Director of Public Prosecutions (Commonwealth) v Geoffrey Reginald Hammond No. SCCRM 94/287 Judgment No. 4736 Number of Pages 7 Criminal Law and Procedure Appeal against Sentence

[1994] SASC 4736

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA COURT OF CRIMINAL APPEAL PRIOR(2), OLSSON(3) AND PERRY(1) JJ

CWDS
Criminal law and procedure - appeal against sentence - application by the Crown to appeal against a suspended sentence of 20 months imprisonment on admitted counts of defrauding the Department of Veterans Affairs contrary to s29D of the Crimes Act 1914 - respondent, a part-time supervisor in the Department, created and approved four fictitous applications for a pension, and over a period of six months directed pension payments totalling $23,000 into fictitious bank accounts - held, allowing the appeal, that both the duration of the term of imprisonment and its suspension indicated a failure to allow for the seriousness of the offence, it being an internal fraud against the Commonwealth committed by an officer holding a position of trust - order substituting a custodial term of three years imprisonment with a recognisance release order operative after 18 months. Crimes Act (Commonwealth) s29D, s20(1)(b) and s19AC. Malvaso (1989) 89 ALR 34; Nath (unreported) Judgment No 4689, 22 July 1994 and R v Cameron and Simounds (1993) 171 LSJS 305, considered.

HRNG ADELAIDE, 17 August 1994 #DATE 17:8:1994

Counsel for appellant:     Mr P J Rice

Solicitors for appellant:    DPP (Cwlth)

Counsel for respondent:     Mr E Mcgee

Solicitors for respondent: Mcgee and Associates

ORDER
Appeal allowed.

JUDGE1 PERRY J This is an application for leave to appeal by the Commonwealth Director of Public Prosecutions against the sentence imposed in the District Court upon the respondent on four admitted counts of defrauding the Commonwealth, more particularly, the Department of Veterans Affairs, contrary to s.29D of the Crimes Act 1914.

2. Acting pursuant to s.4K of the Crimes Act, the learned sentencing Judge imposed one penalty; a sentence of 20 months' imprisonment. He proceeded, subject to s.20(1)(b) of the Crimes Act, to direct that the respondent be released forthwith upon giving security by recognisance, namely, a bond to be of good behaviour for a period of two years in the sum of $500, and during that time to be under the supervision of a probation officer and to obey the lawful directions given by the probation officer, in particular as to a course of counselling for his gambling addiction. As well, the learned sentencing Judge directed the respondent to perform 120 hours of community service work within 18 months.

3. The application for leave to appeal and full argument on the merits of the appeal were heard together.

4. The applicant complains that the sentence is manifestly inadequate in that it fails to maintain an adequate standard of punishment for offences involving internal fraud against the Commonwealth by an employee, that the learned sentencing Judge, in imposing penalty, failed to give sufficient weight to a number of circumstances of aggravation set out in the application and had given undue weight to the respondent's prior good character, prospects of rehabilitation and the fact that restitution had been made.

5. The respondent is a married man now aged 38 years. He commenced full-time employment with the Commonwealth Department of Veterans Affairs at their Adelaide regional office, in 1978. At the time of the offending, the respondent held the office of supervisor. A few months before the offending, he opted to reduce his employment to a part-time basis, working two days per week. At the same time, he purchased a lawn cutting round, which he operated when he was not working for the Department.

6. The respondent's duties included the interviewing of persons applying for pension benefits and the approval of applications for such benefits.

7. With the assistance of two friends, the respondent opened separate bank accounts in four fictitious names, approved pension claims in those names and directed periodic pension payments into the accounts.

8. The perpetration of the fraud involved a good deal of ingenuity and subterfuge in the creation of departmental files. Each of the fictitious claims involved the forgery of a number of documents and falsification of a number of forms necessary to establish the false identities of each fictitious claimant. Departmental letterheads and falsified correspondence were used to authenticate the continued payments of each claim. Bogus post office boxes were opened.

9. The relevant departmental files were removed from the file registry of the Department and hidden at the respondent's residence in order to avoid auditing and detection.

