De Angelis v R

[2015] NSWCCA 197

Court of Criminal Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

De Angelis v R [2015] NSWCCA 197

Hearing dates:

13 July 2015

Decision date:

24 July 2015

Before:

Simpson JA at [1]; Button J at [70]; Fagan J at [71]

Decision:

(1) Extend the time for filing an application for leave to appeal against sentence to 17 April 2015;

 

(2) Grant leave to appeal against sentence;

 (3) Dismiss the appeal.

Catchwords:

APPEAL - sentencing - fourteen counts of fraud as a company director, Crimes Act 1900 (NSW) s 176A - two counts of obtaining money by deception, Crimes Act 1900 (NSW) s 176BA - whether sufficient consideration of utilitarian value of guilty plea - where plea was made following a fitness for trial determination - at no point was applicant unfit to be tried or significantly impaired in his capacity to plead - plea not made at earliest opportunity

  APPEAL - sentencing - manifest excess - whether applicant suffered from mental condition which warranted imposition of a lesser sentence - no evidence of a condition of sufficient severity - no causal connection between condition and offending - offending was of a deliberate and continuing nature - sentence not manifestly excessive - leave to appeal granted - appeal dismissed

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999 (NSW), Pt 3 Div 3, s 21A(2), s 44(2), s 53A
Crimes Act 1900 (NSW), s 176A, s 178BA
Mental Health (Forensic Provisions) Act 1990 (NSW)

Cases Cited:

Director of Public Prosecutions (Cth) v De La Rosa [2010] NSWCCA 194; 79 NSWLR 1
Hatfield v R [2011] NSWCCA 286
House v The King [1936] HCA 40; 55 CLR 499
R v Borkowski [2009] NSWCCA 102; 195 A Crim R 1
R v Sharrouf [2009] NSWSC 1002
R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383

Category:

Principal judgment

Parties:

Dimitri De Angelis (Applicant)
Regina (Respondent)

Representation:

Counsel:
D Carroll (Applicant)
E Balodis (Respondent)

  Solicitors:
A Harmstorf (Applicant)
C Hyland - Solicitor for Public Prosecutions (Respondent)

File Number(s):

2010/70664

 Decision under appeal 

Court or tribunal:

District Court

Date of Decision:

1 March 2013

Before:

Cogswell DCJ

File Number(s):

2010/70664

Judgment

1. SIMPSON JA: The applicant seeks leave to appeal against an aggregate sentence of imprisonment imposed upon him, pursuant to s 53A of the Crimes (Sentencing Procedure) Act 1999 (NSW) (“the Sentencing Procedure Act”), on 1 March 2013, following his pleas of guilty to 16 counts of fraud offences on an indictment. (In order to do so, he needed an extension of time, which the Crown does not oppose, and which ought to be granted.) Fourteen of the counts on the indictment were of fraud as a company director, contrary to s 176A of the Crimes Act 1900 (NSW) (now repealed); each of these offences exposed the applicant to a maximum penalty of imprisonment for 10 years. The remaining two counts were of obtaining money by deception, contrary to s 178BA of the Crimes Act (also repealed). Offences against s 178BA carried a maximum penalty of imprisonment for 5 years. The applicant asked that a further offence against s 176A be taken into account pursuant to Pt 3 Div 3 of the Sentencing Procedure Act.

2. The sentencing judge applied the provisions of s 53A of the Sentencing Procedure Act. He imposed an aggregate sentence of imprisonment for 12 years, and specified a non-parole period of 7 years and 6 months. In accordance with the requirements of s 53A(2)(b), he stated the “indicative” individual sentences that he would have imposed in respect of each offence. These ranged from 1 year and 9 months (for each of the deception offences) to 6 years and 6 months. The indicative sentences that otherwise would have been imposed were reduced, to take account of the utilitarian value of the pleas of guilty, by 12.5 per cent: R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383. The aggregate sentence imposed reflects a finding of special circumstances, pursuant to s 44(2) of the Sentencing Procedure Act, that resulted in a non-parole period that was less than it would have been had the statutory proportions been applied.

Procedural history

3. The applicant was arrested and charged on 19 March 2010. He remained in custody until 8 April when he was granted bail.

