CDirector of Public Prosecutions v Phillips
[2023] VCC 1481
•23 August 2023
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-22-01965
| THE COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| LINDEN PHILLIPS |
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JUDGE: | HER HONOUR JUDGE DALZIEL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7 August 2023 | |
DATE OF SENTENCE: | 23 August 2023 | |
CASE MAY BE CITED AS: | CDPP v Phillips | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 1481 | |
REASONS FOR SENTENCE
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Subject:CRIMINAL LAW
Catchwords: Plea of Guilty – Dishonestly obtain a financial advantage by deception from a Commonwealth entity – fraudulent claims for GST refunds in respect of a non-existent business – substantial refunds claimed and paid – diagnosis of ADHD and PTSD – physical, verbal and sexual abuse experienced in childhood
Cases Cited:Bugmy v The Queen (2013) 249 CLR 571; R v Verdins (2007) 16 VR 269
Sentence: Total effective sentence of seven years and six months' imprisonment. Non-parole period of five years.
Section 6AAA declaration - nine years and six months with a non-parole period of six years and six months.
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APPEARANCES: | Counsel | Solicitors |
| For the Prosecution | Ms K. Piechutowska | Commonwealth Director of Public Prosecutions |
| For the Accused | Ms A. Wong (Plea) Mr A. Waters (Sentence) | Victoria Legal Aid |
HER HONOUR:
1Linden Phillips, you have pleaded guilty to two charges of dishonestly obtaining a financial advantage by deception from a Commonwealth entity, one charge of attempting to dishonestly obtain a financial advantage by deception from a Commonwealth entity, and one charge of dealing with proceeds of crime worth $100,000 or more.
Summary of Offending
2On 31 August 2021, you were released from custody, having served around two years in prison for offences of burglary, theft, damaging property, aggravated burglary, driving offences, possession of controlled weapons, and obtaining property by deception. When you were released from prison you commenced a CCO.
3Just before, or whilst you were in custody, you had started a relationship with Ruth Kelevitz, who lived in Ballarat. After your release from jail in August 2021, you lived mostly with your mother in Red Cliffs.
4A week after your release you opened several bank accounts, in your name, with Westpac. On 12 October 2021 you created an Integrated Client Account with the ATO and registered for GST. You backdated this registration to 26 January 2018. I note that you had gone into custody on 13 June 2018, and between that day and 31 August 2021, which was a period of around three years and two months, you were out of custody for approximately six months in total.
5In the registration form you stated that your business had a GST turnover of between $75,000 and $149,999 per annum, and you applied to report monthly.
Charge 1
6You lodged a BAS on 22 October 2021, for the period 1 to 31 October 2021. You reported total sales of $15,631 with a GST amount of $1,421. You claimed a GST credit of $14,579. If these figures had been true that would have meant that you had made purchases for the business with a total value of $160,369. The refund amount you claimed was $13,158, which is the amount set out in Charge 1.
7In the process of lodging the GST claim you ticked a box to make the declaration 'I declare that the information given is true and correct, and I am authorised to make this declaration.'
8The information in the BAS you lodged on 22 October 2021 was false. You did not engage in a business and had no income or outgoings for such a business. The only income you had in the period of 2018 to 2021 was government benefits, and two weeks of wages from an earthmoving business, Bott Civil Engineering, for work done in New South Wales in November and December 2021.
9As a result of the false information you provided in the October Business Activity Statement, the amount of $13,158 was paid by the ATO into the your Westpac Choice account on 27 October 2021.
Charge 2
10The prosecution submit that this first BAS, which was the subject of Charge 1, was in effect a test run for you. Having succeeded in obtaining the $13,158 you went on to lodge 46 Business Activity Statements, purporting to be backdated to 1 January 2018. When lodging each form you ticked the box with the declaration 'I declare that the information given is true and correct, and I am authorised to make this declaration.'
