CDirector of Public Prosecutions v Naseeruddin
[2023] VCC 2458
•20 December 2023
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-22-01537
| COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| MUDASIR MOHAMMED NASEERUDDIN |
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JUDGE: | HER HONOUR JUDGE TODD | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 6 December 2023 | |
DATE OF SENTENCE: | 20 December 2023 | |
CASE MAY BE CITED AS: | CDPP v Naseeruddin | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 2458 | |
REASONS FOR SENTENCE
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Subject:CRIMINAL LAW
Catchwords: Dishonest conduct in relation to a financial product or financial service in the course of carrying on a financial services business – failing to exercise powers and discharge duties in good faith in the best interests of the corporation or for a proper purpose
Legislation Cited: Corporations Act 2001 (Cth) ss 1041G, 184(1); Crimes Act 1914 (Cth) s 16A
Cases Cited:Braun v R (2008) 68 ACSR 539; Totaan v R [2022] NSWCCA 75; R v Richard [2011] NSWSC 866; R v Pantano (1990) 49 A Crim R 328
Sentence: Total effective sentence of four years and four months’ imprisonment with a non-parole period of two years and nine months; orders for reparation
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APPEARANCES: | Counsel | Solicitors |
| For the CDPP | Mr R. Barry | Commonwealth Director of Public Prosecutions |
| For the Accused | Mr R. de Kretser | Tony Hargreaves & Partners |
HER HONOUR:
Introduction
1Mudasir Mohammed Naseeruddin, you have pleaded guilty to:
(a) two ‘rolled up’ charges of engaging in dishonest conduct in relation to a financial product or service in the course of carrying on a financial services business;[1]
(i)Charge 1 carries a maximum penalty of 10 years’ imprisonment, 4,500 penalty units or both;[2] and
(ii)Charge 2 carries a maximum penalty of 15 years’ imprisonment,[3] 4,500 penalty units or both;[4] and
(b) two ‘rolled up’ charges of failing to exercise your powers and discharge your duties in good faith in the best interests of the corporation or for a proper purpose;[5]
(i)Charge 3 carries a maximum penalty of five years’ imprisonment, 2,000 penalty units or both;[6] and
(ii)Charge 4 carries a maximum penalty of 15 years’ imprisonment,[7] 4,500 penalty units or both.[8]
[1]Corporations Act 2001 (Cth) s 1041G (‘Corporations Act’).
[2]Ibid sch 3 item 310 as at 12 March 2019.
[3]Ibid sch 3.
[4]Ibid s 1311B(4).
[5]Ibid s 184(1).
[6]Ibid sch 3 item 30 as at 12 March 2019.
[7]Ibid sch 3.
[8]Ibid s 1311B(4).
Factual circumstances
2A Summary of Prosecution Opening for Plea dated 9 November 2023 was tendered and became Exhibit 1 on your plea. That document sets out the factual circumstances of your offending, and is attached to and forms part of these reasons. I will refer to only parts of it in summary form here.
Background
3At the time of the offending you were a financial advisor and property developer. You were also a director and shareholder of two companies: Secure Investments Pty Ltd (‘Secure Investments’) and Aquila Group Pty Ltd (‘Aquila Group’).
4I pause here to note that at various times you were an ‘authorised representative’ of two holders of an Australian financial services licence, and that this authorised you at various times to provide both financial services and advice. However, you did not hold authority to issue a financial product or to carry on a business which issued financial products.
5An Australian financial services licensee has general obligations, including to do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly.
6You encouraged investors, six in all, to transfer their existing superannuation entitlements into self-managed superannuation funds (SMSFs) newly established by you. Sometimes, the investor, by the SMSF, would enter into a formal agreement with you, through either Secure Investments or Aquila Group, and under that agreement, a certain sum was to be invested in property development. You would then cause the funds held by the SMSF to be transferred to one of your companies.
7The agreement between you and the investor was a ‘financial product’; you promoted the scheme and received the investments, and in doing so you were carrying on a financial service business. The investors intended that you would use the contributions from their SMSFs to generate a return through property development. Neither you, Secure Investments nor Aquila Group were licensed to issue interests in a financial product.[9]
[9]See ibid s 911A(1).
Charges 1 and 2
8Charges 1 and 2 arise as a result of dishonest conduct by you in relation to six investors: Mohammed Azim, Mohammed Siddiqui, Faiyaz Khan, Mary Jones, Sandra Kelly and Tony Edwards. In each case, you made false representations when promoting the investment and did not invest money in accordance with any agreement made with the investor.
