Director of Public Prosecutions v Bouhalis
[2019] VSC 684
•14 October 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
CRIMINAL DIVISION
S ECR 2019 0134
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| GEORGE JAMES BOUHALIS |
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JUDGE: | MACAULAY J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 26 September 2019 |
DATE OF SENTENCING: | 14 October 2019 |
CASE MAY BE CITED AS: | DPP v Bouhalis |
MEDIUM NEUTRAL CITATION: | [2019] VSC 684 |
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CRIMINAL LAW – Sentence – False accounting (6 charges) – Theft (3 charges) – Lawyer causing a deficiency in a trust account (1 charge) – Continuing criminal enterprise offences – Course of conduct – Offending by lawyer over 4 year period – Breach of trust – Plea of guilty – Ill health – Importance of general deterrence, just punishment and denunciation – Sentenced to total effective sentence of 5 years and 5 months imprisonment with non-parole period of 2 years and 9 months.
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | K Churchill with K Farrell | Office of Public Prosecutions |
| For Mr Bouhalis | R Nathwani | Haines & Polites |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 1
Circumstances of offending............................................................................................................. 2
Yan Nui / Meletsis matters......................................................................................................... 4
Ehaircaredirect.com...................................................................................................................... 5
Causing deficiency in a trust account and false accounting between May/June 2014...... 5
False accounting between June 2014 and June 2016................................................................ 6
False accounting 17 June 2016..................................................................................................... 6
The Mandjian matter.................................................................................................................... 6
The Haralampou Estate............................................................................................................... 7
Nature and gravity of the offences.................................................................................................. 8
Culpability and degree of responsibility.................................................................................... 10
The impact of the offence on the victims..................................................................................... 10
Personal circumstances and mitigating factors........................................................................... 11
Guilty plea and remorse.................................................................................................................. 15
Applicable sentencing purposes................................................................................................... 16
Sentence............................................................................................................................................. 17
Formal declarations.......................................................................................................................... 19
Schedule............................................................................................................................................. 20
HIS HONOUR:
Introduction
At 59 years of age, with deteriorating eyesight, an adult daughter with a serious illness and a fragile elderly mother, having practised the respected profession of a solicitor for more than a quarter of a century, almost without blemish, you, George James Bouhalis, now face inevitable imprisonment for the first time in your life for abusing the trust of your clients.
How does the law balance the community’s rightful need to denounce wrongdoing that harms its members, and the suffering that will be inflicted on the wrongdoer and those around him by the punishment required to satisfy that need? Parliament’s answer is that sentencing judges must not impose a sentence more severe than that which is required to achieve the purpose or purposes for which the sentence is imposed.[1] The particular application of that rule arises in this instance.
[1]Sentencing Act 1991 (Vic), s 5(2), (‘Sentencing Act’).
George Bouhalis, you have pleaded guilty to 10 indictable offences, being: six counts of false accounting contrary to s 83 of the Crimes Act 1958 (counts 1, 2, 4, 5, 6 and 7),[2] three counts of theft contrary to s 74 of the Crimes Act (counts 8, 9 and 10), and one count of a lawyer causing a deficiency in a trust account contrary to s 3.3.21(1) of the Legal Profession Act 2004 (count 3).[3] You have also pleaded guilty to one summary count of a lawyer causing a deficiency in a trust account contrary to s 148 schedule 1 of Legal Profession Uniform Law Application Act 2014.[4]
[2]Crimes Act 1958 (Vic), (‘Crimes Act’).
[3]Legal Profession Act 2004 (Vic), (‘Legal Profession Act’).
[4]Legal Profession Uniform Law Application Act 2014 (Vic), (‘Legal Profession Uniform Law’).
The statutory maximum penalty for each of the indictable offences are 10 years imprisonment for false accounting, 10 years imprisonment for theft, and 15 years imprisonment for a lawyer causing a deficiency in a trust account.
Five of the six false accounting counts (counts 1, 2, 5, 6 and 7) and two of the three theft counts (counts 8 and 10) are continuing criminal enterprise offences (‘CCE offences), and so, because of s 6I of the Sentencing Act, each attracts a 20 year maximum term of imprisonment.
It is not disputed that for these crimes you must serve a period of imprisonment. For reasons which I will explain, it is my view that the appropriate total effective sentence is 5 years and 5 months imprisonment with a non-parole period fixed at 2 years and 9 months.
Circumstances of offending
You were admitted as a legal practitioner in this Court on 1 May 1989. After working as an employee solicitor for several years, you practised in partnership from around 1994 until 2001 when the partnership dissolved. Thereafter you continued practising as a sole practitioner under the name George James Lawyers (‘GJ Lawyers’).