4. On 9 December 2011 the applicant was arraigned in the District Court. The presiding judge (Blanch CJ of the District Court) was advised that a trial would be expected to take 3 months. At arraignment, a reference was made as to the applicant’s fitness to be tried. However, that does not appear, at that stage, to have been pursued, and a trial date of 30 July 2012, with a 3 month estimate, was fixed.

5. On 27 July, a question as to the applicant’s fitness to be tried was formally raised. A report (dated 31 July 2012) was obtained from Dr Olav Nielssen. Dr Nielssen (apparently on the basis of a history taken by another doctor, Dr Henson) concluded that the applicant had a mental illness of late onset, and was unfit to stand trial. The trial date was vacated and an inquiry, under the provisions of the Mental Health (Forensic Provisions) Act 1990 (NSW), was conducted. On 24 August 2012 Marien DCJ found that the applicant was fit to be tried.

6. On 3 September (10 days after the finding of fitness) the applicant entered pleas of guilty to all counts on the indictment.

7. Sentence proceedings began on 8 November 2012 before Cogswell DCJ. They proceeded over 6 days, concluding on 25 January 2013. On 4 December 2012, the applicant’s bail was revoked.

The circumstances of the offending

8. The offences were committed over a 6 year period, commencing in about 2004 and ending in 2010. Although the offences varied in detail, they followed a similar pattern. The facts of the offences were put before the sentencing judge by way of a very lengthy and detailed Agreed Statement. That reveals the following.

9. In February 2005, the applicant registered with the Australian Securities and Investment Commission (“ASIC”) a company named Emporium Music Production and Distribution Pty Ltd (“the company”). He was the sole director and shareholder, and the secretary, of the company. The purported business of the company was the promotion of singers, musicians and bands, and producing and distributing sound and video recordings of their work.

10. Over the period of the offending, the applicant befriended the 16 individuals (and, on occasions, their partners) who became the victims of the offences, and persuaded them to invest very large sums of money in the company. He did this by making false claims, extravagant in their nature, about his own financial and social standing and his association with and access to significant world figures (including three former presidents of the United States of America, Queen Elizabeth II, Pope John Paul II, and many others). He produced “evidence” of his association with these people, by manufacturing falsified photographs, and by producing false emails appearing to show that he was associating with the wealthy and powerful of the world.

11. He told investors that he had previously developed a “corporate empire” which he had sold to a well-known US corporation for hundreds of millions of dollars. He said that the company would be listed on the Sydney Securities Exchange (and, in some cases, the New York Stock Exchange). He invited the victims to invest in the company, forecasting great profits.

12. He gave false information to the investors about his personal life, even as to the address at which he was living. He claimed to have inherited a vast sum of money, to own a fleet of expensive luxury motor vehicles, yachts, a helicopter, and mansions in various parts of Australia and other countries. He showed some of the victims falsified documents purporting to evidence bank deposits in large sums, in one case of $32 million. He falsely claimed to have been the recipient of a Medal in the Order of Australia.

13. In this context, and perhaps most significantly, he represented to investors that the company was highly successful, and that their investments would be handsomely rewarded, yielding capital gains many times the initial contribution.

14. In some cases, after an investor had advanced a sum of money, he inveigled that person into advancing further and larger sums, with representations that he was, out of friendship, allowing them to purchase shares at a significant discount.

15. Some of the investors believed that they were close friends of the applicant.

16. He treated some to lavish and expensive meals in high priced restaurants, and others to luxury holidays. All this was intended to give verisimilitude to his claims that he and his company were highly successful, that the company was profitable, and that investment would result in large profits.

17. In fact, the company had no real business dealings and was often in financial crisis. It was under threat of deregistration by ASIC.

18. The 16 victims of these offences advanced a total of $8.5 million, believing that they were purchasing shares in the company, which would yield capital gains of many times their investments.

19. Some measure of the applicant’s persuasiveness can be gauged by reference to the identities of the victims. They were not naïve, inexperienced or unworldly first time investors; nor were they people unused to access to significant financial resources. They (or, at least, a number of them) were, rather, extremely well resourced; at least some were individuals or couples with high profiles in business and professional circles. Individuals invested sums of money as high as $780,000, $1,010,000, $1,040,000, $2,775,000 and $1,300,000. Others invested and lost smaller sums, the least being $20,000.

