Having Trouble Deciding Whether There Are Reasonable Grounds to Suspect?
Well, you are in good company. So does the Supreme Court of Canada. The Court of Appeal for Ontario too.
In Canada, entrapment is a full defence to a criminal charge. It relies on the legal concept of Reasonable Grounds to Suspect (“RGS”) to delineate in two situations between lawful police investigations and those that entrap: (1) When the police provide a person with an opportunity to commit an offence without acting on a reasonable suspicion (synonymous with RGS) that the person is already engaged in criminal activity or pursuant to a bona fide inquiry (“situation one”); or, (2) Although having RGS or acting in the course of a bona fide inquiry, the police go beyond providing an opportunity and induce the commission of an offence.
The police may only present the opportunity to an individual to commit a crime when the person causes the police to develop RGS that he or she is already engaged in a particular criminal activity. The exception to this rule is when police are undertaking a bona fide investigation focused on a narrowly defined geographic area where there are RGS that criminal activity is occurring. Where police neither have RGS of an individual already engaged in crime, or are investigating at a location without RGS that it is hosting criminal activity, presenting an opportunity to commit a particular crime is entrapment and therefore unlawful.
The remedy for entrapment – a stay of the charges (tantamount to an acquittal) – has been described as the most drastic of judicial remedies in the criminal law. It is to be used sparingly and only in the clearest cases of intolerable police conduct.
The test seems relatively straightforward, that is until judges are required to decide in a particular context whether there was RGS authorizing the police to invite the commission of a crime.
In R. v. Ahmad and R. v. Williams (“Ahmad”) released on May 29, 2020, the Supreme Court was split (5-4) on whether the two appellants should have their criminal charges stayed for trafficking in cocaine and money laundering on the basis that the police investigations were unlawful because they were not premised on RGS and therefore entrapped the accused; that is, situation one.
Regarding Mr. Ahmad, a police officer had received information from another that a person named “Romeo” was selling drugs using a specific phone number. He called the number without investigating the reliability of the information or how the other officer had procured it. His understanding was that the other officer had received the tip from a confidential source. Continuing from the majority’s factual summary:
“ After a brief conversation, the officer asked for “2 soft,” meaning two grams of powder cocaine. The man on the line subsequently agreed to meet to complete the sale. The officer went to the meeting place, called the number again, met the man who answered the phone, and exchanged $140 for two small plastic bags of cocaine. Mr. Ahmad was arrested and searched. He was found to have an envelope with the handwritten word “Romeo” on it containing cash, the $140, the cell phone that had been used to set up the transaction, and two small bags of powder cocaine. In Ahmad’s backpack, the police found a large quantity of cocaine and three envelopes containing cash.”
As to Mr. Williams, Officer One received an information package from another officer about “Jay,” who was alleged to be selling cocaine in a certain area. The package identified “Jay” as Mr. Williams and included a collection of information about him, including that, according to a tip, he was a “cocaine dealer” who worked in a certain area. The tip was from a confidential source of unknown reliability. The tip did not specify how Mr. Williams was connected to the name “Jay”. It was not clear if the tip was current.
Officer One did not ask about the reliability of the source or how current was the information. She had been involved in Mr. Williams’ arrest twenty months earlier for trafficking cocaine, although Mr. Williams ultimately pleaded guilty to simple possession. She had not known him to use the name “Jay.”
Officer Two was given some of this information by Officer One and called the number. The man who answered the phone confirmed his name was “Jay.” Officer Two said that he needed “80 . . . [h]ard,” meaning $80 worth of crack cocaine, and the man replied that they should meet at a particular intersection. The officer met the man, later revealed to be Mr. Williams, and exchanged $80 for the crack cocaine. Eleven days later, he arranged a second transaction and made the same purchase.
Both accused argued at their trials that the police did not have RGS that they were engaged in drug trafficking, and therefore, they had been entrapped. The majority, applying what is described as a “parsing approach’, agreed that Mr. Ahmad had not been entrapped and rejected his appeal. Although a “close call” there was RGS:
“…we are satisfied that [the trial judge] did not err in her conclusion that the police had a reasonable suspicion of drug trafficking before providing the opportunity to commit an offence. We acknowledge that the answer “What do you need?” to the question “[Y]ou can help me out?” can admit of innocent responses, but the reasonable suspicion standard did not require the police to direct the conversation to rule out innocent explanations for Ahmad’s positive response. Nor can the question and answer be assessed in isolation. It came after the officer’s references to both Romeo and the police’s concocted “drop name” Matt, and after Ahmad evinced no surprise and did not deny he was Romeo or ask who Matt was. Significantly, he betrayed no surprise that a stranger, on another person’s recommendation, would be reaching out to him for “help”; in fact, he did the opposite, continuing to engage the caller to ascertain what he wanted. The officer was entitled to rely on what he knew of illicit drug transactions and all of the circumstances, as well as the response “What do you need?” in response to a request that he “help . . . out” a stranger, in forming reasonable suspicion that the individual with whom he was speaking was engaged in drug trafficking. Perhaps no one of these factors, on its own, was sufficient to establish reasonable suspicion. But we share [the trial judge’s] conclusion that, taken together, they disclosed a reasonable possibility that this individual was involved in drug trafficking.”
