He later held that, due to the failure to name Shanghavi, the interception of Shanghavi’s private communications offended s. 8 of the Canadian Charter of Rights and Freedoms. However, he admitted them as evidence under s. 24(2) of the Charter.

THE GROUNDS OF APPEAL

I. The Conviction Appeals

(1) The Wiretap Authorization Grounds

[63] At trial, over the objections of trial counsel for the appellants, Crown counsel tendered, and the trial judge admitted, several private communications intercepted under the authorization. The admissibility of this evidence is the focal point of two grounds of appeal.

[64] The first two grounds, common to all appellants, is that the authorization was improvidently granted, and that the trial judge erred in dismissing the Garofoli application. The appellants say that the supportive affidavit, as amplified on review, failed to demonstrate either the probable cause or investigative necessity requirements

that are conditions precedent to the granting of an authorization under s. 186(1) of the Criminal Code.

[65] The third ground, unique to Shanghavi, is that, having decided that the interception of Shanghavi’s private communications offended s. 8 of the Charter, the trial judge erred in failing to exclude the intercepted private communications involving Shanghavi under s. 24(2) of the Charter.

(2) The “Criminal Organization” Ground

[66] Cattral, Brunet and Beauchamp seek to set aside their convictions for having participated in the activities of a criminal organization (s. 467.11(1) – stayed on Kienapple grounds)[6] and committing an offence for the benefit of a criminal organization (s. 467.12(1)).

[67] They contend that the trial judge misinterpreted the criminal organization provisions in the Criminal Code by:

• a) failing to recognize that the Canadian Barcode Group did not have a

sufficient level of continuity and cohesion to meet the organizational prerequisite for

a criminal organization as defined in s. 467.1; and

• b) failing to require the Crown to lead evidence proving, on the basis of a

quantitative comparison between the legitimate and illegal components of their

business, that the illegal components constituted “one of the main purposes or main

activities” of the Group.

[68] In addition, Cattral, Brunet and Beauchamp argue that the trial judge compounded the foregoing errors by reversing the onus of proof and placing the burden on them to adduce the type of quantitative evidence referred to above.

(3) The Individual Grounds of Appeal

Shanghavi and Cattral

[69] Shanghavi and Cattral appeal their convictions on a number of counts relating to the fraudulent possession of credit card data, contrary to s. 342(3) of the Criminal Code. They argue that their possession of the data could not have “enabled” use of the

data because the cards from which the data had been obtained were unusable at the time.

Brunet

[70] Brunet appeals her convictions on Count 6 (conspiracy) and Count 15 (selling devices knowing they were intended for use in forging credit cards).

[71] With respect to the conspiracy charge, she argues that the trial judge erred generally in finding there was an agreement between her and Persaud to commit the offence of forging credit cards and, in particular, that he erred by inferring the existence of such an agreement from his findings of other common designs for evidentiary purposes.

[72] With respect to the charge of selling devices, Brunet submits that the trial judge erred in recording that she had conceded a finding of guilt. As a result, she says she was denied a hearing on the merits of the charge because the trial judge did not deal with any of the submissions relating to it.

Beauchamp

[73] Beauchamp appeals from his conviction on Count 9 (sale of a device – the PMR600 – knowing that it was intended for use in forging credit cards).

[74] He argues that a conviction could not be entered on that count because, although the device was sold to an undercover officer posing as a criminal looking to purchase the device to commit fraud, the undercover officer clearly never intended to do any such thing.

Shanghavi

[75] In addition to the grounds relating to him, set out above, Shanghavi appeals from his convictions on Counts 19 and 21. Both counts alleged that he was in possession of devices (data loggers #3207 and #3225) knowing they were intended for use in forging credit cards.

[76] The main complaint with respect to the conviction on Count 21 is that the trial judge improperly inferred from Shanghavi’s silence during communications with Cattral that he admitted to possessing the data logger. On both counts, he argues the trial judge relied on inadmissible evidence and erred in his approach to the co-conspirators’ exception to the rule against hearsay.

II. The Sentence Appeals

[77] The appellants received the following sentences:

• a) Cattral – a total of seven years’ imprisonment (four years concurrent on most

of the non-criminal organization convictions, six months concurrent on the

obstruction of justice conviction, and three years consecutive for the criminal

organization conviction, half of the latter to be served before parole), plus a $40,000

fine in lieu of forfeiture.

• b) Brunet – a total of four years’ imprisonment (two years concurrent on most of

the non-criminal organization convictions, one month concurrent on the breach of

recognizance conviction, and two years consecutive for the criminal organization

conviction, half of the latter to be served before parole), plus a fine of $40,000 in lieu

of forfeiture.

• c) Beauchamp – a total of two years’ and nine months’ imprisonment (the latter

reflecting the consecutive sentence imposed for the criminal organization conviction,

half to be served before parole).

• d) Shanghavi – 15 months’ imprisonment, plus three years’ probation.

[78] They all seek leave to appeal and, if leave is granted, appeal their sentences.

ANALYSIS – THE CONVICTION APPEALS

I. THE WIRETAP AUTHORIZATION GROUNDS

A. THE GOVERNING PRINCIPLES

[79] Before considering the specific allegations advanced by the appellants, a brief reminder about some aspects of the procedure followed on applications for authorizations and the scope of authorization review is warranted.

(1) The Authorization Process

[80] Section 186(1) of the Criminal Code reads as follows:

186. (1) An authorization under this section may be given if the judge to whom the application is made is satisfied

(a) that it would be in the best interests of the administration of justice to do so; and

(b) that other investigative procedures have been tried and have failed, other investigative procedures are unlikely to succeed or the urgency of the matter is such that it would be impractical to carry out the investigation of the offence using only other investigative procedures.

[81] Based on this provision, authorizations to intercept private communications require satisfaction of two conditions precedent:

• a) probable cause (s. 186(1)(a)); and

• b) investigative necessity (s. 186(1)(b)).

Both have roots in the supportive affidavit required by s. 185(1). Indeed, it is this affidavit, and only this affidavit, that provides the evidentiary support that underpins the conditions precedent imposed by s. 186(1). The affidavit may be based on information and belief. Its contents are not confined to the firsthand knowledge of the affiant.

[82] An authorization does not issue as of right upon satisfaction of the conditions precedent in s. 186(1). The opening words of the subsection – “An authorization under this section may be given” – are permissive, not mandatory.

[83] Applications for authorization are made ex parte by a specially designated agent. The ex parte nature of the application imposes an obligation on the affiant to provide full and frank disclosure of facts material to the granting of the authorization: R. v. Araujo, 2000 SCC 65, [2000] 2 S.C.R. 992, at para. 46. Ideally the affidavit should be clear and concise and not attempt (by errors, strategic omissions or the use of boilerplate language) to confuse or deceive its reader, or obscure or mischaracterize the true state of affairs: Araujo, at paras. 46-47. The affidavit need not describe in detail every step taken in the underlying investigation: Araujo, at para. 46.

(2) The Garofoli Review

[84] A Garofoli hearing is held before the trial judge to determine whether the authorization complies with s. 8 of the Charter : Garofoli, at pp. 1451-1452; R. v. Pires; R. v. Lising, 2005 SCC 66, [2005] 3 S.C.R. 343, at para. 6. The reviewing judge must determine whether the interceptions constituted an unreasonable search or seizure. To

make this determination, the reviewing judge must decide whether the statutory conditions precedent to the issuance of the authorization have been met: Pires; Lising, at para. 8.

[85] The Garofoli hearing is based on the documents relating to the authorization, including the supportive affidavit, any additional evidence that may be received on the hearing and the submissions of counsel: Pires; Lising, at para. 8. The review begins from a presumption that the authorization is valid: Pires; Lising, at para. 30; R. v. Ebanks, 2009 ONCA 851, 249 C.C.C. (3d) 29, at para. 21, leave to appeal to S.C.C. refused, [2010] S.C.C.A. No. 84; R. v. Sadikov, 2014 ONCA 72, 305 C.C.C. (3d) 421, at para. 83. The review involves a contextual analysis, not a piecemeal approach to individual items of evidence shorn of their context: Sadikov, at para. 87.

[86] The reviewing judge does not stand in the same place or perform the same function as the authorizing judge. The reviewing judge does not conduct a re-hearing or substitute his or her view for that of the authorizing judge. The issue is not whether the supportive affidavit in fact satisfies the probable cause requirement in s. 186(1)(a) of the Criminal Code.

[87] The reviewing judge considers the record that was before the authorizing judge, often redacted, as here, so as not to disclose the identity of confidential informants, and as amplified on the review. The task for the reviewing judge, as framed by Garofoli and subsequent authorities, is to determine whether on the supportive affidavit, as amplified by evidence adduced on the review, there was sufficient reliable evidence that might reasonably be believed on the basis of which the authorizing judge could have concluded that the probable cause requirement had been met: Garofoli, at p. 1452; Araujo, at paras. 51 and 54; Ebanks, at para. 20; R. v. Morelli, 2010 SCC 8, [2010] 1 S.C.R. 253, at para. 40.

[88] On a Garofoli hearing, even if it is established that information contained in the supportive affidavit is inaccurate or omits material facts, it does not follow that the statutory requirements have not been met: Garofoli, at p. 1452; Araujo, at para. 54; Pires; Lising, at para. 30. The merits of any of the Crown’s allegations about the offence are of no moment to the judge presiding on the Garofoli hearing. The truth of the allegations asserted in the affidavit about the essential elements of the offence is for the trier of fact to determine based on the evidence properly received at trial: Pires; Lising, at para. 30.

[89] On appeal, we owe deference to the findings of fact made by the reviewing judge in his or her assessment of the record, as amplified on review, as well as to his or her disposition of the s. 8 Charter challenge. Absent an error of law, a misapprehension of material evidence or a failure to consider relevant evidence, we should decline to interfere: Sadikov, at para. 89; Ebanks, at para. 22; R. v. Grant (1999), 132 C.C.C. (3d) 531 (Ont. C.A.), at para. 18, leave to appeal to S.C.C. refused, [1999] S.C.C.A. No. 168.

(3) The Probable Cause Requirement: s. 186(1)(a)

[90] The first requirement imposed by s. 186(1)(a) of the Criminal Code as a condition precedent to the authority to grant an authorization is that the order must be “in the best interests of the administration of justice”. In the search and seizure jurisprudence that has developed since the proclamation of the Charter, this requirement is described as that of probable cause.

[91] Section 186(1)(a) coincides with the minimum constitutional requirement mandated by Hunter v. Southam Inc., [1984] 2 S.C.R. 145. The statutory language – “it would be in the best interests of the administration of justice to [grant an authorization]” – is the equivalent of “reasonable and probable grounds to believe that an offence has been, or is being, committed and that the authorization sought will afford evidence of that offence”: R. v. Duarte, [1990] 1 S.C.R. 30, at p. 45; Garofoli, at p. 1444; R. v. Mahal, 2012 ONCA 673, 292 C.C.C. (3d) 252, at paras. 40 and 68, leave to appeal to S.C.C. refused, [2012] S.C.C.A. No. 496.

[92] Thus, an essential constituent of the probable cause requirement is a reasonably grounded belief that a listed offence has been or is being committed. This does not require establishing a prima facie case, much less proving beyond a reasonable doubt, or even on a balance of probabilities, that an offence has been committed: R. v. Wong, 2011 BCCA 13, 268 C.C.C. (3d) 37, at para. 20, leave to appeal to S.C.C. refused, [2011] S.C.C.A. No. 90. That is for the trier of fact to decide on relevant, material and admissible evidence adduced at trial.

[93] The interception of private communications is an investigative technique or tool to record words spoken by various individuals. What the speakers say may afford evidence about the commission of an offence, or an individual’s participation in it. The words sought for capture do not exist when the authorization is granted. They may never exist or disclose anything of relevance to any offence under investigation. By nature, the subject-matter sought – communications about an offence – is speculative. The probable cause analysis must take cognizance of this reality.

(4) The Investigative Necessity Requirement: s. 186(1)(b)

[94] Section 186(1)(b) of the Criminal Code creates the investigative necessity requirement and establishes its place as a condition precedent to the authority to grant an authorization to intercept private communications. By its terms, the investigative necessity requirement may be satisfied in any one or more of three ways:

• a) trial and failure of other investigative procedures;

• b) unlikelihood of success of other investigative procedures; or

• c) urgency and corresponding impracticality of other investigative procedures.

[95] Where the case for investigative necessity is advanced on the basis of the unlikelihood of success of other investigative procedures, an applicant must demonstrate that, practically speaking, there is no other reasonable alternative method of investigation in the circumstances of the particular criminal inquiry: Araujo, at para. 29; Mahal, at para. 41.

[96] This interpretation of the second branch of the investigative necessity requirement is based on the text of the provision, read with simultaneous awareness of two potentially competing considerations:

• a) the principle of statutory interpretation that requires reading the words of a

statute in their entire context, and in their grammatical and ordinary sense, in

harmony with the scheme and object of the Act and the intention of Parliament; and

• b) an awareness of the competing values of enabling criminal investigations and

protecting privacy rights.

See Araujo, at para. 26.

[97] The language of the second branch of the investigative necessity requirement must not be read in a vacuum. Rather, it must be read together with the other branches. The term “unlikely” is not to be read weakly, but in its context in light of the competing values at work and how any particular investigation meshes with these values: Araujo, at para. 28. The language is to be read in a common sense way taking into account not only the nature, but also the purpose, of the proposed investigation: Araujo, at para. 29.

[98] As the second and third branches of the investigative necessity requirement demonstrate, authorizations may issue even where other investigative techniques or procedures have not been pursued. The unlikelihood of success of other investigative procedures may arise because:

• a) the other procedures would be unlikely to reveal key information about the

participants or the nature and extent of their involvement;

• b) the other procedures may be ineffective against the targets because of the

nature of their organization, the closeness of their association or the nature of their

offences; or

• c) counter-surveillance methods used by the targets may make certain

techniques unlikely to succeed.

See Araujo, at paras. 33 and 41.

[99] The investigative objective informs the analysis of investigative necessity: Araujo, at para. 43; R. v. Lajeunesse (2006), 208 O.A.C. 385, at para. 17; R. v. Schreinert (2002), 165 C.C.C. (3d) 295 (Ont. C.A.), at para. 39.

[100] The investigative necessity requirement relates to the investigation as a whole, not to individual targets. The supportive affidavit need not demonstrate investigative necessity on an individual target basis: R. v. Tahirkheli (1998), 130 C.C.C. (3d) 19 (Ont. C.A.), at para. 4; R. v. Wasfi, 2006 BCCA 55, 206 C.C.C. (3d) 203, at paras. 34-35; R. v. Pham, 2002 BCCA 247, 165 C.C.C. (3d) 97, at paras. 85-86; and Mahal, at para. 42.

[101] That police investigators anticipate at an early stage of an investigation that they will need to apply for an authorization to intercept private communications does not mean they cannot invoke the second branch of investigative necessity when they seek an authorization: Wasfi, at para. 49. Nor are investigators required to try every alternative investigative technique or procedure: Araujo, at para. 34.

[102] Lastly, the investigative necessity requirement may well anticipate the vicissitudes of proof in a criminal trial. The requirement is not incompatible with the use of authorized interceptions to confirm the evidence of a tainted witness or to add strength to the prosecution’s proof: R. v. Rosebush, 1992 ABCA 293, 77 C.C.C. (3d) 241, at p. 248, leave to appeal to S.C.C. refused, [1992] S.C.C.A. No. 509.

(5) The Obligation to Identify “Known Persons”

[103] Section 185(1)(e) requires the affiant to include:

[T]he names, addresses and occupations, if known, of all persons, the interception of whose private communications there are reasonable grounds to believe may assist the investigation of the offence.

Under s. 186(4)(c), the authorization must:

State the identity of the persons, if known, whose private communications are to be intercepted.

[104] The Criminal Code distinguishes between “known” and “unknown” persons in ss. 185(1)(e) and 186(4)(c). The same test – that of “may assist” – applies to both. In other words, there are two categories of persons who may be the object of interceptions:

“knowns” and “unknowns”. The categories are mutually exclusive. There are not two categories of “known persons”.

[105] The threshold for naming a person in an affidavit and authorization is not onerous. Reasonable grounds to believe that a person is involved in an offence under investigation are not required. Nor is it essential that there are reasonable grounds to believe that the interception of a person’s private communications will afford evidence of a listed offence. Investigators must know a person’s identity and have reasonable grounds to believe that the interception of that person’s private communications may assist in the investigation of an offence to trigger the identification or “known person” requirement: R. v. Chesson, [1988] 2 S.C.R. 148, at p. 164; Mahal, at paras. 70-73.

