Director of Public Prosecutions v Bilton
[2023] VCC 947
•5 June 2023
ftw
| IN THE COUNTY COURT OF VICTORIA AT Melbourne CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-22-01957
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| FIONA BILTON |
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JUDGE: | HIS HONOUR JUDGE DOYLE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26 May 2023 | |
DATE OF SENTENCE: | 5 June 2023 | |
CASE MAY BE CITED AS: | DPP v Bilton | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 947 | |
REASONS FOR SENTENCE
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Subject:Criminal law - Sentence
Catchwords: Guilty plea – three charges of obtaining a financial advantage by deception – continuing criminal enterprise offender – reduced moral culpability – offences committed reluctantly – no benefit to offender - no criminal history – inordinate delay – assistance to authorities – extra-curial punishment – Verdins principles limbs 5 and 6 – good character.
Legislation Cited: Crimes Act 1958 (Vic); Sentencing Act 1991; Corporations Act 2001 (Cth)
Cases Cited:DPP v Bulfin [1998] 4 VR 114; Hicks v The Queen [2016] VSCA 162; R v Boulton (2014) 46 VR 308; R v Doran [2005] VSCA 271; R v Verdins (2007) 16 VR 269; R v Schwabegger [1998] 4 VR 649; Rich v ASIC (2004) 220 CLR 129
Sentence: 20 months, suspended for a period of three years; Community Correction Order of three years and six months
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Ms S. Tatas | Office of Public Prosecutions |
| For the Accused | Mr N. Papas KC | Con Kiatos & Co. |
HIS HONOUR:
1Fiona Bilton, you have pleaded guilty to three charges of obtaining a financial advantage by deception. The maximum penalty for Charges 1, 2 and 3 is 20 years' imprisonment because all charges are continuing criminal enterprise offences under s 6H of the Sentencing Act 1991. Therefore, pursuant to s 6I of the Sentencing Act 1991, the maximum penalty is doubled.
2You were between 46 and 48 years old when you committed the offences. You are now 56 years old. The offences occurred when you were working at BBY Limited (“BBY”). You started working there in June 2011 as Head of Operations based in Melbourne on a salary of $132,000 per annum. You did not receive a pay rise or any bonuses in the time you worked there.
3The circumstances of your offending are set out in a Statement of Agreed Facts which you signed and in the Amended Prosecution Opening, which is a summary of that document. The agreed statement of facts is an attachment to the amended summary.
Background
4BBY was the largest independent stockbroker in Australia and New Zealand until it was placed into administration on 17 May 2015. As part of its stockbroking business, BBY placed trades on behalf of clients on the ASX.
5On 30 November 2011, BBY became a clearing and settlement participant with the ASX commencing on 5 December 2011. What this means is that from that date when BBY placed trades on behalf of its clients, it was responsible for the trade settling regardless of whether the client had paid BBY. Trades in equities on the ASX were required to be settled on the third day after the trade was executed. The settlement of equities trades occurred at about 10.30am each day through a system known as CHESS.
6You were Head of Operations for the duration of the charged periods. You reported to Mr Arunesh Maharaj, who was the CEO of BBY.
7He resigned from BBY on 20 March 2015. After that, you reported to Mr Glen Rosewall, who was the Executive Chairman of BBY and after Mr Maharaj's departure, he also acted as the CEO.
8The Operations team, of which you were in charge, was responsible for ensuring that all Australian equities traded by BBY were cleared and settled efficiently and correctly.
9On 13 December 2011, St George Bank provided BBY with an overdraft facility of $3 million to be used for limited purposes. On 12 December 2012, this overdraft was increased to $8 million. An account was established called the Facilitation Account used by BBY to access the overdraft.
10You, Ms Bilton, used the overdraft facility in accordance with processes requested by St George Bank by email and telephone over time and actioned daily.
11At all relevant times, BBY was unable to transfer money from the Facilitation Account without approval by an authorised St George Bank employee. Once authorisation was given, the St George Corporate Servicing Team would process the transaction.
12The daily procedure for equities settlements was that at about 10.30am the net settlement amount for all BBY equities clients was settled with the ASX by a single transaction on the Facilitation Account. Additionally, BBY also settled a daily margin with the ASX on exchange traded option trades as a single transaction on the Facilitation Account.
13For buy trades, clients were expected to pay funds due to BBY by the settlement date notified on the contract notes. Clients who did not pay BBY by the settlement date became debtors to BBY. There were some clients who did not pay BBY by the end of the settlement day or paid on the day by BPay or internet banking, where the funds were not received into BBY's bank account until the following day. These trades were known as “open fails”.
14St George Bank agreed to fund “open fails” at the end of each day by a drawdown on the overdraft facility known as “open fail funding” or “failed settlement funding”. This provided BBY with funds from the Facilitation Account to cover the debts owed by all open fail clients.
15BBY was required by the ASX rules to hold end-of-day trust balances on behalf of equities and exchange traded options clients.
16You, Ms Bilton, used an Excel spreadsheet which listed the balances of the accounts within your control for BBY settlement purposes and the daily account activity used by operations, to calculate the amount of additional funding needed to meet the obligations and to determine the amount of open fail funding needed to be claimed in the daily request to St George.
