CDirector of Public Prosecutions v Saad

[2021] VCC 1901

IN THE COUNTY COURT OF VICTORIA

Revised

Not Restricted

Suitable for Publication

AT MELBOURNE

CRIMINAL JURISDICTION

CR-21-00801

DIRECTOR OF PUBLIC PROSECUTIONS (CTH)

v

AHMED SAAD

---

JUDGE:	HIS HONOUR JUDGE MAIDMENT
WHERE HELD:	Melbourne
DATE OF HEARING:	15 November 2021
DATE OF SENTENCE:	23 November 2021
CASE MAY BE CITED AS:	CDPP v Saad
MEDIUM NEUTRAL CITATION:	[2021] VCC 1901

REASONS FOR SENTENCE

---

Subject:Plea – sentencing

Catchwords:            Dishonestly obtain financial advantage by deception - attempt to dishonestly obtain financial advantage by deception

Legislation Cited:     Sentencing Act 1991 (Vic),
Superannuation Industry (Supervision) Act 1993 (Cth)

Cases Cited:            

Sentence:9 months’ imprisonment + 18 months’ Community Correction Order

---

APPEARANCES:	Counsel	Solicitors
For the Commonwealth Director of Public Prosecutions	Mr J. Rodrigo	Commonwealth Office of Public Prosecutions
For the Accused at Hearing	Mr A. Lewis	Doogue & George Criminal Lawyers
For the Accused at Sentence	Ms K. Kothrakis

HIS HONOUR: 

1Ahmed Saad, you have pleaded guilty to a charge of dishonestly obtaining a financial advantage by deception to the value of $1,531, 925 and a charge of attempt to dishonestly obtain a financial advantage by deception to the value of $92,400.  The maximum sentence for the first of those offences is imprisonment for 10 years; for the second offence the maximum sentence is imprisonment for five years.

2Your offending involved the dishonest exploitation of your role as a registered financial adviser and a corporate authorised financial services adviser between 11 November 2016 and 13 October 2017.  You devised and executed a fraudulent scheme to circumvent the objects and provisions of the Superannuation Industry (Supervision) Act 1993 (Cth) which are intended to limit early access to superannuation benefits to cases of severe financial hardship. By so doing you enabled clients of your private financial services business to obtain early access to superannuation benefits to which you knew they were not entitled.

3You also obtained for yourself the benefit of an increased client base for your personal financial services business, together with attendant monthly fees payable to that business. 

4The circumstances of your offending are well described in the prosecution opening upon plea, which was Exhibit A at the plea hearing.  Those circumstances may be summarised as follows. 

5You had been employed in the financial services industry since at least 2010.  Your most recent role was from 10 April 2012 to 16 October 2017 as an authorised financial services representative of Apogee Financial Planning Ltd (I will refer to them as “Apogee” from now on), which was a subsidiary of the National Australia Bank.

6Between 14 October 2016 and 16 October 2017, whilst an authorised representative of Apogee, you dishonestly completed and submitted client applications for one-off adviser service fees to Nulis Nominees Australia Ltd (“Nulis”) as trustee of the MLC super fund.  And you did that in 193 separate transactions for 178 MLC super fund clients.

7Each application for the one-off advice fee falsely represented that the fee was for legitimate financial services provided, when in fact the fee was the first step in the process of dishonestly enabling your clients to obtain early access to funds held in their superannuation accounts.

8Between 11 November 2016 and 13 October 2017 you dishonestly obtained a financial advantage totalling $1,531,925 from Nulis in 183 separate transactions in respect of 168 MLC superannuation fund account clients.  Between 11 August 2017 and 11 October 2017 you attempted to dishonestly obtain a financial advantage totalling $92,400 from Nulis in 10 separate transactions from 10 MLC superannuation fund account clients.

9On suspending your letter of authority on 12 October 2017, Nulis and Apogee stopped the processing of these transactions, and funds were not withdrawn from the MLC client accounts in respect of those 10 clients and 10 applications. 

10In 2010 you commenced employment as a paraplanner with Apogee and were based at your business address in Sydney Road, Coburg, Victoria.  On 10 April 2012 you became an Apogee authorised representative and financial adviser, recorded on the financial advisers register, until your letter of authority and your authorised representative agreement was terminated by Apogee on 16 October 2017.