20. The applicant was arrested and charged with the offences on 19 March 2010. The circumstances in which the offending came to light are not disclosed in the material before this Court.

Victim impact statements

21. Victim impact statements from two of the investors were received, pursuant to s 28 of the Sentencing Procedure Act. One victim, who believed that the applicant was a close friend, had entrusted the bulk of his life savings ($760,000) to the applicant. This victim said that he has since been diagnosed as suffering from severe depression, forced to sell the majority of his assets, and found himself on a disability pension.

22. Another, female, victim, told of the impact on her family. She said that she did not have liquid assets to invest, and had financed her investment by a mortgage on her home. She said that the investment, and its consequences, caused a rift between herself and her son, who himself suffered a breakdown. She declared herself to be “devastated by [the applicant’s] betrayal”.

The applicant’s personal circumstances

23. Evidence of the applicant’s personal circumstances was complex, and was put before the sentencing judge by way of a number of character references, and a psychiatric report, the author of which gave oral evidence and was cross-examined. On behalf of the applicant there was also tendered a document purporting to be a “Certificate of Attestation” from French Social Services. This stated that the applicant (then known as Slobodan Pavicevic) had been a ward of the State during three periods between 1970 and 1985. The applicant himself did not give evidence or call any other oral evidence. Although there was a considerable amount of documentation, the amount of information yielded was quite limited; the amount of reliable information was very limited indeed.

24. Eight acquaintances of the applicant provided written character references. These are indicative of the applicant’s plausibility. One wrote:

“I define [the applicant] as a complex individual as his life has been one of psychological, torment, abuse and loneliness. His upbringing was one with no role models nor mentors to follow both as an orphaned child, young adult and finally as a mature man … Underlying the label is a confused, at times volatile, generous and sadly, irreparably damaged individual who craves acceptance and love but who sadly has only created destruction around himself for financial gain and public exposure he yearns for but, unfortunately, for all the wrong reasons.”

25. Another declared himself to have been proud to have worked with the applicant and to be prepared to do so again, at any time, in the future. Surprisingly, given the circumstances, he added:

“I have found him to care about people, was honest in his business dealings and I consider him a friend I could call on if needed at any time in the future if I needed his help.”

26. Another wrote:

“During nearly 19 years, we shared and still share a strong and deep friendship, a curiosity into the depths of the soul and the mind. I had the privilege in many moments, through life, to connect with the fragile and extremely kind heart that [the applicant] has, as well as drastic outbursts of total disconnection, self-destruction, outrageous behaviour and actions which would come up now and then in the early years of our friendship and got more significant, progressively worst [sic] and more frequent over the years, 1998, then 2001, 2005 and 2008 were years when these episodes of radical behaviour became quite difficult to the best of friendships.”

27. There were others to similar effect. For reasons that will appear, the assessments of the applicant’s character could be given little weight.

The psychiatric evidence

28. A forensic psychiatrist, Dr Stephen Allnutt, conducted clinical evaluation of the applicant over three (possibly four) separate days in a three week period in October and November 2012. During that time, Dr Allnutt took a detailed history from the applicant. Dr Allnutt’s report runs to 19 pages. Appended to it is a further 18 pages, which is a review of documentation provided to Dr Allnutt. Dr Allnutt also gave oral evidence.

29. He recorded (on the basis of information provided to him by the applicant) a 2009 admission to a psychiatric unit at Hornsby, as well as a psychiatric history when the applicant was 10 years of age and living in France. He also recorded a history of cocaine use from 2005 until 2009. The applicant told Dr Allnutt that he was born in France, abandoned by his parents as a child, and abused by his foster carers.

30. Dr Allnutt noted that the applicant:

“… seemed unsure about the basis for the charges and had not read the facts.”

(The Agreed Statement is dated 3 September 2012 - before the assessments by Dr Allnutt - and is signed by the applicant, as well as by his legal representative.)

31. Dr Allnutt then recorded the following history:

“At the time that he saw me he was an intelligence officer - he worked for the CIA, and for the French Secret Service; he alleged that the local council were poisoning his plants every day in an attempt to persecute him; he had asked the FBI, the FSB and the CIA to follow up on this and to find out why all the agents were following him; he added that he had also worked for the KGB.

