Director of Public Prosecutions(Cth) v Samarakoon
[2017] VCC 1426
•4 October 2017
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-17-00807
| COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| ARJUNA SAMARAKOON |
---
JUDGE: | HIS HONOUR CHIEF JUDGE KIDD | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7 September 2017 | |
DATE OF SENTENCE: | 4 October 2017 | |
CASE MAY BE CITED AS: | DPP(CTH) v SAMARAKOON | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 1426 | |
REASONS FOR SENTENCE
---
Subject: Criminal Law – Sentence.
Catchwords: One count of attempted fraud on the revenue – Quantum of attempt in excess of $222,000 - Two counts of possess proceeds of crime – Quantum of proceeds in excess of $380,000 – Plea of guilty – Good character – Extra-curial punishment – Immediate term of imprisonment warranted.
Legislation Cited: Criminal Code Act 1995 (Cth); Crimes Act 1914 (Cth); Proceeds of Crime Act 2002.
Cases Cited:R v Ly (2014) 241 A Crim R 192; R v Huang (2007) 174 A Crim R 370; DPP(Cth) v Gregory (2011) 34 VR 1; R v Verdins (2007) 16 VR 269.
Sentence: Total effective sentence of 3 years’ imprisonment, with release after serving 18 months imprisonment on a recognizance of $5000 to be of good behaviour for 3 years.
---
APPEARANCES: | Counsel | Solicitors |
| For the DPP(CTH) | Mr A Buckland (Plea) Mr M Challen (Sentence) | Ms A Pavleka, Solicitor for Public Prosecutions (Cth) |
| For the Accused | Mr A Halphen (Plea) Mr G Halperin (Sentence) | Halperin & Co Pty Ltd |
HIS HONOUR:
1 Arjuna Samarakoon, you are now 38 years old. You were between 33 and 34 years old at the time of this offending.
2 You have pleaded guilty to three charges against the Criminal Code Act 1995 (Cth). Charge 1 is that you dealt with money reasonably suspected of being the proceeds of crime, less than $100,000[1]. The maximum penalty is two years’ imprisonment. Charge 2 is that you dealt with money reasonably suspected of being the proceeds of crime, more than $100,000[2]. The maximum penalty is three years’ imprisonment. Charge 3 is that you attempted to dishonestly obtain a financial advantage by deception from a Commonwealth entity, namely the Australian Taxation Office (“ATO”)[3]. The maximum penalty is ten years’ imprisonment.
[1]Contrary to subsection 400.9(1A).
[2]Contrary to subsection 400.9(1).
[3]Contrary to subsections 11.1(1) and 134.2(1).
Summary of the offending
3 Your offending is detailed in Exhibit 1, the summary of the prosecution opening. The facts contained in the opening were accepted by you through your counsel and represent the facts I will sentence you on. However, there was some debate about how I should characterise your conduct. I will return to this later.
4 Each of the charges arises out refunds issued as a result of tax returns lodged in respect of two Australian companies, Balancing High Proprietary Limited (“Balancing High”) and IT Connect (Aust) Proprietary Limited (“IT Connect”), in which you held office as a public officer or director.
5 These refunds were issued as a result of claims made by these companies for research and development expenses. At the relevant time, there was an entitlement program, the Research & Development Tax Incentive and here afterwards I will refer to Research & Development as "R&D", which allowed businesses to offset some of the costs of undertaking research and development. To make claims under this R&D Tax Incentive, companies could self-assess eligibility and submit claims for R&D expenses as part of their Income Tax Return, or otherwise called the “ITR”.
6 There is an alleged co-accused in this matter who has been charged with related fraud offences. These charges are still pending and a contested committal is listed in April 2018.
7 In respect of Charge 1, between 20 and 21 February 2013, a total of $21,100, being a portion of a tax refund Balancing High was credited, was transferred and received into accounts controlled by you.
8 The relevant facts are as follows: On 7 February 2013, Balancing High lodged a Company ITR for 2011/2012. There was a claim for research and development expenses of $422,050. You were recorded as a public officer for the company at the time. As a result of the ITR, the ATO credited Balancing High with a refund of $189,922.50. This amount was offset against other Balancing High tax liabilities and the residual sum of $71,021.28 was transferred into an account of Balancing High.
9
On 20 February 2013, two sums of money were transferred from the Balancing High account. $1,500 was transferred to an account in your name and $17,600 was transferred to an account in the name of another company. You were
a third party signatory to this account. The following day, on 21 February 2013, a further $2,000 was transferred to another account in your name.
10 In respect of Charge 2, on 19 February 2014, $359,797.50, which was the sum total of a tax refund Balancing High was credited, was transferred to and received into an account in your name.
11 The relevant facts are as follows: On 6 January 2014, Balancing High lodged a company ITR for 2012/2013. There was a claim for research and development expenses of $799,550. You were still recorded as a public officer. As a result of the ITR, the ATO credited Balancing High with a refund of $359,797.50. On 19 February 2014, the sum of $400,000, including the entire sum of the refund, was transferred from a Balancing High account into an account in your name.
