Director of Public Prosecutions v Chkhaidem & Fotia
[2024] VCC 2127
•17 December 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
CR-23-00646
CR-23-00647
| COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| OMAR CHKHAIDEM & DOMINIC FOTIA |
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JUDGE: | His Honour Judge Rozen | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 21 November 2024 | |
DATE OF SENTENCE: | 17 December 2024 | |
CASE MAY BE CITED AS: | DPP v Chkhaidem & Fotia | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 2127 | |
REASONS FOR SENTENCE
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Subject:CRIMINAL LAW
Catchwords: Conspiracy to dishonestly cause a loss to the Commonwealth; Three co-accused; Growing and harvesting tobacco; Potential loss of excise exceeding $4 million; Poor health of accused; Caring responsibilities; Family Hardship; Youth; Reduced moral culpability; Parity; Delay
Legislation Cited: Criminal Code 1995 (Cth); Excise Act 1901 (Cth); Juries Act2000 (Vic); Crimes Act 1914 (Cth); Sentencing Act 1991 (Vic)
Cases Cited:Cheung v The Queen (2001) 209 CLR 1; Barakat v DPP (Cth) [2020] VSCA 185; Saoud v R; Fernandez v R [2019] VSCA 208; Abbas Elzein & Ahmad Elzein v R [2021] NSWCCA 246; Assi v R [2021] NSWCCA 181; Robers v R [2019] VSCA 230; Damoun v R [2015] NSWCCA 109; Assheton v R [2012] 132 A Crim R 237; R v Sinclair (1990) 51 A Crim R 418; Totaan v R (2022) 108 NSWLR 17; Mohamed v R [2022] VSCA 136; R v Saleh [2015] NSWCCA 299; R v McKay [2007] NSWSC 275; Postiglione v The Queen (1997) 189 CLR 295
Sentence: Omar Chkhaidem – 12 months’ imprisonment – Release forthwith on recognisance release order – s 6AAA declaration – 12 months imprisonment – Recognisance release order after serving 4 months – Dominic Fotia – 18 months’ imprisonment – Recognisance release order after serving 6 months
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Mr A Buckland | Commonwelath Director of Public Prosecutions |
| For the Accused: Omar Chkhaidem | Mr M Weinman | Tony Danos Solicitors |
HIS HONOUR:
1Dominic Fotia, you were found guilty by a jury of 11[1] of one charge of conspiracy to dishonestly cause a loss to the Commonwealth contrary to section 135.4(3) of the Criminal Code 1995 (Cth). The maximum penalty is 10 years’ imprisonment.
[1] 12 jurors were empanelled on 24 June 2024; one juror was discharged pursuant to s 43 of the Juries Act 2000 (Vic) (‘Juries Act’) on 26 June 2024, and the trial continued with 11 jurors pursuant to s 44 of the Juries Act.
2Omar Chkhaidem (Omar), you have pleaded guilty, following a sentence indication, to one charge of conspiracy to dishonestly cause a loss to the Commonwealth contrary to section 135.4(3) of the Criminal Code 1995 (Cth).
3Between August 2016 and May 2017, the two of you conspired with the late Ahmad Chkhaydem (Ahmad) to grow and harvest tobacco in Cobram with the intention that excise payable upon the manufacture of the tobacco would not be paid.
4Ahmad died in late August 2024 and the proceedings against him were formally discontinued on 21 November 2024.
5It remains the task of the court to sentence you Mr Fotia and you Omar.
6Before I outline the facts of your offending and address the relevant sentencing considerations, it is necessary to set out some relevant background facts to better understand what this case is about.
Background
7Australia once had a flourishing tobacco industry including in North Eastern Victoria. Growers were granted licences to grow and harvest tobacco.
8However, since October 2006 no licences to grow tobacco have been granted in Australia. Despite this, excise still applies to tobacco grown in Australia under the Excise Act 1901 (Cth).
9The Excise Act specifies that the duty is calculated at the time of manufacture of the excisable product. For tobacco, the point of manufacture is the time at which the dried tobacco leaf is cut. Therefore, in order to determine the amount of excise payable it is necessary to estimate the potential yield from tobacco seedlings, plants or leaf.
10The Excise figure is also dependent upon the Excise rate applicable at that time, as the rate is subject to indexation. For seizures of unlawful tobacco, the Excise Act prescribes that the calculations are made using the rate in force at the date of seizure.
11As of the date of the seizures of the unlawful tobacco in this case, the applicable excise rate was $771.60 per kilogram of tobacco.
The Offending
12The following summary is based on the Summary of Prosecution Opening for Plea dated 8 November 2024. I sentence Mr Fotia on the basis that the jury accepted the prosecution case in its entirety at his trial.[2]
[2] Cheung v The Queen (2001) 209 CLR 1 (‘Cheung’).
13Seizures of harvested and planted tobacco relevant to this case were made from:
(a) 3105 Murray Valley Highway, Cobram, 3644 (Cobram);
(b) 262 Hill Road, Yarroweyah, 3644 (Yarroweyah).
14Despite both of you being charged with being part of the same conspiracy, at trial nothing was alleged to suggest that Mr Fotia was involved in the Yarroweyah property.
Cobram
15The Cobram property is split, with a fruit orchard and undeveloped farmland at the rear and another business at the front of the property called 'Cobram Fruit Carriers Pty Ltd' owned by Christopher Baldwin, who was Mr Fotia’s accountant.