He continued to work for secret service agencies, providing them with intelligence about what was happening in Australia which was a uranium producing country; he was being followed by police all the time, everywhere he went they followed him; he would see cars following him, other agents also tried to poison him with polonium and they tried to inject him with polonium; there were secret doors underground in Wahroonga Park which only opened up at 10pm and people would go in; these were people who wanted to extract uranium; they were scientists who worked for government intelligence; he said that Barry O’Farrell lived in Wahroonga which is why this was a ‘secret thing’ that was happening.”

32. There was very much more of similar, or equally fantastic, nature. The applicant also gave Dr Allnutt an account of hearing voices. In subsequent interviews he gave further accounts of voices and persecution.

33. He gave various histories of psychiatric treatment. For example, he said that he had, in 2009, been diagnosed by Hornsby Mental Health Services with depression following the death of his dog, and believed that he had been diagnosed with bi-polar attentive disorder and possible mania. He gave a history of a suicide attempt in 2006, and of contact with Mental Health Services in France, as a child.

34. He told Dr Allnutt that a Dr Bennett had made a diagnosis of paranoid schizophrenia.

35. I here interpolate that, ordinarily, it has been the practice of this Court to accept the histories taken from offenders by health professionals. In this case, no reliance can be placed upon any account given by the applicant to Dr Allnutt. Dr Allnutt himself did not accept that the applicant believed the account of persecution, voices and delusions that he gave.

36. Dr Allnutt expressed his opinion as follows:

“Overall this is a man who has a history of abuse and neglect in childhood; who developed personality vulnerabilities of a narcissistic nature as well as mood and anxiety disorder; he likely had ongoing difficulties with mood and anxiety symptoms through his life, with underlying deep seated insecurities about himself; more recently he commenced using cocaine and experienced other stressors related to his business dealings which had the effect of triggering an aggravation of his mood disorder … he now presents with more significant symptoms of mood disorder requiring ongoing treatment with mood stabilising mediation [sic - medication]; I am reasonably confident of a current diagnosis of mood disorder, predominantly recurrent depressive disorder and anxiety disorder (with panic attacks) with a vulnerability to periods of hypomania; differential diagnosis includes bipolar affective disorder.

I am unable to conclude a diagnosis [of] chronic psychotic disorder based on the current information; am reluctant to definitively rule it out - this is a diagnosis that will become clearer in the course of time, but at this stage on balance, I would not conclude a diagnosis of chronic psychotic disorder.”

37. He then diagnosed narcissistic personality disorder. He noted but did not endorse a prior diagnosis (by whom he did not say) of antisocial personality disorder. In part he withheld endorsement of the diagnosis because it depended upon a history of conduct disorder prior to the age of 15. Since the only basis for such a conclusion lay in what the applicant told him, he considered the information insufficient. With respect to the applicant’s history of hearing voices, and of his asserted involvement with security agencies, Dr Allnutt said:

“… consideration needs to be given to the concept of ‘pseudologia fantastica’ which describes a tendency to fabricate highly improbable stories which are not delusional; this which tendency [sic] arises out of innate underlying personality vulnerabilities …”

He nevertheless expressed himself unable to conclude that the applicant was driven by an underlying delusional motivation, and concluded that it was unlikely that the applicant experienced delusional beliefs at the time of his arrest.

38. Dr Allnutt acknowledged that, since 2010, the applicant had been a patient of mental health services with multiple psychiatric admissions, and was currently being prescribed anti-psychotic and mood stabilising medication as well as an anti-depressant.

39. In giving oral evidence, Dr Allnutt was questioned extensively both by counsel for the applicant and counsel for the Crown. In examination in chief he said:

“Personally I think it’s a very difficult case not only because of the voluminous amount of information and documentation and writings on his behalf [and other] people’s behalf but I think it’s very much clouded by his unreliability in reporting. So that makes it a very complex case.”

40. Later, he said, when questioned about the applicant’s asserted history of cocaine use:

“Once again it leaves it open, I understand that, but this is a case that is very open your Honour.”