12 The following day, on 20 February 2014, $300,000 was then transferred from this account to a mortgage loan account, also in your name.
13 In respect of Charge 3, the sum of $222,844.95 was credited to IT Connect, but not ultimately paid, as a result of a company ITR lodged on 14 March 2014.
14
The relevant facts are as follows: On 14 March 2014, IT Connect lodged
a company ITR for the 2012/2013 income period. There was a claim for research and development expenses of $495,211.21. You were recorded as director and nominated contact at this time. As a result of the ITR, the ATO credited IT Connect with a refund of $222,844.95. However, the payment of the refund was stopped pending a verification process. Three days before the claim was made, an application for registration for the R&D Tax Incentive was lodged with AusIndustry.
15 The lodgement of each of these returns was completed by a Tax Agent Portal assigned to Bruce Simmons.
16 As a result of the ATO audits, the ATO concluded that the R&D expenditure claimed by both Balancing High and IT Connect, had in fact not been incurred.
17 During the ATO audits, you supplied tax invoices which purported to substantiate the research and development claim made in relation to IT Connect. On 16 May 2014, you supplied a number of false tax invoices from three companies or firms. In that respect, the audit received written confirmation from these entities that they had never issued these tax invoices. The financial documents provided to the ATO in support of the R&D expense claim were false. You also had a conversation with a Denis Crema, a director of one of these companies, where you asked him to acknowledge to the ATO if contacted, that the tax invoices were paid. It became common ground at the plea that this probably occurred after the 14 March. Subsequently during the audit, many more documents were received from you concerning IT Connect’s claim for the rebate.
18 You were not formally interviewed in relation to these charges, but you had some recorded conversations with the Informant. No allegations were put to you during these conversations, but neither did you volunteer any information about the false nature of the documents provided to the ATO.
Legal principles
19 I turn to the legal principles. In sentencing you today, I must have regard to s16A of the Crimes Act 1914 (Cth) and impose a sentence that is appropriate in all the circumstances.
20 More specifically, relevant legal principles concerning the two money laundering charges which emerge from intermediate appellate authority[4] are as follows:
[4]R v Ly (2014) 241 A Crim R 192, 205 [86]; R v Huang (2007) 174 A Crim R 370.
· The amount of money involved is a significant consideration and is the primary identifier of the maximum penalty.
·
Knowledge as to the source of the funds is a matter which will increase the seriousness of the offence. That is, however, largely determined by the offence charged and is also reflected in the maximum penalty.
I note knowledge as to the possible illicit source of the funds is not an element of the offence to which you have pleaded guilty. I will return to this.
· The number of transactions and the period in which the transactions occur are significant and will identify the extent of criminality.
· Money laundering is serious criminal activity and warrants severe punishment. General deterrence of a significant degree will also be warranted.
21 Relevant legal principles concerning Commonwealth fraud offences in relation to defrauding the revenue which emerge from Victorian and interstate appellate authority[5] are as follows:
[5]DPP(Cth) v Gregory (2011) 34 VR 1,15-17 [51]-[57].
· Defrauding the revenue is a serious offence that is not a victimless crime.
· Serious tax fraud affects other honest taxpayers by pushing the incidence of tax onto them.
· Sentences should reflect community expectations that all citizens should be taxed fairly and share in the burden of taxation.
·
General deterrence of a significant degree will be warranted for
a number of reasons. Detecting offending of this kind can be difficult; there is a need to protect the revenue; white collar criminals are rational actors, capable of comprehending cost and benefit and are more likely to fear the prospect of incarceration.
· The degree to which an offender's personal circumstances will mitigate, will be moderated by the emphasis given to general deterrence.
· In most cases of serious tax fraud, imprisonment will be the only sentencing option, in the absence of powerful mitigating factors.
· The quantum of the fraud is significant, but not determinative.
· The level of sophistication and planning is relevant.
22
I have otherwise considered current sentencing practice. In particular,
I considered the sentences referred to me at the plea by both parties which inform current sentencing practice, particularly with respect to Charge 3. Of course every case is necessarily different, but these sentences do assist in broadly identifying the general range of sentences available.
Gravity of the offending and role
23 I now to the turn gravity of the offending and to your role in it.
24 Charge 3 is the most serious offence. I regard your offending as serious. It involved an attempt to obtain a very significant amount of money, over $220,000, even though it was ultimately unsuccessful. This is an indicator, that is, the quantum, of the gravity of your offending. The claim also involved two steps: registration with AusIndustry for the R&D Incentive; and then the subsequent claim made to the ATO through the lodgement of the ITR. The R&D claim was blatantly false and the making of it was dishonest. It was stopped and ultimately thwarted by the ATO.
