Director of Public Prosecutions (Cth) v Brandi

[2021] VCC 1045

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

CRIMINAL DIVISION

Revised
Not Restricted
Suitable for Publication

Case No. CR-18-00542

COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS

v

DAVID BRANDI

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JUDGE:	HIS HONOUR JUDGE WRAIGHT
WHERE HELD:	Melbourne
DATE OF HEARING:	26 July 2021
DATE OF SENTENCE:	30 July 2021
CASE MAY BE CITED AS:	DPP (Cth) v Brandi
MEDIUM NEUTRAL CITATION:	[2021] VCC 1045

REASONS FOR SENTENCE

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Subject:CRIMINAL LAW – Sentencing.

Catchwords:              Plea of guilty – Dishonestly obtain gain from the Commonwealth – Accountant dishonestly obtained $135,248.67 from the ATO after falsely claiming GST tax refunds – Blatant and calculated offending – Reparation and degree of remorse – Delay – Good character and contribution to community – Ongoing professional sanctions.

Legislation Cited:      Criminal Code (Cth) s 135.1; Crimes Act 1914 (Cth) ss 16A, 17A, 20(1)(b); Sentencing Act 1991 s 9.

Cases Cited:DPP (Cth) v Goldberg (2001) VSCA 107; The Queen v Merrett (2007)14 VR 392; Duncan v The Queen (1983) 9 A Crim R 354.

Sentence:                  Imprisonment for a period of 2 years, released forthwith on a recognisance of $3000 and to be of good behaviour for a period of 2 years.

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APPEARANCES:	Counsel	Solicitors
For the DPP	Mr R Pirrie	Commonwealth Office of Public Prosecutions
For the Accused	Mr I Hill QC Mr J Taaffe	Doogue & George Criminal Lawyers

HIS HONOUR:

Introduction

1David Brandi, you have pleaded guilty to two charges of dishonestly obtaining a gain from the Commonwealth contrary to sub-s135.1(1) of the Criminal Code (Cth), which at the time of the offending, carried a maximum penalty of five years imprisonment on each charge (Charges 1 and 2).

2You have no prior Criminal Record.

Circumstances of the offending

3A detailed prosecution opening was tendered on the plea and may be summarised as follows:

Background

4At the relevant time, you were an accountant and the principal of the Chartered Accounting practice Baitana Peak Pty Ltd trading as Brandi & Co (‘Baitana’).  You were the sole director of Baitana which was a Registered Tax Agent (‘RTA’).

Goods and Services Tax (‘GST’)

5The Good and Services Tax (‘GST’) is a tax of 10 per cent on most goods and services sold and consumed.  Generally, businesses registered for GST will include GST in the price they charge for their goods and services and claim credits for the GST included in the price of goods and services they buy for their business.

6If the GST credits exceed the GST charged, a GST refund can be claimed from the Australian Taxation Office (‘ATO’).  Businesses are required to lodge Business Activity Statements (‘BAS’) with the ATO to report sales and purchases and pay GST or receive a GST refund.  Depending on the circumstances, lodgement of business activity statements with the ATO may be done monthly, quarterly or yearly.

Quantum 8 Group – Property Development

7One of Baitana’s clients was Socrates Michanicos, who was a property developer involved in purchasing properties, demolishing the existing residences and engaging registered builders to construct new residential units.  Mr Michanicos did this via his group of property development companies known as the Quantum 8 Group.

8Baitana was engaged by the Quantum 8 Group to lodge BAS for the property development companies in the group, including 16 Bradley Street Pty Ltd and 19 Faulkiner Street Pty Ltd.

9These companies were involved in the purchase and/or development of property at the specified addresses.  Building construction services for 16 Bradley Street Pty Ltd and 19 Faulkiner Street Pty Ltd were arranged through the company Royal Blue Constructions Pty Ltd (‘Royal Blue’).

10Melbourne Property Group Pty Ltd (‘MPG’) was a company associated with you.  MPG had loaned a substantial amount of money to Mr Michanicos via the Quantum 8 group of companies (the Quantum 8 Group).  The Quantum 8 Group was in financial difficulty and owed MPG a substantial amount of money.