11The Opening sets out a table of these forms, setting out the date the BAS was lodged, the amounts and the period each purported to cover. I will further summarise that table as follows:
§On 13 November 2021 you filed four Business Activity Statements purporting to relate to December 2020, January and February 2021 and September 2021. The total amount claimed and paid for these four BAS was $58,028;
§On 14 November 2021 you filed 18 Business Activity Statements. Twelve covered the period from 1 December 2019 to 30 November 2020, and eight covered the period 1 March 2021 to 31 August 2021. The total amount of refund you claimed was $294,404;
§On 19 November 2021 you lodged three Business Activity Statements covering the period 1 September to 30 November 2019 and you claimed total refunds of $43,637;
§The next day, 20 November 2021, you lodged one Business Activity Statement only, purporting to be for the month of November 2021, with a total claimed refund of $18,115;
§On 21 November 2021, you filed four more Business Activity Statements covering the period of 1 May to 31 August 2019, claiming a total refund amount of $67,685; and
§On 22 November 2021, you lodged a further 16 Business Activity Statements covering the whole of 2018 and the period of 1 January to 30 April 2019. The claimed refund amount in these 16 Business Activity Statements was $33,345.
12In total, acting on these deceptive claims, the ATO paid into your bank accounts $821,279.
13An investigation into you was commenced by the ATO on 8 December 2021. On 9 December 2021 an ATO officer, Mr Randall, spoke to you on the phone. You told Mr Randall that the BAS had been prepared and lodged by your accountant. You provided a name and number for this person. The number was registered to some other person and the person you nominated as your accountant was a painter, not an accountant.
14You told Mr Randall that you were in the earthmoving business. You said you had received GST refunds totalling $834,000 and that this amount was correct, as you had had significant business expenses, including diesel costing 'a couple of thousand dollars' per month, tools, materials, and subcontractors. You said you most recently contracted to Botts Earthworks. As I have already noted, you worked for wages for that business for two weeks in late 2021.
15Mr Randall pointed out to you that if the BAS were correct you had, since 1 January 2018, spent around $9.7 million on your business. You said that that did not seem right, you had not spent that kind of money, and you did not check the BAS before they were lodged. You said you were running a cash business and so could not show records to support your expenditure and income.
16Mr Randall said a letter would be sent seeking confirmation of the information set out in the Business Activity Statements. This letter was sent on 10 December 2021. Mr Randall attempted to contact you by email and by phone between 10 December 2021 and 10 February 2022. You did not respond to any of these attempts to contact you and you did not provide any supporting documentation.
17As a result of the offending, which is the subject of Charges 1 and 2, you received a total of $834,437 to which you were not entitled.
Charge 3
18Despite the contact from the ATO, you lodged a further false Business Activity Statement on 30 December 2021, purporting to cover that month. The refund amount claimed was $17,520. You again ticked the box with the declaration 'I declare that the information given is true and correct, and I am authorised to make this declaration.'
19The ATO, having been alerted to your false claims, did not pay the amount claimed.
Charge 4
20This charge covers your dealings with the $834,437 you had obtained by deception from the ATO. Over the period of 30 November to 8 December 2021 you transferred $742,619.44 between your accounts, and to other people including your mother and girlfriend. The remainder of the money, around $91,000, was spent on what was described in the opening as 'daily living expenses'.
21The Prosecution opening sets out the transfer dates, amounts and recipients. Of particular relevance are the following payments and purchases:
§On 6 December 2021, you paid $55,000 for a second-hand Porsche Cayenne, which was initially registered in your girlfriend's name, and then transferred into your name on 17 December 2021;
§You transferred a total of $602,000 to your mother, by nine different transfers. This money was mainly used to purchase a house in Mount Helen, which is a suburb of Ballarat. The price of this house, $515,000 plus $26,416.41 in stamp duty and other fees, totalled $541,416.41. This house was put in your girlfriend's name; and
§In two separate deposits you transferred $35,000 to your girlfriend for the purchase of furniture and other expenses regarding the Mount Helen property.
22The last significant bank transfer occurred the day you were first spoken to by Mr Randall. It is not clear if this call was instrumental in you ceasing to spend or transfer large amounts of money.
Arrest and Interview
23On 25 April 2022 you were arrested by Victoria Police in respect to other matters. You gave a no comment interview, as was your right. State charges were filed by Victoria Police, relating to this offending and some other offences. On 22 June 2022 the Commonwealth DPP took over carriage of these charges in respect to the ATO fraud.
24You indicated on 26 October 2022 that you would plead guilty to the charges before me now and you were committed to the County Court. A plea was listed in the Mildura circuit in April 2023, but as your matter was not reached, this plea was listed in Melbourne and heard by me on 7 August 2023.
25The prosecution sought a reparation order in the sum of $834,437 pursuant to s21B of the Crimes Act 1914 (Cth), which you did not oppose. I was told that proceedings were on foot to recover the Mount Helen property which would meet a substantial proportion of the reparation amount.