25
Your offending of course involved one instance of dishonesty, in that you have pleaded guilty to an offence which occurred on a single day, namely 14 March 2014. That is what I must punish you for. However, shortly afterwards on
16 May, you provided the ATO audit team with a number of false documents to substantiate the R&D claim. You also tried to have Denis Crema lie about the tax invoices purportedly issued from his company.
26
This conduct was opened as providing the full context to your offending. It is intimately connected to your attempt, it being directed towards persuading the ATO audit team to allow the false R&D claim. This confirms a certain determination on your part to give effect to your fraud and reveals a certain attitude on your part towards your offending. While your offending did involve one instance of dishonesty, it was not an opportunistic, spur of the moment misjudgement, quickly regretted. However, I agree with your counsel’s submission that you do not fall to be sentenced for a continuing offence or
a course of conduct offence involving multiple criminal acts. You have not pleaded guilty to such offending.
27 Making an assessment of the gravity of the offending of Charges 1 and 2 is difficult because of an issue surrounding your state of mind. Your counsel submitted that he had instructions that you believed the transfers, the subject of Charges 1 and 2, represented repayments of an outstanding loan which the Samarakoon Investments Trust had previously provided or made to Balancing High. Your counsel submitted you had an innocent state of mind with respect to these amounts.
28 Before addressing the argument put to me, it is helpful to say something about the elements of these offences. By pleading guilty to these offences, you accept that it was reasonable to suspect that the money in question was proceeds of crime. This sets out an objective or impersonal element which depends on objective facts, rather than upon the subjective knowledge or belief of the accused. This means that by pleading guilty, you are not to be taken to have admitted any knowledge as to the illicit source of the funds. However, it seems to me that by pleading guilty, you accept that you could not make out the defence provided in s 400.9(5). This provides that:
It is a defence if the accused establishes he had no reasonable grounds for suspecting the money was proceeds of crime.
29 An issue arose on the plea about whether this was so and whether your asserted loan explanation is inconsistent with your plea of guilty. I do not need to resolve this. I told your counsel that it would be highly unlikely that I would be prepared to accept that loan explanation on the basis of mere instructions, without supporting evidence. Despite my explicit invitation, you specifically declined to give or call oral evidence to support those instructions. A financial document relating to the Samarakoon Investments Trust was tendered on the plea, which noted a loan from the Samarakoon Investments Trust to Balancing High, in the amount of $447,829 and that this was outstanding at 30 June 2011.
30 Apart from this, no contractual-type documents were tendered, such as a loan agreement, a repayment schedule, or a history of repayments. If these were in fact loan repayments, one might also expect to see some accompanying documentation or correspondence with respect to such large repayments. None was tendered on the plea. Nor did the amounts of money received by you correspond exactly to the purported loan amount. Finally, the money was transferred to personal accounts and a mortgage account associated with you, not to an account of the Samarakoon Investments Trust. Your counsel acknowledged that this fact created a real difficulty. I am not persuaded, on the balance of probabilities, that you believed that these amounts represented legitimate loan repayments.
31 Your counsel also submitted that even if I rejected the innocent loan story, it does not follow that I should sentence you on the unfavourable basis that you had knowledge as to the illicit source of the funds. I agree. Subjective knowledge is not an element of the offence, as I have said. Indeed, I was not invited by the prosecution to attribute to you a culpable state of mind with respect to the source of these funds. I have effectively been asked to sentence you upon the bare elements of the offences. I will sentence you on that basis.
32 The most significant objective fact which informs the gravity of Charge 2, in particular, is the size of the payment involved. The amount of money is very significant indeed, being some $359,000. This is significantly over the threshold amount of $100,000. That alone makes Charge 2 a serious offence. You also personally obtained the benefit of these funds. Ultimately, the money was transferred into a mortgage account in your name.
33 I am conscious that Charge 1 carries a lower maximum penalty and the overall sum of money is self-evidently smaller. However, again the funds were transferred into three accounts, two of which were held in your name.
Personal circumstances
34 I turn to your personal circumstances. As I have said, you are 38 years of age. You were born in Sri Lanka, but are now an Australian Citizen.
35 You grew up in Kandy, Sri Lanka, with your parents and four siblings. Your parents divorced in 1983. You did not have contact with your father for almost a decade after your parents’ divorce, but have since reconciled. Your father was in the Sri Lankan Army and later held Ministerial Defence positions in the Government. Your mother was a literature teacher. Both are now retired. You are close to both of them and have travelled to Sri Lanka regularly to visit them.
36
Your parents still live in Sri Lanka and are now quite elderly. The health of your parents has deteriorated recently. Your father suffered a heart attack in
early-2016 and your mother sustained an injury from a fall in late-2016. She was hospitalised. You are extremely worried about the decline of your parents' health, in circumstances where you are not able to support their day-to-day living.
