CDirector of Public Prosecutions v Curtis
[2017] VSC 613
•17 October 2017
| IN THE SUPREME COURT OF VICTORIA | Unrestricted |
AT MELBOURNE
CRIMINAL DIVISION
S CR 2014 0048
S CR 2014 0079
| THE COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS | |
| v | |
| MYLES ANDREW CURTIS | |
---
JUDGE: | Hollingworth J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 10 October 2017 |
DATE OF SENTENCE: | 17 October 2017 |
CASE MAY BE CITED AS: | CDPP v Curtis |
MEDIUM NEUTRAL CITATION: | [2017] VSC 613 |
---
CRIMINAL LAW – Conspiracy to offer to pay bribes to foreign public officials – Rolled-up conspiracy charge – False accounting – Offending not committed for personal gain – Prior good character – Little need for specific deterrence – General deterrence – Plea of guilty – Effects of delay – Offender suffering from chronic PTSD and severe depression – Sentenced on conspiracy charge to 2 years and 6 months’ imprisonment, to be released immediately on a recognisance release order – Sentenced on false accounting charge to 6 months’ imprisonment, to be wholly suspended for 1 year – Criminal Code 1995 (Cth) ss 11.5(1) and 70.2(1) – Crimes Act 1958 (Vic) s 83(1)(a) – Sentencing Act 1991 (Vic) s 6AAA
---
APPEARANCES: | Counsel | Solicitors |
| For the CDPP | Mr N Robinson QC and Mr K Armstrong | Commonwealth Director of Public Prosecutions |
| For the Accused | Ms M Fox QC and Mr J Gullaci | Tony Hargreaves & Partners |
HER HONOUR:
Introduction
Myles Curtis, you have pleaded guilty to one charge of conspiring with Securency International Pty Ltd and others to offer to bribe a foreign public official in order to obtain or retain business in Indonesia and Malaysia,[1] and one charge of false accounting.[2]
[1]Contrary to ss 11.5(1) and 70.2(1) of the Criminal Code Act 1995 (Cth) (“Criminal Code”). The maximum penalty for charge 1 is 10 years’ imprisonment, and/or a fine of not more than $66,000.
[2]Contrary to s 83(1)(a) of the Crimes Act 1958 (Vic). The maximum penalty for charge 2 is 10 years’ imprisonment.
The offences arose out of conduct in which you engaged in the course of your employment with Securency. Securency was established in 1996 by its two shareholders, one of which was the Reserve Bank of Australia. Securency’s premises were located together with Note Printing Australia Limited, a wholly-owned subsidiary of the RBA. NPA’s business included printing banknotes for the RBA and other central banks, using polymer substrate supplied by Securency. Employees of Securency and NPA worked closely together for the benefit of both companies.
You moved to Australia from England in 1996, to help establish Securency’s business in the highly competitive banknote printing industry. You were employed at various times as the general manager and/or chief executive officer, and the daily management of the company was entrusted to you. You were appointed a director of Securency in October 1999. You worked for Securency until your employment was terminated in March 2010, after the allegations of bribery had emerged.
The conspiracy charge
You have pleaded guilty to a single charge of conspiracy, relating to conduct in both Indonesia and Malaysia.
In both countries, Securency and/or NPA engaged local agents to assist in obtaining contracts to supply their products to the local central bank. The local agents were to be remunerated by way of success-based commissions. The parties to the conspiracies agreed that the local agent would offer part of the commission to one or more bank officials, with the intention of improperly influencing them in the exercise of their duties.
Given the longevity of polymer currency, it was necessary for the RBA and its subsidiaries to look for foreign markets in which to supply polymer banknotes. The RBA had been paying substantial commissions to overseas agents since the early 1990s, prior to the incorporation of Securency. During the period of the Indonesian and Malaysian conspiracies, the boards of the RBA, Securency and NPA were well aware that very substantial, success-based, commission payments were being made to local agents, to obtain contracts with overseas banks. I do not know the extent to which board members knew or suspected that some part of the agents’ commissions were to be used to offer bribes to foreign bank officials;[3] nor is it necessary for me to determine that for the purposes of sentencing you. It is sufficient to note that I am not sentencing you on the basis that you were the architect of such conduct.
