Kelowna woman found not guilty in $35k payday loan fraud

A former manager of a now-closed Kelowna payday loans company has been acquitted of fraud and theft charges, after a judge ruled the testimonies of her former employers were largely unreliable and lacked credibility.

This past week, 45-year-old Melanie Robertson's trial was held in Kelowna, where she stood charged of stealing more than $35,000 from her employer, EasyCash Inc., and 59 of the company's clients, over a 10-month period in 2019.

The Crown alleged that Robertson created fraudulent cash loans using the profiles of existing customers and took the money for herself. Through trial, Crown prosecutor Jim Bird showed how the dozens of fraudulent loans were made using Robertson's user ID in EasyCash's "eCash" system.

Bird also relied on the fact that for several months before the Kelowna EasyCash store closed in October 2019, Robertson was the only employee there. Bird alleged the money was stolen in cash and Robertson was the only employee in the store most of the time.

But after four days of trial, which included testimony from EasyCash co-owners Daljit Sadhra and Jason Kreut, along with former Kamloops EasyCash branch manager Nicole Taylor, Justice Margot Fleming was left unconvinced that Robertson was the one behind the fraudulent loans.

She noted the evidence the Crown used in the prosecution of Robertson was largely circumstantial, and the testimony of Sadhra, Kreut and Taylor left her unconvinced that Robertson stole the funds.

“I am left without credible and reliable evidence that the eCash system, as the Crown alleges, balanced each day and related to the amount of cash in the store on the dates of the alleged fraudulent loans,” Justice Fleming said in her ruling Friday.

“This allegation ... is central to the Crown's assertion that all of the alleged fraudulent loans were cash loans, that required the person responsible to remove the actual cash amounts from the store and return cash from subsequent loans resulting in the deficit. This in turn is the basis for the Crown's assertion that Ms. Robertson must be responsible because she had exclusive opportunity as the only employee working in the store from Sept. 7, 2019 onward.”

'A poor witness'

She described Sadhra, now a Kamloops real estate agent, as “a poor witness,” and said “there was nothing precise, careful or thoughtful about his testimony.” While she said Kreut and Taylor's testimonies were "much more straightforward,” she said both changed their evidence between their direct and cross examinations “about a number of important issues.”

She added that it was Sadhra's idea to go to the police about the alleged fraud, while Kreut had reservations.

"[Kreut] identified some of the reasons for being opposed as not seeing value in the process and not believing the outcome would satisfy him," Justice Fleming said.

In discussing the witnesses' credibility, she noted Robertson's defence counsel, Elliot Holzman and Melanie Heathman, had shown Kreut had ran another payday loan company, Little Loans, that was separate from EasyCash, and Sadhra hadn't known about it.

Mid-trial texts

While Sadhra testified that it didn't bother him that his business partner had run a competing company without telling him, Taylor reached out to Kreut after her testimony by text message, expressing concern.

“Mr. Kreut also gave evidence that Ms. Taylor sent him text messages after she testified in this trial, saying that she had been asked about Little Loans and she was afraid Mr. Sadhra would find out,” Justice Fleming said.

“I'm also frankly troubled by Ms. Taylor's text messages to Mr. Kreut about her testimony ... Discussing her evidence with a witness who's not yet testified risks tainting their evidence. Simply put, it is not what I would expect from a fair and honest witness.”

She also noted that some documents that could have proven the fraud was carried out solely in cash were not entered as evidence, and Kreut did not supply police with all the documents they had sought in their investigation. Instead, the Crown relied on cash sheets that all witnesses agreed were “essentially wholly unreliable.”

“They were based on a manual cash count, and could easily be falsified to reflect the eCash system balance to conceal the fraudulent scheme,” Justice Fleming said.

Who's to blame?

While Justice Fleming ruled the evidence did not convince her beyond a reasonable doubt that Robertson was responsible for the fraud, she stopped short of pointing the finger at who was. But she made a point to disagree with the Crown that the owners of EasyCash had no motive.

“Mr. Kreut, more-so than Mr. Sadhra, acknowledged having the fraudulent loans on the books made EasyCash look busier and more profitable than it actually was,” she said, noting both co-owners had testified about considering selling their stake in the business prior to its closure.

“In all the circumstances, I simply do not agree with the Crown's suggestion that the owners had no motive.”

During his own testimony, Sadhra denied he or Kreut would have any reason to defraud themselves.

“This is my money, it's my cash and Jason's cash,” Sadhra said, adding that they had to pay the defrauded clients back with their own funds.

In coming to her conclusion to find Robertson not guilty, Justice Fleming laid out the many issues she had with the case.

“There's Mr. Kreut's failure to provide key documents to police, his ability to retroactively change information in the system, his and Mr. Sadhra's lack of apparent concern, attention or supervision of EasyCash, financial benefit to EasyCash flowing from the alleged fraudulent loans coupled with each owners' interest in selling their shares, Mr. Kreut in particular,” she said.

“In addition, there is the sharing of passwords and the ability to access log-in information and passwords, the ability to access the system remotely, and the access available to Ms. Taylor after she apparently was no longer employed by EasyCash.”

Nearly two years after the charges were first laid against her, Robertson was found not guilty of all charges.