IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]           Ms. Milligan has pled guilty to one count of defrauding her employer of monies of a value in excess of $5,000 contrary to s. 380(1)(a) of the Criminal Code, and to one count of committing forgery by making false cheques with an intent they be used to the prejudice of her employer, contrary to s. 367 of the Code.

[2]           The charges arose in the course of Ms. Milligan’s employment with the complainant between the dates of February 1, 2012 to February 28, 2014.

[3]           In October 2011 the offender was hired by the Chief Executive Officer of Sparkling Hills Wellness Hotel LTD (Sparkling Hills) for the position of Account Manager.  Her functions included bookkeeping, and doing payroll and taxes.  These functions had previously been outsourced.  She was hired on the basis of her background and experience in general accounting.

[4]           The financial structure of the employer provided that the CEO was the only person with single signing authority on cheques.  If he was present, any cheques to be signed were to be brought to him.  If he was away, the backup signing authority required the cheques to be signed both by the offender and the assistant general manager.

[5]           The company used an automated accounting system called QuickBooks.  Ms. Milligan was one of three people who had access to the program.  Her access allowed the printing of cheques via the program.  Ms. Milligan, to her credit, expressly states the other two employees who had access to the program were not in any way involved in the creation of the fraudulent cheques.

[6]           In January 2014 Ms. Milligan gave her employer two weeks’ notice of her intent to leave her employment, saying she had been offered a better position at another resort.  Ms. Milligan clarified at the sentencing hearing that she had actually not been offered a position with another resort but that she simply wanted to leave her employment with the complainant as a way to put to an end the ongoing temptation to further defraud the complainant.  This time of year was nearing the financial year end, and Ms. Milligan had been working on employee T-4 slips.  When she left her employment, it was determined that her pay had inadvertently not been adjusted for the truncated pay period.  She told her employer she would send the employee T-4 slips she had been working on, and also send a cheque to repay her unearned wages.

[7]           There was a delay in the return of the T4 slips and salary repayment cheque that prompted the Operations Manager to look into how much the repayment cheque should be.  She discovered a cheque that had been made out to Ms. Milligan but the account entry in QuickBooks showed another person as payee.  She took the cheque to the CEO and although it was signed in his name the CEO confirmed that it was not his signature.  This prompted the company to begin looking into other cheques Ms. Milligan had issued and soon the police were involved.  Sixty-seven suspect checks were discovered, and a representative from Sparkling Hills’ bank confirmed that the cheques had been deposited into Ms. Milligan’s personal account.  The bank representative also said that Ms. Milligan had instructed the bank to not send paper statements to the employer.  At the sentencing hearing, Ms. Milligan confirmed she was taking responsibility for practically all of the suspect cheques, however there were two cheques she wasn't sure about, those being cheques #1970 and #2270, and two cheques that she was positive were not fraudulent: cheques  #3840 and #1997.  Based on the submissions, I have concluded that the cheques Ms. Milligan was not sure were fraudulent were in fact fraudulent cheques, especially given that on one of the cheques Ms. Milligan admits to having forged another person’s signature, and on the other she simply could not recall if it in fact it was or was not a fraudulent cheque.  However, I cannot conclude that cheque #3840 made out to Cabana Catering in an amount of $3,810.55 was fraudulent.  Consequently that amount will be removed from the total amount sought in restitution.  Similarly, I cannot conclude that cheque #1997 made out to Crystal Nagy in the amount of $870 was fraudulent and consequently that amount will also be removed.  It remains open to the complainant to pursue Ms. Milligan for these amounts in a civil action.

[8]           Regarding Ms. Milligan's request to the bank to change paper statements to electronic statements, she says she did not do this in an effort to purposefully cover her tracks but did it because those statements had to be referenced in a month-end report that had to be forwarded to another company location.  Ms. Milligan points out that any paper statements would nevertheless have come directly to her, and that if she wanted to cover her tracks that way, she could have done so without changing the paper statements to electronic statements.

[9]           Ms. Milligan’s authority on the QuickBooks program allowed her to edit the entries after the cheques had been printed.  Ms. Milligan re-assigned cheques that were written out to her, to other payees, in an effort to cover up the fraud.

[10]        The first fraudulent cheque was dated February 3^rd, 2012, which was a little over three months after Ms. Milligan was hired by Sparkling Hills.  Ms. Milligan continued to write fraudulent cheques to herself on every subsequent month of her employment.  In November, 2012, the frequency of the fraudulent cheques Ms. Milligan issued to herself increased, and every subsequent month she fraudulently issued to herself between two and six cheques.  In so doing, she would most often forge the signatures of the other signing authorities and change the payee name in QuickBooks from herself to a false payee.

