White-collar criminal sentenced to 12 years for $8m fraud

The District Court of New South Wales sentenced a white-collar criminal to 12 years imprisonment for extensive and predatory fraud involving 16 victims over four years, totaling over $8 million. The court considered the harm caused to natural persons and corporations, the need for general deterrence, and the defendant's personal circumstances, including a history of drug use and mental health issues.

District Court New South Wales

Medium Neutral Citation: R v [NAME] [2013] NSWDC 79 Decision date: 01 March 2013 Before: Cogswell SC DCJ Decision: For 14 offences of director cheat or defraud and 2 offences of obtain money by deception, an aggregate sentence of imprisonment of 12 years. Non-parole period 7½ years. Balance of the term 4½ years. Catchwords: CRIMINAL LAW - Particular offences - director cheat or defraud; and obtain money by deception - extensive and predatory fraud perpetrated on 16 victims over 4 years totalling over $8,000,000 - several victims in professional, academic, business or local government careers - [NAME] sole director of music production and distribution company - persuaded victims to invest - some victims used superannuation funds - made false and misleading representations regarding personal wealth, financial health of company - falsified ASIC documents - produced false photographs. Sentence - purpose of sentence - community protection and recognition of harm done to victims - victim impact statement - should harm to natural persons be given more weight than harm to corporations? - general deterrence - significant factor - relevant factors - 'white collar criminal' - no criminal record - prospects of rehabilitation unclear - response to charges - very late plea of guilty - 12 and a half per cent discount - s 21A(2) aggravating factors some relevant some not - nature and circumstances of [NAME] - narcissistic personality disorder - childhood abuse - adult cocaine use - special circumstances - mental health, first time in custody - form 1 taken into account. Legislation Cited: Crimes Act 1900 s 176A, s 178BA. Crimes (Sentencing Procedure) Act 1999 s 21A(2), s 32, s 53A. Cases Cited: R v Borkowski (1999) 195 A Crim R 1; [2009] NSWCCA 102. [NAME] (No.2) (1999) 109 A Crim R 348; [1999] NSWCCA 378. Gomes v Regina [2008] NSWCCA 142. Regina v Jackson [2001] NSWCCA 355. R v Mungomery (2004) 151 A Crim R 376; [2004] NSWCCA 450. Heather Kathleen Power v Regina [2002] NSWCCA 244. R v [NAME] [2011] NSWSC 866. R v Tadrosse (2005) 65 NSWLR 740; [2005] NSWCCA 145. Category: Sentence Parties: Regina (Crown) [NAME] ([NAME]) Representation: Counsel [NAME] (Director of Public Prosecutions) [NAME] ([NAME]) File Number(s): DC 2010/70664

REMARKS ON SENTENCE 1I am sentencing a [NAME] who defrauded over a dozen people - over some four years - of amounts totalling over $8,000,000. The [NAME]'s name is [NAME]. What I will do first is to set out the offences that I am sentencing him for. I will formally convict him of those offences then I will say something about what he did to bring about the charges against him. I will then say something, as a judge must, about the personal circumstances of [NAME], the [NAME]. I will canvass the arguments put by the prosecution and the defence and, finally, I will sentence [NAME]. 2Mr [NAME] has pleaded guilty to 16 crimes. Fourteen of those crimes are offences against s 176A of the Crimes Act 1900. As it happens that section has since been repealed but it was the applicable law at the time. The maximum penalty provided by Parliament for such an offence is 10 years imprisonment. 3I am also sentencing him for two offences of dishonestly obtaining for himself money by a deception. Once again that provision has been repealed but it was the law at the relevant time and that offence carries a maximum of 5 years imprisonment. 4The list of offences, all 16 of them, are contained in an indictment signed by [NAME], the Crown Prosecutor who appeared for the Director of Public Prosecutions in these sentence proceedings. When I am sentencing [NAME] for the first offence in the indictment, he has asked me to take into account an additional charge which is also an offence under s 176A of the Crimes Act. He has signed a form provided for by s 32 of the Crimes (Sentencing Procedure) Act 1999, asking me to do that. I will take into account that offence when sentencing him for count 1 in the indictment and I have signed the form to that effect. 5If I have not done so already, I formally convict [NAME] of all 16 of the offences contained in the indictment which was dated 31 August 2012. 6What [NAME] did to bring about these charges is set out in exhibit A. Exhibit A is a folder entitled "Agreed Facts" and contains a 77 page document signed by [NAME] as well as his legal representative and [NAME] and dated 3 September 2012. It sets out in considerable detail all of the background to the various offences that he committed. 7It is important to observe at this stage that I am sentencing him on the basis of those agreed facts. [ADDRESS] of Criminal Appeal in this State has made it clear that the parties, and indeed to some extent the Judge, are bound by the facts which are agreed and tendered. I will draw on those agreed facts to briefly summarise what happened. 8It is said that, in essence, "through a series of false and misleading representations, the [NAME] defrauded a number of persons". [NAME] did this by "persuading those persons to put money into a company of which he was sole director. Through his false and misleading representations and conduct the [NAME] lead those persons to believe that by investing their money in the company they were guaranteed to earn extraordinarily large amounts of money". 9There was indeed a company called [COMPANY] which was registered with the Australian Securities and Investment Commission on 5 February 2005. [NAME] was the sole director, shareholder and secretary of that company. It was supposedly in the business of "promoting singers, musicians and bands, and producing and distributing those artists' various recordings, in the form of CD's and DVDs". 