[3]When I sentenced NPA and Securency in 2012 for their parts in the conspiracies, it was done on the basis that the prosecution accepted that the respective boards of directors had no knowledge of the illegal conduct being carried out by the companies’ “high managerial agents”. From what I have learned since then, I have some reservations about the accuracy of that agreed fact.
Although this is a rolled-up charge, covering the period between 17 December 1999 and 24 December 2003, I shall consider the conduct in the two countries separately.
Indonesian conspiracy
By late 1996, you were exploring opportunities to supply printed polymer banknotes to the Indonesian central bank. You became aware of a person called Radius Christanto, who could advise about the Indonesian bank’s operations and competitors’ strategies, and who had access to high level decision-makers. Over the course of a year or so, you and other Securency employees discussed with Christanto how polymer banknotes could be promoted to the Indonesian bank.
Although a formal written agency agreement with Christanto’s company, PT Aneka Star, was not entered into until November 1998, Christanto in fact started lobbying on behalf of Securency and NPA earlier than that. Christanto spent hundreds of thousands of dollars engaging a local lobbyist, and providing benefits such as computers, travel and golf tournaments to Indonesian bank officials (including Herman Susmanto, the director of the bank’s Currency Circulation Department).
You played a leading role in negotiating the commission to be paid to the agent. You were also well aware that the agent would be using some of the commission to make payments to Indonesian bank officials, in order to secure a banknote contract.
On 1 June 1999, the Indonesian bank executed an agreement with Securency and NPA, for the supply of its 100,000 rupiah polymer banknote.
Between 6 August 1999 and 6 June 2000, commission payments totalling USD 4.775 million were paid into an account controlled by Christanto; that was the equivalent of 20% of the total sales made under the contract with the Indonesian bank. Around USD 3 million of that total amount was paid during the conspiracy period. In fact, unbeknown to his co-conspirators, Christanto retained most of the commission for himself, and did not pass on nearly as much to bank officials as expected.
At the time when you and Securency entered into the agreement with Christanto to provide an illegitimate benefit to Indonesian bank officials, it was not an offence under Australian law to engage in such conduct. Australia’s foreign bribery provisions, including s 70.2 of the Criminal Code, only came into force on 17 December 1999.
However, because two of the commission payments were made after the foreign bribery provisions had been introduced, you are guilty of conspiracy in respect of the payments which occurred after 17 December 1999.[4]
[4]Under the principles in Agius v R (2013) 248 CLR 601.
I have already sentenced Christanto[5] and Securency[6] in respect of their respective roles in the Indonesian conspiracy.
[5]R v Christanto [2013] VSC 521R.
[6]R v Note Printing Australia Limited & Anor [2012] VSC 302R.
Malaysian conspiracy
In order to win the business of printing Malaysian currency using polymer substrate, you conspired with NPA, Securency, and some of their senior officers, to offer to provide benefits to officials of the central Malaysian bank. The Malaysian conspiracy took place between 1 October 2001 and 24 December 2003.
In 1999 and 2000, NPA and Securency each negotiated and entered into separate agreements with a Malaysian man, Abdul Kayum Syed Ahmad (“Kayum”), and/or his company, Aksavest Sdn Bhd, appointing them as their agent in Malaysia. The agency agreements provided that the agent was to be remunerated in the form of success-based commissions. The agent was to bear the cost of any expenses incurred in order to obtain contracts.
In December 2003, NPA entered into a contract to supply the Malaysian bank with 160 million 5 ringgit polymer banknotes. Securency was not a party to the banknote contract. NPA used Securency’s polymer substrate in manufacturing the banknotes, and the contract price of $15.2 million included a price for that substrate. As with the Indonesian conspiracy, the illegitimate benefits were to be funded from the agent’s commission. In Malaysia, NPA paid the agent commission totalling AUD 2.19 million, which represented 17% of the contract price.
I have already sentenced Securency and NPA for their respective parts in the Malaysian conspiracy. The trial of three other alleged co-conspirators is due to commence early in 2018.