16Prior to 16 April 2015, Mr Fotia was the owner of the Cobram property. On 16 April 2015, Bowenhall Pty Ltd (Bowenhall), a company wholly owned by Mr Baldwin, became the registered proprietor of the property.
17Bowenhall informally leased part of the Cobram property back to Mr Fotia for nominal rent.
18On 5 September 2016 Ahmad attended the law offices of Denis Deane & Associates and instructed Denis Deane to draft a lease for the Cobram property with Mr Fotia as lessor and Omar as the lessee. Mr Deane searched the title and advised Ahmad that as the property was not in Mr Fotia’s name, a formal head lease would need to be created before the property could be sub-leased.
19In or around September 2016, Mr Fotia approached Mr Baldwin to formalise the lease of the Cobram property. Ahmad presented the formalised lease to Mr Deane, who prepared a sub-lease naming Omar as the sub-lessee. Later, on 23 November 2016, Ahmad instructed Mr Deane to remove Omar from the sub-lease and substitute ‘John Asber’ (an apparently fictitious person) as the sub-lessee.
20Prior to Christmas in 2016, Ahmad and Omar delivered tobacco seedlings to the Cobram property and, with Mr Fotia’s assistance, planted them.
21On 15 March 2017, Mr Fotia purchased chemicals and supplies from IK Caldwell in Cobram.
22On 24 April 2017, at Cobram, Victoria Police located a 12.5-acre tobacco crop in the rear section behind Cobram Fruit Carriers Pty Ltd. They also located three trucks, and a trailer with registration plate P63 844 (connected to a John Deere tractor), registered to Mr Fotia. Each of the trucks and the trailer contained picked green tobacco leaves, some baled and others partially baled, in hessian sacks and green leaf packed in the trucks in racks.
23Victoria Police took a series of photographs at the property, which depict a large crop of illicit tobacco in the process of being harvested and processed. Also at the property was a makeshift drying kiln constructed from timber, complete with electrical wiring and a heat dispensing flue.
24Victoria Police seized the three trucks that contained tobacco, but they did not seize the John Deere tractor or trailer registered to Mr Fotia, or the tobacco within the trailer.
25Following this, on 27 April 2017, the ATO executed search and seizure warrants at Cobram. The tobacco was seized.
26The ATO measured the size of the crop and calculated the total quantity of tobacco to be approximately 6,250kg.
27On 27 April 2017, the tobacco crop was photographed and sampled, and videos were taken of the sampling of various locations of the crop and destruction of the crop on the same day. The samples were confirmed to be tobacco.
28On the same day samples were taken from the green leaf contained in the three trucks and these were confirmed to be tobacco. The truck with registration plate IGV 5OU, which was owned by Imad Adra, contained 3670kg of tobacco, the truck with registration plate YSS 587, owned by Khaldoun Mohamed, contained 820kg of tobacco, and the truck with registration plate 1IY 5RG, owned by Diana Mohamed, contained 230kg of tobacco.
29The ATO also seized the trailer, registered to Mr Fotia, that had been photographed by Victoria Police on 24 April 2017. Although it had contained tobacco on the day it was photographed, on the date of seizure the trailer was empty and registration plates removed.
30Cobram has never been licensed as a place to manufacture, produce, store or deal in tobacco leaf.
Yarroweyah
31Yarroweyah is jointly owned by Lynette and Matteo Orsida.
32On 11 May 2017, following a tip-off, the ATO executed a search warrant at Yarroweyah and discovered a 9-acre crop of tobacco plants.
33Present at the property were Khaldoun Mohamad and Wael Mohamad who appeared to have been staying in a caravan located adjacent to the tobacco crop. Both men were at Cobram on 24 April 2017 when police attended.
34Investigators seized an iPhone belonging to Khaldoun Mohamad. The mobile phone was briefly examined and revealed text messages showing communication between Mr Mohamed, Ahmad and Omar.
35Botanist Andrew Drinnan attended the site and took a series of photographs and provided a report discussing the layout and quality of the crop. The crop was sampled and destroyed on the same day. The samples were confirmed to be tobacco.
36The ATO measured the size of the crop growing and calculated the total quantity of tobacco to be approximately 4,500kg.
37Yarroweyah has never been licensed as a place to manufacture, produce, store or deal in tobacco leaf.
Interview
38On 27 April 2017, a search warrant was executed at Mr Fotia’s home address of 5 Bisogni Drive, Cobram.
39On 24 May 2017 a search warrant was executed at Omar’s home address, 32 Parkside Drive, Shepparton.
40During the execution of the search warrants you both participated in recorded interviews in which you made admissions.
Potential loss of excise
41The tobacco seized and destroyed was in the form of plants in the ground or wet, recently harvested leaf.
42The weights of the tobacco located in the ground at Cobram and Yarroweyah are estimates based on observations and measurements of the area and size of the crops by experienced tobacco investigators. The weights of the harvested tobacco leaf located in the trucks at Cobram are the actual weights, confirmed at a weighing station.
43The weights are set out below:
(a) The crop at Cobram: approximately 6,250 kilos;
(b) The tobacco leaf in the trucks at Cobram: 4,720 kilos;
(c) The crop at Yarroweyah: approximately 4,500 kilos.
