Director of Public Prosecutions v Castaldi
[2015] VCC 596
•15 April 2015
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted Suitable for Publication |
AT MELBOURNE
CRIMINAL DIVISION
CR-14-02035
| COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| FRANK CASTALDI |
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JUDGE: | HER HONOUR JUDGE PULLEN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 31 March 2015 | |
DATE OF SENTENCE: | 15 April 2015 | |
CASE MAY BE CITED AS: | DPP v Castaldi | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 596 | |
REASONS FOR SENTENCE
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APPEARANCES: | Counsel | Solicitors |
| For the Prosecution | Mr M. Kalyk | Commonwealth Director of Public Prosecutions |
| For the Accused | Mr L. Gwynn | LAC Lawyers Pty Ltd |
HER HONOUR:
1 Frank Castaldi, you have pleaded guilty to one charge of dishonestly obtaining a financial disadvantage by deception contrary to subsection 134.2(1) of the Criminal Code (Cth). This charge is a ‘rolled up’ charge relevant to three entities. The maximum penalty applicable to this offence is 10 years imprisonment.
2 It is not necessary for me to recount in great detail the facts of this case as they are on transcript, the matter having been opened in detail by the learned prosecutor (Exhibit A).
3 I proceed to sentence you on the basis of the facts as summarised by the prosecutor and discussed during the plea hearing. It is sufficient for present purposes to simply say that the facts in this case are very serious.
4 I turn to a summary of your offending.
5 The prosecution case is that you lodged 22 Business Activity Statements (BAS statements) with the Australian Taxation Office (ATO) that contained false information by which you received Goods and Services Tax (GST) refunds to which you were not entitled.
6 The charge concerns BAS statements lodged in relation to three entities:
(a)Mail Service Management Pty Ltd (MSM);
(b)Ontime Corporate Solutions Pty Ltd (Ontime); and
(c)Casdawn Holdings Pty Ltd (Casdawn)
7 In relation to MSM, you lodged five BAS statements with the ATO in the name of MSM for five quarters between 1 January 2010 and 31 March 2011 in order to claim GST refunds by knowingly under-declaring the sales income of MSM.
8 In relation to Ontime, you lodged seven BAS statements with the ATO in the name of Ontime for six-monthly periods and one quarter between 1 April 2010 and 31 January 2011. At that time Ontime was not operating as an enterprise, yet you declared false amounts of sales and/or purchases from the company in each statement. You knew the information in each statement was false and that Ontime was not entitled to the GST refunds claimed.
9 In relation to Casdawn, you lodged 10 BAS statements with the ATO for 10 monthly periods between 1 June 2010 and 30 April 2011. Again, Casdawn was not operating as an enterprise. You declared false amounts of sales and purchases for the company in each statement. You knew that information in each statement was false and that Casdawn was not entitled to the GST refunds.
10 As a result of your offending, the subject of the charge that is before me, the total advantage received by you was that:
(a)you obtained refunds or credits towards prior debts totalling $92,803; or
(b)obtained a total net benefit of $99,211.
11 MSM was incorporated on 21 August 2009 and your daughter, Laura Doughney, was the sole director and shareholder. You were listed as the contact person with the ATO. Both you and your daughter were signatories to a Westpac bank account in the name of MSM.
12 Your daughter was involved in the day to day operations of the company. You were responsible for the accounting, including completion and lodgement of BAS statements to the ATO.
13 It is not suggested that your daughter was aware of the details of the BAS statements, the subject of the charge. She recalled at one stage you mentioned a BAS statement and said there had been an adding error, that you had contacted the ATO and explained the error.
14 In the five BAS statements relevant to MSM, you declared sales of $72,554 during a period where actual sales were $361,116. The amounts relevant to each of those five transactions were set out in the prosecution opening (Ex A, paras 15(a)-(e)). In relation to two BAS statements no refunds were paid by the ATO.
15 Regarding the statement lodged on 29 December 2010, a Pre-Issue Refund Integrity Review was initiated due to the high value of the refund claimed, $86,650. You were contacted by the ATO and you submitted a revised claim, claiming a clerical error in the original calculation. At that time, the amount payable of $86,650 was revised and you were required to pay $351. Had you declared the amount of sales accurately, you would have been liable for a debt of $8,434. In my opinion, you were certainly ‘on notice’ at around that time in January 2011 that your declarations were being monitored.
16 Turning to Ontime Corporate Solutions, at the relevant period, Ontime was not trading, not earning any income or incurring any expenses. There were two directors of the company, yourself and Conrad Dawson. Mr Dawson did not lodge any BAS statements on behalf of Ontime and was not aware of any BAS statements being lodged.
17 Relevant to the seven BAS statements involving Ontime, you declared sales of $22,406, capital purchases of $99,145 and non-capital purchases of $174,711. The relevant BAS statements are set out in paragraphss 24(a)-(g) of Exhibit A.