17
To obtain the open fail funding, you would send a template email request to
St George for a specific amount of funding, attaching the following documents to the email:
(a) an Excel spreadsheet summarising contracts that clients had not settled with BBY; and
(b) screenshots taken from a BBY back office clearing system software showing details of the corresponding contract notes under which BBY had purchased shares for clients, showing the outstanding amount required from the client to settle the trade. These screenshots were dated but not timestamped.
18
In response, an authorised St George employee would compare the figures in the attached unsettled contracts to the level of the requested funding. If the funding requested was supported by the unsettled contract notes, the authorised
St George employee would approve the open fail funding which was then processed through the Corporate Servicing Team at St George. The funds would then be transferred from the Facilitation Account to an account utilised by the staff of operations.
19At the start of the following day, BBY was required to return the open fail funding to the Facilitation Account.
20On 2 March 2015, there was a change to the daily procedure. BBY was no longer required to repay the open fail funding from the previous business day to the Facilitation Account and was instead permitted to retain the funding in its own accounts. However, BBY was still required to support its retention of the open fail funding by providing screenshots each day. This arrangement was in place for the duration of the offending period for Charge 3. In this system, the open fail funding became an ongoing drawdown on the overdraft facility instead of an overnight drawdown which had operated under the earlier daily procedure involving repayment the following morning.
21
At all relevant times, you were responsible for making the daily request to
St George for open fail funding.
The offending
22Overall, on 115 separate occasions over the offending period, you knowingly deceived St George by misrepresenting in email requests for open fail funding that BBY had not received settlement monies from clients in respect of certain trades, when in fact BBY had received those funds.
23By doing this, you obtained additional open fail funding to which BBY was not entitled. Under instruction from Mr Maharaj, you misrepresented this to St George by an email which claimed:
(a) an inflated amount of open fail funding;
(b) attached an Excel spreadsheet summary of the contracts included in the open fail claim;
(c) attached screenshots of the contract note details which you took in the morning showing BBY had not been paid rather than at the time of the request for funding, as required by the daily procedure or the amended daily procedure.
Charge 1
24
Either in the afternoon of 27 June 2013 or in the morning of 28 June 2013,
Mr Maharaj called you and instructed you to obtain additional open fail funding from the overdraft facility because the funds were needed urgently for end of financial year purposes. You strongly objected, but Mr Maharaj assured you that the money would be repaid the following day, which it was.
25Mr Maharaj told you to coordinate the funding request with Ms April Yuen, who was BBY's head of strategy and who had control over BBY's bank accounts. You felt under pressure to comply with the request because he was the CEO, that is Mr Maharaj.
26On the morning of 28 June 2013, you took screenshots of various contracts which recorded the clients who had not paid BBY for their trades, and you provided these screenshots to Ms Yuen. These screenshots included a date stamp but not a timestamp. The screenshots included three trades associated with Jaguar Advisory Services. The value of the Jaguar trades was $4,394,962.84.
27At 5.19pm, Ms Yuen instructed you by email to obtain the open fail funding, including the amounts related to the Jaguar contracts. By that time, BBY had received payment for the Jaguar contracts from its clients and therefore these were not open fail contracts. Ms Yuen further instructed the transfer of $3,559,390.45 to an account she controlled.
28At 5.34pm, you sent an email to St George requesting the open fail funding. You included screenshots of the Jaguar contract notes. The funds were then transferred by St George from the Facilitation Account to a BBY account over which you had access and joint control with BBY finance.
29At 5.59pm, you were not willing to process the payment and you asked Ms Yuen to transfer the $3,599,390.45 she had requested in the earlier email. The balance of the open fail funding was kept in accounts utilised by the Operations team which included you.
30The next day, 1 July 2013, Ms Yuen returned the $3,599,390.45 to an account used by Operations, and these funds were included in the repayment of the open fail funding as required and in accordance with the daily procedure.
31The financial advantage in this charge is the use of St George overdraft facility funds.
Charge 2
32Sometime in the first two weeks in November 2014, Mr Maharaj instructed you to obtain an additional $2 million in open fail funding from the overdraft facility using settled contract notes. He told you this was needed for the business but did not explain why. You initially refused, but Mr Maharaj said that you had no need to worry because the money would be repaid within a day or two, as had occurred previously.
33On 14 November 2014, you took screenshots of trades where the clients had not yet paid BBY. The total value of these contracts was $2,537,991.15. Later that day, you instructed one of your employees to transfer $2 million to a BBY business account over which you no had control or access, and a further $500,000 to a BBY operating account controlled by Ms Yuen. You were acting on instructions from Mr Maharaj and Ms Yuen in respect of these transfers.
34As a result of the transfers, there was $2.5 million less available to meet the end of day cash requirements, which was a trust deficiency BBY was required to report to the ASX. To address the shortfall of funds, you implemented Mr Maharaj's instructions by obtaining $2,537,991.15 in open fail funding using the screenshots from the November 2014 contracts, even though payment had been received from relevant clients.
35The following day, you repaid the open fail funding falsely derived from these contracts. The repayment was made from accounts used by Operations and there was no repayment by Mr Maharaj or from BBY's business accounts. This again left BBY with a $2.5 million shortfall in accounts controlled by Operations and, again, there would have been a reportable trust deficiency without additional funds. To cover the shortfall, you obtained $2,621,411.68 in open fail funding using false screenshots of contract notes. This occurred on 17 November 2014.
36Mr Maharaj instructed you to continue to obtain funding required by operations from the Facilitation Account rather than using BBY's working capital.