44As the tobacco crops and the green leaf in the trucks were seized and destroyed before reaching the point of manufacture, that is, the time at which dried tobacco leaf is cut, no actual loss of excise occurred. However, harvesting had been occurring at Cobram for 5-6 days before the crop was detected and therefore an undetermined amount of tobacco leaf did escape seizure.
45Using the weights above, the loss of excise that would have been caused by the conspiracy had the tobacco not been seized and destroyed was at least $4,147,350, split between the crops as follows:
(a) Cobram: $2,411,250;
(b) Yarroweyah: $1,736,100.
46Based on these totals the total loss that would have been caused by Omar was at least $4,147,350.00, while in Mr Fotia’s case based on the Cobram property only it was at least $2,411,250.00.
47Neither of you have ever held a licence to grow or deal in tobacco seed, plant, and/or leaf or to manufacture tobacco products. You have never had permission under the Excise Act to have possession, custody, or control of tobacco seed, plant, and/or leaf or to manufacture tobacco products.
Roles of each offender
48Omar, you were a subordinate partner to your father Ahmad. Under his supervision, you carried out the following activities in relation to Cobram and Yarroweyah:
(a) with Ahmad, you approached Matteo Orsida to arrange the sub-lease for the Yarroweyah property and became the sublessee;
(b) you were nominated as a sub-lessee for the Cobram property;
(c) you purchased chemicals, diesel and equipment for Yarroweyah;
(d) you assisted with planting seedlings at Cobram;
(e) you delivered machinery to Cobram;
(f) you established the crop at Yarroweyah with help from mates and tended the crop with help from your best friend, Khaldoun Mohamad, and backpackers;
(g) you organised mechanical repairs to machinery at Yarroweyah by witness, David West;
(h) you paid West for mechanical work he carried out;
(i) you moved farm workers around;
(j) you received instructions from Ahmad to pass on to Khaldoun Mohamad;
(k) you tended to tobacco plants, reported on progress to, and received instructions about tending the plants, from Ahmad; and
(l) you assisted with harvesting.
49Multiple photographs of plants located on your mobile phone were examined by a botanist and confirmed to be tobacco.
50Mr Fotia, you were also a subordinate partner to Ahmad. You carried out the following activities in relation to Cobram:
(a) you assisted Ahmad to arrange the Cobram Sub Lease;
(b) you purchased agricultural chemicals;
(c) you assisted with planting seedlings;
(d) you assisted with harvesting; and
(e) you provided your trailer which was used to transport harvested tobacco on the day the Cobram crop was detected.
Personal Circumstances
Omar
51Omar, you were 19 years of age at the time of offending, and are now 27.
52Your counsel submits that your ‘early years were marked with significant instability’.[3] When you were 6 years of age, your brother, sister and you were sent to Lebanon following the divorce of your parents in circumstances of domestic violence. In a letter provided to the court your mother explained that this was against her will but that she did not have the ability to go to Lebanon to retrieve you.
[3] Defence Outline of Submissions for Plea dated 17 November 2024, [13].
53Your mother described the difficulties you faced from an early age navigating your relationship with your father, characterised by a ‘lack of support, inconsistent presence, [and] negative interactions’. She says that this ‘left an impression on [you], shaping [your] belief of family and trust’.
54On your return to Australia you lived with your father for two years until Child Protection removed you, after your school noticed marks on yours and your siblings’ bodies. You were then returned to your mother’s care.
55Around this time your brother died in tragic circumstances and following this you became the subject of pressure from your father, which will be discussed later in these reasons.
56Earlier this year your grandmother, with whom you lived in Lebanon, passed away and you were unable to attend her funeral due to these proceedings.
57Only two weeks later, as has been explained, your father passed away, and as you are now the eldest male in the family you were required to take a leading role in funeral rites, as part of your cultural obligations.
Mr Fotia
58Mr Fotia, you were born in 1958 and are now 66 years of age.
59Your parents emigrated from Italy and you were raised in an Italian speaking household. Your counsel describes your childhood as uneventful, save for the difficulties faced by a migrant of your generation.
60You left school at 15 to undertake a bricklaying apprenticeship and worked in that industry until you were able to purchase and run a pizza restaurant. You eventually sold this business for a profit and returned to bricklaying.
61Your mother passed away in 2017 and your father is 93 years of age. You are the eldest of 5 siblings and have 5 children with your wife Kim, and 4 grandchildren. You are close with your family and have taken on significant caregiving responsibilities for several family members including your daughter following a car accident, your sister, and your father. This will be discussed later in these reasons.
62Your father owned and operated the Cobram property and another property in the same area, both of which were purchased in around 1970. In 1989 the properties, which hold strong familial attachment, passed to you. The properties were successful until around 2008 when business became difficult after a large contract with SPC fell through.
63Between 2008 and 2013 you faced ongoing hardship which was heightened in 2012 when the Cobram area was heavily impacted by severe flooding and hailstorms. As a result you became bankrupt and the properties were sold to Mr Baldwin at auction.
64During this period your mental health declined and you started drinking heavily. Your counsel Mr Kounnas submits that this context contributed to your poor choices, noting your lack of criminal history prior to 2009. You have since sought support from friends and family and cut back your drinking.
65You leased the properties from Mr Baldwin due to your familial connection to the land and desire to carry on your father’s legacy. You began to borrow money from 2012 onwards in an attempt to save the farm, which lead to alienating friends and family, however you have since mended relationships and letters of support provided to the court from your wife, sisters, and other members of community are a testament to this.
