Director of Public Prosecutions (Cth) v El Sayegh
[2015] VCC 1404
•25 September 2015
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted Suitable for Publication |
AT MELBOURNE
CRIMINAL JURISDICTIONCase No. CR-15-01143
| COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| RACHED EL SAYEGH |
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| JUDGE: | HIS HONOUR ACTING CHIEF JUDGE MCINERNEY |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 15 September 2015 |
| DATE OF SENTENCE: | 25 September 2015 |
| CASE MAY BE CITED AS: | DPP (Cth) v El Sayegh |
| MEDIUM NEUTRAL CITATION: | [2015] VCC 1404 |
REASONS FOR SENTENCE
---Subject: CRIMINAL LAW
Catchwords: Plea of guilty to three charges of obtaining financial advantage by deception
Legislation Cited: Crimes Act 1914 (Cth), Criminal Code Act 1995 (Cth), Sentencing Act 1991 (Vic)
Cases Cited: R v Verdins [2007] VSCA 102
Sentence:Convicted and sentenced to 3 years imprisonment, to be released immediately by way of recognisance to be of good behaviour for 36 months, and fined $10,000.
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APPEARANCES: | Counsel | Solicitors |
| For the CDPP | Mr M. Camilleri | Solicitor for CDPP |
| For the Accused | Mr J. McLoughlin (Plea) Ms Y. Hession (Sentence) | Victoria Legal Aid |
HIS HONOUR:
1In this matter, in a plea heard 15 September 2015, Mr El Sayegh, pleaded guilty to three charges of dishonestly obtaining a financial advantage by deception from the Commonwealth. Such is a breach of s.134.2.1 of the Criminal Code Act 1995 (Cth), the penalty which is prescribed for each charge is one of 10 years and/or penalty units of 600. The maximum penalty by way of fine is $66,000, based upon the penalty unit value at the time of the offending being $110.
2The first charge occurred between 15 October 2005 and 13 August 2007 and relates to the sum of $50,132.22. The second charge relates to a sum of $96,132 and this charge relates to a period of 7 July 2006 to 17 August 2007. The third charge relates to a sum of $123,516.76, such charge relating to the period 2 July 2007 to 20 August 2007. Mr El Sayegh is now 34 years of age, having been born on 15 November 1980.
3The offending in this matter, and the background to such, is fully set out in the prosecution opening upon the plea, tendered Exhibit A, and accepted by Mr McLachlan as the facts upon which I am to sentence his client. The offending relates essentially to the rules governing registration and charging of fees to preparation of income tax returns by a Registered Tax Agent (RTA). I point out immediately Mr El Sayegh was not an RTA. This process is administered by the Tax Practitioners Board, which oversees the matter. Prior to 2010 it was done by the Australian Taxation Office (ATO). Persons who are not RTA are prohibited from charging a fee for providing such a service as an RTA.
4Between 15 October and 26 July 2007, Mr El Sayegh prepared and lodged 42 income tax returns on behalf of 27 taxpayers. False expenses and deductions were claimed in order to generate a larger tax refund. All the taxpayers obtained a tax refund, which should not have been paid. The offender obtained clients from meeting them at the grocery/milk bar in Hall Street, Newport, which was the family business conducted by his father, and introduced himself as an accountant. He also thereafter, or at the same time, gained clients by word of mouth and newspaper advertisement.
5In regard to Charge 1, there were 10 Income Tax Returns (ITRs) lodged for the tax year 2005 for 10 taxpayers. In regard to Charge 2, there are 15 income tax returns lodged for the period 2006 tax year for 15 taxpayers. And in regard to Charge 3, there were 17 ITRs lodged for the 2007 year in regard to 17 taxpayers. A fee was charged to the clients, although there seems to be some inconsistency here. However, what was agreed apparently was a flat fee of 10 per cent of the refund. On seven occasions that 10 per cent was obtained. It was paid in cash. On other occasions, as I am advised by Mr McLachlan, no fee was obtained. The total fees, as agreed, was $21,130.
6In respect of Charge 1, the offender retained $34,437.24 for himself from the total amount of $45,870 in taxpayer refunds paid into his account. That does not necessarily mean that that was the payments or deductions that he received. The total loss to the ATO was a figure of $269,782.42 in regard to all the charges.