37
You therefore continued the practice of obtaining additional open fail funding on 69 occasions on almost every business day between 18 November 2014 and
27 February 2015, by including contracts in the open fail funding requests for which BBY had received payment from relevant clients.
38On 16 January 2015, you transferred $500,000 from accounts used by Operations to a foreign exchange trust account managed by Ms Yuen's team. You had initially refused to make the transfer when directed to do so by Mr Maharaj, but you were then directed to make the transfer by Mr Rosewall, and you did so. Mr Rosewall said to you, “We need the money. If you do not, the impact on the business will be extremely serious”. You were concerned about what you were doing and you sent an email to Mr Rosewall and to Mr Maharaj (Ms Yuen was copied in) seeking written approval for the transfers.
39As with Charge 1 the financial advantage in this charge is the use of St George overdraft facility funds.
Charge 3
40On 27 February 2015, open fail funding advanced by St George was $3.4 million, which included $3,170,291.73, to which BBY was not entitled.
41On Monday, 2 March 2015, the amended daily procedure commenced. Under this new procedure, open fail funding was still maintained by BBY with daily adjustments and needed to be supported by a spreadsheet listing the contracts which had not settled, accompanied by screenshots of the unsettled contracts.
42Between 2 March 2015 and 6 May 2015, you emailed St George on 45 occasions on almost every business day in accordance with the amended daily procedure, attaching the Excel spreadsheet and screenshots to justify BBY's retention of the open fail funding from St George, and to support further open fail funding. By doing this, you deceived St George by falsely representing that certain contracts were open fails and that BBY was entitled to retain the open fail funding.
43In respect of Charge 3, the financial advantage in this charge is enabling BBY to retain the St George overdraft facility funds.
44In summary, the amounts obtained by deception were as follows:
(a) Charge 1 – $4,394,962.84;
(b)
Charge 2 – the average daily false claim between 14 November 2014 and
27 February 2015 was $3.53 million, making a total of $243,627,040.81; and
(c) Charge 3 – the average daily false claim from 25 March 2015 to 6 May 2015 was $2.67 million, making a total of $120,319,993.91 obtained.
45
Following BBY's liquidation on 22 June 2015, $3,376,417.38 for transactions on
6 May 2015 was never returned to St George and became part of their claim as a creditor against BBY.
46On 8 May 2015, Mr Rosewall called you during a BBY Board Meeting. When you took the call, you thought you were participating in a private telephone conversation about a client trust breach. You were not aware you were on speaker phone at a Board Meeting. You took the opportunity of restating your concerns about the misuse of the overdraft facility as the funds had not been restored, and you reiterated your daily practice of using false contract notes to maintain the open fail funding from St George. You then heard another voice on the call and realised it was Mr David Perkins, a BBY Director and Board Member. He said, “What are you talking about Fiona?” You began to explain what had been going on, but you were interrupted by Mr Rosewall, who said that you were speaking in a Board Meeting. He ended the call with you.
47The Agreed Statement of Facts includes the following passage which part of the evidence of your reluctant involvement in the offending:
'According to the BBY Melbourne Settlement Team it was common knowledge amongst them that Ms Bilton was being directed by Mr Arun Maharaj to make false claims from the overdraft facility in order to fund cash shortfalls in BBY's business which was also known to Ms April Yuen and Mr Glenn Rosewall. Ms Bilton advised Mr Peter Clavin of the misuse of funds.'
48On 13 and 25 May 2015, you admitted your role to KPMG employees, who had been appointed as the administrators of BBY. You made admission statements to ASIC on 28 May 2015.
49On 11 March 2021, with your lawyers, an approach was made to ASIC and discussions followed, which have resulted in these negotiated charges and your guilty plea.
50You made several voluntary interviews and agreed to the Statement of Facts in 2021.
51At all times since May 2015, you have complied with all requests made by ASIC to assist with their enquiries. As regards to the loss to St George Bank I was told there was some ultimate recovery to St George, but it is not possible to quantify exactly what portion of the loss attributable to your conduct was returned.
Sentencing principles and seriousness of offences
52Dishonesty offences based on deception are serious offences. The gravity of such offences is encapsulated in the following passage from the judgement of Charles JA in the case of DPP v Bulfin: [1]
Whatever the motivation, offences of the kind here in question almost invariably involve a carefully calculated course of conduct over a long period, repeated deliberate acts of dishonesty, substantial amounts of money and frequently losses (often tragic in their impact) to large numbers of small investors. The offender often holds a position making it possible, or has the ability, to disguise or camouflage the conduct in question. Detection is difficult, the investigation of the crime usually lengthy and very expensive, and the problems of trial and proof will frequently be extreme. ... The result of such considerations, in my view, is that the element of general deterrence will usually carry particular significance in sentencing for crimes such as the present, both in relation to the total effective sentence and the non-parole period, together with the requirement for strong denunciation by the sentencing court.[2]
[1] [1998] 4 VR 114,
[2] Ibid, 132.
53In this case the prosecution relied on a number of those factors in emphasising the seriousness of the offending.
54The motive for the offending may bear on the genuineness of any expression of remorse or may be relevant to the need for specific deterrence, or the prospects of rehabilitation.
