Fraud, money-laundering were all part of scheme

A lengthy, complicated and often contentious trial for the accused members of an Ajax-based fraud ring has ended with convictions for four of the five defendants.
In a finding released Friday, Ontario Court Justice Joseph De Filippis ruled that the Crown had proven allegations of fraud, money laundering and participation in a criminal organization against the ringleaders of the gang, and two of its members.
The charges relate to allegations of fraudulent activity dating back to 2001 in a number of locations, including Durham Region. The Crown alleged that losses to individuals and banks as a result of the creation of numerous fraudulent credit card accounts exceeds $1 million.
The case surrounded several members of an extended family group. Identified as ringleaders were Kuhen Neshan and Ramanan Kenegarajah of Ajax. Also charged were Rajitha Kanagarajah, Mr. Kenegarajah’s sister, and her husband, Hariharan Neserajah, and Anantha Neeranjan, Mr. Neshan’s wife. A sixth suspect, Jeya Balan, pleaded guilty to charges in the midst of the trial, which began 18 months ago and was heard sporadically over 28 days, ending in July.
Mr. Neshan, Ms. Neeranjan and Mr. Kenegarajah lived in Ajax at the time of their arrests; the others are Toronto residents. They faced more than 100 fraud-related charges as well as allegations of conspiracy and participating in a criminal organization.
Justice De Filippis dismissed the conspiracy charges against all defendants and acquitted one -– Mr. Nesarajah -– of all counts. But he found the remaining four guilty of fraud-related charges and the offence of participating in a criminal organization. Mr. Neshan and Mr. Kenegarajah were further found guilty of fraud and money laundering.
The ruling was applauded by Crown attorney Mitchell Flagg, who led a prosecution that presented evidence from 47 witnesses and 134 exhibits, including six books of documents. He said the case spanned years and numerous allegations of fraud that required considerable effort by investigators with the Durham police fraud unit, as well as the co-operation of affected financial institutions.
“These are incredibly complicated investigations to put together. They are costly in terms of time and resources. A lot of people had to dig back through 10 years of financial transactions to put this case together,” Mr. Flagg said.
“(Justice De Filippis) agreed with the Crown that this was an overwhelming case of ongoing enterprise fraud that victimized many individuals as well as financial institutions over a period of years,” he said. During the trial in Oshawa, the judge heard that police had actually been investigating Mr. Neshan for years in connection with large-scale frauds, including the creation of phony accounts in 2001 when he was an employee at American Express, as well as credit card scams perpetrated in 2007 and 2008 in British Columbia. Neither investigation resulted in convictions, court heard.
But police in Durham Region picked up Mr. Neshan’s trail again in 2009 when it was suspected he was back in Ontario and involved in credit card fraud. Cops here conducted extensive surveillance on Mr. Neshan, Mr. Kenegarajah and other suspected members of the ring, often tailing them as they made purchases and bank transactions and in some cases retrieving discarded pieces of paper work and receipts to bolster their case.
Finally, on March 30, 2010, search warrants were executed at a number of homes, including Mr. Neshan’s house on Bissland Drive in Ajax. Police seized hundreds of documents related to mortgages and credit card accounts, as well as cash, vehicles and other property deemed to be proceeds of crime.
Police said at the time the fraudsters created false credit accounts in two ways: by stealing the information of real people and having credit cards issued, or by obtaining cards using false identities, usually depicting themselves as recent immigrants.
Once cards were issued, the bandits were alleged to have patiently managed the accounts, making small purchases and paying off balances until credit limits were increased. When the credit limits reached a certain level, the accounts would be “busted out” -- drained of cash through advances, paid off with fraudulent cheques and then drained again, police alleged.
At trial lawyers for the defendants argued the Crown had not proven many of the charges, particularly the allegations of conspiracy and participation in a criminal organization. Lawyers for some of the peripheral players argued it was conceivable they were not aware of the scams perpetrated by the ringleaders.
They also asserted that the Crown had exceeded its jurisdiction and unnecessarily complicated the trial by including allegations dating as far back as 2001. Lawyers filed several applications seeking to exclude evidence, alleging Charter breaches by investigators.
The trial was also roiled by a shortage of certified interpreters, and a mid-trial finding by Justice De Filippis that three police witnesses had breached a court order by discussing their evidence outside the courtroom. The breach was not a deliberate attempt to subvert the proceedings, nor was it serious enough to affect the integrity of the trial, the judge ruled.
Mr. Flagg said Friday the crimes perpetrated by the ring had affected many individuals and six financial institutions. He estimated losses at $1.4 million.
“That’s what we’ll be recommending as restitution for Neshan and Kenegarajah,” he said.
Sentencing hearings for those convicted are scheduled for November and December.