With the dissolution of the partnership in 2001 you had to rebuild a client base, which brought about particular financial challenges for you. Additionally, in about 2007 you incurred a significant personal liability to pay $150,000 in counsel’s fees after your client, on whose behalf the fees were incurred, became bankrupt. Whilst you managed to pay that sum, it had a significant knock-on effect for your personal financial position. Increasing debt and, at that time, the depreciating value of your home (which stood as security for your borrowings), evidently precluded you from obtaining further loans from first-tier financial institutions. You resorted to lenders who charged very high interest rates.
At the same time your practice was not performing well, in part due to the development of an eyesight illness, retinitis pigmentosa, which compromised your working capacity. So it was, for a combination of reasons, your personal financial position became increasingly desperate.
Against that background, you succumbed to the temptation to withdraw a client’s money from your firm’s trust account to meet a personal debt believing that you would be able to replace it in a short period of time. Not being able to do so, you replaced that client’s money with money from another client’s funds, hoping again to be able to restore it from your own funds, leading to you repeating the process over and over and becoming further and further entrenched in a cycle of offending.
To cover up your unauthorised withdrawals you made false or incomplete entries in trust account records, on cheque stubs and other accounting records resulting in the six counts of false accounting. Having pleaded guilty to the offences of ‘false accounting’ you have admitted doing so dishonestly with a view to gain for yourself or another, or with intent to cause loss to another.
Inevitably, your conduct also led to deficiencies in your firm’s trust account, resulting in the two counts of causing a trust account deficiency. Additionally, a number of the withdrawals were applied to meet your own personal debts, resulting in the three counts of theft.
You were 53 years old when your offending began in November 2013, and it continued over a period of around 4 years until December 2017.
Two significant sources of funds used either to cover withdrawals from other clients’ funds or to meet your own debts, were (1) trust funds belonging to the vendors of a housing development called ‘The Pasco’, and (2) estate funds belonging to the Haralampou family.
In relation to ‘The Pasco’ development, in May 2014 you began receiving money in your trust account pursuant to a retainer from the developers to receive and invest deposit moneys paid by purchasers for off-the-plan sales, pending the registration of the plan of subdivision and settlement of the sales. Various occasions of falsified records and unauthorised transactions, the subject of a number of the counts described more fully below, arose from your failure to repay trust monies that you held after the settlement of those sales took place. The developers and vendors of the units in ‘The Pasco’, for whom the deposits were held, were Calhand Pty Ltd and Dabrant Pty Ltd.
You were also the sole executor of the estate of Mrs Panagiota Haralampou who died in November 2015. A year later, the estate’s principal asset, a property in Hawthorn East, was sold for over $3 million and the proceeds were paid into your trust account: first the purchaser’s deposit in February 2017 and then the balance of sale proceeds in June 2017. As an example of how you ‘robbed Peter to pay Paul’, you used the purchaser’s deposit money received from the sale of the Haralampou property, in February 2017, to pay Calhand Pty Ltd and Dabrant Pty Ltd for money for which you had previously failed to account to them when settlements of the sale of units from ‘The Pasco’ took place.
You were initially charged with many more offences than the 10 indictable counts and one summary offence to which you have since pleaded guilty. Resulting from discussions with the prosecution that led to your plea on these counts, a number of the initial false accounting and theft transactions were aggregated into single counts. However, certain individual transactions remained the subject of individual counts. The reason for the distinction was that offences involving sums of money above $50,000 were kept as the subject of single counts because they qualified as CCE offences and therefore attracted the higher maximum penalty already referred to.[5]
[5]Sentencing Act, ss 6H(1), 6I, Schedule 1A cl 1(a),(f).
With that general background, I turn to your offending in a little more detail.[6]
[6]A table of the offences and the transactions that comprise them appear in the Schedule to these sentencing remarks.
Yan Nui / Meletsis matters
On 6 November 2013, a cheque for $196,000 was drawn by a GJ Lawyers client, Yan Nui, payable to GJ Lawyers trust account, and deposited into that account. On the same date, you falsely recorded in the GJ Lawyers trust ledger that the amount of $196,000 was received from Nick Meletsis for the ‘Meletsis’ matter.
This conduct is the subject of count 1 on the indictment: false accounting contrary to s 83 of the Crimes Act, a CCE offence.
