Lack of remorse, restitution failure inform N.S. Supreme Court lobster fraud conviction

Law360 Canada (May 30, 2025, 2:32 PM EDT) --

John L. Hill

“How many families get destroyed because of Terry f--king Banks?” Those were the words of one of three men who stopped by the cottage of Beaverdam Lake, N.S., lobster dealer Wayne Banks, who was recorded on a tape subsequently turned over to CBC News. The visitors complained that, over about 10 days, someone had defrauded them for approximately $1.6 million. Wayne seemed unfazed. “Have a seat, you fellas,” he said. “I think I know why you’re here. But there ain’t nothing I can tell you.”

Later, a 2017 joint operation by the RCMP and the federal Organized Crime Unit initiated an investigation that uncovered a complex criminal organization, which some feared could impact an industry. The police investigation led to Terry Dale Banks, then 51, facing four counts of fraud over $5,000 related to allegations that he participated in a scheme that embezzled approximately $3 million from four different seafood companies.

On Jan.12, 2024, Justice Pierre Muise of the Supreme Court of Nova Scotia found Banks guilty of one count of fraud and one count of theft, both exceeding $5,000, relating to lobsters obtained from Independent Fisheries Ltd. between Dec. 1, 2014, and June 30, 2015. The facts established by Justice Muise include that Chris Malone was the individual responsible for selling lobsters for Independent Fisheries. Its owners had decided they did not want to sell any lobsters to Terry Banks because he had previously defaulted on payment for lobsters they sold to him.

Aware of this prohibition, Malone and Banks entered into an arrangement whereby lobsters would be sold to Banks’s companies yet would be made to appear as if they were going through D. Light Seafoods International, a company managed by Banks’s brother, Wayne, with payment made through bank drafts and some cash. Some delivery slips indicated delivery to Terry Banks’s companies, which the bookkeeper for Independent Fisheries raised as an issue. Still, Malone asserted that all should be invoiced to D. Light Seafoods. He also instructed that no invoices would be sent out and that a running total should be maintained, contrary to past practices. Records from Independent Fisheries indicated that, by the time deliveries ceased, over $1.3 million worth of lobsters remained unpaid, even though D. Light Seafoods had paid for all lobsters received by them, plus an additional $125,000.

Justice Muise sentenced Terry Banks and provided written reasons for his decision (R. v. Banks, 2024 NSSC 415). The theft charge was stayed. The judge held that in accordance with R. v. Mella, 2022 ABQB 68, the Kienapple principle should apply. The same facts gave rise to the fraud conviction.

Despite the inaccuracies in the bookkeeping, Justice Muise found that the scale of the fraud exceeded $1 million. Accordingly, s. 380(1.1) of the Criminal Code applies, and a minimum sentence of two years must be imposed. The value of the property loss, not the recorded value, counts (R. v. Steinhubl, 2010 ABQB 602). With a minimum sentence applicable, a conditional sentence is not available, nor is the imposition of a suspended sentence.

Crown counsel requested a six-year sentence be imposed. Defence counsel had proposed either a suspended sentence or a conditional sentence along with a period of probation. Since the judge deemed that it was not a permissible sentence, it was necessary to determine the appropriate length of imprisonment.

Defence counsel proposed that a restitution order be made, reduced by an amount corresponding to Banks’s ability to pay, as was done in R. v. Fagan, [2013] O.J. No. 276 and R. v. Klimitz, [2018] O.J. No. 3196. The suggested amount was $300,000. Defence claimed Malone was the principal offender and his charges had been discontinued. Crown argued there was insufficient evidence to proceed.

Justice Muise was aware that Banks had previously been sentenced to a four-year term for fraud and was subject to a $2.5-million restitution order. A presentence report in this case noted no signs of remorse or insight into how his actions affected the financial lives of his victims. As pointed out in R. v. Reeves, 2020 ONCA 38, lack of remorse informs the assessment of future dangerousness. Moreover, he defaulted on the previous restitution order.

In the end, the court ordered Banks to pay $800,000 in restitution and fined him $800,000, but said the restitution takes priority over the fine. The judge also ordered a five-year sentence of imprisonment and imposed a $200 victim fine surcharge.

The Halifax Chronicle Herald reported that Banks’s brother Wayne, who managed D. Light Seafoods, was also charged but acquitted at trial. The court said the brother had told police he was not happy his brother’s actions had dragged him into this messy situation.

John L. Hill practised and taught prison law until his retirement. He holds a J.D. from Queen’s and an LL.M. in constitutional law from Osgoode Hall. He is also the author of Pine Box Parole: Terry Fitzsimmons and the Quest to End Solitary Confinement (Durvile & UpRoute Books) and The Rest of the [True Crime] Story (AOS Publishing). The Rest of the [True Crime] Story has been shortlisted for a prestigious Brass Knuckles Award, which is the Crime Writers’ of Canada’s prize for best nonfiction crime book of the year. Contact him at johnlornehill@hotmail.com.

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