10To various victims of his offences he made "a series of false and misleading representations". Some of those included the following: * He had built a corporate empire with a group of companies that he had incorporated in 2001, the [COMPANY]. * That he had sold the [COMPANY] to the US corporation [NAME] for hundreds of millions of dollars which meant that he had access to those vast amounts of money. * He knew and was good friends with many important and famous persons throughout Australia and the world. * He justified that last representation by producing false photographs made using a computer program called Photoshop. The photographs depicted himself with no lesser persons than Her Majesty Queen Elizabeth II, His [NAME] II, His Holiness the Dalai Lama, US Presidents George Bush Senior, George W. Bush and Bill Clinton and [NAME] and [NAME]. The photographs extended to persons in significant positions in private enterprise including Gail Kelly, [NAME] and [NAME]. 11Mr [NAME] had falsified ASIC documents, including documents that made it appear that [NAME] and [NAME] had made large investments in his enterprise and were shareholders. He represented to people that he owned fleets of luxury cars, as well as mansions and luxurious homes in Sydney and Melbourne. 12Part of the proposition that he put to potential investors was that every one per cent investment in his company would be worth $6,000,000 when the company went public. He represented that the purported float was to be underwritten by [COMPANY] and was being administered by [NAME]. The facts record that [NAME] "persuaded persons to transfer and pay more than $8,500,000 to himself and to the company or its associated company [COMPANY]". 13The agreed facts record the prosecution allegation that other than making a show of promoting some artists and producing and distributing some recordings "the company had no real business dealings". It was often, so far as a corporation is concerned, in financial crisis. The company I am referring to is [COMPANY]. The facts record illustrations of the company being in a financial crisis, including bank statements showing its balances often being close to zero and tax records showing the company made no money and always ran at a loss. 14The company failed to pay many of its creditors or to meet contractual obligations to some of the artists. Over a three year period from June 2006 to June 2009 over $7,500,000 was paid into either [NAME]' account or the company's account. Of that amount $2,621,646.60 was withdrawn in cash. Over $2,225,000 was systematically transferred directly from the company's account to [NAME]'s personal account. A further $2,239,653.58 was withdrawn from [NAME]'s personal account using Visa cards for a combination of personal use and company business. 15I will say something briefly about each of the offences without going into the same detail which is recorded in the agreed facts. Count 1 is a charge under s 176A of the Crimes Act and the victim is [NAME]. [NAME] was also the victim of count 2, which was an offence under s 178BA(1) of the Crimes Act. [NAME] met [NAME] in 2004 when [NAME] used to attend [NAME]'s restaurant. They struck up a friendship. Part of the deception perpetrated on [NAME] involved the rental of a penthouse suite in Melbourne. [NAME] provided a statement which became part of exhibit B. So far as the first offence was concerned [NAME] lost $700,000. So far as count 2 was concerned [NAME] lost $80,000. In his statement [NAME] said that as a result of [NAME]'s actions "I have suffered financially and emotionally and am in fact still suffering substantially today." He went on to say that "the hardest part is knowing that I was made to believe that [NAME] was a good and close friend, only to find that he had inveigled himself into my life so as to defraud me of so much of my money." 16That process of inveigling himself into other people's lives is a feature of the way that [NAME] went about committing these crimes. 17The victims of the third count - which is a count under s 176A of the Crimes Act - were [NAME] and [NAME]. [NAME] defrauded them of no less than $1,010,000. They are a married couple and [NAME] was, at the relevant time, an independent councillor with the City of Sydney Council. The fraud perpetrated on [NAME] included [NAME] doing things such as developing a website, preparing shareholding and loan agreements, persistent emails and text messages and renting an office in [ADDRESS]. He also manufactured false documentation. [NAME] invested part of their retirement plan essentially into [NAME]'s own pocket. 18The victim of count 4 is a [NAME] named [NAME]. [NAME] told [NAME] that he, [NAME], "was a successful banker, businessman and entrepreneur". They met one New Year's Eve on a yacht which [NAME] told [NAME] that he, [NAME], owned. [NAME] was also an academic at [COMPANY] University and in February 2005 [NAME] "invited the [NAME] to speak to a group of MBA students about leadership". In the lecture [NAME] apparently "described owning many companies". 19For the purposes of defrauding [NAME] of $195,000 [NAME], as I said, had rented a yacht one New Years Eve and entertained lavishly. He had produced business cards and also sent [NAME] emails giving him the impression that he, [NAME], was connected with the chairman or CEO of [NAME] based in New York. In addition, as I said, he accepted the invitation to speak to the university students. 