11Under that authority you were authorised to advise and deal in certain financial products on behalf of Apogee, including insurance and superannuation products.  From 10 February 2012 you were the sole director, secretary and shareholder of Saad Wealth Management Pty Ltd., which I will refer to as “Saad Wealth”.  From 10 April 2012 until 16 October 2017 Saad Wealth was appointed as a corporate authorised financial services representative of Apogee.  Pursuant to that appointment Saad Wealth was also authorised to provide services under a separate business agreement dated 10 April 2012, including the provision of financial product advice and dealing in financial products to retail clients.

12On 16 October 2017 Saad Wealth ceased to be a corporate financial services representative when its agreement with Apogee was terminated by Apogee.  During the relevant period Saad Wealth provided its services through you in your capacity as an authorised representative.

13Under the Superannuation Industry (Supervision) Act 1993 a person cannot access their superannuation unless certain preconditions are met. These include reaching a certain age or on grounds of severe financial hardship. Your conduct was aimed at dishonestly circumventing those legislative provisions.

14During the relevant period, in your capacity as an authorised representative of Apogee you facilitated the early release of superannuation funds from your clients' MLC superannuation fund accounts for the financial advantage of your clients.  You and Saad Wealth benefitted from this conduct through increase in Saad Wealth's client base during the relevant period and therefore also an increase in revenue obtained by Saad Wealth from these clients.

15You typically recommended that your clients take out new superannuation and insurance with MLC or modify their existing superannuation arrangements.  All recommendations made by you were for an Apogee-approved financial product.  To that end you either (a) arranged for clients to sign a completed MLC superannuation fund application form if the client was rolling over their existing superannuation, which listed a one-off advice fee; or (b) if the account was already established, arranged for the client to sign an adviser remuneration form, listing the one-off advice fee and complete details in the one-off advice fee section.

16You also charged your superannuation clients an ongoing advice fee of at least $50 per month that was deducted monthly from their superannuation accounts.  The ongoing advice fee authorisation was usually completed around the same time as you provided clients with a statement of advice of recommendations for superannuation.  You signed each form using your Apogee financial adviser number and submitted them to Nulis for processing.

17The dishonest method by which you enabled clients to obtain early access to their superannuation involved charging clients a notional one-off advice fee which ranged from $1,550 to $11,400, purportedly for the provision of financial services.  The one-off advice fee was either submitted at the same time a client application for a new MLC superannuation fund account was completed and lodged or as a separate ad hoc MLC adviser remuneration form submitted to Nulis.  The one-off advice fee was then deducted by Nulis from the funds held in the client's MLC superannuation account. 

18To put your conduct in perspective, I note that the National Australia Bank has indicated that it considers one-off advice fees greater than $1,000 to be excessive. 

19Nulis would then process these one-off advice fee payments and send the payment to Apogee as part of regular fortnightly remuneration payments.  These payments included the one-off advice fees and other fees paid in bulk to you as revenue into your Commonwealth Bank of Australia Saad Wealth business bank account.  Once you received the fortnightly payment from Apogee you would then typically rebate the client the one-off advice fee by undertaking a net bank transfer. 

20ASIC investigators created a spreadsheet showing the clients for whom you obtained financial advantage by deception and attempted to obtain financial advantage by deception, the dates these moneys were obtained or claimed and the identification and source documentation.  That document is an annexure to the prosecution opening.

21On 12 September 2017 Apogee received a report from Nulis as trustee of the MLC superannuation fund, who had identified concerns relating to the multiple large, one-off adviser fee transactions deducted from your clients' MLC superannuation accounts.  Apogee also identified a significant increase in business revenue for March 2017 and as a result Apogee commenced an investigation into your activities.

22On 12 October 2017 representatives of Apogee met with you at your office to discuss Apogee's concerns regarding the advice you were providing to your clients.  You stated that you had felt bad and stressed about your conduct and knew it was wrong.  You said that you had felt pressure from your clients when they requested you to access their superannuation money.  You said that it had all started with a client who was under financial stress with personal debts.  You said that this client was not eligible for financial hardship; however, you told the client you could find another way to do it.