37 You have three sisters residing in different parts of the world, who are all very accomplished. You are very close to one of your sisters in particular and you Skype on a daily basis. This sister has been diagnosed with multiple sclerosis and has been wheelchair-bound since 2005.
38 Your older brother, 12 years your senior, was a decorated war hero in Sri Lanka. You idolised him. Tragically, in 1995, he died as a result of complications from a gunshot wound to his leg. You remain profoundly affected by this traumatic event, as do you parents and you have been a support to them.
39 You completed your primary and secondary education in Sri Lanka. After school you decided to join the Sri Lankan Airforce, however your parents were not supportive of this and you ceased this pursuit. You had felt the weight of family responsibility after your only brother had died. Your counsel submitted that you felt undermined by your parents in this regard and decided to distance yourself geographically.
40 To that end, you made the difficult decision to leave Sri Lanka and move to Australia. You arrived in Melbourne in 1999 and have been engaged in study and employment since you arrived.
41 In 2003, you completed a double Bachelor Degree in Business and Information Systems at Swinburne University, subsequently completing a Masters of Business Administration in 2006. After you graduated in 2003, you commenced working in an accounting practice and trained others in software solutions.
42 In 2004, you first incorporated Balancing High and then became a director. This company experienced some financial success, but also significant strain following bankruptcy of a major client around 2008. Your counsel advised me that you sought to distance yourself from Balancing High as a result of this event. You ceased acting as a director of Balancing High in 2011, but remained a public officer. In 2012, you signed a separation agreement.
43 In 2013, you were appointed as a director of IT Connect. You also set up three accounting or bookkeeping businesses, which have ceased trading.
44
During this year, that is, 2013, you married your childhood sweetheart in
Sri Lanka, Ms Thilini Ekanayake. Your wife was present in court at your plea hearing and provided a reference exhibited on your plea. She remains very supportive of you. She expressed that you had a relationship founded on deep love, affection and shared values.
45 You and your wife experienced health issues around this time. You wife suffers from endometriosis and underwent surgery for this in 2013. In 2014, you were also unwell, having contracted dengue fever and you remained bedridden for some time.
46 Your wife fell pregnant in February 2014 and you learnt in April of that year that she had been pregnant with twins, but there had been a miscarriage of one of the babies. To receive support from her family, your wife returned to Sri Lanka for the remainder of her pregnancy and for a time after the birth of your daughter. You travelled to Sri Lanka on numerous occasions during this period.
47 Your daughter was born in November 2014 with heart problems. Your daughter spent time in intensive care in Sri Lanka and later, Melbourne. This was a very anxious time for you and you wife, but fortunately, this condition was resolved by October 2015 and your daughter is well.
48 You have a very close relationship with your wife and daughter. You consider your role as a father to be the most important responsibility in your life.
Context
49 I now turn to the context to this offending. Your counsel relied on the fact that this offending was committed in a particular context. That context was that during lodgement periods for the ITRs, you were experiencing a particularly stressful period in life, where you were trying to juggle regular travel, your wife’s health issues, pregnancy and your own recovery from dengue fever. Your conduct in persisting with your claim with the ATO auditors also needs to be seen in the context that you were then dealing with the trauma of your wife recently miscarrying.
50 Your counsel submitted that your ability to navigate this period should also be viewed in light of your history of trauma issues, following the death of your brother and your failure to address those issues. In a report of clinical psychologist, Ms Jenny Markos, which was exhibited on your plea, Ms Markos concluded that you had a low self-worth and that you were motivated by how people regarded you and a desire to avoid negative consequences. She further concluded that at the time of offending, you had been “overwhelmed” by work and personal psychological pressures and this resulted in “flawed and careless” decision making. Your counsel thus submitted that as a consequence, you were distracted and your judgment was affected.
51 These matters were not relied upon as an excuse or in mitigation of your moral culpability under Verdins[6]. It is not suggested that they significantly reduce your moral culpability. Rather they were really relied upon to provide an explanation for the offending by a man, otherwise of good character, and go to my assessment of your prospects. I accept these matters provide some explanation and take them into account in a general way. In my view, however, they do not adequately or entirely explain how it is that your chose to engage in the blatantly dishonest behaviour encapsulated by Charge 3. On no view was this behaviour merely careless.
[6]R v Verdins (2007) 16 VR 269.
Mental health issues and application of Verdins 5 and 6
52 Clinical psychologist, Ms Jenny Markos, diagnosed you with “extremely severe” symptoms of depression and anxiety and assessed that you fall within the clinical range for post-traumatic stress disorder (“PTSD”). When you first attended on Ms Markos, you also “described frequent suicidal ideation” and presented a suicide risk. This was in 2016.
53 Your counsel submitted that your mental health condition was relevant to Verdins Principle 5, namely that your mental health condition, in particular your depressive symptoms, may mean that the sentence of imprisonment that I will impose or may impose, will weigh more heavily on you than on someone who was in normal health.