20Count number 5 is also a count under s 176A of the Crimes Act and involves him defrauding [NAME] of $90,000. She had been invited to a beach house at Wombarra. She was told by [NAME] that he owned the house. [NAME], when she went to the house, saw Rolls Royce, Ferrari and BMW cars parked in the driveway. [NAME] told her that he owned them. In order to obtain money to invest in [NAME]'s companies [NAME] "re-mortgaged her house with a loan through [NAME]". Involved in the deception of [NAME] was [NAME] engaging in hiring numerous very expensive makes of cars and manufacturing false banking documents. He even accepted an invitation to visit a secondary school where he handed out CD's. 21Count 6 alleges that [NAME] defrauded [NAME] of $100,000. He had met her in 2004 and she had invited him to her unit. That occurred in these circumstances. [NAME] apparently received a call from the concierge in her unit on behalf of [NAME] "asking whether the apartment was available for rent". The concierge brought the [NAME] to her apartment. [NAME] told [NAME] "he was anxious to rent her apartment for his mother who would soon arrive from France for a few weeks." [NAME] told [NAME] that he owned 17 apartments. He pointed to a contract for sale of land. This was his means of introducing himself to [NAME] and inveigling himself into her life. As I said, he manufactured a false contract for sale of land. He rented expensive rural or beach recreational properties. He manufactured false flight bookings. Indeed at one stage he repaid [NAME] $450,000 which she had lent him, thereby giving the impression that he was genuinely financially responsible when in fact he had taken the money from somebody else in order to repay her. What I have just described are all attributes of the activity that [NAME] engaged in in order to defraud [NAME] of $100,000. 22The victim of count 7 was a [NAME] named [NAME]. He was defrauded of some $50,000 which amounted to an offence under s 176A of the Crimes Act, as was count 6 as well. [NAME], as it turned out, "was one of the students who attended the speech the [NAME] was invited to give on strategic management". In describing the facts of that count, [NAME], who was the victim of count 4, is referred to as "[NAME]". [NAME], two years later, contacted [NAME] about a business deal which he, [NAME], had. [NAME] was just seeking advice. [NAME] could not resist this opportunity and told [NAME] that he could invest in his company. [NAME] said that "he only had $50,000 which was to be used as the deposit on a house". The kinds of things which [NAME] engaged in to defraud [NAME] included attending [NAME]'s wedding and providing four Rolls Royce cars as transport for him and his bride and the wedding party. In addition he had also rented an expensive apartment in Sydney. Given the way [NAME] met [NAME] and the source of the funds, namely a home deposit, which were available to [NAME], I regard this offence as particularly heartless in a series of heartless offences. 23Offence number 8 is also an offence under s 176A of the Crimes Act and involves [NAME] defrauding [NAME] of $130,000. [NAME] was the owner of a [COMPANY]. He drove [NAME] to the airport on one occasion and received a text message from him a few weeks later. He invited him to invest $100,000 in the company and told him that a two per cent stake would be worth about $3,000,000. He showed [NAME] pictures of himself with people such as [NAME] and [NAME]. The agreed facts go on to quote that [NAME] was "very persistent and persuasive and in May 2006 [NAME] invested $100,000 for a two per cent shareholding in the company". The money which [NAME] paid into the company came from "the sale of his home after a divorce settlement." The facts go on to record that [NAME] "will now have to rent for the rest of his life". [NAME] presented [NAME] with a loan agreement which gave the impression of safeguarding his investment. 24At this stage I depart from the recitation of the various offences to return to count 5 which is the offence involving [NAME]. A statement by her has been tendered which became part of exhibit B. She met [NAME] just after her mother had died. She said she was not in a position to invest in [NAME]' company, so she "borrowed the money against my home in Scarborough", which is a suburb of Perth. Her son, she points out, did not trust [NAME] and "begged me not to do it". She points out that this has "caused consistent rift between us and he has never forgiven me for losing the money". She goes on to say that the loss of the money ($90,000) "created financial hardship, as I now owe a lot of money on the home in Scarborough". She said that the whole experience unsurprisingly "has had a devastating effect on my ability to trust or take risks in business ventures, not to mention my finances and relationships". She described [NAME] as "very organised, charming, clever and obviously planned" in perpetrating his scam. 25Count 9 is also an offence under s 176A of the Crimes Act and involves [NAME] defrauding [NAME] of $1,040,040. [NAME] was at the relevant time a solicitor and lived in Melbourne. [NAME] made a large number of representations to [NAME], which are set out in the agreed facts. He claimed that he owned luxury homes and that she must transfer the amount of money for her investment by a particular time, thereby putting pressure on her. He said that he had not taken any of the money out by way of salary from the company. He claimed to own a car hire business and also suggested that he was contacting her from the office of the CEO or chairman of [NAME] in New York City. 26The fraud committed against [NAME] illustrates [NAME]' capacity to put a large amount of pressure on some of his victims to make hasty decisions. As a result of the pressure and his persuasion, [NAME], as I say, transferred some $1,040,000, not $1,040,040 as I said earlier, which essentially went into [NAME]' own pocket. 27The victim of count 10 was a Victorian silk, [NAME], who is [NAME]'s partner. [NAME] defrauded [NAME] of some $20,000. [NAME] persisted in asking [NAME] for a prospectus, which was not produced, and [NAME] kept promising him one. [NAME] gave the impression of using the e-mail of the chairman of [NAME] in New York City. 28The victims of counts 11 and 12 are [NAME]. They are both offences - as were the offences as against [NAME] and [NAME] - against s176A of the Crimes Act. Count 11 involves [NAME] defrauding the [NAME] of no less than $2,075,000 and count 12 involves a fraud of $700,000. The agreed facts point out that the [NAME] were owners of a company structure "for superannuation and investment purposes". It appeared to be a family superannuation company which involved their adult sons as well. Mr [NAME] at one stage said that "he and his wife were 'pretty naïve' as they had never been involved in an investment such as this before and needed to understand the processes involved". 29The activity involved in defrauding the [NAME] of this huge amount of money involved preying upon them through a contact which [NAME] had in Melbourne. He persuaded them to part with superannuation funds which had been set up for themselves and their sons. He continued to prey on them despite them acknowledging that they were "pretty naïve". 