23Then it escalated over time, according to what you told the investigators, with word passing around your client group, which consisted of largely manual workers and low-income clients.  You said that you knew it was wrong to get early release of superannuation for your clients.

24ASIC investigators also performed a forensic analysis which shows that during the relevant period Saad Wealth's client base grew significantly as a result of the scheme.  During the period of the offending the business client base for Saad Wealth increased from 247 to 341 clients by 26 October 2017, representing a client increase of 38 per cent.  As a result of the increase in clients, Saad Wealth's earning capacity through fees and commissions also increased.

25On 16 October 2017 Apogee terminated your authorities and their business agreements with Saad Wealth.  On 30 November 2017 ASIC was notified of the matter by the National Australia Bank on behalf of Apogee.  On 11 December 2018 the Australian Security Investments Commission permanently banned you from providing financial services.

26Turning to matters personal to you, Mr Saad, your counsel provided me with a written outline of submissions dated 10 November 2021; a psychological report from Debra Nielson dated 5 October 2021; a report from Gina Cidoni, psychologist, dated 9 November 2021; a letter from Emily Latta of the Mindful Centre dated 8 October 2021; and a letter from your wife Hiyam Taleb.  Her letter speaks of her love and support for you, of your good personal qualities and of your three children, the youngest of whom was born with an abnormality of the cerebellum.  I have read all that material carefully and I take it into account.

27You were born in August 1985 and are now 36 years of age.  You have no prior criminal history or history of offending since this matter.  You were born in Brunswick into a large family of Lebanese origin.  You are the third-oldest in a sibship of seven.  Your parents came to Australia from Lebanon after their marriage, your father then aged 18 and your mother then aged 14.  They left their families behind at a very young age to flee the civil war and in search of a better life.

28They came to Australia with no English and worked hard to support their family as it grew.  Your father worked at the Dunlop factory and your mother was a seamstress.  Your parents initially lived in a house with 10 other people before managing to save money for their own house.

29You have always had a particularly close and special bond with your mother.  She has been a very strong influence on you.  She worked very hard and instilled in you and your siblings the value of hard work.  You have strong relationships with your siblings and apparently feel deeply grateful for the support they have shown you throughout your life.  Your parents were open-minded to their children having broad experiences and they had friends from all backgrounds and cultures.  They also encouraged participation of you and your siblings in sports. 

30Your schooling was relatively unremarkable, although you struggled a bit in the last three years for various reasons.  As a result, your Year 12 marks were not good enough to get you into university.  Undeterred by that setback you did a TAFE course in accounting and achieved acceptance at RMIT for a four-year Bachelor of Accounting degree course.  Your time at RMIT was happy and rewarding both socially and academically.  You graduated in 2008.

31You have always shown a good work ethic and secured work in the field of accounting.  You then worked as a paraplanner before qualifying as a financial planner in April 2012.  You then started your own business, Saad Wealth Management, which you found rewarding.

32You married in 2013 and now have three children born respectively in 2014, 2016 and in May of this year.  Your wife was born in Lebanon.  None of her family are in Australia and she relies on her primary support upon your family.

33You are a practising Muslim.  You have habitually attended mosque every morning at 5.30 am.  You have been actively involved in raising donations, passing the collection tin around and attending each Wednesday to clean the bathrooms.  Your faith is very important to you.  You try to be a charitable person to assist any family member or friend in need.

34Turning to evidence concerning your mental health.  Following the termination of your authority to act as a representative of Apogee on 16 October 2017 you were referred by your GP to Ms Nielson for psychological treatment.  She found that you were suffering from an adjustment disorder with anxiety and depression initially in the severe range; however, between then and 12 December 2018 you responded well to treatment and your mental health improved to a point where you were planning to return to work.

35In November 2020 you were referred by your GP to the Mindful Centre and thereafter attended nine appointments.  Ms Emily Latta, psychologist, reports that you initially scored in the severe range for your mental health, but as treatment progressed you scored in the normal range for depression and the mild range for anxiety.