Personal Circumstances
26You are now 30 years old. You were born in Alice Springs and lived on a cattle station with both your parents and your younger sister until your parents separated when you were around nine years old. You have had little contact with your father since then. You had an older brother who passed away when you were 14.
27Your childhood was marred by a series of traumatic events where you were sexually and physically assaulted by numerous people in your life.
28You were sexually abused by your babysitter’s teenage son numerous times. You said you were compliant with this abuse because you feared that if you refused your sister would be abused instead. You never disclosed any of this offending until you were a teenager.
29After your parents separated, you, your sister and your mother moved to live with your uncle on his farm outside Alice Springs. About a year later your mother re-partnered with a man who later became your stepfather. Your stepfather was an abusive man who physically and verbally abused you. He would hit you, throw you around and also knocked you unconscious multiple times when your mother was not around.
30You initially did remote learning as a child on the station and then in Alice Springs you were at school up to Year 10. You did well at metal work classes and in PE but you did not get the assistance you needed for maths, science and English. You say that you would get into trouble for not paying attention.
31Your stepfather was a senior office-bearer in the Rebels Motorcycle Club and would often invite his associates back to your home. It is here where you were exposed to drugs, alcohol or criminal activity.[1] The relationship between your mother and you stepfather also had a negative impact on your mother who became a heavy drinker and started using amphetamines. You attribute some blame to your stepfather for your current situation.[2] Your mother, who is now separated from this man, has turned away from that lifestyle.
[1]Psychological report of Gina Cidoni dated 23 April 2023 [21].
[2]Ibid, [11].
32When you were 15 you moved out of home, alone, and relocated to Katherine. You started a diesel mechanic apprenticeship, however, things did not improve for you. You were assaulted by other youths in Katherine with hot wires which burned you and left lacerations and scars on your stomach and arms. After this assault, you dropped out of the apprenticeship and moved back to Alice Springs when you were 18.
33Back in Alice Springs you obtained your own accommodation and started working in the earthworks industry. You were seriously assaulted after moving back. One of those times you and your then partner were both assaulted. Your partner was pregnant at the time and had a miscarriage as a result of the assault. Shortly after this incident you were set on fire. You suffered extensive injuries, underwent skin grafting and were hospitalised in Adelaide for approximately six months.
34After being discharged from hospital you returned to live with your mother and stepfather. However, the dysfunctional home life had not changed and your stepfather was still abusive.
35Due to the continued abuse, you left home again at 19 and went to live and work on cattle stations in the Northern Territory. You led a relatively stable life over the four years that you lived on the cattle station. In 2016 you went to visit your mother in Mildura. You found work in the earthmoving business and formed a relationship with a woman named Melanie. You went to live with her in Berwick. In mid-2018 you were incarcerated for the first time and that relationship ended.
You reported that after being released from prison in 2018 you were homeless and quickly relapsed into drug use and offending. Since then you have been in and out of jail. Based on the records showing your dates of incarceration between 13 June 2018 and today, you were out of custody for around two months between July and September 2018, 24 days in October 2018, two months between May and June 2019, and then from 31 August 2021 to the day of your arrest on 25 April 2022.[3] That period of eight months is the longest that you have spent in the community since mid-2018. You were sentenced on 25 April 2022 in the Mildura Magistrates’ Court to 14 days' imprisonment for unrelated driving matters.
[3]The records show 3 days of police custody in February 2022 and 2 in March 2022, also.
36You have few supports other than your mother, to whom you speak most days. Your grandmother passed away at the end of July 2023 and you have not spoken to your father for the past 14 years. Your mother’s relationship with your stepfather ended approximately seven years ago and she has now been sober for many years. In her character reference she speaks of how the two of you call each other every evening and you have done so for the last few months.
37Your relationship with Ruth Kelevitz broke down at the end of 2021, after you purchased the house for her. You were very upset by this and you returned to using drugs.
38You identify as an Aboriginal man. Your father told you of this part of your heritage when you were a teenager, telling you that his paternal great grandmother was a member of the stolen generation. You believe that your ancestors are Bardi people from North-Western Australia. Whilst you were working in the Northern Territory you spent time with elders and took part in cultural activities.
