This press release is sponsored by Investigation Counsel PC, Fraud Recovery Lawyers.
On September 29, 2021, Justice Tulloch of the Ontario Court of Appeal dismissed an appeal of the fraud conviction against Kumaraguruparan Manickam of Oshawa, Ontario. Mr. Manickam argued that the judge should have believed his story and even if convicted, not sent him to jail or order a restitution order against him. The back story to the application is worthy of a review.
On October 15, 2018, Justice Susan C. MacLean of the Ontario Court of Justice convicted Mr. Manickam of two counts of fraud and one count of utter forged document. On April 29, 2019, Mr. Manickam was sentenced to 18 months in jail, 3 years’ probation, and a standalone restitution order. Justice Maclean did not publish her reasons for conviction or sentence.
Mr. Manickam was a small business owner. He owned a restaurant, a convenience store, a video store, and a grocery store. He financed his restaurant business with private loans at a very high interest rate. By May 2013, he was indebted to his private lenders and had accumulated substantial credit card debt. He was hoping to obtain loans from banks with lower interest rates.
In 2013 Mr. Manickam met a man that he only knew as “Ramesh”. Ramesh offered to assist Mr. Manickam obtain loans from Toronto Dominion Bank, and later from the Royal Bank of Canada. Mr. Manickam and Ramesh agreed that Ramesh would get a 15 percent commission on any loan he obtained. This unusual arrangement was not documented.
Between June 12 and June 18, 2013, Mr. Manickam deposited cheques from Ambigai Janitorial Services (a fake business) to his TD bank accounts. All the cheques were fraudulent. Most were cheques deposited in the two TD business accounts, but some were deposited to his personal account and to pay the balance on his credit cards. His TD accounts were blocked on June 17, 2013 and frozen after June 20, 2013.
Mr. Manickam also opened two Royal Bank of Canada business accounts for a company operating as Twin Bird as well as two personal accounts. Mr. Manickam repeated the TD scheme with his RBC business accounts. Between September 19, 2013 and September 23, 2013, the appellant deposited 18 cheques in his RBC business accounts, all of which were fraudulent. The combined loss to both banks was over $250,000.
At trial Mr. Manickam admitted that he opened fake businesses and deposited counterfeit cheques. Mr. Manickam’s defence was that he trusted “Ramesh” and that Ramesh told him that the business were bona fide and the cheques were authorized. Mr. Manickam’s defence was that he was a dupe of the unscrupulous fraudster Ramesh.
The Court found Mr. Manickam’s involvement went beyond simply depositing cheques. It defied belief that Mr. Manickam did not appreciate the suspicious nature of the scheme. Instead, he feigned ignorance in an attempt to evade criminal liability. At a minimum, even if Mr. Manickam evidence was believed, he was willfully blind.
The Court of Appeal agreed with the willful blindness assessment, and also held that the trial judge considered all sanctions other than incarceration and found that due to the seriousness of the fraud and the significant loss that resulted, incarceration was necessary to adequately address the principles of deterrence and denunciation.
This fraud falls into the category of almost too dumb to be true. It is unlikely this sentence would have been issued against Mr. Manickam if he had perpetrated it against a private lender. Mr. Manickam, however, attempted his fraud on banks that are the backbone of Canada’s financial system, and for that the Court determined that general deterrence was required.
The Reasons for Decision of the Court of Appeal are reported at R. v. Manickam, 2021 ONCA 668, available here.