55In this case the prosecution has submitted that the seriousness of the offending is underpinned by the following factors: the offending occurred over almost two years with 115 false representations; the quantum of the financial advantage obtained was extremely large, ranging from $645,022.43 up to $5,363,028.09; the conduct was not isolated; rather it was systematic and involved planning and premeditation; the offending caused a substantial loss to the victim, St George Bank (approximately $3.4 million); the offending was facilitated by your position of trust as the Head of Operations within BBY and could not have occurred without your participation.
56
The Crown conceded the following matters: you did not personally receive any direct financial benefit from the offending nor did you have an intention to derive a personal benefit; you did not intend to permanently deprive the bank of the funds, and you intended that the money be returned; there were no direct, individual victims of the offending; the offending was relatively unsophisticated with you exploiting a loophole in St George's processes. You played a lesser role than
Mr Maharaj, who was the CEO, and others such as Yuen were also involved, and you were acting on the instructions of Mr Maharaj.
57The prosecution submitted however, that you held a senior role at BBY and could have chosen not to participate in the scheme, particularly given the length of time over which it occurred. They submitted that you could have refused to participate, and you had the option of resigning.
58Mr Papas KC emphasised on your behalf that you did not receive any money from what you did. Rather, he submitted you were bullied and pressured to offend, to help keep the BBY business in operation; and that you did try to resist the pressure exerted on you. He submitted that you felt intimidated and manipulated by your superiors into committing the offences. He relied on the Agreed Facts and other documents to support this proposition. He provided me with an extract of evidence given by Mr Peter Clavin, compliance officer at BBY, at the public examination in the NSW Supreme Court. Mr Clavin gave evidence that he was aware that you were under pressure to use money from the Facilitation Account. You also refer to the work environment and the pressure you were under in the evidentiary statement you made to ASIC.
59Mr Papas KC submitted that these factors substantially reduce the moral culpability that should be attributed to you for this offending. He conceded the seriousness of the offending and that ordinarily a significant prison sentence would be the outcome for offending such as this. I agree with that.
60This is obviously serious deception offending. Across all the offences the value of the financial advantage obtained by BBY was extremely large, very high indeed. The figures are a measure of the repetitive nature of what you did and the time frame over which the offending took place. The quantum of course does not represent the actual loss in this case, which was $3.4 million, the amount sitting in the overdraft, when as Mr Papas KC put it, 'the merry-go-round stopped for BBY', but the overall amount of the financial advantage obtained illustrates the scale of the offending here. You were in a position of significant responsibility and you had a duty by virtue of your position to always act honestly. The deceptions here masked the risk to the bank of advancing credit to BBY, which turned out to be a considerable risk. You well understood what you were doing was wrong. The conduct was deliberate.
61However, in assessing your moral culpability for this offending, I accept that you never intended and nor did you think that actual loss would be incurred by the bank. In my opinion, had you thought that you would not have participated. That said, the risk to St George Bank was or should have been apparent.
62
Your moral culpability is also reduced because you acted under direction from
Mr Maharaj and Mr Rosewall. You were reluctant to participate and you sought to resist the directions of Mr Maharaj and later Mr Rosewall. That you acted reluctantly under direction emerges from the facts relied on by the prosecution in the Opening and the Agreed Statement of Facts, and the evidence of Mr Clavin and your statement. I accept Mr Papas' contention that the offending occurred in a workplace environment of bullying and under a level of duress, albeit well short of what would be necessary to provide a defence to the charges. It seems you were told the position of the business was precarious, and should have refused to participate knowing that; indeed, the position of BBY was precarious. However, I accept that the context of your offending was that you were placed under pressure to offend and that you were concerned about your job and the jobs of others and the future of the business. Your motive was not personal enrichment and you received nothing at all from the offending. Of course, you should have refused to participate or you should have resigned if that was required, but it is easier to say that than to do it.
63Nonetheless, but for the other mitigating factors that apply in this case, notwithstanding that you reluctantly participated, a significant gaol sentence would have been the result.
Matters in mitigation
64However, in addition to his submissions relating to mitigating aspects of the offences, Mr Papas KC relied on the following further matters in mitigation: substantial delay; the value of your admissions to the prosecution case against you; good character; a guilty plea at the first reasonable opportunity; significant cooperation with ASIC, including in providing a signed undertaking to cooperate, and an undertaking to cooperate on oath before me; the assistance you provided to the creditors and investors of BBY in civil litigation; and your excellent prospects of rehabilitation. Before returning to those matters, I turn to your personal circumstances.
Personal circumstances
65You were brought up in Vermont and Mitcham with your parents and your two brothers. Your upbringing was stable. Your mother is still alive. She is now either 78 or 79 years old and lives in Mornington. Your father died in July 2021 at the age of 84. Your parents provided a supportive and caring environment for you and your siblings. One of your brothers is 57 years old and holds a senior position in the Army. He gave character evidence on your behalf. He lives in New South Wales. You have a younger brother who lives in Maidstone and works for Ventura Bus Lines. You are close to your siblings.
66You attended Eastmont Primary School in Vermont and then Nunawading Secondary College between Years 7 to 9. You finished your schooling at Canterbury Girls High School and completed your VCE. You were initially admitted to study Fine Arts but deferred to enter the workforce. You enjoyed working, and decided to complete a course in compliance, and qualified as a financial adviser. You never worked in that field.