Mohammed Azim
9Between about 13 May 2015 and 31 July 2019, you engaged in dishonest conduct regarding an investment by Mohammed Azim in the total sum of $124,950. Of that amount, $121,740 was transferred before 12 March 2019 and is captured by Charge 1, and an additional $3,210, transferred between 22 March 2019 and 13 May 2019, is captured by Charge 2.
10At the time, Mr Azim was earning his living as a teacher. You approached Mr Azim in early 2015 about investing with Secure Investments. Mr Azim was interested because he knew other teachers who invested with you; he trusted you because he knew your family.
11You told Mr Azim that you would set up a SMSF and his money would be invested in properties around Victoria. You provided documents including deed papers and a loan agreement which outlined the loan term, interest to be paid and where the money would be invested.
12Mr Azim agreed to invest with you and gave you a cheque for $83,861.99, which comprised the amount held in his previous superannuation fund.
13On 20 January 2015, ‘SMZSMA Investments Pty Ltd’ was registered as a company.
14On 4 March 2015, a bank account was opened in the name of SMZSMA Investments Pty Ltd ATF SMZSMA Super Fund ‘from the SMZSMA Super Fund account’. A deposit in the amount of the cheque previously provided by Mr Azim was made into the account on 7 May 2015. A superannuation contribution of $1,632.48 was paid by Mr Azim’s employer on 11 May 2015 and further employer contributions followed.
15On 13 May 2015, you and Mr Azim signed a loan deed between SMZSMA Super Fund and Secure Investments. The ‘interest rate/profit margin’ was documented as “15%”. The amount of the loan, $84,000, was transferred from the SMZSMA Super Fund account to an account in the name of Secure Investments.
16Throughout 2016, you provided updates to Mr Azim on his investments. You told him that the returns you were giving ‘could not be matched in the market’.
17On 21 February 2017, a transfer of $19,000 (which had accrued as the result of further employer contributions) was made from the SMZSMA Super Fund account to an account in the name of Secure Investments. Mr Azim did not authorise that transaction.
18In total, between 13 May 2015 and 1 March 2017 $103,174.80 was deposited into the SMZSMA Super Fund account.
19Mr Azim met with you on 1 March 2017 for an update on his investment. You told him that you had made a good return in accordance with the initial loan deed. You and Mr Azim then signed a second loan deed between SMZSMA Super Fund and Secure Investments. At the time of signing the deed, Mr Azim understood the amount of the loan, being $115,600, was the value of his investment and was in the SMZSMA Super Fund account. In fact, the balance of the account as at 1 March 2017 was $17.17, the remainder having been transferred to an account in the name of Secure Investments.
20During the period 1 March 2017 to 30 September 2018, Mr Azim deposited in total $16,203.46 into the SMZSMA Super Fund account by employer superannuation contributions. A total of $15,460 (in seven transactions) was transferred from the account into an account in the name of Secure Investments during that period.
21In mid-2017, Mr Azim told you he wanted full control of the SMZSMA Super Fund account and that he wanted to withdraw from your company as investor. You told him that he could only do so after 30 September 2018 when the projects were completed. Despite this, between 11 October 2018 and 13 May 2019, a total of $6,490 was transferred from the SMZSMA Super Fund account into an account in the name of Secure Investments, over six transactions.
22Mr Azim finally obtained access to the SMZSMA Super Fund account in or about June 2019.
23A deposit in the amount of $5,074.55 was made into the account with the description “SECURE INVESTMEN (sic) Reimbursement” on 9 July 2019 to reimburse Mr Azim for the cost of submitting tax returns on behalf of the Super Fund. These were the only funds Mr Azim ever received from you.
24In July 2019, Mr Azim received a letter from you in your capacity as director of Secure Investments purporting to provide a “detailed breakdown of your investment thus far”. The letter falsely represented the status of Mr Azim’s investment, including the amount invested and the expected return. It made vague reference to ‘various property projects’.
25In August 2019, Mr Azim met your accountant, Sohail Merchant, who told Mr Azim that he would be required to enter into another loan deed if he wanted his investment back. Mr Azim did not sign the further deed.
26In total, $124,950 was transferred from the SMZSMA Super Fund Account to accounts held in the name of Secure Investments. The transfer of $5,974.55 is the only occasion money ever moved to Mr Azim from accounts controlled by you.
27The particulars of your dishonesty are set out at [40] of the prosecution opening. They include withdrawing money to which you held no entitlement, continuing to do so after Mr Azim expressed his wish to withdraw from your arrangement, and your false representations about how and where the money was being ‘invested’.