GST Refund Claims

11You used your position in Baitana, the registered tax agent for companies in the Quantum 8 Group, to make false GST refund claims by adding false invoice amounts for Brandi Homes to the construction costs for quarterly BAS.  This allowed the companies to claim larger GST refunds than entitled from the ATO.  The property development companies 16 Bradley Street Pty Ltd and 19 Faulkiner Street Pty Ltd were used to claim GST refunds.

12The charges concern GST refunds obtained as a result of false representations in five BAS statements lodged with the ATO for those companies.  The GST refunds exceeded the GST amounts genuinely owed by a total amount of $135,248.67, which is the amount you dishonestly obtained as a result of false representations in the BAS statements, particularised in Charges 1 and 2.

13The false invoice amounts claimed were purportedly from either ‘Brandi Homes Pty Ltd’ or ‘Brandi Homes (Aust) Pty Ltd’.

14No business, company or entity by the name of Brandi Homes, Brandi Homes Pty Ltd or Brandi Homes (Aust) Pty Ltd did any work on these projects.

Brandi Homes (Aust) Pty Ltd /Brandi Homes Pty Ltd/Brandi Homes

15Both you and your brother Jason Brandi were former directors and shareholders of Brandi Homes (Aust) Pty Ltd which was deregistered on 18 November 2007.  Brandi Homes (Aust) Pty Ltd had not lodged BAS returns with the ATO for the period 1 July 2007 to 30 June 2010 or income tax returns for the financial years 2008 to 2013.

16No company by the name of Brandi Homes Pty Ltd has been registered with ASIC.  The business name Brandi Homes was cancelled on 21 February 2002, re-registered on 28 December 2005, and cancelled again on 28 December 2008.

17The prosecution summary provides significant detail as to the individual transactions that support the charges on the indictment.  That summary was tendered and marked as ‘Exhibit P1’ on the plea and was accepted by you as an agreed basis for sentencing.  As such I will not reproduce the facts that constitute the specific transactions relating to each charge.

Nature and gravity of the offending

18The offence of obtaining a gain from the Commonwealth is a serious charge.  In this instance your dishonesty was blatant in that you intentionally created false invoices in order to obtain GST refunds to which the respective entities were not entitled.

19Your offending was motivated by the fact that you were financially connected to the companies for which you prepared tax documents.  You had loaned money to the companies and had a close business relationship with the director of those companies.  The companies involved were struggling to find funds to complete the developments and the motivation behind your offending was to prop up those entities to assist them in completing the projects.  If you could assist the companies, you protected your investment and ultimately you stood to gain.

20Rather than seek legitimate ways of alleviating the financial difficulties, you used your professional position as a certified practising accountant to dishonestly obtain money from the Commonwealth.  As the principle accountant for Brandi and Co you had authorised access to ATO systems and thus were is a position of trust which you grossly breached.  Your offending was calculated, it extended over a period of months and as was conceded by you counsel, it was serious offending.

21Further, crimes such as yours are difficult to detect, difficult to investigate and, as is well settled, are not victimless crimes.  In DPP (Cth) v Goldberg[1], Vincent JA quoted with approval the remarks of the sentencing judge below as follows:

Tax evasion is not a game, or a victimless crime.  It is a form of corruption and is, therefore, insidious.  In the face of brazen tax evasion, honest citizens begin to doubt their own values and are tempted to do what they see others do with apparent impunity.  At the very least, they are left with a legitimate sense of grievance, which itself is divisive.  Tax evasion is not simply a matter of failing to pay one’s debt to government.  It is theft, and tax evaders are thieves.

[1] (2001) VSCA 107 at [32] (Winneke P and Batt JA agreeing).

Personal circumstances

22You are 48 years of age.  Your parents migrated to Australia from Italy in the 1950s.  Your father worked on V/Line and later operated his own business in finance and building.  Your mother worked as a cook in aged care but her main work was in the home.  You have an older sister and a younger brother.  Your parents’ relationship was traditional in that your father was authoritarian, strict and made the decisions in the family and your mother raised the children.  Your parents had high expectations of you academically and you felt the burden of being the eldest son.

23You had a close relationship with your parents but have since become estranged from them as a result of your offending.  Your father died from bowel cancer on your birthday in December last year and this was particularly difficult for you as you were not in contact with him leading up to his death.

24You completed secondary school at Penleigh and Essendon Grammar School.  You excelled at maths and science in particular and were the captain of the school soccer team.

25You completed a Bachelor of Business at RMIT before undertaking further study to become a Chartered Accountant.  Whilst studying you worked at a café and then at a small accounting firm for seven years where you became a manager.