67From the age of 19 you worked for Colonial Mutual Insurance Company in debt collection, and then worked for an over-50 friendly society providing support and advice for retirees. By your early twenties you had obtained employment for stockbrokers in Collins Street. You worked there for 20 years. You were promoted from accounts clerk to become the 2IC of operations. You then worked at Merrill Lynch, where you became the head of operations.
68You joined BBY on 10 June 2011 and stayed there until May 2015. For about six months after BBY was placed into liquidation you assisted the receivers in relation to accounts and transactions. You then obtained a position with Phillip Capital Limited, and you worked there from November 2015 until you were charged in respect of these matters at which time you were required to resign. You have been unemployed now for some time.
69You met your husband when you were 18 years old and he was 20 years old. You were engaged for 12 years, and then you got married on 8 November 1997. You and your husband lived in Boronia, Bayswater and Blackburn before moving to Heatherton. You became aware quite early in your marriage, following a major surgical procedure, that you would not be able to have children.
70Your husband was employed by Amcor until they moved their operations offshore and he was left unemployed. He obtained further work after some time, including with your brother at Ventura Bus Lines. However, health issues have interfered with his capacity to work in recent years. He has been entirely supportive of you over the last seven years in coping with the circumstances surrounding these charges.
71Since being charged with these offences, you have curtailed your social contact with friends because of the guilt and shame you feel in relation to the offending.
72Two short reports from a psychologist who has been treating you, Ms Priscilla Mulhern, were provided. She says you were referred to her by your General Practitioner, Dr Peter Schuijers, on 17 February 2021.
73You presented with symptoms of depression and anxiety. She says you meet the diagnostic criteria for Major Depressive Disorder with anxious distress within the context of being the subject of a protracted investigation by ASIC, charges being laid and the ongoing uncertainty regarding the outcome of the criminal proceedings. She says that due to the ongoing legal costs, you have had to sell your family home and your lifestyle has changed significantly.
74In a psychological report from Mr Bernard Healey, which was tendered as an exhibit on the plea, you were assessed as having a superior intellectual ability with a full-scale IQ of 121.
75Mr Healey says in his report that you are suffering from a generalised anxiety disorder with persistent depression and post-traumatic stress at clinical significance. He says that these findings are in accord with the diagnosis of your doctor and treating psychologist. He says you remain deeply distressed over the offences because you compromised your integrity and because of the impact of the offending on others.
Delay
76The delay in issuing charges in this matter is a very significant mitigating factor. The prosecution did not argue otherwise.
77I accept that this investigation was complex and there was a need not only to investigate the St George bank deceptions but also what is described in the material as the 'Client Money Matters', but the fact is you first admitted your participation in these deceptions over eight years ago now, in May 2015. This is an extraordinarily long delay by any measure. No part of the delay is your fault. To the contrary, Mr Robert McAlpine, senior lawyer at ASIC has provided a statement and other documents which make it clear that you made extensive admissions to KPMG in May 2015 and on 28 May 2015 further admissions in a voluntary interview with ASIC. In the ASIC interview you made substantial and detailed admissions beyond the information within ASIC's knowledge at that time. You made further admissions in another interview with ASIC in November 2015.
78You attended compulsory ASIC examinations in 2017 and 2019.
79Mr McAlpine refers to what is described as your plea negotiation which started in March 2021, almost six years after you first made detailed admissions to KPMG and then ASIC.
80Mr McAlpine says that your plea negotiation enabled the matter to be resolved without the need to complete a full brief of evidence and at an earlier time; and that without it, ASIC would have been required to deploy additional resources and time to investigate your misconduct, depriving ASIC of resources to investigate other individuals in the BBY investigation and other unrelated ASIC work.
81I have had regard to Mr McAlpine's material, but one wonders how long the delay would have been had you not made full admissions at an early stage. Even considering the complexity of this investigation and the matters set out in
Mr McAlpine's statement, I view the delay in this case as unsatisfactory and inordinately long.82In the case R v Schwabegger,[3] the ATO audited the appellant in 1989 and identified tax evasion. He was interviewed on various occasions between 1989-1991. The matter was referred to the AFP in 1992. He was charged in early 1997. In respect of the delay in that case, Vincent AJA (as his Honour then was) observed that there was,
'... a serious incongruity between the assertion that an offence is serious and that the courts must, through the sentences they impose, endeavour to limit its incidence, on the one hand, and such a leisurely progression of the criminal justice proceedings which follow its commission that literally years pass before the matters comes before the court, on the other. For a number of reasons, the investigation and prosecution of criminal conduct should be conducted as quickly as is reasonably practicable if the objectives of the system are to be attained'.[4]
[3] [1998] 4 VR 649.
[4] Ibid, 649.
83His Honour said also that:
'... assertions of the need to deter generally lose force if the process otherwise does not appear to reflect commitment to the principle'.[5]
[5] Ibid, 660.
84There are numerous other authorities about the impact of delay in sentencing, including the case of Hicks[6] in which Priest JA dealt with the impact of delay in sentencing. These principles assume considerable importance in this case where general deterrence would be one of the primary reasons for imposing a period of immediate custodial imprisonment.
[6][6] Hicks v The Queen [2016] VSCA 162.
85The delay in the prosecution of this matter means you are a considerably older person now at the age of 56 than the 46–48-year-old who committed these offences. In the period it took to bring these charges your father died and your mother, now 79 years old, requires care much which you provide.