18 Regarding Casdawn Holdings, your daughter was the sole director and shareholder and you were listed as the contact person for the ATO.
19 During the relevant period, Casdawn was also not carrying on as an enterprise. Your daughter was not aware that the ten BAS statements had been lodged on behalf of Casdawn and she did not receive any of the money paid as a result of those statements. Details of the offending involved in those statements were set out paragraphs 29 and 30 of the prosecution opening.
20 As I previously stated, following your lodgement of a BAS statement on 29 December 2010 on behalf of MSM, the ATO contacted you on 27 January 2011 to advise you to review your records and contact the ATO should there be any error in the BAS statement. You attempted to deflect auditors away from your activity, telling the ATO the figures had been entered incorrectly by your daughter and that you would submit the correct figures for adjustment.
21 On 1 February 2011, after the ATO request, you sent an email:
“Whilst on holiday my daughter, Laura, lodged the BAS. As she was doing quite a few different things at once has lodged it incorrectly. On returning we noticed the problems and actually tried to call the Tax Office but the message says not open until 6th of Jan. On this date I called back and spoke to three different people who could not help me until I got onto a guy that put me on the right track.”
22 You lied about your daughter’s involvement in an attempt to cover up your dishonest activity. You then provided various documents in an attempt to support your revised figures, however I was advised and accept by the prosecutor, Mr Kalyk, that none of those documents actually addressed sales.
23 ATO officer, Joseph Siro, identified a number of issues with the documents you provided and spoke with you on 16 February 2011 about the issues as identified.
24 Further documents were provided by you (again not addressing sales), and you were given an opportunity to be heard on whether there should be any administrative penalty. At that time the administrative penalty of $21,750.25 was waived.
25 Despite being “on notice” from 27 January 2011, you continued with your offending, lodging further false statements on 19 April 2011 relevant to MSM, 31 January 2011 relevant to Ontime, 31 January 2011, 30 March 2011, and 20 April 2011 relevant to Casdawn.
26 On 3 February 2011, the ATO initiated a review of the BAS statement lodged on 30 September 2010 on behalf of Casdawn and a representative of the ATO contacted you advising that you should review your records and contact the ATO should there be any error in the BAS statement.
27 On 7 February 2011, you faxed to the ATO a letter including a “revised GST calculation sheet that is now correct.” You explained that the original calculations were completed incorrectly, reaffirming the total sales were $3,895 but you revised the capital purchases from $22,686 down to $10,000 and non-capital purchases from $41,687 down to $21,558.22.
28 As a result of your response, the original refund of $6,083 paid to you was amended to result in a debit of $4,478. You were notified of this by letter dated 18 February 2011.
29
On 23 March 2011, the ATO commenced an audit of MSM, Ontime and Casdawn. You were advised of this audit on 3 May 2011 at which time you said you had been subjected to an earlier audit in February 2011 and thought the matter had resolved. In May 2011, the ATO sent a formal notification and request for substantiation relevant to MSM, Ontime and Casdawn. On
27 June 2011, ATO worker Perrera contacted Australia Post to enquire about its involvement with MSM, Ontime and Casdawn. Australia Post confirmed that they had contracted MSM but not with either Ontime or Casdawn.
30 You provided bank statements on 9 and 10 August 2011 to the ATO, however, those documents again did not substantiate the amounts claimed in the BAS statements, and nor could they.
31 On 10 December 2012, you participated in an interview with the ATO.
32 Regarding MSM, you said you created MSM but “didn’t have an active part … role in the company.” You said Laura Castaldi was director. That you opened and had full access to the MSM account and that you were responsible for lodging five BAS statements for MSM, the subject of the charge. You could not recall what you did with the payments the ATO paid to MSM as GST refunds.
33 Regarding the mistake on the BAS statement lodged on 29 December 2010, you said that you made the mistake and it was you (and not the ATO) who had initiated contact to correct the mistake. It was in fact the ATO who contacted you.
34 Regarding Ontime Corporate Solutions, you agreed you prepared seven BAS statements, the subject of the charge and stated you were:
“under the impression that the … the sub-contract – the payroll sort of system that we were running, right, was coming out of Ontime Corporate … so therefore it could be a deduction, an expense.”
35 Regarding Casdawn Holdings, you said you opened and had full access to the MSM account and that you were responsible for the preparation and lodgement of the ten BAS statements, the subject of the charge. Regarding the figures, you stated, “A lot of these figures aren’t – most of these figures aren’t correct” but said you were “under the impression that … I could … use these invoices to help offset this one here and then the following month, try and sort of make any adjustments.”
36 You said you had no real intentions of ripping off the Tax Office:
“… I was trying to … put some of the invoices from that company onto … this company here in order to claim it … You know you can sort of take it from here and then in the following quarter do an adjustment and sort of try and get it back to normal.”
37 You said you had been under a lot of pressure in the past five years “… in my family environment.” That you had been diagnosed with compulsive anxiety disorder and that your son was struggling with a heroin addiction.
