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APPEARANCES:

137/13

SUPERIOR COURT OF JUSTICE

HER MAJESTY THE QUEEN

VERSUS

JOSIP VINSKI

REASONS FOR SENTENCE

DELIVERED BY THE HONOURABLE JUSTICE DURNO

On January 29, 2014 at Brampton, Ontario.

Counsel for the Crown: S. Sherriff25

Counsel for Mr. Vinski: R. Loccisano

30

Reasons for Sentence, Durno, J.R. v. Vinski

January 29, 2014.

Q. v. Vinski

REASONS FOR SENTENCE

DURNO, J. (Orally)5

In 1958, the Croatian Credit Union was created in

response to the perceived need for credit by

members of the Croatian community who were not

able to be effectively served by chartered banks.

By arranging loans, the credit union benefited10

the members of the Croatian community by

facilitating their loans and the loans also

benefited the credit union. The credit union

flourished and remained a successful and

important institution in the Croatian community.15

It was an institution the Croatian community

regarded with pride. At its height there were

three branches.

Josip Vinski, himself from Croatia, became the20

general manager in 1981. He has a Masters of

Business Administration and quickly earned an

excellent reputation in the Croatian community.

However, between 2002 and 2009 along with Mike

25Anicic, he orchestrated a series of 27 fraudulent

mortgage transactions against the credit union.

Because of his complete control over the credit

union's operations, the fraud remained undetected

for years. The masterminds, according to the

3o agreed statement of fact, were Mr. Anicic and Mr.

Vinski. In submissions, Mr. Loccisano, in my

2

Reasons for Sentence, Durno, J.R. v. Vinski

view, correctly described Mr. Vinski as the

inside mastermind.

The scheme, known as an Oklahoma, involved 235

properties and 27 mortgages between 2002 and 2009

where low valued underdeveloped property was

purchased in rural Ontario. The typical purchase

price was around $15,000. The vacant land was

then quickly resold in sham transactions for10

grossly inflated prices. Typically, the resale

amount was between 395,000 and $460,000. The

difference between the purchase price and

mortgage amounts was purportedly paid through

promissory notes from the purchaser to the15

vendor. For some of the properties, the scheme

was repeated so that there were 27 transactions

on 23 properties.

The sham equity was mortgaged to 75 percent of20

the inflated price resulting in the dishonest

acquisition of substantial sums by Mr. Anicic and

his accomplices from the credit union. Mr.

Vinski prepared all the fraudulent mortgage loan

25documents in every one of the transactions and

caused the credit union to advance mortgage

proceeds to corporations or individuals under

Anicic's control. All mortgage payments were

regularly made by Vinski using overnight cash

3o deposits from some source, likely Anicic, and

other means to continue the false appearance that

the mortgages were in good standing.

3Reasons for Sentence, Durno, J.

R. v. Vinski

While property appraisals were generally

required, Mr. Vinski ensured that none were

obtained for these properties. The mortgages

were initially kept below the union's limit to5

avoid suspicion. Mr. Vinski also knew the

properties were in rural Ontario and not in the

electronic Teranet registration system so that

anyone who wanted to examine the titles of the

property had to travel to local registry offices.10

Mr. Vinski maintained complete physical control

over the mortgage files, keeping them in his

office.

The volunteer and mostly financially unsophis-15

ticated credit committee rubber stamped Mr.

Vinski's decisions. He had complete control of

the committee and the credit union Board of

Directors.

20

The credit union appears to have functioned

without problems until, in the words of the

agreed statement of fact, Mr. Vinski was

"corrupted by the flamboyant Anicic" in 2002.

Anicic was a client and a regular customer at the25

credit union. He was involved in what were

described in submissions as legitimate mortgages

for which payments were made prior to the events

that are the subject matter of the indictment.

30

At this time, he, along with a teller with whom

he was having an affair, is in jail in Slovenia.


R. v. Vinski

He is serving a 14 year sentence for drug

offences, and her sentence is somewhat shorter, I

believe it is six years. While it may be a

reasonable inference that some of the funds5

involved in the Oklahoma scheme went for drug

deals, there is absolutely nothing to suggest Mr.

Vinski was in any way, shape or form related to

or even knowledgeable about Anicic's drug

activities. Anicic was arrested after these10

charges were laid.

The purported secondary purchasers were pawns who

were recruited into the scheme by Anicic and

others, but not by Mr. Vinski. They were either15

members of the credit union or would have had to

have become members. The twenty had no genuine

interests in the properties, made no mortgage

payments and were not paid for their dishonest

roles despite having been promised that they20

would be. While they were exposed to criminal

sanctions, none have been or will be prosecuted,

due to the overburdened load on the financial

crime sector of the criminal justice system.

25 Substantial civil judgments, however, are pending

against all which wi11 jeopardize their modest

life savings. None of the debts have been paid.

