Cardinale Decision - ORC Commission Ruling by gjjur4356


									1 TB        Ontario
                                                        RULING NUMBER COM SB 002/2006
                                                    and RULING NUMBER COM TB 002/2006

COMMISSION HEARING                              TORONTO, ONTARIO– DECEMBER 20, 2005


                            AND IN THE MATTER OF LICENSEE
                                   FRANK CARDINALE

Frank Cardinale requested a hearing pursuant to Section 21 of the Racing Commission Act,
2000 with respect to a notice of proposed order by the Director to revoke Mr. Cardinale's
licenses. Mr. Cardinale is licensed as a standardbred owner and as a thoroughbred owner.

On December 21, 2005, a Panel of the Commission convened to hear the matter.
Brendan Van Niejenhuis represented the Administration and Joseph Bloomenfeld represented
the licensee.

On hearing the evidence of Michael Elcyshyn and Richard Grant, and on reading the exhibits,
filed, and on reading the written submissions of counsel, filed subsequent to the hearing, the
Panel upheld the Director's Proposed Order and directed the Director to make the Order
revoking Mr. Cardinale's licenses as an Owner, Standardbred Racing and Owner,
Thoroughbred Racing.

Dated this 17th day of February 2006.

                                              John L. Blakney
                                              Executive Director
                                                          RULING NUMBER COM SB 002/2006
                                                      and RULING NUMBER COM TB 002/2006
                                                                                          Page 2
COMMISSION HEARING                               TORONTO, ONTARIO – DECEMBER 20, 2005

                                  REASONS FOR DECISION

Frank Cardinale requested a hearing pursuant to Section 21 of the Racing Commission Act,
2000 with respect to a notice of proposed order by the Director to revoke Mr. Cardinale’s
licenses. Mr. Cardinale is licensed as a standardbred owner and as a thoroughbred owner.

Counsel for Mr. Cardinale requested an order excluding witnesses during the hearing and the
order was made. Exhibits 1, 2 and 3, consisting of various documents, were admitted on
consent of both parties, as was Exhibit 4, a CD of taped intercepted telephone conversations.
The parties also agreed to and did provide written argument. All these agreements shortened
the time required for the hearing.

Two witnesses testified, Detective Constable Mike Elchyshyn and Investigator Rick Grant.

In December 2004 Mr. Cardinale applied for a standardbred licence as a new owner. On March
30, 2005 he applied for a thoroughbred owner’s licence, indicating on it that it was a renewal of
“93-96”. The Commission records indicate that he was last licensed as a thoroughbred owner in
1993. On the application he disclosed his part ownership of two horses. On the Standardbred
application he disclosed the charges laid against him in 2001 for gambling and that the charges
had been withdrawn. He did not make the same disclosure on the thoroughbred licence

His application for the Standardbred licence was subject to a “due diligence” investigation by
Detective Constable Elchyshyn of the Ontario Provincial Police in his capacity as an ORC
investigator. Detective Constable Elchyshyn had been involved in an investigation into illegal
gambling by the OPP and the RCMP named “Juice”, and had provided a report on it to the
Commission in 2002. Mr. Cardinale was identified in the investigation but because he was not
licensed by the ORC at the time, the report was filed and no further steps were taken.

In the course of the 2004 due diligence investigation, Detective Constable Elchyshyn retrieved
his 2002 report. ORC Investigator Rick Grant had played an important role in the Juice project
when he was a member of the Toronto Police Services.

Investigator Grant testified that the investigation included, among other investigative measures
such as surveillance, judicial authorization under the Criminal Code of interception of telephone
calls connected with an illegal gambling operation that included a Montreal office. On the first
authorization, the police intercepted calls involving a male known as “Frank”, and the request for
authorization involving the male known as “Frank” was made in the next application for further
authorization of interception of calls. The person named “Frank” was identified as Frank
Cardinale, in the course of that investigation.

Exhibit 3 includes the transcripts of intercepted telephone calls. The seven intercepted calls
were either from or to a Cantel Cellular telephone number 416-318-6619. Some of the
                                                            RULING NUMBER COM SB 002/2006
                                                       and RULING NUMBER COM TB 002/2006
                                                                                               Page 3
COMMISSION HEARING                                 TORONTO, ONTARIO – DECEMBER 20, 2005

interceptions involved the Montreal number for which authorization to intercept had also been

The transcripts clearly indicate discussions related to gambling on sports being carried on by
various bettors. The names “Dario” and “Frank” are clearly identified on the transcripts, as are
other names involved in calls. In the transcript of the call of April 8, 2001 there is reference to a
raid of an office in Montreal and that neither person (one identified as Frank) should contact that
phone number.