Remand
39Whilst you have been on remand since April 2022 you have made good use of your time. In March 2023 you applied for a role as an Alcohol and Other Drug Peer Educator at Marngoneet Correctional Centre. You were accepted. It is a positive sign that you considered taking on such a role, and also that you were considered an appropriate person to act as a Peer Educator. As the letter from Caraniche sets out, a Peer Educator is supposed to be a role model for other prisoners, no incidents of drugs or violence can have occurred, and you have to have been respectful of prison staff and clinical staff. You were described as a 'valuable part of the Peer Educator team, [you] complete required components of [your] employment satisfactorily.'[4]
[4]Letter from Ms Martino, (Caraniche), 4 May 2023.
40You have also completed a range of vocational courses which shows you are trying to make the best of the situation you are in.
41You have commenced on buprenorphine whilst in custody, which you have found beneficial.
42I take into account that over 2022 there were increased lockdowns due to the pandemic. I have been given no specific information about the extent of the impact of lockdowns and the pandemic on you and so take this into account in a general way.
References
43In addition to the letters about your efforts in Marngoneet, and becoming a Peer Educator, your mother and sister wrote letters to the court on your behalf. Your sister describes how close you were growing up and that you are a generous and caring person. She thinks you are putting yourself on a better path now and how helping others will benefit them, and you.
44Your mother writes that she speaks to you nearly every day and that you are trying your best to improve your life. She also speaks of your generosity and kindness.
Drugs and Alcohol
45You were exposed to drugs at an early age. When you were around 15 you started smoking methylamphetamine, following the attack on you. Prior to your incarceration in 2018 you were apparently using that drug on a daily basis. Despite forming a significant habit you report that you did not use drugs whilst you were working on the cattle station in your 20s and you achieved a period of abstinence from methamphetamine between 2016 and 2018 when you were in a relationship with Melanie.
46You have turned to drugs in times of stress. You think that one attraction of methylamphetamine is as a form of self-medication for your PTSD and ADHD symptoms.
47It appears from your criminal history that you were sentenced to two years’ imprisonment, to be served by way of a drug treatment order, on 30 May 2019. You were breached on that program on 1 August 2019 and were required to serve the balance of the Drug Court sentence. You reported that because your living situation was difficult, you had to share accommodation with other drug users and so you relapsed.
48When you were released from custody in August 2021 you were on a CCO, but due to the pandemic you were not able to receive any treatment in respect to your drug addiction. Despite this, you were able to remain drug free for a time and you were drug free at the time of these offences. After the relationship with Ms Kelevitz broke down in late 2021 you relapsed.
Mental State & Intellectual Capacity
49You were assessed by a forensic psychologist, Ms Cidoni, for the purposes of the plea. Ms Cidoni considered that you met the diagnostic criteria for ADHD and Post-Traumatic Stress Disorder. She also considered that you have significant Borderline and Anti-Social personality traits.[5] She assessed you as in the borderline range of cognitive skills.
[5]Psychological report of Gina Cidoni dated 23 April 2023, [74].
50The PTSD symptoms are connected to the traumatic events of your childhood. You have nightmares and flashbacks.
51The CCO that you were on at the time of the offending had a mental health treatment condition. You had obtained a Mental Health Care Plan from your GP and had had two counselling sessions before your arrest.
52You were also assessed by Ms Lofthouse, a neuropsychologist. The history you provided indicated that you may have suffered one or more traumatic brain injuries, but this was difficult to particularise and no medical records were available.
53There were difficulties in coming to a clear score for your IQ. Your scores on different tests varied considerably. For example, in the Perceptual Reasoning Index your scores were in the below average range but in the Attention test the scores were in the extremely low range. In Speed of Information Processing they were both below average and in the extremely low and borderline range. Your scores on non-verbal tests were generally notably better than verbally based tests.[6]
[6]For example page 10.
54Broadly, Ms Lofthouse came to the following conclusions: [7]
§You have an intellectual impairment consistent with an Acquired Brain Injury, either due to impacts to your head or to your use of methylamphetamine;
§Your lowered knowledge of words and information is likely as a result of the deficiencies in your education, as well as the traumas of your childhood;
§There were indications of a moderate level of executive dysfunction, that is, your ability to think about information, problem solve and have insight into and the ability to control your behaviour.
[7]Neuropsychological report of Jane Lofthouse dated 22 June 2023 page 14-15.
55Ms Lofthouse considered that your impaired problem-solving ability would have been a contributing factor to the criminal offending. She said that the rapid filing of so many BAS forms with such high claim amounts was an indicator of poor judgment, as was committing the offences at all. She accepted that you did demonstrate planning by opening the bank accounts but noted the lack of forethought associated by you using your own name and accounts.
