Director of Public Prosecutions v Athanasiadis

[2019] VCC 2257

IN THE COUNTY COURT OF VICTORIA Revised
Not Restricted
Suitable for Publication

AT MELBOURNE
CRIMINAL JURISDICTION

CR-19-01121

DIRECTOR OF PUBLIC PROSECUTIONS

v

CONSTANTINOS ATHANASIADIS

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JUDGE:	HER HONOUR JUDGE QUIN
WHERE HELD:	Melbourne
DATE OF HEARING:	11 November 2019
DATE OF SENTENCE:	25 November 2019
CASE MAY BE CITED AS:	DPP v Athanasiadis
MEDIUM NEUTRAL CITATION:	[2019] VCC 2257

REASONS FOR SENTENCE
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Subject: Obtain property by deception
Catchwords:
Legislation Cited: Part 2B of the Sentencing Act (1997)
Cases Cited: Grossi [2008] VSCA 51
Sentence:  Total effective sentence of two years, with a non parole period of eight months.

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Ms M. Sargent	OPP
For the Accused	Ms P. Marcou with Ms D. Markotich

1HER HONOUR: Constantinos Athanasiadis, you have pleaded guilty to seven charges of obtaining property by deception. The maximum penalty for this offence is 10 years. Each of the charges are rolled up, meaning that the total amount in each charge is the sum of the individual amounts obtained by you in the relevant period. Charges 2, 3 and 7 relate to individual amounts of $50,000 or more as part of the total, thus the provisions of Part 2B of the Sentencing Act (1997) are enlivened and the maximum penalty for those offences is 20 years. This offending occurred between 24 April 2014 and 8 June 2016.

2The circumstances of your offending are fully set out in Summary of Prosecution opening dated 7 November 2019 (Exhibit A).  You were a friend of John Kaparelis and offered to provide financial advice to some of his clients.  In February 2009, he introduced you to his then partner, Sylvia Nicolades.  You developed a close friendship with both of them, enjoying social and family activities and celebrations, prior to and during the offending period.

3You also assisted Ms Nicolades in refinancing or managing her loans in 2009, and on 3 occasions during 2013.  Ms Nicolades lent you significant amounts of money on a number of occasions between March 2009 and March 2016. 

4This information was provided by way of background as to the nature of your relationship with Ms Nicolades and the trust between you.  It was not submitted that any of those dealings involved fraudulent activity.

5As to the circumstances of this offending, on 27 May 2014, you approached Ms Nicolades to provide short term loans to some of your clients.  The first proposed loan was to Tony Kanellopoulos.  You told Ms Nicolades that the loan was for business purposes and that there was a second co-lender, your father who was providing half the funds.  You asked her for $25,000 and advised the loan was for a period of three months with an option to extent for one month.  A loan agreement was prepared by you and provided to Ms Nicolades.  On 6 June she transferred $25,000 into your account. 

6Mr Kanellopoulos is known to you, but did not obtain this finance through you.  The loan was fully repaid in December 2014.

7Between 27 April 2014 and 20 September 2016 you fraudulently obtained a further 26 short term 'loans' from Ms Nicolades, in a similar manner, though the identity of your so called 'client' varied.  In each instance, the loan amount or funds were not provided by you to the named borrower.  Each of the loans was supported by a loan agreement prepared and provided by you, and included falsified signatures of the borrower.  The funds went to your account or an account connected to you. 

8The amounts paid by Ms Nicolades to you are set out in chronological order in paragraph 22 of Exhibit A.  Additionally, that table includes details of the purported 'borrower'.  Those circumstances amount to Charges 1-4, 6 and 7. 

9Around August or September 2015, you requested a loan of $30,000 in the same way.  Ultimately, it was Mr Kaparelis who provided those funds but again, your client did not obtain those funds and you falsified the relevant documents.  Thus the circumstances of Charge 5 are the same.  But it was Mr Kaparelis who provided the funds.

10On a large number of occasions when these loans were due to be paid in full, you produced a further loan agreement to roll over or extend the loan period.  By this means you were able to defer the repayment date, thereby avoid detection and such activity enabled you to continue with the fraud.

11The total amount obtained by you was $1,305,000.  This was comprised of $1,275,000 from Ms Nicolades and $30,000 from Mr Kaparelis.

12During the period of offending, on 16 March 2016, you organised additional draw down amounts from two of Ms Nicolades own loan accounts.  You also made a number of repayments to Ms Nicolades, though she believed they were interest payments on existing loans, or pay outs of part or all of the principal.  The total amount of the repayments was $950,550.80.  By reason of this offending Ms Nicolades has suffered a loss of $354,450.