30The agreed facts also record this. In 2007 they were invited to the Presidential Suite at the Crown Casino in Melbourne by [NAME]. There was a woman named [NAME] and several other people there as well including artists. The facts say that "[NAME] heard [NAME] say to the [NAME] '[NAME] has arrived and wants to have dinner with you' to which he replied 'Tell him I'll see him for breakfast'. She later heard her tell the [NAME] that 'Red' had arrived from Perth and also wanted to see him. She understood 'Red' to be a reference to [NAME]. The [NAME] continued to order expensive bottles of champagne and buckets of caviar while they were there." In addition, in order to assist him in defrauding the [NAME] of so much money, he falsely manufactured [NAME] logos to give the impression that he was associated with that corporation. At one stage the facts record that he "bombarded" the [NAME] with SMS messages relating to the success of the company and its artists and pictures of himself with prominent people. 31Count 13 is also an offence against s 176A and involves [NAME] defrauding [NAME] of $950,000. Once again [NAME] used the Presidential Suite at the Crown Casino and told the [NAME] that he had been speaking to [NAME] about an investment. He e-mailed a photograph of himself with [NAME] and sent them a business plan. He also again gave the impression that he was contacting them from the office of the chairman of [NAME]. He showed them a document which "appeared to be an [NAME] statement with a balance of approximately $145,000,000". He told them he had a hundred employees and that he had a bodyguard. 32Count 14 claims that [NAME] defrauded [NAME] of $1,300,000, thereby offending against s 176A of the Crimes Act. The facts record that "[NAME] and his wife met the [NAME] while they were eating at a Sydney restaurant when he began talking to them from his table nearby". He sent them numerous SMS messages attaching the usual photographs. He made extraordinary claims about his company and the prospects of investing. Again he told them of associations with [NAME] and [NAME]. [NAME] "told the [NAME] that the money would be paid out of his superannuation account, with his son [NAME] acting as his financial adviser, so they needed to ensure that all documentation et cetera was finalised". He sent them an e-mail attaching "an ASIC search document which appeared to indicate that the [NAME] and [NAME] were sole shareholders in a company called [NAME]. (It should be noted that [NAME] is also known as [NAME].) He even sent a text message to [NAME] addressing him as [NAME] thereby giving him the impression that he was sending a text to [NAME]. Again he used the [NAME] logo. 33Hence count 14 involved him preying on people to whom he introduced himself gratuitously in a public place. He allowed them to invest superannuation funds. He manufactured an ASIC document which was false and gave the impression of being connected to [NAME]. 34The final two offences are counts 15 and 16. They involve a victim named [NAME]. Count 15 is the second of the two charges under s 178BA(1) of the Crimes Act and asserts that by deception [NAME] dishonestly obtained $50,000 from [NAME]. Count 16 is a charge under s 176A of the Crimes Act and involves defrauding her of $277,000. 35Mr [NAME] met [NAME] in 2004 in Scarborough, Western Australia. Again he began speaking to her in a café where she was dining with a friend who knew [NAME]. He took her to a penthouse where he was staying and they stayed on for drinks. He induced her to come across to Sydney. [NAME] took out a mortgage on her home in order to invest funds in [NAME]' proposed investment. He even suggested that she move to Sydney from Perth and she agreed to sell her apartment. This she did and she moved to Sydney. [NAME] organised for her to rent an apartment. The facts go on to record that just after "she had sold her apartment the [NAME] told her she could purchase another five per cent share in Emporium for $100,000". Accordingly she invested more than that amount. All in all, as I said, [NAME] invested $277,000 as well as an amount of $50,000. 36Again [NAME] had preyed on a stranger whom he had met, admittedly through somebody else, in a public place and persuaded her to sell her apartment and move interstate where he relieved her of more funds. She had also sold her business. He allowed her to sell her own business so she could work with him. 37I turn now to some personal information about [NAME]. The information is limited. One source is a very helpful report from the experienced forensic psychiatrist, [NAME], who produced a report dated 24 December 2012 and who gave evidence before me on 23 January this year. [NAME] had interviewed [NAME] a number of times and had reviewed a large amount of information about [NAME]'s medical background, including treatment at various stages under psychiatrists and some admissions to hospital. In his report, which became exhibit 2, he said: "The varied clinical opinions in my view reflect the difficulty in this case; this is a [NAME] who has pled guilty to engaging in a large fraud of various experienced people who has a tendency to exaggerate his achievements (having regard to the documentation from Wikipedia that was amongst the evidence); this would suggest an underlying tendency to fabricate his history and information about himself to meet secondary gains; given that he is now facing charges and sentencing for these offences, it would be reasonable for clinicians to be concerned that his self report of symptoms might be unreliable." [NAME] fairly added that on the other hand: "People who are fraudulent have the same risk of mental illness as the general population and this needs to be considered in this case." 38I add here that of course any history which comes directly from [NAME] I regard as unreliable unless corroborated, for the reasons stated by [NAME]. 