41. He repeated that he did not consider that the applicant believed the grandiose claims that he had made; if Dr Allnutt considered that if the applicant held those beliefs, he would have diagnosed him as delusional. He said:

“It seems to become more dense after his arrest and my impression is that you know he’s panicking and he’s highly anxious and he doesn’t want, he doesn’t want to go to prison. I’m more prone to accept mood disorder because there is evidence of mood symptoms that are quite prominent in the notes prior to his arrest.”

42. In preparation for the fitness hearing, Dr Allnutt’s report as well as records of the applicant’s psychiatric history were reviewed, on behalf of the Crown, by two psychiatrists, Dr Dinah Bennett (of the Hornsby Mental Health Service), and Dr Yvonne Skinner. It is unnecessary and unproductive to detail all of what was reported by those two practitioners; it is sufficient to say that, in many respects, they contradicted, as a matter of fact, the histories of his psychiatric treatment given by the applicant. For example, Dr Skinner said that much of the history recorded by Dr Allnutt differed from that given to her by the applicant (although she was not specific as to the differences). Dr Bennett reported, reviewing a great deal of documentation, detailing variations and inconsistencies in what the applicant had told Dr Allnutt, and what he had told other mental health authorities. She denied any diagnosis of paranoid schizophrenia.

43. There is evidence, however, that the applicant had contacted the Hornsby Mental Health Service in January 2010, shortly before his arrest.

44. The result is that there is little concerning the applicant’s history and background upon which any reliance can be placed. What is known is that he was born in December 1965 and was about 40 years of age at the commencement of the offending. He has no prior criminal history.

The Remarks on Sentence

45. The sentencing judge reviewed the relevant facts at some length and in some detail. With respect to the applicant’s personal circumstances, he made the following observation:

“38.  I add here that of course any history which comes directly from [the applicant] I regard as unreliable unless corroborated, for the reasons stated by Dr Allnutt.”

46. He referred to Dr Allnutt’s psychiatric opinion and diagnosis. He said:

“42  I am inclined to accept the noted history of early abusive experiences in childhood …”

This was because, he considered, they were supported by the documentation from France.

47. He observed that, in order to deceive, as the applicant did, victims of the capacity of the applicant’s victims, the applicant was required to engage in “very skilled criminal craft and perseverance”. He said the enterprise:

“… required hard work, co-ordination, preparation, perseverance, extravagance, ruthlessness, exploitation of friendships, deviousness, cunning, heartlessness and intelligence.”

He described the conduct as “not only fraudulent, it was predatory”.

48. He accepted that there were, pursuant to s 44(2) of the Sentencing Procedure Act, special circumstances warranting an adjustment of the normal relationship between the non-parole period and the head sentence (of 75 per cent). He considered that the applicant’s “mental health condition” was one feature warranting that conclusion. Another factor was that the applicant had not previously been sentenced to a period of incarceration. He was unable to make a clear finding that the applicant was unlikely to re-offend or had good prospects of rehabilitation.

49. He found no significant evidence of contrition. He accepted there was some force in a defence submission that the offending could be seen as “one episode of an ongoing criminal enterprise”, but considered the significance of that was outweighed by the number of individual victims of the applicant’s criminality.

50. It was put to the sentencing judge that, by reason of his pleas of guilty, the applicant was entitled to a reduction in the sentence that otherwise would have been imposed of 25 per cent: see R v Thomson; R v Houlton. The submission was made on the basis that the applicant had, very shortly after the finalisation of the proceedings concerning his fitness for trial, entered pleas of guilty. In the result, his Honour reduced the sentence he otherwise would have imposed by 12.5 per cent.

51. In doing so, he cited Howie J in R v Borkowski [2009] NSWCCA 102; 195 A Crim R 1 at [32]:

“The utilitarian value of the pleas will be determined largely by the timing of the plea so that the earlier the plea the greater the discount.”

52. He then considered the provisions of s 21A(2) of the Sentencing Procedure Act, itemising aggravating factors relevant to sentence. It is unnecessary to go into the detail of this, since it does not feature in the matters raised on behalf of the applicant with respect to sentence.

The application for leave to appeal

53. Two grounds of appeal were proposed. They were pleaded as follows:

“Ground 1:  His Honour erred in his assessment that the appropriate discount for the plea of guilty was 12.5 percent rather than the full discount.