13By July 2016 many of the loans had fallen into arrears.  Between July and December 2016 Ms Nicolades made numerous attempts to contact you to request the loans to be recalled, and to inform you that any expired loans would not be extended.  She received limited responses from you.

14In late January 2017, Mr Kaparelis, when he reviewed the files, became suspicious of the signatures and concerned about the quantum and legitimacy of the loans.

15During February 2017, he made a number of requests for overdue funds and principal and you gave various responses.  You initially were able to placate him by indicating your clients would repay once their tax returns were completed and that all principal could be repaid at the end of the year.  You later told him you would raise the funds owed using the equity in your own home.

16Six months later, in about August, you admitted all the loans were not genuine, and your fraudulent activity.  You admitted you had spent all of the money on school fees, shares and paying off debts owed to other people.

17Mr Kaparelis sought a mortgage over your house, and provided you relevant documents which ultimately you did not sign.  You told them in September 2017 that you were unwell and seeing a forensic psychologist, that you were sorry and you would pay the money back, though you had no money at that time.  On 13 November 2017 their solicitors referred the matter to police.

18A forensic accountant examined your accounts where the money was paid.  This analysis revealed that you transferred the funds to other accounts in either your name or third parties or companies connected to you.  You also withdrew cash amounts and paid funds to the Australian Tax Office.

19You were interviewed by police on 20 June 2018 and gave a no comment interview.  You were charged on 29 March 2019.

20Relevant to this sentencing exercise is that you were sentenced by me on 5 September 2018 on three charges of obtaining financial advantage, to 8 months' imprisonment and a community correction order for a period of 12 months.  That offending occurred shortly after this current offending ceased, and was very similar with you obtaining funds from others on similar false representations with bogus borrowers.  Though this related to funds from two other friends.  That offending occurred between June 2016 and May 2017 with a loss of $247,000 incurred.

21I received a victim impact statement from Ms Nicolades who outlines the significant financial loss she suffered as a consequence of your crime.  She describes your actions as having a devastating effect on her life emotionally and physically.

22She is seeing a psychologist and suffers from anxiety, sleeplessness and depression.  She feels totally gullible, betrayed and used.  Her long-term relationship with Mr Kaparelis has broken down due to the stress associated with your offending, and she finds it very difficult to trust people.

23She concludes:  you represented yourself to her in the most horrible way.  Your actions have had a deep and detrimental impact on every aspect of her life:  her personal self-esteem, her relationship, friends and financial security.  The healing process is taking a long time and she feels it will be felt by her for many years to come.

24As to your personal circumstances, much of the information regarding your personal history had been provided to me at the previous plea hearing.  Much of what follows is a repetition of what was contained in those remarks.

25I was provided with reports from Patrick Newton, clinical forensic psychologist, dated 17 August 2018, and an addendum report dated 20 October 2019; material from Suzy Adler, therapeutic counsellor dated 14 August 2018 and 22 August 2019; letter from Vera Semjonov, a gambling counsellor dated 30 September 2019.  I was also provided with medical material relating to you, your wife and daughters, and character references from your employer, family members and friends.  I take all of that material into account.

26You are currently aged 52.  You have one sister and your parents immigrated to Australia from Greece in the mid-1960s.  You had a normal happy childhood with both parents being hard working and your grandmother assisting with your care.  You have a good relationship with your sister, her husband and your parents with whom you are currently residing.  You had family and other friends in court to support you.

27You learnt English in primary school though Greek is your first language.  You successfully completed Year 12 then a Bachelor of Arts.  You have had a range of jobs since graduating:  working in a finance company, operating a pub, operating a business with your wife in children's sport.  Whilst operating this business you continued to work in the finance sector referring clients to mortgage and other finance brokers on a commission basis.  It was through that work that this offending occurred.  Since being charged, you've worked in the construction industry as a labourer whilst not in custody. 

28You met your wife in 1986 and married in 1990.  You have two teenage daughters.  Your wife suffers from a range of health problems and additionally your daughter has had significant health issues.  (See the relevant medical reports.  You and your wife separated in 2017 after you were charged with these matters, though you remain in communication with each other.  I was informed you are living separately, each with your respective parent and that you were required to sell the family home, the proceeds of which, in excess of $1m, all went to the bank in June 2018. 