39Mr [NAME] did not go into the witness box to give evidence. That does not make the situation worse for him on sentence, but it does deprive him of an opportunity of giving evidence under oath or affirmation whereby he could be cross-examined by the Crown Prosecutor and give evidence of matters such as contrition and his own personal history. As was pointed out by Mr [NAME], who later appeared for [NAME], he is not prejudiced by not going into the witness box but, as I say, he loses an advantage which he might have otherwise had. 40Dr [NAME] went on to say he was "reasonably confident of a current diagnosis of mood disorder, predominantly recurrent depressive disorder and anxiety disorder (with panic attacks) with a vulnerability to periods of hypomania; differential diagnosis includes bipolar affective disorder". [NAME] said he was "unable to conclude a diagnosis of chronic psychotic disorder" although he was reluctant to definitively rule it out. He thought specifically the applicable diagnosis was one of narcissistic personality disorder. 41Dr [NAME] ventured an opinion about [NAME]'s mental state around the time of offending. He was not seeing [NAME] at the time and had to draw on [NAME]'s history and also evidence from other medical sources. He said he was "unable to conclude that he was driven by an underlying delusional motivation". He was of the opinion that a "significant feature that would have made impact on his offending behaviour would have been his underlying personality disorder which could be regarded as being a narcissistic personality disorder suffered by an individual with a poor self identity and self esteem derived from early abusive experiences in childhood; his offending could be seen in terms of an attempt to achieve success, not only for financial gain (secondary gain) but also an attempt to shore up an underdeveloped sense of self and self esteem (primary gain)." 42I am inclined to accept the noted history of early abusive experiences in childhood because they are consistent with evidence that in his infancy in France he was transferred into State care and spent time in State care until he became an adult. 43Dr [NAME] noted that from 2009 until he was arrested in 2010 [NAME]'s mental state was of some concern to various doctors. It had deteriorated and [NAME] thought that might have been triggered "by a number of factors including: prior cocaine abuse, realisation that his enterprise was failing and the death of this dog". (That should read "his dog".) 44Dr [NAME] confirmed in evidence before me his diagnosis of narcissistic personality disorder. In cross-examination he said the offences which [NAME] committed required reasonable judgment. He acknowledged it was a difficult case to express an opinion on because of the volume of information and documents and was "clouded by [NAME]'s unreliability in reporting". Cocaine was a significant factor contributing to mood fluctuations. 45There were put into evidence various character references from people who appeared to know [NAME] well. He is described, amongst other ways, as being a "complex individual". It was pointed out his life has been "one of psychological torment, abuse and loneliness". One person described him as a "confused, at times volatile, generous and sadly, irreparably damaged individual who craves acceptance and love but who sadly has only created destruction around himself for financial gain and public exposure he yearns for but, unfortunately, for all the wrong reasons". He is described as extremely kind hearted but with drastic outbursts "of total disconnection, self destruction, outrageous behaviour". He is said to show a genuine concern for those in need and the less fortunate in life and as being a person who is genuinely interested in people. I must take those character references in the context of my description of the offending which he has committed. 46Exhibit 3 was the document which was from France and set out the fact that he was a ward of State from about the age of four until he was about 19. 47I turn now to consider arguments put forward by [NAME] and [NAME] as to matters which should affect the sentence. I must accept there was, as [NAME] argues, some genuine attempt to set up a record label, to produce CDs and to promote artists. A reading of the agreed facts shows such attempts were almost lost in the extensive fraud perpetrated on the victims. His lifestyle, as [NAME] pointed out, had to show the trappings of success but he was spending his victims' money on those trappings whilst telling them lies. 48There was an issue about whether the harm perpetrated to victims who are natural persons should be given more weight than the harm perpetrated against a corporation. The relevance of the issue to this case was the reference to various authorities which [NAME] said often concerned corporations and I should regard the sentences imposed in those other cases as being based upon damage done to corporations rather than to natural persons. [NAME] argued there should be no distinction. I find as a matter of fact the impact on victims who are natural persons is worse than on a victim which is a large corporation. One is a real person; the other is a legal person. The shareholders are affected by the impact on a corporation but the impact there is indirect. As [NAME] pointed out, the impact is literally shared by the shareholders. 49Mr [NAME] pointed to the sophistication of some of the victims and argued there was nothing particularly sophisticated about his client's conduct. I reject the latter submission. His client went to extraordinary lengths to present himself as a successful, experienced and well-connected company director and entrepreneur. Those efforts were very worthwhile in extracting millions of dollars from innocent victims who thought they were investors. They were very effective in persuading experienced and professional people. To defraud a couple of unsophisticated victims might not need much skill; to defraud 16 unsophisticated victims would need an adept fraudster; but to defraud 16 victims, some of whom were are in professional, academic, business or local government careers for a period of over some years, requires very skilled criminal craft and perseverance. [NAME] demonstrated that. 50As [NAME] says, his client made some extraordinarily, perhaps occasionally bizarre, claims. But [NAME] went to a lot of trouble to make those claims convincing. The enterprise which [NAME] engaged in over some four years, speaking generally, required hard work, co-ordination, preparation, perseverance, extravagance, ruthlessness, exploitation of friendships, deviousness, cunning, heartlessness and intelligence. He was, after all, dealing with intelligent and sometimes professional people. His fraudulent behaviour involved a very large logistical exercise. It was not only fraudulent, it was predatory. He had to use great skill in forging or in arranging the forging of documents, including photographs. 