Mohammed Siddiqui
28Your dishonest conduct in your dealings with Mohammed Siddiqui occurred between 14 September 2017 and 12 March 2019. Mr Siddiqui invested a total of $70,782, none of which has been recovered.
29Mr Siddiqui is a pharmacist; a customer of his had recommended that he speak to you about investing his superannuation. You approached Mr Siddiqui at his pharmacy on 14 September 2017, telling him that if he invested with Secure Investments, he would receive a guaranteed annual return of 10%, and that it was a very safe investment.
30Mr Siddiqui agreed to invest his existing superannuation entitlements with you and completed a number of documents to establish a SMSF.
31On 18 September 2017, an application for registration of Najeelah Family Super Pty Ltd was lodged with Mr Siddiqui as the sole director, secretary and shareholder. Mr Siddiqui was recorded as the applicant, however he did not submit the application or authorise anyone to do so on his behalf.
32On 1 October 2017, a bank account was opened in the name of Najeelah Family Super Pty Ltd ATF ‘NAJ Super Fund’. The contact details provided for Mr Siddiqui included an email address of which he was unaware and your phone number. Mr Siddiqui was not aware that this account existed and did not authorise for it to be opened.
33On 2 November 2017, $64,961.88 was transferred from Mr Siddiqui’s existing superannuation fund into the NAJ Super Fund account. Between 29 December 2017 and 11 December 2019, Mr Siddiqui deposited $10,958.75 in employer superannuation contributions.
34Money totalling $66,982 was moved (across 10 transfers) from the NAJ Super Fund account to an account in the name of Secure Investments between 6 November 2017 and 7 February 2019. A total amount of $5,010 was also transferred from the NAJ Super Fund to an account in your name. Mr Siddiqui was unaware of, and did not authorise, those transfers.
35In early to mid-2019, Mr Siddiqui told you that he was uneasy about his inability to see his superannuation account. You told him that you were setting up an online portal but were awaiting ‘approval from ASIC’.
36Mr Siddiqui received a letter from you in your capacity as director of Secure Investments on 1 August 2019. The letter contained a series of false statements as to the return on his investment.
37Mr Siddiqui made a number of attempts to contact you between 20 and 21 March 2020. He asked that you transfer his superannuation into a nominated retail superannuation account immediately. You responded by text saying”:
“I have told you I am dealing with a family matter and will look into this next week. I need to ask the accountant and find out what’s has happened so that I can then work on it.”
38The next thing Mr Siddiqui heard was that the company was in liquidation; you also said that he would have his money returned and this never happened.
39The particulars of your dishonesty regarding Mr Siddiqui’s funds are set out at [61] of the prosecution opening and they include making false representations, and transferring money in ways that were unauthorised.
Faiyaz Khan
40Your dishonest conduct in relation to Faiyaz Khan occurred between 1 October 2018 and 12 March 2019. Mr Khan’s investment totalled $74,807.96.
41Mr Khan had worked with Mr Azim and had attended meetings between you and Mr Azim; he had witnessed you and Mr Azim’s signing of the first and second loan deeds.
42On a number of occasions, you tried to convince Mr Khan to invest with Secure Investments, and in November 2018, during a meeting between you and Mr Azim, Mr Khan told you that he was interested. You suggested that, rather than setting up his own SMSF, he could be added as an additional trustee to the SMZSMA Super Fund (‘the SMZ fund’); you said this would be more economical for both Mr Khan and Mr Azim. Mr Khan agreed; Mr Azim remained silent and Mr Khan took his silence as agreement.
43On 6 December 2018, a deposit of $74,807.96 was made into the SMZ Fund account with the description “FOC Redemption A 518683 F Khan”.
44On 10 December 2018, a phone call was made to the bank by a caller claiming to be Mr Azim, requesting a temporary limit increase on the SMZ fund account. The call was made from your phone number. Mr Azim did not make the call, and after listening to a recording of it, said that the voice resembled yours.
45Two transfers totalling $75,000 were subsequently made from the SMZ fund account to an account in the name of Secure Investments.
46On 6 December 2018 Mr Khan received a letter from his retail superannuation fund stating that his superannuation, in the sum of $74,807.96 had been rolled over to the SMZ fund. Mr Khan was surprised as he had not signed any documents relating to this.
47Mr Khan told Mr Azim that his funds had been rolled over into the SMZ fund. Mr Azim said he was not comfortable with their superannuation being combined and that he had not agreed for Mr Khan to become a trustee of the fund.