54
In May 2016, you commenced regular psychotherapy with Ms Markos on
a weekly and then fortnightly basis. You have continued to see Ms Markos until your plea hearing.
55
Your counsel relied on Ms Markos’ observation that your symptoms of depression and anxiety first presented following the death of your brother and were left untreated. You have some history of suicidal ideation and following
a relationship breakdown in 2003, you attempted an overdose.
56 Ms Markos opines that you continue to experience depression and anxiety, but without current suicidal ideation and you remain “in the extremely severe symptom range for depression, anxiety and stress, as well as being within the clinical range for PTSD.”
57 I accept that your mental health condition is likely to make your experience of incarceration more burdensome, especially in circumstances where you will be away from your wife and child and the poor health of your parents who are in another country, and your sister. In that respect, I accept Verdins 5 is enlivened and I will give it weight.
58 Reliance was also placed upon Verdins Principle 6. Ms Markos expressed the following opinion:
Adversely, imprisonment is likely to exacerbate your depression. Being away from and incapable of supporting, protecting and providing for his wife, child and extended family, which has always given
Mr Samarakoon’s life a sense of purpose and meaning, his suicidal tendencies may return.
59 Ms Markos earlier observed in her report that the resolution of your charges will assist in your recovery, so the evidence seems to cut both ways. Ms Markos’ statement that your depression is likely to be exacerbated, says nothing about the level or seriousness of that potential deterioration. While she refers to your suicidal tendencies returning, she expressed this as a mere possibility, in that she said your suicidal tendencies "may" return. There is also no evidence that your condition or conditions could not be adequately treated in prison, at least to the point of avoiding a grave deterioration. Your counsel frankly accepted that he could not put this point too high.
60 While I am not persuaded that that there is a serious risk of imprisonment having a significant adverse effect on your mental health, I am prepared to accept that you will experience a high level of stress and anxiety because of your mental health issues and because of you being unable to see and support your family when they have serious health issues, particularly your parents who reside in another country. The combination of these factors will make imprisonment difficult for you.
Delay
61 I turn to the question of delay. Your counsel submitted that there was some relevant delay in this matter, which was not attributable to you, which I should take into account.
62 It was accepted that there has been no delay since you were invited to formally participate in a record of interview in April 2016, or indeed since the charges were laid in June 2016. Your counsel submitted that there had nevertheless been a delay between the ATO audit disallowing your claims and charging you. Your counsel pointed to the fact that the interim audit reports in relation to both Balancing High and IT Connect were completed in February 2015, identifying the fraudulent conduct. The claims were then disallowed at that time. The ATO criminal investigation was not commenced until November 2015 and charges were not laid until June 2016. It was during this period when you were left lingering in uncertainty. Counsel for the prosecution advised me that part of the delay between the conclusion of the audit and the initiation of the charges is explained because the ATO audit and criminal investigation of this matter were conducted by different and separate units at the ATO.
63 You were not operating under the prolonged burden of facing a certain prosecution, but you must have known during this period that you were at least exposed to being charged. I accept this must have resulted in a level of anxiety and uncertainty. While you contributed to some delay in the ATO audit process through the provision of false invoices to the auditors, this cannot be said of the delay which occurred between the conclusion of the audit and the laying of the charges, which seems to have been attributable to bureaucratic or organisational factors. I will take this period of delay into account and the effect or the impact that it had upon you.
Extra-curial punishment
64 I now turn to the question of extra-curial, or extra-judicial punishment. Your counsel relied upon the extra-curial punishment endured by you.
65 A sentencing court may properly take into account that an offender has already suffered some serious loss or damage as a result of having committed the offence. Relevant loss or damage may include abuse and harassment, threats and assaults, loss of career, and public opprobrium.
66 The weight to be given to extra-curial punishment is a question of degree and there may be cases where it attracts little or no significant weight.
67 Your counsel relied on a number of matters in combination to establish that you had experienced extra-curial punishment.
68 Firstly, that you have endured some harassment as a result of you being charged with these offences. I was told by your counsel that you have been harassed by two individuals who were not known to you prior to being charged. I was told that these individuals, at the behest of one of your competitors in the industry, have intimidated you with the intention of taking your client base. This competitor has utilised the charges as a foundation for defamatory claims about your character to direct clients away from your base, according to your counsel.
69 Your counsel told me that you had received persistent phone calls and visits upon your home and business premises with menace. As a result, you developed concerns, not only for your safety, but the safety of others. In February and April this year, you were granted personal safety intervention orders by the Melbourne Magistrates’ Court against both of these individuals. These orders prohibit harassment of you. Copies of the intervention orders were exhibited on your plea and I have read them.
70 This was not a typical case where you have suffered through private persons exacting revenge or retribution for the commission of the offence, where the harassment is motivated by punishing you for your criminal conduct. Rather it seems to be more a case of persons seeking to opportunistically exploit your difficult legal situation. The harassment is a more indirect consequence of your criminal conduct.
