House arrest for former used car dealers who defrauded customers in Fredericton

A judge has sentenced two former used car dealers in Fredericton to house arrest for defrauding customers in a scheme that left some clients owing tens of thousands of dollars to third-party lenders.

New Brunswick Court of King's Bench Justice Thomas Christie on Friday ordered the conditional sentences for Peter Kennedy and William Cornford, following a joint recommendation submitted by the Crown and defence counsel.

Kennedy pleaded guilty earlier to 12 counts of fraud exceeding $5,000, and two counts of fraud not exceeding $5,000. He was given a conditional sentence of two years less a day, with 14 of it to be spent on house arrest. He will also be on probation for two years.

Cornford, who earlier pleaded guilty to two counts of fraud exceeding $5,000 in value, was sentenced to an eight-month conditional sentence, with all of it to be spent on house arrest. This is to be followed by a year on probation.

William Cornford was sentenced to house arrest for eight months for fraud he committed while working as a used car salesman at W&P Auto Sales. (Aidan Cox/CBC)

A conditional sentence is defined by Justice Canada as a sentencing option given to a court that allows a convicted person to serve their time in the community, with certain conditions, instead of in jail. It can only be imposed for sentences of less than two years in jail.

Crown prosecutor James McConnell said the "overriding" factor precipitating the conditional sentence recommendation was Kennedy's "grave personal health" caused by a cancer diagnosis.

"The Crown acknowledges that is an exceptional circumstance, and that coupled with his guilty plea and statement of remorse makes it not against public interest for Mr. Kennedy to serve his sentence in the community," McConnell said.

Both men were also prohibited from engaging in the sale of motor vehicles, and from contacting some of their victims for the duration of their sentences.

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Nature of fraud

Their sentences come after they pleaded guilty last November to several fraud charges in connection with vehicle trade-ins and sales that left some customers on the hook for tens of thousands of dollars, and others subject to having their vehicles repossessed.

The crimes took place between April 2018 and May 2019.

According to a statement of facts, it was common for W&P Auto's customers to trade in their former vehicles at the time of purchasing a vehicle from the dealership, so that the value of the traded-in vehicle would be deducted from the purchase price.

However, in each incident of fraud, Kennedy advised the customer he'd pay off the outstanding loan on their trade-in, when he in fact did not, resulting in some customers taking significant hits to their credit scores.

Other customers had their newly purchased cars repossessed by third-party lenders.

In Cornford's case, he defrauded his brother by fraudulently taking out a loan against a pickup truck he sold him by using an old copy of the registration document, which showed Cornford as the owner.

It resulted in a lien against the truck, which was later repossessed because of non-payment of the loan.

Impact to victims

In delivering his sentencing submissions, Crown prosecutor James McConnell summarized a handful of the victim impact statements, though he noted that not all of the 14 victims chose to submit one.

He said many of the victims were left with loans they were unable to repay, leading to "ongoing disturbing calls" from collection agencies, and the embarrassment and humiliation this caused.

Crown prosecutors James McConnell told court how the victims have been haunted by the fraud committed by Kennedy and Cornford. (Pat Richard/CBC)

"The impact of that fraud … has haunted many of these victims to today," McConnell said.

He said others who had their vehicles repossessed were left with no way to get to work or get groceries as it was the only vehicle in their household.

Kennedy's sentence also comes with standalone restitution orders for four of his fraud victims, with the amounts totalling $47,550.

However, court also heard the 55-year-old is currently unemployed because of complications of his illness.