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Crown seeks up to 4.5 years in penitentiary for Karen Cady’s ‘large-scale’ fraud

Ontario Court Justice Michael Carnegie has reserved decision, returns Sept. 2
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Ontario Court Justice Michael Carnegie has reserved his judgement in the sentencing of Karen Cady, who pleaded guilty to stealing more than $1 million from local business Henninger’s Diesel.

Crown counsel is seeking a penitentiary term of four to four and a half years or 4.5 years on the fraud conviction. 

The Crown is also seeking a one-year sentence, to be served concurrently, on the possession of a fraudulent document in the commission of an indictable offence.

It is also seeking restitution in the full amount of the fraud, totalling just over $1 million.

Defence lawyer Denis Michel said he is seeking a penitentiary term of between two and three years.

The sentence will be handed down Sept. 2.

Crown counsel Carolyn Hackett of the Serious Fraud Office called Cady’s fraud a “true example of pure greed.”

Cady was the bookkeeper for Henninger’s Diesel, a small engine manufacturing, exporting and service business in Greater Sudbury. She had been working there since 2015. By the time she left her job, she had committed 136 fraudulent transactions, not including cheques that were part of the early fraud, the court heard.

On Dec. 8, 2016, Cady was sentenced on a previous fraud charge and received a suspended sentence and 18 months’ probation. At that point, she was almost two years into defrauding Henniger’s Diesel of about 326K. 

Cady had told her employer she needed time to attend court to support a friend.

While on probation, she committed more fraudulent transactions for a total of another $465K.

“Her sole motivation was greed,” Hackett said. “There is no other reason for this fraud.”

The money was used to improve Cady’s family’s lifestyle. It was spent on trips to the Dominican Republic, a new home in Wahnapitae, a number of new vehicles, a jet ski and a backhoe, to name a few.

The guilty plea is a mitigating factor, Hackett said, as it spares the victims from having to relive the events and testifying in court. However, Cady’s case is an “overwhelming Crown case” given the number of transactions flowing into Cady’s account.

While Diana Fuller, president and owner of Henninger’s Diesel, did not read her victim impact statement in court, Hackett did provide excerpts from it.

“Part of me has lost faith in the fundamental decency of humanity,” Fuller said in her statement. “I have always believed that, if you treat people well, they will treat you well. I treated Karen very well, and was someone she could count on for support. I am saddened to no longer have confidence in this view, and to have been profoundly betrayed for so long by such a consummate con artist.”

Cady’s lawyer said his client acknowledges her crimes and has not interfered with any of the forfeiture orders. He said her time in jail will “shock” her, and her experience there will provide “specific” deterrents from recommitting more fraud.

Michel also said his client is taking full responsibility for the fraud. Cady said no one else had knowledge of the fraudulent activity, whether that be Fuller or Cady’s husband, Michael Cady.

Michael Cady was charged with laundering proceeds of crime and possession of property obtained by crime. He has elected to go to trial.

Had Cady decided to go to trial, it would have been in court for likely a month at least, because they would need testimony from forensic accountants, the victims would  have had to testify, said Michel.

“She has readily acknowledged her terrible actions,” said Michel. “She is apologizing.”

His client has not interfered with the investigation, she has not tried to run away, she has appeared at all her court dates, and has complied with providing medical documentation.

Sentencing submissions were to take place in June; however, before court began, Cady informed the court that doctors found masses on her left lung, kidney and gallbladder. There were concerns she may have cancer.

The matter was adjourned until today, July 16. 

A June 25 letter from her family physician at Boreal Family Medicine revealed gallbladder polyps that will require follow up in May 2022. Cady also requires a follow-up chest x-ray in November this year due to spots seen on a recent chest x-ray. The letter advised there is a risk of this being a precursor to cancer, given her history of smoking.

Cady also has lupus, an auto-immune disease, that might put her more at risk of serious complications should she contract COVID-19 while incarcerated. Furthermore, she has diabetes and requires insulin on a daily basis.

Hackett said Cady’s health concerns, while legitimate, are not serious, and there is no specific evidence that she is at immediate harm from COVID-19.

A forfeiture hearing took place immediately following sentencing submissions on Friday. 

Carnegie said he will take some time to review all of the submissions from the various parties with an interest in these circumstances, and a date to return will be canvassed.