7The ATO does not seek reparation in regard to this charge, unfortunately because of an issue of resources. A considerable portion of these funds lost to the Commonwealth, and therefore the people of Australia, have not been able to be recouped because there was simply not the assets, in the sense of personnel and resources held by the Commonwealth, to recover such money. I have expressed some concern about this during the hearing but the reality is this is a very large organisation and in order to run, it must meet budgets, and ever decreasing budgets, no doubt. Unfortunately in these circumstances budgetary requirements were such that certainly half of this money lost to the community was not able to be recovered from the taxpayers themselves.
8Insofar as that issue was concerned, that is the taxpayers themselves, in analysing the circumstances at Paragraph 14 of the opening, the learned prosecutor said this. "The offender charged a fee to his client. Sometimes this was a flat fee, which the client paid. The offender charged seven tax payers a 10 per cent fee of the refund. The offender received $21,130 total fees from the taxpayers. That amount includes $560 that the offender deducted from tax refunds that he had obtained into his bank account for seven of his clients”. In respect of Charge 1 the offender retained $34,437.24 for himself and from the total amount of $45,870.24 in taxpayer refunds that had been paid into his Westpac account.
9Coming back to the overview of offending. It was put to the Court in summary at Paragraph 4 that these false declarations, made as a consequence of the relationship between the taxpayers and the prisoner, were obtained unbeknown to the individual taxpayer. I do not accept that at all. In my view it is absolute poppy-cock to think that the persons involved, the individual taxpayers, did not know that their returns were being prepared with false deductions and their tax liability was reduced thereby.
10However, they are not here before the Court. The person who is before the Court is Mr El Sayegh, the person trading as a tax agent, without authority, who prepared these documents. As I say, and did during the plea, to contemplate that anyone seriously would consider there was nothing suspicious, when you meet your tax agent at the local milk bar, beggars belief, as far as I am concerned.
11There is no pre-sentence detention. There is no co-accused in the matter. Insofar as the prosecution was concerned, a reparation order was sought in the sum of $136,932.20, which I have signed.
12Mr McLachlan, on behalf of his client, referred to his background, the fact that he had in fact studied accountancy and the unsuccessful nature of that study, which led to him being somewhat disappointed about the lack of success that he had achieved academically. It would appear that because of some personality defects, which I will come to when I refer to Mr Cummins' report, Mr El Sayegh felt that he should, and did, maintain this scheme.
13The scheme was obviously fraught with failure because, as it turned out, the IP addresses upon which these returns were lodged, all turned out to be the same one. However, it led to suspicions from the Department as to how all the individual returns were from the same IP address. As a result of an investigation, these crimes soon came to be disclosed.
14Mr McLachlan called the scheme "harebrained." That might be true, but certainly each of the individual taxpayers in this matter were part of it. The return was lodged on their behalf by an agent, albeit it was able to be done electronically.
15By way of background, Mr El Sayegh was involved in an earlier marriage which did not work out. He had a feeling, according to the material, and to what Mr McLachlan said, that perhaps he did not come up to the expectations of either his friends and/or family. He subsequently married again. He and his wife have three young children; two sons and a daughter. He met his current wife in Lebanon in 2002. They married in Lebanon and he then sponsored her to Australia.
16As I say, he was educated to Year 12 level and studied as a trainee accountant at Sothertons, Chartered Accountants. At the same time he was studying simultaneously a Bachelor of Business Accounting at Victoria University in Footscray. It would appear that either by way of his study, or the time he spent at Sothertons, he picked up the technical knowledge to be able to undertake this scheme.
17Mr El Sayegh was sacked at Sothertons and struggled with his studies and, left his studies at about the age of 21 or 22. By that time his first marriage had ended and from that time he has never met his daughter of that marriage. Subsequently, to this offending, he went to Lebanon and lived there from August 2007 until he returned on 9 February 2015, when he was arrested at Melbourne International Airport. I will come back to that matter. As I said, he has no priors.
18The circumstances are that while this offending was taking place, which was now some time ago, as is clear from the years that are involved, being October 2005 to August 2007, whether associated with his own feelings of inadequacy or just coincidentally he became apparently involved in the partaking of drugs and attending at nightclubs. This apparently continued even after his second marriage. It is all by way of background to this criminality.
19Mr El Sayegh’s jobs since that time have not been of long term. He worked in a sheep skin company, which his father had previously been employed in 2002, has sought employment in an employment agency and has done some casual work in welding. He was helping out, apparently, at the Newport shop when, as I say, the skills that he picked up he started to use and those people continued to come to the store.