38 Regarding the three entities, you stated that you:
“…honestly believed so long as you had the recipient created tax invoice with their ABN number that it could be – that it was all claimable.”
39 When you were asked whether the figures were therefore higher than they should have been, you answered:
“No comment. What I'm saying is that on some occasions, I perhaps didn’t … inform myself a hundred percent … I knew okay, well it’s roughly this much here, right in order to lodge the activity statement with a view of if there’s any discrepancies I can adjust it in the following month.”
40 The prosecution submitted your attempts to explain your "figures" as "mistakes" in the interview were your attempts to deflect the ATO from your activity.
41 None of the money has been repaid.
42 Of particular concern, quite apart from the significant number of BAS statements lodged by you over the period of time until January/February 2011, were the lodgements of BAS statements after 27 January 2011. At that time, you were well and truly aware that the ATO was querying some of the content of at least one of your statements. That however did not deter you from offending. Further, concerningly, you attempted to justify the documentation provided to the ATO by providing some documentation, although not providing any documents to support sales (paras 33 and 35 of prosecution opening).
43 Again, on 9 and 10 August 2011, further documents were provided by you as outlined in the prosecution opening (para 41). Again, they did not substantiate the claim in the BAS statement and was a further example of your attempt to justify and substantiate the BAS statements prepared by you.
44 Concerning also was your attempt to deflect responsibility for these false records to your daughter, stating she was the one who prepared the incorrect figures.
45 Your offending occurred over a significant period of time and on multiple occasions.
46 Regarding your record of interview, Mr Gwynn conceded that there were some concerning answers by you in your attempt to deflect attention from your actions, although submitted you did acknowledge it was you who prepared the relevant BAS statements.
47 I accept, however, as discussed with Mr Gwynn, that in particular since the record of interview, you have displayed some remorse for your offending.
48 Regarding the gravity of your offending, the prosecutor submitted the entities Ontime and Casdawn were set up specifically to enable your fraudulent endeavour to continue. That Ontime was incorporated on 12 April 2010, with the first BAS statement being filed on 6 May 2010, less than one month later. Regarding Casdawn, this company was incorporated on 9 June 2010, with the first BAS statement filed on 9 July 2010. The prosecutor submitted there was no evidence of anything other than these entities being used for this fraud, including there being no other legitimate documentation. The prosecutor submitted, in the alternative, that if those companies were not set up for this fraudulent activity or endeavour, within a very short period of time they were recalibrated for the purposes of this fraudulent activity. On the material before me I am unable to conclude beyond reasonable doubt that the companies were set up for this fraudulent activity, however, I am satisfied of the prosecutor’s alternative submission. I have formed that conclusion, I believe, somewhat generously. But I am also concerned about the lack of documentation to support legitimate use of the two entities, Ontime and Casdawn, and the use of those entities within a short period of incorporation. The prosecution position was that you knew you were not eligible to do what you were doing in relation to the respective BAS statements. I agree. Also tendered by the prosecution was a summary of the financial advantage obtained (Ex B).
49 You have a number of very concerning and relevant prior court appearances, albeit dated.
50 You appeared at Moonee Ponds Magistrates’ Court on 6 July 1995 on charges of making a false document to the prejudice of another, use copy of false document and obtain property by deception. You were without conviction fined an aggregate of $950. I was advised by Mr Gwynn that that involved documents fraudulently prepared by you for the purpose of a loan application.
51
You were also previously convicted at the Melbourne County Court on
11 October 2001 on charges of obtaining property by deception and attempting to obtain property by deception. On all those charges you were placed on a community-based order for 12 months, ordered to perform 175 hours of unpaid community work, undergo psychological assessment and treatment as directed and participate in counselling for gambling problems.
52 You next appeared and were convicted at the Melbourne Magistrates’ Court on 16 October 2001 on charges of making a false document to the prejudice of another, use copy of false document and obtain property by deception and on all charges were placed on a community-based order for 12 months and ordered to perform 75 hours of unpaid community work.
53 The offences dealt with on 11 and 16 October 2001 occurred at the time when you were working as a mortgage broker. In that employment, you instructed Mr Gwynn that you were approached by people, otherwise not entitled to mortgages, and for a fee you furnished and used false documents to assist them to get loans.
54 I am conscious that thereafter there is gap of many years during which you have not offended. However, it is regrettable you re-offended in this way after so many years. That concerns me when considering your prospects of rehabilitation, and I discussed that with Mr Gwynn.
55 Your dishonesty priors and the nature of them, albeit dated, are very concerning when assessing your offending before me.
56 I also note you were convicted at the Melbourne County Court on 24 October 1988 on a charge of conduct endangering life, at that time being placed on probation for two years on a $1,000 good behaviour bond and ordered to forfeit a firearm. For sentencing on the charge or offence before me, I disregard that prior Court appearance.