Mr. Vinski instructed lawyers to register the

3o mortgages and advance the funds to lawyers in

trust to be disbursed to Anicic and his

accomplices in each transaction. He was the


R. v. Vinski

joint signatory on each cheque. The scheme

required and used corrupt or grossly incompetent

lawyers. However, Mr. Vinski played no role in

recruiting the lawyers.5

Mr. Vinski received $288,585.06 from a Swiss bank

account traceable to Anicic in June, 2006. The

Crown contends those funds were not used to pay

down the mortgages and Mr. Vinski acknowledges10

that first of all, the money went to him, and

that there is nothing to show or suggest the

funds went towards the mortgages. Accordingly,

those funds were a direct benefit to Mr. Vinski.

When it appeared the scheme might be detected,15

money was transferred from a Swiss bank account

by Anicic to cover the mortgages. The full

extent of the offender's personal benefit is

unknown as he has not been forthcoming regarding

the disposition of the proceeds.zo

Shortly before being suspended from the credit

union, Mr. Vinski had most of the applicable

mortgage files shredded or insured that they were

25 otherwise unavailable for the credit union

investigation. Once he was out of control, he

knew the mortgages would fall into arrears and be

detected. Two files remained however, both had

notes in Mr. Vinski's handwriting that there were

30~ houses on the properties. The notes were false.

5

THE LOSS


R. v. Vinski

The scheme was discovered after he was suspended

with pay in January, 2009. He was arrested in

2010.

The transactions led to the demise of the credit

union that had branches in Mississauga, Toronto

and Hamilton in 2009, after the Deposit Insurance

Corporation of Ontario placed the credit union in10

liquidation as a result of serious capital

deficiencies caused by inter alia a fraudulent

transaction.

At its highest point, the fraud loss exposure was15

over seven million dollars. It appears that some

of the money was used by Anicic for land deals in

Toronto and Croatia. In June, 2006, roughly $4.7

million was transferred from Anicic to a Swiss

bank account to the credit union for repayments20

that avoided an external audit detecting the

crimes. After the payments and the Deposit

Insurance Corporation examination were concluded,

some of the same properties were again

25 fraudulently remortgaged and several more

introduced into the scheme.

It is agreed that ultimately the Oklahoma related

fraud loss to the credit union was approximately

3o three million dollars. While that loss alone

would have been fatal to the credit union, it is

acknowledged that there were other fraudulent

5


R. v. Vinski

losses that are not the subject matter of this

sentencing that are not involved in this

indictment.

The customers' deposits were fully protected by

the Deposit Insurance Corporation, so that those

deposits were paid out to them. The losses,

however, were funded by the Ontario credit union

system, so there is a real loss to every credit10

union and their member:, in Ontario.

As a result of insolvency and liquidation,

everyone of the several thousand, I believe it's

over 4,900 Croatian Credit Union members lost15

their $200 membership fee. Thirty employees lost

their jobs.

Mr. Vinski has plead guilty to defrauding the

Croatian Credit Union of a sum of over $5,00020

between June lst, 2002 and January 31St, 2009.

On behalf of the Crown, Mr. Sherriff seeks a

sentence of five years. He submits the range for

25this offence is three years to six or seven

years. Without the guilty plea, he submits the

sentence would be in the seven to eight year

range.

30~ On behalf of the offender Mr. Loccisano seeks a

sentence of three years.

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R. v. Vinski

Have I accurately set out counsel's positions in

the background facts?

MR. SHERRIFF: Yes, Your Honour.

MR. LOCCISANO: Yes, Your Honour.

THE IMPACT OF THE OFFENCE

On consent, a letter was filed from the President

and Chief Executive Officer of the Deposit

Insurance Corporation of Ontario, Andy Poprawa.

It is regarded as a victim impact statement, and

based on previous case law, the portions that

advocate the application of sentencing principles

such as deterrence and case-specific factors,

such as lack of remorse are not appropriately

included in a victim impact statement. Such a

statement is limited to addressing the harm done

to and loss suffered by the victim. They are not

to include what are in effect sentencing

submissions. Those submissions are properly part

of Crown counsel's argument and have been

presented here, and so in the context of the

victim impact statement, I am not considering

them.

In the letter, Mr. Poprawa writes:

The bedrock of the credit union movement is

the trust and confidence of members that

their funds are safe. This offence was an

assault on that trust.

He notes the credit union was a significant

source of pride for the Croatian community, and


R. v. Vinski

that the offender's breach of trust lead directly

to the demise of the credit union. Over 4,500

members lost their membership fees amounting to

over a million dollars in lost capital.5

He says the collateral damage of the offences i_s

the injury to the trust and confidence the

offender's abuse of his position has caused to

the entire credit union movement in Ontario.10

Fraud, the scourge of financial institutions

results in harm to all financial institutions,

but the impact on credit unions is more keenly

felt because the impact is on the individual15

members and collectively to all credit union

members.

He notes

Depositzo

mitigate

efforts.

revealed

the

Insu

the

He

the

offender refused to assist the

rance Corporation in its efforts to

losses or to assist the recovery

notes the offender has never

whereabouts of the money.

