Director of Public Prosecutions v David Llewelyn Hicks
[2015] VCC 1760
•11 December 2015
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted Suitable for Publication |
AT MELBOURNE
CRIMINAL DIVISION
Case No. CR-13-01233
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| David Llewelyn Hicks |
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JUDGE: | Lewitan | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 3 December 2015 | |
DATE OF SENTENCE: | 11 December 2015 | |
CASE MAY BE CITED AS: | DPP v David Llewelyn Hicks | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 1760 | |
REASONS FOR SENTENCE
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Subject: Obtaining financial advantage by deception
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Ms R Harper | John Cain |
| Solicitor for Public Prosecutions | ||
| For the Accused | Mr P Kilduff | Pica Criminal Lawyers |
HER HONOUR:
1 You, David Llewelyn Hicks, have been convicted, after trial, of five charges of obtaining financial advantage by deception. The maximum penalty for Charge 2 is ten years' imprisonment. Pursuant to part 2B of the Sentencing Act 1991 each of Charges 1, 3, 4 and 5 is a continuing criminal enterprise offence and accordingly you are a continuing criminal enterprise offender in relation to each of the continuing criminal enterprises offences. The maximum penalty for each of Charges 1, 3, 4 and 5 is 20 years' imprisonment.
2 On 30 May 2006 you registered the business name Financial Markets Trading Group (FMTG) with Consumer Affairs Victoria. On the following day, 31 May 2006, you attended the Commonwealth Bank (CBA) in Collins Street, Melbourne and used the certificate of registration to open a Commonwealth Bank Premium Business Cheque Account in the name of David Hicks trading as Financial Markets Trading Group. The CBA allocated this account to its North Melbourne branch with the BSB number 063158 and account number 10239976 (the CBA account). You were the only signatory to that account.
3 In early 2008 Gordon Matthews (Matthews) met you through his friend Jeff Foley (Foley) with whom Matthews was trying to establish a trading platform. You were introduced to Matthews as a banker.
4 You and potential business partner Tony De Marco sought advice from Peter Bellomo (Bellomo), a financial services compliance advisor about setting up a foreign exchange business. Bellomo created a template ‘due diligence’ questionnaire as a basis for what would ultimately be required if the venture proceeded. The document was provided to you as a draft in need of alteration to reflect the details of the venture.
5 On 5 June 2008, you signed a lease agreement with agent Knight Frank, to sub lease office space at Level 8, 330 Collins Street, Melbourne from another company called AXA. The lease of this office commenced shortly after the agreement was signed and expired on 29 November 2011. This lease required you to pay AXA $10,039.30 per month in rent.
6 You and Matthews discussed creating an investment scheme to generate income and met a number of times from July to August 2008. You emailed a number of documents to Matthews including an application form you had created for FMTG and a due diligence questionnaire for Tuscan Capital Secured Fund which listed Ernst and Young as auditors.
7 Matthews and Foley agreed that the forms appeared to be in order. You had indicated to Matthews that the minimum investment was $50,000 and Matthews did not have sufficient funds to invest. Matthews did however mention your name and the investment scheme to several people including Rochelle England, Trevene Mattox and Neena Scott whom he had known for varying periods.
8 Matthews then passed on the FMTG application form and the due diligence questionnaire for Tuscan Capital Secured Fund as provided to him by you to each of the three complainants.
9 The prosecution alleged that you obtained a financial advantage from each of the complainants by falsely representing to each of them that:
(a) the due diligence questionnaire in the name of Tuscan Capital Secured Fund was a genuine and valid document;
(b) Financial Markets Trading Group was a genuine licensed entity;
(c) the funds advanced would be invested as to 90 per cent in Australian bank securities; and
(d) the balance of 10 per cent would be invested in long and short derivative instruments with protected margins;
(e) the investment money would be placed in true and genuine investments.
10 The prosecution alleges that you made an additional false representation to Trevene Mattox and Neena Scott that the return would be 30 per cent per annum of invested money.
11 You were convicted after trial of each of the charges. Accordingly the jury was unanimously satisfied beyond reasonable doubt that you made one of the alleged false representations to each of the complainants, that you knew that that representation was false, that you intended it to be acted upon and that you obtained a financial advantage as a result of making that particular representation.