A search warrant was obtained for Mr. Cardinale’s residence and the documents entered as
Exhibit 2 were obtained in the course of that search. Also, a cell phone which was plugged into
the wall in the family room at that location was seized and the number for it confirmed to be
416-318-6619, the number on which calls were being intercepted.

Exhibit 2 includes several pages with four columns, one of which contains dates (name of month
and day by number), a column labelled “in”, a column labelled “out” and a column with numbers
ranging from 751 to 761 appearing at various times. Sprinkled among those numbers in the
same column were some individual given names such as “Vince” or “Pete”. There were no
dollar signs. Investigator Grant testified that the “in” and “out” columns indicated the money won
and lost by the gamblers, and that these documents recorded the amounts owed to and by the
bookmakers running the gambling operation with respect to the individuals identified by the
numbers running from 751 to 761 or by name.

 Mr. Cardinale was jointly charged with one Dario Zanetti and Guiseppe (Joe) Renda with
offences under the Criminal Code including engaging in bookmaking, engaging in the business
or occupation of betting, recording bets, transmitting bookmaking information, control of monies
related to gambling and, by himself, possession of property obtained by crime. Mr. Zanetti was
described by Investigator Grant as an individual who worked out of a basement in a townhouse
with a bank of telephones with tape recording of messages. On the wall of the townhouse were
mounted television monitors giving up to date betting lines from various sports services. A
person named “Dario” was a person referenced in call #2 of Exhibit 3 and was one of the parties
in call # 4 of the same exhibit. Joe Renda is described by Investigator Grant as being the
financier of the organization responsible for monies going in and out. A person named “Joe”
was one of the parties to call # 3. The evidence of Mr. Grant who was involved in the laying of
the charges and the subsequent court appearances was that the charges against Mr. Cardinale
were withdrawn as part of a plea bargain that involved Mr. Zanetti pleading guilty to the charge
of bookmaking and paying a fine of $300,000.

Section 19 of the Racing Commission Act provides as follows:

   “The Director shall refuse to issue a licence to an applicant or to renew the licence of
   an applicant if,
   a) there are reasonable ground to believe that, while the applicant carries out
      activities for which the licence is required, the applicant will not act in accordance
                                                           RULING NUMBER COM SB 002/2006
                                                      and RULING NUMBER COM TB 002/2006
                                                                                               Page 4
COMMISSION HEARING                                TORONTO, ONTARIO – DECEMBER 20, 2005

      with law, or with integrity, honesty, or in the public interest, having regard to the
      past conduct of the applicant; or
   b) the applicant is carrying on activities that are, or will be, if the applicant is
      licensed, in contravention of this Act, the regulations, the rules or the terms of the

Counsel for Mr. Cardinale cited to the Commission the decision of the Supreme Court of
Canada in Mugesera v. Canada (Minister of Citizenship and Immigration) [2005] S.C.J. No. 39
at par. 114 setting out what the phrase “reasonable grounds to believe” means in legislation.

The Court said:

       “… “the reasonable grounds to believe” standard requires something more than
       mere suspicion, but less than the standard applicable in civil matters of proof on
       the balance of probabilities…In essence, reasonable grounds will exist where
       there is an objective basis for the belief which is based on compelling and
       credible information.”

He also bases his defence on the argument that the proposed order should not be issued on the
following ground set out at the opening of his written argument filed with the Commission:

       “the Administration has failed to proffer the requisite level of evidence before this
       Commission to meet the test set out by Section 19 of the Racing Commission
       Act..” (par. 2, Submissions on behalf of Francesco Cardinale, hereinafter
       “Cardinale submissions”).

Counsel for Mr. Cardinale put forward alternative explanations intended to exculpate his client,
and identified alternative or other proof that he says the Administration should have tendered.
The evidence before us consists of 4 exhibits all entered on consent of Mr. Cardinale’s counsel
and the testimony of the two investigators. He argued that there is no compelling evidence in
the absence of voice recognition evidence that the voice on the intercepted calls was that of
Frank Cardinale. He also argued that the documentary evidence could have been brought into
the Cardinale home after the date of the telephone calls or could have belonged to someone
else. He pointed out that there was no direct evidence as to whose documents these were or
who actually resided in the residence. He further argues that the connection of Mr. Cardinale to
the phone and to the documents is speculative and conjecture, not properly supported.

Mr. Cardinale’s counsel also points out that the charges against him were withdrawn, rather
than pursued by the Crown Attorney. He therefore has not had a chance to dispute those
charges in court; nor was the legality of the wiretap evidence tested.