57 There is nothing subsequent alleged against you since your offending in 2011, which is to your credit.
58 You have pleaded guilty to this charge and are entitled to have that fact taken into account in your favour and I do so. The community has been spared the time and cost of a trial and witnesses spared the need to give evidence upon your trial. There is social utility in your plea. Further, I take into account in your favour you intimated early your intention to plead guilty to this charge. I accept the chronology as outlined by Mr Gwynn regarding the progress of your plea.
59 You offered to plead guilty on 14 November 2014, which was accepted three days later by the prosecution. You then entered your plea of guilty in the Magistrates’ Court.
60 As recently as the week prior to your plea hearing, the prosecution determined the appropriate charge to be different from that to which you had pleaded guilty. You nevertheless agreed to the new proposed charge and maintained your preparedness to plead guilty. I accept you entered your plea of guilty at the earliest opportunity and such is relevant in mitigation of your sentence, and that your plea of guilty is indicative of some remorse for your offending.
61 Mr Gwynn appeared on your behalf, as I have stated, during your plea hearing and provided a written outline of submissions (Ex 1) which he addressed during the course of your plea.
62 Mr Gwynn urged your offending was not overly sophisticated and was readily detected upon audit. I discussed my concern regarding this description of “not overly sophisticated." In my opinion there was a significant degree of sophistication in your offending.
63 I questioned Mr Gwynn’s description of your offending as involving “a level of stupidity” when he submitted Casdawn Holdings and Ontime were not operating as a business during the relevant period. I disagree with his description of your offending as "stupidity", in particular given your repeated offending after being questioned about statements in January 2011, and your repeated attempts to justify the statements by providing "supporting documentation."
64 Regarding the entities Casdawn and Ontime, Mr Gwynn submitted that MSM was the initial entity that was set up with a plan to diversify which led to the setting up of Ontime and Casdawn. He agreed that both those entities were then used within weeks for the purposes of obtaining the funds, the subject of the charge.
65 He urged that your culpability was not of the upper end. In my opinion, your culpability falls towards the upper end, certainly it does not fall at the lower end of gravity.
66 It was conceded by Mr Gwynn that you wanted money and thus you completed the BAS statements in the way you did.
67 Mr Gwynn further urged that your offending occurred in the context of your long term depressive illness, complicated by your son’s addiction to heroin. He conceded your past gambling history was not a matter in mitigation.
68 Regarding your depressive illness and your offending, Mr Gwynn conceded, correctly in my opinion, such did not attract Verdins & Ors[1] principles relevant to your offending behaviour.
[1] (2007) 16 VR 269
69 He conceded your offending was over a sustained time and represented an “attack on the revenue." Further, Mr Gwynn correctly observed that general deterrence was a relevant and significant sentencing consideration.
70 He turned to the matters urged in mitigation. Firstly, that you pleaded guilty at the earliest opportunity, which was indicative of remorse and I have referred to this. That you made relevant admissions in the record of interview, after initially, he conceded, attempting to deflect responsibility for your criminality.
71 Mr Gwynn urged that there was a delay in finalisation of this charge. That the investigation commenced in January 2011 but you were not charged until 1 September 2014, nearly two years after you were interviewed. He urged that delay was relevant to punishment and rehabilitation. I accept that since your offending ceased in April 2011 you have not committed any further offending. I note the prosecution, however, was complex and whilst delay is relevant to sentence, in particular you have not re-offended and have had this prosecution hanging over your head for some time, I accept the prosecution submission that such offending is often complex, difficult to investigate and delay of this nature is not unusual.
72 Mr Gwynn urged that since this offending, you had undertaken significant attempts in rehabilitation including self-exclusion from gambling premises and had participated in treatment for depression. I also note this has occurred during the period of delay, and that is to your credit.
73 Mr Gwynn submitted that whilst gambling had been an issue for you in the past, you had shown initiative and excluded yourself from Crown Casino prior to being charged with these offences but after you were interviewed by police. That is encouraging.
74 Mr Gwynn submitted you had the ongoing support of your wife and family, and I note a number of family members were in Court during your plea hearing.
75 Also, that you have a solid history of employment and were currently employed part time with your brother as a bookkeeper and also working part time as a delivery driver.
76 Mr Gwynn conceded that whilst you were taking medication for your longstanding depressive illness, you were not always compliant with its use.
77 Regarding your prior criminal history, Mr Gwynn conceded such was relevant but urged the gap of approximately 10 years since your last appearance before Court and the previous Court orders had been complied with. Of course, I am aware of that, as I have previously stated.
78 Whilst Mr Gwynn submitted custody would be burdensome due to your family situation, in particular relevant to your mother, he did not urge that this amounted to exceptional hardship. That was correct. I do, however, take this into account pursuant to s16A(2)(p) Crimes Act 1914 (Cth).
79 You instructed you hoped in the future to make restitution to the ATO.
80 Mr Gwynn submitted relying upon Verdins principles that imprisonment would be more burdensome for you, and relied upon the report of Mr Patrick Newton. I accept this to be so and have taken that into account when sentencing you.