Charge 1 – Rochelle England
12 On 14 September 2008, Rochelle England signed an FMTG application form to invest $150,000 with you. She then electronically transferred this money from her Westpac Bank account into your CBA account. The money was deposited into your CBA account on 16 September 2008.
13 Between 1 September and 16 September 2008 prior to the deposit, this account was $547.66 in debit and there were no transactions made.
14 Between the time the $150,000 was deposited into your CBA account on 16 September and 9 October 2008, you made 37 separate withdrawals from the account. Following the withdrawals, your CBA account was $367.99 in debt.
Charge 2 – Rochelle England
15 Ms England spoke to you in late September or early October 2008 and discussed a further investment and the likely returns.
16 On 9 October 2008, Ms England signed a second FMTG application form to invest a further $45,000 with you. She then electronically transferred this money from her Westbank account into your CBA account. The $45,000 was deposited into your CBA account on 10 October 2008.
17 Between the time the $45,000 was deposited into the CBA account on 10 and 17 October 2008, you made 11 separate withdrawals from the account. Following these withdrawals, your CBA account was $4,932.01 in credit.
18 On 6 November 2009 Ms England received one payment of $1,347 said to be “income” from her investment.
Charge 3 – Trevene Mattox
19 On 10 October 2008 Trevene Mattox signed an FMTG application form to invest $50,000 with you. She then electronically transferred this sum from her HSBC Bank account into your CBA account. The $50,000 was deposited into your CBA account on 20 October 2008.
20 In the days following the transfer of this sum, between 20 and 24 October 2008, you made 14 withdrawals from this account. Following these withdrawals, your CBA account was left $2,492.01 in credit.
21 On 6 November 2008 Trevene Mattox received one payment of $443.50 said to be “income” from the investment.
Charge 5 – Trevene Mattox
22 On 27 November 2008 Trevene Mattox signed two additional FMTG application forms to invest a further $250,000 with you. She then electronically transferred this money from her HSBC Bank account into your CBA account. This $250,000 was deposited into your CBA account on 28 November 2008.
23 At the time these funds were deposited into your CBA account, the account was $214.87 in debit. On the following day 28 November 2008, you made 8 withdrawals from this account. Following the withdrawals, you bank account was $118,097.13 in credit.
24 Between 28 November 2008 and 22 December 2008 you made a further 25 withdrawals from your CBA account. This took the account from $118,097.13 in credit to $494.62 in debit.
Charge 4 – Neena Scott
25 On 5 November 2008, Neena Scott signed an FMTG application form to invest $100,000 with you. She then electronically transferred this money from her NAB account into your CBA account. This $100,000 was deposited into your CBA account on 5 November 2008.
26 Between 5 and 27 November 2008, you made 35 different withdrawals from your CBA account. As a result of these withdrawals, your CBA account was left $214.87 in debit.
27 The three complainants transferred a total of $595,000 into your CBA account. The money deposited by Rochelle England, Trevene Mattox and Nina Scott has not been recovered.
28 You were arrested on 20 March 2010. You were interviewed by police later that day.
29 The facts in this case are very serious. Your conduct was callous and you took advantage of innocent and vulnerable people who were feeling the effects of the global financial crisis.
Effect on the victims
30 The victims of your crimes have and continue to suffer very considerably. Your crimes have robbed them of their plans for retirement and hopes for the future and will affect the manner in which they spend the rest of their lives.
31 Each of the victims has filed a victim impact statement. Rochelle England stated that in 2008 she was 65 years old and had consolidated her finances by buying a home and living on bank interest. She completed 2 masters degrees in the United States of America in Anthropology and Public Health. She became a lecturer at the University of Newcastle in Health Studies. She retired in 2002, having accumulated money for her retirement throughout her working life. She said that her whole lifestyle has changed as a result of your refusing to return the money she had invested with you. She stated that she has lost her trust in people and in her capability to make good decisions for her life. She had to go ‘begging’ to family and friends for money and found that mortifying. She was in a deep state of grief and shock for many years. She stated:
I felt extremely fragile and vulnerable, and for a long time I withdrew from people through both embarrassment and lack of money to engage in simple social activities, such as going to a film or going out for a meal. So my social life contracted severely. I could only spend money on fulfilling basic living needs, as I had to repay the money I owed with little to spare from the pension.