Ehaircaredirect.com
On 22 May 2014, the GJ Lawyers trust ledger recorded that a cheque for $57,000 was made out to Narouzi Nominees for the refund of a deposit it had paid on the purchase of land from Ehaircaredirect.com Pty Ltd, implying that the transaction did not proceed. The payment particulars on the cheque stub were similar. On the same date, the sum of $57,000 was debited against the GJ Lawyers trust account as the result of the presentation of the cheque, in fact made payable to Geojam Corporation Pty Ltd, a company of which you were the sole shareholder and director.
The trust ledger records were false because other records establish that the sale from Ehaircaredirect.com to Narouzi Nominees ultimately proceeded. It settled in December 2015 and you were directed to distribute deposit monies that you held to the vendor, including the $57,000 received from Narouzi Nominees.
This conduct is the subject of count 2 on the indictment: false accounting contrary to s 83 of the Crimes Act , also a CCE offence.
Causing deficiency in a trust account and false accounting between May/June 2014
Between 22 May 2014 and 26 June 2014, by four separate transactions, you transferred a total sum of $1,483,496 from the GJ Lawyers trust account when you were not authorised to do so, thereby causing a deficiency in that trust account.
The first transaction was the unauthorised payment of $57,000, the subject of count 2, which I have just described. The second and third transactions, both on 4 June 2014, involved you making out two trust cheques totalling $55,000 to Primary Capital Group Pty Ltd, falsely recorded on the cheque stubs as refunds to Calhand Pty Ltd. The fourth transaction, on 26 June 2014, involved you making out a trust cheque for $1,371,496 payable to George James Lawyers also falsely recorded on the cheque stub as a payment to Calhand Pty Ltd.
This whole conduct is the subject of count 3 on the indictment: that is, being a lawyer causing a deficiency in a trust account contrary to s 3.3.21(1) of the Legal Profession Act.
The conduct in relation to the fourth transaction is, separately, the subject of count 5 on the indictment: false accounting contrary to s 83 of the Crimes Act, also a CCE offence.
False accounting between June 2014 and June 2016
On 16 occasions between 4 June 2014 and 27 June 2016, you falsified various records in the GJ Lawyers trust account ledger and cashbook. The false records show that, from 16 transactions, a total of $445,500 was debited across various client matters in favour of client matters different to those detailed in the account ledger and cashbook or in favour of entities directly related to yourself.
The conduct on these 16 occasions is the subject of count 4 on the indictment: false accounting contrary to s 83 of the Crimes Act. Two of the 16 occasions, those occurring on 4 June 2014 involving a total of $55,000, were the second and third transactions forming part of count 3 (causing a deficiency in a trust account).
False accounting 17 June 2016
On 17 June 2016, Trust Cheque 923, totalling $129,000 was made out to ‘Evlavia Antoniou’ and deposited into a National Australia Bank account in that name. On the cheque stub you recorded only the date and no other details. If accompanied by the requisite mental element, false accounting may be made out by the omission of material particulars as well as or instead of the inclusion of false information.
This conduct was the subject of count 6 on the indictment: false accounting contrary to s 83 of the Crimes Act, also a CCE offence.
The Mandjian matter
You acted for Peter Mandjian on the sale of his unit in Canterbury. Under the contract of sale, the purchase price was $2,465,000 and the deposit was $246,000. The deposit was eventually paid into and held in the GJ Lawyers trust account. On 21 December 2016 the sum of $246,000 was debited against the trust account. The GJ Lawyers trust account ledger and the cheque stub falsely recorded that the cheque for $246,000 was made out to Peter Mandjian. In fact, the cheque was made payable to one of your firm’s practice accounts.
This conduct was the subject of count 7 on the indictment: false accounting contrary to s 83 of the Crimes Act, also a CCE offence.
The Haralampou Estate
On 15 August 2016, you obtained a grant of Probate for the Estate of Mrs Panagiota Haralampou and arranged the sale of a residential property within the estate (‘Myrniong Grove Property.’)
On 20 February 2017, you directed real estate agents to pay the balance of the deposit paid by the purchaser (totalling $122,655.25) into a non-trust account, namely the GJ Lawyers practice account. You were not authorised to receive this money personally. That payment was used as the primary source of a payment of $125,000 made to Dabrant Pty Ltd to satisfy a demand it made for trust monies that you owed to it and Calhand Pty Ltd in relation to deposit money held for the sale of a unit in ‘The Pasco’, as described earlier. It is an example of a ‘rob Peter to pay Paul’ transaction.
