Director of Public Prosecutions (Cth) v Allen
[2024] VCC 1127
•29 July 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CR-23-01033
| DIRECTOR OF PUBLIC PROSECUTIONS |
| (CTH) |
| v |
| STEPHEN ROBERT ALLEN |
---
JUDGE: | HIS HONOUR JUDGE PARRISH | |
WHERE HELD: | Melbourne | |
DATE OF PLEA HEARING: | 27 May 2024 and 19 July 2024 | |
DATE OF SENTENCE: | 29 July 2024 | |
CASE MAY BE CITED AS: | DPP (Cth) v Allen | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 1127 | |
REASONS FOR SENTENCE
---
Subject:CRIMINAL LAW
Catchwords: Sentence – pleas of guilty – one charge of making a false document with the intention of inducing another person to accept the document as genuine – one charge of making or authorising the making of a materially false or misleading statement in a document charged with or submitted to the Australian Securities & Investments Commission
Legislation Cited: Crimes Act 1958 (Vic) s83A(1); Corporations Act 2001 (Cth) sub-s1308(1); Sentencing Act 1991 (Vic)
Cases Cited:Worboyes v R [2021] VSCA 169; Phillips v R [2012] VSCA 140; DPP v Bulfin [1998] 4 VR 114; Tones v R [2017] VSCA 118; R v Nikodjevic [2004] VSCA 222; R v Merrett; Piggot & Ferrari (2007) 14 VR 392; R v Miceli [1998] 4 VR 588; R v Verdins; R v Buckley; R v Vo (2007) 16 VR 269, Ryan v The King [2022] SASCA 110.
Sentence:
---
APPEARANCES: | Counsel | Solicitors |
| For the DPP (Cth) | Ms O. Kefford | Solicitor for the Commonwealth Department of Public Prosecutions |
| For the Offender | Mr W. Barker | Kabo Lawyers |
HIS HONOUR:
1Stephen Robert Allen, on 27 May 2024, you pleaded guilty to the following offences:
Charge 1 – that you made a false document with the intention of inducing another person to accept the document as genuine. Such offence is contrary to s83A(1) of the Crimes Act 1958 (Vic) and carries a maximum penalty of ten years’ imprisonment and/or a fine of $182,004.
Charge 2 – that you made or authorised the making of a materially false or misleading statement in a document lodged with or submitted to the Australian Securities & Investments Commission. Such offence is contrary to s1308(1) of the Corporations Act 2001 (Cth) and carries a maximum penalty of five years’ imprisonment and/or a fine of $66,600.
Circumstances of the offending
2Counsel for the prosecution tendered a document headed 'Prosecution Opening Upon Plea dated 15 January 2024 (Exhibit 1).
3I will not refer to all of the matters set out in such document but do refer to the important aspects pertaining to your offending.
Summary of the prosecution case
4You operated an accounting and auditing business that was not registered as an auditor. Between 15 July 2015 and 5 November 2020, you falsified the signature of two registered company auditors ('RCAs') on documents relating to audits of the financial accounts of 12 clients. You then provided them to the clients with the intention of inducing the clients to pay for auditing fees. As a result of that conduct, you received payments from the clients said to be in the amount of $241,280.60 (Charge 1 on the indictment). On 10 February 2021, you lodged a document containing a falsified signature with the Australian Securities & Investments Commission ('ASIC') on behalf of a client, Highett Community Financial Services Limited ('HCFSL) (Charge 2 on the indictment).
Events leading up to and over the course of the offending
5In or around March 2013, you purchased Alkemade & Associates ('A & A') from Donald Alkemade ('Alkemade). Prior to this, you had been working with Alkemade for approximately ten years. When you took over A & A, Alkemade continued working with you and, as an RCA, signed the audits undertaken by you.
6In mid to late 2014, you approached Alkemade and discussed with him the need for you to become an RCA to be able to sign the audits that you were conducting. Alkemade agreed to assist you and began signing the required paperwork.
7In about late 2014, Alkemade ceased signing your audits and failed to sign the paperwork to enable you to become an RCA. After Alkemade left A & A in late 2014, the business did not have at least one member who was an RCA. A & A is not, and never has been, an authorised audit firm.
8On 20 March 2015, you lodged a form with ASIC, being an application for registration as an ASIC auditor. ASIC refused to register or receive the application under the relevant section of the Corporations Act 2001 (Cth) due to the signed paper form and proof required not being received by the appropriate date.
9Sam Peter Marotta ('Marotta') is an RCA and has been since 29 April 2013, and is a person known to you. Around mid-2015, you approached Marotta, who agreed to review and sign the audit that you had conducted. Following this engagement, you commenced a practice of placing Marotta’s digital signature on audit papers without Marotta’s knowledge or approval.
10
Hugh Robert Ballment ('Ballment') has been an RCA since 17 January 1983 and a person known to you. In around June or July 2020, Mr Ballment agreed to assist you in reviewing and signing an audit. Subsequently, you also began to place
Mr Ballment’s signature on audit documents without his knowledge or approval.
11Between 15 July 2015 and 5 November 2020, you falsified Marotta’s and Ballment’s signatures on 84 documents consisting of 18 Audit Opinions, 43 Auditor Independence Declarations, 20 Independent Auditor’s Reports and three Independent Auditor’s Review Reports. All such documents were in relation to audit clients who engaged your business.
12Between 16 July 2015 and 10 March 2020, you issued invoices to the audit clients for orders that you conducted and received payments totalling $241,280.60.[1] All these events constitute the basis of Charge 1 on the indictment.
[1]A schedule was attached to exhibit A setting out the dates of the audit, invoice numbers, invoice date, payment amount and the date of payment received.
13On or about 10 February 2021, you handwrote a signature, purporting to be that of Ballment, on a document you submitted to ASIC for A & A to resign as auditor for the entity HCFSL. Such signature was without Ballment’s knowledge or approval and was a Form 342, that is application for consent to ASIC to resign as an auditor.
14On 12 February 2021, ASIC received the Form 342 from HCFSL, the subject of Charge 2 in which A & A was named as the nominated auditor firm, purportedly signed by Ballment in his capacity as auditor. The required payment did not accompany the Form 342 and, consequently, ASIC contacted Ballment who advised he knew nothing about the matter and did not audit HCFSL’s accounts. When contacted by ASIC, you admitted you were not an RCA.
15Further enquiries made by ASIC revealed that neither Ballment nor Marotta undertook the audits completed by A & A and they had not signed the documents the subject of the charges.
16ASIC has not received any complaints or reports of concerns in relation to the quality or accuracy of the audits signed by you.
17On 4 November 2021, you voluntarily attended a formal record of interview with ASIC and made full admissions to the offending. During 2022, following discussions between ASIC and your legal representatives, it was agreed that the matter would proceed as a plea of guilty and would be commenced by direct indictment with your consent.
18You have not served any pre-sentence detention and no ancillary orders are sought.