My hopes and plans for a modest retirement – to help my children, do some travel and engage in community service – were dashed.
…
Preparing for this court case and the gruelling cross-examination in which my good character was attacked have caused me to re-live all the details of my experiences of 2008-9. These current experiences have caused all the traumatic impacts of my losses to re-surface – the anxiety attacks, difficulty sleeping, and the deep mortification of repeating my errors of trust and judgement over and over again to strangers.
32 Trevene Mattox said that your crimes have affected her severely; physically, emotionally financially and socially. She had trouble sleeping due to thinking of the lost $300,000 and not having enough income to live on. Her doctor prescribed Valium to help her with sleep, depression, muscular problems and coping with her reduced lifestyle. She lost trust in friends, her ability to make wise decisions and a lot of her self-esteem. The six year delay to the court case caused her further emotional stress and health problems throughout that time. The loss of $300,000 left her unable to purchase a home. She tried to get employment by applying for several jobs but as she was over 65 years old, she was unemployable. She had to make changes socially, and could not spend money on social and cultural activities. She moved to a country town where she did not know anyone. She had to make new friends. Trevene Mattox stated that her investments with David Hicks have been the worst mistake she has made in her life.
33 Neena Scott stated:
This situation that David Hicks caused has severely stressed me, and damaged my life. Both the shock of discovering in 2009 my investment money I had entrusted to him was gone, the time, effort and expenses we went to endeavouring to resolve this, and the build-up of stress and its side effects over the 6 years it has taken to bring this to justice.
I was greatly distressed, and suffered lots of trauma and anxiety due to this deception, and financial loss, and it most certainly detrimentally effected all areas of my life, including physically, emotionally, socially and financially.
Before this I enjoyed good health, in fact I had no medical record. As the tension built up, my health deteriorated to the point that I came under Medical care and the Doctor stated I was ‘unfit to travel’ thus I was unable to personally attend the hearing last year in Melbourne or the trial this year. I did both by video link.
All areas of my life are depleted, how can I recoup this money. I am a single, retired woman. I was always a home owner and now I am homeless. I am considered unemployable as I am 70.
34 Your counsel submitted that in this case there were other people involved in making recommendations that the complainants relied on. Your counsel referred to Rochelle England’s evidence that she trusted Matthews and believed statements made by Matthews that you were a brilliant trader[1] and that the basis for sending her application for three units totalling $150,000 in Financial Markets Trading Group were the “Lead-up conversations” with Matthews.[2] Your counsel submitted that the trust that each of the complainants put in the representations made by Matthews and Foley had a clear influence on making them apply for units in FMT Group.
[1] Transcript p 211.
[2] Transcript p 238.
35 The prosecution submitted that the due diligence questionnaire was provided as a draft by Bellomo to you and you are the one who disseminated it to Matthews. You provided Matthews with the FMTG application for units. You did not tell Matthews that you were not taking funds. The jury found that you made at least one fraudulent representation to each of the complainants which induced them to invest their money. You took the money.
36 I have been told something of your personal history and your circumstances. You were born In Wellington, New Zealand on 13 July 1945 and are now seventy years old.
37 You married Adrienne Hicks in 1966 and have four children. Your wife is on the age pension. She suffers from arthritis in her hands. Your counsel submitted that she will suffer from hardship when you are imprisoned but not in a mitigatory sense.
38 You graduated with a Bachelor of Commerce degree in 1968. You trained as a chartered accountant and commenced public practice as David Hicks and Associates in 1973. You sold your practice to Touche Ross for $300,000 in 1986 and commenced work as a management consultant.
39 As has been pointed out by your counsel, there are some mitigating factors.
40 Since you committed these offences, there has been delay in the matter coming before me. Your counsel conceded that part of the delay was as a result of your health and that the delay was not the fault of the prosecution. I accept that this matter has been hanging over your head for a period of time and has left you in a state of uncertainty. I take the overall delay into account in mitigation of sentence.