B. DISCUSSION

(1) Probable Cause

[106] The appellants say the trial judge erred in failing to consider whether the affidavit, as amplified on review, could establish a reasonably grounded belief that the listed offences were being committed on an ongoing basis. The appellants submit that the offences being investigated were those of s. 342.01(1) of the Criminal Code for which an authorization was not available at the time it was granted. The relevant materials failed to support any current connection between the appellants and those who committed the listed offences as principals.

[107] The appellants contend that, at best, the evidence disclosed that they operated a legitimate business that sold devices that could be used, by those who were minded to do so, for illegal purposes. Indeed, some of their devices had been used by others for such illegal purposes. But, the appellants say that no current information linked them, by passing on the required expertise, to the crimes of others. In other words, merely selling legal devices that could then be used for illegal activity was not sufficient to establish the grounds of an offence. The trial judge, on the Garofoli review, failed to direct his mind to whether the necessary nexus had been established and thus erred in holding that the evidence could sustain a finding of probable cause.

[108] We disagree.

[109] There is ample evidence in the affidavit, as amplified on review, to support a reasonably grounded belief by the reviewing judge that the authorizing judge could have concluded that the “known persons” listed in the authorization were conspiring to commit credit card skimming offences (or in other words, that the probable cause requirement had been met in connection with one or more of the listed offences).

[110] The targets all had significant criminal histories for credit card skimming fraud. Cattral, Brunet and other Canadian Barcode staff were closely associated with a

career credit card fraudster, Persaud, his parents and other credit card skimming fraudsters. The evidence disclosed that devices and equipment sold by Canadian Barcode were at once capable of use in credit card fraud and, to the knowledge of the appellants, were regularly used for that purpose. The devices and equipment were specifically designed to appeal to fraudsters and to facilitate credit card fraud. Indeed, the structure of Canadian Barcode’s business – cash only transactions without invoices – facilitated the commission of credit card fraud.

[111] Finally, contrary to the appellants’ submissions, the conduct alleged was not “dated” in the sense that there was no evidence that the offences were continuing when the authorization was sought.

[112] Canadian Barcode, the hub of the conspiracy, continued to operate and make available on an ongoing basis the devices, equipment and expertise essential to the commission of the offences. Confidential sources confirmed the continuing criminal activities of the principals and an anonymous tip, less than two weeks old, confirmed Cattral’s recruitment of shoppers to purchase things with fake credit cards.

[113] However, even without this evidence, it would have been open to the authorizing judge to infer current criminality from past criminality in the circumstances disclosed by the evidence in the affidavit. In considering the capacity of the evidentiary predicate to ground a finding of probable cause, it is important to keep in mind the investigative objective and the nature of the alleged criminality involved. Ongoing criminal enterprises do not come into existence, nor do they disappear overnight. Information that seems dated at first blush can retain its relevance.

[114] This probable cause ground of appeal fails.

(2) Investigative Necessity

[115] The appellants contend that the resort to interception of private communications was premature. They submit that the reviewing judge erred in concluding there was any basis in the amplified record on which the authorizing judge could have found that the investigative necessity requirement had been established.

[116] Again, we disagree.

[117] The appellants advance three broad errors in the trial judge’s consideration of the “unlikely to succeed” branch of investigative necessity. First, the trial judge effectively (and erroneously) held that, if other investigative means did not meet all the investigative goals established by the investigators, then those means were unlikely to succeed and investigative necessity was established. Second, even if the alternative investigative means needed to meet all the investigative goals, this requirement was met. Other investigative means, such as undercover approaches to Cattral, could have met the overall investigative goals. Third, the trial judge erroneously decided that other

investigative means were unlikely to succeed in the absence of any evidence that those alternatives had even been tried. Accordingly, the resort to interception of private communications was premature and failed to meet the standard of investigative necessity set by s. 186(1)(b).

[118] We reject these arguments. It is essential not to lose sight of the substance of the investigative necessity requirement. It may be satisfied in any one of three ways. It is not a technique of last resort, as seems at least implicit in the appellants’ submissions, but one of practical necessity in light of the investigative objectives. The police do not need to exhaust every investigative procedure that defence counsel submits was available to them. Were it so, no need would arise for the latter two branches of investigative necessity in s. 186(1)(b) of the Criminal Code.

[119] We also regard as untenable the appellants’ related argument that investigative necessity cannot be established where the use of other investigative techniques or procedures would likely succeed in establishing the culpability of one of the targets of investigation. Investigative necessity is not target-specific any more than the legal standard of proof applies to individual items of evidence adduced in a criminal trial. Investigative necessity relates to the investigation as a whole. It is no answer to a finding that investigative necessity has been established on the investigation as a whole to say that some other investigative procedure short of the interception of private communications would have done the job for one of the known objects of interception.

[120] The appellants also submit that, although the investigative goals are relevant to the assessment whether the investigative necessity requirement has been met, these goals cannot be molded or manipulated so that the interception of private communications itself becomes an investigative necessity. According to the appellants, by permitting such an approach, the reviewing judge effectively allowed law enforcement to circumvent the investigative necessity requirement.

[121] Again, we reject this submission. The nature of the activity under investigation is a crucial factor in any analysis whether investigative necessity has been established. Pre-concerted and ongoing crimes, such as those at issue in this case, pose a significant threat to society and a constant challenge to investigators. Such activity is often resistant to other investigative procedures that cannot reach the degree of participation and state of mind of those involved. Consideration of this reality in evaluating investigative necessity does not circumvent the investigative necessity requirement.

[122] We also reject the submission that law enforcement’s ultimate goal was to prosecute those involved for offences under s. 342.01(1) of the Criminal Code, for which an authorization could not have been granted. Even if this had been law enforcement’s objective, it is of no moment on this issue.

[123] The task of the authorizing judge was to decide whether the investigative necessity requirement had been met in connection with the offences listed in the

supportive affidavit and for which authorization to intercept was sought. The task of the trial judge, on the Garofoli review, was to determine, based on the affidavit, as amplified on the review, whether there was sufficient reliable information on the basis of which the authorizing judge could have concluded the investigative necessity requirement had been met in connection with the listed offences. Our assignment is yet a further step removed, but as with the others, is linked to the listed offences. Whether or not law enforcement hoped to prosecute those involved for s. 342.01(1) offences – absent evidence of bad faith – is irrelevant to a review whether the investigative necessity requirement was met in respect of the listed offences.

[124] It is scarcely remarkable that evidence gathered in relation to one offence – say fraud or forgery – might be relevant, material and admissible in a prosecution for other offences with similar elements – say offences under s. 342.01(1) of the Criminal Code or associated preliminary crimes. That such evidence may assist in proof of these other crimes is irrelevant to the question of the adequacy of the supportive affidavit to satisfy investigative necessity in connection with a listed offence.

[125] Finally, we reject as factually inaccurate and legally unsound the appellants’ complaint that an investigative predisposition to the interception of private communications, and a manipulation of the authorization process to mask the true purpose of sidestepping the legal impediment to obtaining wiretap authorization regarding s. 342.01(1) offences, negated the claim of investigative necessity.

[126] First, as submitted by the Crown, there was no rush to interception here. Project Instrument had been underway for about 15 months. Other investigative techniques and procedures had been tried, but proved unavailing in the collection of inculpatory evidence. Investigators did not manipulate the process to further their investigation of an offence for which an authorization could not have been obtained. The goals in this case reflected a legitimate police objective, including determining the individual roles and degrees of involvement of the owners and employees of Canadian Barcode in the facilitation of credit card skimming offences, identifying forged credit card manufacturers, traffickers and users, and tracing the proceeds of credit card crimes.

[127] Even so, early anticipation of the necessity for interception to further investigative goals, even a predisposition towards interception as an investigative procedure, is not fatal to the investigative necessity requirement. The requirement must be met on the basis of the affidavit material filed before the authorizing judge. Provided that material, as it did here, satisfied the test on a branch of s. 186(1)(b), investigative necessity has been established.

[128] In our view, the reviewing judge correctly found, on the basis of the amplified record, that the authorizing judge could have found that, practically speaking, no other reasonable alternative method of investigation was available in the circumstances of this particular criminal inquiry, and therefore, that the investigative necessity requirement had been satisfied.

[129] Accordingly, we reject this investigative necessity ground of appeal.

(3) The Obligation to Identify “Known Persons”

[130] The appellant Shanghavi says that even though the trial judge was wrong in concluding that there are two categories of “knowns” under Part VI of the Criminal Code, he was correct in concluding that Shanghavi should have been included among the “knowns” listed in the authorization. The judge was also correct in finding a violation of s. 8 of the Charter. However, the trial judge’s mistake about the number of categories of objects of interception distorted his analysis under s. 24(2) of the Charter.

[131] Shanghavi contends that the affiant was grossly negligent in his failure to include him, Shanghavi, as a known object of interception. Shanghavi was a “known person” and the decision not to name him was deliberate. This resulted in a serious breach that repeatedly compromised Shanghavi’s privacy interest. On balance, the intercepted private communications should have been excluded as evidence against him.

[132] We disagree.

[133] Although we need not decide this issue, we are not satisfied that the trial judge applied the proper test in reaching his conclusion that Shanghavi should have been included as a “known person” in the authorization. As discussed above, there are two categories of persons who may be the object of interceptions: “knowns” and “unknowns”. The categories are mutually exclusive. To repeat, there are not two categories of “known persons”.

[134] The trial judge correctly found that investigators knew Shanghavi’s identity because a confidential informant had mentioned him. When it came to the second part of the test, however, the trial judge erroneously considered that there were two categories of “known persons”, rather than one. As a result, he concluded that Det. Sgt. Bedard’s failure to distinguish between these two categories meant that he had not applied the correct test in deciding not to include Shanghavi as a “known” object of interception.

[135] In the end, however, we find it unnecessary to gauge the effect of the trial judge’s error on his decision about whether Shanghavi should have been included in the authorization as a “known person”. It is unnecessary because we are satisfied that the trial judge correctly admitted the evidence of the intercepted private communications of Shanghavi.

[136] Accordingly, Shanghavi’s ground of appeal regarding the obligation to include him as a “known person” fails.

C. CONCLUSION ON THE WIRETAP AUTHORIZATION GROUNDS

[137] For the foregoing reasons, we reject these grounds of appeal.

II. THE “CRIMINAL ORGANIZATION” GROUND

A. BACKGROUND

[138] The appellants were all charged with offences relating to the activities of a “criminal organization”. Shanghavi was acquitted. However, Cattral, Brunet and Beauchamp were each convicted of: (i) participating in or contributing to the activities of a criminal organization for the purpose of enhancing the ability of the organization to facilitate or commit the indictable offence of buying and selling devices used to forge credit cards, contrary to s. 467.11(1) of the Criminal Code, and (ii) committing an indictable offence for the benefit of a criminal organization, contrary to s. 467.12(1).[7]

[139] The trial judge found: (i) that Cattral, Brunet and Beauchamp constituted a group of three persons comprising a criminal organization; (ii) that they had, as one of their main purposes, the commission or facilitation of the serious offence of selling devices they knew were intended to be used to forge credit cards; and (iii) that the commission of the offences resulted in a material benefit to each of them.

[140] Cattral, Brunet and Beauchamp dispute these findings. Whatever else they may have done, they say the activities in which they were engaged did not amount to those of a “criminal organization”.[8] We do not agree.

B. STATUTORY FRAMEWORK AND PRINCIPLES OF INTERPRETATION

[141] The appeals raise two issues of statutory interpretation: the meaning of the words “however organized” and of the words “one of its main purposes or main activities” in the context of the definition of “criminal organization” under the Criminal Code.

[142] The relevant “criminal organization” provisions for the purposes of the appeals are the following:

467.1(1) “criminal organization” means a group, however organized, that

(a) is composed of three or more persons in or outside Canada; and

(b) has as one of its main purposes or main activities the facilitation or commission of one or more serious offences that, if committed, would likely result in the direct or indirect receipt of a material benefit, including a financial benefit, by the group or by any of the persons who constitute the group.

It does not include a group of persons that forms randomly for the immediate commission of a single offence.

…

467.11 (1) Every person who, for the purpose of enhancing the ability of a criminal organization to facilitate or commit an indictable offence under this or any other Act of Parliament, knowingly, by act or omission, participates in or contributes to any activity of the criminal organization is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years.

(2) In a prosecution for an offence under subsection (1), it is not necessary for the prosecutor to prove that

(a) the criminal organization actually facilitated or committed an indictable offence;

(b) the participation or contribution of the accused actually enhanced the ability of the criminal organization to facilitate or commit an indictable offence;

(c) the accused knew the specific nature of any indictable offence that may have been facilitated or committed by the criminal organization; or

(d) the accused knew the identify of any of the persons who constitute the criminal organization.

(3) In determining whether an accused participates in or contributes to any activity of a criminal organization, the Court may consider, among other factors, whether the accused

(a) uses a name, word, symbol or other representation that identifies, or is associated with, the criminal organization;

(b) frequently associates with any of the persons who constitute the criminal organization;

(c) receives any benefit from the criminal organization; or

(d) repeatedly engages in activities at the instruction of any of the persons who constitute the criminal organization.

…

467.12 (1) Every person who commits an indictable offence under this or any other Act of Parliament for the benefit of, at the direction of, or in association with, a criminal organization is guilty of an indictable offence and liable to a term of imprisonment for a term not exceeding fourteen years.

(2) In a prosecution for an offence under subsection (1), it is not necessary for the prosecutor to prove that the accused knew the identity of any of the persons who constitute the criminal organization.

[143] As alluded to earlier, the modern approach to statutory interpretation is purposive and contextual. In Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26, Iacobucci J. re-affirmed the formulation of the rule articulated by Elmer A. Driedger at p. 87 of his Construction of Statutes 2d ed. (Toronto: Butterworths, 1983):

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

[144] Legislative history and statements made to parliamentary bodies at the time the legislation was introduced may be of some assistance in understanding the background, purpose and intent of the legislation: Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at para. 35.

[145] The criminal organization provisions were first introduced into the Criminal Code in 1997. However, they proved to be inadequate, partly because criminal organizations were able to avert their impact by restructuring themselves in different ways to avoid the strictures of the then definition of “criminal organization”. In 2001, the Government proposed amendments to address these concerns and to ensure that the provisions applied in a focussed but flexible way to a broad range of criminal activities posing an elevated threat to society.

[146] A statement made on May 8, 2001 by the then Minister of Justice and Attorney General for Canada to the Standing Committee on Justice and Human Rights regarding the Bill underlines this point and the objective of flexibility in the reach of the provisions:

The new provision will … provide police bodies and prosecutors with the required flexibility to prosecute more criminal organizations and more of the people who choose to participate in the activities of those organizations.

The new definition is focused to ensure that only those who pose a serious threat to society are subject to the new measures and flexible to ensure that such individuals do not evade the full force of the law by simply restructuring their organizations. [Standing Committee on Justice and Human Rights,

37th Parl., 1st Sess., No. 11 (8 May 2001) at 0845 (Hon. Anne McLellan); emphasis added.]

[147] Later, speaking to the Standing Senate Committee on Legal and Constitutional Affairs on November 21, 2001, the Minister underlined that the new provisions were not limited to notorious groups such as those engaged in illegal drug trafficking; they were intended to apply to a broad range of organized criminal activities, including property theft such as credit card fraud:

Organized crime is also involved in serious property theft, such as automobile theft, to feed illegal markets. We know that criminals are stealing from Canadians through telemarketing, Internet and credit card fraud. It is an understatement that organized crime has negative effects on public safety and security. [Standing Senate Committee on Legal and Constitutional Affairs, 37th Parl., 1st Sess., No. 16 (21 November 2001) at 3:40 (Hon. Anne McLellan); emphasis added.]

[148] The language used to define a criminal organization is obviously quite comprehensive, and signals Parliament’s intention to extend the reach of the new provisions to a wide variety of groups who work collectively to commit serious crimes: see R. v. Terezakis, 2007 BCCA 384, 223 C.C.C. (3d) 344, at para. 11, leave to appeal to S.C.C. refused, [2007] S.C.C.A. No. 487 (Mackenzie J.A., writing in concurrence).

C. DISCUSSION

[149] Cattral, Brunet and Beauchamp submit that Canadian Barcode was nothing more than a relatively small, but successful, store-front business in Ottawa operating with legitimate purposes and selling many legitimate products. At worst, they say, there may have been some illegal components to the group’s activities, but the 2001 amendments to the Criminal Code were not designed to draw in a “run-of-the-mill shady business”. The purpose of the amendments, they submit, was “not to bring within the ‘criminal organization’ rubric all manner of small businesses carrying on illegal transactions as one of their activities” (emphasis in original).