Your personal circumstances and background
19Your counsel tendered the following documents:
(a) a document headed 'Outline of plea submissions on behalf of the accused' dated 23 May 2024;[2]
[2]Exhibit “A”
(b) report from consultant psychologist, Mr Ian H Mackinnon ('the psychologist'), dated 25 April 2024;[3]
[3]Exhibit “B”
(c) report from the treating psychologist, Ms Lisa Miller ('the treating psychologist'), dated 25 January 2024;[4]
[4]Exhibit “C”
(d) references from the following:
̶ your wife, Ms Marciella Allen, dated 28 April 2024;
̶ Mr Neil Grant ('Grant'), dated 22 May 2024;
̶ Ms Joanne Woods, dated 24 May 2024;
̶ Mr John Waugh, dated 23 May 2024;
̶ Mr Mark Rizzo, dated 26 May 2024;
̶ Mr Jehad El-Bouch, undated;
̶ Mr Marcus Limosani, undated;
̶ Mr Rafael Andrada, undated;
(all documents constituting Exhibit 'D');
(e) a patient health summary from your general practitioner, Dr Frank Chai, dated 27 November 2023;[5]
(f)
letter from the oncologist, Associate Professor Joseph McKendrick, dated
28 November 2023.[6]
[5]Exhibit “E”
[6]Exhibit “F”
20Partly based on some of the documents tendered and partly based on submissions made by your counsel, I note the following:
· You were born in September 1964 and are now 59 years of age. The subject offending occurred when you were 50 to 56 years old.
· You were raised by your biological parents in the suburbs of Melbourne and have three siblings, two younger brothers and an older sister. You informed the psychologist,[7] that one of your brothers has 'full-blown Asperger’s' and was violently abusive towards your mother and to you. Such activity was an ongoing source of friction and unhappiness in the household and whenever you complained to your mother in particular, you were blamed for raising the issue and would often get 'kicked out of the house'.
[7]Exhibit “B”
· You described your family life as 'fantastic' until your two younger brothers came along and by the time you were in Year 9 you described to the psychologist that everything 'turned to shit'. In particular, your parents would fight every day and sometimes you ended up in the middle of such a fight.
·
You informed the psychologist that the brother who has Asperger’s is now
53 years of age and is 'antisocial, violent, abusive, permanently unemployed and a chronic suffer of Asperger’s Syndrome'. You and he no longer talk to each other.
·
You also informed the psychologist that your other brother, who is now
57 years old, was also found to be suffering from Asperger’s Syndrome some two years ago. His marriage has come to an end and he is now living with another woman, and you do not have any contact with him. You again informed the psychologist that your sister, who is now 62 years old, is married to an accountant who worked for you some time in the past and is like a de facto brother to you.
· You attended the Melbourne High School, where you repeated Year 10, and then transferred to the Rosanna East High School and later to Trinity Grammar, where you ultimately completed Year 12. You later enrolled for studies at Swinburne TAFE but did not continue with this course.
·
In your early 20s, you trained as a Lifeline counsellor and it was only at
29 years of age you returned to study, originally studying psychology, but ultimately obtained a degree in accounting from the Swinburne Institute.
· After obtaining your degree in accounting, you started CPA professional experience work with the accounting firm, Price Waterhouse (that is before the merger with Cooper). Although you wanted to work in the tax area, you were allocated to the 'auditing' team. You worked on until about six months after the death of your first wife.
· You travelled to the Philippines and upon your return you were employed at another accounting firm, Snowball, again working in the 'auditing' team. Just prior to starting at Snowball, their RCA had resigned and thus there was nobody employed who could 'sign off' on the audits. At about that time, you met Alkemade, who Snowball engaged to perform the role of the RCA.
· You left the employ of Snowball to work for Alkemade in about 2003-2004, after which you continued working for Alkemade for about eight years, performing 'auditing work'. In this respect, you completed the bulk of the work on all auditing files. The amount of work varied from working several days on a file to several weeks. Alkemade, being the only RCA at the company, could check the completed work and 'sign off' on the audits.
· After about 10 years you decided to resign your employment with Alkemade. During a meeting with Alkemade to discuss your resignation, Alkemade proposed that you buy the accounting firm from him. You did not do that immediately, but in 2013 you and Alkemade had agreed on the sale of the business to you.
· When you purchased the business from Alkemade, part of the agreement was that the following two matters would occur:
ꟷ Alkemade would remain engaged by the firm for a minimum of five years, during which time he would complete 1,000 hours per year of work ꟷ including signing off on all audit work;
ꟷ Alkemade would assist you with your application to become an RCA, primarily in relation to the confirmation of you completing the required 3,000 hours of auditing work in the preceding five years (you being technically eligible to be registered as an RCA and only needing to complete the application process).
· Neither of these terms were complied with by Alkemade.
· By late 2013, you had completed the entire application process to become an RCA. You had paid the fee for registration in advance and required only one more signature from Alkemade before you could submit your application. Alkemade never signed the registration, and you therefore were never able to apply and there was no other way for you to apply for registration at that time.
· By mid-2014, Alkemade had withdrawn from the firm, notwithstanding the agreement, and you were left trying to complete the audit work without an RCA to sign off. Such a situation ultimately led to you meeting and engaging Marotta.
· Throughout this time, you made several calls to ASIC to ask for help and/or advice, and or ideas or ways you could deal with the problem. Ultimately, as ASIC was not able to solve the issue for you, Marotta signed the first audit file you gave him and agreed to look at, and sign off, on the second, however due to logistical issues that did not occur. You eventually made the decision to transfer his electronic signature from the first file to the second and to all the subsequent audit files you completed which are the subject of the offending. Later, around June or July 2020, Ballment agreed to assist you in reviewing and signing an audit. Subsequently, you began to place Ballment’s signature on audit documents without his knowledge or approval.
· You also informed the psychologist that you continued to operate your accounting business, now based in Rosanna, with the assistance of your employee, Grant. In particular, you reported that Grant had recently received 'taxation licence approval', which meant that, depending on other outcomes, your business may remain viable. You also added at that time, and stated to the psychologist, that:
'The Tax Practitioners’ Board emailed every one of [your] clients, with a link to the media release about [your] matters. So, everyone was ringing up, asking what was happening. Everyone said, "I don’t care, Stephen’s been really good to us"…I have to apply to the Tax Practitioner’s Board to see if I can work…'
(sic)
· You married your first wife, Vivian, who was of Filipino origin, in 1998 and she worked as an accounts receivable officer. In 2000, Vivian was diagnosed with B-cell non-Hodgkin's lymphoma and after receiving treatment for that condition, she was informed in 2001 that she was 'cured', but seven days later died. You described Vivian to the psychologist as a 'quality human being' and feel that you changed as a person after her death.
· You have since met your second wife, Marciella, who is also Filipino. You described her to the psychologist as 'super intelligent' and 'high achieving'. Marciella had been working in finance in Manila and got a job in Coles’ financial department. She continues to work as a program manager for Coles and manages construction of supermarkets. You described to the psychologist that Marciella has been 'the greatest thing that ever happened to [you]'.
· You have not had children with any of your partners.
· In 2020, your mother died five months after being diagnosed with Creutzfeldt-Jacob disease, which spread into her brain, causing her to suffer paralysis and other symptoms. Your father continues to live in Southbank and following the death of your mother you have developed, what you refer to as, 'a proper relationship' with your father, whom you speak to every week.
· At the age of 16, you suffered a back injury which forced you to stop playing competitive tennis for nine months. You also suffered a right-shoulder injury when you were 26 years of age and underwent surgery on an elbow when you were 28 years old.
· In 2014, you were diagnosed with Diabetes Type 2 and in 2015 you were diagnosed with B-cell non-Hodgkin’s lymphoma – the same condition that killed your first wife 14 years earlier. You have undergone treatment from the oncological specialist, Associate Professor Joseph McKendrick, with the treatment finishing in 2021, and you informed the psychologist that such condition is now considered to be in remission.