41 You have no previous convictions. I sentence you as a person of previous good character.
42 You have been in no further trouble since this matter. I am, on balance, satisfied that given your age, the chances of your rehabilitation are reasonable.
43 You have experienced health problems. In 1988 you had a perianal abscess and major strokes in 2002, 2011 and 2014. A letter dated 7 October 2015 by Dr Hans Tu of the Royal Melbourne Hospital indicates that you underwent a 5 vessel coronary artery bypass graft on 25 May 2015. Dr Tu stated that you would require access to your prescribed medications as well as regular general practitioner and cardiologist review should you be subjected to a term of imprisonment.
44 Your counsel conceded that you can be treated for those conditions in gaol but submitted that your health problems would make it more difficult for you to serve a period of imprisonment than other persons of normal health. I accept your counsel’s submissions that the condition of your health would make prison more difficult for you than it would be for a prisoner in a healthy condition.
45 However, as well as those matters personal to you to which I have referred, including your prospects of rehabilitation, I must also take into account such matters as deterrence, especially general deterrence , which is of considerable importance in a case such as this. I must also consider the question of the protection of members of the community from you and bear in mind the likelihood of your re-offending. I am called upon by the Sentencing Act 1991 to manifest the community's denunciation of your conduct and generally to impose a just punishment.
46 Your counsel conceded that the offending was serious and the primary consideration for the court is general deterrence. Your counsel submitted that when considering the scale of the offending, the court should consider that other people were involved. Your counsel did not suggest that other people received the money. Your counsel had no instructions as to what happened to the money. There is no evidence of remorse and you have not sought to repay the money. However your counsel submitted that you accept the verdict and are ready to be incarcerated for the offending you have committed.
47 Your counsel submitted that specific deterrence is a lesser factor in this case given your age. He submitted that your prospects of rehabilitation are high and that you are unlikely to reoffend.
48 Your counsel conceded that incarceration is the only sentencing option but asked me to be as merciful as possible given your age, health, delay and that you have no prior convictions.
49 In The Queen v RLP[3] the Court of Appeal (Neave, Redlich JJA and Hollingworth AJA) considered the conjunction of the appellant’s advanced years and ill health and stated the following propositions:
[3] [2009] VSCA 271, [39] (citations omitted).
1. The age and health of an offender are relevant to the exercise of the sentencing discretion.
2. Old age or ill health are not determinative of the quantum of sentence.
3. Depending upon the circumstances, it may be appropriate to impose a minimum term which will have the effect that the offender may well spend the whole of his remaining life in custody.
4. It is a weighty consideration that the offender is likely to spend the whole or a very substantial portion of the remainder of their life in custody.
5. Other sentencing considerations may be required to surrender some ground to the need to exercise compassion to take account of the real prospect that the offender may not live to be released and the offender’s ill health will make his or her period of incarceration particularly onerous.
6. Just punishment, proportionality and general and specific deterrence remain primary sentencing considerations in the sentencing disposition notwithstanding the age and ill health of the offender.
7. Old age and ill health do not justify the imposition of an unacceptably inappropriate sentence
50 Your counsel referred to DPP v Penny.[4] In that case the respondent pleaded guilty to defrauding a company of over $3 million. He was sentenced to a total effective sentence of six years with a non-parole period of four years. He was sentenced on the basis that he derived no personal benefit from his offending.
[4] [2012] 0
51 In Koch v The Queen Maxwell P (with whom Buchanan and Neave JJA agreed) said that while
The amounts involved are not determinative of sentence, they are –for good reason – of very great significance in determining the appropriate sentence. This is so, at least in part, because the quantum provides some real indication of the measure of loss and damage, both financial and psychological, caused to the victims of the frauds. [5]
[5] [2011] VSCA 435, [58]
52 The prosecution conceded that there are no prior matters and there has been some delay but submitted that your offending is serious. There are multiple complainants and a significant amount of money involved and that general deterrence should be the primary consideration. The principles of specific deterrence, denunciation, just punishment and protection of the community remain alive. The complainants were unknown to you and were vulnerable due to their age and naivety in relation to these matters. There is no evidence of remorse. The impact on the complainants has been substantial and has been worsened by the delay. While there should be some concurrency, there should be substantial cumulation to reflect the impact on each of the complainants. The prosecution submitted that the only available sentence is an immediate term of imprisonment.