56I accept that your offending was unsophisticated and you probably did not give much consideration to the consequences of being caught.
Verdins / Bugmy
57Your barrister relied on statements by Ms Cidoni that your various diagnoses contributed to your decision making: [8]
'He has symptoms of impulsivity and poor decision-making, also anxiety and emotional distress, making it difficult for him to relax and sleep. The cluster B personality disturbances also contribute to mood instability and difficulties with emotional regulation, compromised morality and consequential thinking, leading to conflicts and problems in relationships and generally in navigating his life.
Cluster B personality disturbances are characterized by unstable moods, behaviours, and relationships. As a result, he has difficulty controlling his emotions and he has intense and unstable interpersonal relationships and a distorted self-image, a fear of abandonment, an inability to trust others and a tendency to engage in impulsive behaviours.'
[8]Psychological report of Gina Cidoni dated 23 April 2023 [79]-[80].
58Ms Cidoni also considered that your life as a child and the offending to which you were exposed as a child had a significant effect on your behaviour as an adult. She said:
'When a child grows up in an environment where deception is the norm, he may internalise these behaviours and view them as acceptable or even necessary to survive. This impacts moral development and the development of a skewed perception of right and wrong.
In Mr Phillips' case, his childhood exposure may have normalised dishonest behaviour and made it more difficult for him to recognize the illegality of his actions. He may have learned that breaking the law was a means of survival or a way to get ahead. This could explain why he thought it was acceptable to acquire his lifestyle illegally where fraudulent behaviour was seen as acceptable or necessary.
This contributed to his perception of right and wrong.'
59Ms Cidoni also noted that your Cluster B personality traits meant that your empathy and regard for the rights of others are compromised.[9]
[9]Cidoni [81]
60Ms Cidoni’s report sometimes makes a clear statement, such as regarding the impact of your personality traits on your responses and behaviour. Elsewhere, she uses the terms 'may' or 'could.'
61She said of your ADHD that it 'may have made it more challenging for [you] to resist the temptation of committing fraud' and that your 'impulsivity may have led you to overlook the potential consequences'. Similarly, she said of the PTSD that 'the offending acts may be perceived as the only way to regain a sense of control over [your] life or to cope.'[10]
[10]Cidoni [84], [85] emphasis added.
62Whilst her statement 'this contributed to his perception of right and wrong' is unequivocal, it is incongruent with the preceding discussion which was far less definite.
63In order to act on a factor in mitigation I must be satisfied of it on balance of probabilities. I am not so satisfied that your moral culpability is directly reduced due to the influence of your stepfather and the criminal behaviour to which you were exposed by him. You may have felt entitled to defraud the government, as it suited your ends, but I do not accept that you had a reduced capacity to understand that obtaining money in the way that you did was wrong and against the law.
64Furthermore, even whilst I accept that your ADHD and intellectual deficits might lead to increased impulsivity and poor judgment, this would have a greater impact on my assessment of your culpability if the offending had been reactive or short lived. In your case, however, the offending was methodical and systematic. It required multiple steps, planning and days of offending. You had ample and repeated opportunity to desist and consider the consequences of your actions.
65It appears to me that the motivating force for your offending was the desire for money and your anti-social personality traits helped you justify your actions to yourself. The fact that your method of offending was not sophisticated does not mean that you had a reduced capacity to understand that it was wrong.
66Whilst I do not accept that your childhood, upbringing, intellectual deficits, and your mental state are directly linked to this offending, that history is, nevertheless, relevant to sentencing you. The abuse that you suffered from the baby-sitter’s son, the violence and negative influences brought into your home by your stepfather have undoubtedly left their mark on you. The reports from Ms Cidoni and Ms Lofthouse confirm that you have cognitive deficits and personality traits that are selfish and anti-social. You were not connected to a supportive community and you had to learn to survive in a world which was unsafe and unsupportive.
Verdins 3
67General deterrence is a significant factor in sentencing you. I will moderate this to a small degree, in view of your personal circumstances, but it nevertheless carries substantial weight.
Verdins 5 and 6
68Ms Cidoni considered that the stress and trauma of prison life might worsen your PTSD, leading to an increase in your anxiety, depression and hypervigilance. Furthermore, she thought your personality traits might make it more difficult for you to manage prison and increase the risk of conflict. Ms Lofthouse had similar opinions.