The seriousness of the conspiracy charge
This is a serious example of the offence of conspiracy to offer a bribe:[7]
[7]Christanto and the companies pleaded guilty to conspiring to bribe, rather than conspiring to offer a bribe.
(a) The conduct was sophisticated, carefully orchestrated and concealed;
(b) You were involved in the Indonesian conspiracy for 6 months, and in the Malaysian conspiracy for just over 2 years;
(c) Similar conduct took place in more than one country; and
(d) The amount of commission paid was substantial.
Although the gravamen of the offence of conspiracy is the agreement to participate in organised criminal activity, unlike Christanto and the companies, you were not involved in the conspiracy for your own financial gain. I regard that as an important point of difference in assessing your relative moral culpability.
The false accounting charge
The false accounting charge relates to a payment made in July 2006 to the Malaysian agent, Kayum, which was falsely described as marketing and promotional fees, but was in fact part-payment of commission. You played an active role in the payment being falsely described.
After the period of the Malaysian conspiracy, NPA and Securency were keen to secure further business from the Malaysian bank. Around late 2005, Kayum started asking Securency to pay him a commission in respect of any substrate used in future bank contracts, even though NPA (not Securency) would be the party to any such contract (and therefore the only party who should be paying Kayum any commission). You were involved in communications with other officers of NPA and Securency, about whether or not Securency should agree to pay any commission to Kayum. Those officers included David John Ellery, the chief financial officer and company secretary of Securency.
In March 2006, NPA entered into a further contract with the Malaysian bank, to produce a further 100 million 5 ringgit polymer banknotes. Shortly thereafter, Kayum raised again the question of Securency paying him a “special commission” in respect of the substrate to be used in the new order; he was insistent that it had to be paid.
You and Ellery (together with other officers of NPA and Securency) had further discussions about whether or not Securency should be paying any such commission. Eventually, you decided that Securency should pay AUD 79,502, which was an amount equal to 3% of the substrate price. However, you approved it being invoiced and paid as “reimbursement of expenses”, rather than commission.
On 12 July 2006, a debit note was received from Kayum’s company for the sum of AUD 79,502, which was said to be calculated as follows:
(a) Marketing and promotional expenses ($40,000);
(b) Seminars and meetings ($20,000);
(c) Materials, lunches and dinners ($9,502); and
(d) Accommodation and transportation ($10,000).
No supporting documentation was provided for the debit note. Ellery arranged for one of his accounting staff to pay the invoiced amount.
You and Ellery were both well aware that the debit note was false, in that no such marketing expenses had been incurred on behalf of Securency.
Your knowledge that what you were doing at the time was dishonest is evidenced by the steps you and Ellery subsequently took to try to conceal what had actually occurred. In answer to queries in 2007 by the RBA or its auditors, you both asserted that Securency had never paid any commission to its Malaysian agent, and had only reimbursed the agent for actual marketing expenses.
In August 2012, I sentenced Ellery on a single charge of false accounting.[8] In the course of sentencing him, I noted that:
Unlike most cases of false accounting, you did not offend for the personal financial gain of yourself or a closely-related person or company. The person who benefited from the offence was Kayum, somebody with whom you had no personal relationship. And the primary motive behind your offending was to assist your employer in its commercial activities, by assisting it to gain the benefit of future contracts. It might be said that part of your motive was to maintain or advance your position in Securency, but that is a far more indirect personal gain than in most cases of false accounting.
… You occupied positions of importance within a subsidiary of Australia’s central bank. Your offending involved a serious and dishonest breach of trust. It was done in order to disguise the true nature of the transaction from the board and the owners of Securency. Notwithstanding the lack of personal financial gain, and the relatively modest amount involved, I assess your offending as being in the mid-range of false-accounting offences.[9]
[8]R v Ellery [2012] VSC 349.
[9]At [27] and [29].
Those comments apply equally to you. Although Ellery reported to you, and you were the person who ultimately approved the payment being made and documented in the way that it was, the prosecution does not suggest that your offending should be regarded as more serious than Ellery’s. As chief financial officer and company secretary, with his own independent duties to Securency, I regard Ellery as equally culpable as you.