[150] Cattral, Brunet and Beauchamp focus their attack on two of the statutory components of a criminal organization: “however organized” and “one of its main purposes or main activities”. They submit, first, that the illicit activities carried on through Canadian Barcode did not have a sufficient level of continuity and cohesion to meet the organizational prerequisite. Second, they argue that, where an organization has both legitimate and illegitimate dimensions to its business, the Crown must demonstrate by way of a quantitative comparison between the legal and illegal aspects of the business, that the illegal portion comprises a main purpose or activity of the group. Finally, they submit that the trial judge compounded the foregoing errors by reversing the onus of proof.

[151] We reject these arguments.

(1) “A Group, However Organized”

[152] In R. v. Venneri, 2012 SCC 33, [2012] 2 S.C.R. 211, at paras. 27-41, the Supreme Court of Canada sketched out the contours of what “a group, however organized” is meant to portray. Whether a targeted group is a “criminal organization” is to be determined on a flexible basis, not on the basis of pre-conceived notions about what organized crime may look like. At the same time, however, care must also be taken not to overextend the reach of the provisions and turn every conspiracy of three or more persons involving the commission of serious crimes for material benefit into a criminal organization.

[153] This balance between flexibility and overreaching is important. The Venneri decision strikes it in three broad ways:

• a) by highlighting the need for “some form of structure and degree of continuity”

and coordination, as a means of distinguishing between a criminal organization and

other forms of illegal group activity, such as conspiracies, that are already

adequately dealt with in the Criminal Code: at paras. 27-31 and 35;

• b) by making it clear that the criminal organization provisions are not intended to

capture only certain “stereotypical [models] of organized crime” (biker gangs and

drug cartels, for example): at para. 41; and

• c) by resisting the temptation to adopt a “checklist” of common characteristics or

attributes that must be satisfied in every case: at paras. 38-40.

[154] As Fish J. stated, at paras. 40-41:

It is preferable by far to focus on the goal of the legislation, which is to identify and undermine groups of three or more persons that pose an elevated threat to society due to the ongoing and organized association of their members. … Groups of individuals that operate on an ad hoc basis with little or no organization cannot be said to pose the type of increased risk contemplated by the regime.

…

Courts must not limit the scope of the provision to the stereotypical model of organized crime. ... Some criminal entities that do not fit the conventional paradigm of organized crime may nevertheless, on account of their cohesiveness and endurance, pose the type of heightened threat contemplated by the legislative scheme. [Emphasis added.]

[155] The group must therefore have “some form of structure and degree of continuity”, but even a minimal amount may suffice:

Working collectively rather than alone carries with it advantages to criminals who form or join organized groups of like-minded felons. Organized criminal entities thrive and expand their reach by developing specializations and dividing labour accordingly; fostering trust and loyalty within the organization; sharing customers, financial resources, and insider knowledge; and, in some circumstances, developing a reputation for violence. A group that operates with even a minimal degree of organization over a period of time is bound to capitalize on these advantages and acquire a level of sophistication and expertise that poses an enhanced threat to the surrounding community [Venneri, at para. 36; emphasis added.]

[156] Applying these guidelines to the facts of these appeals, we are satisfied that the Canadian Barcode Group had a sufficient level of continuity and cohesion to meet the requirements of a criminal organization, as defined in the Criminal Code. It had both a structure (in this case, organization through a corporate business model) and a coordinated division of labour characterized by a considerable degree of continuity, in terms of the duration of the endeavour and its suppliers, customer base, and personnel. The Canadian Barcode Group was not simply a group of individuals who came together collectively for the purpose of committing a single offence, or even a small number of offences. They were organized. And they were organized to commit or facilitate the commission of credit card fraud over a wide territorial range, including at least Ontario, Quebec, the United States and, perhaps, Europe.

[157] The fact that Canadian Barcode is a corporation is not particularly meaningful. For purposes of these criminal activities, no distinction need be drawn between the “acts” of the corporation and those of the members of the Group. Canadian Barcode is simply the conduit – it happens to be a corporation – through which Cattral, Brunet and Beauchamp chose to funnel their activities and the proceeds of those activities, enabling them to hide behind the shield of an apparently legitimate “front”.

[158] Nor is the fact that the Canadian Barcode Group was a small group of people particularly meaningful. “Small” is not a factor once the three-person threshold has been met, as it has been here.

[159] Each of the three members of the Group had their respective areas of responsibility. Cattral was the face of the operation to authorities and others, as well as

the organization’s technical expert. He developed the key software program (RenCode) that was widely used to forge credit cards. He also provided technical assistance to customers and suppliers. Brunet was responsible for the financial management of the organization and participated in the sale of devices. Beauchamp was dedicated to the sale of the devices.

[160] The Canadian Barcode Group was active for at least one and a half years (Canadian Barcode itself was incorporated by Cattral and Brunet in 1999). Project Instrument was initiated in 2002 after devices sold by Canadian Barcode were recovered by police in credit card forgery schemes. This period of temporal continuity was not inconsequential. Continuity of time.

[161] The Canadian Barcode Group was also characterized by a continuity and cohesiveness of suppliers, distribution base and personnel. We have described the roles of Cattral, Brunet and Beauchamp above.

[162] The Group’s chief supplier of skimming devices was SST in Montreal. Its principals, Gehmlich and Winslow, designed and manufactured the skimming devices. Canadian Barcode was the only Canadian buyer forming the basis for SST’s conviction, and one of SST’s largest customers. Continuity of supply.

[163] Canadian Barcode’s primary customers in the credit card skimming endeavour were Krespine, Persaud and Shanghavi. Each was a street-level fraudster who used the devices sold to him by Canadian Barcode to acquire data from others’ credit cards, store the data, and transfer the data to counterfeit credit cards and identification cards they had (or had caused to be) manufactured. The Canadian Barcode Group formed part of a consistent network for the ultimate theft and illegal use of credit card data. Continuity of distribution.

[164] The cohesion of the Canadian Barcode Group and their suppliers and customers was consolidated through their frequent contact and other personal interactions. Cattral and Brunet introduced Shanghavi to SST. Persaud was a long-time friend and close associate of Cattral and Brunet. Cattral, Brunet and Beauchamp all provided technical support and other assistance to Krespine, Persaud and Shanghavi in various forms and at various times. Cattral, Brunet and Beauchamp all facilitated the initial and continuing contacts between Krespine, Persaud and Shanghavi. Continuity of personnel.

[165] In addition, Cattral and Beauchamp organized a meeting at Canadian Barcode’s premises, where they introduced Krespine to Persaud and Shanghavi. The intercepts indicate that Shanghavi told Cattral that he had been waiting for six months to meet Krespine, and Persaud told an associate that after waiting “for years”, he had just met “the biggest printer in Montreal”. Cattral, Brunet and Beauchamp all facilitated further and continuing contacts between Krespine, Persaud and Shanghavi for purposes of encouraging the sale of the skimming devices.

[166] The Canadian Barcode Group formed the hub of this activity throughout.

[167] On the basis of this evidence, we are satisfied that the Canadian Barcode Group displayed the necessary “form of structure and degree of continuity” and coordination that Parliament required in the 2001 amendments “to engage the organized crime provisions that are part of the exceptional regime it has established under the Code”: Venneri, at para. 29.

(2) “One of its Main Purposes or Main Activities”

[168] In spite of the foregoing, Cattral, Brunet and Beauchamp contend that the Crown failed to prove they comprised a “criminal organization” because it failed to establish that the facilitation or commission of the serious offences involved was “one of [the Group’s] main purposes or main activities”. To do this, they say, the Crown was required to lead evidence comparing the legal and illegal components of the business on a quantitative basis.

[169] Again, we disagree.

[170] We agree with Crown counsel that there is no requirement to weigh criminal purposes and activities against non-criminal purposes and activities before making a “criminal organization” designation. While we would not say that such evidence may never be relevant, nothing in the language, purpose or objects of the criminal organization provisions mandates such an inquiry. Such an inquiry would also be unworkable.

[171] The language of the definition of “criminal organization” in s. 467.1 is instructive. It requires that a group have as “one of its main purposes or main activities” the facilitation or commission of the serious crimes described. This tells us a number of things. First, it tells us that such a group may have more than one “main” purpose or activity. Second, there is a distinction between “purposes” and “activities”, and either one or the other can qualify. Third, only one of the purposes or activities of the group need be the criminal purpose or activity. Finally, it is not any purpose or activity that counts, but only a main one.

[172] A number of things follow logically from these observations. First, the criminal purposes or activities of the organization need not be quantitatively or numerically dominant, because multiple activities cannot all fall into that category. Second, a group may have legitimate “purposes” but still have “main activities” that are illicit. Third, the impugned “purpose” or “activity” must be at least more than a de minimus feature of the endeavour at least in a qualitative, if not quantitative, sense.

[173] These implications all work against the quantitative comparison analysis proposed by the appellants.

[174] The purpose and intent of the criminal organization provisions also militate against a quantitative comparison approach. As Fish J. noted in Venneri, the goal of the legislation is “to identify and undermine groups of three or more persons that pose an elevated threat to society due to the ongoing and organized association of their members”, and to do so with “a purposive approach that eschews undue rigidity” and is not fixated upon stereotypes that “fit the conventional paradigm of organized crime”: at paras. 29 and 40-41.

[175] This intent cannot be accomplished if the word “main” in s. 467.1 of the Criminal Code is given the meaning the appellants propose and the Crown is required to quantify the illicit activities in relation to legitimate activities.

[176] For example, although the appellants say they do not claim that a specific percentage of an organization’s activities must be illicit for the “one of its main purposes” threshold to be reached, they insist that the trial judge erred by not conducting “some comparison” between the legal and illegal dimensions of the business. But how else would such an approach work? Some conclusions about the quantitative comparison between the legal and illegal aspects of the business would have to be reached. How could they be expressed except on some level of proportionality?

[177] A quantitative comparison is by definition one that deals with relative size, magnitude, amount or measurement. There is no point in having a comparison if the comparison is meaningless. To make it meaningful, would the Crown have to show that the criminal activities constituted more than 50% of the group’s business, for it to be a “main” purpose? Would 49% not count? Where would the line be drawn? At 30%? 25%? 10%? 3%? The approach is unworkable.

[178] Similarly, the appellants appear to suggest that the relative number of sales is the appropriate metric for a quantitative comparison. Nothing about the criminal organization provisions suggests relative number of sales to be the applicable metric. What would be the basis for a quantitative comparison? Percentage of profits? Number of sales? Time invested? The purposive approach to these provisions outlined in Venneri indicates that a focus on a single metric is not appropriate.

[179] The approach is unworkable for yet another reason. Evidence establishing the size, importance and extent of substantially all the criminal and non-criminal aspects of the group’s business may not exist. Criminal organizations do not always keep records that would pass an audit. The evidence may also be unreliable. As the evidence in this case shows, books and records may be doctored to avoid detection of illegal activities and to highlight legal ones. As pointed out above, the evidence may be difficult, if not impossible, to assess through the quantitative comparison lens.

[180] In addition, the quantitative comparison approach risks undermining the purpose of the legislation because organized criminals could adapt their operations to stay on the right side of whatever line is drawn. It suggests that some amount of non-criminal

activity can outweigh serious ongoing criminality. As the respondent points out in its factum,

[t]his interpretation would effectively allow a group to cancel out, counterbalance and/or neutralize its bad deeds with good ones (or at least less bad ones). It would create a simple way for criminal organizations to avoid criminal liability without actually reducing the seriousness or frequency of their criminal activities.

[181] We agree with this submission. The quantitative comparison approach to “main purposes or main activities” gives rise to the very sort of problem that led to the implementation of the 2001 amendments to the criminal organization provisions in the first place.

[182] In our view, “main” is used in s. 467.1 in a qualitative sense. It is the importance of the criminal purpose or activity to the perpetrators and not its quantitative relationship with other non-criminal aspects of the group’s activities that determines whether it is a “main” purpose or activity. Serious ongoing criminality is still serious ongoing criminality even it is camouflaged under a cover of non-criminal activity, however quantitatively significant that non-criminal activity may be.

[183] As is evident from the above, importance should not be determined quantitatively. An important purpose or activity will be one in which the members of the group, individually or collectively, have invested significant efforts. The nature and degree of effort invested in the purpose or activity will be a telling marker whether the purpose or activity is a “main” one. The broader circumstances – such as the scope of the illegal activities and the environment in which the group operated – will also be relevant.

[184] Here, for example, Cattral, Brunet and Beauchamp dedicated considerable time and effort into fostering the criminal aspects of their enterprise by creating networking opportunities between other fraudsters, using their technical expertise to make advances in the skimming field, and taking significant steps to conceal their illegal activities and those of their customers. There was ample evidence that the commission or facilitation of credit card fraud was “one of [the Canadian Barcode Group’s] main purposes or main activities” in the foregoing sense.

(a) The Evidence Regarding “One of the Main Purposes or Main Activities”

[185] The sale and distribution of Canadian Barcode devices, software and materials capable of being used – and, on the evidence, actually used – to forge credit cards and otherwise facilitate the fraudulent scheme was not a de minimus or limited edition activity.

[186] The scheme was decidedly international in its scope, involving sales to customers in Canada (Ontario, Quebec and Manitoba), the United States, France, and London, England (the latter to individuals thought to be involved in raising funds for terrorist activities in Pakistan and Afghanistan).

[187] The scheme was deeply felonious in its composition. It involved a broad web of contacts and actors, at least some of whom were known to be, and were in fact, active charlatans in this type of activity. These included Persaud, who was a major credit card fraudster in the Toronto area, and Krespine, who was lauded as “the biggest printer [of counterfeit cards] in Montreal”. On the supply side, they included Gehmlich and Winslow, whose company, SST, designed and manufactured the skimming devices and sold those devices knowing that Canadian Barcode’s customers were using them to commit fraud. Cattral himself had a long history of friendship with Persaud and his family, had been implicated in skimming offences on five different occasions in the mid-to-late 1990’s, and boasted that he used to be one of the top ten fraudsters in Ottawa.

[188] Earlier in these reasons we described the degree of organization dedicated to the fraudulent credit card skimming scheme by the Canadian Barcode Group. This manner of organization in itself speaks volumes about the importance Cattral, Brunet and Beauchamp placed on the illegal purpose of their endeavour and the illicit activities in which they engaged. In addition, the manner in which the organization operated in carrying out the endeavour reinforces its importance to the Group. The scheme was sufficiently important to Cattral, Brunet and Beauchamp that they went to considerable lengths to foster and enhance its success, as evidenced by the following:

• a) Cattral, Brunet and Beauchamp provided introductions and promoted

continuing connections among the criminal actors involved in the scheme. Cattral

and Brunet introduced Shanghavi to Ghemlich and Winslow at SST; Cattral and

Beauchamp organized a meeting at the Canadian Barcode premises where they

introduced Shanghavi and Persaud to Krespine. As we have said, the wiretap

intercepts reveal regular communications among all these individuals, passing along

contact information and alerting each other to potential problems with their products

and even to potential incidents of police surveillance.

• b) Cattral, Brunet and Beauchamp provided technical expertise to their fraudster

customers on ways to commit credit card crime, thus improving the customers’

ability to commit this type of crime. They did research and provided feedback to

SST to assist in the development of new and improved devices and equipment (such

as the MIR38 and the KT104). Cattral was the author of the RenCode software

program, which – although it also had legitimate uses – was a leading tool for

downloading credit card data from magnetic stripe readers and transferring that data

to the magnetic stripes on forged cards.

• c) The members of the Group took comprehensive measures to conceal and

protect their illegal activities, including:

• i. using aliases in Canadian Barcode’s sales records to

conceal the names of their customers, as described above;

• ii. sharing information about police surveillance and

counter-surveillance techniques and bank anti-fraud countermeasures;

• iii. alerting each other to potential law enforcement actions

(for example, Cattral warned Shanghavi that one of “his” devices (data logger

#3225) had been seized by police and gave advice on how to avoid detection, and

when Cattral was inadvertently tipped off by a journalist about a planned police raid

the following day, Brunet immediately contacted Shanghavi and Persaud to warn

them, telling Persaud that the Canadian Barcode Group planned to remove all stock

by the next day and warning Shanghavi that “we’re cleaning out this place tonight”);

• iv. by encouraging the use of encryption techniques to foil

the police;

• v. by choosing not to advertise publicly certain products, for

example by deciding not to display the MIR38 on their website; and

• vi. by engaging in cash transactions in order to avoid

producing traceable records.