29This offending has been explained by your addiction to gambling.  You commenced betting on horses when you were aged about 16.  This developed into more of a problem in about 2012, and again in 2015.  Your offending occurred in the context of increased personal stressors and mounting business debts.  Inevitably you accrued substantial losses.  Like many others in that situation rather than desist, you increased your gambling, borrowing money from friends in a desperate attempt to recoup your losses.

30Once you revealed your offending to your family, other victims and Ms Nicoledes and Mr Kaparelis, you consulted Ms Suzy Adler, therapeutic counsellor at Gamblers Help in August 2017.  Your first contact with her was in October 2017 and you attended on three occasions in the first week.  There was, however no further face to face contact until March 2019.  You indicated to her you thought you were no longer gambling and that you had work commitments which now served to distract you from that activity. 

31After you were released from prison you recommenced counselling sessions first with Ms Adler and then with Ms Semjonov on a fortnightly basis.  Ms Semjonov reports you have an increased understanding of your gambling activities.

32Apart from the expected normal range stress and anxiety at both the time of the offending and regarding your current situation, you have no history of mental illness, other than that relating to gambling.  You have never had issues with drugs or alcohol.  You have no prior criminal history.  As revealed in the material tendered on your behalf, you are, apart from the offending, otherwise of good character.  I accept that you have been a good and caring father and made a valuable contribution to your local community. 

33Your counsel explained both this and the other offending on the basis of your gambling addiction that existed at the time of the offences.  Mr Newton was of the view that you were suffering from a severely pathological gambling problem.  He describes you at the time of offending as being oblivious to the behavioural, statistical and economic realities of gambling and that you engaged in superstitious rituals by which you hoped you might garner divine favour to skew the odds in your favour.  Mr Newton was of the opinion that you met the DSM-5 criteria for a Gambling Disorder, though he noted that your arrest seemed to have broken the compulsive cycle which maintained your gambling.

34Your counsel did not submit the principles of Verdins were implied, enlivened on the basis of that opinion, rather, it was submitted that although such a diagnosis does not excuse your conduct, it does provide a context or explanation for it. As noted by Justice Redlich in Grossi [2008] VSCA 51 at [56]:

35'The relevance of such a disorder to the sentence to be imposed will generally not, on that basis alone, result in an appreciable moderation of the sentence, rather it provides a motive and explanation for its commission.' 

36You took advantage of your friends' trust and continued to do so over a period of almost two years with Ms Nicolades. You made the choice to approach and deceive both her and her partner, your friends.  I accept that your offending was not to finance a high lifestyle or greed; these aggravating features do not exist.  I view your gambling addiction as part of the context of the offending.  It does not reduce to a significant degree your moral culpability or general deterrence, and further, there is a need to deter you from further offending and to denounce your conduct.  And I refer to the remarks I made in respect of specific deterrence later in those reasons.

37I accept that you, of your volition, revealed your offending to your family and eventually told Mr Karpelis and Ms Nicolades of your wrongdoing.  It was their solicitor who contacted police in November 2017.  You indicated an intention to plead guilty to these matters when the matters were first at Court.  I accept your guilty plea has significantly facilitated the course of justice and has a utilitarian benefit.  Neither of your victims were required to give evidence at any stage during these proceedings and you have saved the community the significant costs associated with running a trial. 

38I accept that your plea is also indicative of remorse.  You told Mr Newton in 2018 you were truly disgusted with yourself.  They were friends and that you couldn't apologise enough.

39Consistent with remorse, your counsel submitted that you were intending to repay the funds.  I accept that you legitimately hope to be able to do so and that you have repaid $10,000 to victims in respect of the other offending.  There still is a significant amount owing to all 4 victims.  That is those relating to this and the other offending.

40Your brother in law, John Kanga, gave evidence.  He had been unaware and had only limited contact with you at the time of this offending.  Your offending came as a shock to him when it was revealed.  There were at no times indications that you were living a 'high life'.

41He visited you in prison on one occasion and also collected you on completion of your term.  You showed 'extreme' remorse.  You spoke of your commitment, through your own hard work, to repay the funds.  He also indicated a preparedness to provide you work in one of his successful businesses.  I accept that you are remorseful for the offending and take that into account.  Your counsel focussed on the progress you made both whilst you were in custody and on your community correction order, since you were sentenced by me in September 2018.  Clearly, this is related to your rehabilitation prospects.

42Your counsel conceded your offending involved a breach of trust, though submitted it was not in a professional context.  Further it was submitted the actual loss to Ms Nicolades was significantly less than the actual deception.  Your counsel also relied on the evidence of Mr Kanga, who maintained that he has, since your release from custody, monitored you on a fortnightly basis, your income and expenditure; that he recognises that your issues stemmed from gambling and he ensures that you have no opportunities or links to that anymore. 