Mr. Cardinale’s counsel also argued that the link between Mr. Cardinale and the documents
entered as Exhibit 2 and voice in the telephone calls was speculative. No issue was raised at
the time of the admission of the exhibits as to whether or not the documents were being filed for
the truth of the statements contained in them. We recognize that the summaries of the
                                                           RULING NUMBER COM SB 002/2006
                                                      and RULING NUMBER COM TB 002/2006
                                                                                           Page 5
COMMISSION HEARING                               TORONTO, ONTARIO – DECEMBER 20, 2005

transcripts of the intercepted calls at the outset of each tab in Exhibit 3 are comments from the
investigative team and therefore are clearly hearsay and of little weight. W are however entitled
to accept the actual transcripts text as true and correct records of the conversations that
occurred on the cell phone found in Mr. Cardinale’s home and to draw our own conclusions,
based on the witnesses’ testimony, as to the effect, import and content of the conversations. In
most of the telephone calls intercepted, one of the parties called the other “Frank” or Frankie” in
the opening exchanges.

We are satisfied on the evidence that the individual referred to in the transcripts of the phone
calls as “FC” and as “Frank” or Frankie” in calls #2 to #6 was Frank Cardinale and that the cell
phone found in his residence with the number 416-318-6619, was his cell phone or one he used
for calls related to gambling. We conclude, absent evidence to the contrary, that, because it
was Mr. Cardinale’s residence, he controlled who had access to the residence. At the very
least, the owner of the cell phone was someone who had been invited into the residence who
felt welcome enough to plug it into the wall. We find that, given the references in the cell phone
transcripts to “Frank” and the cell phone being found in his residence, the cell phone belonged
to or was used by Mr. Cardinale himself, rather than by someone he knew whom he invited into
the residence.

Further we find that Mr. Cardinale was involved in and carried responsibility in an illegal
gambling operation which involved individuals placing bets on sporting events.               The
Administration in its written argument presented a clear analysis of the text of the intercepted
phone conversations with a comparison to the documents seized at Mr. Cardinale’s residence.
In the telephone calls the speakers, including Mr. Cardinale, referred to bettors by numbers that
corresponded to the numbers on the pages in Exhibit 2 and the amounts that are listed as “in” or
“out” bear some relationship with the amounts owing or won referred to in the telephone calls,
though there is not a precise relationship. The Administration position is that the differences
between the amounts listed and the amounts discussed in the conversations was due to the
difference in dates noted in the documents seized and the dates of the conversations. In the
circumstances of this investigation, one would not expect a precise matching in any event. No
response is contained in Cardinale submission in response to this analysis, beyond saying that
these documents could have been prepared after the telephone calls and that no direct
connection to those records to Mr. Cardinale has been proven. We are not persuaded by these
arguments that the Administration is wrong in its position.

The Administration argued that we are entitled to draw an adverse inference on the basis of the
failure of Mr. Cardinale to testify. The Administration refers to Re Schickedanz [2001] O.R.C.D.
No. 25, Series No. COM TB 9/2001. Mr. Cardinale’s counsel argues that an adverse inference
should not be drawn and says that the Schickedanz case should be distinguished because
there was a successful criminal prosecution in that case of the corporation and therefore there
was a case to be met with responding evidence.

The proof of a criminal conviction is not the only method by which it becomes necessary for a
licensee to testify in order to avoid the adverse inference. In this case there was evidence
under oath and in documents and on recording that connected Mr. Cardinale with telephone
                                                           RULING NUMBER COM SB 002/2006
                                                      and RULING NUMBER COM TB 002/2006
                                                                                           Page 6
COMMISSION HEARING                                TORONTO, ONTARIO – DECEMBER 20, 2005

calls involving bookmaking. These are objective facts that could have been rebutted by him, if
he so chose, with an innocent explanation. His counsel offered in argument alternative
explanations to what conclusions we might draw (i.e. the Exhibit 2 documents came into the
house after the phone calls, the phone belonged to someone else) and relied on a lack of proof
(i.e. voice recognition evidence). Many of those explanations are dependent on information
solely within the control of or knowledge of Mr. Cardinale. Mr. Cardinale did not testify to
provide evidence to support his counsel’s submissions. Indeed, it is inconsistent for
Mr. Cardinale to defend himself by pointing out that he did not have a chance to clear his name
with respect to the criminal charges and to challenge the wiretapping of his phone, when he
refused to take the opportunity here to testify.
Mr. Cardinale’s counsel relies on Re Sudbury Downs [2000] O.R.C.D. No. 15, in which the
Commission approved a teletheatre licence for Sudbury Downs racetrack to open a teletheatre
to replace one that had been operated by one Dante Sindori. The Administration opposed the
granting of the licence because Sindori would be the operator of the new teletheatre. An
undercover OPP officer testified to participating in illegal poker games at the old teletheatre.
The police did not lay criminal charges against Sindori. In that case the operator testified before
the Commission with respect to the previous operation of the teletheatre.        In arriving at its
decision, the Commission ruled:

       “In determining the application it is necessary to weigh on the one hand, the
       manifest benefits to Sudbury horseracing in having a person of Sindori’s
       unrefuted qualifications operating the proposed new Dante’s Den, and on the
       other hand, his conduct in the recent past which was unseemly and arguably

       No charges were laid against Sindori or anyone else in connection with the
       reported events. The only evidence of criminal conduct on the part of Sindori is
       the uncorroborated testimony of Gregory who, while an excellent and forthright
       witness with obviously no reason for bias against Dante, was nonetheless
       disagreed with by his superior officer as to the worth of his evidence against
       Sindori.” (par.13 and 15)

The Commission approved the application with conditions imposed on the track. In arising at its
decision, the Commission held:

       “The Administration referred the panel to a number of past Commission, other
       Tribunal and judicial decisions, none of which were directly on the same factual
       footing. However, all addressed the appropriate degree of weight to be given to
       evidence colouring the character of an applicant. In all cases to which the panel
       was referred where an applicant’s past deeds influenced the relevant tribunal, a
       conviction of some sort had occurred. Here by reason of the absence of
       charges, no conviction is recorded and technically at least, no evidence of
       judicially substantiated criminal conduct is available.” (par.16)
                                                           RULING NUMBER COM SB 002/2006
                                                       and RULING NUMBER COM TB 002/2006
                                                                                              Page 7
COMMISSION HEARING                                TORONTO, ONTARIO – DECEMBER 20, 2005

The Commission included four conditions, designed to ensure that the “arguably illegal”
activities that were observed by the investigator at the other teletheatre would not occur at the
new teletheatre. From this we conclude that the Commission panel, while approving the new
license, was satisfied on the evidence that the arguably illegal activities had in fact occurred, or
there would have been no reason to impose the conditions which included a monitoring
requirement and report to the Director. The Commission clearly placed a lot of weight on the
operator’s positive contributions, of which there was objective proof and his own testimony.

Here we have no evidence of such positive contributions to horseracing on the part of
Mr. Cardinale. The best that can be said is that he has no record of negative contributions. He
apparently had not been licensed since 1993. In addition, there was sufficient evidence against
Mr. Cardinale to provide reasonable and probable grounds for the criminal charges. Also, unlike
Mr. Sindori, Mr. Cardinale did not testify either to rebut the evidence that he was involved in the
illegal gambling or to persuade us that he could be trusted in the future to abide by the Rules of
Racing and act with honesty and integrity.

The Sudbury Downs decision includes a dissent by the then Chair Stanley Sadinsky who would
have refused the licence, even when there was not criminal charge laid or prosecuted. He found
as a fact that Sindori routinely organized, promoted and played in poker games in the
teletheatre premises and that he sold beverages and food to the poker players. He recorded
Sindori’s testimony that he did not think this activity was illegal although he had some doubts in
this respect. Mr. Sadinsky held:

       “…Mr. Sindori’s conduct was entirely inappropriate. He permitted a competing
       gaming activity, which may have been illegal to take place within teletheatre
       premises where legal pari-mutuel wagering on horse racing was being
       conducted. His desire to accommodate the wishes of his patrons prompted him
       to allow a legal pari-mutuel operation to become associated with other highly
       questionable gambling activities. This constitutes a disservice to the horse
       racing industry and diminishes the perception of integrity, which is so vital to all
       aspects of horse racing.” (par. 21)

A Racing Commission licence application includes a promise by each applicant to abide by the
Rules of Racing and the rulings and decisions of the Commission and officials. (Exhibit 1, Tabs
4 and 5). When it issues a licence, the Commission exercises its discretion in favour of the
applicant based on that promise.

Mr. Cardinale’s counsel is frank to admit that the Commission’s past rulings make it clear that
the Director is justified in revoking the license of a licensee who engages in unregulated gaming

We agree with the Executive Director, that he had reasonable grounds on which to conclude
that Mr. Cardinale will not act in accordance with the law, or with integrity, honesty or in the
public interest, having regard to his past conduct. We note that no period of suspension or fine
                                                     RULING NUMBER COM SB 002/2006
                                                 and RULING NUMBER COM TB 002/2006
                                                                                   Page 8
COMMISSION HEARING                           TORONTO, ONTARIO – DECEMBER 20, 2005

is sought; the only penalty sought is the revocation of the licences and we agree that his
licenses should be revoked.

DATED this 17th day of February 2006.

Lynda Tanaka

To top