25 There is one victim impact statement from

Margaret and Slavko Butkovic, founding members of

the credit union, representative of the impact

the offence has had on credit union members. The

credit union helped thousands of Croatian

3o immigrants to Canada with loans and mortgages.

When Mr. Vinski asked members to buy additional

shares because of financial problems, they did


R. v. Vinski

so. Ms Butkovic transferred all of her RRSP

funds to the credit union, $19,400 and her

husband transferred $25,000. They lost the

$44,400 that was a critical part of their old age5

savings. Ms Butkovic is now 70 and had a nervous

breakdown. Mr. Butkovic is 82. When a new

manager arrived and assessed the situation, he

called them and said their life savings were

gone.10

THE OFFENDER

Josip Vinski was born in Croatia in 1950. He is

now 64. He currently lives with his parents in

Toronto. He completed university in 1974 and15

came to Canada in 1976 obtaining his MBA from the

University of Toronto in 1984. He worked as a

consultant to McDonalds who were opening Eastern

European franchises and also worked in the courts

as a court interpreter. He has completed various20

real estate related courses at Seneca College and

25

an accounting course at York, as well as a

certification in property management at Humber

College.

He was in a common law relationship between 1991

and 2004. Most unfortunately, his partner became

seriously ill in 2002 and died in 2004.

3o In June of 2010, while vacationing in Cuba, he

met a woman and married her. She was a 32 year

old nurse and single mother who had a nine year


R. v. Vinski

old child. The offender tried to sponsor her to

bring her to Canada but his application was

refused. Because of his bail that precluded him

from leaving Ontario, he has not been permitted5

to see her or the child since his arrest.

15

The offender is currently on social assistance,

regarding himself as virtually unemployable

because of the charges.

The pre-sentence report concluded that he has

taken responsibility for his part in the offence,

was remorseful for the offence, the loss of his

job and reputation. He expressed empathy for the

credit union clients. He notes he has been

ostracized from the Croatian community.

Pursuant to the agreed statement of facts, as

well, Mr. Vinski has been disgraced in most

sectors of the Croatian community and20

successfully sued with the credit union having a

9.6 million dollar judgment against it. He is an

undischarged bankrupt and still faces other law

suits.

25

Unemployed, he is living with his parents. It is

conceded that there is nothing in the evidence to

suggest that he lived an extravagant lifestyle at

any time.

30


R. v. Vinski

There is also a report from Dr. Pillowsky, a

psychologist, about which much was said during

the submissions.

~~The report notes the offender began to use

alcohol as a means of coping after his arrest.

In the offender's words, the pressure is

overwhelming. Since his legal problems started,

his physical and emotional health have~odeteriorated. He has developed insulin dependent

diabetes.

The doctor noted that the offender's first wife

died in 2004, and that given her illness predated15

the start of the offences, her illness coincided

with the start of his criminality and "likely

contributed to his faulty judgment at the time."

The report describes Anicic as a highly20

manipulative conman with unabashed charm and

manipulative capabilities and that the offender

was duped by Anicic. In explaining the offence,

the doctor noted Mr. Vinski's strong desire to

25benefit the community and the credit union on a

long term basis.

Being arrested was a shock, as he was in his

words, paraded down the street to the cruiser

3o that was parked a block away. He felt the police

did that so that everyone would see him, and it

scarred his reputation. The report includes the


R. v. Vinski

offender did not incur any amount of wealth or

profit from the fraud. He also lost his

severance package worth more than $650,000.

5

He, along with his parents, have been ostracized.

It notes he was physically attacked in a shopping

mall. He is overwhelmed at the shattering of his

reputation. The offender fears his reputation

and prominent status in the community has been10

tarnished forever and that he will become "a poor

nobody". He feels abandoned by the majority of

his friends and family.

He was in jail for 12 days when arrested. He15

felt mistreated by the staff while there, but

there are no specifics provided.

There has been a significant impact from his

criminal behaviour that has effectively destroyedzohis self-esteem, self-worth and sense of control

over his life. He did not set out to be

dishonest or to commit crimes. He trusted others

that lead to the credit union being compromised.

25

He feels he let Anicic manipulate him in what

started as a legitimate relationship to the

benefit of the credit union. He admits however,

that he allowed the fraud to happen and is

30~ remorseful.

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251


R. v. Vinski

He contends with severe major depression disorder

and severe anxiety. He suffers from panic

attacks.

The doctor concluded Mr. Vinski has been

psychologically affected due to his legal and

occupational matters. He is highly concerned and

worried about the quality of his and his family's

future if he is jailed for a long period of time.

He is an emotionally vulnerable man whose ability

to cope with stress continues to deteriorate. He

is quite anxious and depressed. Continued

prolongation of the proceedings would be

devastating to his already fragile state. He

would benefit from psychotherapeutic treatment.

The report starts noting that the offender went

to the doctor's office in October 2nd of last year

and that the aim of the clinical interview was to

examine how his psychological functioning has

been impacted by his criminal and occupational

difficulties, as well as his subsequent

proceedings. It continues:

Mr. Vinski perceives many losses in his life

as a result of this matter and appears to

believe that his future is in jeopardy.