86The period during which these charges have been hanging over your head is causally related to the depression and anxiety described in the psychological reports that have been provided. Most of the reference letters provided on your behalf also refer to the toll the delay in this case has had on you.
87Additionally, the delay in this case has allowed me to assess your remorse, insight and prospects of rehabilitation based not just on words and promises, but through the actions you have taken to try and repair the damage done not just by the offending against St George Bank but also the wider losses stemming from the collapse of BBY.
88
With respect to your psychological state the prosecution in their written submissions accepted that based on the assessments of Mr Healey and
Ms Mulhern, limbs 5 and 6 of Verdins[7] 'may have some limited application.' That is that any period of imprisonment would be a greater burden on you because of your psychological state, and that there is a probability that your psychological state would worsen in the event of a period of imprisonment.
[7] R v Verdins (2007) 16 VR 269.
89Those psychological conditions are of course linked to the delay in the matter before me. Based on the material before me, including a mental health report from Forensicare dated 30 May 2023, which assessed you as having a mild-moderate mental health difficulty, I accept that any period of imprisonment I impose would be affected by your depression and anxiety, and a custodial disposition would weigh more heavily on you than a person without such conditions.
90Whilst I accept the Crown submission that your mental health issues are largely situational and have the potential to improve once the legal proceedings are finalised, it seems to me you are still likely to be a vulnerable person in prison.
Cooperation and assistance
91I have already set out to some extent your assistance and cooperation with ASIC in its investigation against you and the utilitarian value of that co-operation which relates not only to the case against you but also in freeing up resources for the rest of the BBY investigation and other ASIC matters.
92Although Mr McAlpine says that ASIC had a strong case against you, it seems clear that your admissions were the backbone of that case, certainly at the outset, and that you provided the information necessary to convict you in the various interviews you did over the entirety of the investigation.
93Mr Papas KC relied on the case of R v Doran[8] and the principle that where an offender voluntarily, without any pressure from any authorities, provides the prosecution with all the evidence necessary to prove guilt, it is important that the offender should receive a demonstrable discount in sentence to encourage others to make like admissions. Moreover, such admissions demonstrate true remorse and reduce the need for specific deterrence. I accept that, notwithstanding that ultimately, ASIC was able to assemble a strong case against you, the admissions you made attract what has been referred to as the Doran discount, and those principles that I have outlined apply to you.
[8] [2005] VSCA 271.
94Additionally, you pleaded guilty at the earliest opportunity. Your plea of guilty has very substantial utilitarian value (as did your cooperation with ASIC). Your guilty plea and your cooperation demonstrate genuine and profound remorse for the offending. You have facilitated the course of justice. You have spared ASIC, the CDPP and the Court the time and resources involved in what would have been a very complex and lengthy trial. The utilitarian value of your plea is heightened by the delays in listing trials in this court arising from the suspension of trials during the pandemic. For this factor alone you must receive a palpable amelioration of sentence.
95You made an 86-page statement to ASIC which you have acknowledged as true and correct. Your assistance and cooperation are backed by the undertaking you gave on oath before me to give evidence in accordance with the statement in any future prosecutions arising from the investigation into the collapse of BBY. Decisions are still to be made about whether others will be charged.
96Mr McAlpine says that in the event of criminal proceedings against others over the St George Bank matters, you will be a critical witness. He says that the cumulative value of your past cooperation and future assistance is high in respect of the
St George Bank matters. You will also be a material witness in other matters under investigation if charges proceed, including what is referred to in the material as the Aquila transaction. You may well be required to provide further statements and to attend court. Any future criminal proceedings are likely to be held in NSW.97I indicate pursuant to s 5(2AB) of the Sentencing Act 1991 that I will impose a less severe sentence because you have given these undertakings. The fact that you have given these undertakings and their details must be entered into the records of the court pursuant to that section.
98The authorities in this area of the law make it clear that full and frank cooperation of an offender is to be encouraged by the courts. In assessing the value of your cooperation what is relevant is the potential for the information to assist the authorities as comprehended by you.
99Taking into account all of the matters, having read the entirety of your statement and Mr McAlpine's assessment of it, I have formed the view that your assistance justifies a substantial sentencing discount in this case.
100But that is not all you did to right the wrongs caused by BBY's collapse. In the aftermath of the collapse of BBY, court proceedings were initiated on behalf of creditors/investors.
101A statutory declaration from Mr Gerald Parncutt, a barrister who acted as counsel for a group of investors/creditors in the civil litigation was tendered. Mr Parncutt also attended the plea hearing and gave impressive evidence on your behalf. At one point he was junior counsel in these criminal proceedings but stepped away from that role so that he could give evidence for you.
102He says in his statutory declaration that at the time of the collapse of BBY, $17 million was owed to investors. He says sorting out what was owed to individual investors was an insurmountable task for the liquidators. The initial position of the liquidators was that creditors might receive nothing or at most 24 cents in the dollar.
103Mr Parncutt says in his statutory declaration that you provided to the lawyers acting on behalf of creditors and to the Supreme Court an insight into the operations of BBY. You spent many weeks explaining the BBY trading system and assisted to identify each individual client's ownership of collateral and trust funds. Mr Parncutt says that your cooperation with KPMG, the liquidators, and with ASIC, enabled the recovery of over $6 million for the investors that he and others were acting for. He says that you provided crucial evidence as to how funds moved between the ASX and the broker for settlement, and how funds moved between clients' accounts. He gave evidence that without such information, recovery of the clients' funds could not have been achieved. The funds attributable to individual investors were unprovable without your assistance.