· You informed the psychologist that you received:
'…extra chemotherapy and twenty rounds of radiotherapy, the chemo made [you] very ill. [You] had ‘chemo-brain,’ you changed as a person. Radiotherapy damaged the main artery in [your] leg. The damaged cells in the artery can’t absorb cholesterol…I’d get intense pain in my calf. For five or six years, no-one knew what it was…For a long period of time, [you were] in a state of ‘chemo-brain, not [yourself]. About 2020, [your] wife looked at [you] and said, ‘you’re back,’ with a big smile on her face, ‘the old Stephen before [you] got sick, is back. She said, ‘you were irritable, short, difficult, in another world…[you] didn’t realize [you’d] made things very difficult for her … [Your] oncologist says that you can get non-Hodgkins lymphoma from stress, which reduces your immune system, so [Don Alkemade] caused [your] cancer. [You] can’t even walk up the hill, or up the steps of the office at Surrey Hills.'
· You also suffer from hypertension and high cholesterol levels, with both conditions being treated with medication.
· You reported to the psychologist that your physical health 'is improving' and that you engage in Pilates exercise and resistance training at your home on a systematic basis.
· You reported to the psychologist that, in your mid-20s you had been involved with a highly troubled young woman and you had attended with her for a few sessions of relationship counselling and it helped her 'get off drugs and get a job in accounting'. However, the young woman eventually relapsed and you broke up after two-and-a-half years of trying to maintain an unstable relationship.
· In particular, you informed the psychologist that you have been engaging in counselling therapy from the treating psychologist, at the Total Wellbeing Medical and Counselling Centre in Doncaster, but you have no other history of mental health treatment.
· You informed the psychologist that you are not currently prescribed any psychotropic medication, but do take medication for hypertension, Diabetes Type 2 and high cholesterol.
· You informed the psychologist that you have never used illicit substances, noting that you had been a very keen sportsman in your youth and this had been a protective factor. You rarely drink alcohol, noting that you are 'always the designated driver'.
The evidence of the treating clinical psychologist, Ms Lisa Miller
21In her report, dated 25 January 2024,[8] the treating psychologist records that you had been attending regular psychology appointments at the Total Wellbeing Counselling Suites from February to April 2022 and from December 2023 to February 2024 to help manage your psychological distress.
[8]See exhibit “C”
22In particular, the treating psychologist notes that you reported symptoms consistent with post-traumatic stress disorder and major depressive disorder during therapy in 2022, as well as when you returned in 2023. Furthermore, you presented throughout treatment as engaged in the psychology sessions and reported very limited emotional regulation strategies. Treatment across the sessions has involved psycho-education on emotional regulation and cognitive behavioural therapy to begin to process post-traumatic experiences contributing to your psychological distress.
23In particular, the treating psychologist got histories involving various incidents at work, particularly involving the previous owner, Alkemade, and his attitude to work, contracting non-Hodgkin’s Lymphoma in 2015 and various bouts of suicidal ideation in 2015.
24In particular, the treating psychologist reported:
'In December 2023, [you] reported great remorse, guilt and shame over using another registered company auditor’s name on various reports. [You] explained that [you] had placed great value and significance on [your] ability to become a Registered Company Auditor and that [you] had been working hard to get this qualification. [You] reported that to become a Registered Company Auditor would have meant that [you] had finally reached [your] potential, it was something that [you] felt [you were] good at, something that [you] deserved and that [you] had finally succeeded at. To [you] this most likely would have meant that [you were] no longer a failure or an imposter in the business world and that [you] finally belonged amongst [your] work colleagues. [You] reported pressure from [your] clients at the time to finalise their company audit reports and when [Alkemade] had refused to sign the required document for [you] to obtain this qualification, [you] said it felt like [you were] ‘losing a child’, and you felt that [your] whole career, self-worth and future had been taken away from [you] for no valid reason. Furthermore, [you were] planning to rely on the income from being a Registered Company Auditor to repay [your] debt and secure [your] financial future. [You] reported that this left [you] feeling like [you] had lost [your] self-identity, and self-worth.'[9]
(Emphasis added.)
[9]See exhibit “C” at page 2.
25Later in her report, the treating psychologist states:
'Given the schemas of failure and social isolation that [you hold], the subsequent significance that [you] placed on [your] work in terms of [your] financial future, self-identity, work and value, the traumatic response to the events that happened with [your] business between 2013-2015, and [your] subsequent development of cancer and suicidal ideation in 2015, it would be reasonable to assume that [you were] not making the decision to use another auditor’s signature on reports with a clear and rational state of mind. Taking into account [your] pronounced and genuine remorse about using another auditor’s signature on reports, [your] willingness to work with Australian Securities and Investments Commission and openly admit [your] wrongdoing, and [your] willingness to engage in psychotherapy to improve [your] mental health and address maladaptive schemas and lack of ongoing strategies that have conceivably contributed to [your] actions, it is highly unlikely that [you] would engage in fraudulent activities in the future.'[10]
(Emphasis added.)
[10]See exhibit “C” at pages 2-3
The evidence of the consultant psychologist, Mr Ian McKinnon ('the psychologist')
26You were referred to the psychologist by your solicitors and he interviewed you by video link on 1 February 2024 and 17 April 2024. He had available documents supplied by your solicitors, including the indictment, the ASIC record of interview; the prosecution opening upon plea dated 15 January 2024[11] and the report from the treating psychologist, dated 25 January 2024,[12] to which reference has already been made.
[11]See exhibit 1
[12]See exhibit “C”
27The psychologist got histories in relation to your family and relationships, education and employment, recreational interests, medical history and treatment, mental health treatment, current medication and treatment and substance use history. In his report, under the heading 'Current Clinical Summary', the psychologist states:
'In [his] opinion, [your] functional intelligence and general cognitive functioning fell within the normal adult range, and [you were] appropriately orientated in time, place, person and purpose.
In [his] opinion, at the time [he] assessed [you], [you were] suffering with a "Recurrent Depressive Disorder (RDD) and Complex Post-Traumatic Stress Disorder (CPTSD)".
Based on the information available to [him], in [his] opinion, likely, identified antecedents to [your] RDD and (the later development of) CPTSD include: [your] younger brother’s disturbing acting out during [your] childhood, the death of [your] first wife, the threats to [your] career, financial standing, and general living circumstances, posed by [your] business difficulties and [your] associated legal predicament, [your] development of the same condition that killed [your] first wife (non-Hodgkins lymphoma), the long and drawn-out legal process [you have] been dealing with, and [your] mother’s death in 2020, that resulted from a condition that had some parallels with [your] deceased wife’s condition.
In [his] opinion, in addition to suffering ongoing depression, with associated bouts of suicidal ideation, [you] also [suffer] with symptoms of CPTSD which include: anxiety, sleep disturbance, avoidance behaviour, insensitivity to environmental cues and triggers, rumination, flashbacks, intrusive thoughts, and emotional lability.
[He notes] that [his] diagnoses of RDD and CPTSD are consistent with the diagnoses of Major Depressive Disorder and PTSD made by the Clinical Psychologist Lisa Miller, although CPTSD signifies that several traumatic experiences have combined to fuel the disorder (rather than one event, as usually signified by a diagnosis of PTSD). In [his] opinion, Ms Miller’s report is persuasive and helpful, the information she received from [you] is consistent with what [you] provided to [him], and [he does] not take issue with anything else concluded or suggested.
In [his] opinion, closely associated with [your] CPTSD, [you] also [suffer] with existential anxieties, and that includes thoughts of death, fear of losing [your] business and suffering a profound financial loss, and fears for the welfare of [your] wife and concerns about how she has been affected by [your] legal matters, in a context where [you] "brought her to Australia from The Philippines".[13]
(Emphasis added.'