81 Mr Gwynn urged that you had good prospects for rehabilitation. I, however, have guarded optimism regarding your rehabilitation prospects, given your lengthy and repeated offending before me, and your prior court appearances for dishonesty, albeit dated. Whilst I acknowledge you did not offend in the intervening years it is concerning that ultimately you did so and with such serious, frequent and sustained conduct.
82 Turning to your background and history, you were born in 1965 and are 49 at time of sentence. You have two siblings.
83 You have been married for 20 years and have five children, and a number of grandchildren.
84 You were educated to Year 10 at Preston Technical College and upon leaving school worked as a labourer and then in insurance sales. For eight years you worked in a finance company. You also ran your own mortgage broking business for four years and owned a postal contracting business relevant to the current matters before the Court from 1999 to 2014.
85 I turn to a report that was before me from Patrick Newton, Clinical and Forensic Psychologist, dated 24 March 2015. He saw you for assessment on 4 March 2015, and set out further details of your personal history. Your father, it seems, had been a heavy drinker throughout your early years and on your report was physically and verbally aggressive towards yourself, your mother and your siblings. Your mother also drank alcohol in the past to excess.
86 Your father died in 2004. Your mother is in her mid-80s, living independently, although you (and other family members) provide ongoing support to her.
87 You operated your own contracting business from 1999 to 2014. As I have said, it was during this time the offending before me took place. That business was no longer operating. You were, however, at the time of interview with Mr Newton working as an office manager, which I assume was a reference to your employment with your brother.
88 You told Mr Newton of your eldest child’s drug addiction, and I accept that has caused a lot of distress to you and your family.
89 Turning to your mental health history, you reported a history of longstanding depressive mood disorder which you traced back to your abusive childhood. It was not until you were in stable employment and married that you said you began to feel any sense of accomplishment.
90 Medical records that were available to Mr Newton revealed you had presented to professionals for depressive symptoms in late 2011, 2012, 2013 and 2014, and had been prescribed antidepressant medication. You had been referred for psychological assistance to various practitioners, most recently Ms Jenkins and there were two reports tendered before me from her.
91 As a result of adverse side effects of medication in the past, your compliance with your medication regime had been haphazard. You were currently not consulting a psychologist, according to Mr Newton. You wished to cease taking medication and were currently prescribed Zoloft.
92 While you advised Mr Newton of your prior gambling problem, you did not believe you required any treatment to address any current issues associated with gambling.
93 You instructed Mr Newton that your current offending occurred when you were going through a period of severe personal stress. You had not been using an accountant to assist with your tax affairs and were trying to do it yourself. You said you had been struggling with depression and anxiety during that time.
94 You expressed remorse for your behaviour to Mr Newton, acknowledging it was dishonest and culpable.
95 Your history, according to Mr Newton, suggested longstanding depressive mood disturbance and your medical records confirmed same during that time.
96 In his opinion, you met the DSM-5 criteria for ‘Persistent Depressive Disorder’. It was “plausible” in the opinion of Mr Newton that you would have been labouring under your depressive mood disturbance at the time of your offending. As previously stated, however, Mr Gwynn was not relying upon Verdins relevant to your offending, conceding your mental health issues did not go far enough for me to conclude your moral culpability was diminished, and I agree. He did, however, as I have said, rely upon Verdins principles and the difficulty you would have in custody as a result of your mental health problems. Such was an appropriate concession. As I have already said, in that regard, I accept some moderation of your sentence is applicable.
97 Mr Newton concluded your ultimate prognosis was guarded, given your prior history of dishonesty-related offending and your emotional and behaviour problems. I agree it is guarded.
98 A number of references were before me.
99 From your son, Frank Castaldi (Jnr), dated 13 February 2015. He said he was now aware of your anxiety and depression. He said you assisted in the care of his grandmother.
100 There was a reference from your daughter-in-law, Amanda Castaldi dated 16 February 2015. She was surprised to hear of your offending as it seemed out of character. She described you as family-oriented.
101
There was a reference from your daughter, Laura Doughney, dated
18 February 2015. She described you as a loving father. She was aware of your depression and anxiety history.
102 There was a reference from your brother, Tony Castaldi, dated 16 March 2015. You had been assisting with your mother on a daily basis, including taking her to appointments. He described you as a committed family man. He said you were embarrassed and remorseful for your offending.
103 There was a reference from George Castaldi, your brother, dated 15 February 2015, confirming you had been employed by him as part time office manager for the past six months. He described the difficulties with your son’s drug addiction and that you had been assisting in the care of your mother.
104 There was a reference from your daughter, Sarah Castaldi, dated 22 February 2015. She described a good relationship between you and her children and that you were remorseful for your offending.
105
There was also a reference from your wife, Linda Castaldi, dated
18 November 2014. She referred to her ongoing support of you. She described you as a loyal and hardworking partner and as a true role model for your children. She described difficulties you had regarding your son’s drug dependence, your own illness and the passing of your father. She also referred to your assistance to your mother.