48Mr Khan contacted you; you told him not to worry about it and that you could convince Mr Azim to let him become an additional trustee. Soon afterwards, you told Mr Khan that you were sending over an employee so that he could sign documents in relation to him becoming a trustee. Mr Khan signed a form; he requested a copy of the form and the trust deed but received neither.
49A couple of days later, Mr Azim again told Mr Khan that he did not want Mr Khan to join his fund. Mr Khan contacted you, and you said you would set up a SMSF for him alone. You never did so.
50In February or March 2019, Mr Khan and Mr Azim attended an ‘annual dinner’ for Secure Investments at a restaurant. At the event, you said that Secure Investments had been very successful and they were going to move their investments to a property fund called Aquila Property Fund. Mr Kahn and Mr Azim asked you to explain how it would work, but you did not respond.
51Mr Khan had agreed to invest on the basis that he would become a trustee of the SMZ fund, however the funds were transferred at a time when Mr Khan was not a trustee of the fund and he never did become a trustee.
52Mr Khan has not recovered the $74,807.96 that was rolled over from his retail superannuation account and he has not received any return on his investment.
53Again, the particulars of your dishonesty in relation to Mr Kahn are set out at [81] of the prosecution opening.
Mary Jones
54You engaged in dishonest conduct in your dealings with Mary Jones between 23 October 2019 and 13 December 2019. Ms Jones had invested a total of $50,000, $45,000 of which has not been recovered.
55Ms Jones is an Aboriginal woman living in Bourke, New South Wales. She was employed as an Aboriginal health care practitioner at the Bourke Aboriginal Health Service.
56In 2019, Ms Jones learned that a Tony Dennison, who she knew through her church, was working with a company that could pay $5,000 of a person’s superannuation to them if they let the company invest some of their superannuation.
57Later that year, Ms Jones was in financial difficulty and told Mr Dennison she was interested in accessing her superannuation. Mr Dennison introduced her to you.
58On 23 October 2019, you sent an email to Ms Jones attaching a ‘sign up document’ and ‘company brochure’. The former related to the establishment of an SMSF. Ms Jones completed the document and sent it to you.
59On 25 October 2019, Ms Jones sent you a copy of her most recent statement from First State Super, showing she had a balance of $47,518.74.
60In early November 2019, Ms Jones decided that she did not want to proceed with the investment, and on 8 November 2019, she sent you an email to that effect. In response, you informed Ms Jones, falsely, that “if we cancel the smsf now it will have an effect on your personal file with the ato.”
61You also said:
“I really need to speak to you and explain you how SMSF works. When you signed the paperwork and sent it, that’s automatically give us your consent and the office started work on it.”
62You went on to set up the company NSMJ Pty Ltd (‘NSMJ’) on behalf of Ms Jones. You informed her in an email dated 9 December 2019 “That’s great news that your super has been rolled over into your SMSF”, and attached to the email was a loan deed between NSMJ and Aquila Group which you told Ms Jones was “approved by the ATO”. Ms Jones signed the deed and sent it to you.
63On 9 December 2019, the amount of the loan, being $50,000, was transferred from a bank account held by NSMJ Super to an account held by Aquila Group. Ms Jones did not make the transfer.
64On 13 December 2019, $5,000 was transferred from the Aquila Group account to an account held by Ms Jones with the description ‘Capital paymnt’(sic). Apart from that payment, Ms Jones has not received any return on the investment.
65Under the loan deed, the money invested by Ms Jones was to be used for the purchase of the property at Lot 623 Kinbrook Estate Donnybrook. The money was not used for that purpose, as the purchase of the property by Secure Investments occurred prior to Ms Jones’ investment, and was not invested in any other property.
66The particulars of the dishonesty are set out at [99] of the prosecution opening.
Sandra Kelly and Tony Edwards
67Your dishonest conduct in relation to dealings with Sandra Kelly and Tony Edwards spanned 1 November 2019 to 6 January 2020. Ms Kelly and Mr Edwards invested a total of $201,000, of which $191,000 has not been recovered.
68Ms Kelly and Mr Edwards are an Aboriginal couple living in Bourke, New South Wales. Ms Kelly worked as a customer service officer in a community hub for the New South Wales Department of Family and Community Services, and Mr Edwards was employed on a casual basis as a shearer.
69In 2019, Mr Edwards was in financial difficulty on account of a reduction in work caused by drought. Following a recommendation from an associate, Mr Edwards and Ms Kelly contacted Mr Dennison, who then introduced them to you.
70You told the couple that, if they rolled their superannuation into a SMSF, you could get them access to $10,000 from their superannuation, and you would invest the rest of their money in property.
71On 13 November 2019, Ms Kelly and Mr Edwards each completed forms to establish the SMSF.