36Ms Gina Cidoni, psychologist, opines that your major complaints and behaviour since October 2017 -

'… parallel the following DSM-5 clinical syndrome diagnoses:
       -  adjustment disorder with depressed mood;
       -  generalised anxiety disorder  '

each of which you have developed since the offending.

37Ms Cidoni assessed your risk of reoffending as low, although she noted that there are -

'… emotional and personality factors (poor self-regulation and problem-solving, disordered thinking) that contribute to [your] risk.  ‘

Ms Cidoni concluded her report by saying:

‘Considering the effect of a prison term, [you] may exhibit many different symptoms in response to this environment including intense emotional reactions, mood swings, intensely painful feelings of anxiety, distress and sadness.  This will most likely worsen symptoms and [your] maladjustment'.

38Your counsel urged me to find that Verdins principles 5 and 6 were therefore engaged.  I indicated during the plea hearing that I was satisfied principle 5 applies but not immediately persuaded that principle 6 is engaged.  However, although the latter passage I quoted from Ms Cidoni's report may fall short of supporting the application of principle 6, I am persuaded by a combination of the reports to which I have referred that there is a serious risk that imprisonment will cause a relapse into the more severe symptoms of your mental health conditions such as occurred between May 2018 and November 2020.

39I note also that the prosecution concedes that both principles are engaged, albeit that the mitigation of sentence should be moderate.  I accept that submission.

40In addition I accept that the effect of delay of more than four years in the resolution of this case has been particularly burdensome for you and that the stress of that delay has become the more acute as the prospect of your being separated from your wife and children by prison sentence has become a reality.  The special needs of your youngest child will add to that burden.

41I accept you are ashamed of your conduct and are genuinely remorseful.  The loss of your career as a result of the Australian Security Investments Commission banning you from providing financial services for life will operate as a substantial extracurial punishment.  You have cooperated with the Australian Security Investments Commission and the prosecution to resolve this matter as a plea of guilty.  You are entitled to a full measure of credit for those pleas and that cooperation in these COVID times.

42The sentence I intend to impose is intended to reflect all of those factors as well as the more arduous conditions of incarceration occasioned by the pandemic.  I regard your prospects of rehabilitation as good.  Nonetheless, I regard your offending conduct as serious.  Throughout the 11 months of your offending you had constant opportunities to reflect on the nature of your dishonesty and the breach of trust as a financial adviser and an authorised representative of Apogee inherent in your offending.

43It is no excuse to say that you were persuaded by the hard luck stories of your clients to devise and implement the scheme which enabled them early and impermissible access to their superannuation benefits.  Further, although it is true that you did not stand to benefit directly from such access, I am not satisfied your motivation was unrelated to the not insubstantial personal gain you derived from the charging of your participating clients an ongoing fee of $50 per month excluding GST and from the increase in the client base of Saad Wealth during the offending period. 

44You well knew that the operation of the dishonest scheme had the effect of circumventing and undermining the long-term beneficial community objectives of the statutory superannuation scheme.  Your conduct demands strong denunciation by this court and a level of punishment commensurate with the scale of your transgressions and which may effectively deter others from engaging in similar conduct.  In particular, there is a strong public interest in maintaining public confidence in the financial services industry and in the integrity of registered financial advisers. 

45I did not regard the need for individual deterrence as great; however, I am not persuaded that the need for denunciation and general deterrence in the sentencing discretion can be met solely by a community correction order.  In my judgment the scale of the dishonesty, involving as it did some 193 transactions and 178 clients over an 11-month period by a trusted agent and the actual obtaining of financial advantage of more than $1.5m, demands a period of actual incarceration.

46I agree with counsel for both parties that the unusual features of this case make it difficult to derive a sentencing yardstick from comparable cases.  Indeed neither counsel was able to identify any comparable cases.

47Given the balancing effect of the mitigation and the desirability of promoting your rehabilitation, I am satisfied that the need for a term of imprisonment can be met by a sentence that would enable me to meet punitive and deterrent factors with a combined sentence of imprisonment and a community correction order.  You have been assessed as suitable for a community correction order with a recommendation that the discretionary conditions of such an order be confined to unpaid community work.