26At the age of 28 you opened your own practice, Brandi & Co.  This business thrived and you have developed a large business network including taking up other opportunities such as sitting on boards and partnerships in other businesses.  You currently operate or have shares in around 15 companies and employ around 150 staff.

27You are also very involved the community, having sponsored initiatives such as a community swim program and school sporting camps including an Indigenous program for upcoming athletes from disadvantaged backgrounds.  You have also established a charity called The French Rainbow Foundation which supports men’s mental health.

28In 1998 you married your wife Tina and you have three children together, aged six, eight and 13.  Your children are keen sportspeople and you are actively involved in their training and supportive of them in their endeavours, both academic and sporting.

29Your wife owns a hairdressing salon which has struggled during the pandemic.  The resultant financial stress, as well as your offending and the court proceedings, have placed a strain on her and your relationship and you no longer attend social events together.  Your wife has developed anxiety and high blood pressure for which she is now medicated.

30You have no history of substance abuse however since being charged you have increased your alcohol use as a coping mechanism.

31A report was prepared by Carla Ferrari, forensic psychologist, and tendered on the plea.  Ms Ferrari provides a detailed personal and psychological history and conducted psychometric testing.  In Ms Ferrari’s opinion, you are presenting with a Generalised Anxiety Disorder and a Major Depressive Disorder.  The anxiety and depression you suffer seem to be reactive to your current legal circumstances which you have been living with since the initial raid in 2012, and as a result of the long delay in bringing this matter to a conclusion.

32A number of references were tendered on your behalf.  Colleagues that have worked with you for many years speak of your dedication to hard work and your commitment to family.  Others speak of your involvement in the community, particularly in community sports.  Your wife wrote a reference to the court confirming that the criminal process has taken a significant toll on the family and your relationship, however she states that you are a dedicated family man and you have her ongoing support.

33Following the plea hearing, I sought some further clarification as to your professional status and any disciplinary action that may arise from the conviction in this matter.  I received from your solicitors information concerning a separate matter that has been dealt with by the Tax Practitioners Board resulting in a termination of your registration for a period of five years from August 2020.  While accepting that disposition, you are currently challenging the reasons for the determination in the Administrative Appeals Tribunal (‘AAT’).  Allied to that appeal is a Supreme Court action related to the same subject matter that is awaiting conclusion and undoubtedly will be relevant to the outcome of the AAT matter.

34Further, I was informed that presently you remain a member of Charted Accountants Australia and New Zealand however they too have an interest in the outcome of the Tax Practitioner Board matter and undoubtedly the outcome of this matter.

Sentencing considerations

35As the charges to which you have pleaded guilty are Commonwealth charges, I am required to take into account a number of matters pursuant to s 16A of the Crimes Act 1914 (Cth). In written submissions, Mr Hill QC who appeared with
Mr Taaffe on your behalf, highlighted a number of the matters in s 16A(2) that he submits should be given weight in the sentencing discretion.

36First and foremost is your plea of guilty.  The matter was committed to this Court in March 2018 and listed for trial in July 2020, however this date was vacated due to the suspension of jury trials during the pandemic.  The matter resolved in May this year after a number of other charges were withdrawn.  Whilst you did not plead guilty at the earliest opportunity, your plea of guilty has spared what would have been a lengthy and complex jury trial and has meant that witnesses have not been required to give evidence.  Your plea therefore has considerable utilitarian value and carries greater weight in the current circumstances where the court is burdened with delays as a result of the pandemic.[2]  I therefore take your willingness to facilitate the course of justice into account in your favour.

[2] Worboyes vThe Queen [2021] VSCA 169 at [39].

37In the course of your interview with Ms Ferrari, you expressed shame and remorse for your actions acknowledging the effect that has flowed to businesses associated with you, including the staff and their families.  Further, at the time of the plea you were in possession of a bank cheque which was then provided to the informant in this matter making full reparation to the Australian Tax Office.  Therefore, in my view in the circumstances you have accepted full responsibility for your conduct and have expressed a degree of genuine remorse.  However as noted at the plea, there is little evidence of remorse in terms of the wider effect of your conduct on the community in the way described by Vincent J in Goldberg.[3]

[3] Op cit.