72On 24 November 2019, a bank account was opened in the name of SK & TE Super Fund Pty Ltd. Neither Ms Kelly nor Mr Edwards opened this account.
73Between 31 December 2019 and 2 January 2020, Ms Kelly and Mr Edwards rolled over a total of $201,430.38 from their existing superannuation funds into the account held by the new SMSF.
74Between 2 and 6 January 2020, a total of $201,000 was transferred from the SK & TE Super Fund account into an account held by Aquila Group.
75On 3 January 2020, you asked Ms Kelly and Mr Edwards where you should deposit the $5,000 you had promised each of them. They instructed you to deposit the money into an account held by Mr Edwards. Two transfers of $5,000 were made from an account called ‘Aquila Group’ with the description ‘Capital return’. Other than these payments, Ms Kelly and Mr Edwards have not received any return on their investment.
76The particulars of your dishonesty are set out at [121] of the prosecution opening.
Charges 3 and 4
77Charges 3 and 4 relate to your appropriation of funds held by Secure Investments in breach of your duty as a director of Secure Investments to exercise your powers and discharge your duties in good faith in the best interests of the company or for a proper purpose. You had transferred a total of $555,000 from Secure Investments between the period 15 July 2016 to 23 December 2019 to Dome (Vic) Pty Ltd (Dome) with the intention of purchasing shares from Dome for your own benefit.
78Dome operates in the security industry and specialises in shopping centres and event security. At the time of your offending, Frederick and Janine Reinking were the directors of Dome. Secure Investments was a tenant under an informal lease of Dome until March 2020.
79Analysis of the principal operating bank account of Secure Investments revealed deposits made to accounts in the name of or associated with Mr and Mrs Reinking between 15 July 2016 and 23 December 2019 totalling $555,000. No shares in Dome were ultimately transferred to you and no benefit was obtained by Secure Investments.
80In response to a notice issued by the Australian Securities and Investments Commission (ASIC), Mr Reinking produced documents relating to the payments. These included a ‘Letter of Understanding’ between you and Mr Reinking containing terms of a proposed sale of Dome Security and Traffic, email correspondence between 14 July 2016 to 28 February 2020 including your agreement to the terms of the sale, and a draft Contract for the Sale of Company Shares for the sale of shares in Dome between Mr and Mrs Reinking as vendor and you as the purchaser.
81Details of the Dome transactions, and communications about them were revealed in documents produced to ASIC by Reinking. A kind of informal contract for the part purchase of Dome is there.
ASIC Investigation
82An investigation under s 19 of the ASIC Act 2001 was conducted on 20 February 2020, during which you made a number of statements, the combined effect of which were, broadly, to make some admissions, for example, to the use of certain bank accounts, but to otherwise deny liability.
Criminal history
83You have no prior criminal history; you were dealt with for a subsequent charge relating to family violence which arose in June 2020. You were fined without conviction and I do not regard that event to be of relevance to this sentence.
Commonwealth scheme
84As you are pleading guilty to charges brought pursuant to the Corporations Act 2000, the Commonwealth sentencing scheme applies and I am required to impose a sentence of a severity appropriate in all the circumstances of the offence,[10] and to do so by reference to the matters set out in s 16A(2) of the Crimes Act (Cth).
[10]Crimes Act 1914 (Cth) s 16A(1).
85Before going further, I will note two structural issues in this sentence. First, due to new legislation that took effect on 13 March 2019, the statutory maxima for charges 2 and 4 are higher for the part of your offending which occurred after that date.
86The other is that each charge is a ‘rolled up’ charge, encompassing different victims (charges 1 and 2) or different events where money was transferred (charges 3 and 4).
87The offences you are pleading guilty to have particular objectives in the context of the Corporations Act2001 (Cth) (‘the Act’).
88Section 1041G of the Act is one of several provisions in Ch 7 directed to reinforcing the requirement for integrity in the financial services industry by imposing criminal and civil penalties for conduct which is ‘dishonest’ as defined in the section.[11]
[11]Braun v R (2008) 68 ACSR 539.
89Another objective of the Act is to regulate corporations and their directors. In particular, s 184(1) is designed to facilitate the community, shareholders and creditors trusting and having confidence in the directors of a company.
Nature and circumstances
90I turn to my assessment of the nature and circumstances of your offending.
91The total sum the subject of charges 1 and 2 was $521,539.96. This amount bears some relationship to (without there being proof that the very same money was involved in) the amounts transferred, and gives rise to charges 3 and 4, being $555,000.
