B.C. Appeal Court turns a repeated fraudster house arrest into jail time

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As a bookkeeper, Renee Merkel was in charge of payroll. The fraudster entered false time and payroll information for existing employees and reactivated payroll entries for employees who were fired or on leave, causing tax headaches and devastating losses.

Judges said conditional sentence for Vancouver Island repeat offender was ‘demonstrably unfit.’

Prosecutors didn’t explicitly link the bankruptcy of the Errington mill to the fraud perpetrated by the company’s former bookkeeper.

But when Renee Patricia Merkel was sentenced, her former boss told the court that “the forest industry is a really hard industry to be in” and that while “$100,000 might not seem like a lot of money … to a company that’s struggling, it was a lot of money.”

Merkel had a long history of fraud and of getting house arrest, the judge who sentenced the 43-year-old last spring decided she deserved one more shot at doing her time at home.

On Monday, B.C.’s top court said that decision was “demonstrably unfit,” sending Merkel to jail for two years instead.

“Errington is the fourth employer the respondent has defrauded or stolen money from while in a position of trust,” Justice Gregory Fitch wrote in a three-person unanimous decision.

“Her history of offending, her evident failure to benefit from previously imposed [conditional sentence orders], her high moral culpability, the harm she inflicted on her victims, and her ongoing risk to the community are such that, but for the position taken by the Crown on sentencing, a significant penitentiary term could well have been imposed.”

Repeat offender

The three judges overturned the previous sentence after the Crown appealed on a number of grounds. As part of the decision, the judges substituted the two-year custodial sentence.

The ruling stated that Merkel worked as a bookkeeper at the mill 40 kilometres north of Nanaimo from 2010 to 2018, overseeing timekeeping and payroll systems for the tiny operation, which employed around 50 people.

Merkel was fired in 2018, but the fraud was not obvious yet.

Things started to come to light when an employee complained that their T4 tax form showed earnings that were significantly more than what they had actually made. Merkel had entered false time and payroll information for existing employees as well as reactivating payroll entries for employees who were fired or on leave.

Merkel funnelled $70,000 in total to her personal account and cost the company another $38,700 in overpayments to various pension, employment and worker compensation agencies.

“The company was not the only victim,” Fitch wrote.

Merkel’s actions also caused headaches for mill employees who faced increased taxes and the loss of child and other tax credits as a result of phony information given the Canada Revenue Agency.

“The extent of the harm inflicted … on her co-workers could not be determined,” the appeal court justices wrote.

It was held that Merkel was given a six-month conditional sentence in May 2004 after being convicted of failing to declare employment income while receiving social services benefits.

She then worked as a bookkeeper for two other companies, both of which she also defrauded.

Merkel was given an 18-month conditional sentence order for those crimes and ordered to pay more than $108,000 back — which she never did.

Only four days into that sentence, she was pulled over for impaired driving and found to have blank cheques for yet another company who she provided with bookkeeping services. She had defrauded them as well.

A need for deterrence

The lower court judge who gave Merkel yet another shot at house arrest for the Errington fraud considered her claim that she had been taking opioids at the time of her crimes.

However, the appeal court judges said the drug should not have been considered a mitigating factor. They also noted that even the defence’s medical witness didn’t attribute her actions to oxycodone use.

Fitch wrote “there was no evidence that a mental health disorder contributed to [Merkel’s] purposeful, sophisticated and repeated acts of fraud,” and “even if there was, the judge did not find that the respondent met her burden of establishing a link between her mental state and her conduct.”

Merkel has been assessed as being at a high risk to reoffend.

On that note, the appeal court judges found that there was a need to send a message both to society in general in order to deter fraud and to Merkel specifically by imposing a significant period of incarceration.

The two year sentence means she will serve her time in federal custody. She also faces a three-year period of probation.

After she was fired from the Errington mill, Merkel got a job as a bookkeeper at another forestry company. She was fired once her guilty plea was made public.

This article was originally sourced by www.cbc.ca.