A Vancouver Island bookkeeper who pleaded guilty to defrauding her employer of more than $70,000 has received a two-year jail term following a Crown appeal of her sentence.
In October 2020, Renee Patricia Merkel entered the guilty plea to one count of fraud over $5,000 for the offence committed against Errington Cedar Products Ltd., a family-owned sawmill which employed about 50 people.
Merkel, who had access to the company’s timekeeping and payroll systems and oversaw the payment of wages, used a complicated scheme involving multiple transactions to defraud the company from April 2017 to July 2018.
The scam involved Merkel reactivating dormant payroll accounts in the names of workers who had been terminated or placed on unpaid leaves and saw her change the direct deposit bank account numbers of those employees to her own personal bank account number.
Merkel entered false time and payroll information, setting the payroll system to record that those absent or former employees had worked longer hours, with greater payments owed to them. She then directed those payments to her own account.
A total of 38 fraudulent transactions were carried out resulting in $70,340 of company funds being paid to Merkel. The company lost another $38,700 to various kinds of overpayments, including Canada Pension Plan and employment insurance, based on the falsified reported employee payments.
In April this year, B.C. Supreme Court Justice David Crerar sentenced Merkel, a 43-year-old mother of five, to two years of house arrest, electronically monitored, and three years probation.
The Crown appealed the sentence and argued that the judge had made several errors, including accepting as a mitigating factor Merkel’s claim that her opioid use and mental health issues contributed to her offending conduct in the absence of any evidence establishing such a link.
The prosecution also claimed that the judge was wrong to conclude that Merkel’s house arrest could be terminated if she failed to comply with a restitution order that had been made.
In a ruling released Monday, a three-judge panel of the B.C. Court of Appeal agreed with the Crown submissions and substituted a sentence of two years in jail.
Justice Gregory Fitch noted that although it wasn’t necessary for him to address the point, it was clear that the house arrest sentence for Merkel, who had committed a similar fraud against three previous employers, was demonstrably unfit.
“The respondent engaged in a deliberate pattern of deception over a substantial period of time, all the while abusing her position of trust.”
Justice Harvey Groberman and Justice Patrice Abrioux agreed with Fitch.