71
Despite this, I am prepared to accept that there is a sufficient link between this conduct and your charges and that it has had some adverse impact upon you. I will give it some weight. However, the evidence is unspecific. There was no specific evidence before me about the nature of the harassment. There was also no direct evidence before me as to the particular effect or impact of this harassment upon you. For example, there is no mention of the impact of this harassment on your mental health condition in the report of Ms Markos. The conduct justified you taking steps to secure intervention orders, but beyond that, I do not know much about the consequences of this harassment. This is not
a case where the evidence establishes that the harassment reached such
a proportion as to constitute a significant level of additional punishment upon you.
72
Secondly, it was put that you have endured embarrassment as a result of
a media article which reported on this offending and on you. Your counsel submitted the article went beyond matters to be legitimately reported. The article entitled “Millions rorted from government R&D scheme” was published by the Sydney Morning Herald on 3 July 2017, online and in print. The article contained information that went beyond this offending, including an allegation that you further owe more than $2.5m to the ATO and stated that you are closely linked to an individual who was implicated in a multi-million dollar fraud in the United States. A copy of this article was exhibited on the plea.
73 I accept that you would have endured some embarrassment as a result of the publication of this article, particularly in circumstances where the article reports on matters beyond allegations of this offending. But while this article was published by a major newspaper and while it was re-published in other forms, it was one article only. The publicity was effectively a single instance and does not amount to a sustained publicity campaign over a long period of time. However, I accept, as observed by Ms Markos, that it has contributed, in part, to “high levels of stress and anxiety, as well as depressed mood.” Ms Markos observed that you were “acutely aware of the stigma attached to the proceedings and extremely fearful of the damage it was causing to your reputation.”
74
Thirdly, it was put that you have endured the loss of your career in IT and the involvement in your charitable works. I am told that you have resigned from 35 directorial positions and will resign from a further five, due to these charges.
I am also told that you have resigned from charitable organisations to protect them from perceived negative association with you, as a result of this offending.
75 Your counsel submitted that you have not only lost your career, means of livelihood, but also your sense of self-respect, which was tied to your professional ambitions and contribution to the community. I accept these matters, though they are somewhat unremarkable for while collar offenders.
76 Finally, while not typically characterised as extra-curial punishment as such, your counsel also pointed to the fact that you have been prohibited from travelling to visit your ailing parents since the ATO issued a departure prohibition order on 23 May of 2016. Your parents' deterioration has rendered your day‑to‑day existence unbearable, with the prospect that you may never see them again. I accept this.
77 I accept that you have suffered extra-curial punishment. However, even considered in totality, the extent of the punishment does not approach the extreme or exceptional level that one sees from time to time in some of the cases before the courts.
78 I also accept that these matters have had a deterrent effect upon you and I will take this into account in sentencing you. This is relevant to my assessment of your rehabilitation prospects and to a reduced need to place weight upon specific deterrence.
Co-operation regarding confiscation proceedings
79 I turn to the issue of the ancillary proceedings raised by your counsel. There are ancillary proceedings in respect of assets worth $2.7m, held in your wife’s name. These assets are the subject of a confiscation order and a forfeiture application under the Proceeds of Crime Act 2002. There is a revocation and exclusion application listed in October. On 15 May 2017, an offer was made to settle this matter by your wife forfeiting, for your benefit, $380,897.50, being the sum total of the proceeds subject of Charges 1 and 2 on this indictment. This offer was rejected by the Commissioner for the Australian Federal Police.
80 Your counsel submitted that this offer was relevant because it showed some co-operation in attempting to resolve this matter, by making an offer of restitution for this offending. I accept this and I will take that into account in sentencing you.
Registered Tax Agent Status
81 The question of your status as a registered tax agent. The case was opened to me upon the basis that you were a registered tax agent at the time of the offending. However, it became apparent at the plea that the prosecution was not relying upon this feature as an aggravating factor in your offending. The claims in question were lodged though another tax agent. You did not use your position to commit this offending. It is not suggested by the prosecution that you had any specialised knowledge which you used to facilitate the offending. It is not suggested by the prosecution that a breach of trust is involved and none is alleged. In the circumstances, I will not sentence you upon the basis that your tax agent status aggravated your offending. I put it to one side.
Plea of guilty and remorse
82 Your plea of guilty and remorse. You have pleaded guilty at an early opportunity.
83 You receive credit for the objective utilitarian benefit through the saving of time and resources associated with the running of a contested committal and trial.
84 I accept that your entry of the plea of guilty indicated, as it was at an early stage, is also representative of some evidence of remorse and a willingness to facilitate the course of justice.
85 Your counsel also submitted that there was other more direct evidence of your remorse in the references and in the psychological report of Ms Markos.