69In contrast to these opinions is the material regarding you being given a role as a Peer Educator. You could not have got that position if you had been involved in incidents or drug use, and you had to show that you could engage appropriately with staff and other prisoners. This suggests you are able to successfully navigate the many issues that can arise in custody.
70Your counsel did not press a submission there was a substantial risk that prison would worsen your mental state. She did submit that your mental health and cognitive issues would make your time in custody more onerous than for a person without those conditions. I accept that is so and moderate your sentences to a limited degree on that basis.
Plea of Guilty, Remorse and Extent of Cooperation with authorities
71You indicated a willingness to plead guilty to these charges at an early stage. I take this into account as an expression of some remorse and for the utilitarian benefits which flow. Whilst the case against you was strong, this does not reduce the practical benefits of your pleas which have saved the courts and the prosecuting authorities the time and expense associated with a trial. Furthermore, whilst reduced, there remains some impact on the court lists due to the pandemic, which also increases the mitigation afforded by your pleas.
72As to remorse, I take into account your pleas of guilty, and also that your mother says that she has spoken to you about your actions, that you have been sorry and distressed for what you have done and the hurt to your loved ones.
Prospects of Rehabilitation
73One of the difficulties you face is that the events of your childhood and the impact on your personality and decision-making skills have an ongoing impact on you. Ms Cidoni considered that your anti-social traits and your history of drug use increases your risk of re-offending. This does not mean you are a lost cause, rather, they are significant matters for you to address and hopefully learn to manage.
74Ms Cidoni stated that you would benefit from talking-based therapies to help you develop coping mechanisms and to manage your emotions and behaviour and to improve your decision making. You may also benefit from medication regarding the ADHD and PTSD. She also suggests that reconnecting with your Aboriginal heritage may be a support for you and increase your sense of purpose and belonging.
75It is much to your credit that you have completed a number of courses whilst on remand and that you applied for, and were given, a position as a Peer Educator. This speaks well of your work towards addressing your own issues and your willingness to help others.
76In view of your history, your prospects of rehabilitation are somewhat guarded. Because of your history of offending and because of the short passage of time between your last release and this offending, specific deterrence has a significant role to play in sentencing you.
77It was submitted that I should impose a shorter than usual non-parole period, to assist you with your rehabilitation once you are released. In view of the sentences I will impose there will be a significant period where you are eligible for parole, even without imposing a minimum term that is proportionally less than usual.
Gravity of the Offending
78The maximum penalties for the charges are:
§On Charges 1, 2 and 3, a maximum of 10 years' imprisonment or a fine of 600 penalty units, which totals $130,200, or both;
§On Charge 4, the maximum is 20 years' imprisonment or a fine of 1200 penalty units, that is $266,400, or both.
79Your counsel rightly conceded that the offences of defrauding the tax office are inherently serious. Such offending impacts the funds the government has available to meet its many obligations. Your offending here involved lodging 48 different Business Activity Statements. You tried this out in Charge 1, filed 46 more Business Activity Statements in the space of nine days in respect to Charge 2, and then had one final try even when you had been alerted by the ATO to the audit.
80Charge 2, in particular, was repeated, methodical offending. You had to enter the information into each online Business Activity Statement form and go through the process of lodging the forms. You were able to obtain a very significant amount of money by this method. This was not impulsive reactive offending. At each stage, at each key-strike, you could have ceased this dishonest activity but you chose not to. By the last lodgement on 22 November 2021 you had filed a deceptive Business Activity Statement for every month of the backdated registration period of your Integrated Client Account with the ATO.
81I accept that your offending was not sophisticated. You did not use a false name or bank account to hide your identity.
82Dealing in proceeds of crime worth $100,000 or more is an inherently serious offence, it carries a maximum penalty of 20 years’ imprisonment. It appears that your dealings with the money obtained in Charges 1 and 2 was not intended to hide it from the ATO to prevent recovery, rather, you spent the bulk of the money on a house and a fancy car to impress your girlfriend.
83Your counsel explained that you were also motivated by a desire to compensate your mother for the loss of expensive machinery which she had given you but which was destroyed. It appears that your mother did not push you to offend in this way, as she did not want the money you tried to give her. Rather, you were impelled by a sense of needing to repay her and when she refused the money you bought the house. You say that you lied to both women about the source of the money.