[13]See exhibit “B”, page 8, paragraphs [73]-[78]
28In particular, the psychologist opined that you do not have entrenched antisocial criminal traits and although the subject offences were, in a sense, 'technically illegal', they were not intended in a malicious manner to deprive others of their money or property. The psychologist commented that you appeared, in other respects, to have led a hardworking and law-abiding life, and you appear unlikely to fall back into recidivism. Furthermore, the psychologist noted that you repeatedly expressed:
'… remorse and shame over [your] offending, acknowledging that [your] wife has suffered ongoing distress for [your] actions, and [your] previously good name has been sullied'.
29You informed the psychologist of your willingness to salvage your career in accounting, including submitting to close supervision by ASIC-approved professionals, continuing psychological therapy and anything else that may be appropriate to you.[14]
[14]See generally exhibit “B”, pages 8-9, paragraphs [79]-[80]
30Again, I refer to the psychologist, under his heading 'Summary and Conclusion' where it is stated, in part:
'In summary, [you are] a 59 year-old man, who continues to suffer with a Recurrent Depressive Disorder (RDD), and Complex Post-Traumatic Stress Disorder (CPTSD).
In [his] opinion, these disorders made profound contributions to [your] offending, during the period 2015 to 2021.
[You appear] to still suffer with these disorders, but they appear to have ameliorated somewhat, as [your] physical health has improved, and the prospects for salvaging [your] accounting business appear a bit more promising. However, many significant uncertainties still hang over [you], and [you are] vulnerable to suffering a worsening of [your] RDD and CPTSD, in the face of elevated and new life stressors.
[You] repeatedly expressed remorse and shame over [your] offending, and evinced a strong determination to never again engage in offending (of any sort), despite whatever new hardships life may throw at [you].
[You continue] to be treated for B-cell non-Hodgkin’s lymphoma, and other physical medical conditions. [You] also [maintain] therapy sessions with the Clinical Psychologist Lisa Miller.
In [his] opinion, should the court impose a term of imprisonment on [you], [you] will be devastated, and [you are] likely to suffer suicidal ideation and a psychological breakdown, requiring intensive crisis mental health care. [Your] mental health is already poor, and imprisonment is likely to cause [you] to suffer an overwhelming sense of personal failure, shame, anxiety, fear, and shock, embodying a broad, resurgent existential crisis. Further, [you do] not have any prior experience of the prison environment, [you do] not associate in the criminal milieu, and [you are] likely to be targeted and intimidated by predatory prisoners.
In addition, treatment of [your] physical health issues, particularly [your] B-cell non-Hodgkin’s lymphoma, are likely to suffer neglect and a poorer level of service, within the prison system.'[15]
(Emphasis added.)
[15]See exhibit “B” at page 10, paragraphs [90]-[96]
Other medical material
31I refer to the following exhibits pertaining to medical matters:
(a) Patient Health Summary, signed by Dr Frank Chai, dated 27 November 2023.[16] In that document, there is described what is referred to as an 'Inactive Past History' of non-Hodgkin’s lymphoma on 1 January 2022 and a hip injury on 9 February 2022. Under the heading 'Active Past History' are the following: Diabetes Mellitus, 1 January 2022; anxiety/depression, 9 January 2022 and peripheral vascular disease, 23 March 2022. Furthermore, you are taking various medications for the various conditions;
(b)
Report from Associate Professor McKendrick of Eastern Oncology, dated
28 November 2023.[17] Associate Professor McKendrick notes that you have been a patient of his since September 2015, at which time you were diagnosed with Stage 1 diffuse large B-cell lymphoma, involving glands of the right inguinal region. You were treated with cytotoxic chemotherapy and local radiotherapy, with complete clearance of the lymphadenopathy. Associate Professor McKendrick notes that, on follow up, you appeared highly likely to be cured.
Associate Professor McKendrick notes that you did have significant side effects from your treatment, including anxiety and depression related, in the main, to the diagnosis of potentially lethal malignancy and the intensive therapy you undertook. You also had physical complications from treatment with vascular complications likely from radiotherapy and having vascular surgical intervention, which has resulted in significant improvement of your anxiety and depressive illness.
[16]See exhibit “E”
[17]See exhibit “F”
The various references
32I have read all the references on which you rely. Such references are from your wife; Grant, who has worked at Alkemade & Associates since November 2006 to the present, and who describes, among other things, the various difficulties you had after you purchased the business from Alkemade; clients, including Mr Mark Rizzo, Mr Jehad-El-Bouch; Ms Joanne Woods, who at one stage was working for a client of your firm and also later worked for you; Mr Marcus Limosani, who met you when he was working for Business Works and who later became one of your clients; Mr Rafael Andrada who was assisted with advice in finance and general direction by you, and Mr John Waugh, who first met you at Melbourne High School, and has been a friend of yours for over 40 years. In particular, he describes himself as currently the head of Health & Safety at Healthcare Victoria – an agency of the Victorian Government. Both you and he have played tennis over the years at high levels and also have holidayed together over the years.
33A common thread throughout such references was that you were a very loyal and compassionate person, willing to help people when they were going through difficult circumstances. Furthermore, several of those referees highlighted how well you performed accounting services, always ready to explain matters and assist if possible.
34In particular, the reference from Grant also details the travails and difficulties you underwent after Alkemade sold the accounting business to you and, indeed, how you battled through very difficult times brought about, in part, by ongoing illnesses, financial pressures brought about by taking out a business loan to buy the business; Alkemade not living up to his agreement of servicing various customers, but still expecting to be paid an agreed sum and, of course, the recent difficulties relevant to the subject offending.
Further relevant matters
35Following a request from the Court to make further submissions in relation to matters raised in an email sent by the Court to the parties, the matter was again listed for a further plea hearing on 19 July 2024 and at that time, your counsel provided a further document headed 'Outline of Further Submissions'.[18] Your counsel set out details of three registrations which had been cancelled since your offending:
(a)
membership of the Institute of Public Accountants ('IPA'), cancelled on
5 October 2023;
(b) registration as a tax agent with the Tax Practitioner’s Board ('TPB'), terminated on 22 January 2024. In this respect, I refer to the letter from TPB dated 20 December 2023, which advises of the disqualification. I direct that that document be tendered and marked as exhibit 'H';
(c) registration as an external examiner with the Legal Services Board ('LSB).
[18]That document was not tendered, but I direct that it be tendered and marked as exhibit 'G'.
36I was further informed by your counsel that, as a result of the termination of your registration with the TPB, you become a 'disqualified entity'. I refer to exhibit 'H' (the TPB letter), which advises you of the disqualification, states that a disqualified entity is disqualified for the period that you are unregistered as a tax practitioner, and for five years after any event listed in s45.5(2) of the Tax Agent Services Act 2009 ('TASA') occurs. Section 45.5(2)(a) includes a conviction for an offence involving fraud or dishonesty. Your counsel accepted that the phrase 'fraud or dishonesty' would extend to the nature of your offending.
37Furthermore, it was submitted that, if the Court does not convict you for either offence on the Indictment, that you will be a disqualified entity for 'the period that [you] are unregistered as a tax practitioner'. Apparently, this means for at least two years,[19] but also until you successfully apply to the TPB to be registered from that two-year ban.
[19]Refer to the letter of the Tax Practitioner’s Board, dated 20 December 2023.