48Ahmed Saad, on Charge 1 you are convicted and sentenced to imprisonment for nine months.  On Charge 2 you are convicted and sentenced to imprisonment for one month.  Those sentences will run concurrently. 

49The total effective sentence is therefore imprisonment for nine months.

50I declare eight days of pre‑sentence detention not including today as time to be reckoned as served on that sentence and deducted from it.

51In addition, on both charges I propose to make a community correction order for a period of 18 months with a requirement that you complete 100 hours of unpaid community work during that period.  I will now explain the terms and conditions of that order to you, if you would listen carefully to what I have to say, please.  I have no doubt that the mandatory conditions of the community correction order were explained to you during your assessment, but I will go over them again. 

52During the period of the 18 months that the order will be in force:

-    you must not commit another offence for which you could be imprisoned;

-    you must comply with the requirements of Regulation 17 of the Sentencing Regulations 2011, which essentially set out your obligations as to your attendance at the community corrections centre - such things as not attending drug or alcohol-affected - and they will be explained to you in full;

-    you must report to and receive visits from a community corrections officer;

-    you must report to the community corrections centre, that is the centre at the Coolaroo Community Correctional Services, 5/1640 Pascoe Vale Road, Coolaroo, Victoria, 3048, within two clear working days after the commencement of this order, which will be at the conclusion of your custodial sentence;

-    you must notify a community corrections officer of any change of address or employment within two clear working days after the change;

-    you must not leave Victoria without first getting permission to do so from a community corrections officer;

-    you must obey all lawful instructions from and directions of community corrections officers - such directions may be given either orally or in writing. 

53In addition to the mandatory conditions that I have just read out the additional condition that I impose upon you is confined to one only: that you perform 100 hours of unpaid community work as directed by the regional manager.

54Do you understand and agree to those conditions, Mr Saad?

55OFFENDER:  I do, Your Honour.

56HIS HONOUR:  If you are ill or there are exceptional circumstances, the order may be suspended for a period of time.  And if your circumstances materially alter you may apply for a variation or cancellation of the order.  In either case you must notify the community corrections centre, that is the centre at Coolaroo, and I recommend that you obtain legal advice if any of those things happen.

57In addition I must warn you that if you breach any condition of this order you will be brought back before this court, probably before me, and one of the options open to this court is to cancel the community correction order and resentence you on the original charges.  The court may also deal with you for the  breach of the order by sending you to prison for that offence alone for up to three months. 

58Of course it will be no surprise you that if you breach the order and are brought back in that way that you do stand to be returned to prison with a longer period of incarceration, so it is most important that you adhere to the terms of the order and comply.  You have got 18 months to complete the 100 hours of unpaid community work and that should give you ample time to complete the order.

59I did consider attaching a term which involved a requirement that you participate in assessment and treatment for mental health issues, but I note that you seem to have been well motivated from the time of your dismissal by Apogee until your incarceration to look after yourself in that regard and to find a suitable psychologist to help you through the difficult time.  I have got no doubt that you will continue to do that as is required, so on the recommendation of Community Corrections I have not included any order for that or any other condition to your community correction order.

60Now having heard all that, Mr Saad, do you understand the consequences of breaching your community correction order?

61OFFENDER:  I understand, Your Honour.

62HIS HONOUR:  Yes.  And are you willing to sign and obey the conditions of the order?

63OFFENDER:  I am, Your Honour.

64HIS HONOUR:  All right.  Having obtained your consent by audiovisual link I shall now sign the order myself and that order is now in force.  I repeat that it doesn't come into effect until the conclusion of your term of imprisonment and I remind you that you are required within two clear working days of your release from custody to attend the Coolaroo Community Corrections Centre. 

65I declare eight days of pre‑sentence detention as time to be reckoned as served on the sentence that I have imposed and deducted therefrom.  I order that these details be noted in the records of the court. 

66Pursuant to s6AAA of the Sentencing Act I declare that but for your pleas of guilty I would have sentenced to you to imprisonment for 24 months with a non-parole period of 16 months.

67Are there any other matters, counsel?

68MS KOTHRAKIS:  No, Your Honour, as the court pleases.

69MR RODRIGO:  No, Your Honour.

70HIS HONOUR:  Please adjourn the court.

- - -