10. The total period of offending in the case of two of the counts was between July 1993 and January 1994, a period of six months. The remaining two counts related to the last two months of that period.

11. The total amount of money obtained was $23,086. It appears that this money has been repaid from the respondent's superannuation entitlements.

12. The fraud was detected when an item of correspondence went astray into the hands of one of the friends who had innocently assisted in the setting up of the bank accounts.

13. It was put to the learned sentencing Judge that the motive for the offending was an addiction to gambling at the Casino or TAB. Some support for that was given by a psychological report which was before the court below. The conclusion offered by the psychologist was that the offending behaviour appeared to have been motivated by two elements - namely, resentment at a failure to be promoted and compulsive gambling.

14. The psychologist offered the view: "In my opinion, Geoffrey Hammond is a compulsive gambler and needs assistance to modify his dysfunctional behaviour."

15. There was tendered on behalf of the respondent the report of a Mr Glenn, described as a financial addiction counsellor attached to the Adelaide Central Mission. He offered an opinion as to various options which he suggested should be considered in the context of imposing sentence, including a ban from entering the Casino and other controls.

16. During the course of his short sentencing remarks, the learned sentencing Judge observed:
    "I have to bear a number of matters in mind, like your past.
    You have made full restitution of that money from money
    taken from your superannuation. I hope you appreciate,
    certainly that money was yours, but it was there for the
    benefit of your wife and children. They have lost that now.
    My concern initially when the matter came on was for a
    statement in the psychologist's report that, in April, you
    were still gambling. My real concern then was for the
    effect that must be having on your wife and family and if
    that was going to continue. I saw no point in suspending
    your sentence. I thought gaol was the only option. Since
    that time, I was hoping that you would receive counselling.
    I have this very helpful letter from Mr Glenn. I think you
    can appreciate that your future is in your hands, either to
    try to beat this sickness of gambling, which it is, or if
    you keep it up, I have no doubt that you will be back here.
    I hate to think what is going to happen to your home
    situation. What I am prepared to do is to say, in view of
    this report, and in view of your past, that you will go to
    gaol for 20 months, but I will direct that you be released
    forthwith providing you be of good behaviour for two years.
    That will be in your own bond of five hundred dollars."

17. In considering the question of whether or not the sentence was manifestly inadequate to such a degree that it falls into the rare category of a case in which an appeal by the Crown will be allowed against sentence, I have had regard to the decision of the High Court in Malvasso (1989) 89 ALR 34.

18. There were circumstances of aggravation which undoubtedly put the offence into a serious category. Mr McGee, for the respondent, did not suggest otherwise. The respondent was guilty of a deliberate, systematic, well-planned and intricately executed system of deception designed to avoid detection. The offending persisted over a period of approximately six months and only came to light through the misdirection of a bank statement in the circumstances which I have indicated.

19. The amount of money obtained was substantial and the taking of it involved a serious breach of trust by the defendant.

20. Internal frauds of this kind are difficult to detect, and, being a fraud against the welfare system, the case falls into a serious category.

21. The fact that the respondent did not have any prior criminal record is not a consideration which can be taken to go far in ameliorating the seriousness of the offence, given its deliberate nature and the fact that it went on over a period of time.

22. Although the offending was motivated substantially, if not wholly, by the respondent's gambling habit, it was nonetheless motivated by greed.

23. This Court has recently had occasion to emphasise the seriousness of offences involving fraud on the part of public officials in the case of Nath, (unreported, judgment number 4689 delivered 22 July 1994, available on SCALE), which involved bribes paid to a state official.

24. In that case, this Court upheld a Crown appeal with respect to a suspended sentence of imprisonment, and quashed the order suspending the term of imprisonment.

25. In Nath, the amount involved was the same as here, namely, $23,000, although the period of time over which the offending extended in that case was longer.

26. In allowing the appeal in that case, the Court observed that, were it not for the fact that the appellant had completed a period of community service, and were it not for the element of double jeopardy involved, the length of the term of imprisonment ordered in that case, which was four years, would have been extended.