38Accordingly, it was submitted by your counsel that if the Court does convict you for either of the subject offences, you would be a disqualified entity for five years following the conviction (in addition to the period between 22 January 2024 and the sentence) and until you successfully apply to the TPB to be re-registered for that period.
39Furthermore, as a disqualified entity you are only able to do basic 'administrative work' and cannot share in any profits of the business. You cannot provide 'any taxation services'. Your counsel noted that Grant does all the work at Alkemade’s and that you do minor administrative work, such as errands like attending the bank, making phone calls and organising appointments. In particular, you cannot do any work which can be charged to clients, and you do not earn any income from the work.
40The Court was also informed that you and your wife rely on your wife’s income to live and to service the various debts you have, including those associated with purchasing Alkemade’s accounting business.
41Your counsel noted that, although it is likely that the TPB would at least consider registering you when eligible, you are now 59 years of age and face a period of at least two years before becoming eligible and it is possible that you may not work as an accountant again.
Matters in mitigation
42Your counsel made the following general submissions in relation to your offending:
(a) although it was a 'very abhorrent decision' on your part to employ the electronic signatures of Marotta and later Ballment, you continued to do the audit work for each client in the same standard established over two decades. There was never any aspect of the audit file which would have caused any genuine RCA not to sign off. Your counsel pointed out that if you simply found the time or resources to engage an external RCA each time, you would have foregone a small cost each time (based usually on a few hours of their hourly rate per week) and would never have committed an offence;
(b) prior to the offending, you had been diagnosed with Type 2 diabetes (2014) and non-Hodgkins Lymphoma (2015) and were suffering from and receiving chemotherapy for the cancer throughout the offending period. It was submitted this partially explains why you would took somewhat of a 'head in the sand' approach to these crimes;
(c) Although acknowledging that the offending in relation to Charge 1 on the Indictment spanned a period of just over five years, such offending was not motivated by greed, as you would have made marginally less had you engaged an RCA, as you had done in previous work. In this respect, it was also submitted that, because Charge 1 is one of making a false document and not theft or obtaining by deception, the sum you were paid for the work was of much less relevance to the overall seriousness of the offence. He submitted that the gain for you was much less than a theft or deception;
(d) In relation to Charge 2 on the indictment, it was submitted that such offending necessarily flowed from the earlier offending relevant to Charge 1. One of the complainants in Charge 1, HCFSL, who were registered with ASIC. In early 2021, they ceased engagement with Alkemade and to do this, Alkemade had to resign as their auditor, and since you had use Ballment’s signature to complete the previous work for ASIC, Ballment had to sign the ASIC form for them to resign. This brought attention to the whole situation.
43In particular, your counsel referred to the following matters in mitigation of your sentence:
(a) Your plea of guilty
Your counsel submitted that your plea of guilty was at the 'earliest possible opportunity'. As made clear by counsel for the prosecution, on 4 November 2021, you voluntarily attended a formal record of interview with ASIC and made full admissions to the offending. During 2022, following discussions between ASIC and your legal representatives, it was agreed the matter would proceed as a plea of guilty and would be commenced via direct indictment with your consent.
Counsel for the prosecution tendered a further document, dated 24 May 2024, headed 'Crown Submissions on Sentence'.[20] In that document, counsel for the prosecution submitted that the pleas of guilty were at the earliest available opportunity and that you co-operated with the investigations and made full admissions in relation to the offending.
[20]Exhibit 2
I accept that your pleas of guilty were at the earliest possible time and were accompanied by full admissions as to the offending. In this respect, I refer to the document which is said to be a 'Statement of Facts', which was not seemingly tendered by way of oversight, and I direct that such document be tendered and as marked as Exhibit '3'.
In particular, I refer to paragraphs 35 and 36, which state:
'The evidence of the offences committed by [you] obtained by ASIC without [your] cooperation is, in ASIC’s view, strong. However, the cooperation provided by [you] in admitting the Agreed Statement of Facts and pleading guilty at the earliest opportunity, have been of significant value to ASIC. Without this cooperation ASIC would have been required to expend significant time and resources seeking to gather admissible evidence capable of proving the offences and preparing a formal brief of evidence for CDPP to consider in deciding whether to recommend that charges be laid.
The Agreed Statement of Facts and guilty plea enabled this matter to be resolved much earlier than it would have otherwise been the case and freed up resources which ASIC has been able to utilise for other investigations'.
Accordingly, I also accept that your pleas of guilty have had substantial utilitarian value, as described above. Again, counsel for the prosecution accepted that such pleas carried utilitarian value.
It was also submitted that such pleas of guilty were entered into during the period still affected by the COVID-19 pandemic and that such a plea should attract 'an actual and palpable amelioration of sentence'. Reference was made to the well-known decision of Worboyes v R.[21] Counsel for the prosecution accepted the principles in Worboyes[22] do apply.
[21][2021] VSCA 169
[22]Ibid
In all the circumstances, I do consider that the plea should attract 'an actual and palpable amelioration of sentence'.
(b) Remorse
It was also submitted that an early plea of guilty is demonstrative of remorse. Although it is always a matter for the presiding judge as to whether or not a plea of guilty is demonstrative of remorse and I refer to Phillips v R (2012) 37 VR 594 [23]. I consider such plea is clearly demonstrative of remorse, given all the circumstances of this matter. I also note the comment of the psychologist, wherein he has recorded that:
[23]See Phillips v R (2012) 37 VR 594
'[You] repeatedly expressed remorse and shame over [your] offending, and evinced strong determination to never again engage in offending (of any sort), despite whatever new hardships life might throw at [you].';
(c) Your prospects of rehabilitation
Your counsel submitted that you have 'excellent prospects' for rehabilitation. In particular, your counsel submitted the following matters:
(i)your offending was not caused by greed or any sophisticated attempts to gain something you could not have otherwise gained without offending;
(ii)you made admissions to ASIC the moment you were first phoned by them, even in circumstances where you were told not to make comments without legal advice. You explained that you were relieved that they had come to you so you could come 'clean';
(iii)your co-operation with the prosecution, which has already been referred to;
(iv)your co-operation and acceptance of the TPB’s findings;
(v)you have expressed remorse, as already recorded, both to family, friends, and to the treating psychologist;
(vi)you have sought treatment since 2022 from the treating psychologist;
(vii)that the psychologist formed the view that you are 'unlikely to fall back into recidivism'.
Counsel for the prosecution, in her written submissions, submits that:
'The Crown submits that [your] prospects of rehabilitation are positive and concedes it appears unlikely [you] will reoffend. The Crown also accepts that [your] conduct demonstrates remorse and contrition.'[24]
[24]Crown Submissions on Sentence, dated 24 May 204 at paragraph [13]
After a consideration of all the material before the Court, I have formed the view that your prospects of rehabilitation are good and it is highly unlikely you would ever commit this type of offending again;
(d) Prior good character
There is no issue that you had no criminal history and no other matters pending.
In her written submissions, counsel for the prosecution, although accepting that you have no prior criminal history and have previously been of good character, the weight of such matters is tempered in cases in what she referred to as, 'white collar offending and a breach of trust'[25]. Reference was made to DPP v Bluefin.[26] It was further submitted that:
[25](Ibid) at paragraph 10d.
[26][1998] 4 VR 114
'… It is a feature of white collar crime that offenders will likely be of prior good character, have no prior convictions, have good character references, and good prospects of rehabilitation'.[27]
[27](Op cit) at paragraph 10d
On balance, I do give some weight to the fact that you have been a law-abiding citizen up to the date of offending and indeed, based on the references, is someone who has been loyal and helpful to many people and friends. Furthermore, the references from some of your past clients, who clearly respected you as an accountant.