51I accept [NAME]'s submissions there are special circumstances for adjusting the normal relationship in a sentence between the non-parole period and the head sentence. When someone is sentenced to gaol the non parole period is fixed according to the Crimes (Sentencing Procedure) Act 1999 to being 75 per cent of the head sentence. For example, if someone were sentenced to 4 years imprisonment the non-parole period would be 3 years imprisonment. In special circumstances a judge can alter the relationship so the parole period is longer, thereby reducing the non-parole period. 52Mr [NAME] points to his client's mental health condition as being a special circumstance. I accept that submission. He also pointed to the fact it was his client's first time in custody. I accept that. He pointed to bail conditions his client had been subject to as being very onerous. I do not regard that as being particularly significant given the length of the sentence I will have to impose. He also referred me to what the Court of Criminal Appeal had said in Heather Kathleen Power v Regina [2002] NSWCCA 244 as being relevant to the sentencing of what are called white collar criminals. [NAME] falls into such a category, which is not unusual. He has no record of criminal convictions. [ADDRESS] of Criminal Appeal in Power at [38] said this: "In Corbett 52 A Crim R 112 at 117 this Court, comprising Gleeson CJ, [NAME] J, understandably said: 'Nevertheless, a feature of past sentencing for 'white collar' crimes involving fraudulent abuse of trust, and sometimes involving fraud on the public purse, has been the imposition of lengthy head sentences, but with a substantial gap between head sentence and non-parole periods or minimum terms. This has probably been the consequence of a desire on the part of the courts, on the one hand, to reflect the need for general deterrence and, on the other hand, to give due account to the fact that the offenders involved frequently have no prior criminal history, are not likely to re-offend, and have good prospects of rehabilitation.' [NAME] has no prior criminal history I am not able to make a clear finding about him being unlikely to re-offend or good prospects of rehabilitation. 53Mr [NAME] referred me to the sentencing of [NAME] by Garling J in the Supreme Court on 12 August 2011: see [2011] NSWSC 866. Garling J observed at [71] in that case (which involved superannuation funds) that such funds "represent an important and significant element in the financial system in Australia and in ensuring its economic and financial stability. Superannuation monies represent the savings of individual members of the community which are intended to provide a secure retirement fund." 54Mr [NAME] wanted to draw some comfort from the sentences imposed by his Honour in that case. But his Honour was sentencing [NAME] for only two offences, each of them carrying a maximum of 5 years imprisonment. 55Mr [NAME] argued that the offending of his client could be seen as one episode of an ongoing criminal enterprise. There is some force in that argument but what is more significant is the number of individual victims which that criminal enterprise impacted upon. 56There is no significant evidence of any contrition. 57Mr [NAME] argued that because of his client's plea of guilty the sentence should be discounted. [NAME] acknowledged the sentence could be discounted but they disagreed by how much. [ADDRESS] of Criminal Appeal has indicated that for a plea of guilty at the earliest available opportunity a sentence may be discounted by some 25 per cent. [NAME] sought to persuade me that his client should receive up to 25 per cent. [NAME] on the other hand argued the discount should be only in the region of 10 to 15 per cent. 58MFI 1 in these proceedings is a chronology of the sequence of events involved in [NAME] pleading guilty. On 9 December 2011 the Chief Judge of this Court listed [NAME]'s prosecution for trial. The date fixed was 30 July 2012. The question of fitness was mentioned on 9 December 2011. The estimate for the length of the trial was some three months but it was not until three days before the trial, namely 27 July 2012, that a serious question of [NAME]'s fitness for trial was raised. That led to a fitness hearing during August. Once Judge Marien SC found [NAME] fit for trial he entered a plea of guilty a few days later, on 3 September 2012; in fact 10 days later. Although there has been a significant saving of time and resources which were not devoted to a trial, the Director of Public Prosecutions had to be ready to proceed until a few days before the trial. Some of the victims, [NAME] points out, are from interstate. 59Mr [NAME]'s argument is I should discount the sentence by 25 per cent because there is no delay after his client was found fit. He also pointed out his client had agreed with the complex statement of the facts. [NAME] says the range is 10 to 15 per cent and should be fixed closer to 10 per cent. He argues it was a very late plea and that must impact on its utilitarian value which is the kind of discount I am considering at this stage. I have taken into account what Howie J said about the principles governing a discount for a plea of guilty in R v Borkowski [2009] NSWCCA 102; (2009) 52 MVR 528 at [32]. Although there was a good deal of practical value in the saving of the trial and the agreement to the facts, the plea was very late and, as Howie J pointed out by reference to authority: "The utilitarian value of the pleas will be determined largely by the timing of the plea so that the earlier the plea the greater the discount." 