Ms Markos observed that you had “genuine” remorse and you had expressed regret and remorse and spoke of yourself in self-deprecating terms, and about the shame you brought to your family and the blow to your reputation. That said, her report is ambiguous in part on this question of remorse. She said that you recognised that your actions were “careless and negligent”. This understates the criminality of your behaviour, at least with respect to Charge 3. Of course the fact is, you were dishonest in relation to Charge 3.
86 There are also expressions of remorse observed by your personal referees, which I have read and I accept and take into account.
87 Any assessment of your remorse is qualified by the fact that it was not present in the immediate aftermath of your offending. Despite being given opportunities to resile from your fraud, you sought to persist with it with the ATO audit investigators. Your counsel submitted on the plea that the provision of false documentation to the ATO audit team, constituted some kind of co-operation, because this inevitably exposed your fraud. As I said on the plea, I utterly reject that argument for obvious reasons.
88 In summary, I do accept that there is evidence of remorse beyond your entry of the plea, but with the qualifications I have mentioned above.
Good character
89 I turn to your good character. You have no criminal history and I accept that prior to this offending, you have otherwise been of good character.
90 Your good character can also be observed through the charitable works you have been involved in. Following the tsunami that hit Sri Lanka in 2004, you became involved in “Help Sri Lanka Tsunami”, which supported Sri Lankan people who were affected by the natural disaster. This work finalised around 2008. From 2010 to 2016, you were a financial controller in Project BEAP, which was established to develop a national trauma service in Sri Lanka to treat those suffering from the effects of long-term conflict. In relation to these projects, you have contributed to administration, strategy and fund raising.
91
Your counsel also submitted that your demonstrated work ethic and academic achievement were a testament to your character. The numerous personal references exhibited at you plea, all speak of a hard-working, determined,
self-made man, who was generous and respectful. I accept those submissions.
92 These factors which demonstrate your character will also, as submitted by your counsel, be relevant to my assessment of your prospects. I will come to that in a moment.
93
Your counsel indicated that very recently, a further charge of attempting to deal with restrained property had been laid against you. This matter is in its infancy and your counsel submitted that it was not relevant to my sentencing task.
I am told that this pending matter is unproven. I accept that and I consider that it is not relevant to my sentencing exercise. I put it to one side.
Prospects for rehabilitation
94
I now turn to your prospects for rehabilitation. Your mental health prognosis is highly relevant to my assessment of your prospects for rehabilitation. You have engaged in treatment for the first time for mental health issues, which
Ms Markos assessed had been underlying since you were about 16 years old. During your psychotherapy sessions, you have learnt strategies to manage your anxiety, depression and trauma-related symptoms, as well as stress management, identity development, self-esteem issues and boundary setting. Ms Markos has observed that you have engaged well and as a result of therapy, you have “shifted your perspective and priorities and you have developed sound coping strategies.” Given the context to this offending, your ability to successfully cope with and manage times of heavy workloads and interpersonal stress will be an important predictor of your rehabilitation.
95 You have a supportive and loving family. Your young daughter is an important motivating factor for you. Your family’s support is a positive and protective factor going towards your rehabilitation.
96 As I have already noted, you have a strong work ethic, demonstrated work history and a number of academic qualifications. You are capable of work, notwithstanding that your IT career may have concluded.
97 You have no prior matters and as I mentioned, were otherwise of good character prior this offending. You have complied with bail conditions for over 12 months, which included a significant reporting condition. You have also complied with the prohibition on departure from Australia.
98 As I have mentioned earlier, you have also experienced some extra-curial or other punishment in relation to this offending, which will serve as a deterrent.
99 For reasons which I have already outlined, I do entertain some residual concern about whether you have fully recognised your dishonest behaviour in relation to Charge 3. However, even with this reservation, I assess your prospects of rehabilitation as being at least good. You are a low risk of re-offending.
Concurrency, cumulation and totality
100 On the question of concurrency and cumulation and totality, there is no overlap, in a strict sense, between the charges. I agree with the submission of the prosecution, which was not disputed by your counsel, that some cumulation in relation to each charge is justified. That said, I need to take into account the principles of totality. I am also mindful that the offending is related in time and subject matter to some degree. That is especially so with respect to Charges 1 and 2. All three charges relate to obtaining ATO refunds in relation to research and development expense claims.
Sentencing
101 I now turn to the primary submission made by your counsel at sentencing. The primary sentencing submission of your counsel, was that the extra-curial punishment endured by you, in addition to the other forms of punishment you have endured, would satisfy the need for punishment, obviating the need to impose upon you an actual term of imprisonment.
102 Of course in deciding what is the appropriate sentence, I am required to have regard to all relevant factors, both favourable and unfavourable to you, to which I have made reference. That having been said, I do not accept your counsel’s submission. In my view, the punishment you have already suffered is not of such a magnitude as would make me wholly suspend the sentence of imprisonment I am about to impose upon you. While the punishment you have already suffered does mitigate your sentence, I have decided that an immediate term of imprisonment in your case is required, having regard to all the factors, including the seriousness of the offending and the need for general deterrence and denunciation of this kind of criminal conduct. This is also so, despite your otherwise good character and prospects.
