COURT FILE No.: Toronto Region, Metro North Court
DATE: 2011·01·04
Citation: R. v. Kwaw, 2011 ONCJ 29
ONTARIO COURT OF JUSTICE
BETWEEN:
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HER MAJESTY THE QUEEN
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— AND —
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EDMUND KWAW
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Before Justice Leslie Pringle
Heard on September 24, 2010 and December 8, 2010
Reasons for Judgment released on January 4, 2011
Mr. T. Morgan and Mr. A. Hannah-Suarez ............................................................ for the Crown
Mr. P. Downes ............................................................................. for the accused Edmund Kwaw
PRINGLE J.:
1. Overview
[1] Edmund Kwaw was a lawyer when he committed a criminal breach of trust by using approximately $287,000 given to him by clients Mercy and Amber Akmal for a purpose not authorized by the trust. He has since been disbarred by the Law Society of Upper Canada, and has now pleaded guilty to this offence. Both counsel for the Crown and for Mr. Kwaw agree that a reformatory sentence is appropriate; the primary issue before me is whether that sentence should be served in a real jail cell or by way of a conditional sentence in the community.
[2] I have determined that a term of incarceration is required in this case. In my view, the appropriate sentence is one of 14 months, followed by 2 years of probation, along with the appropriate orders of restitution. These are my reasons for that conclusion.
2. Facts of the offence
[3] Mercy and Amber Akmal had retained Mr. Kwaw to assist them in refinancing a mortgage on Mercy Akmal’s residence, and on June 28, 2008 Mr. Kwaw received $439,750 in trust for that purpose. Mr. Kwaw dispersed some of the monies as directed, however, he admits that he failed to disperse $287,000 to TD Canada Trust to discharge their first mortgage as instructed. Further, he failed to disperse approximately $3,500 back to the victims as directed.
[4] In October of 2008, Mr. Kwaw advised the victims that he had not discharged the mortgage, but had loaned out the funds to a friend who was in need of funds. In November, he supplied the Akmals with two cheques for the amounts owing, however, they were returned for insufficient funds.
[5] Mr. Kwaw was disbarred this past summer. During those proceedings, he stated that he wasn’t able to provide the name of the friend to whom he had lent the money. However, through investigation, the Law Society determined that a portion of the missing funds were used to discharge a mortgage of unrelated clients, whose funds Mr. Kwaw had previously misapplied.
3. Victim impact statement
[6] Mercy Akmal is 60 years old, and has been very emotionally affected by the breach of trust. In her victim impact statement she recounted many sleepless and tearful nights worrying about whether she would lose her home, and how she would pay the bank. Although the bank has now assumed payments for the mortgage on her behalf, she is worried and depressed, and continues to feel violated by Mr. Kwaw.
4. Mr. Kwaw’s circumstances
[7] Mr. Kwaw has been working as a free-lance journalist since he was disbarred. He is 49 years old, single, and lives alone with his dog. He has seen a psychologist since his arrest, and not surprisingly, he is experiencing some anxiety, stress and depression as a result of the outstanding court case.
[8] As a lawyer, Mr. Kwaw was in private practice between 1996 and 2009, acting on behalf of major Canadian trust companies and banks in connection with commercial mortgage transactions, as well as a variety of retail, commercial and corporate clients. He also served as a lecturer at the School of Business at Seneca College, and the faculties of law at Queen’s University, the University of Windsor and Osgoode Hall Law School. The former dean of Queen’s Law School, Professor Emeritus Don Carter, provided a letter on sentencing indicating that Mr. Kwaw was an excellent teacher and a collegial and hard working academic who had genuine concern for his students.
[9] Mr. Kwaw has written many academic works, and some fictional ones as well. He is a keen member of the African Catholic Community, and is viewed as someone who is honest and reliable in that community. In the past he has helped others in the community with free legal services, and he has also mentored youth. Friends and colleagues describe him as kind and generous to a fault, and state that this offence was out of character for him.