60I regard an appropriate discount for the pleas of guilty as being one of 12½ per cent. 61A number of arguments were directed to the provisions of s 21A(2) of the Crimes (Sentencing Procedure) Act. That is a provision which sets out factors that are described as aggravating factors to be taken into account in determining an appropriate sentence. There was an argument about the applicability of cl (k) about whether [NAME] abused a position of trust or authority. I do not accept that I should take into account as a separate aggravating feature under s 21A an abuse of a position of trust or authority. The frauds were committed by him as a director. That itself involves a breach of trust so I already take it into account in sentencing him for the offence expressed in its terms that there has been a breach of trust. I do not accept that the offence was aggravated because of a breach of trust in the relationships involved. Many frauds must involve a violation of trust, which is part of the relationship. 62Mr [NAME] was himself not a professional person such as a solicitor or an accountant. I have taken into account what the Court of Criminal Appeal said in R v [NAME] (No.2) (1999) 109 A Crim R 348 at [27] (Dunford J) and R v Carr (2003) 135 A Crim R 171 (Howie J at [31]). 63Another issue was whether the victims would fall into the category of cl (l) of being vulnerable - as the provision says - because they were "very young or very old or had a disability, or because of the victim's occupation". I do not think any of the victims fall within this provision. Some were more pliable than others and [NAME] took advantage of that. I regard the pliability of victims not as an especially aggravating feature under s 21A, but one to be taken into account in assessing the objective seriousness of each respective offence. I regard the offence involving [NAME], as I said, as more serious in a sense than some of the others because he had met him in a teacher student relationship and, as the facts record, [NAME] drew on a deposit on his home and [NAME] attended his wedding. 64Mr [NAME] sensibly and obviously concedes the offences were part of planned or organised criminal activity in accordance with cl (n) and this is a feature which aggravates all of them. I do not regard cl (o) as applicable - being committed for financial gain. That is because almost all frauds would be committed for financial gain, so it is not a separately aggravating factor. I do regard cl (m) as applicable as the offences involved a series of criminal acts. Cl (m) is applicable because although there were multiple victims there is a separate charge for each of them. The fact there are multiple victims is not itself an aggravating feature, but each of the offences involved a series of criminal acts. Some of them constitute quite complex steps in the deception involved. 65I have regard to what the Court of Criminal Appeal said in R v Tadrosse [2005] NSWCCA 145. As Howie J said in that case, an aggravating factor as referred to in s 21A "is something that operates over and above the general considerations that indicate that a particular class of offending should generally be dealt with in a particular way". (That was in [25].) The offences in this case, as I said, involve notions of breach of trust and financial gain. 66Mr [NAME], in his helpful written submissions, drew my attention to various decisions of the Court of Criminal Appeal dealing with matters of fraud. I have had particular regard to the sentences imposed in [NAME] (No.2) (1999) 109 A Crim R 348, Jackson [2001] NSWCCA 355, Mungomery [2004] NSWCCA 450 and Gomes [2008] NSWCCA 142. All of those cases concerned offences under s 176A of the Crimes Act. I have also had regard to those cases which record sentences for offences against s 178BA of the same Act. 67I propose to sentence [NAME] by imposing an aggregate sentence of imprisonment in respect of all of the offences. In accordance with s 53A of the Crimes (Sentencing Procedure) Act I propose to indicate the sentences which would have been imposed in respect of each offence. There will be a large degree of concurrence in these offences. 68General deterrence is obviously a very significant factor in my sentencing as well as community protection and recognition of the harm done to the victims. In accordance with the authorities I regard two of the most important features in sentencing for each offence as being the amount involved in the fraud and the period of time over which the fraud was committed. I refer to the decision of the Court of Criminal Appeal in Mungomery. 69I turn now to the various offences. I have taken into account in calculating my sentence, and I have to indicate each sentence, [NAME]'s mental health condition. It is relevant to his serving a term of imprisonment in that it means the imprisonment might be harder. It is relevant to some extent in general deterrence that a person with a mental health condition is not regarded by the authorities as a clear example of an [NAME] which should be taken into account for general deterrence. In this regard I note he has not been diagnosed as having a psychosis but a personality disorder. In addition he was suffering to some extent whilst he was offending. 70So far as count 1 is concerned, [NAME] was relieved of $700,000 over a period of about 2 years and 5 months. I would regard an appropriate sentence as being one of 6 years imprisonment. I discount that by 12½ per cent and that would produce a sentence of 5 years and 3 months. 71So far as count 2 is concerned - the offence against s 178BA carrying a maximum of 5 years imprisonment - that again involved [NAME] over a period of about 4 months and an amount of $80,000. I would regard an appropriate sentence as being one of 2 years imprisonment reduced by 12½ per cent and that would produce a sentence of 1 year and 9 months. 72Count 3, the offence involving [NAME], was committed over 4 years and 4 months and from them was taken $1,010,000. I would regard an appropriate sentence as being one of 7 years imprisonment. Discounted by 12½ per cent, an appropriate sentence would be 6 years imprisonment. 73Count 4, involving [NAME], is under s 176A carrying a maximum of 10 years imprisonment. That involved an amount of $195,000 and was committed over 4 years and 5 months. The appropriate head sentence would be 5 years and after a discount of 12½ per cent that would be 4 years and 3 months. 