[11]        Over the approximate 24 months of her employment with the employer, Ms. Milligan fraudulently paid herself a total of $76,479.20 ($81,159.75 as originally claimed by the complainant less $3,810.55 for cheque #3840, and $870 for cheque #1997).  She was charged in September, 2015. 

[12]        In April of 2016, Ms. Milligan arranged to start repaying to the insurance company that held the employers’ subrogated claim $3,000 per quarter by post-dated cheques.  Of the four cheques she provided, two came back as cancelled due to insufficient funds.  Ms. Milligan has repaid $6,000 to date.

[13]        Ms. Milligan is 63 years old.  She was raised in a stable family with two siblings, both of whom lead stable lives, have families, steady employment and have no reported social problems.  She had a good relationship with her parents who are now deceased, and continues to enjoy a good relationship with her siblings.

[14]        Her first marriage ended after five years.  That relationship produced two children now 40 and 38 years old.  Both of these children have families and maintain contact with Ms. Milligan.  Ms. Milligan’s second marriage lasted 25 years.  She and her second husband divorced in 2010, but remain friends.  She has another child from that relationship who is now 29 years of age and lives nearby with her family.  Ms. Milligan has a good relationship with all of her children and their families.  She has been single since 2010 and lives alone in a rented accommodation in Kelowna.

[15]        Ms. Milligan has a grade 12 education and started working as a bookkeeper when she was 20 years old.  She enrolled in the Chartered General Accountant program at Thompson Rivers University in Kamloops and at Okanagan College in Kelowna.  Due to financial pressures, she left the program in 2012 without completing the required courses for her accounting designation.  She reports to be more skilled in the area of accounting than a bookkeeper, and according to the pre-sentence report is referred to as a Senior Accounting Technician.

[16]        The pre-sentence report indicates that family, long-time friends, and past co-workers view Ms. Milligan’s actions as completely out of character and believe they were a result of severe financial pressures.  Family members state that Ms. Milligan’s life at the relevant time period was very stressful to the extent that her health suffered.

[17]        Ms. Milligan's daughter, who was given leave to speak for her mother at the sentencing hearing, stated her mother was suffering from depression during the relevant time period and was under severe financial stress as a result of the breakdown of her second marriage.  Ms. Milligan's daughter stated that her mother used some of the money to relieve both her own financial stress and the financial stress of her children, including the adult daughter who was at that time a single parent.

[18]        Prior to employment with the complainant, Ms. Milligan was a bookkeeper for a construction company.  The person who runs that company recommended Ms. Milligan to the complainant and says he would rehire Ms. Milligan if he needed a bookkeeper.

[19]        Another prior employer described her as an excellent and diligent bookkeeper, and stated his experience as Ms. Milligan’s employer was very positive.

[20]        Ms. Milligan is currently employed, and does freelance work making about $4,200 gross income per month.  She had been making $6,000 per month but lost a couple of clients.  She says this reduction resulted in her being unable to maintain the restitution schedule she had agreed to through her then counsel.  She says she attempted to renegotiate the repayment schedule but was having difficulty making contact with the required people, perhaps as a result of no longer being represented by counsel, and also possibly because of the looming sentencing hearing.  In any event, she says she continues to have a desire to make full restitution.  She has a $40,000 debt and reports to have used all of her savings on legal fees.  Her only asset is an $8,000 vehicle.  As stated previously, she has paid $6,000 in restitution.

[21]        Ms. Milligan is healthy, with no history of drug or alcohol abuse, and has no mental health problems other than periodic depression.

[22]        Ms. Milligan is remorseful, and has no criminal conviction history.

[23]        Crown counsel Shelley Hulko submits that given the duration and frequency of the fraudulent transactions, the overall amount of the fraud, and the breach of the employer’s trust, Ms. Milligan’s sentence must emphasize denunciation and deterrence.  Ms. Hulko submits that a sentence in the range of 3 to 5 year’s incarceration is appropriate, and consistent with the range established by the BC Court of Appeal for similar cases.

[24]        Ms. Hulko fairly points out that given the date of the start of Ms. Milligan's offending behaviour, a conditional sentence order remains an available sentencing option.

[25]        Crown counsel relies on and refers me to the following sentencing decisions:

[26]        At the time of sentencing, Ms. Milligan was self-represented.  She confirmed to the court that she had obtained legal advice and that she fully understood the consequences of entering a guilty plea.  At the conclusion of the Crown's submissions on sentencing, there was no time left in the day to fully hear from Ms. Milligan, however she did state at that time that she had no submissions as to the appropriate sentence and would leave that up to the court and, in her words, “God “.  At the continuation of the sentencing hearing, and with the leave of the court, Ms. Milligan's adult daughter, Samantha Milligan, who is not a lawyer, made submissions on her mother's behalf.  She was motivated to do so out of a concern that her mother would not adequately represent herself.  