[10] Mr. Kwaw spoke on sentencing and expressed his deep remorse to Ms. Akmal for the problems he has caused her. He appears genuine in his desire to repay her and the money he now owes to the bank. His brother has also pledged to help him make restitution in this matter. He is a doctor in the United States, and notes that all members of the family are professionals who heard about their brother’s predicament late in the day. They are saddened and disappointed by their brother’s situation, but see it as a result of his good heart and desire to help people.
5. Restitution
[11] Through counsel, Mr. Kwaw has reached an agreement with the bank to repay them in accordance with a repayment schedule. He has currently repaid $40,000 of the monies owing. It is agreed that $241,863.67 remains to be paid to TD Canada Trust.
[12] Some monies have been paid to Mercy Akmal, and I believe it is agreed that further monies are owed to her in the amount of $1264.81 plus title insurance fees of $341.00, as set out in her victim impact statement. While it is not disputed that she had to pay lawyer’s fees to commence a civil action against Mr. Kwaw for repayment of the monies he misapplied, the total amount of the legal fees is unclear. In August 2010 she stated the lawyer’s fees were $1,600.00, however in her victim impact statement she indicated the sum was $2,715.37.
6. Legal principles
[13] Our Court of Appeal has frequently stated that in large-scale frauds carried out by a person in a position of trust, the need for general deterrence is particularly pressing. In such cases, the fundamental principles of sentence may require incarceration as opposed to a conditional sentence: see R. v. Dobis, 2002 CanLII 32815 (ON CA), [2002] O.J. No. 646 (C.A.); R. v. Bogart, 2002 CanLII 41073 (ON CA), [2002] O.J. No. 3039 (C.A.); R. v. Clarke, [2004] O.J. No. 3438 (C.A.); R. v. Davies, 2005 CanLII 63757 (ON CA), [2005] O.J. No. 4829 (C.A.); and R. v. Castro, [2010] O.J. No. 4573 (C.A.).
[14] In R. v. Rosenfeld, 2009 ONCA 307 (CanLII), [2009] O.J. No. 1478 (C.A.), Mr. Justice Doherty stated that the appellant’s status as a lawyer was a significant aggravating factor on sentence, in part because:
…those privileged to practise law take on a public trust in exchange for that privilege and the many advantages that come with it. Lawyers are duty bound to protect the administration of justice and enhance its reputation within their community. Criminal activity by lawyers in the course of performing functions associated with the practice of law in its broadest sense, has exactly the opposite effect. Lawyers like the appellant who choose to use their skills and abuse the privileges attached to service in the law not only discredit the vast majority of the profession, but also feed public cynicsm of the profession. In the long run, that cynicism must undermine public confidence in the justice system: see R. v. Oliver, [1977] 5 W.W.R. 344 (B.C.C.A.)
[15] Nonetheless, it is clear that a conditional sentence remains available even in large frauds involving a breach of trust by a lawyer: in R. v. Bunn, 2000 SCC 9 (CanLII), [2000] 1 S.C.R. 183, a majority of the Supreme Court of Canada upheld the decision of the Manitoba Court of Appeal to impose a conditional sentence in a breach of trust situation by a lawyer in the amount of $86,000.
[16] In some later cases, Bunn has been distinguished on the basis that there were “important mitigating circumstances” there, due to the fact that the accused was the sole provider and caregiver for his disabled wife and their daughter: see for example, R. v. Dobis at para. 54, and R. v. St. Fort, [2002] O.J. No 5570 (O.C.J.) at para. 9, upheld in the result, [2003] O.J. No. 5154 (C.A.).
[17] This recognition that significant mitigating circumstances might justify a conditional sentence in a large fraud involving a breach of trust was also referred to by Laskin J.A. in R. v. Bogart at para. 38. In that case, Justice Laskin explained that special circumstances that might justify a conditional sentence for OHIP fraud included that the amount of the fraud was relatively small, the doctor had made full restitution before sentencing, or where the doctor could point to exceptional personal circumstances such as ill health or advanced age.