20I am unable to tell necessarily from the materials that his “clients” were predominantly of Lebanese background, because some of them clearly are not, in the sense that they seem to have what might be described as classic Anglo Saxon names. However, he was taking these actions as a young man of some 22 years and I did use the phrase 'Walter Mitty' in describing what he was doing.
21It appears as a combination of word of mouth, a combination of what he was up to at the time, by way of drugs and the life he was leading, that this offending came about.
22In support of the plea, tendered Exhibit 2, was the report of Mr Cummins, consultant clinical and forensic psychologist, of 7 September 2015. As I say, since the time that he returned to Australia, he has been in receipt of a caring parenting payment. He has had a number of medical problems. He suffers from obesity, from diabetes and elevated blood pressure. Unfortunately it does not seem that he is working. It seems to me that a man of his age should be out working and looking after his dependents. However, he is not. That may also be an issue in regard to his rehabilitation.
23At Paragraph 34 of Mr Cummins' report he said:
"As far as I can ascertain, at the time of the offending, Mr El Sayegh was suffering from an adjustment disorder with mixed disturbance of emotions. This condition was triggered by a combination of stressors, including the end of his first marriage, his termination at Sothertons, his difficulties in finding employment at that time, the fact that he was forced to withdraw from his studies".
In my opinion, at that time his perception, ability to think clearly and an ability to make rational decisions was impaired, at least to some degree, although he clearly eventually had the insight and foresight to decide to relocate to Lebanon, it was suggested by him, in order to become drug free. He certainly, as at this stage, does not present with any psychological problems".
24To the extent that report offers some explanation of why this criminality took place, I accept it. I do not see it, nor was it presented as a Verdins[1] type situation, in the sense that it would reduce the culpability of this criminality.
[1]R v Verdins [2007] VSCA 102.
25
Insofar as the particular matters that I was asked to take into account,
Mr McLachlan stressed the young age of the prisoner at the time of these offences and the fact that he had no priors at that time and still has none.
26During the time that Mr El Sayegh was abroad, this investigation began. The defence have supplied the Court with a chronology, insofar as his background. It would appear from that, as I said, that the offences took place between October 2005 and July 2007. By that time he has married, as I said, his current wife, he has got two children, Tariq born in 2003 and a daughter, Hiam, born in 2005.
27The prisoner went to Lebanon on 21 April in 2007 and stayed there, to treat his diabetes and drug problems, but most importantly apparently to assist the parents of his wife. As was indicated, at about July 2007, the first enquiries begin in Australia insofar as these proceedings are concerned. As the Court notes, it is always difficult in a self-regulated process, where the tax office, because of the size of its office, and the size of our community, relies upon honesty of its taxpayers, it is always a difficult issue to detect these types of offences. That is the reason why, as Mr Camilleri put, general deterrence is of such importance where you have attacks on the revenue system of this country.
28There were some apparent telephone conversations between Mr El Sayegh and one of the clients, Frances Fisher. It was, as I have said, subsequent to that that he then left again for Lebanon, having returned again from the earlier trip that I had spoken about, and lived with his in-laws and cared for them. That essentially involved a period of some four years. While he was away search warrants were executed at his father's. A CD containing the tax returns were seized. Charges were filed in March of 2011.
29While still in Lebanon in 2013 the third son, Yusef, was born and indeed, Mr El Sayegh started making enquiries himself and tendered to the Court, a copy of a Freedom of Information application made by Mr El Sayegh, or on his behalf by the family, to ascertain what the circumstances were insofar as the investigation. The point that I think strongly stands in his favour, is that despite knowing this, he returned voluntarily, and as I have said, was arrested in February 2015, to Australia. As I pointed out, and as I understand is correct, there is no relevant treaty between Lebanon and Australia, which would otherwise have got him back to Australia.
30That matter was stressed, as was the fact that he has pleaded guilty, and the utilitarian benefit of that. His wife's family still lives in Tripoli and while he was there it was suggested that he was involved in assisting young men from a humanitarian basis, that he was able to help his sick in-laws and, indeed, got himself on the right track by way of drugs. This is always a difficult proposition.