106 Also before me was an application for Self-Exclusion from Crown Casino signed by you on 28 April 2012 (Exhibit 5).
107 There was also a report from Daliborka Lazarevic dated 9 February 2011, referring to your attendance at that time at Better Access to Mental Health Initiative for psychological therapy. You attended for six psychology consultations. It was noted by the author that you had longstanding anxiety and depression-related symptoms. At that time your symptoms appeared to be maintained by “ongoing difficulties with your children” (Ex 3).
108 There was also a report from Dr Mel Clark dated 13 March 2015, of Wingrove Medical Clinic, your mother’s medical practitioner. Your mother has health issues requiring assistance from family to maintain her. Her care is usually, he said, provided by her son, Tony, and when he was unavailable by you.
109 There was a reference from your mother, Rita Castaldi, dated 15 February 2015. She described the difficulties you had with your son’s drug addiction, also that you had suffered depression and anxiety since you were a teenager. You assisted in taking her for medical appointments and shopping.
110 There was a reference from Sophie Jenkins, Psychologist at VOICE Psychologists and Allied Professionals, dated 10 October 2014, regarding your attendance with her to determine a pathway back into employment. You described that your previous diagnosis of depression and anxiety had impacted upon your motivation for employment. There was a further report of the same date in which you described longterm treatment with medication plus therapy (over 10 years ago) and that you had felt little therapeutic benefit from those treatment regimes.
111 Mr Gwynn submitted the significant difficulties in your background enlivened the principles of mercy, as stated in Osenkowski[2]. Specifically, he referred to the substantial life stresses on you at the time of your offending referrable in part to your son, your own mental health issues, and your father’s recent illness and death.
[2] (1982) 5 A Crim R 394
112 There is no doubt that a Court can, in appropriate cases, apply principles of mercy, sometimes referred to as a "residual discretion of mercy." The Courts may extend mercy to an offender by the imposition of a lenient sentence where the "sympathies of a Court are reasonably excited" by all the circumstances.
113 In my opinion, in all the circumstances of this offending, that direction is not enlivened when sentencing you, when considering matters which include your previous court appearances, and the opportunities given to you at that time to assist you not to re-offend by various court orders. Further, your continued offending after the ATO questioned your figures.
114 Turning to his conclusions, Mr Gwynn submitted, taking into account all relevant sentencing considerations, the appropriate disposition would involve a Community Corrections Order of some length with community work. Such an Order would address, he submitted, the sentencing principles of general deterrence, specific deterrence, appropriate punishment and allow for your treatment in the community.
115 His secondary submission without abandoning his primary submission was that a Recognisance Release Order could be imposed which would bind you to the Court, and which would also address, he submitted, all sentencing considerations.
116 Ultimately, Mr Gwynn’s submission was that you could be sentenced and rehabilitated in the community without the need for the imposition of any immediate custodial sentence.
117 Mr Kalyk, on behalf of the prosecution, directed me to the relevant sentencing considerations within s16A Crimes Act 1914.
118 The prosecution submitted an immediate custodial disposition was the only appropriate sentence for your offending.
119 Mr Kalyk submitted general deterrence should be a predominant consideration when sentencing and this is consistent with authorities.
120 I was also referred to the decision of Carter[3], the decision of Rowson[4] and the decision of Purdon[5]. In the latter, reference was made to the difficulty detecting these crimes.
[3] (1997) 91 A Crim R 222, p232
[4] [2007] VSCA 176, paras 24&26
[5] 27 March 1997, p7-8
121 From these authorities it is clear also that the offending involving revenue is serious offending and that general deterrence is an important sentencing consideration.
122 Mr Kalyk further submitted there was the need for general deterrence, as these offences were easy to commit as they relied upon self-reporting for BAS statements, that whilst your offending was ultimately detected, the ATO should not have to audit every BAS statement. Yours was a good example, he submitted, of how difficult it is to audit BAS statements. That it took the final audit before your fraud was detected. I agree.
123 The fact that the entities of Ontime and Casdawn were not operating did not make it any easier to detect. He submitted the companies were paper-based, and created the illusion the transactions were “valid”.
124 Turning to the circumstances of your offending, he referred to the amount being a significant amount and over a period of time, a year, approximately $100,000.
125 Further, Mr Kalyk submitted your offending was deliberate and sustained involving twenty-two BAS statements over a year, and that you were “on notice” from January/February 2011 with the ATO questioning some of the documentation.
126 Your attempts to blame your daughter for the incorrect figures were, he submitted, a further attempt by you to give a veil of legitimacy to your offending. Also, further BAS statements submitted by you after the ATO notified you of questions regarding a BAS statement.
127 Mr Kalyk submitted your record of interview reflected simply your attempt to deflect your behaviour from anything criminal, purporting to describe your offending as a “mistake”. He described your admissions as minimal. That most admissions made by you involved material you were aware the ATO already knew. Yet you continued to deflect your involvement, suggesting “honest mistake."