66Your sole income is now a carer’s benefit from Centrelink.
Sentencing Considerations
67The charges before the court are for ‘federal offences’. The court is therefore guided in sentencing by the regime set out in the Crimes Act. In sentencing for a federal offence, the court must impose a sentence that is of a severity appropriate in all the circumstances of the offence.[4]
[4] Crimes Act 1914 (Cth).
68I take into account the matters set out in Part 1B of Crimes Act. In particular, I have had regard to s 16A(2) which sets out a non-exhaustive list of factors that must be taken into account as far as they are relevant and known to the court.
69I will address each of the relevant paragraphs in s 16A(2) in turn.
Nature and Circumstances of the Offence & Offence committed as a course of conduct – s 16A(2)(a) & (c)
70The nature of the offences before the court is informed by the maximum penalties and appellate decisions concerning cognate offending.
71Counsel for Mr Fotia referred the court to the case of Barakat.[5] The accused HB faced a rolled up charge of importing tobacco with the intention of defrauding the revenue in breach of s 233BABAD(1) of the Customs Act 1901 (Cth). The maximum penalty was 10 years’ imprisonment.
[5] Barakat v DPP (Cth) [2020] VSCA 185 (‘Barakat’).
72HB had recruited his older brother (DB) to participate in some but not all of the offending. DB pleaded guilty to a lesser charge carrying the same maximum penalty.
73The excise duty payable on the three consignments was a little under $4m. There was a ‘considerable delay’ of three years between the laying of the charges and the imposition of sentence.[6]
[6] Ibid, [38].
74The Court of Appeal considered that the objective gravity of the offending was such as to call for a substantial period of imprisonment in the case of HB. The assessment was informed by the ‘high degree of planning and organisation’ of the operation. Taking into account the delay, HB’s appeal succeeded on a manifest excess ground and he was re-sentenced to imprisonment for three years and three months with a non parole period of two years. Because of the ‘high utilitarian value of the guilty plea’, the court indicated that a not guilty plea would have attracted a sentence of five years and six months.[7]
[7] This indication was given under s 6AAA of the Sentencing Act 1991 (Vic).
75Given DB’s lesser role, ‘relatively unblemished record’ and ‘excellent prospects of rehabilitation’ the sentence of 20 months’ imprisonment with release after 10 months was reduced to 8 months’ imprisonment. The s 6AAA indication was 18 months.[8]
[8] Barakat (n5) [74].
76The prosecution referred the court to a number of appellate decisions to inform the court about the nature of the offences and current sentencing practices.
77In the case of Saoud & Fernandez[9] bears some resemblance to the present case. The accused were found guilty after a trial of conspiring to dishonestly cause a loss to the Commonwealth. The offending involved growing tobacco on a large scale. The excise avoided by Saoud was in excess of $2.1m. The excise avoided by Fernandez was in excess of $1.2m.
[9] Saoud v R; Fernandez v CDPP [2019] VSCA 208.
78The sentencing Judge had characterised the offending as ‘a sophisticated operation, carried out over a considerable period of time, and requiring the investment of considerable time, money and manpower’.[10]
[10] Ibid, [11].
79Fernadez had a significant prior conviction for unauthorised possession of tobacco with an excise value of in excess of $500,000.
80The applicable maximum sentence was imprisonment for 5 years.
81Both offenders were sentenced to 3 years’ imprisonment with a release on recognizance after 2 years and 3 months. In dismissing an appeal by both offenders, the Court of Appeal characterised the sentences imposed as ‘entirely appropriate’ and ‘plainly warranted’ having regard to the objective gravity of the offending and ‘the lack of any remorse by the offenders’ .[11]
[11] Ibid, [44]-[45].
82In Abbas Elzein & Ahmad Elzein,[12] the accused pleaded guilty to charges involving a conspiracy to import tobacco and thus avoid excise tax of in excess of $4.8m.
[12] Abbas Elzein & Ahmad Elzein v R [2021] NSWCCA 246.
83The Court of Appeal upheld appeals by the offenders. Abbas’s appeal against a sentence of 4 years and 3 months’ imprisonment with a non parole period of 2 years and 10 months, was dismissed.
84Ahmad, who played the lesser role, was re-sentenced to 2 years and 10 months imprisonment with a non-parole period of 1 year and 11 months.
85In reducing the sentence, the Court of Appeal accepted that there was ‘considerable delay’ of approximately four years between the date of arrest and the date of sentence, none of which was attributable to the offender, and that this was relevant as a mitigating factor.[13]
[13] Ibid, [274]-[276].
86I have also considered the other appellate decisions to which I have been referred by the prosecution.[14] They demonstrate that custodial sentences can be expected where offenders engage in sophisticated tobacco-related offending that deprives the Commonwealth of significant revenue. This is so even if the offenders have no criminal history and plead guilty. General deterrence is identified as the principal sentencing consideration. As the Victorian Court of Appeal has explained:
[i]t is necessary that sentencing courts visit the offending with suitably stern sentences so as deter those who might otherwise be attracted to the high returns fortified by the difficulty of detection.[15]
[14] Assi v R [2021] NSWCCA 181; Robers v R [2019] VSCA 230; Damoun v R [2015] NSWCCA 109.
[15] Barakat v DPP (Cth) [2020] VSCA 185, [54].