104You gave evidence in January 2017 in the Supreme Court in Sydney where
Mr Parncutt was one of the counsel appearing. Your evidence he said was relevant to the judgment obtained by the investor classes. He says that without your personal sacrifice of spending several months assisting to understand BBY documentation, recovery for the 124 retail clients he represented would have been impossible.105He says in his reference, “Fiona unflinchingly put the interest of the investors above her own”. He describes this as having taken a severe toll on your health. He says he has known you for eight years and he has observed what this personal sacrifice has done to you. He says he knows you and your invalid mother and can say that you come from a fine family, and that over the past eight years you have suffered punishment for your wrongdoing and made outstanding reparation as best you could.
106In his oral evidence he said your motivation was driven by a need to do the right thing. He said you struck him as a person of overwhelming integrity and you did what you did because someone needed to rectify what had gone wrong. You were not concerned about your own welfare. None of his evidence and none of these matters were challenged in this proceeding.
Good character
107You have no prior convictions.
108Multiple character references were tendered on the plea.
109In his reference your older brother, Gregory Bilton, who is Lieutenant General and the Chief of Joint Operations for the Department of Defence, describes you as a genuine, caring and law-abiding citizen. He says you are decent, conscientious, and compassionate and described the substantial toll that these charges have had on you and your family. He said this:
’The charges and the elongated investigation have already placed considerable mental strain on Fiona. She is less self-confident, constantly apologetic, deeply embarrassed and ashamed. She believes she has disappointed her family, friends, professional colleagues and clients. If convicted, the impacts on her mental well-being will be further exacerbated. She worries that if she is sentenced to serve a period of time in jail she will not be able to continue to support her husband and care for our mother. Since our father passed away Fiona has been our mother's primary source of care and support.’
110He was called to give evidence and adopted his reference in evidence before me on the plea.
111Your aunt, Wendy Koleits, works as a paralegal in property law. She details how you have supported your mother and siblings since your father died in 2021.
112Your brother-in-law, Dan Perucic, says he has only known you to be a totally trustworthy and ethical person. He describes you helping care for his two children and mentoring his stepchildren. Your family say you are deeply remorseful for this offending.
113Over a dozen further references were provided by persons who have known you - some for over 30 years - in a professional capacity within the financial industry and who are aware of your offending, namely:
(a) Alan Wassilieff, retired Head of Operations at Citi Smith Barney Australia Pty Ltd;
(b) Alistair Warren, Co-founder and CEO of Trade for Good Pty Ltd;
(c) David Barlow, retired Executive of Phillip Capital Ltd, where you worked until charges were laid in this matter;
(d) James Gordon McIntosh, Senior Operations officer at Phillip Capital;
(e) Henry Parkinson, General Manager at Westlink Consulting;
(f) Jacqueline Katsianas, Program Manager at Praemium Ltd;
(g) Leigh Stewart, Senior Consultant for NAB;
(h) Nicholas Nifakos, Corporate Advisor for Mining Plus;
(i) Nick Katiforis, Senior Advisor for Sequoia Wealth Management;
(j) Vicki Angouras, Team Leader in Administration at Generation Life Pty Ltd;
(k) Chris Forte, a Financial Advisor;
(l) John Miles, a previous colleague; and
(m) Craig Simmons, who also knows you within the Melbourne broker community.
114Most of these people attended the plea hearing to support you.
115Each of your professional character references describe you as possessing an exemplary work ethic, personal integrity, and a high standard of conduct.
116Mr McIntosh spoke of the impact a conviction will have on your career in a field that you have worked in your whole life. They all describe your offending as completely out of character.
117It is clear that you are highly respected as a colleague, a friend and family member.
118Of course, for deception offences the absence of prior convictions and good character is generally considered to have less weight than for other criminal offences because without good character the offender would not have been in a position to commit the offences. In this case however, in my view, the references and your good character remain a powerful mitigating factor in circumstances where the offending was committed under a level of duress, under protest and under instruction from those above you in the hierarchy at BBY. Your conduct in assisting the authorities and the creditors to salvage what was left from the liquidation is entirely consistent with the sentiments expressed in the voluminous reference material tendered on the plea.
119The evidence of your good character and support in the community is also relevant to my assessment of your prospects of rehabilitation which I regard as excellent.
Extra-curial punishment
120You have worked with Phillip Capital over the years that have passed since the offending and collapse of BBY but when you were charged with these offences that employment ended. You are now unemployed. You will be automatically disqualified from managing corporations for a period of five years, under the Corporations Act 2001 (Cth). You will also be prevented from being involved with securities markets, pursuant to the ASIC Market Integrity Rules (Security Markets) 2017. It seems to me unlikely you will work in the securities industry. I accept that a conviction will have an irreparable effect on your reputation and career and I take this into account as extra curial punishment.
121In Rich v ASIC,[9] the High Court confirmed that disqualification from holding office, whilst designed to protect the public, was a penalty. They said this:
'The order for disqualification thus causes the person against whom it is made to forfeit any office then held in a corporation and forbids that person from holding office in a corporation for the duration of the disqualification order. Those consequences, whether taken separately or in combination, when inflicted on account of a defendant's wrongdoing, are penalties.[10]
…
[9] (2004) 220 CLR 129.