31
Mr McLachlan, submitted that the amount in this case was relatively low, and albeit such was done for profit, the amount received for by way of profit was not a huge amount. He stressed the very lengthy delay and submitted that the appropriate penalty should be a Community Corrections Order. Mr Camilleri rightly put to the Court the serious nature of these offences. He rightly put to the Court the totality of the loss to the community purse and the fact that there is no issues taken with that, by way of the deductions were received directly by
Mr El Sayegh, albeit that what happened to them by way of whether he charged fees or did not, may well be up in the air.
32I think in the circumstances I cannot, despite the proposition, probably not so subtly put, come to a conclusion that Mr El Sayegh deliberately fled the country. I think that proposition is overwhelmed by the fact that he came back voluntarily. The serious nature of this offence was such that Mr Camilleri submitted that in the circumstances, and it being an attack on the revenue, that general deterrence was very important and this Court should be considering a sentence which involves immediate imprisonment. That is obviously the normal consideration where persons make attacks such as this upon the State revenue.
33Apparently Mr El Sayegh has been on significant reporting restrictions since the committal and he reports apparently one to three times a week. His parents and family are here. His family strongly supports him, as is obvious from where he is living. A character reference was tendered from Mr Ablimasir El Kassar, Exhibit 3, and is of value. His father, by way of background, had been, and has been from the time he has been in Victoria and coming to Australia, a very hard worker in this country. It would appear that his son has not picked up those habits. It seems to me that the best thing his son can do is try and follow his father in his life and do some hard work and look after his family, as he should.
34I have no doubt finding, as was put to me by Mr Camilleri, that this is serious offending. As I have said, it involves an attack upon Commonwealth revenue. It also involves a sustained attack, in the sense that we are dealing with three years of tax returns. It was a deliberate attack, recurrent and was done for profit, again, albeit a small amount. I accept the propositions put by Mr McLachlan that relatively it is a small amount, but it is a considerable amount, and the rewards actually obtained, as best we can understand it, were moderate indeed.
35There was no dispute from Mr McLachlan that general deterrence weighs heavily in regard to sentencing in this matter, especially where you have a sustained attack, as I have said. However, the matters that he put related to the age of Mr El Sayegh at the time of offending, the fact that he has no priors, the family support that he has, the need for him to maintain his parents in these circumstances, albeit by way of an assisted carer's pension, and in particular Mr McLachlan stressed the delay in this matter. That delay, of course, has been considerable and when that is combined with the other factors, I have come to the conclusion that while there are crimes that must be dealt with by a sentence of imprisonment, I intend to set a recognisance order which will have the effect that immediate imprisonment will not apply.
36What I intended to do was to pass a sentence of three years in regard to each offence, and set the date of service as of today's date, which would achieve concurrency and order that a recognisance release order would be effective as of today, which would mean that effectively he does not serve immediate imprisonment. That is my intent. I would also intend to impose a fine of $10,000 in regard to each matter but that equally is to be a concurrent fine.
37MR CAMILLERI: Your Honour, I submit you don't have the power to impose a recognisance release and the fine.
38HIS HONOUR: I thought I did.
39MR CAMILLERI: Well, Your Honour is not restricted in terms of how to deal with - he had three counts, Your Honour. On one you may decide to impose a ‑ ‑ ‑
40HIS HONOUR: The recognisance release.
41MR CAMILLERI: A fine.
42HIS HONOUR: And then on the other, the fine.
43MR CAMILLERI: A conviction fine.
44HIS HONOUR: Yes.
45MR CAMILLERI: And the others recognisance or another recognisance release and on the basis ‑ ‑ ‑
46HIS HONOUR: I can achieve both.
47MR CAMILLERI: Yes.
48HIS HONOUR: All right.
49MR CAMILLERI: It would have to be on separate charges.
50HIS HONOUR: Yes. It was going to be separate. It was going to be three different recognisance. It's the sentence of three years on each. I could do that just on two and do a fine on the other.
51MR CAMILLERI: Yes.
52HIS HONOUR: So what I will do, in regard Charges 1 and 2, is impose a period of imprisonment of three years, with recognisance, which in each case I set at $2,000 to be of good behaviour for the same period, three years, to commence today.
53In regard to Charge 3, a fine, with conviction, of $10,000.
54All right. Well that's what I intend to do. Do I need to do anything else? I don't intend, even though the Community Correction report was positive, I don't intend to make such order in this instance. I've gone the Commonwealth way.
55MR CAMILLERI: You've stated, Your Honour, the commencement of the sentences.