87Having said that, I accept the submission made on behalf of Mr Fotia that there are factual differences between the cases cited and the present case as there invariably will be. A court can only obtain limited benefit from earlier decisions as each case must be sentenced on its own facts.
88Turning then to consider the objective gravity of the offending before the court, it is first necessary to consider the respective roles of the three offenders (including for this purpose, the late Ahmad Chkhaydem).
89The features of the offending relevant to its objective gravity are:
(a) It was a relatively well planned and sophisticated operation;
(b) The implementation of the agreement persisted over a considerable period of time;
(c) The crops were extensive and the revenue sought to be avoided a very significant sum of money; and
(d) The sole motivation appears to be financial gain for those involved although the court is unable to say with any certainty what each individual stood to gain.
90It was common ground that Ahmad was the ‘principal organiser of the carrying out of the agreement’ and that he also ‘participated in the day-to-day cultivation of the tobacco crops with [Omar]’.[16] Ahmad ‘supervised others in the clearing of the land, sowing, watering/irrigation, cultivation and harvesting of both the Cobram and Yarroweyah tobacco crops’.[17] He also ‘kept records of expenses associated with the growing of tobacco, images of a tobacco crop, workers tending a tobacco crop, machinery, agricultural chemicals and purchase receipts’.[18]
[16] Summary of Prosecution Opening for Plea dated 8 November 2024, [31] (‘Prosecution Opening – Omar)’.
[17] Ibid, [32].
[18] Ibid, [34].
91Omar had a more ‘hands-on’ role. Omar was the nominated sub-lessee for the Cobram property. As earlier discussed, he performed a range of tasks at the direction of, and under the supervision of, his father including carrying out deliveries of seedlings and machinery; moving farm workers around as needed and assisting with harvesting.
92Mr Fotia’s role was the most limited of the three. It was limited to carrying out a number of activities in relation to the Cobram property only.
93The evidence at trial was that Mr Fotia communicated extensively with Ahmad by mobile phone between 23 August 2016 and 28 April 2017. The prosecution case to the jury was that his role in the agreement could be inferred from this evidence taken together with other evidence of his involvement.
94I take the jury’s guilty verdict to be an acceptance of this case and I sentence accordingly.[19]
[19] Cheung (n2).
95I reject the characterisation of Mr Fotia’s offending as having been ‘unknowingly placed in [a] difficult position’ as his sister has described it in a letter to the court.
96Although Mr Fotia’s role was subordinate to the roles of the other offenders, I accept the prosecution submission that without his involvement the tobacco growing at the Cobram property would not have occurred.[20] This is consistent with the jury’s verdict at his trial.
[20] Prosecution Submissions on Sentence dated 20 November 2024, [16].
97The loss of excise associated with the Cobram crop exceeded $2,000,000. As the prosecution submitted, the scheme nearly succeeded; it only failed as a result of a public tip off.[21]
Victims, Damage, Loss, Harm – ss 16A(2)(d)-(ea)
[21] Ibid, [19].
98Paragraphs 16A(2)(d)-(ea) are concerned with the impact on any victims of your offending. The offences created by s 135.4 of the Criminal Code are designed to protect the Commonwealth revenue. These are not victimless crimes because the community as a whole suffers when tax is evaded.
Specific & General Deterrence – ss 16A(2)(j) & (ja)
99General deterrence is of the utmost importance as a sentencing consideration in relation to crimes such as yours.[22] I must impose a sentence that alerts anyone who may be tempted to offend in this way to the real risk that, if caught, they are likely to be incarcerated.
[22] Assheton v R [2012] 132 A Crim R 237, 246-7.
100Specific deterrence has a more limited role to play in relation to this sentence.
101Mr Fotia, you have some limited criminal history but have been offence free since this offending. Given your age, health and family responsibilities, I consider that it is unlikely that you will offend again.
102There is even less role for specific deterrence with you Omar. You have no criminal record and I am satisfied that much of the motivation for your offending was your late father. You too have been offence free since this offending.
Matters in Mitigation
Contrition and Plea – s 16A(2)(f) and (g)
103Turning to paragraphs (f) and (g), Omar, your guilty plea to the charge has significant utilitarian value. You have saved witnesses the trouble and stress of giving evidence and have saved scarce public resources because a trial will not be needed.
104Your guilty plea is also indicative of remorse.
105Mr Fotia, you have demonstrated minimal remorse. You ran a trial, which of course was your right, but it means that you do not receive the considerable discount for a plea of guilty that is commonly seen in cases such as this.
Cooperation with Law Enforcement – s 16A(2)(h)
106You both co-operated with the authorities by making admissions when interviewed. This is to your credit.
Mental Health, Intellectual Functioning & Moral Culpability
107No psychological material was filed at the hearing of the pleas.
108Mr Fotia, your moral culpability for your offending is considerable. You are a mature man with business experience and should have known better than to become involved in this conspiracy. Your counsel submitted that your involvement ‘arose through financial need’.[23] It was submitted further that ‘seemingly’, you chose not to ask too many questions.
[23] Outline of Defence Submissions on Sentence dated 13 November 2024, [27].
109I reject this. I consider, based on the evidence heard by the jury, that you were well aware that tobacco was being grown at the back of the Cobram property. Whether your offending is characterised as a response to need or greed, it is clear that you were motivated by the prospect of financial gain.