Through 11 separate transactions between 14 March 2017 and 8 December 2017, you stole a total of $148,452.46 from the estate of Mrs Haralampou. For the most part, those monies were drawn against the proceeds of the sale of the Myrniong Grove Property that you held on trust in a bank account opened for the purpose of completing the administration of the estate.
Within that time period, on 6 July 2017, you stole $100,000 from the estate by making an unauthorised payment from the executor bank account to another client, Mr Mandjian. That payment was made in part satisfaction of the $246,000 debt you owed him arising from your conduct in the previous December (which is the subject of count 7, described earlier).[7]
[7]Along with count 8 (the theft of $122,655.25), for the reason explained earlier, count 7 was isolated from the other transactions making up the thefts of money aggregated in count 9 because it involves the theft of a sum exceeding $50,000 and is thus charged as a CCE offence.
All of this conduct was the subject of counts 8, 9 and 10 on the indictment: theft contrary to s 74 of the Crimes Act. Counts 8 and 10 were also CCE offences.
Nature and gravity of the offences
Society treats a solicitor’s abuse of a client’s trust with abhorrence. In general, that is because any abuse of vulnerability is odious. More particularly, in this context, it is because the commission of these types of offences reduce community trust in the legal profession as a whole.[8]
[8]Director of Public Prosecutions v Ryan (Full Court, unreported 7 April 1986, 6); R v Krizmanic (Full Court) [1995] VSC 185 [19]; R v Bernstein [2008] VSC 254; R v Kesik [2006] VSC 493 [39]; R v Coukoulis [2003] VSCA 22 [41] – [42]; R v Linacre [2014] VSC 615; DPP v Sidaoui [2019] VSC 225, [29].
Lest these statements sound like mere platitudes, community trust in the legal profession is a constituent element in the overall trust in the legal system. In turn, the reputation of that system is an important ingredient in the stability of our society. One does not need to look far, both historically and within the present age, to see instances in which the undermining of trust in a legal system has contributed to the destabilisation of a society as a whole.
It is for those reasons, I believe, that courts have consistently stated that instances of theft by solicitors from their clients, and like offences, are serious offences to be met with stern punishment.
There are certain features of your offending which both aggravate and ameliorate the seriousness of that offending.
Features that aggravate your offending include that there were a large number of transactions involved in the offending over a relatively lengthy period of time involving, in total, a significant sum of money. The global dimension of your dishonesty is best seen from the sum paid out as compensation by the Fidelity Fund to the two principal victims, namely the sum of $1.473 million.
Alarmingly, as described more fully below, the bulk of your offending occurred in the face of a condition imposed by the Victorian Civil and Administrative Tribunal (‘VCAT’) for suspending the operation of a penalty it gave you after you pleaded guilty to a number of counts of professional misconduct for behaviour unrelated to these offences. The suspension of the penalty, handed down on 27 February 2015,[9] operated for 3 years and the condition was that you not engage in any act of professional misconduct or unsatisfactory professional conduct during that period. Accordingly, your serial offending thereafter took on a particularly brazen character.
[9]Legal Services Commissioner v Bouhalis (Legal Practice) [2015] VCAT 254.
Finally, your offending after May 2017 occurred after a complaint had been made to the Legal Services Board on behalf of Calhand Pty Ltd and Dabrant Pty Ltd about your failure to pay over trust money. In response, the Board appointed an investigator, you were interviewed and the Board appointed a manager to your practice. All of those events occurred in May 2017. It follows that the 11 transactions that occurred after that time, making up all bar one of the theft transactions, assume an even more brazen character. In addition, it was said that you were not particularly cooperative in the early investigations undertaken by the Board.
These factors, collectively, exacerbate the seriousness of your offending.
Weighed against those factors, however, there is no suggestion that any of your offences were committed to gamble or fund a grand lifestyle or to purchase high-end assets, as is sometimes the case. Rather, they seem to have been committed in a desperate attempt to save yourself, and probably your family, from financial ruin and embarrassment. In a way, the astounding brazenness of your offending corroborates your level of desperation.
Additionally, the fact that your offending exhibits a degree of circularity — referred to as ‘robbing Peter to pay Paul’ — points to an inter-relatedness between many of the occasions of offending and, as such, a degree of unity in the fabric of criminality. For example, as noted, many of the theft transactions were made to make good the result of an earlier theft or unauthorised use of trust money which is the subject of another offence to which you have pleaded guilty. Further, as the prosecution accepted, there is some degree of overlap between offences: for example, the false accounting transactions comprising counts 2, 5 and part of count 4, are also responsible for the trust account deficiency that is the subject of count 3; likewise, the false accounting transactions comprising counts 6, 7 and the remaining parts of count 4, are also responsible for the trust account deficiency that is the subject of the summary offence.