84Charges 2 and 4 are rolled-up charges, covering a number of transactions or actions. In each case the maximum penalty of 10 and 20 years respectively still applies, but as the charge covers multiple acts, the sentences will reflect this.
Loss
85Defrauding the revenue as you have is not a victimless crime, the whole community suffers if the funds available to the government are reduced. The amount of money you obtained was very significant indeed.
86A restitution order was sought and not opposed by you. The difficulty you face is that the bulk of the moneys you obtained are invested in the house which was put in Ms Kelevitz’s name. I was told that proceedings are on foot for the Commonwealth to seize that property.
Totality & Course of Conduct
87Taken together, your offending occurred over two months. In that time you obtained a very significant amount of money from the ATO and you spent it. This was a sustained course of conduct, motivated by the desire for money and the need to spend it.
88I consider there must be a degree of cumulation between each charge to achieve a total sentence which is reflective of the combined offending. I also take into account that the money dealt with under Charge 4 was the same money obtained in Charges 1 and 2, rather than being wholly different offending.
General Deterrence and Punishment
89It appears that you found it easy to commit these offences. You told Ms Lofthouse that a friend told you how to do it and that the paperwork was easy to follow and complete online.[11] You obtained a significant amount of money as a consequence.
[11]Lofthouse page 3
90The ease of the offending and the high level of reward are factors which increase the need to deter others from this type of offending. Furthermore, the cases to which I was referred by the prosecutor speak of the need to protect the revenue of the Commonwealth by deterring those who may seek to defraud it. Thus, general deterrence carries significant weight in the sentencing discretion.
91As I have already noted, I will moderate this factor to a small degree by reason of your childhood trauma and the impact of it on you.
92The sentences are also intended to act as just punishment and to condemn your conduct.
93I should note that I have also moderated general deterrence to a small degree due to your intellectual capacity.
Prevalence
94The prosecutor submitted that there has been an increase in the number of instances of defrauding the revenue in the manner you did. She provided me with a summary of the increased number of referrals to the CDPP of cases of GST fraud from 2019 to mid-2023. Those figures were:
§Nineteen cases in the period from 1 December 2019 to 30 November 2020;
§Twenty-five cases in the corresponding period ending 30 November 2021;
§Sixty-eight cases referred to in the period ending 30 November 2022; and
§Forty-eight cases from 1 December 2022 to July 2023.
§And further, the ATO has advised the CDPP that up to 250 further GST fraud prosecutions may be referred in the 2023/2024 period.
95The prosecutor noted that an ATO media releases and information warning against GST fraud, the first in May 2022 and the second in February 2023.
96The prosecutor submitted that given the increased occurrences of this type of offending, general deterrence should be given more weight.
97Defence counsel submitted that the number of referrals to the CDPP could not be treated as proved cases, nor as indicating that this manner of offending was prevalent, in comparison to the likely number of people registered for GST across the country.
98Whilst it would appear that this manner of offending is increasing, I cannot conclude beyond reasonable doubt that it is prevalent warranting an increase to the weight given to general deterrence. In view of the weight to be given to that factor, on established authorities, it already carries significant weight.
Comparable Cases
99I have had regard to the cases provided by the parties. None is identical to your case and they demonstrate a fairly broad range of sentences for similar levels of offending.
100It was accepted by defence counsel that sentences of imprisonment with a non-parole period were open to the court. In view of the gravity of the offending and taking into account your personal circumstances, I consider that a sentence other than imprisonment, with a non-parole period, would be wholly outside the range properly open.[12]
[12]Section 17A Crimes Act 1914 (Cth)
101Mr Phillips, the sentences are:
(i)On Charge 1, a sentence of two years' imprisonment;
(ii)On Charge 2, a sentence of six years' imprisonment;
(iii)On Charge 3, a sentence of one year and six months' imprisonment;
(iv)On Charge 4, a sentence of five years' imprisonment.
102The sentence on Charge 3 commences today. The sentence on Charge 1 commences three months from today. The sentence on Charge 4 commences three months after commencement of the sentence on Charge 1. The sentence on Charge 2 commences one year after the commencement of the sentence on Charge 4.
103By my calculations this leads to a total effective sentence of seven years and six months' imprisonment.
104I set a non-parole period of five years.
105I declare that you have already served 441 days of pre-sentence detention and I direct that that be entered into the records of the court.
106Pursuant to s6AAA of the Sentencing Act, I state that if you had not pleaded guilty I would have sentenced you to nine years and six months with a non-parole period of six years and six months.
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