[10] Ibid, 37.
For people who have derived a livelihood as company officers, disqualification from holding such offices is doubtless a very serious personal, financial and reputational burden.'[11]
[11] Ibid, 100.
122Those principles apply in your case.
123I have read and had regard to the sentencing decisions provided by the prosecution which were very briefly discussed on the plea hearing. The cases provide a guide to the appropriate range of sentences for deception offences but of course there are relevant differences and my task is to impose a just and appropriate sentence having regard to the individual circumstances of your case. Current sentencing practices are one of the many matters I must have regard to in deciding the sentence to be imposed.
Submissions
124In the end the dispute between the parties as to the appropriate sentence was relatively narrow.
125The prosecution submitted that given the amounts of money involved in this deception, the period over which the offending took place, the deliberateness of the conduct and the breach of trust involved, a proper application of sentencing principles (particularly general deterrence and denunciation) requires a period of immediate imprisonment. The prosecution fairly conceded that there are powerful mitigating factors in this case which they submitted brought a combination sentence of imprisonment and a community correction order within the range of appropriate sentences. I have power to impose a sentence of up to 12 months, combined with a community correction order.
126Mr Papas KC on your behalf conceded that ordinarily for offending such as this a prison sentence would be inevitable, notwithstanding that you acted under direction and received no personal enrichment. He submitted, however, that those circumstances considered alongside with the array of powerful mitigating circumstances make this case exceptional and that a suspended sentence for Charge 1 and a community correction order are within range and appropriate sentences.
127Mr Papas KC relied on the decision of the Court of Appeal in Boulton.[12] In Boulton the Court of Appeal said that a community correction order is a sentence which can be imposed even for relatively serious offences and recognised that a community correction order can be imposed for a period of years with conditions both punitive and rehabilitative. A sentencing court should ask the question whether there is any feature of the offence or the offender which requires the conclusion that imprisonment with all its disadvantages is the only option.
[12] R v Boulton (2014) 46 VR 308.
128Because of the time that has passed since the offending in this case, a suspended sentence is available for Charge 1.
129Pursuant to s 36(2) of the Sentencing Act 1991, a community correction order may be an appropriate penalty in circumstances where, but for the abolition of suspended sentences a suspended sentence may have been imposed.
130I have given careful consideration as to whether in the interests of general deterrence and denunciation I should send you to prison for some period.
131But for the reasons I have attempted to outline in these remarks, I am of the view that the circumstances of this case are highly unusual and exceptional, and I have decided not to do so. I make it clear that but for what I regard as the inordinately long delay in this case, and your considerable assistance to the authorities, in addition to the undertaking you have given to give evidence in any future proceedings, I would have imposed a period of imprisonment in this case of some significance.
Sentence
132In relation to this matter, in respect of Charge 1, I impose a sentence of 20 months, suspended for a period of three years.
133In relation to Charges 2 and 3, I impose a community correction order of three years and six months. That correction order will have the following conditions: supervision, program conditions, in your case in relation to mental health, and I impose an amount of 380 unpaid community work. I allow that 50 hours of participation in program conditions can be deducted from the community work that I have imposed.
134Pursuant to s 6AAA of the Sentencing Act 1991, I indicate that but for your guilty plea, and assuming that without your guilty plea none of this cooperation or assistance that I have referred to would have taken place, I would have imposed a sentence of six years with a minimum of four years.
135So those are the orders I intend to make. Ms Bilton, you have to agree to the Community Correction Order that I have imposed. You have to consent to it. Do you consent to such an order?
136OFFENDER: Yes, Your Honour.
137HIS HONOUR: I will have that prepared. Is there anything you want me to clarify?
138MR PAPAS KC: What was the number of unpaid hours, Your Honour?
139HIS HONOUR: It is 380 with 50 that can be deducted and it is for three and a half years. Your status as a continuing criminal enterprise offender will be entered into the records of the court pursuant to s 6J(1) of the Sentencing Act 1991. I will just stand down while that is prepared.
140I will just hand that down. I will get Ms Bilton to sign it. Ms Bilton, these correction orders have mandatory terms. The first is that you have to attend at the Moorabbin Community Correctional Services office at the Moorabbin Justice Centre within two days.
141Additionally, if you commit another offence punishable by imprisonment over the life of this order, which is 42 months, you would be in breach of the order. You have to report to and receive visits from Corrections. You must let Corrections know if you are changing your address or your job.
142You cannot leave Victoria without letting Corrections know that you are doing so. You have to obey all lawful instructions from Correction as well. In addition you will have to perform the 380 hours of community work that I have nominated. You will be under supervision for 42 months and I have ordered treatment and rehabilitation in relation to mental health assessment and treatment, including psychological, neuropsychological, psychiatric or any other treatment as directed by Corrections.
143You are required to comply with all of those conditions. If you do not and you breach this order then one of the options open would be to resentence you in relation to Charges 2 and 3, and if that happened then the only option, I suspect would be a very substantial prison sentence.
144Additionally, if you were to reoffend over the next three years you would breach the suspended sentence that I have imposed, and in those circumstances, you would be at risk of a restoration of the suspended sentence in a term of 20 months. So those would be the consequences of further offending, but I doubt that is going to happen in this case.
145But you must comply with this order for 42 months, and if you do not you can be brought back before me for breaching the order. I have options, but as I say, one of them is to resentence you.
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