[18] In many cases where a large fraud has resulted in a conditional sentence or a blended sentence, factors such as mental health concerns, poor health or advanced age have been present and taken into account: see for example, R. v. Davies at paras. 32 and 36; R. v. Tulloch, [2002] O.J. No. 5446 (S.C.J.) at paras. 40 and 50; R. v. Adams, 2009 ONCJ 383 (CanLII), [2009] O.J. No. 3442 (O.C.J.) at para. 27; R. v. Campbell, [2005] O.J. No. 4696 (O.C.J.); R. v. Saunders, [2000] N.S.J. No. 397 at paras. 10 and 22.
[19] Mr. Downes provided me with some cases where a conditional sentence has been imposed in the absence of health or other exceptional circumstances, but they are in the minority: R. v. Hayes, [2003] O.J. No. 4590 (C.A.), appeal of restitution order only; R. v. Gross, [2000] O.J. No. 3479 (S.C.J.), on top of 5 months pre-trial custody; R. v. Hastings, [1998] O.J. No. 5517 (S.C.J.); and R. v. Ament, [2006] M.J. No. 236(Q.B.).
[20] In my view, the weight of authority in Ontario suggests that, absent a significant mitigating factor or special circumstance, the sentencing court should impose a sentence of incarceration for a large fraud involving a breach of trust.
7. Application to this case
[21] There are a number of aggravating factors in this case, including the fact that the sum of money was a large one. Further, the money was specifically entrusted to Mr. Kwaw as a lawyer in relation to discharging a mortgage on a residence, and as the Crown pointed out, this was Ms. Akmal’s home, her roof over her head. Ms. Akmal is 60 years old, and she has been deeply affected by the anxiety and sense of violation that this breach of trust has caused her. While it appears that the bank has absorbed most of her financial loss, this offence has had a substantial emotional impact on her.
[22] The offence did not span a long period of time, and appears to have been discovered within months. However, I cannot say that it was an isolated incident: while I have been provided with few details about Mr. Kwaw’s trust dealings, it was agreed that some of Ms. Akmal’s funds were used to discharge a mortgage for unrelated clients of Mr. Kwaw’s, whose funds had previously been misapplied.
[23] It was not contended by the Crown that these funds were used to support a lavish lifestyle on Mr. Kwaw’s part. However, based on the minimal information provided to me, I cannot say how the misapplied funds were used. While one of Mr. Kwaw’s character references attributed the offence to Mr. Kwaw’s great spirit of generosity and suggested that the motive was simply to assist a friend in need, there was no evidence of this before me. Mr. Kwaw declined to provide the Law Society with the name of the friend to whom he said he had lent the money, and he chose not to call any evidence relating to the missing funds before me. This was clearly his right, and there was no obligation on him to do so: however, in the circumstances, it cannot be concluded that the funds were somehow used for a good or altruistic purpose. In the end result, I am simply left with no evidence on this issue.
[24] There are a number of mitigating factors: Mr. Kwaw pleaded guilty and he has repaid some of the money. He has promised to repay Ms. Akmal, and has reached an agreement with the bank regarding a repayment schedule. I find that his remorse is genuine and his desire to repay the money is sincere.
[25] Mr. Kwaw was a well respected law teacher and lecturer, and he was highly thought of in the community. He has many good works to his credit, and this act of dishonesty appears to have been out of character. Notwithstanding his current situation, he still has the support of many educated and successful friends and family. In part, Mr. Kwaw has already paid a price for his crime: he has been disbarred and dishonoured in the eyes of the legal profession, and he has lost his livelihood in that career. He has further suffered the stigma and humiliation of being charged and convicted of a crime which has caused dismay and disappointment amongst his family and his friends.