Other sentencing considerations
You are now 62 years old.
You have no prior criminal history and have, prior to this offending, been of good character. Many character references were filed on your behalf, attesting to how out of character this offending was. The lives of you and your family have been devastated by the consequences of these criminal charges, particularly given the media coverage of these events.
Your career as a respected, senior, corporate officer has been destroyed by your actions. Your family’s financial savings have been exhausted since you lost your job. Apart from some temporary work as a farm labourer, you have been unable to secure any employment since you left Securency.
In November 2008, you were staying at the Taj Mahal Hotel in Mumbai, India, on a business trip for Securency. Whilst there, you were caught up in a terrorist incident in which six people were killed, and numerous others were injured, at the hotel. You were held captive for many hours, with people being shot all around you. Your initial response to those terrible events was to throw yourself back into your work. Eventually, their impact caught up with you, and you were diagnosed as suffering from chronic post-traumatic stress disorder and major depression. You continue to suffer from severe depression, anxiety, irritability, cognitive decline, and intrusive flashbacks to your experiences in India. You have also been despondent at the slow pace of the legal proceedings against you, and your inability to support your wife and two children. You have for many years been receiving monthly psychiatric and psychological counselling. You have been treated with electroconvulsive therapy, and are still being treated with antidepressant, tranquiliser and sleeping medications.
Considerable evidence as to your mental health issues has been filed on your behalf. Based on that evidence, the prosecution does not dispute – and I accept – that most of the so-called Verdins principles apply to you.
By reason of your ongoing mental health issues, you would find imprisonment considerably more onerous than a person without such problems. Imprisonment itself would be likely to lead to a further deterioration in your already fragile mental health.
It is highly unlikely that you will re-offend, and your prospects of rehabilitation are excellent. Quite apart from any Verdins considerations, specific deterrence does not feature as a significant sentencing consideration in your case.
Although there is no evidence before the court as to the prevalence of foreign bribery offences, general deterrence and denunciation are usually very important sentencing considerations in all cases involving “white collar” crime. Such offences are usually hard to detect. They have often been committed by persons who had been regarded as being of good character and reputation. Because such offenders generally have good prospects of rehabilitation, specific deterrence is often not a very relevant consideration. In such cases, courts generally place great weight on the need to deter others from engaging in similar conduct.
Although you were not suffering from any mental health problems at the time of offending, the nature and severity of your current problems should lead to some moderation in the need for general deterrence.
Furthermore, the weight to be afforded to any particular factor (including general deterrence) in the instinctive synthesis sentencing process must depend on the circumstances of each individual case. Frequently, as here, there are conflicting elements which bear upon the sentencing of an offender.
You were arrested and charged in relation to these matters in July 2011. The lengthy committal proceedings against you and many others began in August 2012 and finished around mid-2014. Various complex pre-trial applications and interlocutory appeals occurred in this court between 2014 and 2017.
In June of this year, the first conspiracy trial (against you and others alleged to have been involved in the Malaysian conspiracy) was listed to commence in early 2018. Shortly thereafter, you requested a sentence indication hearing.[10]
[10]Pursuant to s 207 of the Criminal Procedure Act 2009 (Vic).
You pleaded guilty to these charges on 10 October 2017, immediately after I gave a sentencing indication that, if you pleaded guilty to the current charges, I would not be likely to impose a sentence of imprisonment that commenced immediately.[11]
[11]The prosecution accepted that, in the exceptional circumstances of this case, a sentence of imprisonment that did not commence immediately was within the range of sentences open to the court.
You are entitled to a discount on the sentences to be imposed on you, by reason of your guilty plea. For both state and federal offences, a guilty plea is taken to indicate a willingness to facilitate the course of justice. In the case of state offences, a sentencing court can also have regard to the utilitarian value of the plea; that is to say, the court can have regard to the cost and inconvenience to the community which has been avoided by the plea. The Victorian Court of Appeal has held that the utilitarian value of a plea can also be taken into account in the case of federal offences.[12]
[12]Director of Public Prosecutions (Cth) v Thomas (2016) 315 FLR 31. The contrary position has been taken in NSW and the ACT.
