A Sticky Situation: SCC Grants Leave to Appeal for Maple Syrup Heist Case in R v Vallières
In August 2012, the Federation of Quebec Maple Syrup Producers (“PPAQ”) filed a complaint with the Quebec police that 5.9 million pounds of maple syrup, valuing $17.8 million, had been stolen from a warehouse in St-Louis-de-Blanford. The sensational story garnered media coverage from all over the world, and a whole episode in Netflix’s Dirty Money documentary series was devoted to the heist. The conspirators of the scheme—Richard Vallières, Avik Caron, Richard Vallières and Étienne St-Pierre—were eventually found guilty to the various counts of theft, fraud, and trafficking of stolen goods.
Eight years later, the saga continues as the Supreme Court of Canada (“SCC”) granted leave for appeal to the case this past September. At the Supreme Court of Canada, R v Vallières [Vallières] will most likely deal with the issue of whether section 462.37(3) of the Criminal Code RSC 1985, c C-46 [Criminal Code] only permits the court to seize the profit gained from goods when the fine is imposed in place of an order of forfeiture of property. Based on the primary issue dealt with in the Quebec Court of Appeal (“QCCA”) ruling, the SCC ruling of Vallières is anticipated to inform courts on what a proportional sentence could look like moving forward in cases of major theft and fraud.
Background and Facts
The Federation of Quebec Maple Syrup Producers is a government sanctioned organization that regulates the production and marketing of maple syrup in Quebec. Created in the early 2000s, the PPAQ insulates fluctuating maple syrup prices based on annual production levels by implementing a quota system (Jake Edmiston and Graeme Hamilton, “The last days of Quebec’s maple syrup rebellion”, 6 Apr 2018, National Post [National Post]). However, this has given PPAQ a monopoly over the maple syrup market in Quebec and has sparked pushback from independent maple syrup farmers for years. Any bulk sale of maple syrup must pass through the PPAQ, which collects administrative and marketing costs per pound of maple syrup, and any farmer that refuses to do so must pay a hefty fine (National Post). PPAQ’s strict control over the market has been profitable. In 2019, PPAQ’s maple syrup production accounted for 91.1% of maple syrup production in Canada and 71.1% globally.
Avik Caron was the owner of a warehouse in St-Louis-de-Blandford that was being used to store the PPAQ’s maple syrup. In June 2011, Richard Vallières, a “barrel roller” who brokered deals between independent maple syrup farmers and unauthorized distributers, was approached by Mr. Caron with a plan to sell the PPAQ’s maple syrup stored in his warehouse (R v Vallières [Vallières I] 2017 QCCS 1687, para 7). Mr. Vallières signed on and from August 2011 to July 2012, the two men created a team who emptied barrels of maple syrup into separate containers and shipped these unmarked containers using 53-foot trucks to unauthorized maple syrup distributers such as S.K Export Inc. Based in New Brunswick, S.K. Export Inc. was owned by Étienne St-Pierre, who for years had also “rolled barrels” in the black market to buyers worldwide (Vallières I para 11). The empty maple syrup barrels were then filled with water from a pond adjacent to Raymond Vallières’ maple syrup farm, which doubled as the conspirators’ operations headquarters. Raymond Vallières allowed his son to operate on his sugar shack primarily because he too sold maple syrup to his son, unsuspected by the PPAQ (Vallières c. R [Vallières II], 2020 QCCA 372 para 15). Following the complaint of missing maple syrup in August of 2012, Sûreté du Québec (the Quebec provincial police) launched the “Luisance” investigation. Shortly thereafter, the four men were arrested and charged on counts of theft (s. 334(a) of Criminal Code), fraud (s. 380(1)(a)), and possession and trafficking of property attained by crime (s 355.2 and 355.4).
On November 12, 2016, all four men were found guilty at trial by jury: Richard Vallières and Avik Caron for theft, fraud, and trafficking of property obtained by crime; Étienne St-Pierre for fraud and trafficking of property obtained by crime; and Raymond Vallières for possession of property obtained by crime for the purpose of trafficking.
Considering the purpose of sentencing outlined in s. 718 and 718.1 of the Criminal Code, the trial court emphasized the need for the penalty for all the accused individuals to be proportional to the gravity of the offense (Vallières I, para 16). Simultaneously, the court recognized that a strong punitive message must be sent for those who try to profit off crime (R. c. St-Pierre, 2017 QCCS 1688). Avik Caron, who had already been serving a prison sentence due to another fraud charge, was sentenced 5 more years in prison as well as a $1.2 million compensatory fine (Vallières I, para 43).
Based on Caron’s charge and the fact that the heist was not a deeply pre-meditated case, Richard Vallières was only required to provide $ 606 501.56 as retribution (Vallières I, para 14). With that said, because Vallières admitted to earning $10 million total from the sale of maple syrup and because the maple syrup could no longer be recovered, the court felt that it had no option but to request $9.39 million, or the price equivalent to the maple syrup sold excluding the retributory fine, as compensation pursuant to s. 462.37(3) of the Criminal Code. Mr. Vallières was also given 8 years’ imprisonment for the theft and fraud charges.