[27]        Ms. Milligan’s sentencing position is that, based on this being a first offence and also because she is remorseful and has entered a guilty plea, and given the total amount of the fraud is much lower than the amounts in the cases relied on by the Crown, that a conditional sentence order is the appropriate sentence.

[28]        Ms. Milligan relies on and referred me to the following sentencing decisions:

[29]        This sentencing proceeding is governed by sections 718 to 718.2 of the Criminal Code, which set out the purpose and principles of sentencing.  Parliament, through those sections of the Code, directs that the fundamental purpose of sentencing is to contribute to respect for the law and the maintenance of a just, peaceful and safe society through the imposition of just sanctions that have one or more of the following objectives: to denounce unlawful conduct, to deter the offender and other persons, to separate offenders from society where necessary, to assist in rehabilitating offenders, and to provide for reparations for harm done to victims or to the community and to promote a sense of responsibility in offenders.

[30]        The Code directs that a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender, and should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances.

[31]        In section 718.2 (d) and (e), Parliament directs that an offender should not be deprived of liberty if less restrictive sanctions may be appropriate in the circumstances, and that all available sanctions other than imprisonment that are reasonable in the circumstances should be considered for all offenders.

[32]        A sentence is to be increased or reduced to account for any relevant aggravating or mitigating circumstances.  It is an aggravating circumstance when an offender, in committing the offence, abused a position of trust or authority in relation to the victim.

[33]        In sentencing an offender charged with fraud under s. 380 of the Criminal Code, the court must also consider the direction set out in s. 380.1 of the Code, which reads as follows:

[34]        In cases such as Ms. Milligan’s, where an employee is in a position of trust and that trust includes specifically handling the employer’s money, the emphasis on sentencing must be one of denunciation and deterrence.  While it is appropriate to also consider the other sentencing principles, including rehabilitation, the goal of rehabilitation in these types of cases very often must take a backseat to the over-arching principles of denunciation and deterrence. 

[35]        The following case law emphasizes the importance of general deterrent and denunciatory sentences in these types of cases.

[36]        In Regina v. Spiller (above) the BC Court of Appeal increased the sentence from three years to six years imprisonment for a bank employee who had used her position of trust and special knowledge to devise and implement a scheme to steal, over a four and ½ year period ending in September, 1968, a total of $492,000 from her employer. 

[37]        In that case, Robertson J.A., speaking for the court, stated the following in relation to a consideration of evidence of the offender’s good character:

[38]        In regards to the principle of general deterrence, Robertson JA went on to state the following at paragraph 22:

[39]        I note that Spiller was a 1969 decision and the present day value of the money stolen by Ms. Spiller would be over $3 million.  Although the stated principles in Spiller provide guidance, the significant difference in the amount stolen distinguishes it from Ms. Milligan’s case.

[40]        In R. v. Hoy (above) the BC Court of Appeal upheld the sentence of three years’ incarceration for Mr. Hoy, a 45-year-old first-time offender, who used his position as an insurance and mutual funds security salesman to defraud and steal by a series of manipulations over $370,000 from six of his clients over an 18 month period.  Chief Justice McEachern, speaking for the court, made the following comment in regards to general deterrence at paragraph 6:

[41]        In R. v. Beggs, (above), Ms. Beggs, who had no criminal record and had entered a guilty plea, appealed her sentence which included four years’ incarceration, a fine of $30,991 and a restitution order in the amount of $221,000.  The BC Court of Appeal allowed her appeal to a limited extent by reducing the restitution amount to what had been agreed upon between the Crown and defence, that being $103,235.  The fine related to one count of tax evasion, and the four years’ imprisonment related to the other ten counts that included nine counts of fraud and one count of misuse of taxpayer information.

[42]        Ms. Beggs was employed by Revenue Canada and had reached the upper levels of security clearance allowing her access to the computer systems and giving her the ability to override and change data in the system.  She used her position to fraudulently provide for herself, family members, and friends, credits and refunds to which they were not entitled.  Ryan J.A., speaking for the court made the following comments at paras. 6 and 7 in regards to the appropriate sentence:

[43]        In R. v. Dreger (above), Ms. Dreger appealed her sentence of five years’ imprisonment for using her position as a trusted bookkeeper to defraud her employer of $245,514.05 over a seven-year period.  Ms. Dreger had entered a guilty plea, had no prior criminal record and had consented to a civil judgment.