As I read the first report, the initial one, it

was generated from an assessment at the doctor's

office; it is not clear, what, if anything the

doctor was given with respect to the facts. It


R. v. Vinski

also appears clear that the report is exclusively

based on the offender's self-reporting.

It is not clear if there were other sources with5

respect to verification. I am not at all being

critical of the doctor, given the limited scope

of the assessment that he completed. However,

that it is purely a self-reporting assessment

goes to the weight to be attached to the report.10

In at least one area, that he derived no personal

financial gain is clearly wrong. That he was a

dupe of Anicic initially may have been true, but

this offence went on for seven years. With the15

offender's educational background, it is

inconceivable that for seven years throughout

many, many fraudulent transactions he continued

as the dupe or that he allowed the crime to be

committed when he was participating.20

There is a second letter from the doctor, dated

November 27th of last year where it is indicated

the offender had been for two psychotherapeutic

25 treatment sessions. The diagnoses that I noted

earlier is actually from the second report.

Perhaps it is part of human nature and

particularly when one who held a position of

3o prestige in the community is found to have

committed a serious criminal offence, to point

fingers, to have someone else to blame. While


R. v. Vinski

there are references to his own responsibility,

it appears as though there is a great deal of

blaming Anicic for everything, as opposed to

considering this offender's responsibility in5

what he did. I will return to the remorse issue

later.

In any sentencing there are factors in

aggravation as well as those in mitigation.10

FACTORS IN AGGRAVATION

1. This was a massive fraud, on any

definition of large scale fraud. Even on the

basis of the money he received directly, that15

would qualify as a large scale fraud. See R.

v. Dobis; R. v. Williams.

2. The offender's role in the offence was

significant. As noted, the agreed statement of

facts referred to Anicic and Vinski as the20

masterminds. I accept that this scheme and any

thought of fraudulent conduct probably, likely

originated with Anicic, that he was the

initiator and the prime mover. However, he

25 could not do it alone. He needed others, and

in particular, one key participant, someone in

control at the bank. Without this offender the

scheme can't go forward. Who is going to

approve the loans? Who is going to turn a

3o blind eye to the quick flip sales? Who is

going to prepare the documents? Who is going

to make the payments, instruct lawyers and keep


R. v. Vinski

papers? No doubt, others had to be involved

and were, but they did not have the particular

qualifications that this offender did for

participation. He played an essential and5

vital role. With the assistant general manager

ill for several years, there were virtually no

restraints on his conduct.

3. It was a sophisticated scheme dependent on

a number of participants.10

4. The offence for this offender involved a

massive breach of trust. As counsel noted, and

I agree, he was the face of the credit union.

He had previously been elected a member of the

board of directors. He had earned his position15

as general manager through hard work and

dedication. He was regarded as a pillar of the

community. No doubt the community felt safe

with that sort of person in control of their

money in their credit union. He was the20

general manager entrusted by the members with

the operation. He was of Croatian descent. He

was someone trusted by the community. He

breached that trust and abandoned the community

25when he did so.

4. The impact from the fraud has been

devastating to the thousands who lost their

fees, others who lost funds they had advanced

when this offender asked for money to help the

3o credit union through difficult times, like the

couple I referenced in the victim impact

statement who lost their money relating to, I


R. v. Vinski

take it, were preferred shares; the employees

who lost their jobs and the members of other

credit unions who had their funds used to pay

back the depositors. There is also an indirect5

impact on the community at large, because

offences like this undermine public confidence

in financial institutions.

5. The seven year duration of the fraudulent

conduct is aggravating as is the large number10

of dishonest transactions.

6. The crimes stopped when he was suspended.

7. The offender took steps to avoid detection

by destroying bank records once the investi-

gation started, or appeared it was going to15

start, and then by concocting false memos to

put on two remaining files suggesting there

were houses on the property when there were

none. This is a significant factor to take

into consideration.20

8. The offender received at least $288,500

from the fraud that didn't go to pay off the

mortgages. That fact belies any suggestion of

the best interest of the credit union or

25 community motivations being the sole motivation

here. There is no other inference, but there

was at the very least a greed component by a

man who had a reasonably good salary, benefits

and severance package. No doubt, until 2002 he

3o did an admirable job for the credit union until

he was poisoned by Anicic. He argued that

negative demographics around 2002 resulted in


R. v. Vinski

less profits for the credit union, and that

Anicic had people who needed mortgages and had

a good history of paying the mortgage money.

There is nothing to dispute that that is what5

was going on with Anicic in the past. I don't

dispute that for a moment. I also infer that

while these mortgages were being paid, that

there was some funds going into the credit

union mortgages.10

However, the very first time he had to sign a

document he knew was fraudulent or that he

directed someone else to do so in pursuit of

the fraudulent objectives, he was no longer an15

innocent dupe of a manipulative con man. He

became a full-fledged participant in very

serious criminal conduct, not a dupe.