[189] When all this evidence is viewed as a whole, in the context of the formal structure, continuity and coordination of the overall operations of the Canadian Barcode Group, it is unlikely in the extreme that all the above was simply an unimportant blip or subplot in an otherwise legitimate business endeavour. We are satisfied that the illicit credit card scheme was “one of [the] main purposes or main activities” of the Canadian Barcode Group.

[190] Even if the main “purposes” of the Canadian Barcode Group were legitimate business purposes, as Cattral, Brunet and Beauchamp assert (a position we do not accept on the evidence), it is readily apparent that one of the Group’s main “activities” was the facilitation and commission of a broad array of serious crimes involving the use of forged credit cards.

(3) The Burden of Proof

[191] Finally, we do not accept that the trial judge reversed the burden of proof by observing that the appellants did not call any evidence on this issue.

[192] Given the foregoing conclusion that there is no requirement in law to make a quantitative comparison between criminal and non-criminal activities, there was no onus on the Crown to establish some quantitative relationship between the two types of activities. Accordingly, there was no need for the appellants to rebut that onus.

[193] In any event, the trial judge did not base his decision on the presence or lack of such evidence. He simply observed that he had no evidence on the issue, and that the appellants had adduced none. This did not shift the burden to the defence.

D. CONCLUSION ON THE “CRIMINAL ORGANIZATION” GROUND

[194] For the foregoing reasons, we reject this ground of appeal. The trial judge properly found that the Canadian Barcode Group constituted a “criminal organization” as defined in s. 467.1(1) of the Criminal Code.

III. THE INDIVIDUAL GROUNDS OF APPEAL

A. SECTION 342(3) (SHANGHAVI AND CATTRAL)

[195] Cattral and Shanghavi were both convicted on a number of counts relating to the fraudulent possession of credit card data, contrary to s. 342(3) of the Criminal Code.[9]

[196] Section 342(3) reads as follows:[10]

Every person who, fraudulently and without colour of right, possesses, uses, traffics in or permits another person to use credit card data, whether or not authentic, that would enable a person to use a credit card or to obtain the services that are provided by the issuer of a credit card to credit card holders is guilty of

(a) an indictable offence and is liable to imprisonment for a term not exceeding ten years; or

(b) an offence punishable on summary conviction. [Emphasis added.]

[197] Count 5 (Cattral and Shanghavi jointly) and Count 26 (Shanghavi) involved credit card data belonging to the same individual (Paula Landry). Shanghavi was initially in possession of the data. He transferred the data to Cattral during an Internet chat on June 8, 2004. Ms. Landry’s credit card had been cancelled in January of that year, however, and was therefore no longer active or valid.

[198] Counts 22, 24 and 25 all related to Cattral and charged him with possession of credit card data from certain Petro Canada credit cards (Count 22), a Royal Bank of Canada debit card (Count 24) and a TD Canada Trust debit card (Count 25) on or about July 21, 2004. These cards had either previously been blocked for unauthorized use, or the Crown led no evidence as to whether the data could be used.

[199] Shanghavi and Cattral do not contest that they were in unauthorized possession of credit card data. They argue, however, that the Crown did not prove or could not prove they possessed data that “would enable” a person to use a credit card, contrary to the section, because the data upon which the use would be based was unusable, having previously been cancelled or expired.

[200] This Court’s decision in R. v. Kokoouline, 2009 ONCA 253, 82 W.C.B. (2d) 413, and its subsequent decision in R. v. Tuduce, 2014 ONCA 547, 314 C.C.C. (3d) 429, are dispositive of this issue. In both, the Court held that whether the cards from which the data had been extracted could successfully be used by the fraudsters to defraud financial institutions was irrelevant to the offence created by s. 342(3). In Kokoouline, the Court held, at para. 6:

Section 342(3) of the Criminal Code does not require that the Crown prove that the issuer of the credit card could be successfully defrauded by its use before the Crown can obtain a conviction under that section. In our view, the question of whether the cards could be successfully used would be

relevant to a charge of defrauding the financial institutions who issued the cards, but is not relevant to the offence created by s. 342(3).

[201] More recently, in Tuduce, the Court re-affirmed this principle. Tuduce was not a case where the underlying card had been cancelled or blocked, but one in which the Crown had not proven the track data matched that of a valid account and could therefore be used. The Court said, at paras. 89-90:

[E]ven if an account has been blocked or a card cancelled, a conviction under s. 342(3) can be made out. The same logic applies where the reason the data might not enable the successful use of a credit card is that the track data did not match that of a valid account.

The wording of s. 342(3) makes this clear. It provides that the offence is made out "whether or not the data is authentic". Accordingly, an accused can be convicted whether or not the data in the accused’s possession matches perfectly with genuine bank accounts.

[202] The appellants ask us to overrule these decisions. As a panel of three, we cannot do so.[11] In any event, we agree with the principle as applied in Kokoouline and Tuduce. The words “whether or not authentic” in s. 342(3) must be given meaning. The offence can be made out regardless whether the data is “authentic” – i.e., legally valid, reliable or trustworthy[12] – in other words, regardless whether the credit card underlying it is invalid because it has expired, has been blocked for unauthorized use or is inactive for other reasons.

[203] We reject this ground of appeal.

B. ADDITIONAL GROUNDS OF APPEAL RAISED BY BRUNET

[204] The appellant Brunet challenges her convictions on Count 6 (conspiracy) and Count 15 (selling a device, the KT100, knowing it was intended for use in forging credit cards).

(1) Count 6 (Conspiracy)

[205] Count 6 charged Brunet with conspiring with Persaud, between May 5 and May 14, 2004, to commit the indictable offence of forging credit cards. She argues that her conviction on this count should be set aside for two reasons:

• a) the trial judge erred by inferring the existence of a two-person conspiracy

between her and Persaud from his earlier finding of a broader conspiracy between

her, Cattral, Beauchamp and Persaud for purposes of the co-conspirators’ exception

to the hearsay rule regarding the wiretap evidence; and

• b) the trial judge failed to find the existence of an agreement to forge credit

cards between her and Persaud; at best there was an agreement that she would

provide assistance to him, but no common objective to commit the crime of forging

credit cards.

[206] We do not accept either submission.

[207] The trial judge correctly recognized that the Crown was required to prove: (i) “that there was a conspiracy or agreement between [Brunet and Persaud] to forge credit cards”; and (ii) “that Brunet and Persaud were members of that conspiracy.”

[208] In conducting his analysis about whether there was such an agreement, the trial judge did refer to his earlier finding “that there was a common design between Brunet, Cattral and Beauchamp, who were actively involved on behalf of Canadian Barcode in selling devices and providing technical assistance to assist in the commission of credit card fraud, with Persaud.” He made this finding “when considering the co-conspirators exception to the hearsay rule” for the purpose of determining the use to which the wiretap intercepts could be put. The trial judge also referred to his earlier finding that Brunet, Cattral, Beauchamp and Persaud were part of a common design to assist Persaud to forge credit cards.

[209] The trial judge’s analysis did not end there, however. He went on to find – based on a considerable bank of evidence – that there was in fact a mutual agreement between Brunet and Persaud whereby Persaud would forge credit cards and Brunet would provide him with the devices, supplies and other assistance necessary to enable him to do so. In other words, Brunet and Persaud shared the same objective. That is a conspiracy to forge credit cards, in our view.

[210] Brunet sought at trial, and does here as well, to make the fine distinction between knowledge of, and doing acts in furtherance of committing a crime, on the one hand, and the actus reus required for conspiracy, namely mutuality of objective, on the other. While that distinction may exist – difficult as it may be to make out – the law is also clear that “[k]nowledge and acts in furtherance of a criminal scheme do, however, provide evidence, particularly where they co-exist, from which the existence of an agreement may be inferred”: R. v. Alexander (2005), 206 C.C.C. (3d) 233 (Ont. C.A.), at para. 47, leave to appeal to S.C.C. refused, [2005] S.C.C.A. No. 526. That is what the trial judge concluded here.

[211] In arriving at his finding of a mutual agreement, the trial judge relied on an ample body of evidence, including the following:

• a) Brunet conceded her guilt on a related charge (Count 7) of having sold a data

logger and a large number of blank plastic credit cards to Persaud knowing they

were intended for use in forging credit cards. Persaud ordered these devices from

Brunet on May 6, 2004 (within the dates on the indictment). Brunet told him they

needed a “pretend” address to ship the package to, and Persaud told her to address

it to “Sean Brown” – one of his aliases – at a fictitious address in Toronto and

suggested she send it to a FedEx outlet on Front St. They also discussed changing

the password on the data logger.

• b) On May 13, 2004, Persaud called Canadian Barcode and spoke to Brunet

about the new password she was supposed to have included in the package that

she sent to him, but that he could not find. Brunet advised that she would email him

three potential passwords.

• c) Brunet took other steps to conceal the May 6 and other transactions between

Canadian Barcode and Persaud. The May 6 sale was recorded in the Canadian

Barcode sales records (the ACT database) as a sale to “Steve”, another of

Persaud’s aliases. In addition, there were other references to sales to “Steve” in the

ACT database going back as far as 2001.

• d) Brunet was quick to take additional steps in July 2004 to protect Persaud

immediately after she had received the tip about a potential police raid the following

day. She discussed the information with Cattral and said, “Maybe I’ll call G on his

cell.” She did so, telling Persaud: “I wanted to give you a warning”; “They’re gonna

do a raid in Ottawa or something like that.”

[212] The trial judge inferred from the tip-off incident that Brunet was assisting Persaud to avoid detection. On this basis, as well as for the reasons set out below, he found that the only rational conclusion to draw from Brunet’s provision of assistance to Persaud with the knowledge that she was assisting him in committing the offence of forging credit cards, was that Brunet had agreed to the commission of the offence. These inferences and findings were open to the trial judge on the record.

[213] As outlined above, there was ample evidence on the record as well to support the following findings made by the trial judge:

I find that there was an agreement based on their words and actions between Brunet and Persaud that Persaud would forge credit cards and that Brunet would provide assistance to him to allow him to forge credit cards by furnishing the devices necessary to commit credit card fraud, by supplying the supplies such as blank mag stripe cards and foil to forge credit cards, by assisting him and Canadian Barcode … to avoid detection by creating an account in the financial records at Canadian Barcode in the name of “Steve”, a false name, and by sending supplies and devices to Persaud under the alias “Sean Brown” at a fictitious address.

…

Brunet has admitted to an act, namely the selling of a data logger and blank plastic cards to Persaud and I infer that she knew that he intended to use the device and blank cards to forge credit cards from the wiretap evidence and her guilty plea to Count #7. I infer that there was a mutual agreement between Persaud and Brunet and that Brunet would assist Persaud to commit credit card fraud by supplying him with devices and supplies to commit credit card fraud, and Persaud would purchase such devices and obtain technical support from Canadian Barcode and commit credit card fraud. Brunet also agreed with Persaud to conceal his identity and based on this and the above evidence, I find that Brunet was a member of the conspiracy along with Persaud. I infer that there was an agreement between Brunet and Persaud that she would assist him to commit credit card fraud and he would purchase devices and obtain assistance including concealing his identity and commit credit card fraud. I agree with the Crown’s submission that this provides “evidence” from which the existence of an agreement may be inferred.

[214] These are not findings that Brunet merely had knowledge of a scheme to commit criminal acts and provided some assistance in furtherance of the scheme. These are findings that she and Persaud had a mutual objective – an agreement – to commit the crime of forging credit cards: Brunet provided the necessary devices and supplies, and Persaud purchased and used them for this purpose. They were members of a two-person conspiracy to commit the offence of forging credit cards.

[215] We see no error in law on the part of the trial judge, and no basis for interfering with his findings of fact, regarding Brunet’s conviction on Count 6.

(2) Count 15 (Selling Devices Knowing They Were Intended For Use in

Forging Credit Cards)

[216] Count 15 charged Cattral, Brunet and Beauchamp with selling devices (the portable magnetic stripe reader known as the KT100) knowing they were intended to be used in forging credit cards, contrary to s. 342.01(1)(b) of the Criminal Code. The trial judge dealt with this charge on the basis that Brunet had pled guilty to it. Brunet denies doing so and says, correctly, that she did not concede her guilt on Count 15. She argues that this mistake is fatal to her conviction because she was denied a hearing on the merits of the charge.

[217] Brunet acknowledges that she made concessions during the trial. She conceded that she was guilty on Count 7 (referred to above) and on Count 12. Count 12 was a related charge against Cattral, Brunet and Beauchamp concerning the sale of devices knowing they were intended to be used in forging credit cards (in that case, the portable magnetic stripe reader known as the MIR38).

[218] The Crown admits the mistake, but submits that it caused no substantial wrong or miscarriage of justice and that the conviction should be upheld on that basis.

[219] We agree that Brunet’s conviction on Count 15 was virtually inevitable having regard to: (i) her concession of guilt on Count 12; and (ii) the trial judge’s findings with respect to the sales of the KT100 devices and Brunet’s knowledge as to their intended use.

[220] Brunet (together with Cattral and Beauchamp) was found guilty on charges of buying the MIR38 device (Count 11) and the KT100 device (Count 14). In dealing with these counts, the trial judge conducted a detailed review of the evidence respecting both the purchases and the sales of these devices.

[221] Brunet did not deny that she had been involved in the purchase of these devices from SST, but took the position that she had done so only to restock Canadian Barcode’s shelves and that she had no knowledge that the devices were intended for use in forging credit cards. Lack of mens rea on this basis was her defence to Count 15 as well.

[222] It is not completely accurate to say, however – as Brunet submits – that she did not receive a hearing on Count 15. In closing submissions, her counsel specifically acknowledged that there were “intercepts … involving Ms. Brunet in terms of the actual sales of [the KT100] device”, but argued, as he did with Count 14, that the evidence did not support a finding that she knew of the KT100’s illegal purpose.

[223] The trial judge rejected the lack-of-knowledge-of-the-purpose defence with respect to the purchases of the KT100s.

[224] In connection with his disposition on Count 14 (involving the purchases of the KT100s), the trial judge found that Brunet knew that the KT100 constituted the inner workings of the MIR38 and knew or was wilfully blind to the fact that the “kits” (as she called them), or inner workings of the MIR38, were devices intended for use in forging credit cards. Brunet invited a finding of guilt on Count 12 involving the sale of the MIR38 devices. It must follow that by participating in the sale of the KT100s (about which her counsel conceded there was evidence), Brunet knew the KT100s were intended to be used for illegal purposes, since she knew the MIR38s were so intended.

[225] After his review of the evidence, the trial judge made the following findings with respect to both the purchases and sales of the devices:

Based on the above evidence including the intercepted wiretap communications, I find beyond a reasonable doubt that Cattral, Brunet and Beauchamp purchased the MIR38s, KT100s and KT104s from SST in Montréal on behalf of Canadian Barcode. I further find that all three employees, Brunet, Cattral and Beauchamp were aware that these items were being purchased based on their telephone calls with Gehmlich inquiring about the status and delivery dates for the above devices in the intercepted communications. Based on the above evidence and the wiretap evidence, I also find beyond a reasonable doubt that Cattral, Brunet and Beauchamp sold these devices to various customers using unverified or false names, and generally the invoice was made out to “Cash Sale”.

I find that Cattral, Brunet and Beauchamp knew that the MIR38, KT100 and KT104 devices were intended to be used to forge credit cards based on their decision not to advertise the MIR38, the KT100 and the KT104 devices, the wiretap interceptions including the website and their intention to sell the devices only to customers who attended the Canadian Barcode premises.

[226] There is ample support in the record for these findings. Consequently, even if the trial judge had not been under the mistaken impression that Brunet had conceded her guilt on Count 15, the Crown’s case was so overwhelming that a reasonable and properly instructed trier of fact would inevitably have convicted on this count.

[227] We reject this ground of appeal.

C. ADDITIONAL GROUNDS OF APPEAL RAISED BY BEAUCHAMP

[228] Beauchamp appeals his conviction on Count 9 – selling a device (a PMR600 magnetic stripe reader) knowing that it was intended for use in forging credit cards, contrary to s. 342.01(1)(b) of the Criminal Code. He says he should not have been

convicted of that offence because the purchaser in the transaction forming the basis for the charge was an undercover police officer who, by definition, could not have intended to use the device illegally. He therefore could not have known the device was intended for such use. He concedes that, if he is not guilty on Count 9, he should be convicted of the lesser offence of attempting to commit this crime.

[229] The Crown submits that s. 342.01(1)(b) does not require it to prove the purchaser’s intent; the intent of the seller is all that matters. We agree.