Ground 2:  The aggregate sentence is manifestly excessive.”

Ground 1: the pleas of guilty

54. The argument in respect of this ground is simply stated. It is that, since the applicant’s pleas of guilty were entered within a short time after the determination of his fitness for trial, they warranted the maximum reduction. In Thomson; Houlton, it was envisaged that, depending upon the utilitarian value of the pleas of guilty, a reduction of up to 25 per cent might be allowed. The point that was made was that, until the issue of his fitness to be tried was resolved, the applicant could not have been expected to enter pleas.

55. Two principles concerning the reduction to be allowed in respect of pleas of guilty are well established. The first is that any such reduction is a matter of discretion lying within the province of the sentencing judge, and not readily upset on appeal: see House v The King [1936] HCA 40; 55 CLR 499. The second is that the principal consideration is the timing of a plea; this is related to its utilitarian value.

56. Reference was made to remarks of Whealy J in R v Sharrouf [2009] NSWSC 1002 at [67] in which a reduction of 25 per cent had been allowed when pleas of guilty were entered at the earliest available opportunity after a fitness determination. However, what distinguishes Sharrouf from this case is that Sharrouf had earlier been found unfit to be tried (or to plead). The timing of his plea can be seen to be related, not only to the finding of fitness, but to the actuality of fitness. Here, having regard to the determination of Marien DCJ, it cannot be concluded that there was any time when the applicant was not, in fact, fit.

57. Similarly, in Hatfield v R [2011] NSWCCA 286, on which the applicant also relied, it was found that the offender’s mental health was “significantly impaired” from a time after his arrest until the date when he was found fit to stand trial. Hall J, with whom McClellan CJ at CL and Hidden J agreed, considered that it would not have been reasonable for him to have entered a guilty plea until after the date of the fitness finding.

58. In this case, there is no basis for a finding that the applicant’s mental health was “significantly impaired” in a way that impacted on his capacity to enter a plea.

59. Although, in my opinion, it would have been open to the sentencing judge to have allowed a greater reduction, having regard to the issues raised with respect to the applicant’s fitness, no basis has been shown for interference with the essentially discretionary judgment made by Cogswell DCJ. I would reject this ground of appeal.

Ground 2: manifestly excessive?

60. The submissions made in respect of this ground also drew heavily upon the evidence of the applicant’s “mental condition”. Reference was made to Director of Public Prosecutions (Cth) v De La Rosa [2010] NSWCCA 194; 79 NSWLR 1.

61. It is without doubt that a psychiatric condition, bearing a causal connection with criminal offending, is a relevant consideration warranting, in some cases, the imposition of a lesser sentence.

62. However, the evidence in this case establishes neither a “mental condition” of sufficient severity to warrant any significant amelioration in sentence, nor any causal connection with the offending. The applicant has a narcissistic personality disorder.

63. Indeed, a strong inference is available that the applicant quite deliberately attempted to create an illusion of a psychiatric condition of a dimension which could not be established.

64. A second basis put in support of the ground drew upon sentences imposed in previous cases of significant fraudulent offending. These tended to show that offences of a similar kind had resulted in lower sentences than that imposed upon the applicant.

65. No issue was raised as to any of the “indicative sentences” stated in respect of the individual offences; the nub of this proposed ground of appeal must have been directed towards the totality of the aggregate sentence by reference to the totality of offending.

66. In my opinion, the statement of facts indicates criminality on a vast, deliberate and continuing nature. It was properly characterised by the sentencing judge as “predatory” and as involving:

“… hard work, co-ordination, preparation, perseverance, extravagance, ruthlessness, exploitation of friendships, deviousness, cunning, heartlessness and intelligence.”

67. I am not persuaded that the sentence of 12 years with a non-parole period of 7 years and 6 months was outside the range of sentences legitimately available for offending of this nature.

68. I would, therefore, grant leave to appeal but dismiss the appeal.

69. The orders I propose:

(1)  Extend the time for filing an application for leave to appeal against sentence to 17 April 2015;

(2)  Grant leave to appeal against sentence;

(3)  Dismiss the appeal.

70. BUTTON J: I agree with Simpson JA.

71. FAGAN J: I agree with Simpson JA.

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Decision last updated: 24 July 2015