128 Your offences, Mr Kalyk submitted, were serious involving multiple entities, and with two companies Ontime and Casdawn, he submitted, created to perpetrate the fraud. I have already referred to my conclusion in that regard.
129 Further, this offending was not a case of need as the business in that year had turned over $360,000 approximately with Australia Post.
130 Turning to your prior criminal history for similar offending, Mr Kalyk submitted this was relevant to the principle of mercy. At that time, you had been given an opportunity on two occasions to comply with Community Corrections Orders, also given an opportunity to cease this activity when the ATO contacted you in January/February 2011. He submitted mercy was not appropriate when sentencing. As I have previously stated, I agree.
131 Regarding the delay, Mr Kalyk conceded this has some relevance to sentencing. I agree. However, he submitted that the two years was not inappropriate or unduly long given the complexity of the matter. I also agree with that.
132 Relevant to your remorse, he referred to your lack of preparedness to enter into a plan to at least attempt to repay some of the money. But he conceded, however, there were other indicia of remorse. I do not regard this as being relevant to a lack of remorse in your case.
133 Mr Kalyk submitted specific deterrence was an important sentencing consideration when sentencing you, and I agree. You have a relevant prior dishonesty criminal history and your offending occurred over a significant period of time, including after ATO involvement in January/February 2011.
134
I was also referred to a number of authorities involving sentencing for similar types of offending. It is difficult, however, to compare cases factually, as facts vary enormously case to case, as do all matters in mitigation of sentence. Ultimately, it is a matter for me to determine, based on all the material, what is the appropriate disposition, being mindful as I am of submissions made by both counsel on sentencing disposition and in particular in the case of
Mr Gwynn’s submissions the recent decision of DPP v Boulton & Ors[6], in particular that sentencing courts need to "rethink the conventional wisdom about whether prison is really the only option" (para 20).
[6] (2014) VSCA 342
135 When sentencing for Federal offences, in determining the appropriate sentence to be passed and the orders to be made in respect of such offences, I must impose sentences that are of a severity appropriate in all the circumstances of the offending (s16A)(1) Crimes Act 1914 (Cth).
136 There are many factors I must and do take into account when sentencing:
(i)the principles of general deterrence;
(ii)the nature and circumstances of the offences, including your moral culpability;
(iii)the maximum penalty applicable;
(iv)if the offences form part of a course of conduct consisting of a series of criminal acts of the same or a similar character (s16A(2)(c));
(v)the fact that you have pleaded guilty to the charges (s16A(2)(g));
(vi)the degree to which you cooperated with law enforcement agencies in the investigation of the offences (s16A(2)(h));
(vii)the deterrent effect that any sentence or order under consideration may have on you (s16A(2)(j));
(viii)the need to ensure you are adequately punished for the offences (s16A(2)(k));
(ix)your character, antecedence and age, means and physical or mental condition (s16A(2)(m));
(x)the probable effect any the sentence or order under consideration and what it would have on any of your family or dependencies (s16A(2)(p)) – but this must be exceptional;
(xi)your prospects of rehabilitation (s16A(2)(n));
(xii)prison is a sentence of last resort (s17A).
137 In sentencing I have taken into account these and all other matters "relevant and known."
138 Regarding your offending, I regard your culpability as high. In my opinion, there was a degree of complexity in your offending, it was deliberate and involved systematic cheating by you.
139 When sentencing for a ‘rolled up’ charge (as this is) the Court is entitled to impose a sentence which reflects each of the individual offences encompassed within the ‘rolled up’ charge (see Jones[7] and also PDA v The Queen[8]). To impose either sentence urged by Mr Gwynn in my opinion would not appropriately reflect all sentencing considerations, including all matters in mitigation of sentence.
[7] [2004] VSCA 68
[8] [2010] VSCA 94, para 4
140 I turn then to the sentence.
141 The sentence I intend to impose is a head sentence of 2 years' imprisonment. You are to be released after serving a period of 10 months, which will enable you to serve the balance of that sentence in the community. However, if you breach any orders or any conditions of the recognisance that you will then be under, you may be required to serve the balance of the sentence in jail.
142 The purpose of the order is to enable you to be released earlier than the full length of the sentence and to enable you to serve the balance of the sentence in the community. If you commit any further offences or if you breach the conditions of the recognisance at any time during the two year period that I will stipulate, then you can be brought back to Court to be dealt with for that breach. Depending on the nature of the breach, a monetary penalty could be imposed, or the bond could be extended, or a community service order or an intensive correction order could be imposed. However, if the breach is of a more serious nature, then you may be required to serve the unserved balance of the sentence of imprisonment.
143 You will not initially be required to pay the amount of the recognisance which I will set at $1000. However, if you breach any of the conditions of that recognisance, you may, in addition to the other consequences that I have just outlined, be required to pay that amount.