[230] The following is not in dispute: (i) the device was never actually used for the purpose of forging credit cards, and the purchasing undercover officer had no intention of using it for that purpose; (ii) Beauchamp sold the PMR600 device to the undercover officer; and, (iii) when he did so, Beauchamp “undoubtedly” believed that the purchaser was a criminal, and “undoubtedly” believed that the purchaser intended to use the device to forge credit cards.

[231] Beauchamp relies upon the decision of the Supreme Court of Canada in United States of America v. Dynar, [1997] 2 S.C.R. 462, at paras. 35 and 37-44. In that case, the appellant was facing extradition to the United States on charges of attempted money laundering and conspiracy to commit money laundering. But he was to receive the funds for that alleged purpose from an undercover police officer. The Court held that because the money Dynar was to receive was not, in fact, the proceeds of crime, Dynar could not have known that the funds constituted the proceeds of crime; one cannot know the impossible, i.e., what is factually untrue: at para. 47.

[232] We agree with the trial judge that Dynar is distinguishable. Here, unlike in Dynar, the Crown led evidence to establish the necessary intent for conviction: Beauchamp knew that the device was intended to be used to forge credit cards, and whether the purchaser actually intended to use the purchased device for that purpose is not material.

[233] We accept the trial judge’s conclusion, at para. 160 of his reasons, as an accurate statement of the law:

I agree with the Crown’s submission that the offence under … section 342.01(1)(b) is made out when the two essential elements are proven beyond a reasonable doubt by the Crown. The section states that “[e]very person who, without lawful justification or excuse, (b) buys or sells, … any instrument, device, apparatus, material or thing that the person knows, has been used or knows it is adapted or intended for use in forging of falsifying credit cards is guilty …” [emphasis added]. The offence is established by proof that the accused knew the device was adapted or intended for use in the forging or falsifying of credit cards and that the accused sold the device. There is no requirement for the Crown to prove the device was, in fact, used or intended by the purchaser to be used for such a purpose.

[234] The language of s. 342.01(1) confirms this interpretation. At the time of trial, its relevant portions stated:[13]

342.01(1) Every person who, without lawful justification or excuse,

(a) makes or repairs,

(b) buys or sells,

(c) exports from or imports into Canada, or

(d) possesses

any instrument, device, apparatus, material or thing that the person knows has been used or knows is adapted or intended for use in forging or falsifying credit cards is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years, or is guilty of an offence punishable on summary conviction.

[235] Several themes emerge from this language.

[236] First, the offences created by s. 342.01(1) are preliminary and preventative in nature. They are designed to capture an open-ended scope of conduct in order to thwart the commission of the crime of forging or falsifying credit cards – a crime which, as noted earlier in these reasons, is harmful and costly to Canadian society as a whole.

[237] For that reason, the reach of the section is intended to be broad. It extends to a wide variety of objects (instruments, devices, apparatuses, materials and “things”), and to a wide range of activities (making, repairing, buying, selling, exporting, importing, or possessing those objects). In addition, the mental element for the offences is multi-faceted. It encompasses knowledge that the items either: (i) have been used; (ii) have been adapted for use; or (iii) are intended for use, in forging or falsifying credit cards.

[238] Second, the section must be interpreted in a way that is consistent with its broad purpose and broad language. This approach to interpretation militates against the meaning that Beauchamp seeks to apply to the words “intended for use”. Beauchamp was charged with selling materials that he knew were intended for use in forging credit cards. He says “intended for use” must mean “intended by the purchaser to be used” for that purpose. We disagree. It would be inconsistent with the section’s broad, preventative purpose to require proof of a third party’s intention to prove the offence’s mental element. In our view, the words “intended for use” refer to the intention of the seller, not to the intention of a third party to use the item for the prohibited purpose.

[239] Third, the way in which words are used within the section creating the offence must be given a cohesive meaning. Importing the intention of a third party into the “intended for use” mental element where the offence alleged is selling (or buying) is

inconsistent with the elements of the offence when committed in the other ways listed in s. 342.01(1). For example, it is an offence to “make” any of the targeted items knowing that they are “intended for use” in forging credit cards. It is similarly an offence to “repair” or to “possess” them with the same knowledge. In those circumstances, the offence can be completed without the involvement of any third party. It makes no sense to require proof of a third party’s intention to establish the offence’s mental element in some circumstances but not in others.

[240] The decision of the Supreme Court of Canada in Irwin v. The Queen, [1968] S.C.R. 462, involved a similar argument, albeit in a different context. Irwin sold drugs to an undercover officer, believing the officer intended to use them to procure a miscarriage. The undercover officer had no intention of using the drug. Irwin was nonetheless convicted of the offence of “suppl[ying] … a drug or other noxious thing … knowing that it [was] intended to be used or employed to procure” a miscarriage, contrary to what was then s. 238 of the Criminal Code: at p. 464.

[241] Speaking for the Court, Ritchie J. held that the words “intended to be used” related to the intention of the supplier and not to that of the person supplied. Significantly, in arriving at this conclusion, he expressly rejected an older authority from the Supreme Court of Victoria that had adopted the opposite interpretation of the same language: Reg. v. Hyland (1898), 24 Vict. L.R. 101. Instead, Ritchie J. adopted the approach taken by an earlier line of English authorities holding that only the intention of the accused person – and not that of anyone else – is necessary to constitute the offence: see R. v. Hillman (1863), 9 Cox C.C. 386, 169 E.R. 1424; see also R. v. Titley (1880), 14 Cox C.C. 502.

[242] Irwin is instructive, in our view. Section 342.01(1) has a similar preventative objective to that of the former s. 238 of the Code and the language of both is deliberately broad to accomplish that objective. “Selling” a device with the knowledge that it is “intended for use” in forging credit cards, as prohibited by s. 342.01(1), is little different than supplying a drug or noxious substance “knowing that [the drug] is intended to be used or employed to procure a miscarriage”, in the words of the former s. 238. It is the intention of the seller and not that of the purchaser that is relevant.

[243] Beauchamp was properly convicted on Count 9.

D. ADDITIONAL GROUNDS OF APPEAL RAISED BY SHANGHAVI

[244] Shanghavi appeals from his convictions on Counts 19 and 21. Both counts alleged that he was in possession of devices (mini data loggers #3207 and #3225) knowing they were intended for use in forging credit cards.

[245] The main complaint with respect to Count 21 is that the trial judge improperly inferred from Shanghavi’s silence during certain communications with Cattral that Shanghavi had admitted to possessing the data loggers in question.

[246] The trial judge did find that Shanghavi – without expressly saying so – had adopted, as an admission, his ownership and possession of the two data loggers in issue during a series of MSN chats between him and Cattral that were captured in the wiretap intercepts. At paras. 115 and 120 of his reasons, he made the following findings:

In the conversations intercepted on May 17, 2004, Cattral tells Shanghavi to find out where all his data loggers are that went out before December, 2003; Cattral also tells Shanghavi to locate #07 and 37. I infer that these are two data loggers with serial numbers 3207 and 3237 which were sold by Canadian Barcode to Shylok [Shanghavi’s alias] on November 18, 2003 according to Cattral’s business records in the SSS Database. Shanghavi advised Cattral that he has “got the 3207 right here”. This evidence is contained in intercept #197 and in the SSS Database at lines 2431 and 2432.

…

I find that when interceptions #192C, 193, 194, 195, 196, 197, 198, 199 are read together in context, that Shanghavi has adopted as an admission of the following facts as submitted by the Crown:

a) That he bought data loggers 3225, 3207, 3237 from Canadian Barcode;

b) That the data loggers were being used in criminal circumstances that could result in their being seized by police. In fact, he is aware that data logger 3225 had been seized by the R.C.M.P.;

c) He wanted Cattral to withhold information from the police that he had a backdoor password by using the word “DON’T!” in his conversation with Cattral.

[247] We see no error in these findings. The trial judge applied the correct legal principles: an admission may be implied from a party’s silence in the face of statements made by others in circumstances where the party could reasonably have been expected to respond: R. v. Robinson, 2014 ONCA 63, 118 O.R. (3d) 581, at paras. 48-58; Regina v. Dubois (1986), 27 C.C.C. (3d) 325 (Ont. C.A.); Regina v. Baron and Wertman (1976), 14 O.R. (2d) 173 (C.A.). Martin J.A. put it this way, in Baron and Wertman, at p. 187:

The silence of a party will render statements made in his presence evidence against him of their truth if the circumstances are such that he could reasonably have been expected to have replied to them. Silence in such circumstances permits an inference of assent. [Citations omitted.]

[248] Morden J.A. adopted the same principle in Dubois, at p. 341:

The rule bearing on this issue is that a statement made by another in the presence of the accused is only admissible against him in circumstances where he expressly adopts the statement or where by his words, action, conduct or demeanour he may be taken to have inferentially adopted it. [Emphasis added; citations omitted.]

[249] The trial judge conducted a very detailed review of the relevant wiretap intercepts, and other evidence. The inferences he drew and the findings of fact he made with respect to the admissions were open to him on the evidence, and we see no basis for interfering with them.

[250] Shanghavi makes two additional submissions with respect to Counts 19 and 21. He argues, first, that the trial judge erred in placing reliance on Canadian Barcode’s SSS Database in making the above findings and, second, that the trial judge erred in his approach to the “in furtherance” requirement of the co-conspirator’s exception to the hearsay rule.

[251] The trial judge had earlier ruled that the contents of the SSS Database were inadmissible as against Shanghavi, because it was not his database and he did not have it in his possession. We agree that there are aspects of the trial judge’s findings referred to above in which he appears to have relied on evidence that could have come from the SSS Database, particularly in connection with the finding that Canadian Barcode had sold the data loggers to Shanghavi. We do not find this error material, however. Counts 19 and 21 did not charge Shanghavi with buying the data loggers; they alleged that he had them in his possession. Apart from the SSS Database, there was overwhelming evidence in the intercepts, and elsewhere, that Shanghavi had the devices in his possession at the pertinent times. In any event, there was other evidence in the wiretap intercepts from which the trial judge could – as he did in para. 120 – draw the inference that Shanghavi had bought the data loggers from Canadian Barcode.

[252] Finally, we do not think Shanghavi’s argument regarding the co-conspirators exception to the hearsay rule assists him. The argument appears to be focussed on the following statement by the trial judge at para. 210 of his reasons, where he summarized his findings in support of Shanghavi’s conviction on Count 19 (possession of data logger #3207):

I find that Mr. Shanghavi’s statements in intercept #197, made in the context of trying to locate his data loggers constitutes an admission. Minutes after the conversation in which he was attempting to locate the two data loggers, #07 and #37, Shanghavi stated “got 3207 right here”. I find that this statement was made by Shanghavi to Cattral in the context of the conversation with Cattral, which I previously held to be admissible under the co-conspirator’s exception to the hearsay rule, and even if only admitted for the narrative is an admission by Shanghavi that he has the data logger 3207 in his possession at that time. The discussion concerning data logger #3207 ended because Mr. Shanghavi discovered that it was in his possession.

[253] Shanghavi submits that the trial judge was required to conduct a separate “in furtherance of the conspiracy” analysis in relying upon the conversation with Cattral. We disagree. The trial judge had previously conducted a careful Carter[14] inquiry into the admissibility of the wiretap interceptions as against the appellants. He found that there was a conspiracy between Cattral, Brunet, Beauchamp and Shanghavi to pursue the common design and plan to commit credit card fraud, and that the sale of the devices to Shanghavi “was but one step in the process which contemplated several further steps to commit the offence of credit card fraud”. The trial judge referred as well to Cattral’s decision to tip off Shanghavi that the police had retrieved data logger #3225 to assist Shanghavi’s commission of fraud after purchasing the devices.

[254] In any event, the wiretap communications that took place directly between Cattral and Shanghavi did not require reliance on the co-conspirators’ exception rule for their admissibility. Shanghavi made a direct admission – “got 3207 right here” – during one of the MSN exchanges on May 17, 2004, immediately after a discussion about locating data loggers #07 and #37. That alone provided a sufficient basis for the trial judge’s inference and finding that Shanghavi had the #3207 data logger – the subject matter of Count 19 – in his possession.

[255] We do not give effect to this ground of appeal.

IV. DISPOSITION OF CONVICTION APPEALS

[256] For the foregoing reasons, the conviction appeals are dismissed.

ANALYSIS – THE SENTENCE APPEALS

[257] All appellants appeal against their sentences, on various grounds. We begin our analysis of the issues raised on the sentence appeals by first considering some of the sentencing principles specific to s. 467 offences.

I. RELEVANT SENTENCING PRINCIPLES – SECTION 467

[258] For convenience, we again set out s. 467.12(1):

Every person who commits an indictable offence under this or any other Act of Parliament for the benefit of, at the direction of, or in association with, a criminal organization is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.

[259] As discussed earlier in these reasons, the broad language employed in s. 467 confirms the criminal organization provisions are intended to encompass a wide array of co-ordinated serious crimes, including credit card fraud. The section takes aim at the

enhanced harm to society occasioned by a variety of groups who knowingly and collectively engage in criminal activity of a serious nature.

[260] In R. v. Mastop, 2013 BCCA 494, 303 C.C.C. (3d) 411, at para. 46, leave to appeal to S.C.C. refused, [2014] S.C.C.A. No. 23, the British Columbia Court of Appeal described the overall purpose of s. 467 in this fashion:

The overall objective of the criminal organization legislation is to protect society from the wide-ranging effects, violent and otherwise, of criminals who work together as a group, as well as to prevent and deter organized criminal activities. Offenders who regularly commit crimes together are a greater menace to society than an individual offender working alone.

[261] We endorse these comments. Protection of the public, deterrence and denunciation are the primary sentencing objectives for s. 467 offences. We also agree with the Crown’s submission that the achievement of these objectives depends on the prospect of significant penal sanctions for organized criminal conduct.

[262] As a consequence of the wide sweep of acts targeted by the criminal organization provisions, there is no established range of sentence for s. 467 offences: Mastop, at para. 68. This recognizes that s. 467, including s. 467.12(1), can apply to any conduct, including otherwise lawful conduct, that furthers the activities of a criminal organization.

[263] Parliament has underscored the seriousness of s. 467 offences in three important ways relevant to sentencing.

[264] First, s. 467.14 of the Criminal Code provides that sentences for offences under ss. 467.11, 467.12 or 467.13 shall be served consecutively to any other punishment imposed on the offender for an offence arising out of the same event or series of events and to any other sentence to which the offender is subject at the time the s. 467 sentence is imposed.

[265] Second, under s. 743.6(1.2) of the Criminal Code, a presumption in favour of parole ineligibility is triggered when an offender receives a sentence of imprisonment of two years or more for a s. 467 conviction. In these circumstances, the offender must serve half of his or her sentence or ten years, whichever is less, before being released on full parole, unless the court orders otherwise based on the test specified in s. 743.6(1.2).

[266] The statutory test for granting relief from parole ineligibility reveals Parliament’s intention regarding the objectives of sentencing for a s. 467 offence. Under s. 743.6(1.2), delayed eligibility for full parole may be avoided only where:

the court is satisfied, having regard to the circumstances of the commission of the offence and the character and circumstances of the offender, that the

expression of society’s denunciation of the offence and the objectives of specific and general deterrence would be adequately served by a period of parole ineligibility determined in accordance with the Corrections and Conditional Release Act. [Emphasis added.]

[267] Thus, s. 743.6(1.2) underscores the seriousness of a s. 467 offence and affirms the goal of fashioning a sentence that signals society’s condemnation of the offence and that also achieves specific and general deterrence.

[268] Third, by reason of s. 718.2(a)(iv) of the Criminal Code, evidence that an offence was committed for “the benefit of, at the direction of, or in association with, a criminal organization” is a statutory aggravating factor on sentencing.

[269] We approach Cattral’s, Brunet’s and Beauchamp’s appeals from the sentences imposed on their s. 467.12(1) convictions with these important principles at the forefront.

II. DISCUSSION

A. CATTRAL’S SENTENCE APPEAL

[270] Cattral was convicted of five counts of buying and selling devices knowing that they were intended for use in credit card fraud (the MIR38 and KT100), four counts of fraudulent possession of credit card data, and one count of obstructing a police officer in relation to the investigation into the seized data logger #3225. Cattral, together with Brunet and Beauchamp, was also convicted of one count of committing the indictable offence of selling devices used to forge credit cards for the benefit of a criminal organization, contrary to s. 467.12(1). His conviction under s. 467.11(1) – participating in or contributing to the activities of a criminal organization – was stayed in accordance with Kienapple: R. v. Beauchamp, Brunet, Cattral and Shanghavi, 2010 ONSC 1707.[15]

[271] Cattral was sentenced to a global sentence of seven years’ imprisonment, less eight months’ credit for approximately four and one-half months’ pre-sentence custody. He received sentences totalling four years’ imprisonment on his non-criminal organization convictions, plus six months, concurrent, on his obstruction of justice conviction and an additional three years’ imprisonment, consecutive, on his criminal organization conviction under s. 467.12(1).