It follows, in my view, that your offending must be regarded as serious examples of the offences of theft, false accounting and causing a deficiency in a trust account. They involved breaches of a position of trust, significant sums of money, took place over a lengthy period of time, and were predominantly committed in the face of a good-behaviour requirement imposed by VCAT and, in respect of some, while you were being investigated for the offending itself. Nevertheless, despite those aggravating elements, there are also some ameliorating aspects of your offending which prevent it from being placed at the gravest end of the spectrum for these types of offences.
Culpability and degree of responsibility
Clearly, you alone are responsible for your actions. Many others in the community endure financial hardship without resorting to dishonesty and breaching trust as you did. I will come shortly to your personal circumstances and, in particular, your family and health situation, but so far as the assignment of responsibility for this offending goes, you alone bear that responsibility.
The impact of the offence on the victims
No statements were submitted to the Court testifying to the impact of your offences upon victims. Most likely, that is because the victims of your offending recovered compensation for their losses from the Fidelity Fund that is operated under the provisions of the Part 8 of the Legal Profession Uniform Law. A total of $1,473,034 was paid out in compensation to Calhand Pty Ltd and Dabrant Pty Ltd, and the Haralambou family.
In one sense, that recovery makes it appear as if there was no personal victim of your offending. Of course, that cannot be true. I expect that much time, worry and some unrecovered cost was spent by your victims even though they may, ultimately, have recovered the substantial portion of what you took or misapplied. And although the personal toll may have been diffused, as it were, by the burden being borne by a public fund, yours are far from being victimless crimes.
You will be ordered to repay the Fidelity Fund the sum it has paid out to compensate the victims of your offending. I do not know the extent to which you retain any equity in property or assets but I will take into account the prospect that you will probably bear ongoing financial burden arising from your ongoing liability to repay the Fund.
Personal circumstances and mitigating factors
For fear of personal embarrassment, you have not sought testimonials or character references from people with whom you have been associated over the years. I do have, however, your own account of your background as given to a psychologist, Dr Mathew Barth, whose report was tendered at the sentence hearing.
From his report, it emerges that you are the elder of two children born to Greek-immigrant parents and were raised around the Brunswick area. Your parents owned a milk bar/mixed business and worked long hours. They had a strong work ethic which you admired. Your family was close-knit. You were educated at State primary and secondary schools, but finished at a private secondary school. You earned entrance to a Commerce/Law degree at the University of Melbourne.
Thirty three years ago you married your wife, Carol, and you remain together today. With Carol you have two adult children. Your daughter, aged 29, suffers with Multiple Sclerosis and you and Carol are very committed to supporting her emotionally and financially, which, understandably, you find “very draining”.
You were diagnosed with retinitis pigmentosa in the early 2000’s. That condition was described fully by your ophthalmologist, Dr John Manolopoulos, in a report tendered to the Court. You have been a patient of Dr Manolopoulos since January 2014. He describes retinitis pigmentosa as “a disabling disease that is currently incurable”. As your condition has degenerated, you have lost peripheral vision over time, progressing towards loss of central vision. You experience an associated symptom, called photopsia, which produces visual distortions. As occurs with patients suffering retinitis pigmentosa, you have also developed cataracts and on 25 June 2019 Dr Manolopoulos performed cataract surgery on your left eye.
Dr Manolopoulos has described the difficulty you have walking because of your limited peripheral vision, especially your lower level peripheral vision. This means you might accidentally walk into footpath benches, step into potholes or bump into people. For example, you recently stepped onto a dog outside a café provoking an aggressive response from the dog’s owner.
Dr Manolopoulos expressed the opinion that incarceration is likely to be a very difficult and trying experience for you, as it would with any person with advanced retinitis pigmentosa. In his view, your disability will put you at a high risk of abuse and violence in that environment.
Having administered a range of psychological assessments, Dr Barth thought that you were experiencing ongoing symptoms of emotional distress focused on your guilt and shame for your offending and persistent worry about your future and deteriorating health. Your symptoms were not sufficient to meet diagnostic criteria for a mental disorder, nor was there any indication you were affected by such a disorder at the time of your offending. However, Dr Barth considered that despite presenting in a very self-assured manner, you have surprisingly low self-esteem. In his opinion, you buttressed your poor self-esteem by emulating the “success” that you had hoped to achieve but which you felt was beyond your grasp. Dr Barth considered that, underpinning your offending behaviour, was your desire to maintain the illusion of competence and a desire to support your family at a time of particular financial upheaval.