53 As stated by the Court of Appeal in The Queen v RLP[6] just punishment proportionality and general and specific deterrence remain primary sentencing considerations in the sentencing disposition notwithstanding the age and ill health of the offender. In this case general deterrence is the primary sentencing consideration.
[6] [2009] VSCA 271, [39]
54 Would you please, thank you. These are without doubt serious offences. In all the circumstances I have no alternative to the imposition of a custodial sentence. I propose to record convictions on all charges and sentence you as follows:
On Charge 1 – to a term of imprisonment of three years.
On Charge 2 – to a term of imprisonment of twelve months.
On Charge 3 – to a term of imprisonment of twelve months.
On Charge 4 – to a term of imprisonment of two years.
On Charge 5 – to a term of imprisonment of four years.
55 For practical reasons in this case it would not be possible to make the sentence imposed on the individual counts cumulative without breaching the well-entrenched principles of totality. Consequently, where some measure of cumulation is appropriate, there will be a measure of concurrency to avoid producing a sentence which would offend the totality principles. In other words, I propose to tailor the sentence to avoid the imposition of what may otherwise be described as a crushing sentence.
56 The base sentence is the sentence imposed on Charge 5. I direct that 12 months of the sentence imposed on Charge 1, ten months of the sentence imposed on Charge 4 and one month of each of the sentences imposed on Charges 2 and 3 be served cumulatively on each other and on the sentence imposed on Charge 5. That results in a total effective sentence of six years
57 Your counsel submitted that given your age, a wider than normal gap between head sentence and non-parole period would be appropriate. In DPP v Bulfin[7] Charles JA stated:
For persons first contemplating corporate criminality, a sentence which requires an offender to spend a substantial term in actual custody by virtue of the non-parole period fixed, is, in my view, much more likely to focus their attention and have real deterrent impact than a longer head sentence, much of which is likely to be served on parole after the offender’s release from custody. If this view be correct, to fix an unduly short non-parole period, would, in cases such as the present, be quite subversive of the whole concept of general deterrence, notwithstanding that a significantly longer head sentence was imposed.
[7] [1998]4 VR 114.
58 In Dyason v The Queen[8] the Court of Appeal held that the considerations referred to in Bulfin[9] remain relevant.
[8] [2015] VSCA 120 (Dyason)
[9][40].
59 I direct that you serve a period of four years before being eligible for parole.
Compensation Orders
60 Pursuant to s.86 of the Sentencing Act 1991 I order that you pay compensation in the sum of :
(a) $193,653 to Rochelle England;
(b) $299,556.50 to Trevene Mattox;
(c) $100,000 to Neena Scott.
61 I make an order that the documents referred to in the schedule of the forfeiture order which I have signed today be forfeited to the Minister.
62 I make an order pursuant to s.464ZF that you provide a sample of your saliva. I am required by law to say to you that those charged with taking that sample are authorised to use such force as may be necessary to effect the taking of the sample.
63 I declare that you have served how many days?
64 MS HARPER: Eight days, Your Honour.
65 HER HONOUR: Is that - - -
66 MS ALLISON: Yes.
67 HER HONOUR: Eight days by way of presentence detention in relation to this sentence and direct that that declaration be recorded in the records of the court.
68 Pursuant to s.6J of the Sentencing Act 1991, I direct that it be entered in the records of the court that I have sentenced you for a continuing criminal enterprise offence in respect of each of Charges 1, 3, 4, and 5.
69 MS HARPER: As Your Honour pleases.
70 HER HONOUR: Any further matters?
71 MS HARPER: No, Your Honour.
72 MS ALLISON: No, Your Honour.
73 HER HONOUR: Yes, could you please take Hicks into custody, thank you. I'll leave the Bench, thank you.
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