[272] In addition, pursuant to s. 743.6(1.2) of the Criminal Code, the trial judge ordered Cattral to serve half of his sentence on his s. 467.12(1) conviction before becoming eligible for full parole. He also imposed a fine of $40,000 in lieu of forfeiture, payable within three years of the date of sentence, failing which an additional 12-months in jail, consecutive, would apply. A DNA order was also made.

[273] In his factum, Cattral raises three grounds in support of his sentence appeal. He argues that the trial judge erred: (i) by treating his conduct that benefitted a criminal organization as an aggravating factor in respect of his non-criminal organization offences and also imposing a three year consecutive sentence for his s. 467.12(1) conviction, thereby allegedly “penalizing [Cattral] twice for the same conduct”; (ii) by treating Cattral’s assistance to law enforcement agencies as an aggravating, rather than a mitigating, factor; and (iii) by failing to apply the sentencing principles of parity and totality to his seven-year global sentence in a meaningful way, thereby imposing a manifestly unfit sentence.

(1) Parity and Totality

[274] Cattral, Brunet and Beauchamp all raise parity arguments in support of their sentence appeals. In Cattral’s case, his submissions during the appeal hearing focused on his parity and totality argument. Cattral submits that his global sentence of seven years in jail, together with reduced parole eligibility, is so disproportionate to the sentences imposed on Persaud and SST as to offend both the parity and totality principles of sentencing. In particular, he contends that the three-year sentence of imprisonment on his s. 467.12(1) conviction is disproportionate to the sentences imposed on SST and Persaud, and that a one-year jail sentence, consecutive to his sentences on his other convictions, is appropriate.

[275] We disagree. For reasons we will explain, we conclude that the parity and totality principles of sentencing do not compel a reduction in the overall length of Cattral’s sentence and that his global sentence is fit.

(a) The Parity Issue

[276] First, the issue of parity. The parity principle is codified in s. 718.2(b) of the Criminal Code. That provision directs that “a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances.” The principle of parity of sentences is intended “to preserve fairness by avoiding disparate sentences where similar facts relating to the offence and offender would suggest like sentences”: R. v. Rawn, 2012 ONCA 487, 294 O.A.C. 261, at para. 18; see also R. v. Mann, 2010 ONCA 342, 261 O.A.C. 379, at para. 16.

[277] That said, the parity principle does not require equal or identical sentences for similarly situated offenders, nor is it to be applied in a rigid fashion. Rather, parity is only one of several principles that must guide a sentencing judge’s crafting of a fit sentence: R. v. Chambers, 2013 ONCA 680, 311 O.A.C. 307, at para. 31. In R. v. Issa (T.) (1992), 57 O.A.C. 253, at para. 9, leave to appeal to S.C.C. refused, [1992] S.C.C.A. No. 476, this court explained:

So long as sentencing remains an individual process there may be sentences meted out to offenders for participation in the same offence which are justifiably disparate. [We] think that Clayton Ruby’s statement in Sentencing (3rd Ed. 1987), at p. 29 is correct, that the rule against unreasonable disparity in sentencing ‘does not require equal sentences, but only understandable sentences when examined together.’ [Citations omitted.]

See also R. v. M. (C.A.), [1996] 1 S.C.R. 500, at para. 92; R. v. Flowers, 2010 ONCA 129, 258 O.A.C. 97, at para. 10.

[278] Thus, disparate sentences for different offenders for the same offence do not violate the parity principle, so long as the sentences are warranted by all the circumstances: R. v. L.M., 2008 SCC 31, [2008] 2 S.C.R. 163, at para. 36; R. v. Courtney, 2012 ONCA 478, 294 O.A.C. 346, at para. 4.

[279] Further, even if a similarly situated offender receives a somewhat lighter sentence for the same offence, the offender who receives the higher sentence is not automatically entitled to the benefit of the lower sentence received by his or her co-offender: Flowers, at para. 10.

[280] In each case, a reviewing court should only intervene to minimize disparity in sentences where the sentence in question is “in substantial and marked departure from the sentences customarily imposed for similar offenders committing similar crimes”: M. (C.A.), at para. 92.

[281] Applying these principles to Cattral’s case, we see little parallel between his circumstances and those of Persaud and SST.

[282] Persaud pleaded guilty to 20 credit card fraud related offences and received an effective sentence of four years’ imprisonment, on a joint submission. He had 67 prior criminal convictions, 33 of which related to credit card offences. At trial, he gave evidence for the Crown. SST, the designer and manufacturer of the skimming devices sold by Canadian Barcode, received a fine of $30,000 after entering a corporate plea of guilty. As we have said, the charges against SST’s principals, Gehmlich and Winslow, were withdrawn and Gehmlich testified at trial for the Crown.

[283] The trial judge addressed, and rejected, Cattral’s argument that the principles of parity and proportionality should operate to reduce his sentences in light of the sentences imposed on Persaud and SST. In our view, he was correct to do so.

[284] Persaud and SST, unlike Cattral, entered guilty pleas, thus avoiding a complex and lengthy trial and attracting significant mitigation credit on sentencing. As the trial judge aptly observed, at para. 31: “Even if Persaud and SST’s sentences were somewhat light, Cattral … [is] not automatically entitled to benefit from Persaud and SST’s favourable plea arrangement.”

[285] Moreover, Persaud and SST’s guilty pleas contemplated co-operation with the Crown at trial. Although Persaud and Gehmlich testified reluctantly, this does not alter the fact that their trial evidence formed an important plank in the Crown’s case.

[286] Apart from Persaud and SST’s admissions of guilt, other distinguishing features place Cattral in a materially different sentencing context.

[287] First, and importantly, Persaud and SST were not convicted of a s. 467 criminal organization offence, where the sentence must be served consecutively.

[288] Earlier in these reasons, we underscored the gravity of a s. 467 offence. The seriousness of co-ordinated criminal activity should not be gainsaid. In the context of credit card fraud that benefits a criminal organization, the harm potentially occasioned by the crime is far-reaching and of considerable magnitude, implicating numerous victims. The trial judge put it this way, at para. 2 of his sentencing reasons: “Payment card fraud adversely affects both financial institutions and members of the public”, and “[it] is responsible for losses of approximately $500 million each year to the payment card industry in Canada.” This harm is amplified when the fraud in question is the product of organized and co-ordinated criminal activity.

[289] Accordingly, the fact that Persaud and SST were not found guilty of a s. 467 offence materially distinguishes their moral blameworthiness from that of Cattral.

[290] Second, on the trial judge’s findings, Cattral was the mastermind of serious ongoing credit and debit card frauds effected by the Canadian Barcode Group. He was the face of the criminal operation and functioned as the organization’s technical expert. He also developed the RenCode software program that enabled the forging of credit cards, and he provided expert technical assistance and advice to customers and suppliers like Persaud and SST. Unlike Persaud, who was a lower-level operative and customer of Canadian Barcode, Cattral functioned at the upper echelon of the hierarchy of a criminal organization involved in a sophisticated and highly damaging type of crime.

[291] Third, Cattral’s criminal record included convictions in 2000 for possession of credit card data and unauthorized use of data, plus assault with a weapon.

[292] Cattral’s global seven-year sentence thus reflects his crucial and directing role in the criminal organization, his antecedents, and his lack of responsibility and remorse. On these grounds, Cattral was differently situated from Persaud and SST.

(b) The Totality Issue

[293] We also reject the contention that the totality principle mandates a reduction in Cattral’s seven-year sentence.

[294] Clayton Ruby describes the totality principle in his treatise, Sentencing, 8th ed. (Markham: LexisNexis Canada Inc., 2012), at p. 50, in these terms:

The purpose is to ensure that a series of sentences, each properly imposed in relation to the offence to which it relates, is in aggregate “just and appropriate”. A cumulative sentence may offend the totality principle if it is substantially above the normal level of a sentence for the most serious of the individual offences involved, or if it is “a crushing sentence” not in keeping with the offender’s record and prospects.

[295] In R. v. Johnson, 2012 ONCA 339, 291 O.A.C. 350, at para. 18, this Court explained the operation of the totality principle:

In short, a combined sentence must not be unduly long or harsh in the sense that its impact simply exceeds the gravity of the offences in question or the overall culpability of the offender. The overall length of the custodial period imposed must still relate to and reflect the variety of sentencing goals, including denunciation, deterrence (specific and general), rehabilitation, the need to separate offenders from society where necessary, and the general imperative of promoting respect for the law and the maintenance of a just, peaceful and safe society: Criminal Code, s. 718. In this regard, the authorities recognize that where the ultimate effect of the combined sentences is to deprive the offender of any hope of release or rehabilitation, the functional value of these sentencing principles meets the point of diminishing returns. [Citations omitted.]

[296] In this case, there is no suggestion that the sentences imposed for Cattral’s non-criminal organization offences are unfit. The authorities reviewed by the trial judge in relation to other multiple-count, serious credit card fraud cases confirm that Cattral’s four-year custodial term was well within the range of appropriate sentences.

[297] Moreover, in fashioning an appropriate sentence for Cattral’s s. 467.12(1) offence, the trial judge expressly considered the totality principle. Near the outset of his analysis of the principles of sentencing applicable in Cattral’s case, the trial judge stated, at para. 23: “The principle of proportionality and the totality of the sentence to be imposed are also applicable principles on this sentencing.”

[298] Later in his reasons, the trial judge returned to the issue of totality. He held, at paras. 44-46:

The applicable principle [sic] of sentencing which applies to Cattral is denunciation and specific and general deterrence.

I agree with Cattral’s submission that Canadian Barcode’s conduct was not as serious as that of a violent biker gang as it was not involved in any violent activities [sic] however, credit card fraud is a serious offence. A sentence of

three (3) years imprisonment on the criminal organization conviction when added to the sentence imposed for the underlying credit card fraud related [convictions] would result in a total effective sentence of seven (7) years imprisonment. I find the totality of this sentence is sufficient to achieve the objectives of denunciation and specific [and] general deterrence in these circumstances and to protect members of the public and the well-being of our financial system.

I therefore find in the circumstances of this case, given that Cattral was the mastermind of the organization, the sophistication of the operation, Cattral’s high level of knowledge and expertise, having a PhD in computer science, the potential for huge losses to Canadian financial institutions from the organized sale of devices intended to be used to forge credit cards, the lack of violence, that a further term of imprisonment of three (3) years consecutive, should be imposed on Cattral for the conviction on Count #13. [Emphasis added.]

[299] In light of these comments, we do not accept Cattral’s claim that the trial judge failed to address totality meaningfully when crafting an appropriate sentence.

[300] We also specifically reject any suggestion that the three-year jail sentence imposed on Cattral’s s. 467.12(1) offence is unfit. While there is no established range of sentence for criminal organization offences, provincial appellate courts have upheld similar sentences for s. 467 offences. See for example, Mastop (two and one-half years’ imprisonment for a s. 467.11 conviction); R. v. Lindsay, 2009 ONCA 532, 97 O.R. (3d) 567 (four years’ and four months’ imprisonment for extortion and a s. 467.12(1) conviction).

[301] Finally, at the sentencing hearing, the Crown sought a total sentence of nine years in jail for Cattral – five years on his s. 467.12(1) offence and four years on his various credit card fraud related and obstruction of justice offences. Defence counsel urged a total sentence of four years’ imprisonment, on all charges, with credit on a 2:1 basis for pre-sentence custody.

[302] The trial judge concluded, in all the circumstances, that a global sentence at the approximate mid-point of the sentences urged by counsel – seven years in jail – met the objectives of denunciation, deterrence and protection of the public.

[303] We see no reversible error in this conclusion. In our view, Cattral’s global sentence appropriately recognized the seriousness of his offences and the magnitude of his culpability.

[304] Accordingly, this ground of appeal fails.

(2) Other Grounds

[305] Although they were not the focus of his oral submissions before this court, it is appropriate to comment briefly on Cattral’s remaining grounds of appeal.

[306] First, Cattral argues that the trial judge erred by treating Cattral’s provision of assistance to law enforcement authorities as an aggravating, rather than a mitigating, factor on sentencing. Cattral contends that the trial judge adopted a “jaded history” of his assistance to police, leading to the improper characterization of this assistance as an aggravating circumstance.

[307] We disagree.

[308] The trial judge accepted that Cattral is a computer expert, as evidenced both by his doctorate degree in computer science and his role as a technical consultant to various police forces. He found as a fact, at para. 26, that Cattral’s provision of assistance to the police served as “a way of gathering information about what devices the police had discovered in the field and about what the police knew about the devices.”

[309] The evidentiary record overwhelmingly supports these findings. The evidence at trial established that Cattral exploited the information gleaned through his consulting services to the police to perpetuate Canadian Barcode’s criminal activities. Based on insider information learned from the police, he warned customers, including Shanghavi and Persaud, of police interest in or attentiveness to their fraudulent activities. Recall, for example, that he alerted Shanghavi that one of his devices, data logger #3225, had been seized by the police and offered Shanghavi advice on how to avoid detection. He also took active steps to conceal the identity of Canadian Barcode’s customers and misled the police in their investigation, leading to his conviction for obstruction of justice.

[310] In light of this evidence, it was open to the trial judge to find Cattral had an ulterior motive in assisting the police that furthered his criminal activities and those of the Canadian Barcode Group.

[311] Nor do we see any error in the trial judge’s treatment of this evidence as an aggravating factor on sentencing. Cattral capitalized on his role as a police consultant to facilitate his crimes and those of his associates and to avoid detection of those activities by the authorities. This was a pertinent and aggravating circumstance on sentencing.

[312] Finally, Cattral contends that the trial judge engaged in impermissible “double-counting” by treating the conduct underlying his s. 467.12(1) conviction as an aggravating factor when sentencing him for his non-criminal organization offences, while also imposing a three-year consecutive sentence for the s. 467.12(1) offence itself.

[313] Again, we disagree. We will explain our reasons for rejecting this “double-counting” complaint when addressing Brunet’s sentence appeal, on which essentially the same issue arises.

B. BRUNET’S SENTENCE APPEAL

[314] Like Cattral, Brunet was convicted of five counts of buying and selling devices knowing that they were intended for use in credit card fraud and committing the indictable offence of selling devices used to forge credit cards for the benefit of a criminal organization. She was also convicted of one count each of conspiring to commit the indictable offence of forging credit cards and breaching a condition of her bail by communicating with a person known to have a criminal record.

[315] At trial, the Crown sought a global sentence of six years’ imprisonment (three years on the credit card fraud related offences and the breach of recognizance, and three years on the criminal organization offence). The defence argued for a conditional sentence of 12 to 15 months’ imprisonment, together with three years’ probation.

[316] The trial judge sentenced Brunet to four years’ and one-month imprisonment, concurrent, on all counts, as follows: two years’ imprisonment on Brunet’s credit card fraud related convictions, plus one month, concurrent, on the breach of recognizance conviction, and two years’ imprisonment on Brunet’s s. 467.12(1) conviction. As in Cattral’s case, he also ordered that Brunet: (i) serve half of her s. 467.12(1) sentence prior to being eligible for full parole; (ii) pay a $40,000 fine in lieu of forfeiture within three years from the date of sentence, failing which a further 12-month jail term, consecutive, would apply; and (iii) provide a DNA sample.

[317] Brunet raises three grounds in support of her sentence appeal. First, like Cattral, she advances a “double-counting” argument. She maintains the trial judge erred in principle by treating the conduct underlying her s. 467.12(1) conviction as an aggravating factor in respect of her non-criminal organization offences and also imposing a two-year jail term, consecutive, for the s. 467.12(1) conviction.

[318] Second, Brunet submits the trial judge failed to consider and apply properly the principles of restraint and parity when sentencing Brunet to her first custodial sentence.

[319] Third, Brunet maintains the trial judge did not provide adequate reasons in support of his decision to delay Brunet’s parole eligibility under s. 743.6(1.2).

[320] In light of these errors, Brunet says her global sentence of four years’ imprisonment was excessive. Before this court, she submits that a sentence of 14 to 15 months in jail (eight months on the non-criminal organization convictions and approximately six months on the s. 467.12(1) conviction) is appropriate. Brunet does not challenge the trial judge’s ruling that a conditional sentence was unavailable in all the circumstances.

[321] We do not accept these arguments. For the following reasons, we regard Brunet’s global four-year sentence of imprisonment as fit and amply justified in all the circumstances.