9. While he did not recruit the pawns, he

would have known they were involved. These20

were people who were knowingly involved in

criminality. This offender would know that

those folks, as well, were subject to criminal

and civil liability.

2510. Finally, this type of offence requires

significant police time to put the case

together. It is acknowledged in this case that

a significant amount of work was done by civil

counsel, but the fact remains these investi-

3o gations were very labour intensive for the

police.


R. v. Vinski

FACTORS IN MITIGATION.

1. Mr. Vinski plead guilty, thereby saving

significant court time, the public expense of

the trial and the witnesses from having to come5

to court. This would have been a lengthy

trial. On one of the pre-trial estimates it

was a month. It may have been done slightly

shorter than that, but even trials that are

estimated to go three to four weeks, sometimes10

go significantly longer. The trial would have

taken place in a jurisdiction where judicial

and facilities resources are stretched beyond

their limits. I appreciate this is a very

strong case. Mr. Sherriff referred to the plea15

as imbued more with the imprint of strategy

than remorse. He may also be accepting the

inevitable. Nevertheless, the plea is an

important mitigating factor. It is not an

early plea. I believe prior to the plea being20

entered here, there were 24 appearances in this

court, and numerous in the Ontario court.

There were however considerable issues with

respect to retaining counsel by Mr. Vinski, and

25 to Mr. Loccisano credit, once Mr. Loccisano was

on the case, the matter was going in the

direction for resolution.

2. He has no criminal record. He is a mature

first offender.

30 3. I accept he suffers from some health issues

that I have outlined, and I accept from the

report that as a result of his arrest, and the


R. v. Vinski

numerous civil proceedings, that he suffers

from severe depression and anxiety, as well as

the medical issued canvassed.

5

I accept that his depression and anxiety are

linked in a way to the offence, but they really

have flowed from the date of arrest. They can

be viewed as a collateral impact from the crime

on him. That the impact of being arrested and10

awaiting trial has affected an offender's

health is a relevant consideration.

Notwithstanding those legitimate concerns, they

are not such that the sentence should be15

reduced below the appropriate range. I infer

from the doctor's report that in part, the

uncertainty as to what will happen on the

criminal charges contributed to his anxiety and

depression. I am not in any way, shape or formzo

minimizing those symptoms, which I accept as

valid and flowing from, at least in part, the

uncertainty. That sort of impact is neither

surprising nor unusual. He has attended for

25 psychotherapeutic treatment to address those

issues which goes to his credit. That he would

take steps to address those is a relevant

consideration as well.

4. I accept that the sentence will impact on

3o his parents, his wife in Cuba and his child

there. However, when one looks at the impact

of a sentence on an offender's family, it is

22Reasons for Sentence, Dumo, J.

R. v. Vinski

also important to keep in mind that Mr.

Vinski's family is not the only family impacted

by his crimes. Others had their life savings

either wiped out or put in jeopardy. He is an5

educated man and according to the pre-sentence

report, made a conscious decision to get

married and have a child after he was fired or

suspended. While the family consequences are

mitigating, they have to be considered in the10

context of all the circumstances of his family

15

20

and others.

5. He spent 12 days in pre-sentence custody

when arrested and as indicated to counsel that

could be enhanced to give him credit for one

half month.

6. There have been corollary impacts from the

crime, a number of civil judgments against him

and more ongoing at this time.

IS THE OFFENDER REMORSEFUL?

The offender suggests he is. The Crown points to

the medical report filed and raises significant

concerns, whether the offender shows any genuine

25remorse or whether he continues to maintain that

he is a dupe who got talked into a major fraud by

a con artist.

There is no doubt that Mr. Vinski is remorseful

3o that he got caught. There is no doubt he is

remorseful that he lost his reputation. However,


R. v. Vinski

those are not the type of remorse that is

relevant for sentencing purposes.

The Concise Oxford Dictionary defines remorse as5

~~deep regret for a wrong committed". Someone who

is remorseful is filled with repentance.

The Court of Appeal held remorse requires the

acceptance of guilt. Church of Scientology10

[1977] OJ 1548 CA. The expression of genuine

remorse is always regarded as a mitigating

factor. R. v. Nash [2009] NBJ 17.

In R. v. Valentini [1999] OJ 251 at para. 81, our15

Court of Appeal adopted the following comments

from the British Columbia Court of Appeal:

The factor of "remorse" is often important

insofar as it might be suggested that the

court should regard those who come before itzoin a submissive or contrite manner as

deserving of more lenient treatment than

those who accept their predicament with

whatever fortitude they are able to summon,

25 there would be little in this factor which

could assist the sentencing judge. But to

the extent that an accused person is able to

demonstrate that he or she has, since the

commission of a crime, come to realize the

3o gravity of the conduct, and as a result has

achieved a change in attitude or imposed.

some self-discipline which significantly


R. v. Vinski

reduces the likelihood of further offending,

the existence of remorse in this sense

obviously has much importance.

First, the absence of remorse would not be an

aggravating factor. The question is whether he is

genuinely remorseful for committing the offence.