[26] These factors cannot be ignored. However, in my view they do not amount to the kind of significantly mitigating or special circumstances that our Court of Appeal has recognized might justify a conditional sentence. At 49, Mr. Kwaw is a middle-aged man who is fortunate not to suffer from any real health concerns or mental illness. He has no
dependents other than his dog. In his case there are few factors to deflect attention from the serious nature of the crime, and virtually nothing to detract from the principle that in cases of a serious breach of trust, general deterrence and denunciation will usually require a sentence of incarceration.
[27] In the end result I find that a sentence of incarceration is required.
8. Length of sentence and ancillary orders
[28] Although there is no exact formula to determine the appropriate length of a jail sentence, the Criminal Code states that “a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances”. In crafting an appropriate sentence, the judge must consider the fundamental purpose and principles of sentencing, as well as the governing case law.
[29] In R. v. Pavich, 2000 CanLII 16971 (ON CA), [2000] O.J. No. 4209, the Ontario Court of Appeal held that a sentence of 18 months incarceration was too long for a breach of trust committed by an office manager of a law firm in the amount of $200,000, and reduced the sentence to one of 12 months. In Mr. Kwaw’s case, the circumstances are arguably more serious: although Ms. Pavich committed an egregious breach of trust, she was not a lawyer in the kind of special fiduciary relationship that Mr. Kwaw enjoyed with his client.
[30] In R. v. St. Fort, the accused was a lawyer who was found guilty after trial of abusing his position of trust as a solicitor in a fraudulent scheme with two others in the amount of about $350,000. He was not the mastermind of the scheme, but continued to minimize his involvement and made no restitution. A sentence of 18 months incarceration was upheld by the Ontario Court of Appeal. The amount of Mr. Kwaw’s breach of trust was somewhat less than that in St. Fort, and his case is distinguished by the fact that he pleaded guilty, is genuinely remorseful for his conduct and has paid back some of the money.
[31] In these circumstances, I find that a 14 month jail sentence is sufficent to send a loud message of denunciation and deterrence in relation to Mr. Kwaw’s conduct, yet to recognize the mitigating factors of his situation. In order to support and supervise Mr. Kwaw in his rehabilitation, I am imposing a probationary term of 2 years with the following terms in addition to the statutory ones:
• Report to probation as required
• Reside at an address approved by probation
• Take any counselling recommended and sign releases to confirm compliance
• Do not operate a trust account or manage or handle monies held in trust for the benefit of another person
• Do not possess any instruments of credit that are not in your own name
• Pay restitution to Mercy Akmal at a rate of no less than $150 per month, or in an amount considered reasonable by your probation officer in light of your circumstances
• Pay restitution to TD Canada Trust in the amount of $241,863.67 in accordance with any agreement reached with the bank, and provide proof of such terms of agreement and proof of payment to your probation officer
[32] With respect to restitution, I will make a free standing restitution order pursuant to s.738 of the Criminal Code in favour of TD Canada Trust in the amount of $241,863.67.
[33] In relation to Ms. Akmal, I will hear submissions on the appropriate amount if necessary. However, as I understand it, it is agreed that she is still owed $1264.81 as a result of Mr. Kwaw’s misapplication of her funds, and $341 for title insurance which she was charged, as set out in her victim impact statement. Further, it is not disputed that she is owed at least $1600 in respect of legal fees incurred as a result of this offence. In light of the fact that there is uncertainty relating to the higher amount of legal fees mentioned in the victim impact statment, I will not make an order of restitution for the higher amount in the absence of a bill or invoice. Accordingly, subject to submissions, restitution to Mercy Akmal will be ordered in the amount of $3205.81, (1264.81 + 341 + 1600).
[34] The victim fine surcharge will be waived in light of Mr. Kwaw’s financial circumstances.
[35] I want to thank Mr. Downes and Mr. Hannah-Suarez for their helpful submissions.
Released: in court on January 4, 2011; to the parties on December 28, 2010
Signed: “Justice Leslie Pringle”
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