(1) The “Double-Counting” Issue

[322] We see no merit to the double-counting complaint advanced by Brunet and Cattral.

[323] Where, as here, there is evidence before a sentencing judge that an offence was committed for the benefit of a criminal organization, Parliament has decreed such evidence shall be considered as an aggravating circumstance on sentencing: Criminal Code, s. 718.2(a)(iv). By reason of s. 467.14 of the Criminal Code, Parliament has also directed that a s. 467.12 sentence must be served consecutively to any other punishment imposed on the offender for an offence arising out of the same event or series of events and to any other sentence to which the offender is subject at the time when the s. 467 sentence is imposed.

[324] Brunet essentially invites this court to read s. 718.2(a)(iv) as applying only where no s. 467 conviction has occurred. In other words, on Brunet’s interpretation of the interplay between ss. 718.2(a)(iv) and 467.14, evidence of conduct supporting a s. 467.12(1) offence is an aggravating circumstance on sentencing only in the absence of a s. 467 conviction.

[325] This interpretation must be rejected. There is nothing in the language of s. 718.2(a)(iv) to support this narrow construction. Brunet was unable to point to any authority or principled rationale for confining the application of s. 718.2(a)(iv) to cases involving only non-criminal organization offences. And s. 467.14 is clearly not restricted to situations where only a s. 467 conviction is at issue: s. 467.14 specifically applies when convictions in addition to a single s. 467 conviction are in play.

[326] In our view, a plain reading of s. 718.2(a)(iv) confirms that evidence an offence was committed in association with or for the benefit of a criminal organization is an aggravating factor on sentencing for non-criminal organization offences, even when the offender is also convicted of a s. 467 offence. Like any other statutory aggravating circumstance, it is but one of many factors to consider when fashioning an appropriate sentence.

[327] Further, the application of both ss. 718(2)(a)(iv) and 467.14 in a given case is consistent with the approach to sentencing dictated under the Criminal Code for other offences. For example, breach of trust is a criminal offence under ss. 122 and 336 of the Criminal Code, while abuse of a position of trust or authority in relation to a victim is a deemed aggravating factor on sentencing under s. 718.2(a)(iii). It is also consistent with Lindsay, where evidence that extortion was committed in association with a

criminal organization was an aggravating factor on sentencing for the extortion conviction, together with sentencing for a s. 467 offence.

[328] Finally, nothing in the trial judge’s sentencing reasons suggests he overemphasized the s. 718(2)(a)(iv) aggravating factor in relation to Brunet. In determining a fit sentence, the trial judge emphasized the principles of rehabilitation, denunciation and deterrence as key sentencing considerations. He listed Brunet’s role as part of a criminal organization that sold devices to forge credit cards as but one of seven relevant aggravating factors. He also identified six mitigating factors, and went on to conclude that both proportionality and rehabilitation were pertinent considerations on sentencing.

[329] We therefore see no reversible error in the trial judge’s treatment of the s. 718(2)(a)(iv) statutory aggravating factor, nor in his rulings under s. 467.14 that Cattral’s and Brunet’s sentences on their criminal organization convictions be served consecutively.

(2) Restraint and Parity

[330] We also reject Brunet’s submission that the trial judge erred by failing to consider and apply properly the principles of restraint and parity in the circumstances of her case.

[331] There are two branches to this submission. First, Brunet argues that if she succeeds on her conviction appeal in respect of Count 13 (the s. 467.12(1) conviction) or Count 6 (conspiracy with Persaud to commit the offence of forging credit cards) and Count 15 (selling a device, the KT100, knowing it was intended for use in forging credit cards), her global sentence should be reduced. We have already rejected Brunet’s appeal from these convictions. It follows that this branch of Brunet’s restraint and parity argument is moot.

[332] Second, Brunet contends that her global sentence of four years’ imprisonment is disproportionate to the sentences imposed on Persaud (four years in jail following guilty pleas) and Beauchamp (two years and nine months in jail for an offender with a lengthy criminal record). Brunet also argues that the trial judge failed to take account of the conditions and length of her bail, notwithstanding that Brunet has only a minor prior criminal record and faced a custodial sentence for the first time. Based on these factors, Brunet maintains her global sentence is excessive and should be significantly reduced.

[333] This branch of Brunet’s restraint and parity argument also fails. Neither Persaud nor Beauchamp was convicted of a s. 467 offence. We have emphasized the critical importance of this distinguishing feature earlier in these reasons.

[334] Moreover, the trial judge’s sentencing reasons belie the suggestion that he failed to consider and properly apply the restraint and parity principles. To the contrary, in our view, parity and restraint considerations figured prominently in the trial judge’s sentencing analysis.

[335] The trial judge explicitly recognized Brunet’s invocation of these principles, together with her associated argument that a first jail sentence should be as short as possible: at para. 58. He rejected Persaud as a fit comparator to Brunet given that Persaud pleaded guilty to numerous credit card fraud offences. In contrast, it was not until the end of trial that Brunet pleaded guilty to any offences and, even then, she only pleaded to two counts of fraud under s. 342.01 of the Criminal Code. The weight to be accorded to this distinguishing factor was a matter for the trial judge.

[336] The trial judge was mindful of the fact that, unlike Persaud and Beauchamp, Brunet has a limited criminal record. He identified Brunet’s limited criminal antecedents as a mitigating factor and, based on this factor, held that both proportionality and rehabilitation were germane to her sentencing. His approach to Brunet’s criminal record thus operated to her benefit.

[337] Further, it must also be stressed that, unlike Persaud and Beauchamp, Brunet was convicted of the separate offences of conspiracy to commit credit card fraud and breach of her bail conditions. These additional convictions further distance her circumstances from those of Persaud and Beauchamp.

[338] Also relevant to Brunet’s restraint and parity argument is the trial judge’s appreciation of her antecedents, the nature of her role in the Canadian Barcode Group’s activities, and the differences between her role and involvement and that of Cattral and Beauchamp. The trial judge found Brunet engaged in serious credit card fraud related activities, was a controlling mind of Canadian Barcode, and was “very involved in a sophisticated organization” that sold devices used in credit card fraud: at para. 61. Recall, also, Brunet was responsible for the financial affairs of the Group and actively participated in the sale of devices.

[339] Nonetheless, when sentencing Brunet on her non-criminal organization offences, the trial judge accorded mitigation credit for Brunet’s rehabilitation prospects and specifically noted that she was less culpable than Cattral, despite the fact that she was an equal owner of Canadian Barcode. He also took account of Brunet’s more positive antecedents, including the fact that her criminal record is not extensive and is less serious than that of Cattral. These factors also favoured Brunet on sentencing.

[340] The trial judge also took account of parity and restraint considerations when sentencing Brunet on her criminal organization conviction. In imposing sentence on this conviction, the trial judge stated, at para. 62:

I have reduced her sentence from that given to Cattral because she was not the mastermind of the organization, she has a minor criminal record, and

she played a lesser role than Cattral, although her involvement was significant as she was an equal owner of Canadian Barcode.

[341] Finally, Brunet argues that the trial judge erred by failing to give due consideration to the terms and length of her bail. Brunet was on bail for approximately five and one-half years pending trial, under what she describes as “unusual and restrictive conditions”. She also points out that, apart from a breach of undertaking that occurred within one week of her release, she abided by her bail conditions without incident. Further, by the time of her sentencing hearing, Brunet had been on bail for approximately nine years. In these circumstances, Brunet submits her sentence on her non-criminal organization convictions should be reduced from two years to eight months in jail.

[342] This argument is also undercut by the trial judge’s sentencing reasons. The trial judge did not ignore Brunet’s lengthy bail or her compliance with the terms of her release. Rather, he expressly acknowledged Brunet’s compliance with her bail terms – except for the single breach described above – “for a lengthy period of five and a half (5 1/2) years” and gave mitigation effect to these considerations: at para. 56. We note that Brunet has pointed to no evidence of particularly restrictive bail conditions. It must also be recalled that Brunet breached the terms of her release, although the breach was early and of a minor nature.

[343] In light of the numerous aggravating factors identified, the extent of Brunet’s involvement in serious credit card fraud related offences, and the centrality of her role in Canadian Barcode, the trial judge concluded that a two-year jail term for the non-criminal organization offences was appropriate to protect the public and to achieve denunciation and deterrence.

[344] We see no basis for appellate interference with this ruling. The trial judge addressed the applicable sentencing considerations, including the principles of restraint and parity, and applied them to the totality of the facts. We reject the contention that he erred in so doing or that Brunet’s two-year sentence for her non-criminal organization convictions is excessive or manifestly unfit.

(3) Sufficiency of Reasons for Parole Ineligibility Order

[345] We come, then, to Brunet’s submission that the trial judge’s reasons for imposing parole ineligibility under s. 743.6(1.2) of the Criminal Code are fatally deficient. This submission may be dealt with summarily.

[346] As we have already explained, unlike other provisions in s. 743.6, which afford sentencing judges the discretion to delay eligibility for full parole in defined circumstances, the language of s. 743.6(1.2) is mandatory. Under this section, eligibility for full parole is presumptively delayed for s. 467 sentences of two years or

more. Unless the s. 743.6(1.2) statutory test for granting relief from parole ineligibility is met, parole eligibility must be delayed for such sentences.

[347] In this case, having expressly considered the matter, the trial judge concluded that Brunet failed to satisfy the statutory test for relief from mandatory parole ineligibility. Although he expressed his ruling on this issue in summary fashion, the reasons make clear that the trial judge turned his mind to the presumptive nature of s. 743.6(1.2) and his statutory authority to grant relief from parole ineligibility. In our view, since he was not departing from the mandatory application of s. 743.6(1.2), no further elaboration was required to permit meaningful appellate review of his parole ineligibility order. His reasons, while succinct, reveal why the delayed parole order was made. This meets the sufficiency of reasons standard set out in R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869 and related cases. See for example, R. v. Zinck, 2003 SCC 6, [2003] 1 S.C.R. 41, at para. 37.

C. BEAUCHAMP’S SENTENCE APPEAL

[348] Beauchamp was convicted of six counts of buying and selling devices knowing that they were intended for use in credit card fraud, and one count of committing the indictable offence of selling devices used to forge credit cards for the benefit of a criminal organization, contrary to s. 467.12(1).

[349] At sentencing, the Crown sought a global sentence of five years’ imprisonment (three years for the non-criminal organization convictions and two years for the s. 467.12(1) criminal organization conviction). The defence, for its part, urged a 23-month blended conditional sentence, with some part spent in prison.

[350] The trial judge imposed a global sentence of two years’ and nine months’ imprisonment – two years, concurrent, on Beauchamp’s non-criminal organization convictions and nine months, consecutive, on his s. 467.12(1) criminal organization conviction. As with Cattral and Brunet, he also granted parole ineligibility and DNA orders.

[351] Beauchamp makes two submissions on his sentence appeal. First, he submits that if his s. 467.12(1) conviction appeal succeeds, the two-year jail sentence imposed for his non-criminal organization offences is excessive. Second, and in the alternative, he argues that if his s. 467.12(1) conviction appeal fails, his global sentence of two years and nine months in jail is excessive.

[352] We have already concluded Beauchamp’s appeal against his s. 467 criminal organization conviction must be dismissed. Consequently, the only issue is whether the trial judge erred in imposing a global sentence of two years’ and nine months’ imprisonment.

[353] Beauchamp submits the trial judge erred: (i) by overemphasizing the principles of denunciation and deterrence and failing to give adequate consideration to Beauchamp’s limited role within Canadian Barcode; (ii) by failing to apply the parity principle properly; and (iii) by concluding a penitentiary term of imprisonment with an order for reduced parole eligibility was required. Beauchamp argues that a proper application of the governing sentencing principles to his particular circumstances should have resulted in an overall sentence in the mid-reformatory range.

(1) Parole Ineligibility Order

[354] We begin with the trial judge’s parole ineligibility order under s. 743.6(1.2) of the Criminal Code. The Crown concedes that a nine-month sentence of imprisonment on Beauchamp’s criminal organization conviction cannot trigger parole ineligibility under s. 743.6(1.2) of the Criminal Code.

[355] This is a proper concession. Section 743.6(1.2) specifically provides that it applies only where an offender receives “a sentence of imprisonment of two years or more” on conviction for “a terrorism offence or an offence under ss. 467.11, 467.12 or 467.13”. Here, s. 743.6(1.2) applied only to Beauchamp’s s. 467.12(1) conviction, for which he received a sentence of nine months’ imprisonment. Accordingly, s. 743.6(1.2) was inapplicable and the parole ineligibility order must be set aside. See R. v. Mathieu, 2008 SCC 21, [2008] 1 S.C.R. 723, at paras. 5 and 25-29.

[356] However, this conclusion does not address the fitness of Beauchamp’s global sentence, nor does it taint the nine-month jail sentence imposed on his s. 467.12(1) conviction. The question remains whether Beauchamp’s overall sentence is fit having regard to his circumstances and the circumstances of his offences.

(2) A Fit Sentence

[357] Beauchamp maintains that his global sentence offends the parity principle of sentencing. Specifically, he argues that his two-year sentence of imprisonment for his non-criminal organization offences is disproportionate and excessive when compared to the similar sentence received by Brunet for like offences because, unlike Beauchamp, Brunet was a principal and co-owner of Canadian Barcode and a critical figure in the Group’s credit card fraud related crimes.

[358] Beauchamp also argues that his sentence is disproportionate when compared to the sentence imposed on Persaud, an incorrigible career criminal and a long-term customer of Canadian Barcode, who received a global sentence of four years’ imprisonment after pleading guilty to various credit card fraud related offences. Beauchamp contends there are clear differences between the severity of his crimes and level of his moral culpability compared to that of Persaud, which “warrant a

distinction in their respective sentences from a penitentiary to a reformatory term of imprisonment”.

[359] We need not repeat our earlier discussion of the purpose and ambit of the parity principle. Suffice to say, we reject Beauchamp’s parity-based attack on his global sentence. In our view, the trial judge’s sentencing reasons confirm that he took proper account of parity considerations when crafting Beauchamp’s sentence.

[360] Contrary to Beauchamp’s submission, the trial judge gave adequate consideration to his role in the criminal organization, as compared to that of Brunet. He addressed many of the similarities and dissimilarities between Beauchamp’s and Brunet’s activities, their antecedents, and the nature of their respective roles and involvement in the credit card related frauds. He expressly noted, at paras. 72 and 76, that: (i) unlike Brunet, Beauchamp was not a directing mind of Canadian Barcode; (ii) Beauchamp played a lesser role in the criminal organization than did Brunet, since he was merely an employee of the organization for a relatively short period of time; (iii) Beauchamp was not an important or key member of Canadian Barcode’s staff; and (iv) unlike Brunet, Beauchamp has an extensive, although dated, criminal record that includes multiple convictions for theft, fraud and related credit card offences.

[361] It is true that the trial judge did not expressly compare Beauchamp’s circumstances to those of Persaud. However, this omission is of no moment since, in our view, Persaud is not an appropriate comparator for the purpose of assessing the proportionality and fitness of Beauchamp’s global sentence. We underscore the differences between Persaud’s and Beauchamp’s circumstances: Persaud was not convicted of a s. 467 offence; unlike Beauchamp, Persaud pleaded guilty to various credit card fraud related offences; and Persaud testified at trial, albeit reluctantly, for the Crown.

[362] Beauchamp’s reliance on Persaud as a counterpoint to justify a reduced sentence also downplays Beauchamp’s role and involvement with Canadian Barcode and the gravity of his own offences. The trial judge accepted Beauchamp was used as “a front man” by Cattral and Brunet and as “first contact” with new customers. However, he also found, at paras. 72-73, 76 and 78, that: (i) Beauchamp actively and willingly sold devices he knew were intended to be used to forge credit cards; (ii) Beauchamp was aware the sale of these devices for illicit purposes resulted in financial gain for himself and the other members of the organization; (iii) the sale of these devices “potentially caused huge financial losses to financial institutions”; and (iv) Beauchamp provided technical support and assistance to customers, including suggestions on how to commit credit card fraud.

[363] These findings are firmly grounded in the evidence. Recall that Beauchamp was a principal salesperson for the devices, and was aware that Canadian Barcode’s customers – Persaud, Krespine and Shanghavi – were engaged in illegal activities. Together with Cattral and Brunet, Beauchamp took active steps to assist these customers in their illegal activities. He promoted connections between them,

participated in efforts to conceal their identities, provided them with technical advice and assistance, and shared information about police law enforcement measures.

[364] Thus, Beauchamp’s role was not inconsequential. His knowledge of the criminal purpose of the credit card fraud related activities and his willing participation in and efforts to further those activities establish his relatively high degree of moral blameworthiness.