110Omar, the motivation for your part in the conspiracy is more complex and highly relevant to the court’s sentencing task. Your counsel Mr Weinman submitted that your role in the conspiracy was at the behest of your late father who exercised a controlling influence over you throughout your life.
111The court received a letter from your mother Layal Tundas. Ms Tundas refers to her late ex-husband as manipulating you and using you ‘for bait’. Ms Tundas states that you were always scared of your father.
112Although the court heard no evidence about this issue, your counsel’s submissions were not disputed by Mr Buckland who appeared for the Director.
113Mr Weinman informed me that when he appeared on Omar’s behalf at the sentence indication hearing he did not make these submissions as Ahmad was still alive.
114Given Omar’s age at the time of the offending I accept that at least part of his motivation for offending was to please his father.
115This is relevant to the court’s assessment of Omar’s moral culpability for the offending. I consider that his moral culpability is significantly diminished by reason of these matters and that the sentence to be imposed should be moderated accordingly.
116I will return to the relevance of these findings to the court’s sentencing task later in these reasons.
Matters Personal & Probable Effect of Any Sentence on Family or Dependents – s 16A(2)(m) & (p)
117Paragraphs (m) and (p) require me to consider matters personal to Mr Fotia and Omar and the impact of any sentence on their families.
Mr Fotia
118Mr Fotia, this was a significant part of the plea made on your behalf. Mr Kounnas referred to both your poor mental and physical health and the role you play in looking after other family members. I will address each in turn.
119Starting with your health. You have a number of medical conditions for which you attend specialists. The conditions are listed in a report from your treating cardiologist Dr Helprin.[24] The conditions include Obesity, Type 2 Diabetes, alcohol dependence, asthma and vertigo.
[24] Exhibit D2A, Medico-Legal Report by Dr Garry A Helprin dated 31 October 2024.
120You have had coronary artery disease and underwent a pulmonary vein isolation procedure earlier this year. Dr Helprin states that you will require close follow-up and supervision by a Cardiologist and he is concerned about whether that will be available to you in custody.
121In light of your medical needs, Dr Helprin states that ‘there is a not insignificant risk of deterioration in Mr Fotia’s health if he were to be incarcerated’.[25]
[25] Ibid, 3.
122There is also evidence before the court that your mental health has recently deteriorated. You have depression which has been treated with Lexapro but this has not been effective recently. Your doctor has referred you to a psychiatrist for an opinion.[26]
[26] Referral to Dr Amy Tedja from Dr Okotayp Balogun dated 29 November 2024.
123Turning to the likely impact of your incarceration on your family members which was central to your counsel’s plea.
124Historically, s 16A(2)(p) was construed as requiring ‘exceptional circumstances’ to be enlivened.[27] In recent times, the New South Wales Court of Criminal Appeal disavowed historical authority to this effect and held that a court imposing a sentence for a federal offence need not find exceptional circumstances before the provision can be enlivened to mitigate sentence.[28] This position has since been adopted in Victoria.[29]
[27] See, e.g., R v Sinclair (1990) 51 A Crim R 418.
[28] Totaan v R (2022) 108 NSWLR 17.
[29] Mohamed v R [2022] VSCA 136, [83]-[93].
125The evidence relied upon by Mr Fotia’s counsel consisted of:
(a) a letter from Mr Fotia’s sister Matilda Seru dated 3 December 2024 (received on 16 December 2024);
(b) a letter dated 16 December 2024 from Lisa Ford, Corporate Services Coordinator, Cobram Regional Care; and
(c) viva voce evidence given on 17 December 2024 by Ms Seru.
126Based on that evidence, I am satisfied that Mr Fotia is the primary caregiver for his elderly father, Dometrio Fotia, who is in the early stages of dementia, is visually and hearing impaired and speaks very little English. Together with his wife Kim, Mr Fotia provides his father with essential daily care including meals, shopping and transport to medical appointments. Kim Fotia works in disability care and is in good health. Kim and Mr Fotia have adult children who could also presumably assist if needed.
127Mr Fotia’s brother Ben, who lives in Shepparton, takes their father to the cemetery to visit their mother’s grave. Ben, who is single, in good health and works in disability care, also visits his father although not as often as Mr Fotia does.
128A further brother, Angelo, lives in Cobram and visits his father once per week to help out. I assume he could visit more often if needed. Angelo has adult children who do not visit their grandfather but presumably could assist if required.
129Mr Fotia senior is in receipt of an aged care package which provides some care at home in showering and cleaning. He also has his lunch delivered by Meals on Wheels.
130This is not a small family. There are several family members including some that provide no care at present, who live near to Mr Fotia senior and could increase their level of assistance to him if needed. While I accept the level and quality of that care may not be equal to what Mr Fotia senior currently receives, I do not consider there will be that much difference. Any hardship suffered by Mr Fotia senior will, based on the evidence before me, be relatively minor.
131Turning to the question of alternative full time residential care, according to the letter from Mrs Seru, Mr Fotia senior ‘has made it clear he does not want to go into a nursing home, stating that he would rather harm himself than be placed in care’.
132When Mr Fotia’s plea was heard on 21 November 2024 I asked Mr Kounnas what inquiries had been made by Mr Fotia about alternative accommodation for his father in the event that Mr Fotia was incarcerated. Mr Kounnas informed me that no inquiries had been made by the family. This was despite the jury verdict having been returned on 27 June 2024 which is now nearly 6 months ago.