144 In order to give effect to that sentence, I therefore intend to sentence you pursuant to s20(1)(b) Crimes Act.
145 You are convicted and sentenced to 2 years imprisonment, but by order I direct pursuant to s20(1)(b) Crimes Act that you be released after serving 10 months upon you giving security by recognisance in the sum of $1000 conditional that you be of good behaviour for a period of 2 years.
146 Pursuant to s6AAA Sentencing Act 1991, when sentencing for Federal offences, had you been found guilty of this charge following jury verdict, I would have sentenced you to a term of imprisonment of 4 years and set a non-parole period of 2 years and 6 months.
147 Pursuant to s18(4) Sentencing Act 1991, I declare you have spent 15 days in custody by way of pre-sentence detention, up to and including 14 April 2015, and direct that that be entered into the records of the court.
148 HER HONOUR: Is there anything you're not clear about? It's two years is the sentence, 10 months he has to serve but he's already done 15 days and they will be declared if that is correct. So he does 10 months. Once he gets out after 10 months the remaining period of time which is 14 months I think is effectively - he has to be of good behaviour for two years after that 10 months otherwise he runs the risk of having to serve that balance of 14 months.
149 MR KALYK: So, sorry, if I can just clarify one point, Your Honour, if he's released after - 10 months, is the good behaviour period two years after the release date or is it in effect the two years - - - ?
150 HER HONOUR: It's two years after, so it's 14 months effectively which is the balance, right, for two years. Does that make sense? If it can't be done, just leave it for two years in total.
151 MR KALYK: I think that's correct, Your Honour.
152 HER HONOUR: What have you put there?
153 MR KALYK: That the defendant is released after serving 10 months.
154 HER HONOUR: Correct.
155 MR KALYK: A recognisance of $1000, comply with the condition to be of good behaviour for two years.
156 HER HONOUR: Yes, correct.
157 MR PICKERING: Yes, my understanding is that the CU's would effectively run immediately.
158 HER HONOUR: That's correct.
159 MR PICKERING: And just for the statement of perhaps the obvious but the recognisance is not payable immediately, it's only to be paid if in fact a further offence were to be occurred or a breach of the recognisance were to occur.
160 HER HONOUR: Exactly. That's my understanding, yes. Very well, so is the documentation correct, accurately records everything? PSD, do you agree, 15 days up to and including yesterday? Is that right?
161 MR KALYK: I understand, Your Honour, that today is the 15th day so it would make it 14 days not including today.
162 HER HONOUR: Let's check it, every day makes a difference when you're out there.
163 MR PICKERING: My understanding is that in fact today is the 15th.
164
HER HONOUR: Today is the 15th but it's up to yesterday which is the
14th - - -
165 MR PICKERING: Correct, so we're right. 15 days, as I said, up to yesterday which was 14 April. All right, we don’t count the day of the sentence. So everyone is right, up to and including yesterday, 15 days, every day matters.
166 MR KALYK: Yes, apologies, Your Honour.
167 HER HONOUR: Very well, good.
168 MR PICKERING: Thank you.
169 HER HONOUR: Where are we at with this other business?
170 MR KALYK: Yes, Your Honour, my instructor has made inquiries and we see no bar to Your Honour leaving the issue of a reparation order being made to another date - - -
171 HER HONOUR: I think we'll come back and have a discussion about it in about three weeks. That gives Mr Pickering an opportunity to discuss it with Mr Gwynn. I think that's only fair and I'm not prepared to make to - I may ultimately make the order but I want to give him every opportunity to discuss it. I'd be only making the order in relation to the amount in this case, which was an agreed amount given it was not disputed factual circumstances or factual summary of a matter. So I'll leave it at that, we'll set a date very quickly in three weeks' time, early in the morning-ish and that enables counsel - it can either be with Mr Castaldi if he wants to come in and hear it, if he doesn’t want to come in he doesn’t have to, he can be video-linked, let us know.
172 Very well, Monday 11 May at 9.30 am and if Mr Castaldi doesn’t want to attend, and I understand he may not want to, he may or he may not; he doesn’t have to physically be here, we can do a video-link or if he doesn’t want to have any involvement in it at all he doesn’t have to have even a video-link. I will leave that entirely up to you to organise, Mr Pickering. Whatever he wants is fine by me.
173 MR PICKERING: Thank you, Your Honour.
174 HER HONOUR: So 9.30 on that day to discuss the reparation order that's being sought and I suggest that there be some liaising between everybody between now and then so that it makes it a quick hearing if at all possible, although of course if it's not quick so be it.
175 Very well, is there anything further?
176 MR KALYK: No, Your Honour.
177 MR PICKERING: No, Your Honour.
178 HER HONOUR: No, all right. Thank you very much for your assistance. Can you remove Mr Castaldi, please? Thanks, Mr Castaldi.
Addendum
179 By Administrative Order made in Chambers on 11 May 2015, consented to by both parties, reparation order was signed in the sum of $92,803.00 to the Commonwealth of Australia (Australian Taxation Office).
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