92In relation to charges 1 and 2, over a period of four and a half years, you received a total of $521, 539.96 from your victims. With the exception of Ms Jones, Ms Kelly and Mr Edwards, who each received a single payment in the amount of $5000, none of your victims recovered any of their money.
93In relation to charges 3 and 4, you appropriated funds from Secure Investments, of which you were a director, for the purposes of a share transaction for your personal benefit. This attempted ‘takeover’ of Dome appears to be the raison d’etre of the acts that give rise to charges 1 and 2. The fact that the share ‘takeover’ of Dome was naive and forlorn is noted, though this does not mitigate what you did. Charges 3 and 4 unfold over a period of three and a half years.
94In the course of your offending you were persuasive and manipulative; you constructed a cascade of lies and falsehoods. In some cases you exploited relationships of trust with people in your own community. You must have known that each of your victims had accrued these sums in their superannuation accounts the hard way, that is, painstakingly over years in the course of their honest work as teachers, pharmacists, Aboriginal Health Service providers or shearers. A particular feature of your offending is the vulnerability of your victims and their lack of financial literacy.
95It is perhaps also true that you were barely more literate than they. But you were methodical, persistent, and prepared to arrange the various machinery of SMSFs, bank accounts and company structures to achieve your ends. You persuaded your victims to join your ruinous scheme by harnessing the language and authority of trusted institutions, peppering your speech with reference to ‘ASIC approval’ or to the consequences for a person’s status in the eyes of the ATO.
96Your breaches of trust were gross and egregious. One of your victims spoke of your use of your shared religious faith as a way of establishing your bona fides.
97Your scheme was described as ‘chaotic’ by your barrister. That is so, but it was chaos authored by you. It seems as though, in the end, there was little or no personal enrichment to you. This was the result of terrible management rather than any other feature that informs the assessment of your moral culpability.
98Your conduct was sustained over years and had very serious consequences for your victims. You may have had some low-level intention, amid the chaos, to prosper and return people’s money to them. However, you had no capacity to do that, and I regard your offending as grave in objective terms. I find your moral culpability high.
99I regard the most serious charges to be charges 1 and 2 involving as they did quantifiable loss to actual people and repetitious dishonesty; I note the higher maximum for charge 2.
Victims’ personal circumstances
100As I have already said, your victims were people who earned modest incomes doing work that was both ordinary and important. None were wealthy.
101The effect of what you did on your victims has been nothing short of ruinous. I listened carefully to the victim impact statements. Your victims speak of the sorrow and sadness they have experienced. Mr Azim describes a ‘sense of hopelessness creeping in’. Your victims have experienced countless hours of worry and stress. Relationships have become strained; your victims have lost sleep and some have suffered physical health consequences.
102The effects on your victims are profound and ongoing and I take their experience into account in arriving at your sentence.
Personal circumstances
103You are 33 years old at this time; during the offending you were aged between 24 and 29. You were born in India; your parents migrated to Saudi Arabia when you were three, and then to Australia in 2007 when you were 16. Your mother teaches VCE English. You report having caused great shame to your family through your offending.
104In 2013 you entered an arranged marriage, from which relationship you have two daughters, aged nine and seven. You separated from your wife in 2020 and the divorce was finalised in 2022. You have not seen your daughters during 2023; your hope is to improve your situation and resume regular contact with them. You have been unable to pay for the required professional supervision of your contact with them, so you have not been able to see them for some time.
105You have a number of medical conditions acquired in a motorcycle accident in 2012. You take painkillers intermittently for pain in the sciatica nerve and for pain from nerve damage to your left knee. You have not been diagnosed with any psychological condition; you have previously seen a psychologist in connection with your marriage breakdown.
106
In April 2014, aged 23, you became a Director of Secure Investments Pty Ltd, a position for which you had neither experience nor qualification. From that position, you proceeded to engage in complex business ventures that were beyond your capacity. Since being charged for this offending you have ceased working in the financial services industry; you currently work as a truck driver and forklift operator, working between 50 and 55 hours per week; you have also worked as a
sub-contractor for a fencing company.
107At your plea hearing, your father and a former partner (not your ex-wife) attended Court to support you.
108After the plea hearing, your father had suffered recently a ‘life threatening event requiring invasive intervention’ which I understand to be a heart attack and he has been hospitalised.
Matters in mitigation
Pleas of guilt and contrition
109You were subject to an ASIC examination on 20 February 2020; you were charged on 27 November 2020 and entered pleas of guilty on 3 August 2023. You had conducted a committal and cross-examined three of your victims, which was of course a process that you had a right to. It was conceded that your pleas were not entered at the earliest possible time, however I still regard your pleas as valuable, delivering a utilitarian benefit, and saving the human and financial costs of a trial and I regard that as mitigating of your sentence.