Having regard to your depressive and anxiety-related symptoms, status as a former solicitor and poor eyesight, Dr Barth thought that all would combine to make your experience of custody more challenging than that of a prisoner not facing such challenges. While not disputing that conclusion, the Crown submitted that the extent to which such added burden should be taken into account was a matter to be weighed along with other relevant factors, such as the seriousness of the offences, your criminal record and any mitigating circumstances.[10]
[10]See The Queen v Eliasen (1991) 53 A Crim R 391.
Beyond your daughter’s medical condition, in respect of which two medical reports were submitted, your mother, who is nearing 83 years of age, is also in frail health. Your father died in 2006 and you are the primary family support for your mother, your sibling living interstate. A medical report from Dr Teichtahl was submitted in relation to your mother’s health. Wisely or otherwise, by the time of the plea hearing you had still not informed your mother of your offending and impending incarceration. You predicted that the news would come to her as a great shock and would inflict great suffering upon her, a matter that plainly causes you real distress. You are unsure how that news will affect her health. Expecting, correctly, to spend some years in prison you worry that your mother may die in that time.
I am invited, of my own motion, to remove your name from the Roll kept by the Court of those admitted to the legal profession, a power available to me under s 23(1) of the Legal Profession Uniform Law. No submission was made on your behalf resisting such an order, a stance that correctly recognises the reality that the Court must, in your case, make such an order for the protection of the public.[11]
[11]Legal Services Commissioner v Brereton (2011) 33 VR 126, [73] (Ashley and Tate JJA, citing with approval Law Society (SA) v Murphy (1999) 201 LSJS 456, 460-1). See also Quinn v Law Institute of Victoria [2005] VSCA 326, [1]; Woods v Legal Ombudsman [2002] VSCA 133, [7]; Legal Practitioners Complaints Committee v Lashansky [2007] WASC 211; Law Society of New South Wales v Moulton [1981] 2 NSWLR 736, 750-1; New South Wales Bar Association v Evatt (1968) 117 CLR 177, 183-4; Clyne v The New South Wales Bar Association (1960) 104 CLR 186, 201-2; Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279.
Almost inevitably, such an order will mean the permanent loss of your career as a solicitor.
I accept that your career and status as a solicitor has been a matter of great pride for you and that the loss of that career and the status it brings will be an immense blow to you. Accepting what your psychologist, Dr Barth, has said, you will likely struggle for some time to rebuild your sense of self. So, in itself, the loss of your career will operate as a punishment. But because that personal loss is the consequence of you having misused the very office from which your pride and sense of self was derived, it must have attenuated significance as a sentencing consideration in your favour.[12]
[12]See, and compare, R v Sarong [2001] VSC 213, [48]; R v Coleman [2013] VSC 548, [32]; R v Vance; LSC v Vance [2014] VSC 421, [174].
In the result I accept your counsel’s submission that the consequences to you of your offending, and the deprivation you will suffer by incarceration at this stage of your life, particularly in the face of your daughter’s ill-health and your mother’s need, will operate as a significant personal deterrent to any further offending in the future, regardless of the period of time for which you are imprisoned.
Your record as a solicitor is not, however, unblemished. I have already mentioned, as an aggravating factor for your offending, that in 2015 your practising certificate was suspended by VCAT, with the operation of that suspension itself suspended subject to certain conditions. That penalty came about because in 2009 you were convicted of two offences for not having filed taxation returns, for the period 1996 to 2007, or business activity statements, for the period 2001 to 2009. Also, in 2013 you were found guilty (without conviction) of failing to file business activity statements in 2011 and 2012.
Those taxation offences, in turn, founded the charges of professional misconduct under the Legal Profession Act to which you pleaded guilty before VCAT in 2015. Additionally, a further count of professional misconduct arose because you failed to notify the Legal Services Board, as you were obliged to do under the relevant Act, of your convictions for those taxation offences.
Your counsel submitted that I should take into account various factors that, in combination, will have the effect that any given sentence will weigh more heavily upon you than it would on an offender without those same factors. He appealed to the manifestation of that principle as articulated in R v Verdins.[13] However that case is specifically directed to the effects of impaired mental functioning, which you do not suffer. While you, understandably, suffer from emotional distress, moderate depressive symptoms and anxiety as a reaction to your offending and the predicament it has placed you in, those conditions are not of the order that would attract the operation of the Verdins principles.
[13]R v Verdins (2007) 16 VR 269, 276, (‘Verdins’).