(e) The issue of delay
It was submitted by your counsel that there has been substantial delay in this matter which is not attributable to you in any way. In particular, reference was made to the following matters:
(i)your offending was uncovered in early 2021, at which time you made informal admissions to ASIC when you were first contacted by them;
(ii)you were interviewed on 4 November 2021 in regard to the subject offending and made full admissions over a two-and-a-half-hour interview;
(iii)the case was listed before the County Court on direct indictment, with the indictment being signed on 26 June 2023, almost two years after the interview;
(iv)you had the same lawyers assisting you and liaising with the prosecution since prior to the interview;
(v)there has been a delay of over three years since the offending was revealed and admitted to, and almost three years since the formal record of interview.
It was submitted that both so-called 'limbs of delay' are relied upon in the circumstances. The first limb is that you experienced increasing anxiety over the time of the delay, with this matter 'hanging over your head' and the second limb, that the delay has also occasioned rehabilitation for you.
Counsel for the prosecution, in her written submissions, conceded that there has been a 'delay' in sentencing in this matter.
Significant delay between the time an offender is interviewed by police or a relevant authority, and the time charges are laid, as well as delay between the laying of the charge and trial, can be a powerful mitigating factor.[28] Although delay, in itself, creates no automatic right to a sentencing discount, it is clear that when the prosecution unduly delay to bring the matter to court, or, more particularly, when the delay is through no fault of the offender or his solicitors, there is much more likely to be a discount.[29]
[28]See Tones v R [2017] VSCA 118 at paragraph [36].
[29]See R v Nikodjevic [2004] VSCA 222 at paragraph [22].
Generally, delay is analysed as a mitigating factor by reference to the two limbs referred to – the first concerning 'unfairness' to the alleged offender, in that a charge or charges were 'hanging over his head and causing him anxiety'. The second limb concerns whether, during the course of delay, the offender has demonstrated progress towards rehabilitation.[30]
[30]See R v Merrett; Piggot & Ferrari (2007) 14 VR 392 at [35]-[39]
I consider that the first limb concerning unfairness, is particularly relevant to your situation, bearing in mind the delay between when you made full admissions, until the matter was brought before the Court on a plea hearing. In particular, where the unfairness limb is invoked, psychological injuries sometimes gives support to the duress endured by the offender. In the circumstances of this case, I consider there is clear evidence that you have suffered psychologically as a result of the process of getting this matter on to trial and the duration of that delay (although not the only factor). In this respect, I refer to the evidence of the treating psychologist.
Although delay does not have to be 'inordinate' before it may be considered in mitigation;[31] if delay is unduly long 'it may be seen as a mitigating factor'.
[31]See R v Miceli [1998] 4 VR 588 at [591]
The second limb of delay, rehabilitation, is also relevant, since you have undergone psychological treatment and complied with the various cancellations of relevant registrations.
After a consideration of all these matters, I do consider that both limbs of delay are relevant in mitigation of any sentence.
(f) The application of Verdins’ principles
Your counsel submitted that the so-called Limbs 1, 3, 5 and 6 set out in the decision of R v Verdins; R v Buckley; R v Vo[32] have application.
[32](2007) 16 VR 269
I refer to paragraph 32 of Verdins,[33] which states in part:
[33]Op cit
'Impaired mental functioning, whether temporary or permanent (“’the condition"), is relevant to sentencing in at least the following six ways:
1.The condition may reduce the moral culpability of the offending conduct, as distinct from the offender’s legal responsibility. Where that is so, the condition affects the punishment that is just in all the circumstances; and denunciation is less likely to be a relevant sentencing objective.
2.…
3.Whether general deterrence should be moderated or eliminated as a sentencing consideration depends upon the nature and severity of the symptoms exhibited by the offender, and the effect of the condition on the mental capacity of the offender, whether at the time of the offending or at the date of sentence or both.
4.…
5.The existence of the condition at the date of sentencing (or its foreseeable recurrence) may mean that a given sentence will weigh more heavily on the offender than it would on a person in normal health.
6.Where there is a serious risk of imprisonment having a significant adverse effect on the offender’s mental health, this will be a factor tending to mitigate punishment.'
In particular, your counsel submitted that both the treating psychologist and psychologist diagnosed you to be suffering from Post-Traumatic Stress Disorder and the psychologist also diagnosed you to be suffering from recurrent depressive disorder – both conditions existing at the time of the offending and at the time of sentencing.
Your counsel, in support of Limb 1 of Verdins’ being enlivened, made reference to the report of Mr Mackinnon at paragraphs 84 and 91, and in relation to Limb 6, referred again to the report of Mr Mackinnon at paragraph 95, which was said to enliven that particular aspect of Verdins.
In her written submissions, counsel for the prosecution submitted that psychological material indicating the possible application of Limbs 1, 3, 5 and 6 of Verdins may sensibly moderate the need of general deterrence,[34] though psychological evidence to the effect that the offender’s conditions were a:
'… major contribution to his offending, by profoundly degrading his ability to apply good judgement and sound reasoning, reducing his ability to apply consequential thinking, and diminishing the awareness of his professional and community responsibilities.'[35]
However, it was also submitted that this is difficult to reconcile with the auditing accounting role apparently fulfilled without any allegation of incompetence by you and the concealment of the offending. Given the sustained length of the offending and frequent expressions of remorse by you, the Court might give a guarded view to the reduction of moral culpability'.[36]
After a consideration of the material, I consider some weight should be given to the principles relied on by your counsel, particularly in relation to your moral culpability being reduced, which, in turn, requires a moderation of general deterrence and just punishment;
(g) Extra-curial punishment
It was submitted by your counsel that, as a result of your offending, there has been the cancellation of various registrations to which reference has already been made. You have lost the ability to work in your career field and area of expertise. Reference has already been made to the effects of your cancellation of your registration as a tax agent by the TPB. Your counsel did concede that such a mitigating circumstance is reduced 'slightly' since the criminal conduct was in the course of employment that you have now lost. I accept that the extra-curial 'punishment', so identified, is relevant in considering an appropriate sentence.
[34]Reference was made to R v Yaldiz [1998] 2 VR 376 at [383] and DPP (Vic) v O’Neill [2015] VSCA 325 at paragraph [65]
[35]Reference being made to the report of the psychologist, page 9, paragraph [84]
[36]Reference was made to Walker v R [2011] VSCA 230 at paragraphs [8]-[9]; DM v R [2012] VSCA 227 at paragraphs [30]-[31]
Comparative cases
44Although your counsel supplied a table of 'comparable cases', he noted that all such cases involved offending which was far more serious by nature, which does create a 'ceiling' to be considered in the present matter. Such cases involved theft with actual gains to the accused person and substantial losses to the complainants. Furthermore, during argument in court, your counsel and indeed counsel for the prosecution, both noted that it was difficult to find a precise case with similar offending.
45Ultimately, it was submitted that imprisonment was too severe an outcome in all the circumstances in this matter and that an appropriate sentence is either a financial penalty or a community correction order. You counsel finally noted this is a unique case involving, you, a man who had suffered multiple hardships at the time of the offending and made forged documents to enable your career business to continue operating. You never let your offending cause the quality of your work to decline.
The position of the Prosecution
46It was submitted by counsel for the prosecution that, with reference to the gravity of the subject offending, the maximum penalties, your subjective factors and the significance of general and specific deterrence, you should be convicted and sentenced to an immediate term of imprisonment and that was the only appropriate sentencing disposition in relation to Charge 1, whereas a conviction with a fine was an appropriate disposition in relation to Charge 2.