110
I still apply the principle in the case of Worboyes v R[12] in imposing your sentence; your plea was entered before the announcement of the restoration of
pre-pandemic waiting times in the County Court and I do mitigate your penalty further on that account.
[12][2021] VSCA 169.
111I accept that some contrition inheres in your plea, and that you have accepted responsibility for what you did, and this mitigates your sentence too.
Delay
112Your offending occurred now four to eight years ago, and you had come to the attention of authorities by the time of your ASIC interview in February 2020. You have demonstrated your ability not to reoffend and to engage in appropriate work now for a lengthy period. You have had the prospect of your imprisonment before you for over three years and I take those features of the delay before sentence into account in your case.
113Moreover, I note that you attended Court on the day of your plea hearing in the company of your family, and in the knowledge that you would surrender yourself into custody pre-emptively that day. You have, in the end, faced the consequences of what you did squarely.
Previous good character
114I accept that you are a person of previous good character. That feature of your sentence does have limited application however in mitigation in the circumstances. It is unlikely you could have committed these offences without being of good character.
115I do take into account, to a degree, your relative youth; I am prepared to find that one aspect of your capacity to offend in the way you did was your immaturity and its effect on your ability or inability to assess the full consequences for others of what you did.
Risk of re-offending
116I must assess your risk of reoffending; you are serving your first term of imprisonment and I expect that to be profoundly shocking for you, coming from an otherwise law-abiding and hard-working family. You maintain your birth family’s support and affection. You have maintained employment, and in the past have had a role both playing and coaching in your local cricket club. I conclude that, overall, your prospects for rehabilitation are good.
117I understand that what you have done has brought great shame to your family, who have painstakingly made an Australian life as migrants. While no particular legal submission was advanced that there is an effect on your family to be taken into account in this sentence, I am obliged to have regard to the probable effect of your imprisonment upon your family, and I do take it into account, to some limited degree, the shame that I understand has been brought upon them.[13] I also take into account your father’s recent ill health and that your imprisonment makes this more difficult for him.
[13]Crimes Act 1914 (Cth) s 16A(2)(p); Totaan v R [2022] NSWCCA 75.
118I also considered your father's recent hospitalisation and note and take into account the additional burden that places on you during your imprisonment, and on him in his recovery.
119I also have regard to the principle of totality in fixing and structuring your sentence, but particularly at arriving at orders for commencement of sentences.
Sentencing principles
120General deterrence is of particular importance in the sentencing of ‘white collar’ offences.[14] The commercial world expects that people in positions of trust, no matter how young they may be, to conform to exacting standards of honesty.[15] I anticipate that the role for specific deterrence in your case is low. You must be adequately punished however, and through this sentence the Court denounces your conduct as egregious and unacceptable, and totally destructive of people’s lives.
[14]R v Richard [2011] NSWSC 866 [17]; R v Pantano (1990) 49 A Crim R 328 [330].
[15] Braun v R (2008) 68 ACSR 539 [84] citing R v Pantano (1990) 49 A Crim R 328 [330].
Sentencing practices
121I have had regard to similar sentences in Victoria and in other States, in particular in intermediate appellate courts. A helpful table of cases was provided to me, and I considered them, many of which had significant differences to your case across a number of axes. I sentence you, however, in that general landscape. No case I looked at was comparable to yours in a narrow way; I take the sentencing landscape into account but my job is to do individual justice.
Submissions of the parties
122The Commonwealth Director submitted that no sentence other than a term of imprisonment with a non-parole period was sufficient in the circumstances of the case, given the need to adequately reflect the gravity of the offending and the other purposes of sentence.
123Your barrister submitted that a sentence through a recognisance release order would be adequate in the circumstances, a submission which contains within it a proposition that three years' imprisonment is adequate, given the sentencing structures available to me.
124I have considered all of the matters in s 16A of the Crimes Act, and I conclude pursuant to s 17A of that Act, that, having considered all of the other available sentences, I am satisfied that no other sentence other than one of imprisonment is appropriate in all if the circumstances of this case.
125I have given careful thought to your counsel's submission as to the sentence. However, because of the matters going to gravity of your offending, and in the light of the need for just punishment and general deterrence in particular, I am unable to conclude that a sentence of less than three years is sufficient in your case.
Disposition
126On Charge 1 dishonest conduct in the course of carrying on a financial services business, you are convicted and sentenced to two years and two months’ imprisonment.