That said, it does not mean that I ought not to take into account characteristics, personal to you, that will make prison particularly burdensome for you. In your case, those factors are your status as a solicitor, your eyesight problems, your distress at not being able to support your ill adult daughter and frail elderly mother, and that you are 59 years of age and this is your first encounter with incarceration. In combination, I accept that these circumstances will make prison somewhat more burdensome for you than for the ordinary inmate,[14] and I take that into account when determining an appropriate sentence.
[14]R v Eliasen (1991) 53 A Crim R 391, 395 (Crockett J, McGarvie and Phillips JJ agreeing, citing with approval R v Bailey (1988) 35 A Crim R 458).
Guilty plea and remorse
You pleaded guilty at an early stage, choosing not to go to committal but to proceed directly to a plea of guilty in this Court, once negotiations had taken place to arrive at a set of charges acceptable to both the prosecution and yourself. You did not, however, fully cooperate at the earliest opportunity for you to do so. Worse than that, as I have noted, you committed 11 offending transactions in the six or seven month period after the Legal Services Board began investigating you following a complaint by one of your victim clients about your trust account irregularities.
The prosecution submitted that this conduct suggests that you have lacked insight into your offending and, for that reason, the sentence I impose should aim to achieve the elements of specific deterrence and rehabilitation in your case. On the other hand, your counsel submitted that the prospect and actual experience of any period of incarceration, the loss of your career and reputation, and the effect upon your family of your imprisonment will be so salutary in themselves that there is no realistic prospect of you ever re-offending.
I prefer your counsel’s argument on this point. You offended, in part, because you had the uniquely easy opportunity to do so in your role as a trusted solicitor. You are highly unlikely to be put into that position again and I do not believe that, by character or past habit, you are inclined to dishonesty. Your failure to cooperate at the early stages of the investigation, and your continued offending in that period, are better explained, I think, by desperation and denial rather than a lack of insight that now warrants any special concentration on specific deterrence and rehabilitation. I am also impressed by what Dr Barth describes as your utter shame and remorse for your offending.
As well as reducing the weight of specific deterrence and rehabilitation as sentencing considerations in your case, your remorse adds weight to the utilitarian value of your guilty plea when considering the discount that should be given to you for that plea.
Applicable sentencing purposes
Following on from these remarks, in my view the more prominent sentencing considerations in your case are those of punishment, denunciation and general deterrence.
Both the prosecutor and your counsel have drawn attention to cases that may provide some guidance to fixing an appropriate sentence in your case.[15] I have considered each of them.
[15]DPP v Sidhaoui [2019] VSC 225; R v Munt [2015] VSC 132; R v Linacre [2014] VSC 615; DPP v Penny [2012] VSCA 203; R v Blackberry [2019] VSC 279; R v Maloney [2014] VSC 641; R v Tansey [2012] VSC 221; R v Di Cioccio [2012]VSC 28; Di Cioccio v The Queen [2013] VSCA 74. Of them, the prosecutor suggested that the cases of Maloney and Tansey might be of particular assistance.
Sentence
Without detracting from anything I have said, in summary I sentence you as a 59 year old solicitor who:
·engaged in dishonest transactions over a 4 year period;
·breached your client’s trust by misapplying, in total, about $1.47 million of client funds;
·was motivated, it seems, out of desperation to plug holes in your personal financial position rather than to obtain quick and easy riches;
·committed a significant part of your offending either while on a ‘good behaviour condition’ imposed by VCAT or under investigation by the Legal Services Board, making it more serious;
·has lost career and reputation, both of which are of enormous personal significance;
·has a serious and deteriorating eyesight problem;
·will, while in custody, suffer the distress of not being able to support an ill adult daughter and frail elderly mother;
·pleaded guilty early and has demonstrated genuine remorse; and
·will, for a combination of reasons, find imprisonment more onerous than the ordinary inmate.
It is in the context of these considerations that I must seek to apply the rule, recalled at the outset of these remarks, that I not impose any sentence more severe than that required to achieve the purpose or purposes for which the sentence is imposed.
In fixing individual sentences, and determining the extent to which those sentences are to be served concurrently or to be cumulated, I have broadly had regard to the following matters:
·offences committed after February 2015 when, in effect, you were allowed to continue in legal practice subject to the condition that you not engage in professional misconduct deserve greater denunciation than those committed before that date;
·similarly, offences committed after May 2017 while you were under investigation for trust account irregularities deserve greater denunciation than those committed before that date;
·sentences given for CCE offences should generally reflect the fact that they attract a higher maximum penalty than those of the same nature that are not CCE offences;
·the greater the sum of money involved in an offence, other things being equal, the greater the penalty should be; and
·in the case of the offences for causing a trust account deficiency, allowance should be made for the fact that the criminality involved in those offences is in some measure accounted for by the penalty given for the false accounting and theft conduct, separately penalised, which led to the deficiency.