[44]        Bennett J.A., for the court, reviewed case law that sets out that while courts should pay heed to sentencing ranges, they are guidelines rather than hard and fast rules (see para. 42 where the court cites R. v. Nasogaluak, 2010 SCC 6).  At para. 53 Bennett J.A. said:

[45]        The court determined that the sentencing judge erred by treating a lack of remorse as an aggravating factor, and this error led the judge to impose a demonstrably unfit sentence.  At paragraph 58 the court summarized and concluded as follows:

[46]        In R. v. Maddalena (above) Mdm. Justice Maissonville sentenced the offender after trial to 4 years’ incarceration for his manipulation of his employer’s payroll system over a two-year period resulting in misappropriated money in the amount of $205,286.44.  An aggravating factor was his previous conviction for fraud.  I find this decision to be very helpful given Mdm. Justice Maissonville’s case law review starting at para. 13.  I will not restate her lengthy review of the decisions; however I will note that at para. 15 she stated she found more helpful the more recent decisions of the Court of Appeal and the cases that were put forward by the defence counsel.

[47]        Given Ms. Milligan is self-represented, I will set out in full Mdm. Justice Maissonville’s review of the defence cases in Maddalenna, starting at para. 14:

[48]        I do note that prior to the November 20^th, 2012, removal of a Conditional Sentence Order as a sentencing option for fraud over, there were instances where persons in similar circumstances as Ms. Milligan were sentenced to a conditional sentence.

[49]        In R v. Inglis, Judge Brecknell of the BC Provincial Court sentenced a 47-year-old mother of three, first time offending senior bank teller who had defrauded the Royal Bank of Canada of approximately $78,700 over an approximate year and a half period to an 18 month conditional sentence with a restitution order.  Judge Brecknell noted the guilty plea, significant remorse and the fact that the offender had paid $5,000 towards restitution as significantly mitigating factors.

[50]        In R. v. Hammond, above, Judge Gedye of the BC Provincial Court sentenced the first time offending, trusted employee of the District of North Vancouver who had used an elaborate scheme of seven different methods to defraud her employer of approximately $250,000 over a three and a half year period, to a conditional sentence of two years less a day that included eight months house arrest.  Significantly mitigating was the fact that almost full restitution had been paid.  The court also noted the guilty plea and the, albeit somewhat tempered, remorse, and also that the offender had experienced significant negative publicity.

[51]        In R. v. Houde (above), BC Provincial Court Judge Quantz sentenced a 52-year-old first-time offender who had a long and successful work history and was a trusted general manager of a credit union to a conditional sentence of 2 years less a day followed by a lengthy period of probation, and a restitution order, for using his position of trust to defraud the credit union of $168,000.  Judge Quantz noted mitigating factors were a guilty plea, cooperation with a civil suit, a willingness and ability to pay restitution, and noted the significant impact already suffered by the offender which included the loss of his career, embarrassment and humiliation, loss of his interest in a company and the corresponding family money invested in it.

[52]        In R. v. Eby and Goodman (above), Justice Veale of the Yukon Supreme Court was faced with sentencing both offenders, who were married to each other.  Neither had a criminal record.  Ms. Eby was a Program Officer responsible for lending money under Home Completion and Home Ownership programs administered by her employer.  She breached the trust of her employer by preparing and registering a mortgage that would not otherwise have been approved, in the amount of $159,900, to benefit her husband.  She also issued a fraudulent loan in the amount of $158,675 to the benefit of herself and her co-accused husband.  Ms. Eby eventually confessed to her employer and she and her husband co-operated with the police investigation.  They entered into repayment agreements.  At the time of sentencing, they were making regular restitution payments and had paid back over ½ of the money taken. 

[53]        Justice Veale acknowledged that general deterrence and denunciation may often require a custodial sentence.  However, he also cited and relied on R. v. Prouxl, 2000 SCC 5 where the Supreme Court of Canada stated at para 127 sub para 8 the following:

[54]        Justice Veale sentenced both offenders to a 15 month conditional sentence that included house arrest with limited exceptions for the entire time, plus 120 hours community work service and, as a condition of the conditional sentence order, monthly restitution payments.