The majority, however, allowed Williams’ appeal, distinguishing his circumstances on the basis that the police provided him with the opportunity to traffic (i.e. commit a crime) before they had RGS:
“…there was nothing in Williams’ responses — before [Officer Two] provided the opportunity to traffic — to suggest that the phone number was being used to sell drugs. [Officer Two] did not wait to see how Williams would respond to an investigative question that could have corroborated that Williams was engaged in criminal activity prior to providing the opportunity to commit the crime. This means Williams did not respond positively to slang particular to the drug subculture until after the opportunity had been provided. That one aspect of a tip has been corroborated — here, “Jay’s” name — does not allow that tip to ground a reasonable suspicion. The corroboration of the name does not strengthen the reliability of the tip “in its assertion of illegality”…”
Dissenting, Moldaver J. would have refused both appeals. The approach of the majority, “minutely parsing” the recorded police telephone conversations, he described as leading to artificial distinctions, that “are often picayune, difficult to draw, and promote an approach that, in my view, is akin to dancing on the head of a pin…”. He observed that the only distinction between the two cases “is that the undercover officer in Mr. Ahmad’s case waited for the man to say “What do you need?” in response to a request for “help” before asking for a specific quantity of cocaine…”. In effect, he found that RGS was an ill-suited method to delineate between lawful police investigation and entrapment:
“…I am at a loss to see how the conduct of the undercover officer in Mr. Williams’s case can be said to rise to the level of an abuse of process — conduct which society will simply not tolerate — while the conduct of the undercover officer in Mr. Ahmad’s case is found to be acceptable. With respect, I believe that the reasonably informed observer in our society would be utterly bewildered by this distinction…”
Two weeks after the judgement in Ahmad, the Court of Appeal for Ontario released its decision in R. v. Ghotra. Another situation one case, the appellant had appealed his conviction for internet child luring on the basis that police had entrapped him using a chat room. In rejecting the appeal, the majority found there was no entrapment in that the police did not provide the appellant with an opportunity to commit the offence. In dissent, applying Ahmad, Nordheimer J. A. disagreed, finding that the police presence in the chatroom disguised as a child was inherently intended to create opportunity. In addition, he criticized the majority for accepting the Crown submission that chat rooms generally are locations where a reasonable suspicion exists with respect to the prospect of child luring, instead of requiring some evidence to support police RGS in relation the chat room at issue. Such a broad-based approach to reasonable suspicion was rejected in Ahmad.
These decisions demonstrate exactly how complicated RGS in application can be, causing even our most esteemed judges to disagree. RGS works within the criminal domain because it is used to assist police in understanding when they are authorized to undertake particular steps in criminal investigations, subject to judicial scrutiny at trial. But as a creature of the common (or judge-made) law, it was never intended to be applied in the regulatory domain as a trigger requiring action, like the filing of a suspicious transaction report with FINTRAC. As observed in a previous post, to do so is problematic because of: (1) the approach FINTRAC Compliance Officers take during audits in reviewing unusual transactions that an RE has concluded did not rise to the level of suspicious; and (2) there is no practical mechanism (short of an appeal to the Federal Court) by which an RE can push back when it is found to be deficient for not reporting because it concluded it did not have RGS. That is unacceptable when such a deficiency exposes the regulated to serious commercial and regulatory risks.
Recommendation 20 of the FATF (“If a financial institution suspects or has reasonable grounds to suspect that funds are the proceeds of a criminal activity, or are related to terrorist financing, it should be required, by law, to report…”) is exactly that, a recommendation, not a legal requirement. In law, there is no barrier to Parliament amending s. 7 of PC(ML)TFA in a manner that is equally or more effective in detecting ML or TF and provides greater clarity to RE’s as to when the duty to report is triggered. One example described in the previous post is the use of constructive suspicion. There are undoubtedly others. So long as REs are exposed to substantial penalties for failing to report, in addition to the associated commercial risk, Parliamentary concern, if any, that legislative attempts at greater clarity may cause over-reporting and additional work for FINTRAC, is simply not a bona fide excuse.