Crime Can Pay!

Leno Clubber - law student

Dec 23, 2019

4 min read

Updated: 20 hours ago

Author: Leno Clubber

Introduction

Crime doesn’t pay.It only follows that if you made money illegally, then you don’t get to keep it when you are proven guilty. But what happens if illegally-made money is the only money you have: could you afford a defence lawyer to represent you? What if the court finds that the money wasn’t illegally-made after all: were you treated as innocent until proven guilty?

In R v Rafilovich, the Supreme Court explains one situation where crime can pay… depending on the context.

Background: Proceeds of Crime

Part XII.2 of the Criminal Code deals with the proceeds of crime. The overall intention of this legal regime is to deter criminal offenders by ensuring that “crime doesn’t pay.” Under Part XII.2 of the Code, the state may seize property that, on reasonable grounds, is believed to be the proceeds of crime.

A key issue with this regime is that the accused may have their property taken from them despite being presumed innocent and not found guilty of any crime. Inability to access this seized property to finance their defence means that many accused persons may not be able to afford legal counsel.

Parliament has provided a procedure allowing the accused to seek access to some or all of this seized property for reasonable legal expenses if the accused has no other means to pay (s.462.34(4) of the Code). If it is determined that funds are to be returned to the accused for legal expenses, the return of any seized funds is done under a judicial order. Returned funds are no longer considered seized property.

S. 462.37(3) of the Code deals with the situation in which property, proven to be proceeds of crime, is not available for forfeiture to the Crown. In this case, the sentencing judge may order a fine, equal to the amount proven to be proceeds of crime, instead of forfeiture.

Case Facts: R. v Rafilovich

Mr. Rafilovich was arrested for possession of cocaine for the purpose of trafficking. The police found $41,976 in his car and apartment and seized the funds as potential proceeds of crime. Before trial, he applied under s. 462.34(4)(c)(ii) of the Criminal Code for the return of these seized funds in order to pay for reasonable legal expenses. The judge determined that Mr. Rafilovich had no other means to pay for legal defence and released the funds for this purpose.

At trial, Mr. Rafilovich pled guilty to several offences. He was sentenced to imprisonment and forfeiture of his 50% interest in an apartment ruled to be offence-related property. The sentencing judge denied the Crown’s application under s. 462.37(3) of the Criminal Code for a fine equal to the amount of the seized funds returned to Mr. Rafilovich. The Crown appealed this sentencing decision.

The Ontario Court of Appeal changed the sentencing to include a $41,976 fine, removed the forfeiture, and added an additional 12 months imprisonment if Mr. Rafilovich failed to pay the fine.

Issue

In this case, the money returned to Mr. Rafilovich for his legal defence was proven at trial to be the proceeds of crime. Allowing him to benefit from this money, by paying for his legal expenses, seems to contradict the intention of Part XII.2 of the Code. However, the money was returned to Mr. Rafilovich under judicial authority as per s.462.34(4) of the Code.

Money proven to be proceeds of crime must be forfeited to the Crown. In the case that it is spent, the sentencing judge has discretionary power to order a fine for the amount spent. But what if the proceeds of a crime were spent under judicial authority?

The Supreme Court was faced with the issue of when a sentencing judge should, or could, use the discretionary power outlined in s.462.37(3) of the Code to order a fine instead of forfeiture for property that was used under prior judicial authorization to pay for the accused’s legal expenses.

Analysis and Decision

The Supreme Court held the decision of the trial court and set aside the decision of the Court of Appeal. The majority concluded that by enacting the provision of s. 462.34(4), Parliament explicitly allows previously seized funds to be spent on legal expenses. While the full amount of the proceeds of crime may not be forfeited to the Crown, this is balanced by the fairness ensured to the accused in criminal prosecutions. It was concluded that this provision has “two secondary purposes: providing access to counsel and giving meaningful weight to the presumption of innocence.”

If the accused was in real need of these funds to mount a legal defence, then retroactively taking them back as a fine would undermine these secondary purposes. If the accused cannot otherwise afford legal counsel, or knows that the money returned to them will only be taken back retroactively, they may opt to represent themselves thus undermining the fairness of the trial. It is reasonable to expect the accused to obey a judicially authorized court order. It is unreasonable to expect them to know that by following that order they will be subject to additional punishment.

This is distinguished from the context in which it comes to light that the accused did not have a real financial need for these funds. In this context, a fine instead of forfeiture would be consistent with both of the secondary purposes of s. 462.34(4) as well as the overall intention of the proceeds of crime regime of Part XII.2. All of the proceeds of crime would be forfeited to the crown without depriving the accused of the means to pay for legal counsel.

Commentary

In R v Rafilovich, the Supreme Court has struck a fair compromise between deterring crime and ensuring fairness to the accused. While it seems somewhat concerning that a person of proven-guilt may use the proceeds of a crime in their attempt to avoid the consequences of that crime, it is a small price to pay for the assurance that the presumption of innocence and access to legal counsel remain unchallenged.