There is a substantial utilitarian value in your plea, particularly in relation to the Indonesian conspiracy. Although trials against the other co-accused in Malaysia will continue without you, they are likely to be shorter with one less accused. You are the only remaining accused person in relation to Indonesia; by pleading guilty, you have spared the community the time and cost of a trial that would have been likely to run for many months. Your plea has also avoided the need for any hearing into your mental fitness to withstand the ordeal of lengthy trials.
Although this is by no means an early plea, you were entitled to test the evidence in the committal proceedings – the result of which was that three of the six charges you faced at committal were dismissed by the magistrate.
The prosecution does not suggest that the very substantial delay between your being charged and your plea is in any way your fault. I accept that you have, throughout the proceedings in the Magistrates’ Court and this court, acted in an efficient and economical fashion, and have not contributed to any of the delays.
Courts have long recognised that the prospect of a sentence hanging over one’s head during the period of delay can be a punishment in itself. In your case, there is ample evidence that the delay has had a significant and demonstrable effect on your mental health. I also note that during the period of that delay, you have not committed any further offence.
Sentences
Parity considerations
The only two individuals who have so far been sentenced in relation to these offences are Christanto and Ellery. It is relevant to have some regard to their sentences, in determining what is an appropriate sentence for you.
All three of you were previously law-abiding citizens, whose professional careers and reputations have been destroyed by your offending and the subsequent publicity. You all have low prospects of re-offending.
Christanto offended purely for his own financial gain. You and Ellery were both hard-working and dedicated employees, who offended in order to promote your employer’s interests, in what were very competitive markets. I regard that as an important point of difference.
Christanto and Ellery both received a substantial discount on the sentences which would otherwise have been imposed; that was to reflect the fact that theirs were early pleas, accompanied by co-operation with, and an undertaking to provide future assistance to, law enforcement agencies.
You are also entitled to a discount for pleading, albeit that you did not plead as early as them, and your plea was not accompanied by any such assistance.
However, your sentence needs to be mitigated by your serious mental health issues, which did not arise at all in the case of Ellery. Christanto’s mental health problems were not of the same severity as yours.
Conspiracy
On a single charge of conspiracy in Indonesia, I sentenced Christanto to 2 years’ imprisonment, and he was placed on a recognisance release order for 2 years.
For charge 1, I sentence you to imprisonment of 2 years and 6 months.
I order that you be released forthwith on a recognisance release order, with the condition that you be of good behaviour for 2 years and 6 months.
I declare that the sentence imposed on charge 1 commence immediately.
False accounting
On the single count of false accounting, I sentenced Ellery to 6 months’ imprisonment, which was wholly suspended for 2 years.
I consider it appropriate to also impose a 6 month term of imprisonment on you for charge 2.
Having regard to the principle of totality – which was not relevant in Ellery’s case – that sentence will be wholly suspended for a period of 1 year from the date of its commencement.
Although the false accounting events are not unconnected with the Malaysian conspiracy, they occurred at a later time and involved some separate criminality. Accordingly, I propose to order that 3 months of the sentence for charge 2 be accumulated on the sentence for charge 1. In order to achieve that accumulation, I will order that the sentence for charge 2 is to commence 2 years and 3 months after the commencement of the sentence for charge 1.
That means you will not be taken into custody today on either sentence. However, if during the periods of your recognisance release order or your suspended sentence, you commit another offence which is punishable by imprisonment (whether in or out of Victoria), it is very likely that you would be taken into custody to serve the whole of the relevant sentence of imprisonment.
Section 6AAA declarations
I declare, pursuant to s 6AAA of the Sentencing Act that, but for your plea of guilty, I would have sentenced you:
(a) On charge 1, to a sentence of 3 years’ imprisonment, with a minimum non-parole period of 2 years; and
(b) On charge 2, to a sentence of 1 year’s imprisonment, with a minimum non-parole period of 6 months.
I direct that these declarations and their details be entered in the records of the court.
There is no pre-sentence detention.
---
2
3
0