Because both Étienne St-Pierre and Raymond Vallières played a smaller part in executing the crime, they were each given 2 years of house arrest and were fined to pay compensation for the amount earned from the fraudulent scheme (R. c. Vallières, 2017 QCCS 1689).
Vallières c. R., 2020 QCCA 372
A joint appeal was held for the four co-conspirators with four distinct issues. First, the four accused individuals appealed their convictions, all of which were dismissed. The Vallières also appealed that the court erred in rejecting a motion for a stay of proceedings for unreasonable delay; however, the QCCA dismissed this claim stating that the judge did not err in deeming the delays to be reasonable and calculating the cumulative time from the delays to be less than the 30-month ceiling established in R v Jordan 2016 SCC 27.
St-Pierre appealed on the grounds that holding a joint trial with the other accused individuals caused him prejudice and raised that s. 591(3) of the Criminal Code gave discretion to the justice to try an accused separately on one or more of the counts. However, at the onset of setting trial dates, St-Pierre had not requested for a separate trial, but rather, wished for an expedient closing to the case and did not object to the joint hearing. Moreover, St-Pierre was unable to make out the factors outlined in R v Last 2009 SCC 45 which would have established a case for a separate trial. Instead, the QCCA noted that a joint trial in this instance would be more aligned with the public interest due to the complexity of the evidence and the key role St-Pierre played in operations (Vallières II, paras 155-6).
The most contentious issue in the appeal pertained to Richard Vallières’ compensatory fine as he asked whether s. 462.37(3) of the Criminal Code required the fine that replaced the property being forfeited to be “equal to the value” of all the property the accused had control over. The Court affirmed that since Vallières stated that the benefit he received from the proceeds of selling the stolen maple syrup was $1 million, a compensatory fine is justified. They admitted, however, that a fine of nearly $10 million is an exorbitant and unprecedented amount even in major fraud cases. Citing R v Piccinini 2015 ONCA 446, the bench notes that in a crime where multiple parties are involved, having possession at one point in a transaction cannot amount to that individual bearing all of the costs. Otherwise, the victim could be able to recover double the amount lost (Vallières II, para 241). The Court then relied on R v Dieckmann 2017 ONCA 575 to state that the Court has “discretion to adjust the quantum of the fine” (Vallières II, para 242). With the discretion, the QCCA quoted R v Lavigne 2006 SCC 10 [Lavigne] to state “Parliament’s intention is to focus on depriving offenders of the proceeds” (Vallières II, para 243). They concluded that only the profit gained from the property should be subject to a fine.
In applying this reasoning, the QCCA reduced the compensatory fine owed by Vallières to $1 million. Deducting the restitution order from this amount, the QCCA concluded that $ 171 397.57 be paid to the victim as compensation (Vallières II, para 247).
Anticipated Issues and Significance
As the application for leave to appeal was submitted by the Crown, it is likely that only Vallières’ sentence will be appealed since the other appeals have already been dismissed by the QCCA. Though the factums of either party has yet to be disclosed, it is presumable that the Crown will align closely with the ruling of Lavigne in arguing for the imposition of a higher fine for Vallières. In Lavigne, the SCC clearly stated that the purpose of s. 462.37(3) is to impose a fine that is equivalent to the value of the property (Lavigne, para 32). Moreover, the SCC had rejected the idea that a fine could be reduced in cases of impecuniosity or the inability by the accused to afford it, as being sympathetic for the accused individual’s financial position would be “difficult to reconcile with the general objective of deterrence” (Lavigne, para 36).
It is unclear whether the SCC will side with the Crown’s stance and their use of Lavigne as precedent. Strengthening the Crown’s claim is the fact that the accused in Lavigne was charged with producing and trafficking cannabis (Lavigne para 1). Thus, there was no victim from whom the goods were taken from; however, in Vallières, the maple syrup producers, who are part of the PPAQ, had suffered tremendously through the scheme. However, though the SCC in Lavigne ordered that a fine should not be reduced based on the impecuniosity of the convicted individual, the restored fine was the profit received from the trafficking. In other words, if “value of property” is defined as the benefits that the individual earned from the illegal activities rather than the actual value of the goods, it is likely that the calculation of Richard Vallières’ fine will hold.
From a policy standpoint, the interpretation of s. 462.37(3) in the QCCA decision provides a clearer sense of the “value of the property” concept. Often, trafficked goods are not priced according to market value if their market value is known at all. Additionally, in the case of securities and market-based goods, items could fluctuate in value from the time they are stolen or trafficked to when the case arrives in Court. Due to these variables, a fine that reflects the profit received by the convicted individual would provide a simpler solution that reflects the gravity of the crime while acting as a deterrent to those who consider profiting off of illegal activities without unjustly punishing the accused.
Though individual maple syrup producers have had decades of conflict with the Federation, the granting of the leave to appeal to the Vallières case has served as a clear warning to barrel rollers like the accused involved with the case. Beyond its effect on the maple syrup industry in Québec, the Supreme Court of Canada’s decision in Vallières could alter the way fraudsters see the benefits of taking part in any black market. Like maple syrup, the final chapter of the Vallières saga leaves us waiting, licking our lips for more.