47In particular, it was noted Charge 1, of course, is a State offence and the sentencing of you must be in accordance with the Sentencing Act1991 (Vic); whereas Charge 2 is a Commonwealth offence and the Court must sentence you in accordance with Part 1B of the Crimes Act1914 (Cth).
48The sentence must be of a severity appropriate in all the circumstances of the offence, taking into account such matters listed in s16A(2) of the Crimes Act1914 (Cth) as are relevant and known.
49In particular, counsel for the prosecution submitted that, in relation to Charge 1, your offending is 'objectively serious' and it was informed by the following features:
(a) as a result of the offending, you obtained, so it was submitted, $241,280.60 in fees from clients;
(b) though captured in a single charge, there was a large number of discrete incidents, and with the offending not confined to a single incident or through impulsivity. Such offending was systematic, deliberate and occurred over a long period of time;
(c)
the offending involved a course of conduct over a long period, repeated deliberate acts of dishonesty and the accumulation of significant funds. You continued to fraudulently sign audits over a period of about five-and-a-half years and continued to accept audit work and falsify signatures on
84 separate occasions. The fees you charged for your audit services increased over time, despite your knowledge that you were not registered;
(d) your conduct, so it was submitted, constituted a breach of trust. The various entities that relied on services from you relied on your stated qualifications to comply with their own reporting obligations and standards. You also breached, so it was submitted, the trust of the two auditors who had previously assisted you.
50In relation to Charge 2, such offending involved a continuation of the breach of trust flowing from Charge 1. The offending, the subject of Charge 2, was designed to continue concealing the offending, the subject of Charge 1, and assist you in avoiding detection. These features heighten the objective seriousness of this offending.
51The thrust of the submissions made by counsel for the prosecution was based on the essential principle that general deterrence is the primary factor for sentences involving 'white-collar offending'.[37]It was submitted that a sentence imposed for white-collar crime must give real effect to denunciation and general deterrence:
(a) perpetrators of a white-collar crime are likely to be rational, profit-seeking individuals who can weigh the benefits of committing a crime against the costs of being caught and punished;[38]
(b) white-collar criminals are more likely to be first-time offenders;[39]
(c) as already recorded in these reasons, good character cannot be given undue weight and plays a lesser role in the sentencing process;[40]
(d) general deterrence is likely to have a more profound effect in the case of white-collar criminals.[41]
[37]Reference was made to Ryan v The King [2022] SASCA 110 at paragraph [30] and the cases cited therein, including DPP (Cth) v Gregory (2011) 34 VR 1 at [57].
[38]Reference was made to Gregory (op cit) at [53].
[39]Ibid
[40]DPP v Bulfin (op cit)
[41]See Keefe v R [2014] VSCA 201 at paragraphs [77]. See also Stamatopoulos v R [2018] WASCA 148 at paragraph [14].
52It was submitted that the heightened need for general deterrence ordinarily warrants a term of actual imprisonment in cases of white-collar crime.[42]
[42]See Gregory (op cit) at [54].
53Counsel for the prosecution also prepared a table of cases, with the caveat that current sentencing practises were only one factor and not the controlling factor in fixing a just sentence.[43] In particular, counsel fairly observed that there are no cases available with very similar facts to those in this case, and also noted that the objective gravity of the offending in all the cases referred to was greater than in the circumstances of this matter.
[43]Reference was made to Director of Public Prosecutions v Dalgliesh (a pseudonym) (2017) 262 CLR 428 at [68].
54Ultimately, counsel noted that, notwithstanding you may rely on a number of 'compelling' matters in mitigation, the objective serious offending remains elevated due to the number of incidents of offending, the long period over which the offending occurred and the financial gain received as a result of the offending.
Conclusion
55You have pleaded guilty to the State offence of making a false document with the intention of inducing another person to accept the document as genuine (Charge 1 on the Indictment) and the Commonwealth offence of making or authorising the making of a materially-false or misleading statement in a document lodged with or submitted to ASIC (charge 2 on the Indictment).
56Charge 1 is a serious offence, as made plain by the maximum penalty of 10 years’ imprisonment and/or a fine of $182,004. Furthermore, Charge 2, although not as serious, still carries a maximum penalty of five years’ imprisonment and/or a $66,600 fine.
57Of course, as noted by counsel for the prosecution, Charge 1 being a State offence, the Court must sentence you in accordance with the Sentencing Act1991 (Vic), whereas Charge 2, being a Commonwealth offence, the Court must sentence you in accordance with Part 1B of the Crimes Act 1914 (Cth). Part 1B of that Act provides that the sentence must be of a severity appropriate in all the circumstances of the offence,[44] taking into account such matters listed in s16A(2) of that Act as are relevant and known.
[44]See s16A(1) of the Crimes Act 1914 (Cth).
58The prosecution case against you in relation to Charge 1 is that between 15 July 2015 and 5 November 2020 you falsified the signature of two RCAs, the auditors being Sam Peter Marotta and Hugh Robert Ballment, on documents relating to audits of the financial accounts of 12 clients. You then provided them to the clients with the intention of inducing the clients to pay for auditing fees. As a result of that conduct, you received payments from the clients over the period of the offending, said to be in the amount of $241,280.60.
59In relation to the second charge you lodged, on 10 February 2021, a document containing a falsified signature with ASIC on behalf of the client Highett Community Financial Services Limited.
60Clearly enough, entities such as businesses both large and small, sporting clubs and charities etcetera, keep financial records and seek to have those financial records audited by an RCA. Once so audited, it can be asserted that the financial records comply with appropriate accounting regulations and protocols. Those referring to such audited accounts would act on the basis that such accounts do comply with the regulatory requirements. In this sense, I consider that the auditing of accounts in respect of whatever the entity may be is important, both to the entity seeking the audit and to third parties viewing such accounts.
61In relation to Charge 1, you deliberately and knowingly falsified the signature of two RCAs on the documents relating to audits of 12 of your clients. Furthermore, in relation to Charge 2, you deliberately and knowingly falsified the signature on an ASIC-required document.
62However, in coming to a view of the objective seriousness of such offending and your moral culpability in relation to such offending, I consider that the following matters are of importance:
(a) leading up to your offending commencing in about July 2015, you were a qualified accountant who had many years performing auditing work from when you first qualified as an accountant through your years at Price Waterhouse, Snowball and when you were initially an employee of Alkemade & Associates.
As is made plain, a distinction should be made between the accountant who performs what was referred to during the plea as the 'grunt work', that is to say, preparing the accounts of any particular entity, and when so prepared, seeking an RCA to 'sign off' on them. By that of course, the auditor, by 'signing off', is asserting that the financial records are in order and comply with regulatory standards.
In this respect, it must be borne in mind that the various 'audits' completed by you over the period of offending gave no rise to any shortcomings or complaints, or any other difficulties.
(b) perhaps this is not surprising when one considers the factual circumstances immediately prior to your offending. Whereas you had been an employee of Alkemade & Associates for about 10 years performing auditing work, with such work 'signed off' by Alkemade, himself, who was an RCA.
On the material before me, I accept your account of events leading up to the subject offending, which is indeed largely confirmed by your employee, Grant, that agreement was reached with Alkemade for him to sell the business to you on certain terms, which he did not follow through with.