27. The learned sentencing Judge was referred to Nath during the course of submissions on sentence in the court below, but the citation of the case was a citation of its report at first instance, before the appeal to this Court in Nath was heard. It seems that in those circumstances the learned sentencing Judge may well have been led into error by what he must have perceived as an example of the suspension of the sentence in that case, before the suspension was removed on appeal.

28. Mr McGee, for the respondent, has quite properly distinguished Nath's case on its own facts. No two cases, for this purpose, can be regarded as directly comparable. But as I have pointed out, it was the view of this Court that, in Nath's case, the sentence of four years should not be regarded as an appropriate penalty, and was only allowed to stand because of the circumstances in which the order was made removing the suspension.

29. Mr McGee, for the respondent, has said everything possible in his contentions advanced on the respondent's behalf but, in my opinion, even allowing for the fact that the respondent in this case pleaded guilty, and that any sentence of imprisonment will have a seriously adverse effect on his young family, the sentence of 20 months imposed in this case was so manifestly inadequate, given the seriousness of the offence, that this Court should interfere.

30. Likewise, in my opinion, the decision to suspend the sentence is a reflection of an inadequate appreciation by the learned sentencing Judge of the gravity of the offence and the need for general deterrence, a factor which assumes importance in cases of fraud by servants of the Crown.

31. The importance of general deterrence in cases of this kind was emphasised by this Court in the case of the R v Cameron and Simounds (1993) 171 LSJS 305 and, in particular, in the judgment of the Chief Justice in that case at p.307.

32. Having regard to those matters, the sentence in question in this case, including the order of suspension imposed by the learned sentencing Judge, should be quashed. There should be substituted a custodial term of imprisonment.

33. However, in view of the circumstances in which the respondent finds himself, execution of the custodial term imposed should be suspended for seven days.

34. If a fresh term of imprisonment and sentence is imposed now, having regard to the changes in the sentencing laws which came into effect as from 1 August 1994, the head sentence will not attract remissions. Allowance for that should be made in fixing the head sentence, although, as Mr Rice points out, the allowance should not be on any rigid formula.

35. Both under State and Commonwealth laws, no remissions apply to any non-parole period or non-release period.

36. Allowance, of course, must be made for the plea of guilty and also for the fact that the respondent has performed what this Court has been given to understand was 80% of the 120 hours of community service ordered in the court below.

37. If one commences with a term of imprisonment of six years, this should be reduced by one third - that is, to four years - on account of the fact that remissions are not applicable. A further reduction of 25% should made in view of the respondent's plea of guilty and having regard also to the community service which has been performed, resulting in a net sentence of three years' imprisonment.

38. In view of the opening of the bank accounts and the evidence of the two other persons involved in that aspect of the offending, the deduction for the guilty plea is not so significant as otherwise might have been the case.

39. Having regard to s.19AC of the Crimes Act and the fact that the sentence which I consider should be imposed does not exceed three years, it would be necessary to fix a recognisance release order, rather than a non-parole period.

40. I would order that the respondent be released after he has served a period of 18 months' imprisonment upon his own recognisance in the sum of $2,000 to be of good behaviour for a period of two years immediately following such release, on the conditions that, during the period of the recognisance, the respondent be under the supervision of a probation officer and will obey all reasonable directions of the probation officer, including any direction as to the non-attendance of the respondent at any place at which gambling may be carried on and as to the treatment of the respondent in respect of his addiction to gambling or any other direction as to the respondent's gambling which the probation officer may give.

41. In the result, I would give leave to appeal in accordance with the application and allow the appeal for the purpose of substituting the sentence and orders in the terms which I have indicated.

42. I would order that the sentence of imprisonment and the period of the non-recognisance release order run from the date upon which the respondent is taken into custody, the execution of the order being suspended for a period of seven days from now.

JUDGE2 PRIOR J I agree.

2. The order of the Court, therefore, is leave to appeal, appeal allowed, sentence of three years' imprisonment imposed, with a suspension of execution for seven days.

3. The respondent is to be released after he has served a period of 18 months' imprisonment and upon his entering into a recognisance in the sum of $2,000 to be of good behaviour for a period of two years immediately following his release, and on the conditions referred to by Perry J.

JUDGE3 OLSSON J I also agree