[365] In these circumstances, in our opinion, it cannot be said that Beauchamp’s global sentence is excessive or unfit. Nor is it in substantial and marked departure from sentences imposed for similar offenders committing similar crimes. Accordingly, apart from the trial judge’s parole ineligibility order, which we conclude cannot stand, we decline to disturb Beauchamp’s global sentence.

D. SHANGHAVI’S SENTENCE APPEAL

[366] Shanghavi was convicted of one count of trafficking in credit card data, two counts of possession of devices that he knew were intended for use in forging credit cards (mini data loggers), and three counts of fraudulent possession of credit card data.

[367] The trial judge was not satisfied to the requisite criminal standard that Shanghavi was a member of the Canadian Barcode Group, or even that he knew or suspected that the Group was a criminal organization. Shanghavi was therefore acquitted of the criminal organization related charges brought against him, as well as a charge of conspiring to commit the indictable offence of trafficking in credit card data.

[368] On sentencing, the Crown sought a global sentence of three years’ imprisonment, while the defence urged the imposition of a conditional sentence. The trial judge sentenced Shanghavi to 15 months in jail, plus three years’ probation. He also granted a DNA order.

[369] The only issue on Shanghavi’s sentence appeal is whether a conditional, rather than a custodial, sentence is appropriate in the circumstances of his case. Shanghavi argues that the trial judge erred in denying a conditional sentence: (i) solely on the basis of general deterrence and denunciation; (ii) by placing undue weight on general deterrence; and (iii) by relying on the size of the potential losses arising from Shanghavi’s involvement in the credit card scheme, in the absence of any evidence establishing those potential losses. Based on these errors, Shanghavi says his custodial sentence should be set aside and a 15-month conditional sentence substituted in its stead. He further submits that no probationary term is necessary or appropriate.

[370] Shanghavi applied for leave to adduce fresh evidence on appeal concerning his rehabilitative efforts since the date of his sentencing hearing. The Crown did not oppose this application. The fresh evidence consists of an affidavit sworn by Shanghavi

on December 19, 2012, in which he describes, in some detail, the educational and employment-related activities he has undertaken since his sentencing on April 6, 2010.

[371] At the outset, we acknowledge that substantial deference must be accorded to the sentence imposed by the trial judge. This deference applies to the trial judge’s decision to refuse a conditional sentence. Absent an error in principle, failure to consider or overemphasis of a relevant factor, or the imposition of a demonstrably unfit sentence, appellate interference with a sentence is unwarranted: M. (C.A.); R. v. Shropshire, [1995] 4 S.C.R. 227.

[372] That said, the deference principle is not unlimited. Where a trial judge fails to adhere to applicable legal principles and objectives of sentencing, leading to the imposition of an unwarranted sentence, it is appropriate and in the interests of justice for this court to intervene, especially in the case of a youthful first offender: R. v. Ijam, 2007 ONCA 597, 87 O.R. (3d) 81, at para. 52.

[373] In this case, the trial judge recognized that Shanghavi was a first offender and that he was relatively young (24 years of age) when he committed the offences. In light of Shanghavi’s youth and lack of a criminal record, and the fact that he was not convicted of a criminal organization offence, the trial judge held that the appropriate range of sentence was less than two years’ imprisonment. Consequently, on the authority of R. v. Proulx, 2000 SCC 5, [2000] 1 S.C.R. 61, the trial judge held that a conditional sentence was available, as a matter of law. We agree.

[374] The trial judge went on to hold that a conditional sentence should not be imposed. He reasoned, at para. 99:

I find that a conditional sentence would not adequately meet the needs for denunciation and general deterrence in Shanghavi’s circumstances because of the number of credit card fraud convictions involved (6), he was involved in sophisticated credit card fraud which could potentially cause hundreds of thousands of dollars in losses, he was not at the bottom of the ladder in the credit card fraud chain and the seriousness of credit card fraud. The facts are distinguishable from Ijam, supra, by the lack of a guilty plea, the slightly older age and the more extensive involvement in credit card fraud.

[375] With respect, we conclude that the trial judge erred in refusing to impose a conditional sentence. We reach this conclusion for the following reasons.

[376] There is no doubt, on this record, that Shanghavi was involved in sophisticated and serious credit card fraud that could have led to material losses for financial institutions and investors. Further, as the trial judge found, the number of Shanghavi’s convictions establishes his substantial involvement in credit card fraud that was motivated by greed. These were important considerations when addressing whether Shanghavi’s conduct required the imposition of a custodial term.

[377] However, in rejecting a conditional sentence, the trial judge focused on the sentencing objectives of denunciation and general deterrence, without mention of specific deterrence or rehabilitation. He only considered the latter principles when addressing the length of the custodial sentence to be imposed, having already concluded that a conditional sentence was inappropriate.

[378] It is here, in our view, that the trial judge erred in principle. Specific deterrence and rehabilitation were proper and necessary considerations in the assessment whether a conditional sentence was appropriate in this case. Shanghavi is the only appellant without a criminal record. He was not in the upper echelons or, indeed, even a member of the Canadian Barcode Group. And he is the only appellant not convicted of a criminal organization offence. Specific deterrence and rehabilitation speak strongly in favour of a conditional sentence for Shanghavi.

[379] It is well-established that rehabilitation and specific deterrence are the paramount considerations on the sentencing of a youthful first offender; undue weight should not be placed on general deterrence: Ijam, at para. 55. See also R. v. Priest (1996), 30 O.R. (3d) 538 (Ont. C.A.); R. v. Borde (2003), 63 O.R. (3d) 417 (Ont. C.A.); R. v. Kutsukake (2006), 213 C.C.C. (3d) 80 (Ont. C.A.).

[380] Moreover, a conditional sentence can meet the objectives of general deterrence and denunciation. As the majority of this Court stated in Ijam, at paras. 58 and 60:

A related principle pertinent to this case is that even when there are aggravating factors which might point to the need for a sentence geared to general deterrence, “a conditional sentence may provide sufficient denunciation and deterrence”, and it is an error “to rule out the possibility of a conditional sentence ab initio simply because aggravating features are present”. [Citations omitted.]

…

In my respectful view, the governing case law holds that a conditional sentence can serve the purposes of general deterrence and that the trial judge’s intended deterrence message ordinarily should not be sent when the cost is imprisoning a youthful first offender where all other factors strongly point to a conditional sentence.

See also Kutsukake, at paras. 14-17.

[381] The trial judge distinguished Ijam from Shanghavi on the basis of: (i) Shanghavi’s age (Shanghavi – 24, Ijam – 19) at the time of the relevant offences; (ii) Shanghavi’s extensive involvement in credit card fraud; and (iii) the fact that Shanghavi, unlike Ijam, did not plead guilty. However, both offenders engaged in sophisticated and serious crimes and were young or relatively young at the time of their offences. While Shanghavi did not plead guilty, his decision to proceed to trial is not a hurdle to a

conditional sentence, nor can it be treated as an aggravating circumstance on sentencing. Further, even accepting the factual distinctions identified by the trial judge, the governing legal principles for sentencing a relatively young first offender are not displaced.

[382] Here, at the time of sentencing, several factors militated in favour of a conditional sentence. Shanghavi is a relatively young first offender and a street level fraudster. Although he was a regular customer of Canadian Barcode, his involvement with the organization was essentially confined to the purchase of devices intended to be used to forge credit cards. He was neither a principal nor a member of the Canadian Barcode Group. Instead, he acted for his own benefit.

[383] Shanghavi also showed remorse for his conduct and complied with his bail conditions, without incident, for approximately five and one-half years pending trial. He enjoyed the support of his family, lived near his father, and was an active member of the Hindu community. He had also undertaken several self-study educational courses in the years awaiting trial.

[384] These positive factors, of course, must be weighed against the serious nature of credit card fraud, the gravity and extent of Shanghavi’s conduct, its potential consequences, and his multiple convictions. That said, these aggravating factors diminish, not negate, the force of the many positive attenuating factors outlined above. A conditional sentence may be imposed in a proper case notwithstanding the presence of aggravating features: Proulx, at para. 115; Kutsukake, at paras. 14-17.

[385] In fairness, the trial judge identified many of the mitigating and aggravating circumstances applicable to Shanghavi. And, as we have said, he took several of these circumstances into account when determining the appropriate length of a custodial sentence. However, by failing to consider specific deterrence and rehabilitation, he failed to factor Shanghavi’s many positive circumstances into his conditional sentence analysis.

[386] There is also an additional, compelling factor to be taken into account. Shanghavi’s fresh evidence demonstrates considerable, commendable rehabilitative efforts on his part. At the time of sentencing, Shanghavi was unemployed. He is now working in his chosen field as a project manager and IT architect, leading two teams on a multi-year project. He has also continued with his education. In 2011, while working, he successfully completed an industry certification as a Project Management Professional through the Project Management Institute. The following year, he completed an additional information technology industry certification. By the end of 2012, he had been accepted for and was undertaking distance learning in the M.B.A. program offered by the Edinburgh Business School, Heriot-Watt University, in the United Kingdom. On completion of that degree, Shanghavi intends to enrol in doctorate studies. In addition, Shanghavi is now involved in a stable relationship and, at the time his affidavit was sworn, was engaged to be married.

[387] Finally, the events giving rise to Shanghavi’s convictions occurred in 2004, when he was 24 years old. He is now approximately 34 years of age. And he has been on bail, without incident, for almost 11 years.

[388] We do not diminish the gravity of Shanghavi’s conduct or the seriousness of credit card fraud. Nonetheless, in light of the fresh evidence, which confirms Shanghavi’s considerable rehabilitative progress, coupled with his long-standing expression of remorse and acceptance of responsibility for his actions, we do not think that a custodial sentence is required at this juncture for the purposes of specific deterrence or rehabilitation.

[389] As in Ijam, a custodial sentence would interrupt and impede, rather than facilitate, Shanghavi’s progressive course of rehabilitation. Further, on the record before this court, Shanghavi does not pose a risk of re-offending. The protection of the public does not require him to be imprisoned at this stage, and the goal of general deterrence can be achieved by a conditional sentence.

[390] Accordingly, the facts of this case and his current circumstances cause us to conclude that a conditional sentence is the fit sentence for Shanghavi.

[391] We also agree with Shanghavi’s submission that the imposition of a probation order is unnecessary given the passage of time and his significant rehabilitative progress since the time of sentencing.

[392] The purpose of a probation order is to facilitate the offender’s rehabilitation and to protect society, rather than to punish the offender for his or her criminal conduct: Mathieu, at paras. 20-21; Proulx, at paras. 32-34. Shanghavi is well on his way to rehabilitation without the incentive of a probation order and nothing in his current circumstances suggests a probation order is now necessary to protect the public.

[393] We would therefore grant Shanghavi leave to appeal sentence, allow his sentence appeal, and vary his sentence to a conditional sentence of 15 months, subject to the conditions set out in s. 742.3(1) of the Criminal Code.

DISPOSITION OF APPEALS

[394] For the foregoing reasons, the conviction appeals are dismissed. Leave to appeal the sentences is granted. However, the sentence appeals of Cattral and Brunet are dismissed. Beauchamp’s sentence appeal is granted in part by deleting the trial judge’s parole ineligibility order. Shanghavi’s sentence appeal is allowed as set out above.

Released:

“APR 17 2015” “E.A. Cronk J.A.”

“EAC” “R.A. Blair J.A.”

“David Watt J.A.”

Schedule “A”

Appellant Convictions Sentence Cattral 1. Participation in a criminal

organization [s. 467.11(1)] (stay granted based on Kienapple v. R.); 2. Commission of indictable offence for benefit of a criminal organization [s. 467.12(1)]; 3. Knowingly buying/selling instruments intended for use in credit card fraud (5 counts) [s. 342.01(1)(b)]; 4. Obstructing police [s. 129(a)]; 5. Fraudulent possession of credit card data (4 counts) [s. 342(3)].

Total sentence of 7 years’ imprisonment:

- 4 years’ imprisonment, concurrent, for all offences except the criminal organization and obstruction of justice convictions; - 6 months’ imprisonment, concurrent, for obstruction of justice conviction; - 3 years’ imprisonment, consecutive, for criminal organization conviction; - delayed parole eligibility (s. 743.6(1.2)); - fine of $40,000 in lieu of forfeiture to be paid within three years of date of sentence; and - DNA order.

Credit of 8 months for pre-sentence custody.

Brunet 1. Participation in a criminal organization [s. 467.11(1)] (stay granted based on Kienapple v. R.); 2. Commission of indictable offence for the benefit of a criminal organization [s. 467.12(1)]; 3. Knowingly buying/selling instruments intended for use in credit card fraud (5 counts) [s. 342.01(1)(b)]; 4. Conspiracy to commit credit card forgery [s. 465(1)(c)]; 5. Breach of undertaking [s. 145(3)].

Global sentence of 4 years’ imprisonment:

- 2 years’ imprisonment, concurrent, for all offences except the criminal organization and the breach of recognizance conviction; - 1 month imprisonment, concurrent, for the breach of recognizance conviction; - 2 years’ imprisonment, consecutive, for criminal organization conviction; - delayed parole eligibility (s. 743.6(1.2)); - fine of $40,000 in lieu of forfeiture to be paid within three years of date of sentence; and - DNA order

Beauchamp 1. Participation in a criminal organization [s. 467.11(1)] (stay granted based on Kienapple v. R.); 2. Commission of indictable offence for the benefit of a criminal organization [s. 467.12(1)]; 3. Knowingly buying/selling instruments intended for use in

Total sentence of 2 years’ and 9 months’ imprisonment:

- 2 years’ imprisonment, concurrent, for all offences except the criminal organization conviction; - 9 months’ imprisonment, consecutive, for the criminal organization

credit card fraud (6 counts) [s. 342.01(1)(b)].

conviction; - delayed parole eligibility (s. 743.6(1.2)); and - DNA order.

Shanghavi 1. Possession of a device knowing it was intended for credit card fraud (2 counts) [s. 342.01(1)(d)]; 2. Possession of credit card data (3 counts) [s. 342(3)]; 3. Trafficking in credit card data (1 count) [s. 342(3)].

15 months’ imprisonment, plus 3 years’ probation and DNA order

[1] The Crown alleged the appellants engaged in fraud relating to credit, debit and other financial cards. For the purpose of simplicity, throughout these reasons, we will refer to these collectively as credit cards, except where it is necessary to discuss a particular card in relation to certain counts.

[2] R. v. Garofoli, [1990] 2 S.C.R. 1421.

[3] The appellants’ convictions and sentences are set out in the chart attached as Schedule “A” to these reasons.

[4] “MIR” stands for magnetic insert reader.

[5] By the time of trial, Krespine had been murdered, and Persaud had pled guilty to a number of charges in exchange for a lesser prison sentence. Of the three, only Shanghavi remained as a co-accused. At trial, Persaud – together with Gehmlich – was a witness for the Crown.

[6] Kienapple v. The Queen, [1975] 1 S.C.R. 729.

[7] The convictions for participating in the activities of a criminal organization were stayed on the basis of the principles set out in Kienapple. Cattral was acquitted on a charge of having instructed Shanghavi to commit an indictable offence (trafficking in credit card data) for the benefit of a criminal organization, contrary to s. 467.13.

[8] As the criminal organization was composed of Cattral, Brunet and Beauchamp, for purposes of clarity, we will refer to the criminal organization as the “Canadian Barcode Group”. In doing so, we recognize that the group forming the criminal organization consisted of Cattral, Brunet and Beauchamp, but that their illicit activities were carried out through the corporate vehicle, Canadian Barcode.

[9] Count 5 (Cattral and Shanghavi); Count 26 (Shanghavi); Count 22 (Cattral); Counts 24-25 (Cattral); and Counts 29-30 (Shanghavi).

[10] Section 342(3) was amended following the appellants’ trial, effective January 7, 2010. This version reflects that in force at the time of the appellants’ trial.

[11] An earlier request for a five-judge panel to determine the issue was denied by Watt J.A. (sitting as a case management judge), on August 19, 2014, one month after the release of this Court’s decision in Tuduce.

[12] Shorter Oxford English Dictionary, 3d ed., vol. 1, sub verbo “authentic”.

[13] This provision was subject to amendments effective following the appellants’ trial.

[14] R. v. Carter, [1982] 1 S.C.R. 938.

[15] Brunet and Beauchamp were also convicted of offences under s. 467.11(1) of the Criminal Code. Since these convictions, like Cattral’s s. 467.11(1) conviction, were stayed under Kienapple, we do not address them further in these reasons.