103
The Crown submitted that the sentence should include an immediate term of imprisonment. The Crown further submitted that it should be a sentence of more than three years, thus incorporating a non‑parole period. It is apparent
I agree with the first submission, but I do not agree with the second submission.
104
Now, counsel, I am going to hand out - have my associate hand out to you
a table, because I just want to check before I formally pronounce the orders, that it is technically correct, in terms of the orders for cumulation. So you will not have to write this down, you will have it in front of you.
105 MR CHALLEN: As Your Honour pleases.
106 HIS HONOUR: On Charge 3, I convict and sentence you to two years' and five months’ imprisonment. I direct that this sentence is to commence today.
107 On charge 2, I convict and sentence you to 12 months’ imprisonment. I direct that this sentence commences 22 months after the sentence on Charge 3 commences.
108 On charge 1, I convict and sentence you to five months’ imprisonment. I direct that this sentence is to commence nine months after the sentence on Charge 2 commences.
109
The sentence on Charge 3 of 29 months’ imprisonment, is thus the base sentence. On Charge 1, the intended cumulation is two months and on
Charge 2, the intended cumulation is five months, both upon the base sentence and upon each other.
110
You will therefore be sentenced to a total effective sentence of three years’ imprisonment. However, subject to this explanation, I will direct that you be released after having served 18 months' gaol, upon you entering into
a recognizance of the sum of $5,000, to be of good behaviour for a three years.
111Before I make that order, I will explain to you the purpose and the effect of the proposed recognizance release order and the consequences that may follow if you, without reasonable excuse or cause, fail to comply with the conditions of the proposed order.
112The purpose and effect of the recognizance order is to grant you conditional freedom, after you have served 18 months' imprisonment.
113It requires you to be of good behaviour for a period of three years after your release. If you commit a further offence in breach of the recognizance to be of good behaviour in that three year period after your release, then unless you can show a reasonable excuse for committing a further offence or offences, you will be dealt with for that breach and re-sentenced. You may have to pay $5,000 and you may have to serve immediately the remaining term of imprisonment, which is 18 months.
114I should also tell you that you or an authorised person may apply to the court to vary or discharge the recognizance, in accordance with s 20AA of the Crimes Act1914 (Cth).
115So subject to you client signing that recognizance release and subject to hearing from you both, my directions as to commencement dates comply with my intended cumulation, I will formally pronounce those orders.
116MR CHALLEN: May I, Your Honour?
117HIS HONOUR: Yes.
118MR CHALLEN: May I have a few minutes?
119HIS HONOUR: Yes, of course.
120MR CHALLEN: Just to make sure that is correct?
121HIS HONOUR: Yes. Do you want me to leave the Bench?
122MR CHALLEN: If you wouldn't mind, sir.
123HIS HONOUR: Yes. I will leave the Bench.
124MR CHALLEN: I just need time to do a couple of calculations, if I may.
125HIS HONOUR: Yes.
126(Short adjournment.)
127HIS HONOUR: All right, two - - -
128MR CHALLEN: Your Honour, if I may?
129HIS HONOUR: Yes, please.
130MR CHALLEN: My learned friend and I both agree that the sentence that you pronounced earlier is correct.
131HIS HONOUR: Yes, good.
132MR CHALLEN: And that the intended total effective sentence of three years is reflected in the orders for each charge.
133HIS HONOUR: All right. Well, thank you. Well I formally pronounce that sentence.
134MR CHALLEN: And I've taken the additional time to draft a recognizance release order.
135HIS HONOUR: Yes. I have got to sign that first, don't I?
136MR CHALLEN: Yes, that's correct, Your Honour.
137HIS HONOUR: Have you had an opportunity - I know I have explained it to your client, which I am required to do. Have you also had an opportunity to explain it to him?
138MR CHALLEN: My learned friend will do that, Your Honour, yes.
139HIS HONOUR: I am sorry. I apologise.
140MR CHALLEN: Certainly your - - -
141HIS HONOUR: You have?
142MR HALPERIN: Yes.
143MR CHALLEN: It is submitted, Your Honour, that the explanation that you gave earlier is - it complies with the Crimes Act requirements.
144HIS HONOUR: Yes, good. All right, just let me read this.
145My associate will now approach you, Mr Samarakoon, to have it signed.
146Yes, I note that Mr Samarakoon has now signed the document.
147There is nothing else, gentlemen?
148MR CHALLEN: No, thank you, Your Honour.
149HIS HONOUR: No, all right.
150MR HALPERIN: No, Your Honour.
151HIS HONOUR: No, thank you. Thank you for attending. Mr Samarakoon can be taken away please.
152Yes, adjourn the court.
- - -
5
0