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Toronto Judge Reinstates Charges Against Cigarette Executives

Judge reinstates charges against cigarette executives – The Gazette
February 22, 2008

Peter Brieger

A Toronto judge has put Canada’s biggest cigarette-smuggling case back into play by ordering that fraud and conspiracy charges be reinstated against six former executives of tobacco giant JTI-Macdonald Corp.

Ontario Superior Court Justice Ian Nordheimer this week quashed a decision last year to throw out the case against the six men for lack of evidence, saying a preliminary hearing judge made legal errors in his ruling.

Crown lawyers appealed that ruling.

“Put simply, the conduct of JTI and its employees is conduct that a reasonable person could see as dishonest,” Nordheimer wrote in his Feb. 19 decision. “The decisions to discharge these six individuals cannot stand.”

The 37-page ruling also denied a bid by Ed Lang, JTI’s former chief executive, to void seven counts of fraud and conspiracy to commit fraud against him.

The other JTI employees are: former vice-president of operations Pierre Brunelle, former vice-president of finance Paul Neumann, director of finance Roland Kostantos and managers Dale Sisel, Jaap Uittenbogaard and Peter MacGregor.

The seven are accused of defrauding federal and provincial governments out of more than $1 billion in tax revenue during early 1990s by operating a smuggling ring through the United States and First Nations reserves.

JTI and its former employees were charged in 2003 after a four-year police probe. None of the allegations has been proven.

Evidence at the 19-month preliminary hearing is subject to a publication ban.

But Nordheimer, who overturned former Bay Street investment banker Andrew Rankin’s insider-tipping conviction last year, said he disagreed there isn’t enough evidence to put the former tobacco executives on trial.

“Presumably, each of these employees believed, in acting as they did, that they were just doing their jobs,” Nordheimer wrote. “However, if the manner by which they chose to undertake their responsibilities was criminal in nature, the fact that they also acted within the scope of their employment will not absolve them from criminal liability.”

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