133I indicated as clearly as I could that arrangements ought to now be put in place as a matter of urgency pending the imposition of sentence on 17 December 2024.
134On 16 December 2024 the court received a letter of that date from Lisa Ford, Corporate Services Coordinator, Cobram Regional Care. In the letter Ms Ford refers to a discussion with Mr Fotia on 16 December 2024. She writes that availability for a residential bed ‘cannot currently be confirmed’, and that she understands that the family ‘will be looking for a bed in the next 3-6 months’.
135I accept that the Fotia family finds itself in a very difficult predicament in relation to care of their father. However, it is important not to lose sight of why this has occurred. The first reason is because of the offending engaged in by Mr Fotia as reflected by the jury verdict. Secondly, it appears that no action was taken by Mr Fotia or any other family member to make arrangements for Mr Fotia senior until I raised the question on 21 November 2024, five months after the verdict. Even now, inquiries seem to have been made very late in the day with one aged care home.
136This dilatory approach by Mr Fotia senior’s family occurred in circumstances where his legal advisors must have realised in the middle of 2024 that there was a real risk of the court imposing a custodial sentence requiring immediate incarceration given that the offending is serious and he contested the charge.
137In my view, at least some of the hardship is due to the way in which Mr Fotia and his family have addressed the question of what is to occur with his father. While I sympathise with the position that Mr Fotia senior now finds himself in, the hardship has been unnecessarily increased due to the way in which the issue has been handled.
138Mr Fotia, together with his wife Kim, also provides care for his sister Maria and her daughter Molly who faces a number of challenges. Maria has end-stage kidney failure and is bed bound. Molly is 17 and has ASD and ADHD. Molly’s father lives in Queensland and only visits her occasionally. Given that Mr Fotia’s wife Kim is in good health, I assume that she could increase the level of assistance perhaps helped by other family members if Mr Fotia is incarcerated.
139I have taken into account the likely impact that Mr Fotia’s incarceration will have on his health and on other members of his family as part of my instinctive synthesis of all of the relevant sentencing considerations. I have also taken into account the likely effect on Mr Fotia of the worry about how his father, sister and niece will fare while he is in custody.
140In accordance with established authority I have given effect to these matters in two ways:
(a) by partially suspending part of the sentence; and
(b) by reducing the length of both the head sentence and the period to be served.[30]
[30] See, e.g., Adams v R [2003] WASCA 91.
Omar
141The principal matter personal to Omar is his youth. As noted, he was 19 years of age at the time of the offending and is now 27. It is well established that the rehabilitation of young offenders is an important sentencing consideration, a matter to which I now turn.
Prospects of Rehabilitation – s 16A(2)(n)
142Omar, your relative youth means that the promotion of your rehabilitation is an important sentencing consideration.[31]
[31] Mills
143You are active in the Multicultural Youth Centre in Broadmeadows where you volunteer in various different capacities. According to the Imam, Samir Mohtadi, the Centre provides drug and alcohol counselling and promotes anti-extremism. This is important work and it is to your credit that you are a participant.
144I assess your prospects as excellent in light of your lack of criminal history, work and voluntary history and family support which was evidenced by the presence of your family and friends at the hearing.
145Mr Fotia, you also have excellent prospects of rehabilitation.
Delay
146Delay is a significant consideration.
147The offending occurred between August 2016 and May 2017. Mr Fotia was interviewed on 27 April 2017 and made a number of admissions. Despite this charges were not filed until four and one half years had passed since the detection of the offending. Omar was interviewed in May 2017 but not charged until January 2022.
148The delay between the last date of the period of the offending and the date of sentencing is seven and one half years. On any view this is inordinate.
149The prosecution submits that ‘delay in fraud investigations is not unusual’.[32] While that may be accepted, the delay in this case is very considerable indeed. It is relevant to the court’s sentencing task in a number of ways.
[32] Prosecution Submissions on Sentence dated 20 November 2025, [31] (‘Prosecution Submissions – Fotia’).
150First, Omar has lost the chance to be sentenced as a ‘young offender’.[33] He was 19 at the time of the offending and turned 21 on 5 September 2018. Had he been sentenced before he turned 21 he would have been able to serve any custodial sentence in youth detention.[34]
[33] The Sentencing Act provides that a person who is under the age of 21 at the date of sentencing is a ‘young offender’.
[34] Sentencing Act, s 32.
151Secondly, Omar has not re-offended since this offending. He has worked regularly and sought to improve his work skills in the intervening period.
152Similarly, Mr Fotia has remained offence-free since his offending. He has spent much of the time looking after family members.
153Thirdly, both men have had this matter hanging over their heads since they were interviewed in 2017. The pandemic has come and gone and they are still awaiting finalisation of their court proceedings. This is completely unacceptable and calls into question the seriousness with which the Commonwealth has pursued the matters.
154In the circumstances, the delay calls for a significant discount on sentence for both men.
A Custodial Sentence?
155Counsel for each offender submitted that all of the relevant sentencing purposes could be met in their respective clients’ cases by the imposition of a sentence that did not require them to serve time in custody.
156In both cases, the submission was made despite the relevant offending being a serious example of a planned and relatively sophisticated criminal operation designed to deprive the Commonwealth of a very significant amount of revenue.
157Further, in Mr Fotia’s case the submission was made in the face of a jury verdict.