127On Charge 2, dishonest conduct in the course of carrying on a financial services business, you are convicted and sentenced to two years and eight months' imprisonment.
128On Charge 3, failing to exercise powers and discharge duties in good faith in the best interests of a corporation you are convicted and sentenced to eight months' imprisonment.
129On Charge 4, failing to exercise powers and discharge duties in good faith in the best interests of a corporation you are convicted and sentenced to 18 months' imprisonment.
130The sentences will commence in the following order and stages.
131The sentence on Charge 2 commences today.
132The sentence on Charge 1 will commence one year and four months before the end of the sentence on Charge 2; the effect of which is that 10 months of the sentence on Charge 1 cumulates.
133The sentence on Charge 4 will commence 10 months before the completion of the sentence on Charge 1; the effect of which is that eight months of that sentence on Charge 4 cumulates.
134The sentence on Charge 3 will commence six months before the end of the sentence on Charge 4, the effect of which is that two months of the sentence on Charge 3 cumulates.
135The total effective sentence across each of the four charges is therefore four years and four months.
136I direct that you must serve two years and nine months before becoming eligible for parole.
137Mr Naseeruddin, I am obliged to explain to you a parole sentence. I am fixing a head sentence of four years and four months; and you will become eligible for parole after serving two years and nine months.
138You will have to serve no less time than two years and nine months in custody. If you are granted parole, you will complete your term in the community. That time, if granted, will be subject to conditions. You will have to do whatever the Parole Board tells you to do. If you do not comply with the conditions that it imposes, your parole may be cancelled and you may be required to serve the balance of your sentence back in custody.
Section 6AAA
139Pursuant to s 6AAA of the Sentencing Act (Vic), I declare that had you been found guilty after trial, I would have imposed a sentence of five years and seven months with a non-parole period of three years and seven months.
140You can take a seat. Thank you, Mr Naseeruddin.
Ancillary orders
Reparation orders
141I make each of the reparation orders as sought and as set out at [45] of the Prosecution sentencing submissions for the amounts:
(a) Mohammed Azim $124,950;
(b) Mohammed Najeeullah Siddiqui $70,782.00;
(c) Faiyaz Mohseen KHAN $74,807.96;
(d) Mary Martha Jones the sum of $45,000;
(e) Sandra Joy Kelly the sum of $104,000; and
(f) Tony Brent Edwards the sum of $87,000.
Pre-sentence detention
142I note for the record, Mr Naseeruddin, that you have already served 14 days in custody to be reckoned as served under this sentence. Thank you.
143First, Mr Barry, is my sentence clear? Do you need a moment to check it?
144MR BARRY: If you wouldn't mind, Your Honour.
145HER HONOUR: Yes.
146MR BARRY: It's certainly clear. I'm not sure whether I've got down all the commencement dates and - - -
147HER HONOUR: Got the commencement dates.
148MR BARRY: Exactly.
149HER HONOUR: All right. My staff are in possession of a - if you want to see the graph in graphical form, that is available, they can give it to you.
150MR BARRY: Yes. Thank you.
151HER HONOUR: So what I will do is stand down for a few minutes to allow you that time because if there are errors, I need to correct them at this point.
152MR BARRY: Thank you very much.
153HER HONOUR: Counsel, before I do so, there is an application before me for the victim impact statements from a member of the media. I will leave that with you and get your considered response when I return in a few moments.
154MR BARRY: Thank you, Your Honour.
155MR de KRETSER: As Your Honour pleases.
(Short adjournment.)
156MR BARRY: Yes. Thank you, Your Honour. My instructions are that there is no opposition to those victim impact statements being released subject to all personal details being redacted - - -
157HER HONOUR: Yes.
158MR BARRY: - - - and that might include some reference to locations, obviously personal locations that might be included in a text. I can't quite remember but - - -
159HER HONOUR: Yes. So locations, any addresses and perhaps really workplaces should be taken out if they are referred to.
160MR BARRY: Workplaces, phone numbers.
161HER HONOUR: Yes.
162MR BARRY: I do not think they are in there from recollection.
163HER HONOUR: All right. I will direct that those victim impact statements with the removal of that more personal data be released to the media who have applied for those.
164MR BARRY: Thank you, Your Honour. Thank you.
165HER HONOUR: Is there anything else, Counsel?
166COUNSEL: No, Your Honour.
167HER HONOUR: All right. Thank you for your assistance. You are excused. We will call the next matter.
168MR de KRETSER: As Your Honour pleases.
169MR BARRY: Thank you, Your Honour.
170HER HONOUR: All right. I will stand down for that to occur.
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