Taking all matters into account, I sentence you for the counts on the indictment as follows:
(a) 4 years imprisonment on count 10 (theft);
(b) 3 years and 6 months imprisonment on each of count 7 (false accounting) and count 8 (theft);
(c) 3 years imprisonment on each of counts 1, 5 and 6 (all false accounting) and count 9 (theft);
(d) 2 years and 6 months imprisonment on each of counts 2 and 4 (both false accounting), and
(e) 18 months imprisonment on count 3 (causing a trust account deficiency).
For the summary offence of causing a trust account deficiency contrary to s 148 of the Legal Profession Uniform Law, I sentence you to 12 months imprisonment.
The base sentence is 4 years imprisonment on count 10 (theft). All other sentences are to be served concurrently except to the extent that I specifically direct a period of cumulation. I make the following orders for cumulation:
(a) Counts 7, 8 and 9 – 3 months each;
(b) Counts 1, 5 and 6 – 2 months each;
(c) Counts 2 and 4 – 1 month each.
The total effective sentence is 5 years and 5 months imprisonment. For reasons I have already mentioned, particularly the additional burden of incarceration to you, I accept your counsel’s submission that I should set a lower non-parole period than I would have set but for those reasons. I fix a period of 2 years and 9 months before you will be eligible for parole.
Formal declarations
I record, in compliance with s 6J of the Sentencing Act, that you have been sentenced as a continuing criminal enterprise offender in respect of counts 1, 2, 5, 6, 7, 8 and 10.
But for your plea of guilty, I would have sentenced you to a total effective sentence of 8 years imprisonment with a non-parole period set at 5 years.
Since you have remained on bail until today, there is no pre-detention custody to take into account.
On the application of the Victorian Legal Services Board Fidelity Fund, I order pursuant to s 86 of the Sentencing Act that you pay the Fund compensation in the sum of $1,473,034.11.
Finally, it is my sad duty to order, pursuant to s 23(1) of the Legal Profession Uniform Law, that your name and other particulars be removed from the Roll of persons admitted to the legal profession kept by this Court.
Schedule
Table of Offences
| Date | Amount | Offence | Count | Totals |
| 2013 | ||||
| 26‐Nov | 196000 | False accounting* | count 1 | |
| 2014 | ||||
| 22‐May | 57000 | False accounting* | count 2 | |
| 4‐Jun | 55000 | False accounting (2) | count 4 | |
| 26‐Jun | 1371496 | False accounting* | count 5 | |
| 1483496 | Cause trust deficiency | count 3 | ||
| 2015 | ||||
| 1‐Sep | 46000 33500 34000 | False accounting | count 4 | |
| 1‐Oct | False accounting | |||
| 15‐Oct | False accounting | |||
| 2016 | ||||
| 8‐Jan | 7500 20000 23000 23000 32500 32500 | False accounting | ||
| 20‐Jan | False accounting | |||
| 9‐Feb | False accounting | |||
| 25‐Feb | False accounting | |||
| 18‐Mar | False accounting | |||
| 23‐Mar | False accounting | |||
| 8‐Apr | False accounting | |||
| 26‐Apr | False accounting | |||
| 19‐May | False accounting | |||
| 6‐Jun | False accounting | |||
| 17‐Jun | 129000 | False accounting* | count 6 | |
| 27‐Jun | 33000 | False accounting | count 4 445500 | |
| 21‐Dec | 246000 | False accounting* | count 7 | |
| 765500 | Cause trust deficiency | summary offence | ||
| 2017 | ||||
| 23‐Feb | 122655.25 | Theft* | count 8 | |
| 14‐Mar | 17650 20276.84 | Theft | count 9 | |
| 6‐Jul | Theft | |||
| 21‐Jul | 100000 | Theft* | count 10 | |
| 3‐Aug | 20676.84 15000 12000 8000 15000 248.78 | Theft | count 9 | |
| 25‐Aug | Theft | |||
| 1‐Sep | Theft | |||
| 15‐Sep | Theft | |||
| 26‐Sep | Theft | |||
| 4‐Oct | Theft | |||
| 13‐Oct | Theft | |||
| 31‐Oct | Theft | |||
| 8‐Dec | Theft | 148852.46 | ||
| *continuing criminal enterprise | ||||
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