158I will address each man in turn.
Mr Fotia
159In Mr Fotia’s case I reject the submission. The principal reason for this is I consider that to give full and proper effect to general deterrence, nothing less than time to be served is required. This is despite the matters of mitigation discussed above that he can point to.
160In R v Saleh,[35] a Commonwealth prosecution under s 233BABAD(1) of the Customs Act 1901 (Cth), Hulme AJ, with whom Johnson J agreed, explained why general deterrence is so important in cases such as the present:[36]
Premeditated offending for the rewards or benefits that criminality may bring is a calculated risk. As the cases mentioned show, the rewards are not infrequently enormous. The criminality is often difficult to detect and it is impossible to believe that many people do not get away with it. Accordingly it behoves the courts to ensure that the penalties imposed on those who are caught are high enough to operate as a real disincentive to others tempted to offend.
[35] [2015] NSWCCA 299.
[36] Ibid, [47].
161His Honour also observed that ‘a suspended sentence provides little if anything by way of general deterrence’.[37] Similarly, in the case of R v McKay,[38] Whealy J remarked that ‘…the real bite of general deterrence occurs only when an actual custodial sentence is imposed’.[39]
[37] Ibid, [42].
[38] [2007] NSWSC 275.
[39] Ibid, [73].
162While a sentence of immediate imprisonment is required, it must be no longer than is appropriate. I have sought to give full effect to the matters of mitigation that are present in Mr Fotia’s case in setting the sentence that I have.
Omar
163Omar’s circumstances are considerably different to Mr Fotia’s. I consider that those differences make his case quite unusual and, despite the objective gravity of his offending, a sentence that does not require him to serve an immediate term is warranted.
164He can point to his reduced moral culpability stemming from the role and influence of his late father, his youth, lack of prior convictions, guilty plea, lack of subsequent matters and delay, as weighty matters of mitigation.
165I have also taken into account s 17A of the Crimes Act which makes clear that imprisonment is a sentence of last resort.
166The final matter to which I should refer briefly is the principle of parity. Where a court is sentencing co-offenders, like should be treated alike. However, if there are relevant differences, due allowance should be made for them.[40]
[40] Postiglione v The Queen (1997) 189 CLR 295.
167In this case, the circumstances of Omar and Mr Fotia are significantly different and this explains the different sentences I have imposed.
Orders
168Taking into account the above and giving due weight to the matters of mitigation, the orders that I make in this case are:
Omar Chkhaidem
(a) On charge 1, conspiracy to dishonestly cause a loss to the Commonwealth, you are convicted and sentenced to 12 months’ imprisonment.
(b) The sentence commences today.
(c) I make an order under s 20(1)(b)(i) of the Crimes Act that you be released immediately upon entering into a recognisance in the sum of $1,000 to comply with the following conditions, that you:
(i) be of good behaviour for a period of 12 months;
(ii) be supervised by Corrections Victoria and obey all reasonable directions of Corrections Victoria;
(iii) not travel interstate or overseas without the written permission of Corrections Victoria;
(iv) report to Corrections Victoria at Coolaroo Justice Service Centre within two clear working days of today; and
(v) inform Corrections Victoria at Coolaroo Justice Service Centre of any change of address or employment within two clear working days of the change.
(d) I need to explain some of the features of this Order to you.
(i) First, it is open to you to apply to this court to vary the terms of the order if any of the conditions that I have imposed have become particularly difficult to comply with. The court will consider the request in the relevant circumstances.
(ii) Secondly, if you fail to comply with any condition of the order without reasonable excuse, you can be brought back before this court and a judge of this court can:
A.fine you up to $1,000;
B.increase the period during which you are required to be of good behaviour;
C.revoke the order; and
D.resentence you in relation to the original offending, that is require you to serve out the entire head sentence of imprisonment of 12 months.
(e) Finally, pursuant to s 6AAA of the Sentencing Act 1991, had you pleaded not guilty to the charges, I would have sentenced you to 12 months’ imprisonment with 4 months to be served immediately.
Dominic Fotia
(a) On charge 1, conspiracy to dishonestly cause a loss to the Commonwealth, you are convicted and sentenced to 18 months’ imprisonment
(b) The sentence commences today.
(c) I make an order under s 20(1)(b)(ii) of the Crimes Act that you be released after 6 months upon entering into a recognisance in the sum of $1,000 to comply with the following conditions, that you:
(i) be of good behaviour for a period of 18 months;
(ii) be supervised by Corrections Victoria and obey all reasonable directions of Corrections Victoria;
(iii) not travel interstate or overseas without the written permission of Corrections Victoria;
(iv) report to Corrections Victoria at Cobram Community Centre within two clear working days of the date of your release from custody; and
(v) inform Corrections Victoria at Cobram Community Centre of any change of address or employment within two clear working days of the change.
(d) I need to explain some of the features of this Order to you.
(i) Firstly, it is open to you to apply to this court to vary the terms of the order if any of the conditions that I have imposed have become particularly difficult to comply with. The court will consider the request in the relevant circumstances.
(ii) If you fail to comply with any condition of the order without reasonable excuse, you can be brought back before this court and a judge of this court can:
A.fine you up to $1,000;
B.increase the period during which you are required to be of good behaviour;
C.revoke the order; and
D.resentence you in relation to the original offending, that is require you to serve out the entire head sentence of imprisonment of 18 months.
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