56HIS HONOUR: I've made the reparation order as sought. All I can say - well, I've actually sentenced him to imprisonment. All I can say in regard to s.6AAA of the Sentencing Act 1991 (Vic), that had he not pleaded guilty the sentence of imprisonment would have been higher. If I have to set a figure, for the first two charges, it would have been four years imprisonment. And in regard to the third matter, it would have been a period of imprisonment, rather than a fine. I won't be giving a minimum. I think it's enough required of Parliament to just give that figure. Also the question is still a moot, as I understand it, whether it even applies to Commonwealth.
57MR CAMILLERI: Yes, that's not decided, Your Honour.
58HIS HONOUR: Ms Hession, the end result for your client, for which you might want to explain to him because he has to enter into it, is a recognisance release order in regard to the first two charges for a period of three years, with a recognisance sum set at $2,000 in regard to each matter, on the fundamental undertaking, of course, that he behaves himself in that time. In regard to the third matter, a fine of $10,000 to be paid and I will say at this stage a stay of six months.
59MS HESSION: Thank you.
60HIS HONOUR: I am aware of his position. However, I do intend the fine be paid and in the circumstances, given the seriousness of this matter, and should it be a situation that he requires further time after that six months, then he is obviously entitled to come back to seek further instalment payments, providing of course that he shows the Court that he has demonstrated a degree of payment prior to that.
61MS HESSION: Certainly.
62HIS HONOUR: In regard to s.6AAA of the Sentencing Act 1991 (Vic), in regard to the first two charges, you have explained to him had he not pleaded guilty he would have been sentenced to a period of imprisonment of four years and a period of imprisonment as against the fine in regard to the third charge.
63MS HESSION: Yes, sir.
64HIS HONOUR: I suppose from his fundamental point of view he is not going to gaol. You might explain that to him before we ask him to enter into ‑ ‑ ‑
65MS HESSION: Certainly, Your Honour.
66HIS HONOUR: While that's being done, Mr ‑ ‑ ‑
67MR CAMILLERI: I've prepared the recognisance, Your Honour.
68MS HESSION: Thank you for the time, Your Honour. Mr El Sayegh understands.
69HIS HONOUR: All right.
70MR CAMILLERI: Your Honour, the recognisance document is here. Could I just clarify? That the order for reparation is not a condition of the recognisance. It's a separate order.
71HIS HONOUR: Do you call an order reparation? I think it's a fine, isn't it? I'm not making ‑ ‑ ‑
72MR CAMILLERI: Sorry.
73HIS HONOUR: The order of reparation is - how does it have to be? Does it have to be a separate order?
74MR CAMILLERI: It must be. It shouldn't be part of the recognisance.
75HIS HONOUR: No, well that's what I meant it to be. I've signed that. I've told you that I'll sign that order when you send it to me.
76MR CAMILLERI: There will be no ‑ ‑ ‑
77HIS HONOUR: You don't have a formal document?
78MR CAMILLERI: No.
79HIS HONOUR: Right.
80MR CAMILLERI: As long as it's entered into that extract or certificate of correction.
81HIS HONOUR: All right. If you'd stand, Mr El Sayegh. So far as these three offences are concerned, you will be convicted on all charges. On the first two charges, as set out in the Indictment, you will be sentenced to a period of imprisonment of three years. On each of those, both the first and second offence, I will order pursuant to s.20 of the Crimes Act 1914 (Cth), that you be released on a recognisance release order to take effect immediately and I set the recognisance sum in the sum of $2,000 for both charges.
82And for the third charge you will be fined $10,000. Insofar as that fine is concerned, you will be given a stay of six months. You will be able to come to Court to seek an extension. If you do, however, it is important for you to understand that extension is not lightly given and I would expect a considerable amount of that sum to be paid.
83Can I make it very clear to you that you are very lucky you are not going to gaol. These were very serious offences. However, I have taken into account your youth at the time and the circumstances that I have demonstrated. However, you want to understand very clearly, Mr El Sayegh, you come back, having breached this recognisance, in the next three years and you know what is going to happen. All right? The best thing you can do is start working and look after your family and look after your father. I imagine you would not be happy with the disgrace you brought on your family by these circumstances.
84You have signed the document. You understand the obligations upon you. Yes. Ms Hession, I thank you very much for your forbearance.
85MS HESSION: As the Court pleases.
86HIS HONOUR: You will also express to your client, I hope, the importance of him not messing up over the next three years.
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