The predominant themes in the doctor's report are

remorse for being caught, remorse about his10

reputation, remorse he is unemployable, remorse

he was duped, remorse the police paraded him down

the street, remorse he was mistreated in the jail

- all remorse largely unrelated to the crime.

15However, the pre-sentence report, prepared by a

neutral probation officer, does include that he

took responsibility for the offence and expressed

his empathy for the credit union clients who lost

large sums of money. The greatest loss to him,20

according to the report, was the trust and his

prominent status in the community. So, to be

clear, there are some indications of remorse for

the victims.

25

30

In terms of the British Columbia Court of

Appeal's comments, no doubt the arrest,

conviction and sentence would preclude him from

being in a position to commit similar offences.

I find that there are some indications of genuine

remorse. I accept that he has accepted


R. v. Vinski

responsibility in the pre-sentence report and in

court by his plea and comments. What makes the

issue somewhat more challenging and less straight

forward than in many, if not most, cases is that5

his expressions of remorse are in the context or

in the midst of how terrible this has been for

him, for his reputation, his employment, his

status. It is also in the context of ~~I was

duped", an assertion that flies in the face of10

the admitted facts.

There are factors that are neither mitigating nor

aggravating. First, in order for a mental health

condition or addiction or of a particular15

condition of an offender to be mitigating on

sentence, there must be a link to the offence.

The Court of Appeal put it this way in R. v.

Prioriello 2012 ONCA 63 at para. 11:

In order for a mental illness to be20considered as a mitigating factor in

sentencing, the offender must show a causal

link between his illness and his criminal

conduct, that is, the illness is an

25 underlying reason for his aberrant conduct.

R. v. Robinson, [1974] O.J. No. 545 (CA).

While Dr. Pilowsky speculated, in my view, that

the illness and death of the offender's wife may

3o have impacted on this thinking processes at the

time, or in counsel's words in submissions, that

he was particularly vulnerable, in order for a


R. v. Vinski

fact to be mitigating, the offender must

establish it on the balance of probabilities.

Mr. Loccisano properly concedes the report does

not draw the required link. There is nothing5

upon which I could conclude that his wife's

unfortunate illness probably contributed to his

being vulnerable. In particular, it has to be

kept in mind that the illegal conduct continued

for seven years. The credit union membership10

might have been declining. There were concerns

for the credit union, but for a man with this

offender's background to start down the path and

stay on it for 27 transactions is not explained,

nor is it linked to any vulnerability or15

uncertainty in his life because of his wife's

unfortunate illness.

Second, that he refused to assist the Deposit

Insurance Corporation and has refused to say20

where the funds are or provide any further

details, I find in this case is the absence of a

potential mitigating factor, not one in

aggravation. He could have chosen to assist with

25 what he knew and how the money got to him. I

accept that he may very well not know all the ins

and outs of Anicic's world and finances.

Cooperation can significantly reduce a sentence.

3o Lack of cooperation doesn't increase it. I

raised with counsel in submissions the Supreme

Court of Canada decision in R. v. Shropshire


R, v. Vinski

where that offender refused to give any

explanation for what appeared to be a cold

blooded killing in the course of a drug deal.

With the trial judge, the British Columbia's5

Court of Appeal and the Supreme Court of Canada

finding it was a relevant factor on parole

ineligibility, I find that ruling was linked to

the factors specific to determining parole

ineligibility, including the circumstances10

surrounding the commission of the offence. Those

factors don't apply here, so his refusal does not

aggravate. It is the absence of a potentially

mitigating consideration.

15

20

That he has not paid restitution and there

appears to be no hope at all of doing so is not

an aggravating fact as recently noted by the

Court of Appeal in R. v. Dwyer 2013 ONCA 34.

That the police walked him a block in or out of

handcuffs is not clear, is not aggravating

regardless of whether he was in or out of

handcuffs. There is no evidence the police had

25 plenty of parking in front of wherever he was

arrested and chose to walk him down the street.

I have no doubt that he was humiliated and

offended. He, however, was the author of his own

misfortune. The arrest was fully justified and

3o is not open to criticism. Given the large amount

of money that is unaccounted for, there may have

~~


R. v. Vinski

been significant criticism had the police simply

called and asked him to drop into the station.

THE PURPOSES AND PRINCIPLES OF SENTENCING

The sentence must be proportionate to the gravity

of the offence and the degree of the respon-

sibility of the offender. The offence is very

serious for the reasons noted and his moral

culpability very high, given the position of10

trust and duration.

The most important considerations are general

deterrence to send a message to others who would

be like-minded, and denunciation to show15

society's condemnation of the offence. As the

Court of Appeal held in R. v. Drabinsky and

Gotlieb (2011), 107 O.R. (3d) 595 at Para 159

with respect to general deterrence:

The deterrent value of any sentence is a20

25

30

matter of controversy and speculation.