74Count 5 is another s 176A offence carrying a maximum of 10 years imprisonment. It involved $90,000 and [NAME]. It was committed over 4 years and 4 months. A sentence of 4½ years is appropriate, which I would reduce to 4 years after a discount of 12½ per cent. 75Count 6 involving $100,000 and [NAME] was committed over nearly 5 years. It is a 10 year maximum sentence. An appropriate penalty would be 4½ years imprisonment. I would discount that by 12½ per cent and reduce it to 4 years imprisonment. 76In some instances, I should add, the discount I have applied reduces the sentences to slightly below the exact figure and occasionally slightly above. 77Count 7, the offence involving [NAME], is a s 176A offence. It was committed over 4 years and 4 months. I would regard an appropriate head sentence of being one of 5 years, which I would reduce to 4 years and 3 months after a discount of 12½ per cent. 78Count 8, [NAME], was an offence involving $130,000 and was committed over 3 years and 4 months. That carried a 10 year maximum and I would regard an appropriate sentence as being one of 4½ years imprisonment. I would discount that to 4 years imprisonment after a 12½ per cent discount. 79Count 9 involved [NAME] and was a s 176A offence. It involved $1,040,000 and was committed over 2½ years. A sentence of 6½ years is appropriate in that case which I would reduce to 5½ years after a discount of 12½ per cent. 80Count 10 involved [NAME] and $20,000. It too was committed over 2½ years and carried a maximum of 10 years imprisonment. Four years is an appropriate sentence for that offence which I would reduce to 3½ years after a discount of 12½ per cent. 81Count 11 involved the [NAME] and is a 10 year maximum sentence. That involved $2,075,000 and was committed over 2 years. I would regard an appropriate penalty as being one of 7½ years. I would reduce that to 6½ years after a discount of 12½ per cent. 82Count 12 again involved the [NAME] and $700,000, an offence carrying a maximum of 10 years imprisonment. It was committed over a year and a half. Five and a half years is an appropriate sentence in that case but I would discount it by 12½ per cent to reduce it to 4½ years imprisonment. 83Count 13 involved the [NAME] and was a 10 year maximum offence. It involved $950,000 and was committed over 1 year and 8 months. I would regard an appropriate penalty as being one of 6 years imprisonment. I would reduce that to 5 years and 3 months after a discount of 12½ per cent. 84Count 14 involved [NAME]. it was a 10 year maximum offence and was committed over a period of a year. I would regard an appropriate penalty in that case as being one of 6½ years, which I would reduce to 5½ years after a discount of 12½ per cent. 85Count 15 involves [NAME] and is the second s 178BA offence, carrying a maximum of 5 years imprisonment. The amount involved was $50,000 and a period of 3 months. An appropriate sentence in that case is 2 years imprisonment which I would reduce to 1 year and 9 months after discounting it by 12½ per cent. 86The victim of count 16 is again [NAME] but is an offence under s 176A of the Crimes Act carrying a maximum of 10 years imprisonment. That was committed over a period of 4 years and 11 months. I would regard an appropriate sentence as being one of 5 years, which I discount by 12½ per cent to one of 4½ years imprisonment. HIS HONOUR: Stand up [NAME]. 87It is obvious that if I imposed all of those sentences upon you, you would die in prison. I am not going to impose all of those sentences on you; I am going to impose one sentence on you. I am allowed to do that by s 53A of the Crimes (Sentencing Procedure) Act 1999. I have indicated to you what the individual sentences would be. It is also obvious there must be a large telescoping in the sentence I impose. To impose a sentence which would be largely an accumulation or even a significant accumulation of those would result in a manifestly harsh and crushing sentence. Nevertheless, the sentence must serve the purposes which are set out. 88I am going to sentence you to 12 years imprisonment and the non parole period will be 7½ years. It will date from 14 November 2012. I set the non-parole period of 7½ years to commence on 14 November 2012 and to expire on 13 May 2020. The balance of the term will be 4½ years commencing on 15 May 2020 and expiring on 13 November 2024. Have a seat for a moment [NAME]. HIS HONOUR: [NAME] and [NAME], take your time. [NAME]: You've got a day - you miss out a day I think your Honour. Non parole expires you said 13 May and then balance of term to start on 15 May. You've left out a day, so it should be the 14th. 89The balance of the term should commence 14 May 2020 and expire on 13 November 2024. HIS HONOUR: Take your time, check those and also check whether there have been any matters of fact or law which could be dealt with under s 43 of the Crimes (Sentencing Procedure) Act. [NAME]: As far as the Crown is concerned those figure are all accurate your Honour I think, thank you, and nothing else arising. [NAME]: The figures seem to be quite all right to me and there's nothing arising. [NAME] your sentence I have backdated to 14 November 2012 because you went into custody when I refused you bail on 4 December 12. You were also in custody between 20 March 2010 and 8 April 2010, which was about 20 days, so I have backdated it another 20 days from 4 December so that is why it commences on 14 November. It expires therefore 12 years later on 13 November 2024. Your non-parole period is 7½ years. If it had been 75 per cent it would have been a non-parole period of 9 years. I have made it a non-parole period of 7½ years because of the special circumstances which I have referred to. That non-parole period of 7½ years expires on 13 May 2020, so you will be eligible for release on 13 May 2020. The Parole Authority will consider your release before then and it is responsible for whether or not you are released on 13 May 2020. After you are released on parole you are still serving your sentence and under sentence until it expires on 13 November 2024, do you understand that? [NAME]: Yes your Honour.

********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 May 2013