43Further, he thought you were a changed man, that you recognise the impact of your addiction has had on your family and community reputation and you are highly motivated to overcome this problem.

44You utilised your time in custody in a constructive manner.  I was provided with a number of certificates regarding courses successfully completed by you relating to various occupational and stress-reducing techniques.

45Mr Newton opines in his addendum report that in short, you've used the opportunities for treatment both within custody and since your release to address the gaps in your insight that were identified in this earlier report.  In turn, this improved insight has provided the foundation for you to develop a clear relapse-prevention plan which incorporates accountability to your family and which you've reportedly assiduously practiced since your release. 

46On your self-report, you've remained free of all gambling-related behaviour.  Moreover, you've expressed a firm commitment to remaining away from all gambling related activities.  In light of the changes, the gambling disorder which Mr Newton diagnosed in your case, he now specifies to be in sustained remission.  It was submitted that your prospects of reoffending were negligible, given the professional assessment of the state of your gambling condition, your otherwise prior good character and strong, positive family support.

47Much of the argument of your counsel related to the delay in you being charged and the consequences that have flowed.  This offending occurred between April 2014 and June 2016.  The other offending occurred between June 2016 and May 2017 and could be said to have been identical, though with different victims.  You were charged with the other offending on 29 August 2018.  You were sentenced for that other offending on 5 September 2018.  You were charged with this offending on 29 March 2019, whilst you were in custody about two months prior to the expiration of the custodial part of that sentence.

48The prosecutor explained the delay as follows:

49'In these current matters, there 23 different individuals named as borrowers in the documents.  Each of them had to be contacted in proof of the dishonesty.  This occurred between June 2018 and March 2019.  The informant attempted to expedite the matter and prepare a plea brief, but this did not come to fruition.'

50It is accepted that you were unaware of that possibility.  In any event, the delay could not be said to be inordinate.  The complaint was made 13 November 2017, approximately six months later you were arrested and gave a no comment interview.  Given the amount of the fraud and the number of alleged borrowers, I don't accept the investigation by police progressed in a leisurely fashion, with you being charged for about 16 months after your offending was reported to police. 

51Your counsel conceded the offending was serious offending was serious but submitted the effect of delay required reduced emphasis on general deterrence and referred to relevant authorities.  However, as indicated, the nature of the fraud was such that the time taken by police to investigate and charge you was not such as to significantly dilate general deterrence. 

52The more significant matter is a consequence of delay relates to specific deterrence and your rehabilitation prospects. In Rodriguez v The Queen [2013] VSCA 216 at [40-41], Redlich JA clarified the application of the principles regarding delay in these two ways: (1) it's relevant to the steps that have been taken to rehabilitation and the effect on specific deterrence and (2) anxiety, with the matter hanging over your head being punishment itself.

53In respect of the latter consideration, your counsel submitted that there'd been a delay of over two years between the date of the police report, November 2017 and being sentenced and the prospect of a return to imprisonment has weighed heavily on you.  You were released in May[sic] 2019 and charged in March[sic] 2019.  I accept you've suffered in that manner as a consequence of the delay and take it into account.

54It was submitted that you had demonstrated a proven commitment to rehabilitation which commenced when these matters were first discovered and continued whilst you were incarcerated and continues as reflected by your compliance with your CCO.  A report provided to me notes your progress and the order as satisfactory. 

55This was consistent with Mr Newton's opinion regarding your commitment to relapse prevention as outlined earlier in these remarks.  I accept that you have made excellent progress towards rehabilitation.  And that you remain committed.  It is a significant matter to take into account in sentencing you. 

56There were some aggravating features of your offending.  The total amount of the fraud was significant, being over $1.3m.  The loss to Ms Nicolades was approximately $345,000 and Mr Karpelis $30,000.  The impact on your main victim cannot be overstated.  Her life and financial security have been severely affected.  This was a deliberate breach of trust.  Your friend placed a high degree of trust and confidence in your friendship and advice.  Your offending had a level of sophistication with documentation being provided and the use by you of real people as borrowers.  Your offending continued and was consistent over a period of two years.  

57General deterrence has an important role to play.  Your gambling addiction does not reduce the operation of this as a sentencing factor.  Delay has some effect on this consideration.  Just punishment and community denunciation of your conduct are also applicable in the sentencing exercise.

