Ontario appeal court rejects Ponzi schemer’s appeal

The appellant was charged with one count of defrauding the public of over $5,000, pursuant to s. 380(1)(a) of the Criminal Code, R.S.C. 1985, c. C-46, and one count of theft over $5,000, pursuant to s. 334(a). The trial judge described the matter as “an overwhelming case of fraud and theft perpetrated by a devious, clever, calculating, cold-hearted man who has absolutely no remorse for the many lives that he ruined”, and found him guilty on both counts. The theft count was conditionally stayed pursuant to the principle from Kienapple v. R., [1975] 1 S.C.R. 729. 

On appeal, the appellant argued that his fraud conviction should be set aside because there was no evidence that he had defrauded “the public.” He submitted that a fraud on the public must involve a fraudulent solicitation directed at the public at large, or at least at a particular segment of the public indiscriminately, and must be wide-reaching, extending beyond specific victims identified in advance. He noted that the 41 complainants came to him through varied means, as long-time clients, via referrals from family or friends, or by attending his seminars or speaking engagements, and invested differing amounts in different ventures, at different times, and with varying results. 

The Court of Appeal rejected that position. Quoting Bawden J. in Tri-Can Contract Incorporated v. R., 2023 ONSC 4736, at para. 24, the panel reiterated that the hallmark of a fraud on the public is simply that the victims “can rationally be grouped as a whole for the purpose of assessing the guilt or innocence of the accused”. Ponzi schemes are regularly prosecuted via a single count of fraud on the public, since victims are interconnected through their victimization, citing R v. Schoer, 2016 ONSC 1127, aff’d 2019 ONCA 105. As observed in R. v. Romain, 2017 ONCA 519, at para. 95, “to describe the frauds alleged and proved by the Crown as a number of individual frauds against individual victims would mis-describe the nature of the fraudulent scheme and significantly understate its seriousness”. 

The appellant also alleged that the trial judge erred in admitting and relying on a Crown forensic accounting report and in his assessment of the defence expert’s evidence. The panel disagreed, noting that the appellant had conceded the admissibility of the Crown expert’s report at trial, and that the trial judge gave sound reasons for accepting it and cogent reasons for rejecting parts of the defence expert’s evidence. The panel saw no reversible error. 

The appeal was dismissed.