[55]        Ms. Milligan’s case is very similar to the case B.C. Court of Appeal case of R. v. Burkart (above).  Ms. Burkhart was a 38 year old bank employee with no prior criminal conviction history, who used her senior position of trust to defraud her employer of $81,400 over a 1 year period.  The sentencing judge sentenced Ms. Burkhart to 18 months imprisonment, to be followed by 1 year probation and ordered restitution.  The B.C. Court of Appeal found that although the sentencing judge was aware of the Supreme Court of Canada direction in R. v. Prouxl that the principle of general deterrence could be fulfilled by a conditional sentence, the sentencing judge nevertheless erred by failing to impose one given the only extant sentencing goal in that case was general deterrence.  The specific error was the failure of the sentencing judge to take into consideration the fundamental factors set out in s. 718.2 (d) and (e) of the Code, those being that an offender should not be deprived of liberty if less restrictive sanctions may be appropriate in the circumstances, and all available sanctions other than imprisonment that are reasonable in the circumstances should be considered.  The sentence length of 18 months was unchanged, however the Court of Appeal substituted a conditional sentence for the custodial sentence.

[56]        In Ms. Milligan’s case the aggravating circumstances are that there were multiple instances of fraud and forgery that continued regularly, and indeed escalated, over a two-year duration, that totalled $76,479 of misappropriated funds.  Ms. Milligan took steps to change her employer’s accounting records to conceal her fraud.  That said, I do not find this was a sophisticated fraud or that it took much planning.

[57]        Ms. Milligan was in a unique position of trust in that it was her role to handle a significant portion of the company’s finances and she was a designated administrator of the company’s computerized accounting system.

[58]        There was evidence of some impact on employees of the company.  The company is described as a tight knit group.  Specifically, the CEO provided information through Crown counsel as to how disappointed he felt because he 100% trusted Ms. Milligan and often sat beside her at work.  He paid her personally to do his own income taxes.

[59]        The Operations Manager provided information that she had invited Ms. Milligan to attend her wedding and was devastated when she learned of the fraud.

[60]        The mitigating circumstances include Ms. Milligan’s guilty plea and the fact she has paid $6,000 towards restitution and has a continuing desire and ability to make full restitution over time.  She is also genuinely remorseful.  Although I am cognizant of her good reputation in the community, I do not consider that to be a mitigating circumstance given it was her good reputation that placed her in a position of her employer’s trust.

[61]        In Ms. Milligan’s case, the shame and embarrassment she has suffered as a result of acting in a way so far removed from her usual good character makes it unlikely she would act in a similar fashion in the future.  Consequently, both the rehabilitation of Ms. Milligan, and specifically deterring Ms. Milligan from future like conduct, are not significant sentencing concerns.

[62]        However, the sentence must address the goal of general deterrence.  There are, and will be, others who will be trusted and paid by their employers to manage the employers’ money, and/or their employer’s customers’ money, and/or their fellow employees’ money.  Persons working in those positions of trust who may be tempted to use their position and special skills to fraudulently take this money for their own benefit must be made aware of the significant consequences they will face upon conviction.

[63]        That said, I note that all of the cases relied on by the Crown have more egregious facts and involve significantly higher amounts of money taken.  In recognition of Ms. Milligan’s mitigating circumstances, and in an attempt to minimizing the deprivation of Ms. Milligan’s liberty without compromising the goals of denunciation and general deterrence, I have determined the appropriate duration of Ms. Milligan’s sentence is below the range suggested in the sentencing decisions relied on by the Crown, and falls within a range that includes two years less a day.  Consequently, I am required to consider section 742.1 of the Criminal Code as it read at the time Ms. Milligan's offending behaviour began, and determine whether a Conditional Sentence Order would be an appropriate disposition.

[64]        Section 742.1 of the Criminal Code, from the start of Ms. Milligan’s offending behaviour up until November 20, 2012, read as follows:

[65]        Having Ms. Milligan serve her sentence in the community would not endanger the community.  The question is whether it would be consistent with the fundamental purpose and principles of sentencing: specifically whether the desired goal of general deterrence would be achieved.

[66]        I find, in the particular circumstances of this case and this offender, a Conditional Sentence Order of sufficient length with sufficiently restrictive conditions will address the goals of general deterrence and denunciation, and will also provide the opportunity for Ms. Milligan to make reparations and restitution.

[67]        On Count 1, the fraud charge, Ms. Milligan is sentenced to 2 years less a day to be served by way of a Conditional Sentence Order

[68]        On Count 3, the forgery charge, Ms. Milligan is sentenced to 14 months to be served concurrently by way of a Conditional Sentence Order.

[69]        The terms of the Conditional Sentence Orders are identical and are as follows:

[70]        Pursuant to s. 738 of the Criminal Code Ms. Milligan is ordered to pay restitution to the employer’s insurer in the amount of $70,479.20 ($76,479.20 less the $6,000 she has paid to date), less any restitution paid pursuant to the Conditional Sentence Order.

[71]        Pursuant to s. 487.06 of the Code, Ms. Milligan is ordered to provide a sample of her DNA for purposes of registration in the national DNA databank.