58The maximum penalty for Charges 2, 3, and 7, reflect the seriousness with which Parliament views frauds involving large amounts of money.  You are to be sentenced for Charges 2, 3 and 7 as continuing criminal enterprise offences.  And these have a higher maximum penalty.  Your counsel submitted that given the loss incurred by Ms Nicolades in respect of these offences, was significantly less than the amount of fraud related to each of those counts.  But I should not distinguish between the sentences for those matters and the other charges.  I don't accept that is the correct way to approach sentencing for continually putting up enterprise offences.  Although the repayment or loss is relevant to the individual sentence to be imposed on each of them, it does not lose its classification and treatment as a continuing criminal enterprise offence.  And those offences remain distinguishable and more serious given the quantum and amounts of or over $50,000 within each of those offences as part of a rolled-up charge. 

59Your counsel submitted and I accept in relation to totality that I should consider the sentence imposed by me in September last year in considering the sentence imposed on this matter.  This is particularly so, given the similarities and the offending related to that sentence and the matters currently before me.  You have effectively been under supervision for a period of 14 months thus far.  Further, I accept that you've missed the opportunity for concurrency of any sentence that I may impose. 

60The prosecution submitted the objective seriousness of this offending relating to quantum, sophistication, breach of trust and other relevant sentencing considerations were such that even taking into account the matters relating to delay, that this offending warranted an immediate term of imprisonment, that I should impose a term of imprisonment with a non-parole period.  Clearly the focus of your counsel's plea was whether you should be required to spend more time in custody.  Your counsel submitted the delay and timing of the laying of these charges whilst you were in custody combined with matters in mitigation, particularly your progress in addressing your gambling, your first experience at custody and totality considerations, that I should sentence you by way of a lengthy community correction order.  I received a favourable report from Corrections. 

61This is a difficult sentencing exercise, primarily because these matters were not dealt with at the same time as those in September 2018.  As a consequence, you've served a term of imprisonment and are on the way to completing your CCO.  I accept your rehabilitation prospects are good, better than they were when you were previously reforming.  At that time, professionals were more reserved about your prospects and level of insight into your gambling problems. 

62Specific deterrence has less relevance, though given the frequency and continuation of your offending over a two-year period, it is still a matter to take into account.  I also accept you've had these matters hanging over your head and experienced anxiety and worry over the period, particularly since you were released in May this year.

63You did however, engage in prolonged and consistent fraud.  You exploited the trust placed in you by your friend.  The impact of your deception on her particularly has been great and her personal financial security threatened.  As I said to you on the last occasion, the impact on this victim is greater than that suffered by large organisations often the subject of fraudulent behaviour.  The amount of funds and duration of the offending should be viewed in that context.  Your conduct must be strongly denounced and just punishment imposed.  Others must be deterred from engaging in such activity.

64I also take into account totality as referred to above and recognise that you've lost the benefit of concurrency in respect of your previous sentence.  The individual sentence that I'm about to impose and the total effective sentence are for lesser periods than I would ordinarily impose given the unusual situation. 

65Taking all relevant sentencing considerations into account, I propose to sentence you as follows.  If you could please stand. 

66In respect of Charge 1, you are convicted and sentenced to a term of imprisonment of three months.  In respect of Charge 2, you are convicted and sentenced to a term of imprisonment of six months.  In respect of Charge 3, you are convicted and sentenced to a term of imprisonment of six months.  In respect of Charge 4, you are convicted and sentenced to a term of imprisonment of two months.  In respect of Charge 5, you are convicted and sentenced to a term of imprisonment of two months.  In respect of Charge 6, you are convicted and sentenced to a term of imprisonment of two months and in respect of Charge 7, you are convicted and sentenced to a term of imprisonment of 18 months. 

67One month of the sentence in respect of Charges 1, 2, 3, 4, 5 and 6 will be cumulative on the sentence that I impose making a total effective sentence of two years.  You will be required to serve a period of eight months before you are considered eligible for parole. 

68Pursuant to s.6AAA of the Sentencing Act, if you had not pleaded guilty to this matter, I would have sentenced you to a term of imprisonment of five years with a non-parole period of three. Did I note the compensation order?

69MS SARGENT:  I've got it here, Your Honour.  

70HER HONOUR: All right. I've got a compensation order here to be made on behalf of Ms Nicolades in the sum of $354,450 and pursuant to s.6J of the Sentencing Act, it will be noted on the court records, that you are sentenced as a continuing criminal enterprise offender.

71Is there any other matters?

72MS MARCOU:  No other matters, Your Honour.

73HER HONOUR:  Thank you. 

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