However, it would seem to me that if the

prospects of long term jail terms deterring

anyone from planning and committing a crime,

it would be people like the appellants who

are intelligent individuals, well aware of

the consequences, and accustomed to weighing

potential future risks against potential

benefits before taking the risk.

Those comments that related to Mr. Drabinsky


R. v. Vinski

and Mr. Gotlieb apply equally here with this

offender's background.

While specific deterrence has been largely5

achieved, there remains some basis for concluding

that specific deterrence is a necessary component

of the sentence. Finally, I have to consider and

keep in mind his rehabilitation and the doctor's

report.10

PARITY

15

Parity involves two scenarios. First, where two

or more persons are charged with the same crime.

Anicic's close associate and accomplice, Dbravo

Hajderevic was involved in all 23 properties

using one or more of three of his companies

incorporated at Anicic's direction. He plead

guilty some time ago and received two years.

20

The Court of Appeal has addressed the parity

principle in this situation as follows in R. v.

Jacko 2010 ONCA 452 at Para 55:

Similar offenders who commit similar

25 offences in similar circumstances should

receive similar sentences, according to

s.718.2(b) of the Criminal Code. This

principle does not command identical

sentences for co-accused, only similar

3o sentences for co-accused whose participation

in the offence is similar and who pace

similar antecedents, present circumstances

~~


R. v. Vinski

and future prospects. Disparity of

sentences among co-accused is not per se

error.

Given the positions advanced on sentencing here,

it is acknowledged by both counsel that there is

a basis for disparity. The differences are

obvious: Vinski's offence involved a significant

breach of trust, Hajdarevic did not; Vinski was10

the inside mastermind; Hajdarevic was not a

mastermind; Hajdarevic was an earlier plea,

Hajdarevic's role, while important, was not

essential in the sense that only he could carry

it out, his role was go to the lawyers and sign15

papers. Counsel agree through their submissions,

of course, that the sentence here should be

longer. Where they differ is in the amount.

The second scenario where parity applies is in20relation to similar offenders who commit similar

offences in similar circumstances, but are not

co-accused. They should receive similar

sentences. Both counsel have filed informative

25case books that have assisted me in determining

the appropriate sentence. It is important to

canvas those cases briefly to indicate what

sentences have been imposed in somewhat similar

circumstances.

30

With respect to the Crown's cases, in R. v.

Drabinsky and Gotlieb, 2011 ONCA 582 five and


R. v. Vinski

four years was imposed. There the amount of the

fraud, while qualifying as a large scale fraud,

was not capable of determination. That was after

a trial, so they didn't have the mitigating5

effect of a guilty plea.

In R. v. Sanmugam 2012 ONSC 6663, Duscharme, J.

imposed five years for a $1,000,000 fraud where

the offender convinced an elderly couple of10

limited means, a grandmother he met at his

children's school and a doctor he met on the

~7

Internet, to invest their entire savings. That

offender lost all their money through risky

investments. The Crown had been asking for three

years.

In R. v. Khatchatourove and Resnik 2012 ONSC

3511, O'Marra, J. imposed four years on both

accused where they manipulated recent immigrants20to use their identities to obtain mortgage

financing. There were 27 mortgages and the

purchase and sale of 11 residential properties.

It appears that amount there was about $900,000.

25I believe that was a trial.

Finally, in R. v. Palantzas [2009] OJ 3862,

Trafford, J. imposed four years on a bank manager

of a chartered bank who defrauded the bank over

30~ seven years. He had opened 37 loans accounts in

the names of 22 innocent people. He forged


R. v. V inski

signatures and withdrew money from the fictitious

accounts. The loss was about $819,000.

The offender also relies upon Drabinsky as well5

as R. v. Cunsolo 2012 ONSC 114, where Hill, J.

after a trial imposed 18 months for 23 fraudulent

mortgages where the institutional loss was about

$5.5 million. Cunsolo was not a leader of the

scheme. The leader received three years. There10

was no breach of trust element to Cunsolo's

sentencing.

In R. v. Eizenga 2011 ONCA 113, eight years was

imposed. The fraud appears to be about$3515

million. That was on a plea. The offence

involved obtaining funds from the public for

shares in corporations through misrepresentation

to the public.

20In R. v. Leo-Mensah 2010 ONCA 139 the offender

operated an income tax return preparation

business and would provide false charitable

donation receipts to the clients. He generated

25 $11.7 million in false charitable donations that

lead to tax refunds totalling $3.2 million. The

Court of Appeal imposed two years in jail in

addition to 11 months pre-trial credit.

30~ In R. v. Drake 2009 ONCA 560, two offenders

operated a boiler room where exceptionally

gullible victims were asked for an advance


R. v. Vinski

payment of fees in order to secure the release of

huge multi-million dollar sums from a Nigerian

bank. The Court of appeal upheld four and five

years.5

In R. v. Clarke [2004] O.J. No. 3438, the Court

of Appeal imposed an effective three and a half

years on a bank employee where there was no

actual loss. In the course of providing10

assistance to three front line employees, he

gained access to their confidential numbers and

passwords, which he used to redeem money from 33

separate mutual fund accounts. The total amount

of the redemption was 20 million dollars. Other15

evidence suggests that he was taking steps to

transfer the money into investment accounts that

he would control. By chance, the next day, one

of the customers whose funds had been redeemed

discovered the missing funds and notified the20

bank. They were able to reverse the transaction.