Indeed, I accept that you had completed all the appropriate number of hours for you to become an RCA (when working for Alkemade), but that Alkemade, for reasons best known to him, refused to 'sign off' on your work experience, which in turn prevented you from going to ASIC to seek registration as a company auditor. In essence, you had the experience and relevant training to become an RCA. It was in this situation that you found yourself after Alkemade, reneging on various terms, but continuing to seek to be paid an agreed sum per year after the purchase of the business and also agreeing to continue servicing various clients.
Furthermore, you had borrowed heavily to purchase such business in which, when finally separating yourself from Alkemade, you had no RCA to continue servicing clients of the business;
(c) Also at this time, you had various further issues involving the diagnosis for cancer and suicidal ideation in 2015. In this respect, I refer to the evidence of the treating psychologist, who noted that, bearing in mind these matters:
'… it would be reasonable to assume that [you were] not making the decision to use another auditor’s signature on reports with a clear and rational state of mind. … .'[45]
[45]Exhibit “C” at page 2
In this sense, I consider that events surrounding you commencing to falsely use the signatures of the RCA, Marotta, was not when your mind was clear and rational and, accordingly, I accept that your moral culpability is reduced because of that;
(d) the Crown case is that you benefited to the extent of the sum of $241,280.60. In this respect, I accept the submissions of your counsel as to how those moneys should be considered. Again, it must be borne in mind that hitherto your offending, a client would be billed for auditing services which would involve the so-called 'grunt work' and the fee for the RCA signing off on such accounts.
Although there was no evidence before the Court as to what that amount would be, it is clear enough it would be a fee for service and your counsel suggested, based on your experience, that would be about five or 10 per cent of any fee which is ultimately charged to the client. It can only be a matter of speculation as to what the precise fee would have been, but over the period of offending you would have charged an amount of money due to the so-called 'grunt work', to which was added a fee for the RCA to audit such accounts.
Given the material before me, I do consider that, on any view, it dilutes dramatically the amount of the so-called benefit obtained by you following the course undertaken.
63Much discussion ensued between your counsel and counsel for the prosecution as to whether or not the subject offending is white-collar offending or, indeed, something different to that.
64In this respect, it was submitted by the prosecution that 'general deterrence is the primary factor for sentences involving white-collar offending'.[46] The footnote establishing that principle refers to the decision of Ryan v The King[47] at paragraph 30, which states:
'General deterrence and denunciation are prime considerations when sentencing for serious fraud against the Commonwealth and its agencies. Both General and personal deterrence were particularly important sentencing considerations in this matter'.
[46]Crown Submissions on Sentence, dated 24 May 2024, page 2, paragraph [6]
[47]Op cit at paragraph [30]
65Your counsel submitted that so-called 'white-collar offending' would usually involve:
(a) enormous rewards that are available;
(b) greed or the burden of funding an extravagant lifestyle;
(c) a weakness of succumbing to other people to use positions of power;
(d) substantial amounts of money gained;
(e) losses (often tragic in their impact) to much smaller businesses.
It was submitted that none of that conduct applies to you and ultimately it was submitted that your offending should not be characterised as white-collar offending. It was submitted that it should be more properly categorised with other 'supervisory types of offenders', including lawyers who falsify their supervision documents or offending that dishonestly asserts experience to obtain registration or rank.
66After a consideration of all of these matters, I consider that the objective seriousness of your offending is far from the worst type of offending, whether it be characterised as white-collar offending or otherwise. Furthermore, again, I consider your moral culpability is reduced by the matters to which I have referred to in these reasons.
67I consider that your offending is not the type which is traditionally referred to as white-collar offending and, indeed, as both counsel submitted to the Court, neither could find a case which had similar circumstances to that which has occurred in this matter.
68Be that as it may, for the reasons which I have advanced earlier, I consider that general deterrence is an important matter, given that people should be deterred from acting as RCAs when they are not qualified to do so, bearing in mind the financial system relying on financial accounts to be audited appropriately. Again, as I have pointed out, in your circumstances, you had the experience and knowledge of an auditor and was an auditor in all but name. It is common ground that nothing was wrong with the audits undertaken by you, nor, indeed, as I have already noted, have any clients made any complaint into the subject audits.
69I do accept that you have breached the trust of your clients, who would have expected that an RCA would have 'signed off' on their accounts. However, as has been noted, no clients have made a complaint about such audits.
70Ultimately, I have come to the view that you made a terribly bad decision when under both financial and medical pressures, to falsely use the signatures of Marotta to 'sign off' on the various audits by you at the time when you took over the business from Alkemade. Furthermore, your situation is not helped by you continuing to use the signatures of Marotta and later Ballment for the next five years or so. You could have sought the services of an RCA, as you did initially with Marotta and then later with Ballment. Furthermore, although you may well have had to go through a process again, you could have commenced some type of process where you would be supervised and ultimately apply again to be an RCA. This did not occur.
71I consider that the other important matter in coming to a view about appropriate disposition in relation to Charge 1 is the number of powerful mitigating factors to be taken into account. In this respect, as I have already recorded, they include:
(a) your very early plea of guilty in relation to the subject offending, which had significant utilitarian effects and also attracts the discount described as in Worboyes;[48]
(b) your assistance to the authorities, which has been acknowledged by ASIC and your frank and full disclosure to ASIC at the time of the offending;
(c) your agreement to the matter bypassing a committal and being dealt with by this court by direct indictment;
(d) your remorse, which I consider to be real and deep, about your offending over the years;
(e) your rehabilitation prospects as described by both parties as 'very good'. In this respect, I do not consider that specific deterrence or protection of the community have any real relevance in the sentencing disposition;
(f) the application of Verdins’ principles, in particular, to a reduction of your moral culpability, as described earlier in these reasons. Furthermore, if you were sentenced to a period of imprisonment, I consider, based on the material before me, that Principles 5 and 6 would be enlivened.
[48]Op cit
72It is also to be noted that you have suffered what is referred to as non-curial punishment. That is to say, your loss of registrations, which has effectively stopped you practising as an accountant, and although you attend the business, Grant does the taxation work and you attend to administrative matters. Of course, if convicted, that period that you must remain unregistered is lengthened which, of course, given your age, does give rise to the prospect of you never becoming an accountant again.
73After a consideration of all the material, and bearing in mind the concept of parsimony, I consider that such offending should not attract an immediate prison sentence, but rather a significant fine followed by a community correction order with some punitive element. I consider the factors relevant to a sentence to be general deterrence, as I have described, and denunciation of such actions. I do not consider that specific deterrence or protection of the community has any real role to play.
74In relation to Charge 2, both parties submit that a fine would be appropriate. After a consideration of various matters set out in s16A(2) of the Crimes Act1914 (Cth), I have come to the view, again, that a fine would be an appropriate penalty in all of the circumstances.
Your sentence
75Please be upstanding.
76In relation to Charge 1 on the indictment, you are convicted and sentenced to a fine of $20,000. Furthermore, you are sentenced to a community correction order for a period of 12 months commencing from this date. Beyond the mandatory terms, I order the following conditions:
(i)pursuant to s48C of the Sentencing Act1991 (Vic), you are to perform 70 hours of unpaid community work during the course of the order;
(ii)pursuant to s48E of the Sentencing Act1991 (Vic), you are to be supervised, monitored and managed as directed by the Secretary.
77In relation to Charge 2 on the indictment, you are convicted and sentenced to a fine of $2,500.
78Pursuant to s6AAA of the Sentencing Act1991 (Vic), I declare that, save for your pleas of guilty, I would have sentenced you to a period of 18 months’ imprisonment.
- - -
0
15
0