38Mr Hill submitted that delay is a relevant consideration in the circumstances.  The offending occurred in 2010 with search warrants executed in 2012.  Charges were served in March 2017 and as noted, your trial was delayed due to the pandemic.  This considerable delay, has meant that the matter has been hanging over your head for a number of years.  Mr Pirrie who appeared on behalf of the Commonwealth Director of Public Prosecutions, submitted that some of the delay can been attributed to you as a result of an initial legal professional privilege claim made on your behalf that took some years to resolve, adjournment applications made on your behalf and a withdrawal of an earlier plea offer.  While I take those matters into account, nonetheless delay has been caused by other factors outside of your control including the fact that these types of matters are inherently complex and the additional delay caused as a result of the pandemic.

39It was submitted and I accept, that the delay in this instance, however caused, is significant.  As outlined in Ms Ferrari’s report, the delay has had an impact on you and your family and made it difficult for you to move on with your life.  The second aspect to the delay is that since the commission of these offences, you have not further offended and you have continued to contribute to the community and to your family.  However, as noted above, in that time there has also been other litigation both civil and disciplinary that is ongoing.  Nonetheless in the circumstances in my view the delay in this instance still carries considerable weight in the sentencing discretion.

40As to your prospects of rehabilitation, a number of matters support the position that your prospects may be viewed positively.  Other than a minor traffic matter many years ago, you have no prior criminal history and you have not reoffended in the 10 plus years since the commission of this offending.  Further, despite the toll on your family and your business while this matter has proceeded, as noted, you have continued to employ others and contribute to the community.  That said, Mr Pirrie rightly points out, and your counsel concedes, that the other disciplinary matters you have faced since this offending suggest that your prospects of rehabilitation should be viewed with some caution.  I accept that submission.

41In my view specific deterrence need only carry minimum weight in the sentencing discretion in this instance.  As a result of your conduct and this conviction, it was submitted that you will face ongoing professional sanctions preventing you from holding positions in companies or acting as an accountant which will clearly impact your professional capacity for a number of years.

42General deterrence is undoubtedly the paramount sentencing consideration in cases such as this, which was accepted by your counsel.  Others must be deterred from the temptation of obtaining a gain by deliberately providing false information in circumstances where the system relies on, and trusts, professionals like you.  Denunciation of your conduct is also a relevant sentencing consideration.

43While accepting the limitations on the utility of the provision of comparable cases, Mr Pirrie provided me with a number of appeal decisions and sentences of Australian courts which I have taken into account.

44The offending is serious offending and in my view, pursuant to s 17A(1) of the Crimes Act 2014 (Cth), I am satisfied that no other sentence is appropriate other than a term of imprisonment.  Your counsel also conceded that a term of imprisonment is warranted.  However, in all the circumstances, I am also of the view that the relevant sentencing considerations are able to be met with a sentence that will allow you to remain in the community and continue to move on as you have been while awaiting the conclusion of this matter.  As was endorsed by Maxwell P in The Queen v Merrett[4] quoting the Court of Criminal Appeal of Western Australia in Duncan v The Queen:[5]

'[W]here prior to sentence, there has been a lengthy process of rehabilitation and the evidence does not indicate a need to protect society from the applicant, the punitive and deterrent aspects of the sentencing process should not be allowed to prevail as to possibly destroy the results of that rehabilitation'.

[4] (2007)14 VR 392 at [35].

[5] (1983) 9 A Crim R 354 at 356-7.

Sentence

45Mr Brandi, can you please stand.

46David Brandi, in relation to Charges 1 and 2, dishonestly obtaining a gain from the Commonwealth, you are convicted and sentenced to 2 years imprisonment. Pursuant to s 9 of the Sentencing Act 1991, this is an aggregate sentence as both charges form a series of offences of the same or a similar character and were separated only because of the different entities involved.  The offences in relation to each charge were otherwise committed in the same way and in the same time period.

47Pursuant to s 20(1)(b) of the Crimes Act 1914 (Cth), I direct that you be released forthwith upon giving a recognisance in the amount of $5,000 and to be of good behaviour for a period of two years.

48I am required to explain to you that if you breach the conditions of the order you may be brought back before the court to be dealt with for that breach, which could include being ordered to serve the prison component of the order, and you may forfeit the $5,000.

49I will just have that order prepared.  I will have that brought down to you to sign.  While that is occurring, I have got the reparation order here.  I will sign that as well.  In the amount of $135,248.67.

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