Justice Hill, in R. v. Williams [2007] O.J. No.

1604, imposed 18 months after a trial where the

25 offender was a superintendent of the Dufferin-

Peel Catholic School Board and defrauded the

board of roughly $160,000. She was 60 and

suffered from clinical depression. Citing

several Court of Appeal cases, His Honour

3o concluded that a six year sentence is within the

correct range of sentence for major frauds, and

that sentences in the range of three to five


R. v. Vinski

years are common. He found sentences in the six

year range had been imposed with a fraud

involving millions of dollars, at Para 29. In

terms of my earlier comments about the 288,0005

qualifying as a large scale fraud, His Honour

notes cases ranging from $87,000 to $270,000 have

been referenced as large scale fraud.

In R. v. Bogart (2002), 61 O.R. (3d) 75, the10

Court of Appeal imposed what was effectively a 32

month jail term on a 45 year old doctor who

defrauded OHIP of roughly a million dollars by

submitting false billings over a seven year

period. He was an excellent doctor, a cancer15

survivor and treated persons with aides. By the

time the Court of Appeal dealt with the case, he

had made over 25 percent restitution. The court

noted that fraud over 5,000 was a serious

offence. That fraud amounted to an egregious20

breach of trust.

In R. v. Dobis, (2002), 58 O.R. (3d) 536, the

Court Appeal adopts a range of three to five

25 years in 2002 for large scale frauds.

In R. v. Nichols (2001), 148 O.A.C. 344, they

reduced a five year and three month sentence to

four years involving a fraud committed on one

3o individual. He called an 82 year old woman in

Chicago suburbs and managed to get a million

dollars from her.


R. v. Vinski

As is readily apparent, there are wide variations

in the sentences imposed for this offence. The

ranges noted by the Court of Appeal are a first5

step in the analysis because they are generally

determined considering only the objective

seriousness of the offence. R. v. Hamilton

(2004), 186 C.C.C. (3d1 129. Once the range is

determined, the sentencing judge then considers10

the aggravating and mitigating factors specific

to the case to decide where within the range the

sentence falls or whether the aggravating factors

take it above or those in mitigation below.

15Some of those factors noted earlier include the

amount of the fraud, its duration, sophistication

or lack thereof, whether the offender stopped

before being apprehended, the impact on the

victims and the other effects of the crime.20

THE SENTENCE

I am not persuaded that a sentence of three years

adequately addresses the purposes and principles

25 of sentencing having regard to the serious

aggravating factors, notwithstanding those in

mitigation. The case law that I have referenced

for this type of fraud supports a longer sentence

on a guilty plea. I also take into consideration

3o Mr. Hajdaravic received two years for his role.

While not in itself determinative, it is a factor


R. v. Vinski

to take into consideration with respect to the

sentence to be imposed on Mr. Vinski.

I agree with Mr. Sherriff that after a trial,5

this case would have merited six or seven years

at least. The cases canvassed earlier as well as

those canvassed by the Court of appeal in Dobis

and by Hill, J. in Williams, strongly support

that conclusion. While the Crown suggested10

sentence is well within the appropriate range for

this offence on the guilty plea, I am persuaded

that a somewhat shorter period is warranted, and

the sentence will be four and one half years.

Given the credit for pre-trial custody, he is15

sentenced to 53 and one half months.

I take it the fine surcharge is waived?

MR. SHERRIFF: Yes.20

THE COURT: Subject to counsel's views, I am

prepared to direct that the two reports from the

doctor go to the correctional facilities. They

should go anyway, but they would be flagged and I

25 can recommend, if counsel wishes, some psycho-

therapeutic intervention.

MR. LOCCISANO: Yes, Your Honour, that would be

appreciated on behalf of Mr. Vinski.

MR. SHERRIFF: That's fine with me, Your Honour.

3o THE COURT: There were no corollary orders?

MR. SHERRIFF: That's correct.

THE COURT: Count two withdrawn?

OI

~1

~~~

251

m~


R. v. Vinski

MR. SHERRIFF: Yes.

THE COURT: For reasons dictated, sentence fifty-

three and a half months, in addition to 12 days

pre-sentence custody, for which he is credited

with one half month. Count two withdrawn, fine

surcharge waived. The psychologist reports at

tabs one and two of the offender's sentencing

material are to be appended to the warrant of

committal. I recommend that Mr. Vinski receive

psychotherapeutic treatment while incarcerated as

recommended by Dr. Palowsky.

THIS IS TO CERTIFY that the foregoing

is a true and accurate transcription of my

recordings to the best of my skill and ability.

~, ~

Grace Gowland - C.V.R.

dico soad · 2014. 4. 17. · created date: 4/17/2014 7:13:34 am

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